SCC to Decide if Canadian Human Rights Tribunal has Authority to Award Legal Costs

In December of this year, the SCC is scheduled to decide if the Canadian Human Rights Tribunal (“CHRT”) has the authority to award legal costs under the Canadian Human Rights Act, R.S.C. 1985, c. H-6 (“CHRA”). In Mowat v. Canadian Armed Forces, 2006 CHRT 49, the complainant, Donna Mowat, alleged that while a member of the Canadian Armed Forces (“CAF”) she experienced discrimination on the basis of gender, which included sexual harassment. The CHRT awarded her $47,000 in legal costs in addition to $4000 plus interest for “suffering in respect of feeling or self respect.”

In part, the CHRA provides individuals with the ability to challenge a discriminatory practice in areas within Federal jurisdiction. A complaint must first be filed with the Canadian Human Rights Commission which then decides whether or not to forward it to the CHRT for adjudication. In the present case, the CHRT ordered the CAF to reimburse Mowat’s legal costs pursuant to s. 53(2)(c) of the CHRA, which states:

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;

In Canada (Attorney General) v. Mowat, 2008 FC 118, the Federal Court upheld the CHRT ruling by concluding that the appropriate standard of review of the CHRT decision was “reasonableness.” The CHRT was reasonable in its determination that it had the authority, pursuant to s. 53(2)(c) of the CHRA, to award legal costs to a successful complainant. The Attorney General (“AG”) appealed and the Federal Court decision was subsequently overturned in Canada (Attorney General) v. Mowat, 2009 FCA 309. Mowat did not appear before Court of Appeal and the CHRC intervened on her behalf.

What is the Appropriate Standard of Review?

The primary issue before the Court of Appeal was whether the tribunal was within its jurisdiction to award legal costs. In order to do this, the Federal Court was required to determine what standard of review applied to the CHRT decision. As mentioned, the Federal Court ruled that the “reasonableness” of the CHRT’s interpretation of s. 53(2)(c) was the appropriate standard. The Court of Appeal had to decide whether the Federal Court chose the proper standard of review and if that standard was utilized properly.

Before the Court of Appeal, the AG argued that the appropriate standard of review was “correctness.” Accordingly, the issue of whether or not the CHRT could award legal costs was a question of law and beyond the expertise of the CHRT. In contrast, the Canadian Human Rights Commission (“CHRC”), as intervener, asserted that the appropriate standard was “reasonableness with deference.” As stated by the Court of Appeal “if the standard of review analysis yields a standard of review of correctness, no deference is owing.”

Referring to the decision in Dunsmuir v. New Brunswick, [2008] 1 S.C.R. 190,  the appeal court noted “three situations where the correctness standard of review is appropriate”:

[First, a] true question of jurisdiction where the tribunal must explicitly determine whether its statutory grant of power gives it the authority to decide a particular matter is the first situation…The second is where there is a question of general law that is both of central importance to the legal system as a whole and outside the adjudicator’s specialized area of expertise…The third situation is where a determination of jurisdiction between two competing tribunals is required…

(In Dunsmuir, a discharged employee filed a grievance challenging the method of his dismissal. An adjudicator ruled that he was improperly dismissed and the case was eventually appealed to the SCC. The decision is notable for the SCC’s simplification of the standard of judicial review categories.)

In the present case, the CHRC asserted that the broad wording of s. 53(2)(c) provided the authority to grant costs. The Court of Appeal disagreed, concluding that the issue of awarding legal costs is “a question of general law of central importance to the legal system as a whole and one that is outside the specialized expertise of the Tribunal…The Tribunal’s authority to award costs of a proceeding to a successful complainant has nothing to do with the substance of human rights.” Hence, the appropriate standard of review was determined to be correctness.

Is the CHRA a “One-Sided Regime”?

Before the Court of Appeal, the AG presented more persuasive arguments than the CHRC. As is evident from s. 53(2)(c), the CHRT has the authority to mandate compensation for “expenses” incurred by the complainant as a result of the discriminatory practice. Yet, the term “expenses” in s. 53(2)(c) is distinct from “costs”, which is not mentioned in the CHRA. Furthermore, a Parliamentary intention to provide the CHRT with the jurisdiction to awards costs is absent from s. 53(2), or the statute as a whole.

One of the most interesting arguments forwarded by the AG was that Parliament could not have intended to have “established a one-sided regime…” The Court of Appeal agreed, noting that “costs” is a “legal term of art” widely recognized as being awarded to the losing party. While I agree with this reasoning in the narrow context of the appeal court decision and the scope of s. 53(2)(c), it can also be argued that Parliament has already “established a one-sided regime.” More specifically, in the case of an unsubstantiated claim, the CHRA lacks a provision providing any form of compensation for the accused.

Obviously not every complaint is valid and, pursuant to s. 53(1), if it is unsubstantiated it must be dismissed by the CHRT. The accused is not afforded an additional remedy under the CHRA and considering potential legal costs and associated stresses, a successful challenge is likely a hollow victory.

Conclusion

Authorizing the CHRT to award legal costs to successful complainants under s. 53(2)(c) will only further imbalance the CHRA regime. If a complainant is able to obtain expenses, including costs, on a substantiated complaint, the accused should be afforded similar compensation when one is unsubstantiated. As a possible legislative compromise, if it is determined that the unsubstantiated complaint was made in good faith, the CHRC should be responsible for the compensation, not the complainant.