Docket: A-306-13
Citation:
2014 FCA 203
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CORAM:
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NADON J.A.
TRUDEL J.A.
STRATAS J.A.
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BETWEEN:
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ROBERT MCILVENNA
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Appellant
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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 OF THE COURT
(Delivered from the Bench at Ottawa, Ontario, on September
17, 2014).
STRATAS J.A.
[1]
Mr. McIlvenna appeals from the judgment dated
June 18, 2013 of the Federal Court (per Justice Hughes): 2013 FC 678.
[2]
In the Federal Court, Mr. McIlvenna applied to
quash the decision dated March 14, 2012 of the Canadian Human Rights Commission
to dismiss his complaint. Mr. McIlvenna had complained to the Commission that
the respondent Bank had engaged in discrimination contrary to the Canadian
Human Rights Act, R.S.C. 1985, c. H-6.
[3]
Mr. McIlvenna secured a mortgage loan from the
respondent Bank over his home. Later, the Bank called in the loan. In his
complaint to the Commission, Mr. McIlvenna targeted the Bank’s conduct.
[4]
Mr. McIlvenna complained that the Bank
discriminated on the basis of physical disability. He alleged that the Bank called
in the loan when it learned that cannabis grew in the home. A Bank branch
official told him that was the reason. And an appraiser retained by the Bank
also reacted adversely upon hearing that cannabis was being grown in the home.
But the cannabis was being grown under a federal licence for medical reasons. Mr.
McIlvenna’s son and daughter-in-law had been prescribed to use cannabis because
of their physical disabilities.
[5]
The Commission inquired into whether the
complaint should be screened out and dismissed under section 41. As matters
evolved, the Commission’s main concern was whether there was any basis for
believing that a discriminatory reason lay behind the Bank’s decision.
[6]
The Commission asked the Bank certain questions relevant
to its section 41 inquiry. An in-house counsel of the Bank replied. She
reported that the decision-makers at the Bank – not the persons Mr. McIlvenna
was dealing with – called in the loan. She said they relied upon the loan
agreement, which forbade unauthorized extensive renovations to the home. The home
was indeed undergoing such renovations, at least in part to facilitate the
growing of cannabis. On his visit, the Bank’s appraiser noted the home had been
gutted, rendering the Bank’s security for the loan inadequate.
[7]
On this evidence, the Commission dismissed the
complaint under section 41. The parties agree that a recommendatory report
dated November 29, 2011 submitted to the Commission can be taken to set out the
reasons for the Commission’s dismissal. The report concluded as follows (at
paragraph 40):
As noted above, the threshold on the
complainant to demonstrate a link to a ground [of discrimination] 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.
[8]
The Federal Court found that the Commission’s
decision was reasonable. After noting (at paragraphs 4 to 6) that the
Commission had conducted investigations, the Federal Court concluded (at
paragraph 22) as follows:
I am satisfied that this decision was
reasonable. While no doubt [the Bank] 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 [the Bank] and had the effect of considerably reducing the value of
the property. [The Bank] said that the alleged disabilities of [Mr. McIlvenna’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 [Mr.
McIlvenna], the mortgagor, in that respect.
[9]
On appeal, after the end of the hearing in this
Court, we adjourned until the following morning for the delivery of our reasons.
These are our reasons.
[10]
The parties agree that the standard of review is
reasonableness. Thus, in this case, we are to assess whether the Federal Court
was correct when it ruled the Commission’s decision reasonable: Agraira v. Canada (Public Safety and Emergency Preparedness),
2013 SCC 36, [2013] 2 S.C.R. 559 at paragraphs 45-47; Telfer
v. Canada Revenue Agency, 2009 FCA 23, 386 N.R. 212 at paragraph 18.
[11]
In our view, the Federal Court erred. The
Commission’s decision is unreasonable.
[12]
The Federal Court reviewed the Commission’s
decision as if a proper investigation had been conducted and it assumed that no
further investigation was required. Proceeding in that way, it reviewed the substantive
basis for Commission’s decision on the record before it.
[13]
The real question is whether it was reasonable
for the Commission to decide that it was “plain and obvious” on the material
then before it that the complaint must fail. Plain and
obvious is the standard for dismissal at this early stage of proceedings
under the Act (section 41 alone): Canada Post Corp. v. Canada (Human Rights Commission) (1997), 130 F.T.R. 241 (T.D.) at paragraph 3, aff’d (1999), 245 N.R. 397 (C.A.). Another way of putting the
question is whether in these circumstances it was reasonable for the Commission
to proceed without an investigation under section 43 of the Act and dismiss the
matter under section 41.
[14]
Under section 41 of the Act, the Commission is
entitled to dismiss a complaint, among other things, for lack of jurisdiction
or because it is frivolous or vexatious, e.g., the complaint contains a
bald or idle allegation of discrimination utterly implausible or incapable of acceptance
in the circumstances: see, e.g., Hartjes v. Canada
(Attorney General), 2008 FC 830; Boiko v. National Research
Council, 2010 FC 110.
[15]
But that is not the case before us. Here, there
was a live contest in the record before the Commission:
● on
the one hand, Mr. McIlvenna’s account of potentially discriminatory grounds
relied upon by persons who were associated with the Bank and who directly or
indirectly supplied information to the decision-makers on the loan; and
● on the other hand, the say-so of the
Bank’s in-house counsel who reported what the decision-makers on the loan told
her.
[16]
At this point in its process, the Commission cannot
acceptably or defensibly resolve the live contest between Mr. McIlvenna and the
report of the Bank’s in-house counsel in favour of the latter, at least until
it investigates further under section 43. But here, nonetheless, it purported
to do so. In so doing, it must have engaged in some sort of weighing process
that led it to favour the report of the Bank’s in-house counsel. This it cannot
do. During the section 41 stage, a weighing process of the sort conducted here is
no part of its task.
[17]
Only after investigating the matter under
section 43 of the Act – for example, by interviewing those at the Bank who
called in the loan and seeing whether any discriminatory grounds were reported
to them and relied upon by them – can the Commission assess the evidence to see
whether “an inquiry is warranted”: Cooper v. Canada (Canadian Human Rights Commission), [1996] 3
S.C.R. 854 at paragraph 49. But even at the section 43 stage – well
after the stage the Commission reached in this case – the Commission cannot go
further and “determine if the complaint is made out”:
Cooper at paragraph 53.
[18]
In this case, the Commission had not gotten
anywhere near that point. It was only in the section 41 stage.
[19]
It follows that the Commission’s dismissal of
Mr. McIlvenna’s complaint on the basis of section 41 is unreasonable and cannot
stand.
[20]
Before the Commission, the Bank has asserted
that Mr. McIlvenna does not have standing to complain. Rather, it says that his
son and daughter-in-law alone have standing. The Commission has not ruled on
that issue and we do not comment upon it.
[21]
Therefore, we shall allow the appeal with costs
here and below, set aside the judgment of the Federal Court, quash the decision
of the Commission, allow the application for judicial review, and remit the
matter to the Commission for further investigation of Mr. McIlvenna’s
complaint.
"David Stratas"
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