A. INTRODUCTION
In late 2011, the Supreme Court of Canada released its
decision in Canada (Canadian Human Rights Commission) v. Canada
(Attorney General). At issue was whether the Canadian Human
Rights Tribunal had the jurisdiction to award legal costs to a successful
complainant. This case originated as a decision of the Canadian Human Rights
Tribunal (the Tribunal), where legal costs were awarded to the victim of sexual
harassment, in addition to a monetary award. The Supreme Court upheld the
decision of the Federal Court of Appeal, denying the authority to award legal
costs (see Charity Law Bulletin No. 195)
and firmly concluded that the Tribunal does not have the power to award legal
costs. As charities and not-for-profits are not immune from human rights claims, this
decision is important to such organizations.
B. FACTS
Donna Mowat was employed as a traffic technician with the
Canadian Forces for 14 years. After leaving her employment, Ms. Mowat filed a complaint
with the Canadian Human Rights Commission (the Commission), which was
subsequently heard by the Tribunal. The Tribunal determined that Ms. Mowat had
been sexually harassed and awarded her $5000 for “suffering in respect of self
and feelings” and $47,000 in legal costs. The Tribunal determined that it had
the authority to award legal costs by virtue of sections 53(2)(c) and (d) of
the Canadian Human Rights Act (CHRA), which provides as follows:
53(2) If at the conclusion of the
inquiry the member or panel finds that the complaint is substantiated, the
member or panel may, subject to section 54, make an order against the person
found to be engaging or to have engaged in the discriminatory practice and include
in the order any of the following terms that the member or panel considers
appropriate:
...
(c) that the person
compensate the victim for any or all of the wages that the victim was deprived
of and for any expenses incurred by the victim as a result of the
discriminatory practice;
(d) that the person
compensate the victim for any or all additional costs of obtaining alternative
goods, services, facilities or accommodation and for any expenses incurred by
the victim as a result of the discriminatory practice;
The Tribunal based its decision on two considerations. First,
it determined that the term “expenses incurred” in the relevant provisions was
wide enough to include legal costs. Second, the Tribunal determined that there
were compelling policy considerations to allow costs which related to access to
the human rights adjudication process. As previously mentioned, this
interpretation was rejected by the Federal Court of Appeal and the Supreme
Court of Canada.
C. ANALYSIS OF THE SUPREME COURT OF CANADA DECISION
The Supreme Court determined that the question of whether
the Tribunal has the authority to award costs is simply a question of statutory
interpretation. According to the modern theory of statutory interpretation,
this entails seeking the intent of Parliament by “reading the words of the
provision in their entire context and according to their grammatical and
ordinary sense, harmoniously with the scheme and object of the Act and the
intention of Parliament.” Further, because the legislation in question is human rights legislation, in
must also be “interpreted liberally and purposively so that the rights
enunciated are given their full recognition and effect.”
As such, the Court undertook an interpretive analysis,
examining the text, context and purpose of the provisions. With regard to the
text of the provision, the Court determined that the phrase “any expenses
incurred by the victim as a result of the discriminatory practice” should not
be interpreted to include legal costs because each time the phrase is used in
the legislation, it is preceded by a particular type of expense to be covered. That
is, had Parliament intended for this phrase to include all costs and expenses,
it would not have specified particular types of expenses. To interpret the provision
otherwise would make the listing of types of expenses redundant. As Parliament
is presumed to not create redundant legislation, the Court concluded that “any
expenses” did not refer to legal costs.
In further examining the text of the provision, the Court
noted that the term “cost” is a legal term of art that is well-understood to
mean legal costs, a meaning that is distinct from compensation or expenses. The
Court reasoned that if Parliament had intended for legal costs to be awarded,
it would have used the widely accepted term. Finally, the legislation also
included a $5000 limit to monetary awards for pain and suffering. The Court
concluded that this limit is difficult to reconcile with an interpretation that
would allow legal costs to be awarded in an unlimited amount.
With regard to the context of the provision, the Court
considered its legislative history. The Court examined previous drafts of the
legislation, which contained the term “costs”. This suggests that Parliament
had considered this language but deliberately chose not to include it. The
legislative history further demonstrated that Parliament initially chose to
give the Commission an active role in litigating on behalf of complainants
instead of giving the Tribunal the jurisdiction to award costs.
The Court further examined the context by considering the
Commission’s own understanding of costs authority and by considering parallel
provincial legislation. The Commission has consistently stated that the CHRA
does not confer legal cost jurisdiction, and has repeatedly urged Parliament to
address this. Further in any parallel provincial legislation in which there is
the authority to award legal costs, the term “cost” is used.
Finally, with regard to the purpose, the Court concluded
that though the interpretation is meant to be broad and liberal in order to
give effect to the purpose of human rights legislation, it cannot replace a
textual and contextual analysis. As such, the Court concluded that “the text,
context and purpose of the legislation clearly show that there is no authority
in the Tribunal to award legal costs and that there is no other reasonable
interpretation of the relevant provisions.”
D. IMPLICATIONS FOR CHARITIES AND NOT-FOR-PROFITS
The implications of this decision are potentially far
reaching for individuals wishing to pursue human rights complaints that fall
under federal jurisdiction. It is now clear that such complainants will have to
bear their own costs of complaints brought to the Tribunal, whether they win or
lose. Likewise, those who successfully defend a human rights complaint will not
be able to recover their legal costs from the complainant.
Though the Ontario Human Rights Tribunal similarly lacks
the authority to award legal costs, the provincial system provides legal
support to complainants (but not respondents) through the Human Rights Legal
Support Centre, so complainants are able to pursue their claims. However, under
the federal human rights system, there is no such support.
For charities and not-for-profits, the legal costs of
defending human rights proceedings are substantial. Unlike proceedings in civil
courts, where the losing party is often required to pay a substantial portion
of the successful party’s legal costs, there is not such costs regime in human
rights proceedings. Therefore, charities and not-for-profits, as well as their
directors and officers, should consider protecting themselves from the costs of
such proceedings by securing insurance coverage which would cover defence and
indemnity costs in the event of such a claim. Insurance coverage of this type
would typically fall under “Employment Practices Liability” coverage offered by
several Canadian insurance companies.