Law Times

Law Times • sepTember 8, 2014 Page 7 www.lawtimesnews.com COMMENT Time to make human rights protections for obesity more explicit? By daVid harriS For Law Times nitially, the essential controversy on the subject of obesity as a ground for a human rights complaint centred on whether claimants must prove an underly- ing disability that in turn has caused their condition. The answer to this question appeared to turn on the particular wording of the relevant human rights legisla- tion. For example, the B.C. statute doesn't define the need for such a causal connection of an underlying medical disability, whereas Ontario's code does. The 2000 decision of the Supreme Court of Cana- da in Quebec (Commission des droits de la personne et des droits de la jeunesse) v. Montréal (City) (a case also known as Mercier) made it clear that the definition of a human rights disability could go beyond a condition showing real and actual limitations to encompass the perception of the employer that the applicant was suf- fering from a disability. As a result, we could expect a company's decision to treat an employee adversely due to obesity would readily fall into the well of perceived disability and not be depen- dent upon the need to prove an underlying medical cause regardless of the wording of the legislation. This was the experience in B.C. human rights cases, such as Hamlyn v. Cominco Ltd. and Rogal v. Dalgliesh, that embraced the concept of perceived disability prior to the Supreme Court decision in 2000. The B.C. Human Rights Tribunal once more con- sidered this issue in its 2010 decision in Johnson v. D & B Traffic Control and another, again on the basis of a perceived disability. But it did offer the view that obe- sity could be grounds for a complaint given evidence of a functional inability due to the condition. There was no suggestion of the need for an underlying dis- ability that had led to the obesity. The Canadian Human Rights Tribunal used the same issue of a perceived disability to find liability in Turner v. Canadian Border Services Agency. The Ontario code defines disability as some- thing caused by a medical issue and specifically in- volving "any degree of physical disability, infirmity, malformation or disfigurement that is caused by bodi- ly injury, birth defect or illness." The 1991 decision in Ontario (Human Rights Com- mission) v. Vogue Shoes concluded there must be a proven disability that has led to the condition of obesity. This has been the subject of some debate in Ontario. Several cases have repeated the mantra from Vogue Shoes that obesity unto itself isn't a ground for a disabil- ity complaint; however, they weren't necessarily dealing with an obesity complaint. The reference to Vogue Shoes in each instance was oblique and obiter. The Human Rights Tribunal in the 2012 decision of Lombardi v. Walton Enterprises came to the conclu- sion that obesity unto itself was within the definition of disability under the code. The Divisional Court lat- er set aside Lombardi on unrelated grounds, making the decision obiter. In addition, the provenance of the reasoning is in doubt as it relied primarily on a case interpreting the Ontario disability support program that had accepted under its statute that obesity was a disability. It also relied upon the decision of the HRTO in Ke- tola v. Value Propane Inc. that had nothing to do with an argument related to obesity. In its 2000 decision, the Supreme Court also noted that the cause and origin of the handicap, to use the term in the Quebec case before it, weren't relevant. It noted the top court had earlier stated that the particular word- ing of the relevant human rights code shouldn't define substantive rights unless it clearly showed a different intent of the legislature in question: "If human rights legislation is to be interpreted in a purposive manner, differences in wording between provinces should not obscure the essentially similar purposes of such pro- visions, unless the wording clearly evinces a different purpose on behalf of a particular provincial legislature." The door clearly remains open for an argument to interpret the wording of the Ontario code liberally in o rder to avoid the need to prove an underlying causal medical issue. Certain cases have allowed for a remedy based on sexual harassment or adverse treatment due to gender. While this argument may not be a full re- sponse to the issue in question, decisions have granted relief in specific cases. The essential framework of the argument is that the conduct that's abusive of the obese or overweight em- ployee relates to gender and hence there has been ad- verse treatment based on that ground or sexual harass- ment. All of the cases referenced show the complainant as female, which is certainly a limiting feature. Clearly these cases are filling a gap and don't repre- sent the real solution to the issue. Barry Fisher, a Toronto employment law mediator, notes "obesity, to be actionable, must be characterized as a disability rather than simply the fact that some people judge other people who weigh more than the norm dif- ferently than others. In other words, treating people dif- ferently because of their weight may be an example of lookism, which is not covered by the code." Lior Samfiru, an employment lawyer and partner at Samfiru Tumarkin LLP, says: "Perhaps matters are reconciled by operation of subsection 10(3) of the On- tario code which extends the protection of the code to those persons who are 'believed to have or to have had a disability,' consistent within the concept of a per- ceived disability as articulated elsewhere." Peter Israel of Israel Foulon LLP notes: "The inter- pretation of the Ontario code should ref lect the cur- rent view of human rights remedies as expressed by the Supreme Court in Mercier." Norm Grosman, managing partner of Grosman Grosman & Gale LLP, says the issue is deserving of a legislative revision, failing which a liberal view should prevail. Further cases will no doubt refine this issue to a level of certainty. LT David Harris, a former lawyer, is one of the authors of the new book Disability Issues in Employment Law as well as Wrongful Dismissal, published by Carswell. u SPEAKER'S CORNER Meerai Cho affair a cautionary tale about condo deposits he recent arrest and Law Society of Upper Canada discipline case involving Meerai Cho is a truly cautionary tale over absconded condominium deposits. Ontario has a statutory consumer pro- tection scheme designed to protect the deposit moneys of prospective purchasers buying preconstruction condominiums. That said, most real estate lawyers believe this deposit protection is simply the $20,000 coverage automatically available for all new construction condominiums from Tarion Warranty Corp. under the Ontario New Home Warranties Plan Act. This Cho case reminds real estate law- yers the Tarion warranty is but one source of statutory deposit protection. Section 81 of Ontario's Condominium Act also pro- vides an additional form of deposit protec- tion coverage by requiring the payment of all deposit moneys directly to a lawyer who, in turn, must keep the funds in a trust ac- count until closing. Regulations promul- gated under the Condominium Act also permit a very limited number of non-lawyer professional escrow agents to act as deposit holders. But the deposit holder under s. 81 of the Condominium Act is almost invariably a lawyer who then usually holds the money until deposit insurance is in place. Odysseas Papadimitriou, a condomin- ium lawyer with Miller Thomson LLP's condominium law group, notes s. 81 "does not operate as supplemental insurance for the deposits but rather seeks to insulate these deposits from any potential developer insolvency by placing the de- posits into a lawyer's trust ac- count ab initio." In theory, the deposits would be safe from the developer and its creditors until the deal closes. If the deal doesn't close (other than through a de- fault of the purchasers), the law- yer would then return the de- posits to the relevant purchasers. The s. 81 deposit trust require- ments apply to commercial and residential condominiums. But along comes the Centrust Develop- ment Group, a development company head- ed up by Yo Sup (Joseph) Lee. Centrust had ambitious plans for a mixed-use condomin- ium project on Yonge Street at the north end of Toronto. Centrust retained a local lawyer, Cho, to act as deposit trustee under s. 81 of the Condominium Act for all of the com- mercial presales at the Centrium develop- ment. She collected upwards of $15 million in such deposits and deposited them into her bank account. As these stories all too often go, Centrust then ran into financial difficulties with the Centrium project even- tually sold under power of sale. When the relevant Centrium purchas- ers turned to Cho for the return of their respective deposits, they were shocked to learn Cho had prematurely released the funds to Lee, who had by that time al- ready skipped town and was presumably living the life of Riley in Korea. Since Law Times first reported on this matter on Aug. 25, police have arrested Cho and charged her with 75 counts including fraud and breach of trust. The disciplinary actions against Cho to date have all been interlocutory in nature and presumably further details and explanations will come out in the substantive discipline ac- tions that are likely to follow. Regardless of what the outcome of any disciplinary proceedings brought against her may ultim- ately be, her treatment of the Centrium de- posits has already resulted in relatively dire professional consequences for her. As of last week, she had just lost an interlocutory mo- tion seeking to bar her from the practice of law and she had already lost a much-earlier motion preventing her from dealing with bank trust accounts. Nevertheless, s. 81 of the Condomini- um Act has left the prospective purchas- ers of the Centrium units holding the bag. Cho has since declared bankruptcy and there's presumably no prospect of recovery for any of the purchasers from the bank- rupt's estate. The law society may eventu- ally discipline Cho, but anything that hap- pens to her personally and professionally will be relatively cold comfort to the many local purchasers whose life savings were in those deposits. According to Brian Kwan, a well-known local solicitor with a busy practice near the ill-fated Centrium proj- ect, "many of the victims are from the local Chinese-Canadian and Korean-Canadian communities, and most of them can ill afford the loss of these deposits." There are lessons the real estate bar can take away from the mess. The trust require- ments under s. 81 of the Condominium Act create a fiduciary relationship between the developer's own lawyer and the slew of purchasers who are otherwise technically adverse in interest to the builder. In fact, this dual role creates an inherent conf lict for solicitors: on the one hand, they have the usual duty of loyalty to the developer who retained them; but on the other hand, the lawyer also has a fiduciary duty to the pur- chasers as deposit trustee under s. 81. Where the two fiduciary obligations collide (as they presumably did when Lee reportedly instructed Cho to transfer the $15 million in accumulated deposits to him), then the statutorily imposed fiduciary obligations under s. 81 are paramount. Another direct result of the Cho case may be a f light to legal quality by develop- ers. While any solicitor can act as a deposit holder under s. 81, Cho's actions in this case may have driven developers away from lesser-known lawyers for condominium projects. More sophisticated purchasers will now likely be more aware of the fragility of the protection actually offered by solicitors' trust accounts and developers will probably seek out better-known solicitors merely for their reputational values in order to accom- modate more discriminating buyers. LT Jeffrey Lem is an editor-in-chief of Real Property Reports and a certified specialist in real estate law. I T The Dirt Jeffrey Lem Jeffrey Lem

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