Legally Speaking with Michael Mulligan

Settlement exception for family mediation, award for dismissal of Caucasian employees and ex-pizza partner competition

December 31, 2021 Michael Mulligan
Legally Speaking with Michael Mulligan
Settlement exception for family mediation, award for dismissal of Caucasian employees and ex-pizza partner competition
Show Notes Transcript

This week on Legally Speaking with Michael Mulligan:

Mediation efforts to resolve civil or family disputes are typically treated as being confidential and can’t be referred to if the case winds up in court. The reason for this is to permit candid discussions and compromise that result in disputes settling before going to trial.

A recent Supreme Court of Canada case considered the admissibility of a “summary of mediated agreement” that was prepared following the mediation of a family law dispute. This summary was prepared by the mediator and, while not signed by either party, was adhered to by each of them for more than a year.

Eventually, the mother in the family dispute decided to go to court to ask for more money than what was agreed to in the mediation. The father in the dispute asked that the agreement reached in the mediation be enforced.

Ultimately, the Supreme Court of Canada concluded that the concept of a “settlement exception” applied to the summary of mediation agreement and the father was entitled to rely on it in court. The decision is intended to promote mediation as a means of resolving family law disputes by permitting the parties to rely upon agreements reached in this way.

Also, on the show, a judicial review of a BC Human Rights Tribunal decision is discussed. The unsuccessful judicial review involved a resort and spa that was purchased by a man from Hong Kong. The new owner was found to have made comments including that there were “too many white people” working at the resort, and that if hired Chinese employees because he believed they would not ask for overtime pay or pay for statutory holidays.

Eight former Caucasian employees who lost their jobs brough the claim on the basis that they were desecrated against based on their race.

One former employee also brought a successful claim based on discrimination based on sex because the new owner took her on a business trip to Hong Kong, where he booked a single hotel room for them to share after taking her though a market that sold sex toys.

The judicial review, brought by the spa owner, was unsuccessful because he couldn’t demonstrate that the findings of the tribunal were patently unreasonable.

Finally, on the show, a dispute between two former business partners who owned Kwantlen Pizza Sweets & Snacks is discussed.

When the former business partners decided to separate, they came to an agreement to divide their business interests into two parts and then draw lots to determine which of them would get which part of the business. The agreement also provided that the former partner who didn’t get the Kwantlen Pizza part of business couldn’t open another Kwantlen Pizza within 4km.

Sometime after the separation a “Kwantlen Pizza & Curry House” was opened a short distance from the Kwantlen Pizza Sweets & Snacks location.

The former business partner who received the original Kwantlen Pizza Sweets & Snacks business brought a successful application for an interim injunction to prohibit his former business partner from being involved with Kwantlen Pizza & Curry House, despite a claim that this restaurant was being operated by his brother.

Follow this link for a transcript fo the show and links to the cases discussed. 

Legally Speaking Dec 30, 2021

Adam Stirling [00:00:00] Want to welcome Michael Mulligan barrister and solicitor with Mulligan Defence Lawyers, Legally Speaking on CFAX 1070, Michael, good morning. 

Michael T. Mulligan [00:00:07] Good morning. Always great to be here. 

Adam Stirling [00:00:09] Lots of interesting things on the agenda today. I know you and I have discussed family law matters in the past and how emotionally charged they can understandably be. Our first story deals with confidentiality during mediation sessions. How does all that work? 

Michael T. Mulligan [00:00:24] Yes, indeed. And I must say the family law bar has been, I think, run off its feet over the course of the pandemic. People wind up deciding that they can't stand the person they've been cohabiting with or locked down with the various points in time. 

Adam Stirling [00:00:44] Indeed. 

Michael T. Mulligan [00:00:44] So there's been a lot going on there. But this was a decision from the Supreme Court of Canada dealing with an issue concerning the confidentiality of mediation proceedings. And the idea there is that when there's a legal dispute, often there'll be all kinds of efforts to try to resolve the dispute prior to going to court. And happily, those things usually work. It's only a small percentage of civil or family disputes that eventually wind up in the courtroom, and it's a function of lawyers and others doing their job, resolving cases right. And usually, if you can come to an agreement, both parties are going to be happier than the win or loss in a courtroom that you don't have the same degree of control over. And you'll see that if you have a civil litigation or family case going on, you'll often see the lawyers writing back and forth to each other, writing 'without prejudice' at the top of a letter. 

Adam Stirling [00:01:49] Yes. 

Michael T. Mulligan [00:01:50] What they're saying there is, look, it's an effort to try and resolve the case, have a frank discussion about it, but the offers and counteroffers can't just be then used in court. You can't stand up and say, aha, you know, you'd agree to this or that in the negotiations, you shouldn't get more trial if it eventually gets there. And that's important to give space so people can have a frank discussion about things, usually works. 

Adam Stirling [00:02:14] Yes. 

Michael T. Mulligan [00:02:15] Well, in family law cases, one of the trends over the years has been to try to make additional use of mediation rate with a professional mediator. Sometimes parties without lawyers even right, collaborating with a mediator, trying to come up with an agreement that satisfactory to both of them. And that's what this case that eventually went to the Supreme Court of Canada started with. And the parties who have been common law spouses for three years, they had two children. They separated and then they engaged in a process of mediation with a professional mediator, which eventually produced an agreement, and the mediator drew it up and entitled it the summary of mediation agreements. And then the parties went on their way. They interestingly, didn't sign that or enter into a contract or court order reflecting the agreement. But these are sort of accepted. It is the agreement. And for two years, the father paid the mother support and so on in accordance with the mediated agreement. Then, after a couple of years in 2014, the mother in this case decided that she wanted more money than what was provided for in the mediated agreement. And so, she went to court asking for an order for more money. And the father, his response was: Well, hold on. We've come to an agreement. There was a mediated agreement. Look, here is the agreement right? 

Adam Stirling [00:03:49] Yes. 

Michael T. Mulligan [00:03:50] And the mother objected to it, saying, hold on you can't talk about that, that was part of a mediation. And so, the issue that went all the way to the Supreme Court of Canada is how far does that privilege go? Is that mediation agreement something which is not admissible in court? Should it be kept secret because it really just part of an effort to negotiate something? And ultimately, the Supreme Court of Canada sided with the father, here, and found that the mediation agreement drawn up by the mediator, that both parties had accepted, even though they hadn't formalized it for a period of two years, was an exception to that privilege or confidentiality and an exception referred to as the settlement exception. 

Adam Stirling [00:04:41] Hmm. 

Michael T. Mulligan [00:04:41] And the idea there is that once you've come to a written agreement in the mediation or negotiation of both parties have agreed to it. If you were prevented from being able to prove that you've come to the agreement, well, then it doesn't really have much meaning at all, does it? Right. 

Adam Stirling [00:04:58] Yeah. 

Michael T. Mulligan [00:04:59] And so, they found that even though it's important that there be confidentiality of secrecy surrounding efforts to negotiate things or mediate things, right, that's what allows for a frank discussion and somebody says, Hey, I'll give you the Wagon Wheel coffee table if you'll give me the Pinto or, you know, whatever the negotiation might involve. 

Adam Stirling [00:05:18] Yes. 

Michael T. Mulligan [00:05:19] Once you come to an agreement at that point, there is an exception to that kind of privilege. And so here the father was able to prove the nature of the agreement. Here it is. It's in writing. It was written up by the mediator, and both parties had adhered to it for two years. And so even though it wasn't signed off on, or drawn up in a separate contract, it was permissible for the father to rely upon it. And I should say there are some other exceptions to all of this. For example, when you have agreements dealing with things like the arrangements made for the care and support of children, there are circumstances where those things need to be reviewed and signed off on by a court to make sure that the children are adequately taken care of right in all of this. 

Adam Stirling [00:06:14] Yes. 

Michael T. Mulligan [00:06:15] But the point here is that there is that kind of privacy to allow mediation and to allow negotiations to go on. But once you get to the point where there is actually an agreement, then that's an exception to it. And if they're one of the parties later comes forward and says, I want to pay more, I want to be less or I want to change this, somehow the other party would be permitted to prove that, hey, we came to an agreement. And that's a different thing. And this is the term. These are the terms of it, which is a different thing from trying to stand up and wave around some offer that was made in an effort to come to an agreement where that didn't happen. And so that's the concept of the settlement exception in the Supreme Court of Canada has made clear that that doesn't undermine that process. And in fact, it's in the broad public interest that people be encouraged to participate in things like mediation to come to an agreement of what can be, often a pretty emotionally charged disagreement. And if you can come to a mediated arrangement that's ordinarily in everyone's best interest, and once you've done that, it's possible to prove it to try to make that enforceable. 

Adam Stirling [00:07:28] And indeed, and especially in family law, having one's private affairs aired for all to see in a court of law. I would imagine, is uncomfortable, even at the best of times. 

Michael T. Mulligan [00:07:38] Certainly right. And particularly in a case like this where there are two children involved. 

Adam Stirling [00:07:43] Yes. 

Michael T. Mulligan [00:07:43] You know, much better if the two adults are able to, with some help, come to an agreement rather than spending time and money litigating it and having some order made and so on so that it doesn't become the central preoccupation of these children's lives going forward. And so, I think it is also, broadly speaking, a pretty positive development that there are so many additional efforts made to try to mediate disputes of that kind. We're doing that in B.C. as well. It's not always going to work, but it has a pretty good rate of success. And I think this decision will be supportive of all of those efforts very well. 

Adam Stirling [00:08:23] Let's take our first break here because we have a couple of very interesting cases that I do want to get to. Coming up in just a moment as we continue Legally Speaking on CFAX 1070 with Michael Mulligan back after this. 

[00:08:33] COMMERCIAL. 

Adam Stirling [00:08:33] All right back to Legally Speaking here at CFAX 1070 extensively with Michael Mulligan for Mulligan Defence Lawyers. Up next, Michael, the Human Rights Tribunal in award against a resort and spa involving judicial review. This is complicated. Set this up for us. 

Michael T. Mulligan [00:08:48] Yes, I think we do manage to complicate things once in a while in this profession, don't we? So, this was the basics of this was a resort and spa from up around 108 Mile House, and the spa there was purchased by a man from Hong Kong. And then a number of employees there were effectively dismissed, and it resulted in this human rights complaint that they were dismissed on the basis of their race and also an allegation that one of them was discriminated against based on sex. 

Adam Stirling [00:09:28] hmm. 

Michael T. Mulligan [00:09:28] The racial allegation was an interesting one. The employees who were effectively dismissed, all identified as being Caucasian. 

Adam Stirling [00:09:39] hmm. 

Michael T. Mulligan [00:09:39] And the allegation was that that is why they were fired, and they brought this claim based on statements made by the man who purchased the resort and spa. And the tribunal found that indeed, the man who purchased the resort and spa said various things, including that there were too many white people working in the resort. 

Adam Stirling [00:10:02] hmm. 

Michael T. Mulligan [00:10:02] That if he wanted to hire more Chinese students, he wished to hire more Chinese people to work there because they worked harder and didn't ask for overtime pay, and that he believed that if you hired Chinese employees on a salary, he did not need to pay them for overtime or statutory holidays. 

Adam Stirling [00:10:25] hmm. 

Michael T. Mulligan [00:10:25] And so that is what he proceeded to do was essentially work out the Caucasian employees to replace him with Chinese employees thinking that he could pay them less, not pay them for statutory holidays and so forth. And that was the basis for the claim from, one, two, three, four, five, six, seven, eight, of the people who worked at the resort and spa or did work at the resort and spa. One of the employees also brought a complaint that she was discriminated against because of her sex on the basis that the new owner had her come on a business trip to Hong Kong. Why you would from a resort and spa, a 108 Mile House, have a business trip to Hong Kong isn't explained, but indeed they did that. And then when she showed up there, she alleged that he walked her through a market that she originally said sold mainly sex toys. 

Adam Stirling [00:11:21] Oh dear. 

Michael T. Mulligan [00:11:21] and then showed up at a hotel room to find out that he'd booked one hotel room for the both of them. The employer argued that the decision to believe her was unreasonable because on cross-examination, she admitted that only 20% of the things sold at the market were sex toys. But that didn't get too far on the judicial review. 

Adam Stirling [00:11:43] No, I don't imagine it would. 

Michael T. Mulligan [00:11:46] No. So, the tribunal made an award for all of the dismissed Caucasian employees and as well for the female employee who had this treatment in Hong Kong, and then the owner of the resort sought, as you mentioned, a judicial review of that. And a judicial review is going to court Supreme Court asking that the B.C. Supreme Court review that what amounts to an administrative decision? Right. Because the decision of the Human Rights Tribunal would be sort of like other administrative decisions that might be made by the government, right. Anything from whether to approve construction of a house to whether to issue you a driver's licence or all of those kinds of decisions that are made on a daily basis are subject to a judicial review for the court to assess whether the decision was reasonable or standard with the law. 

Adam Stirling [00:12:45] Okay, yeah. 

Michael T. Mulligan [00:12:46] So the spa owner was arguing that these decisions were all unreasonable. Interestingly, he did not provide a transcript of the evidence at the hearing, which was a, I think, a pretty significant impediment for his effort to establish that the tribunal's decisions were unreasonable. He would, of course, have the burden of showing that. 

Adam Stirling [00:13:09] Yeah. 

Michael T. Mulligan [00:13:10] The judge, however, pointed out that on a judicial review was not a matter of just asking the judge, well, what would you have done? You would need to show that, for example, there was no evidence to support decisions that were made or that the decisions that were made were unreasonable ones. And so, for example, on the claim of discrimination based on sex, the owner of the owner of the spa said, well, you know, look, she said most of the things in the market we walked through were sex toys. And then she acknowledged that only 20% of them were sex toys. Therefore, you know, she shouldn't have been believed. But on a judicial review, the judge looking at it needs to ask themselves: look, could you reasonably have come to the conclusion or accepted that witness's evidence? Not Do I accept it right? 

Adam Stirling [00:14:00] Yes. 

Michael T. Mulligan [00:14:00] Or does this judge accept it? And so, for that reason, that ground, for example, and the other arguments made on the judicial review application were unsuccessful. And so, the net result is that the award of discrimination based on the racial background of the former employees and the sex of the employee who was taken on a business trip to Hong Kong, were upheld and the spa will be responsible for paying the damages. As the judge pointed out, there may be additional damages as a result of the wrongful dismissal of the employees, which would be a separate thing from the Human Rights Tribunal Award that would be able to award damages for the breaches of the Human Rights Code. Right. So, there may be more to come. But there it is, so you can't have an employer fire all of your employees based on their race thinking, you may be able to get employees that won't complain about a failure to pay them overtime. That's not on. 

Adam Stirling [00:15:15] I just I can't believe it. It's like, is it? Is it permissible to fire employees, specifically so you could hire ones that you plan to break labour law with respect to...? Like, I just it's just bonkers, but it is what it is I guess. 

Michael T. Mulligan [00:15:29] That's a no no in the human affairs, right? 

Adam Stirling [00:15:32] No, no. The endless complexity. Also, I would imagine the endless complexity of the style of causes or styles of cause or the label on a case because the next one's sort of interesting. It’s, am I reading this right: Kwantlen Pizza, Sweets and Snacks versus Kwantlen Pizza and Curry house. So, I'm quite as memorable as a movie like Kramer vs. Kramer, but it certainly does attract one's attention. 

Michael T. Mulligan [00:15:57] Yeah, you're exactly right. And the background of this was started with Kwantlen Pizza, which not surprisingly sold pizza. And there were two people who were partners in that business. And after a number of years, they decided to separate and go their own ways. From a business perspective, the way they did that was an interesting one. 

Adam Stirling [00:16:22] mm-hmm. 

Michael T. Mulligan [00:16:23] The pizza business had also developed a, I guess, a sideline of selling sweets and snacks. And so, these business partners who were separating decided this was maybe not a bad way to do it. It's kind of the cutting the cake method of fairness. What they did is they decided to come to an agreement in terms of two portions of the business, that would be a fair division of what they thought the different parts of the pizza and sweets business would be. And once they come to an agreement on two parts of it, that would be equal, the agreed that they would draw lots. And that would randomly determine which of the two of them would each get the respective parts of the business. So, so all good so far. 

Adam Stirling [00:17:10] mm-hmm. 

Michael T. Mulligan [00:17:10] They do that. One of them gets the Kwantlen pizza, the other gets the sweets part of it. But the agreement also contained a provision saying that the each of them would be prevented from opening up a competing store using the same name within four kilometers of the existing locations. Right? 

Adam Stirling [00:17:32] Okay. 

Michael T. Mulligan [00:17:33] That didn't go well, after a short period of time. Kwantlen Pizza Sweets, Sorry. Kwantlen Pizza, Sweets and Snacks owner discovered that the there was a Kwantlen Pizza in Curry House, which opened up quite close by showing up on, you know, the dine in sites and this kind of thing.. 

Adam Stirling [00:17:54] Okay. 

Michael T. Mulligan [00:17:54] Selling pizza a little cheaper. And so hence the litigation. 

Adam Stirling [00:18:00] Yes. 

Michael T. Mulligan [00:18:00] And this was an application for an interlocutory injunction to try to stop the Kwantlen Pizza in Curry House from carrying on what they were doing. The principal defence of the former business partner was that I have nothing to do with the Kwantlen Pizza in Curry House that's run by my brother, and I have nothing to do with this. It's just, you know, it just happens to be that he's using an absolutely identical label.. 

Adam Stirling [00:18:28] All his own. Yep. 

Michael T. Mulligan [00:18:29] All of his own. And so that was his principal defence. Now, the judge was obviously pretty skeptical that the brother had done this, and the former business partner had nothing to do with it. But nonetheless, that was the defence. It did lead to an interesting issue on the injunction application because part of the test for an interlocutory injunction is whether there would be irreparable harm and an assessment of a balance of convenience. 

Adam Stirling [00:19:01] Yes. 

Michael T. Mulligan [00:19:02] And in resisting the application for the injunction to stop operating Kwantlen Pizza in Curry House. Part of the argument was this is going to put me out of business. The store will have to be shut down, which the judge pointed out. Well, you're saying you have nothing to do with it. This is just your brother. This is just an injunction ordering you former business partner from carrying on Kwantlen Pizza and Curry House. This is nothing to do with your brother. And so, if indeed you have nothing to do with this, what's the problem? What harm are you possibly going to face from an injunction ordering you to stop doing this? 

Adam Stirling [00:19:39] yeah. 

Michael T. Mulligan [00:19:39] And so having pointed out that failure of logic and also having point despite the fact that the judge was concerned that the injunction might not completely stop the problem because the injunction would only have an effect on the former business partner. On the basis that you entered into this agreement after the drawing of lots, you can't have a Kwantlen pizza company within four kilometers. Interestingly, the agreement not drawn up by a lawyer at the time, didn't prevent that person from operating a Kwantlen pizza anywhere outside of four kilometers or indeed a pizza restaurant right next to the original Kwantlen Pizza, Sweets and Snacks location. But nonetheless, with all of those foibles, the judge was extremely skeptical of the business partners claim not to have anything to do with this new pizza operation. And granted the interim injunction. So, the business partner that drew the lot to take over the sweets and snacks part of the operation is prohibited, at least until trial, from continuing to operate or have anything to do with this Kwantlen Pizza and Curry House. And I suppose assuming there's he's following the order; we'll see whether the brother actually knows how to make pizza. So, there it is, endless human affairs. 

Adam Stirling [00:21:04] May we all have the confidence of the person who attempted the that has nothing to do with me, that's my brother engaging in the activity that I am enjoying from engaging in your honour. But perhaps the world would be a worse place if more of us did try things like that. So, it's good we have a legal system to sort these things out. Michael, a pleasure, as always. Happy New Year to you and yours, and we'll talk to you in a week. 

Michael T. Mulligan [00:21:23] Sounds great. Stay safe. Thank you so much. 

Automatically Transcribed on January 6, 2022 – MULLIGAN DEFENCE LAWYERS