Date:
20130618
Docket:
T-841-12
Citation: 2013 FC 678
Toronto, Ontario, June 18, 2013
PRESENT: The
Honourable Mr. Justice Hughes
BETWEEN:
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ROBERT MCILVENNA
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Applicant
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and
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BANK OF NOVA SCOTIA
(SCOTIABANK)
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Respondent
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REASONS FOR
JUDGMENT AND JUDGMENT
[1]
The
Applicant Robert McIlvenna seeks judicial review of a decision of the Canadian
Human Rights Commission dated March 14, 2012, wherein the Commission, under the
provisions of subsection 41(1)(c) of the Canadian Human Rights Act, RSC
1985, C. H-6, dismissed the Applicant’s complaint against the Respondent Bank
of Nova Scotia (Scotiabank).
[2]
For
the reasons that follow, I will dismiss the application, with costs.
THE
FACTS
[3]
The
Applicant is a retired school teacher. He purchased a house in Sudbury, Ontario, referred to as the Noel Street house, and secured a mortgage from the
Respondent Scotiabank for that purpose. At a later time, the Bank called in the
mortgage loan under circumstances which led the Applicant to file a Complaint
with the Canadian Human Rights Commission. The essential part of the Complaint
is set out at paragraphs 9 to 12:
9.
I
believe that the only reason for demanding immediate repayment is because the
Bank has learned that there is cannabis growing on the property, and that but
for this reason the Bank would not have called my loan.
10.
I
am aware that lenders have experienced problems with residential properties
being used for illegal ‘grow ops’ of cannabis, invariably those problems have
been the result of clandestine operations, that were constructed poorly and
without regard to Building Code compliance, with the result that the buildings
suffered from poor ventilation causing excessive humidity, mould and related
problems. All of these things in turn have led to a diminished property value,
a legitimate concern of lenders.
11.
Not
only are these concerns not present at the Noel Street house, but neither the
appraiser nor the Bank officials had the slightest interest in hearing about
the effective efforts to address potential concerns with proper ventilation and
humidity controls that are in place. Once the Bank heard that there was
cannabis growing at the house, it appeared clear that their minds had been made
up to call the loan.
12.
I
believe the Bank’s actions in this case, and apparently in their policies, are
discriminatory against people with a disability, where such disability requires
the use (and growing) of cannabis. The Bank staff did not seem to care that the
occupants of the home were both prescribed cannabis by their respective
physicians, and both were licensed by Health Canada to possess and grow
cannabis.
[4]
Upon
receipt of this Complaint, the Commission began initial investigations. An
Officer wrote to the Bank on November 3, 2010 asking a number of questions,
including: why was the Complainant asked to repay and; did the liability of the
occupant of the house, the Complainant’s son, have anything to do with it. The
Bank provided an extensive reply by letter dated December 6, 2010, including
stating that the reason for calling in the mortgage was the extensive
alterations to the house and its state of disrepair, and that the son’s
disability played no part in the decision. On September 22, 2011, the
Commission wrote stating that the matter would be placed before the Commission
for a decision as to whether it had jurisdiction to deal with the issues. Each
of the Applicant (through his lawyer Hennessy) and the Bank, made written
submissions as to jurisdiction.
[5]
I
have summarized the above facts in brief because, according to the certificate
of the Commission, none of the above correspondence, except for the initial
Complaint, was before the Commission when it made its decision. What was before
the Commission was a Report from a member of the Resolution Services Division,
which summarized the previous submissions of the parties and made a
recommendation. A copy of that Report was sent to each of the Applicants’
lawyer and Scotiabank, and each provided submissions as to the Report. Those
submissions were also before the Commission when it made its decision.
[6]
The
point to be made is that there were initial investigations made into those
matters. Those investigations were considered and summarized in the Report, and
each party made submissions as to the Report. The Commission did not
make a decision based on the complaint alone; it had before it the Report and
the parties’ submissions as to the Report.
[7]
The
Report summarized the submissions of the parties as follows:
Information from the parties
9.
The
parties were invited to provide their positions on the issues for decision.
They were invited to address the factors that are relevant to the
Commissioners’ decision, including the factors listed above.
Respondent’s position
10.
The
respondent takes the position that it was exercising its contractual right to
call the mortgage as the Standard Charge Terms (the Terms) were violated by the
complainant, which does not constitute a discriminatory practice. It notes that
in June 2010 the complainant asked for an increase of his line of credit so as
to complete renovations for which the funds had run out; a renovation plan was
also submitted. As the renovations had not been done with advanced warning to
the Bank as per the Terms, an appraisal was requested, which was conducted June
24, 2010. The respondent notes that the appraiser found the home gutted, with
the exception of its shell, there were no windows and the roof was exposed
plywood. It is alleged that the occupant of the home informed the appraiser the
renovations were to “build a bigger and better grow-op” to house 500 marijuana
plants used for medicinal purposes. Also, it was found that the work undertaken
deviated from the plan submitted and the appraiser was informed that there was
no intention to submit revised plans for approval by the municipality. The
appraiser’s report to the respondent informed of the marijuana plants and noted
that the renovations were about 40% complete.
11.
The
respondent indicates that certain obligations of the Terms were breached: to
keep the property in good condition; and to inform the Bank of any planned
improvements, provide a plan, and not to deviate from the plan. The respondent
notes that these breaches entitled it to call the mortgage and/or take
possession of the property. It also notes that two additional circumstances
allowed it to demand that the full balance be repaid: the property value was
reduced to what the Bank considered an unacceptable level, and a term that
states if “anything else happens that we believe endangers your ability to pay
or that we believe endangers the property.” As a result of incomplete
renovations, the property value was reduced by $47,000 and thus worth amount
$8990 less than the balance owing. So, in August 2010 the respondent made a
demand to the complainant to repay the mortgage in full within two weeks.
12.
The
respondent takes the position that as a result of the condition of the property
upon appraisal, it “[…] had a valid concern that its security was at risk” and,
since it was not insured by the Canadian Mortgage and Housing Corporation, “[…]
any loss suffered as a result of a default in the value of the property would
be borne by the Bank.”
13.
In
response to a question as to whether the respondent made any enquiries about
the ventilation and humidity controls at the property, it replied as follows:
“The appraiser noted that when inspecting the basement there were a new forced
air gas furnace and an air exchange system which appeared to be larger than
normal. However, no specific testing was done at this time given the state of
the Property, which was in a shell condition.” When asked whether it had taken
into account the occupants’ disabilities prior to calling the mortgage, the
respondent replied as follows: “The occupants’ alleged disabilities were not a factor
in any way in the Bank’s decision to call the mortgage. In fact the Bank does
not have any knowledge of the occupants alleged disabilities. For the Bank’s
purpose the mortgagors of the property were Robert and Jocelyn McIlvenna. It
was their security that had significantly reduced in value and on which the
Bank was demanding payment.”
14.
The
respondent further notes that since calling the mortgage, the complainant has
further breached the Terms by registering a second mortgage on the property
without first acquiring its written consent. As a result of this second
mortgage, the Bank’s priority over subsequent encumbrances has been
compromised.
Complainant’s position
15.
The
complainant notes that “When the appraiser was made aware that the marijuana
was growing in the house, the inspection came to an abrupt end. Within a short
time (a couple of days at most) the Bank called the McIlvennas to the Bank for
a meeting. At that time they were told their mortgage, which was up to date in
payments, was being called […]. They were told that the bank does not allow
marijuana to be grown in houses they hold as security.”
16.
The
complainant acknowledges that his son and daughter-in-law have no privity of
contract with the respondent. However, he notes that it was their disabilities
that gave rise to the prescription and related cultivation which so troubled
the respondent’s officials to the point where they called the mortgage.
[8]
The
Analysis and Conclusions portion of that Report stated:
Analysis
Link to a Ground
36.
As
discussed above, it appears that the practice at issue may be discriminatory if
linked to a prohibited ground. It also appears that the practice had an adverse
impact such as financial implications, and humiliation. The parties do not
appear to dispute that Terms of the Agreement were breached. The issue for
consideration at this point however, is whether the decision to call the
mortgage, was exclusively based on this breach of the Terms or if it was based
on a ground of discrimination, whether in part or entirely.
37.
The
Federal Court decision in Hartjes v. Canada (Attorney General) 2008 FC 830, at
paragraph 12, provides clarification regarding the applicability of section
41(1)(c) of the Act:
As I read s. 41(1)(c), “jurisdiction” could refer to
two different categories of matters. For example, a complaint by an inmate of a
provincial institution could likely be dismissed under s. 41(1)(c) this would
be a question of “true jurisdiction”…In a broader context, a complainant may
complain of certain acts that are, on their own, not allegations that fall
within the mandate of the Commission but allege that these acts took place
because of race, ethnic origin, disability or another prohibited ground. In
such a case, unless the complainant can disclose sufficient information or
facts to show a link to a prohibited ground of discrimination, the acts
complained of are not within the statutory mandate of the Commission. In
this second example, the pre-screening exercise involves an assessment of the
sufficiency of the evidence. [Emphasis added]
38.
In
Hartjes, at paragraph 23, the Court further noted “Although the threshold may
be low, there is a burden on a complainant to put sufficient information or
evidence forward to persuade the Commission that there is a link between complained-of
acts and a prohibited ground”.
39.
Moreover,
the Federal Court has held that decisions under paragraph 41(1)(c) of the CHRA
attract a higher level of judicial scrutiny. The Court has said that at this
early screening stage, the Commission should only decide not to deal with a
complaint if it is “plain and obvious” that there is not a prima facie case of
discrimination. See for example Canada Post Corp. v. Canada (Human Rights
Commission) (1997), 130 F.T.R. 241, aff’d (1999), 245 N.R. 397, Michon-Hamelin
v. Canada (Attorney-General), 2007 FC 1258; [2007] F.C.J. No. 1607 (Q.L.) and
Leslie Hicks v. Attorney General of Canada, 2008 FC 1059. These cases describe
the test that guides the analysis and decision-making at this stage of the
Commission process. Also, due to the quasi-constitutional nature of the Act, a
fair, large, liberal and purposive interpretation must be applied (see
Robichaud v. Canada (Treasury Board) [1987], 2 S.C.R. 84).
40.
As
noted above, the threshold on the complainant to demonstrate a link to a ground
is a low one. However, the threshold does not appear to be met in the present
case. Several terms of the mortgage agreement were breached and as such, the
respondent exercised its right to call the mortgage. As such, it appears plain and
obvious that the decision to call the mortgage was not based on a prohibited
ground of discrimination.
41.
In
light of information from the parties and the explanation provided by the
respondent, it appears plain and obvious that there is no prima facie case of
discrimination linked to a ground.
Standing
42.
Even
if the Commission assumes without deciding that the complainant does have
standing to bring forward the present complaint, it is not linked to a ground
of discrimination since the respondent was enforcing its contractual rights
pursuant to the breaches of the Terms of the mortgage agreement.
Conclusion
43.
It
appears plain and obvious that the complaint is not linked to a ground of
discrimination. The respondent was exercising its contractual right following a
breach of the Terms of the mortgage agreement.
Overall Conclusion and
Recommendation
Conclusion
44.
While
the respondent was providing a service as contemplated by section 5 of the Act,
its decision to call the mortgage following several breaches of the Terms of
the mortgage agreement does not appear to be based on a ground of
discrimination but rather a breach of contract.
Recommendation
45.
It
is recommended, pursuant to paragraph 41(1)(c) of the Canadian Human Rights
Act, that the Commission not deal with the complaint
•
Because
it is not based on a prohibited ground of discrimination identified in section
3 of the Act.
[9]
On
March 14, 2011, the Commission made the decision, now under review, adopting
the Recommendation of the Report and dismissing the complaint.
ISSUES
[10]
The
parties have raised the following issues:
1. What
is the standard of review?
2. Given
that standard, should the decision be set aside?
STANDARD OF
REVIEW
[11]
Both
parties submit that the standard of review is reasonableness. In Hartjes v Canada
(Attorney General), 2008 FC 830, Justice Snider of this Court, at paragraph
20, affirmed that the Commission’s determination as to whether the allegations
of a complainant are linked to or based on a prohibited ground of
discrimination, is reviewable under the reasonableness standard. This decision
was followed in Boiko v Canada (National Research Council), 2010 FC 110
at paragraphs 30 to 31.
WAS THE DECISION
REASONABLE?
[12]
Given
that the standard of review is reasonableness, the remaining issue is whether
the decision under review was reasonable.
[13]
The
jurisprudence with respect to the role of the Commission in dealing with a
complaint under section 41 must be examined with some care. I repeat subsection
41(1)(c), which is the section relied upon by the Commission here:
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41.
(1) Subject to section 40, the Commission shall deal with any complaint filed
with it unless in respect of that complaint it appears to the Commission that
. . .
(c)
the complaint is beyond the jurisdiction of the Commission;
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41.
(1) Sous réserve de l’article 40, la Commission statue sur toute plainte dont
elle est saisie à moins qu’elle estime celle-ci irrecevable pour un des
motifs suivants :
. . .
c)
la plainte n’est pas de sa compétence;
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[14]
It
must be noted that there is no point during the process stipulated as being the
point at which the Commission may make such a decision. Unlike, for instance,
Rule 221 (1) (a) of this Court, there is no provision as to what, if any,
evidence or information beyond the Complaint, that the Commission may take into
consideration. The words “it appears to the Commission” imply a broad
discretion in the commission to deal with issues such as whether a complaint is
beyond its jurisdiction, at a point in the process and in a manner of its
choosing, subject to complying with the principles of natural justice.
[15]
Thus,
we find cases where the Courts have judicially reviewed decisions of the
Commission under subsection 41 (1) where a decision was made based only upon
the Complaint itself.
[16]
An
example is Valookaran v Royal Bank of Canada, 2011 FC 276, where
Justice Snider dealt with a situation where the Commission made a decision
based on the Complaint alone. She wrote at paragraphs 13, 15 and 19:
13 Moreover, I observe that s. 41(1)(c) of the
Act provides the Commission with considerable discretion. Specifically, s.
41(1)(c) provides that "the Commission shall deal with any complaint filed
with it unless in respect of that complaint it appears to the Commission that
... the complaint is beyond the jurisdiction of the Commission" [emphasis
added]. The use of the words "it appears to the Commission" infers
the exercise of discretion.
. . .
15 Procedural fairness does not require the
Commission to undergo a lengthy analysis of the complaint at the initial
stages. When the Commission dismisses a complaint prior to an investigation,
the substance of the allegations must be accepted as true (see Michon-Hamelin v
Canada (Attorney General), 2007 FC 1258, at paragraph 23). Where it is plain
and obvious, assuming the truth of the allegations, that the complaint falls
under s. 41, an investigation is not required and the Commission may refuse to
deal with the complaint (see Canada Post Corp v Canada (Human Rights
Commission) (1997), 130 FTR 241, [1997] FCJ No 578 (QL) (TD) at paragraph 3).
. . .
19 I cannot find that the Applicant was not
given an opportunity to present her case or respond to the concerns of the
Commission or the Respondent.
[17]
In
Hartjes, supra, Justice Snider at paragraph 14 observed that the Commission
possesses “considerable discretion” in dealing with issues under section 41:
14 Finally, I observe that s. 41(1)(c) of the
CHRA provides the Commission with considerable discretion. Specifically, s.
41(1)(c) provides that "the Commission shall deal with any complaint filed
with it unless in respect of that complaint it appears to the Commission that
... the complaint is beyond the jurisdiction of the Commission" [emphasis
added]. The use of the words "it appears to the Commission" infers
the exercise of discretion.
[18]
The
Courts have stated that normally the Commission would deal with such issues at
the outset of the matter and strike out the “plain and obvious” matters, and
where no investigation has been carried out, the allegations in the Complaint
must be accepted as true. Justice Mactavish in Michon-Hamelin v Canada (Attorney General), 2007 FC 1258, wrote at paragraphs 16 and 23 to 25:
16 In Canada Post Corp. v. Canada (Human Rights Commission) (1997), 130 F.T.R. 241, aff'd (1999), 245 N.R. 397,
Justice Rothstein observed that:
para. 3 A decision by the Commission under section
41 is normally made at an early stage before any investigation is carried out.
Because a decision not to deal with the complaint will summarily end a matter
before the complaint is investigated, the Commission should only decide not to
deal with a complaint at this stage in plain and obvious cases... If it is not
plain and obvious to the Commission that the complaint falls under one of the
grounds for not dealing with it under section 41, the Commission should, with
dispatch, proceed to deal with it.
. . .
23 Given that no investigation was carried out
in relation to the substance of Ms. Michon-Hamelin's human rights complaint,
the allegations contained in her complaint form must be taken as true. Indeed,
the Investigator had no evidence or information before her from the respondent
to counter Ms. Michon-Hamelin's version of events.
24 In this regard, Ms. Michon-Hamelin's
complaint clearly asserted that the problems that she says that she encountered
in relation to her application for injury-on-duty and disability benefits
occurred because her employer did not accept that she was suffering from a
disability.
25 Thus Ms. Michon-Hamelin's complaint clearly
links the employment-related adverse differential treatment identified in the
complaint to a proscribed ground of discrimination, thereby bringing the matter
squarely within the jurisdiction of the Canadian Human Rights Commission.
[19]
The
circumstances in the present case are different. The parties were given an
opportunity at the outset to present their case in detail, which they did. A
Report was written. The parties were given an extensive opportunity to make
submissions as to the Report, which they did. Only then was a decision made.
[20]
Not
only were ample opportunities given to the parties to make submissions, but the
Commission had the benefit of an initial investigation as set out in the
Report, upon which its decision could be made. As Justice Sopinka wrote in Syndicat
des employees de production du Quebec et l’Acadie v Canada (Human Rights
Commission), [1989], 2 SCR 879 at page 899, the Commission was at a stage
where it could make a reasonable determination as to whether to proceed to the
next stage. This decision was cited with approval in Cooper v Canada (Canadian Human Rights Commission), [1996] 3 S.C.R. 854, where LaForest J, for the
majority, wrote at paragraph 53:
53 The Commission is not an adjudicative body;
that is the role of a tribunal appointed under the Act. When deciding whether a
complaint should proceed to be inquired into by a tribunal, the Commission
fulfills a screening analysis somewhat analogous to that of a judge at a
preliminary inquiry. It is not the job of the Commission to determine if the
complaint is made out. Rather its duty is to decide if, under the provisions of
the Act, an inquiry is warranted having regard to all the facts. The central
component of the Commission's role, then, is that of assessing the sufficiency
of the evidence before it. Justice Sopinka emphasized this point in Syndicat
des employés de production du Québec et de L'Acadie v. Canada (Canadian Human
Rights Commission), [1989] 2 S.C.R. 879, at p. 899:
The other course of action is to
dismiss the complaint. In my opinion, it is the intention of s. 36(3)(b) that
this occur where there is insufficient evidence to warrant appointment of a
tribunal under s. 39. It is not intended that this be a determination where the
evidence is weighed as in a judicial proceeding but rather the Commission must
determine whether there is a reasonable basis in the evidence for proceeding to
the next stage.
[21]
The
cases cited to me by the Applicant where the Court criticized the Commission
for rejecting cases on preliminary review were cases where no investigation was
conducted or the complainant was given no opportunity to make submissions.
Here, an initial investigation was conducted, with submissions received from
both parties. A Report was prepared. The parties were given an opportunity to
comment on the Report, which they did. A decision was made based on the Report
and those comments. The question is, under those circumstances, was the
decision reasonable?
[22]
I
am satisfied that this decision was reasonable. While no doubt Scotiabank was
made aware that the changes made and proposed to be made were to accommodate
the growing of allegedly approved medical marijuana, those changes were
substantial and were made without the consent of Scotiabank and had the effect
of considerably reducing the value of the property. Scotiabank said that the
alleged disabilities of the Applicant’s son played no part in its decision to
call the mortgage. It was reasonable for the Commission to conclude that there
was no discrimination against the Applicant, the mortgagor, in that respect.
[23]
As
to costs, the parties have agreed that the successful party is entitled to
costs fixed in the sum of $4,000.00. I will award that sum to the Respondent
Scotiabank.
JUDGMENT
FOR
THE REASONS PROVIDED:
THIS
COURT’S JUDGMENT is that:
1.
The
application is dismissed; and
2.
The
Respondent is entitled to costs fixed in the sum of $4,000.00.
"Roger T.
Hughes"
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