Contravention of Settlement Agreement Applications

Many applications to the Human Rights Tribunal of Ontario (HRTO) are resolved without a full hearing. This is often because the parties to the HRTO Application (Form 1) have agreed to settle the application.

This usually happens where the parties have attended at a HRTO mediation or mediation/adjudication and signed a written settlement agreement containing various terms and conditions.  The settlement agreement that the parties sign is usually referred to as a Minutes of Settlement or a Memorandum of Settlement.

Under section 45.9(8) of the Human Rights Code (Code), where a party claims that the other party has breached a term or terms of a settlement agreement, an application may be made to the HRTO to enforce the terms. For example, a term of your settlement may have been that  the respondent  agreed to pay you an amount of money by a certain date. A contravention of settlement would typically occur if the respondent failed to pay you all of the monetary compensation by the agreed upon date.

Rule 24 of the HRTO Rules of Procedure (HRTO Rules) governs the process for contravention of settlement applications. Also see Form 18 (Application for Contravention of Settlement) and Form 19 (Response to Application for Contravention of Settlement) of the HRTO forms.

The issue of whether there is a legally binding settlement agreement depends on the specific facts of your case. Every case is unique.

In some cases, at some point during or after the settlement negotiations, the parties may disagree about whether there is a legally binding settlement. For example, a party may take a position that they did not sign anything and that this means there is no legally binding settlement agreement.

In these cases, one of the parties, commonly the respondent, may request that the HRTO decide whether there is a legally binding settlement. The HRTO has the legal authority to decide whether a binding settlement agreement exists.

The fact that you may not have signed any settlement agreement or even agreed to every term and condition of the settlement does not necessarily mean there is no legally binding settlement agreement.  A settlement agreement can be based on an oral agreement.  See, for example, Ibrahim v. Hilton Toronto, 2016 HRTO 627 (CanLII).

This means you can make a legally binding settlement with the other party without having the whole agreement in writing, without having agreed to all of the language in the agreement, or without having signed a formal settlement document.

See France v. Regional Municipality of York Police Services Board, 2019 HRTO 897 (CanLII) and Thomas v. Ideal Child Care Services Group, 2018 HRTO 917 (CanLII) for a good discussion of the relevant legal principles used to decide whether there is a legally binding settlement agreement between parties.

Also see JL v Greater Essex County District School Board, 2019 HRTO 511 (CanLII), where the HRTO held that there was no legally binding settlement because the parties had not agreed on the amount of monetary compensation to be paid to the applicant. The HRTO found that because the monetary compensation amount was an essential term of the agreement, the lack of agreement on this term meant there was no binding settlement agreement made by the parties.

Section 45.9(1) of Code provides that if a settlement of an application made under section 34 or 35 of the Code is agreed to in writing and signed by the parties, the settlement is binding on the parties. To be enforceable at the HRTO, a settlement agreement must be made after an application is made under the Code.

Pre-application settlements are settlements that are made by parties before an application has been filed at the HRTO and are not within the HRTO’s power to adjudicate. See section 45.9(3) of the Code.

It is also important to understand the distinction between i) the enforcement of a settlement  agreement at the HRTO where there is a written and signed settlement agreement and ii) the enforcement of a settlement agreement at the HRTO where there is no written and signed settlement agreement. These are two different types of settlement agreements.

In the first case, the HRTO has the legal authority or jurisdiction to hear a contravention of settlement application because there is a binding settlement agreement within the meaning of section 45.9(1) of the Code.

In the second case, the HRTO does not have any jurisdiction where there is no signed, written agreement between the parties.   Any HRTO application claiming a contravention of settlement where there is no signed, written agreement between the parties will be dismissed by the HRTO. See, for example, Masco Retail Cabinet Group LLC v. Kumarsingh, 2011 HRTO 2303 (CanLII).  However, as noted above, such an agreement could still be legally binding, even if not signed and written.

If you believe that a respondent has breached your written and signed settlement, you may complete an Application for Contravention of Settlement (Form 18). You must include an answer to each question in Form 18 and attach a copy of the signed settlement agreement.

You must then deliver a copy of Form 18 and a copy of the settlement to each party to the settlement and complete a Statement of Delivery (Form 23). You must then file your Form 18, a copy of the settlement and a completed Form 23 with the HRTO by sending it to the Registrar.

The time limit is six (6) months from the date the settlement term was contravened.  See section 45.9(3) of the Code.

You must make your contravention of settlement application within six (6) months of the contravention to which the application relates. If there was a series of contraventions, you must make the application within six (6) months of the last contravention in the series.

If the respondent has contravened more than one settlement term, then you should file your application within six (6) months of the oldest contravention date.

Failing to file an application on time will likely result in your application to enforce your settlement agreement being dismissed for delay. It is therefore extremely important to meet the six (6) month time period.

Yes. The HRTO may extend the time limit if it is satisfied that the delay was “incurred in good faith and no substantial prejudice will result to any person affected by the delay.” See section 45.9(4) of the Code.

You should be aware that it can be exceedingly difficult to obtain an extension of time at the HRTO. The HRTO requires a good faith explanation for any delay outside the six (6) month time limit. See Moore v. Canadian Memorial Chiropractic College, 2018 HRTO 1495 (CanLII) for a discussion on the HRTO’s interpretation of the phrase “incurred in good faith” under section 45.9(4) of the Code.

If an applicant cannot provide a good faith explanation for the delay, then the HRTO need not consider whether there is any substantial prejudice to the respondent caused by the delay. See Fox Estate v. Mackenzie Health, 2017 HRTO 1129 (CanLII).

In addition, even if an applicant has a good faith explanation for the delay, an applicant must also then show that there is no substantial prejudice to the respondent as a result of the delay.

You should therefore make every reasonable effort to file your contravention of settlement application on time. See Schweizer v. Whitchurch-Stouffville (Town), 2020 HRTO 872 (CanLII) for an example of where a contravention of settlement application was dismissed for delay. Also see Shaw v. University Health Network, 2018 HRTO 716 (CanLII).

A respondent may respond to your Application for Contravention of Settlement by completing a Response to an Application for Contravention of Settlement (Form 19).

A respondent must file their Response to an Application for Contravention of Settlement no later than fourteen (14) days after your Application for Contravention of Settlement was delivered to them.

Yes, the HRTO will schedule a hearing which is usually an electronic hearing, normally by videoconference.

At the hearing, the HRTO adjudicator will review the documents and hear the testimony of the parties about whether a settlement term has been contravened and what impact any contravention of a settlement term has had on the applicant.

A settlement agreement is a type of contract. The HRTO therefore applies the legal principle of the law of contracts to interpret the settlement agreement to decide if there has been a contravention. Often these cases are decided based on the interpretation of the settlement agreement. The primary goal is to give effect to the objective intentions of the parties. See, for example, Unis v. Cardinal Place, 2016 HRTO 738 (CanLII).

The analysis applied by the HRTO is an objective one and any evidence regarding the subjective intent of the parties will not be considered by the HRTO. This means that what the parties themselves thought about what they were agreeing to is inadmissible evidence before the HRTO to help interpret the settlement agreement.

The objective intent of the parties is decided primary by reference to the words used in the agreement, considered together with:

1. a) the settlement agreement as a whole;
2. b) the other provisions of the agreement; and
3. c) an assessment of all the surrounding circumstances or facts up to the time of the signing of the settlement.

See Shankman v. Eke, 2014 HRTO 1710 (CanLII) for a general discussion of the law of contractual interpretation. See also Briggs v. Durham Regional Police Services, 2017 HRTO 1457 (CanLII).

Many breaches of settlement cases are usually not too complicated. For example, the application may claim that a term of a settlement was not completed on time. Sometimes, such a claim by an applicant is not disputed by a respondent as it is apparent that the term of the settlement was not satisfied within the time period set out in the agreement.

Section 45.9(8) of the Code gives the HRTO a broad power to make “any order that it considers appropriate to remedy the contravention.”

The important language in section 45.9(8) is “to remedy the contravention”. The issue for the HRTO is not whether there has been a violation of your Code rights. Rather, the issue is whether there has been a contravention of the settlement agreement.

The HRTO may consider several factors in deciding what remedy is appropriate. This could include whether the breach was fundamental or minor, what terms remained outstanding and what, if any, negative impact  was experienced by the applicant as a result of the breach. See Saunders v. Toronto Standard Condominium Corp. No. 1571, 2010 HRTO 2516 (CanLII).

The HRTO may order that you be compensated for the breach of the settlement. It is a basic legal principle that an innocent party to a breach of contract is entitled to compensation for the loss.  The usual remedy for a loss is monetary compensation to place the innocent party in the position they would have been but for the breach of the settlement agreement.

It is worth noting that monetary awards are not generally very high in contravention of settlement applications as compared to awards for an actual breach of the Code itself. See, for example, Salimi v. Toronto Community Housing Corporation, 2013 HRTO 66 (CanLII), where the HRTO awarded $4,000. See also Temple v. Super Deal Auto Sales Ltd., 2017 HRTO 1439 (CanLII), where the HRTO awarded $2,500 where the respondent failed to pay the applicants in three installments as required by the settlement agreement.

The HRTO also may order that a respondent do what they agreed to do under the settlement agreement, often referred to as a compliance order.

For an example of a compliance order, see 117392 Ontario Inc. v. Herrera-Quispe, 2016 HRTO 619 (CanLII) where the HRTO ordered the respondent to complete the human rights training agreed to in the settlement and to confirm to the applicant’s counsel by a specified date that this training was completed.

No. All breaches of a settlement agreement are not the same. The HRTO has the discretion to decide whether a remedy is appropriate at all. Whether the HRTO grants a remedy will depend on the facts of the case. For example, in Birmann v Honeywell, 2013 HRTO 254 (CanLII), the HRTO did not award a remedy for a breach of a settlement agreement where the delay in payment of the money to the applicant was only three (3) days.

In fact, in many cases the HRTO has held that a minor or trivial delay in the delivery of settlement funds, which was fixed when brought to the respondent’s attention, does not lead to a remedy for the breach of a settlement agreement.

On the other hand, see Crozier v. Genivar Inc., 2013 HRTO 643 (CanLII), for an example of where the delay in getting the settlement funds was held to be more than a minor breach. The HRTO ordered the respondent to pay the applicant interest on the settlement monies to compensate for the respondent’s failure to pay on time.

A HRTO decision to dismiss your contravention of settlement application is a final decision.  This means that you may request a reconsideration at the HRTO.

Rule 26 of the HRTO Rules governs requests for reconsideration.  You must make your request with thirty (30) days and you must be able to satisfy one of the criteria in Rule 26.5.

It is not easy to win on a request for a reconsideration. The grounds for a reconsideration are limited and you must meet one of the criteria set out in Rule 26.5. The HRTO has made it clear that the reconsideration power is not for a party to simply re-argue their case and hope for a better result. See, for example, Ibrahim v. Hilton Toronto, 2016 HRTO 1262 (CanLII).

For more information about requests for reconsideration see the HRLSC guide Requests for Reconsideration: You may also wish to review the HRTO’s Practice Direction on Reconsideration.