Docket: T-2756-23
Citation: 2024 FC 113
Ottawa, Ontario, January 25, 2024
PRESENT: Mr. Justice Pentney
BETWEEN: |
PETERS FIRST NATION |
Applicant |
and |
GORDON LOCK DEBORAH SENGER CAROL RAYMOND NEIL PETERS CANADIAN HUMAN RIGHTS COMMISSION |
Respondents |
ORDER AND REASONS
I. Introduction
[1] On November 28, 2023, the Canadian Human Rights Tribunal (“the Tribunal”)
found that the Peters First Nation (“the Applicant”)
had discriminated against Gordon Lock, Deborah Senger, Carol Raymond and Neil Peters (collectively “the Individual Respondents”
) on the prohibited grounds of age and family status in the provision of membership-related services: Gordon Lock, Deborah Senger, Harold Lock, Carol Raymond and Neil Peters v Peters First Nation, 2023 CHRT 55.
[2] On December 28, 2023, the Applicant filed a Notice of Application seeking judicial review of the Tribunal decision.
[3] On January 4, 2024, the Applicant filed a Notice of Motion seeking an order for a stay of proceedings in relation to certain of the remedies ordered by the Tribunal, namely the orders for monetary compensation to be paid to the Individual Respondents. The Applicant says that it will suffer irreparable harm if it is required to pay the amounts while its application for judicial review is pending, because it fears it will not be able to recover those funds if it is eventually successful in having the Tribunal order overturned.
[4] The Individual Respondents and the other Respondent, the Canadian Human Rights Commission (“the Commission”
) oppose the Motion. They say that Peters First Nation should be barred from relief because it does not come to the Court with clean hands. They also argue that the Applicant has failed to meet the three-part test for the grant of a stay.
[5] The parties agreed that the matter should be dealt with in writing, pursuant to Rule 369 of the Federal Courts Rules, SOR/98-106 [Rules].
[6] For the reasons that follow, the Motion will be dismissed. The Applicant does not come to the Court with clean hands, and is therefore not entitled to equitable relief. Out of an abundance of caution, I also deal with the merits of the motion. I find that the Applicant has failed to establish that it will suffer irreparable harm if the stay is denied, and the balance of convenience strongly favours the Respondents.
II. Background
[7] The Individual Respondents filed complaints with the Canadian Human Rights Commission, alleging discrimination by the Applicant because of its refusal to recognize them as members of the First Nation, contrary to its own Membership Code. These complaints were referred to the Tribunal for hearing, and the Commission participated as a party to the proceeding. The Tribunal upheld the complaints, and made a number of orders under the Canadian Human Rights Act, RSC 1985, c H-6 [CHRA].
[8] The Tribunal order included a financial component, requiring the Applicant to pay each Individual Respondent amounts they would have received but for the Applicant’s discriminatory practice in denying their membership applications, or informing them that they should not bother to apply for membership because they will be refused. The Tribunal also ordered compensation for pain and suffering, as well as an additional amount because of the wilful and deliberate nature of the discrimination.
[9] The financial aspect of the Tribunal’s order provides that the Applicant shall pay to each Individual Respondent:
· $242,000 , comprised of $30,000 for their share of distributions from the Trans Mountain Pipeline funds paid to the Applicant in connection with the expansion of a pipeline, and $212,000 for their share of the Seabird Island land settlement;
· $12,500 for pain and suffering; and
· $20,000 for its wilful and reckless discriminatory conduct.
[10] The Tribunal traced the history of the Individual Respondent’s efforts to obtain membership in the Applicant First Nation. It also noted that other individuals had succeeded in other challenges to their exclusion from membership in the Applicant First Nation: Engstrom v Peters First Nation, 2020 FC 286; affirmed in Peters First Nation v Engstrom, 2021 FCA 243; leave to appeal to Supreme Court of Canada denied 2022 CanLII 96457 (SCC); Peters v Peters First Nation, 2023 FC 399. The Tribunal noted that these cases found that the Applicant acted in bad faith in refusing to apply the rules set out in the Membership Code it had adopted, and in refusing to follow the guidance set out in previous court decisions.
[11] The Applicant has filed a Notice of Application for judicial review of the Tribunal decision, and has brought a motion seeking to stay the financial components of the Tribunal order pending the determination of the judicial review.
[12] The Applicant’s motion is based on the argument that the Applicant is a “very small First Nation with limited financial resources”
and paying the money in accordance with the Tribunal’s order would create a significant hardship. The Applicant argues that it will suffer irreparable harm if it is forced to pay the amounts ordered to the Individual Respondents, and then is successful on its judicial review, because there is little chance it will ever succeed in recovering the money. The Applicant fears the Individual Respondents will spend all of the money they receive before the application for judicial review is determined.
III. Issue
[13] The only issue is whether the Applicant has succeeded in establishing that it meets the test for a stay of the financial component of the Tribunal order.
IV. Analysis
[14] The three-part test for the grant of an interlocutory injunction was summarized by the Supreme Court of Canada in R v Canadian Broadcasting Corp, 2018 SCC 5 [CBC] at paragraph 12:
… At the first stage, the application judge is to undertake a preliminary investigation of the merits to decide whether the applicant demonstrates a “serious question to be tried”, in the sense that the application is neither frivolous nor vexatious. The applicant must then, at the second stage, convince the court that it will suffer irreparable harm if an injunction is refused. Finally, the third stage of the test requires an assessment of the balance of convenience, in order to identify the party which would suffer greater harm from the granting or refusal of the interlocutory injunction, pending a decision on the merits.
[15] The three elements of the test are cumulative, but strength in one factor may overcome weakness on another (see Monsanto v Canada (Health), 2020 FC 1053 at para 50. It is important to remember that an interlocutory injunction is equitable relief, and a degree of flexibility must be preserved in order to ensure that the remedy can be effective when it is needed to prevent a risk of imminent harm pending a ruling on the merits of the dispute. This was reaffirmed in Google Inc v Equustek Solutions Inc, 2017 SCC 34 at paragraph 1, where the Supreme Court of Canada noted that, “[u]ltimately, the question is whether granting the injunction would be just and equitable in all the circumstances of the case.”
[16] A stay of an order is interlocutory equitable relief. Once issued, a Tribunal order takes effect according to its terms, and under section 57 of the CHRA, a Tribunal order may be made an order of the Federal Court for the purposes of enforcement.
[17] The Applicant’s motion before the Court seeks to stay the financial component of the Tribunal’s order, pending a determination of its application for judicial review. The Individual Respondents and the Commission argue that the Applicant should be barred from obtaining such equitable relief because it does not come before the Court with clean hands. I will discuss this question before turning to the three-step test for interlocutory relief.
A. Clean Hands
[18] The clean hands doctrine was described by the Federal Court of Appeal in Canada (National Revenue) v Cameco Corporation, 2019 FCA 67, [2020] 4 FCR 254 at para 37:
Clean hands is an equitable doctrine, under which a party may be disentitled to relief to which it was otherwise entitled as a consequence of past conduct or bad faith. Importantly, for past conduct to justify a refusal of relief, the conduct must relate directly to the very subject matter of the claim: Toronto (City) v Polai, 1969 CanLII 339 (ON CA), [1970] 1 O.R. 483, at pages 493–494 , (1969), 8 D.L.R. (3d) 689 (Ont. C.A.); Dreco Energy Services Ltd. v. Wenzel, 2008 ABCA 290 (CanLII), 440 A.R. 273, at paragraph 13; Morguard Residential v. Mandel, 2017 ONCA 177, at paragraph 18; Robert J. Sharpe, Injunctions and Specific Performance (looseleaf) Aurora, Ont.: Canada Law Book, 2018 (looseleaf updated November 2018), at §1.1030.
[19] The Individual Respondents argue that the Applicant does not come to the Court with clean hands. They point to the repeated findings made by the Tribunal as well as this Court in other litigation that the Applicant has acted in bad faith in continuing to apply membership rules that have been found to be unlawful.
[20] The Tribunal found that this was one of the “very worst cases of reckless indifference… to the point that [the Applicant’s] discriminatory conduct was done wantonly and needlessly”
(Tribunal decision at para 252). The Tribunal also found that the Applicant had wilfully continued its discriminatory behaviour (para 254):
Peters First Nation is aware that the age requirement is not in the Membership Code. It is clear from a plain and reasonable reading of the Membership Code. And, since 2018, Peters First Nation has been repeatedly told by the Federal Courts that the age requirement is nonexistent and should not be applied and that their behaviour regarding the processing of applications is unlawful, abusive and shows bad faith... Yet Peters First Nation candidly and blatantly continues to disregard such findings and continues to apply the impugned criteria while knowing it has no legal authority to do so.
[21] The Individual Respondents also note that this Court and the Federal Court of Appeal have found the Applicant to have acted in bad faith, citing the following comment by Justice Paul Favel in a recent decision: “Band Council has demonstrated bad faith by attempting to impose a non-existent age restriction. The Band Council’s conduct in relying on such an age restriction in light of both Engstrom FC and Engstrom FCA is one such example of bad faith.”
(Peters v Peters First Nation, 2023 FC 399 at para 85).
[22] The Individual Respondents argue that the Applicant should be denied equitable relief because of its persistent bad faith conduct, which now includes ignoring the Tribunal order. They point to the Band Council Resolution adopted by the Applicant on January 9, 2024, which denied the Individual Respondents’ membership applications. No reasons for the denial were provided, as was required by the Membership Code. The Individual Respondents submit that this is yet another example of the Applicant’s bad faith, as explained in their Memorandum of Fact and Law:
17. Given the evidence provided by the Complainants and the facts found by the Tribunal, granting membership to the Complainants is the only lawful result. The applicant’s denial without reasons is yet another example of its bad faith conduct. Its Council continues to demonstrate that it is undeterred by the findings of this Court, the Federal Court of Appeal, and now the Tribunal.
18. As such, Peters has shown a continuing, decades-long, disregard for its own Membership Code. It has also shown a persistent disregard of this Court and the Federal Court’s decisions. It has now shown a disregard for the Tribunal’s Decision as well. Peters has unclean hands and this Court should not entertain the motion.
[23] The Commission advances a slightly different argument than the Individual Respondents. It says that the Applicant’s bad faith tilts the balance of convenience (the third step in the test for a stay) in favour of the Individual Respondents. In the alternative, it submits that the Court “may consider the [Applicant’s] egregious conduct to decline to consider this motion for a stay.”
[24] The Applicant has not filed any submissions regarding the clean hands question.
[25] The Federal Court of Appeal in Cameco made it clear that “for past conduct to justify a refusal of relief, the conduct must relate to the very subject matter of the claim”
(Cameco at para 37). This passage was cited by Justice John Norris in Nsungani v Canada (Citizenship and Immigration), 2019 FC 1172. [Nsungani], and he went on to find that the applicant’s prior criminal conviction and more recent failure to meet his obligations under the immigration process did not disentitle him from seeking the equitable relief of a stay (at para 13). In that case, Justice Norris found that: “[h]earing the stay motion on its merits could not reasonably be seen as condoning the applicant’s earlier misconduct or rewarding him for it.”
[26] Applying this approach to the case at bar, I find that the prior findings (by this Court, the Court of Appeal, and the Tribunal) that the Applicant acted in bad faith in administering its Membership Code are highly relevant to the clean hands question, given that all of the prior findings relate to the Applicant’s unlawful conduct in denying individuals membership in a manner not consistent with the Membership Code. The most recent decision of this Court found that the Applicant had failed to follow the guidance of earlier Court decisions, despite losing its appeal and being denied leave to appeal by the Supreme Court of Canada. The Tribunal in this case found further instances of unlawful, discriminatory conduct by the Applicant in its treatment of the membership claims of the Individual Respondents. In light of that, it seems to me that hearing the stay motion on its merits can reasonably be seen as “condoning the applicant’s earlier misconduct or rewarding [them] for it”
(Nsungani at para 13).
[27] An additional consideration is that the evidence before me indicates that the Applicant decided to deny the Individual Respondents membership by adopting a Band Council Resolution, without providing the reasons that are required by its own Membership Code. While the record before me on this Motion may not be complete on this question, the facts as stated are troubling.
[28] I find that there is merit to the Individual Respondent’s argument that the Applicant should be barred from relief because it does not come before the Court with clean hands. Based on the Applicant’s continuing pattern of ignoring or flouting prior Court decisions finding its administration of membership to be unlawful, and in light of the apparent disregard for the requirements of its own Membership Code in relation to the Tribunal’s order that the Applicant reconsider the Individual Respondent’s membership applications, I find that the Applicants do not come before the Court with clean hands, and are therefore barred from seeking equitable relief.
[29] Out of an abundance of caution, however, I will also consider the merits of the motion. In this regard, I will consider the clean hands question in the context of assessing the balance of convenience.
B. The test for a stay
(1) Serious issue to be tried
[30] In most interlocutory injunction cases, the “serious issue to be tried”
threshold is not a high bar – it is often summarized as merely requiring the judge to make a preliminary assessment of the case to ensure that the claim is neither “vexatious nor frivolous”
(RJR-MacDonald Inc v Canada (Attorney General), [1994] 1 S.C.R. 311 at 337 [RJR-MacDonald]). There are exceptions, including where the interlocutory injunction would provide the same relief as sought at trial, such that granting it would “impose such hardship on one party as to remove any potential benefit from proceeding to trial”
(RJR-MacDonald at 338; Monsanto at paras 44 and 56).
[31] In light of the fact that the record before me is not complete, and that the underlying judicial review may proceed to a hearing, I will not discuss the parties’ arguments on the serious issue question at any length. The Applicant claims they have met the test, while the Individual Respondents and the Commission argue they have failed to do so.
[32] At this stage of the proceeding, and without pronouncing in any way on the merits, I am not persuaded that the Applicant’s arguments on judicial review are “vexatious [or] frivolous”
. Therefore, the Applicant has met the test for serious issue.
(2) Irreparable Harm
[33] The term irreparable harm refers to the nature of the harm rather than its scope or reach. It is generally described as a harm that cannot adequately be compensated in damages, or cured (RJR-MacDonald at 341). It has often been stated that this harm cannot be based on mere speculation, it must be established through clear and compelling evidence: see Glooscap Heritage Society v Canada (National Revenue), 2012 FCA 255 at para 31 [Glooscap]; Gateway City Church v Canada (National Revenue), 2013 FCA 126 at paras 15-16; Newbould v Canada (Attorney General), 2017 FCA 106 at paras 28-29. In addition, the evidence must demonstrate a high likelihood that the harm will occur, not that it is merely possible. This will obviously depend on the circumstances of each case (see the discussion in Letnes v Canada (Attorney General), 2020 FC 636 at paras 49-58).
[34] However, equitable relief must retain its necessary flexibility, and it must be admitted that some forms of harm do not readily admit of proof, especially in interlocutory proceedings where speed is of the essence and the ability to prepare a complete evidentiary record is necessarily somewhat limited. What is required, at the end of the day, is a “sound evidentiary foundation”
for the assessment of the harm; mere assertions or speculation on the part of the applicant will never be sufficient (see e.g. Vancouver Aquarium Marine Science Centre v Charbonneau, 2017 BCCA 395 at para 60; Ahousaht First Nation v Canada (Fisheries, Oceans and Coast Guard), 2019 FC 1116 at paras 87-88).
[35] In this case, the Applicant describes its irreparable harm claim in the following way:
In this case, if monies are paid out to the [Individual] Respondents and Peters is successful in its judicial review application it is unlikely that some or all of the [Individual] Respondents will be able to repay the amounts paid to them pursuant to [the Tribunal’s]… orders…
The amounts that [the Tribunal] ordered to be paid to the Respondents are significant and will have an adverse impact on Peters and its members which will be irreparable if Peters succeeds on its judicial review and is unable to recover those monies for [sic] the [Individual] Respondents. Those monies are needed for various societal and economic reasons by Peters for the benefit of its members.
[36] In an affidavit filed in support of the Applicant’s motion, Norma Webb, the elected Chief of the Peters First Nation, explains their concern that the Individual Respondents may dissipate the funds:
I and my other Council members have grave concerns that should these monies be paid over to the four Complainants and Peters be successful on the judicial review that there will be no way to recover the monies paid to them, given what appears to be their current financial circumstances based upon the evidence they gave at the hearing. At the hearing, Carol Raymond said that she was retired, Neil Peters stated that he is a sheet metal worker who is 75 years old, Deborah Senger gave evidence that she is on “disability”, and Gordon Lock testified that he was off work due to illness and is 68 years old.
[37] In addition, Chief Webb stated that if the stay is granted but the judicial review is not successful, “if I am still Chief of Peters, I will make every effort within my power to ensure that any of the orders and declarations [of the Tribunal]… will be followed through with expeditiously. Peters does have the ability to pay the amounts ordered… although it will create hardships for Peters and its members.”
[38] The Individual Respondents and the Commission argue that the Applicant has failed to meet the test for irreparable harm, because it is only seeking to stay the financial component of the Tribunal’s order, and therefore the harm can be quantified in monetary terms. In addition, they argue that the Applicant failed to produce the kind of clear and non-speculative evidence that is required to establish irreparable harm. They point to the Applicant’s affiant, who merely referred to the age and employment status of the Individual Respondents as the basis for her “grave concerns”
that they would be unable to repay the funds.
[39] Finally, the Individual Respondents and Commission note that the 2023 audited financial statements of the Applicant indicate that it has substantial resources at its disposal ($8 million in cash and over $30 million in assets). They also point out that the Applicant decided to pay a “Christmas bonus”
of $20,000 to each of its members in December 2023 (a total expenditure of approximately $1.5 million), after the release of the Tribunal’s decision and order.
[40] I find that the Applicant has failed to establish that it will suffer irreparable harm if the motion is denied. The Applicant’s evidence is speculative and not supported by the kind of evidentiary foundation needed to obtain such extraordinary relief.
[41] The risk that a successful party may not be able to recover an award of damages from the losing side can be a relevant consideration in assessing irreparable harm: see, for example, Arysta Lifescience North America, LLC v Agracity Crop & Nutrition Ltd, 2019 FC 530. Such an argument will depend on the facts presented to the Court, and whether the evidence demonstrates a risk of harm at a convincing level of particularity.
[42] In this case, I find the Applicant’s evidence to be lacking in two main respects. It failed to provide sufficient details about the circumstances of the Individual Respondents, and it failed to provide evidence about the impact of the payments on its capacity to meet the needs of the other members of the First Nation.
[43] In regard to the circumstances of the Individual Respondents, I find that the guidance of this Court in Canada (Attorney General) v. Thwaites, 1993 CanLII 16524to be relevant. In that case, the Court found that “there is no evidence that Thwaites would dissipate, or abscond with, the money.”
(para 9). The same is true here – beyond speculation based on the age and employment status of the Individual Respondents, the Applicants have not provided any basis for their fear that the funds will disappear before the application for judicial review is dealt with.
[44] On the financial consequences for the Applicant, it is telling that the only evidence about the overall financial situation of the Applicant First Nation was provided by the Individual Respondents and the Commission. The evidence in the record does not indicate that the Applicant is facing significant financial challenges such that the payments of the amounts ordered to the Individual Respondents will have any real bearing on its capacity to meet the needs of its existing members. Moreover, the evidence that the Applicant has paid out a substantial sum to its individual members as a bonus after it had knowledge of the Tribunal’s order is also not consistent with the Applicant’s assertion that the financial impact of the award will undercut its ability to continue to serve its membership.
[45] For these reasons, I am not persuaded that the Applicant has met the test for irreparable harm.
(3) Balance of Convenience
[46] The third stage of the test “requires an assessment of the balance of convenience, in order to identify the party which would suffer greater harm from the granting or refusal of the interlocutory injunction, pending a decision on the merits”
(CBC at para 12). The expression often used is “balance of inconvenience”
(RJR-MacDonald at 342). The factors that must be considered in assessing this element of the test are numerous and will vary with the circumstances of each case; it is at this stage that any public interest considerations may come into play (RJR-MacDonald at 342-343).
[47] The Applicant’s argument on balance of convenience is stated in its memorandum of fact and law:
It is submitted that the balance of convenience clearly favours Peters in this case. The Respondents may be expecting a windfall arising from their receipt of $242,000.00 each in relation to the agreement with Trans Mountain/Kind Morgan and the Seabird Island Specific Claim settlement, neither of which they participated in, as well as the additional $32,500.00 each awarded by Fagan for “pain and suffering” and “willful and reckless discrimination”, however this is not money that they have ever had so if the judicial review is unsuccessful they will receive those amounts, albeit a bit delayed, plus whatever costs may be awarded by this Honourable Court. However, if Peters is successful, without a stay being ordered, it will be deprived of funds that it should not have to have paid out, and will be faced with limited prospects of recovery given the circumstances of each of the Respondents.
[48] The Individual Respondents and the Commission argue that the balance of convenience weighs in their favour. They submit that their argument on the Applicant’s lack of clean hands is relevant to the balance of convenience test: Erhire v Canada (Public Safety and Emergency Preparedness), 2021 FC 941 at paras 47, 86-88. In addition, they submit that the Applicant’s continuing bad faith and unlawful conduct has deprived them of the benefits of membership for virtually their entire lives. Because of this, they should not face a further unjustified delay in obtaining the compensation that has been ordered by the Tribunal.
[49] I find that the balance of convenience strongly favours the Individual Respondents and Commission. The Tribunal awarded the financial compensation to the Individual Respondents after finding that the Applicant had breached the CHRA, by failing to apply the Membership Code it had adopted and instead adopting discriminatory and unjustified rules designed to bar the Individual Respondents from membership. The other cases in this Court and the Federal Court of Appeal cited earlier indicate a similar pattern of unlawful behaviour had been applied to other individuals seeking membership.
[50] On the evidence before the Court, it appear that the Council has decided to deny membership to the Individual Respondents without providing reasons. The Tribunal found that the Applicant and its elected Chief and Council remain undeterred – they expressed their disagreement with the Court decisions and indicated their intention to continue to apply the unlawful criteria: Tribunal decision, paras 185-187; 252-255.
[51] The Individual Respondents have faced a long history of delay and discrimination at the hands of the Applicant, without legal justification. They have been awarded compensation by the Tribunal in recognition of the benefits they have been denied, and because of the pain and suffering they have experienced and in light of the deliberate, continued and wilful nature of the Applicant’s discriminatory conduct.
[52] There is also a public interest dimension to this case, as recognized by the Commission’s participation in the hearing. The CHRA is a quasi-constitutional statute, and Tribunal orders are meant to vindicate the rights protected by it, not only to protect the rights of the individuals specifically affected but also in recognition of the fundamental importance of the rights to equality and non-discrimination guaranteed by the CHRA. The balance of convenience in this respect favours not delaying implementation of any aspect of the Tribunal’s order.
V. Conclusion
[53] After considering the three elements of the test, my task is to step back to examine all of the circumstances of the case based on the evidence , and to answer a simple question: is it just and equitable to grant the equitable relief requested by the Applicant?
[54] I find that it is not. In fact, I find just the opposite – it would be unjust and inequitable to the Individual Respondents to force them to wait any longer to receive the financial compensation the Tribunal awarded them.
[55] As discussed earlier, I have dealt with the merits of the motion out of an abundance of caution, as an alternative ground for the decision. Based on my finding that the Applicants do not come before the Court with clean hands I could have simply refused to deal with the merits. In the circumstances, and given the submissions of the parties on the merits, I decided to also deal with it on that basis. My doing so, however, should not blunt the force of my initial findings on the question of clean hands.
[56] In closing, I will simply add this. Enough is enough. Court and Tribunal orders must be respected. In this instance, the Applicant should fully abide by the Tribunal order while it pursues its application for judicial review. The Individual Respondents should not be forced to wait any longer to receive the compensation that was ordered by the Tribunal.
[57] The Individual Respondents ask for their costs on the motion; the Commission did not seek costs. In the circumstances, it is appropriate to award costs in favour of the Individual Respondents.
[58] In exercise of my discretion under Rule 400 of the Rules, I have considered the following factors in assessing the amount of costs to be awarded. First, the Individual Respondents were successful on the motion. Second, the matter was dealt with in writing, on consent of the parties, and the motion material was not overly long or complex.
[59] Based on these considerations, I order the Applicant to pay to the Individual Respondents lump sum costs in the amount of $2,500, inclusive of fees and disbursements.
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