COURT OF APPEAL FOR ONTARIO

CITATION: Peel Law
    Association v. Pieters, 2013 ONCA 396

DATE: 20130613

DOCKET: C55734

Cronk, Juriansz and Pepall JJ.A.

BETWEEN

Peel Law Association and Melissa Firth

Applicants (Respondents)

and

Selwyn Pieters and Brian Noble

Respondents (Appellants)

Mark J. Freiman and Lucas E. Lung, for the respondents

Geri Sanson, for the appellants

Joseph Osuji, for the intervener Just Society Group

Ranjan K. Agarwal, Christiaan A. Jordaan, and Jessica
    E.R. Weiss, for the intervener South Asian Legal Clinic of Ontario

Anthony Griffin and Sunil Gurmukh, for the intervener
    Ontario Human Rights Commission

Anita Bromberg and Marvin Kurz, for the intervener
    League of Human Rights for Bnai Brith Canada

Margaret Leighton and Andrea A. Cole, for the
    intervener, Human Rights Tribunal of Ontario

Heard: December 18 - 19, 2012

On appeal from the order of the Divisional Court (Justices
    Sandra Chapnik, Peter B. Hockin, and Alexandra Hoy), dated February 13, 2012,
    with reasons reported at 2012 ONSC 1048 (CanLII), setting aside the decision of
    the Human Rights Tribunal of Ontario, dated December 3, 2010, with reasons
    reported at 2010 HRTO 2411 (CanLII).

Juriansz J.A.:

A.

FACTS

[1]

This is an appeal from an order of the Divisional Court quashing a
    decision of the Human Rights Tribunal of Ontario (HRTO).

[2]

On May 16, 2008, the appellants, Mr. Pieters and Mr. Noble (the first
    appellant and the second appellant) were counsel in a proceeding at the
    Brampton Courthouse. They were not gowned. Both of the appellants, and the
    articling student who was accompanying them, are black. Both the first
    appellant and the articling student have dreadlocked hair.

[3]

During a break, they went to the lawyers lounge operated by the
    respondent, Peel Law Association (PLA), with some of the other lawyers
    involved in the proceeding. According to PLA policy, only lawyers and law
    students are permitted to use the lounge, robing room, and library. Signs to indicate
    that are posted. The personal respondent, Ms. Firth, is the librarys
    administrator (the librarian) with primary responsibility for enforcing this
    policy. She approached the appellants and the articling student and asked them
    to produce identification to show they were lawyers or law students. She did
    not ask to see the identification of anyone else in the lounge.

[4]

The appellants brought applications
[1]
to the HRTO alleging an infringement of their rights under s. 1 of the
Human
    Rights Code
, R.S.O. 1990, c. H.19 (the Code) to equal treatment with
    respect to services, goods and facilities without discrimination because of
    race and colour. Vice-Chair Whist was appointed to hear the case. The Vice-Chair
    found their rights had been infringed and awarded each appellant $2000 for
    injury to his dignity.
[2]

[5]

The Divisional Court allowed the respondents application for judicial
    review and quashed the Vice-Chairs decision.

[6]

The appellants were granted leave to appeal to this court.

B.

Decisions below

(1)

Decision of the Vice-Chair
    of the Human Rights Tribunal of Ontario

[7]

The Vice-Chair recognized that the issue he had to decide was whether
    there was a sufficient basis to conclude the applicants race and colour was a
    factor in the personal respondents decision to approach and question the
    applicants in the manner that she did.

[8]

In setting the context, the Vice-Chair found that controlling access to
    the library and lounge was an ongoing organizational concern for the PLA. He
    was satisfied that PLA staff, especially the librarian, regularly asked
    persons to confirm whether they were lawyers, articling students or students of
    law in order to determine whether they were admissible to the lounge and
    library. He was further satisfied that the personal respondent routinely
    carried out this function and that this was a function clearly mandated to her
    as Librarian/Administrator under the PLAs Policy.

[9]

On the morning of May 16, one of the librarys employees noticed that
    the furniture just outside the library door had been rearranged and had seen
    the furniture occupied by five or six people. The librarian asked the employee to
    advise her if she saw these people again.

[10]

At
    about 11 oclock a second library employee observed a female in the robing room
    she did not recognize and asked the personal respondent to check the
    identification of this woman. As well, the first employee advised the
    librarian that she believed that she recognized the persons who had moved the
    furniture from earlier that morning and that they were sitting in the lounge
    area just outside the library doors.

[11]

The
    librarians route to the robing room to check the identification of the woman
    there took her through the lounge. Upon entering the lounge she stopped to
    question the appellants and the articling student, leading to the encounter
    that is the subject of the appellants human rights application.

[12]

The
    librarian testified that she did not ask the first appellant for
    identification. She said that she did not speak directly to the first appellant
    because she recognized him. She said she questioned only the two persons with
    him. Based on this testimony, the respondents argued before the Vice-Chair that
    her questioning only two of the men showed the questioning could not have been
    racially motivated.

[13]

The
    Vice-Chair, after a careful review of the testimony of witnesses including
    other lawyers who witnessed the encounter, found that the librarian initially engaged
    the first appellant. He found that after the first appellant produced his
    identification, the librarian then turned to the second appellant and the
    articling student and asked for their identification. The first appellant identified
    them as his staff and the librarian stated she would check their identification
    nonetheless. The Vice-Chair held that the librarians testimony on this point
    undermined the credibility of her explanations generally.

[14]

The
    Vice-Chair found as a fact that the manner in which the personal respondent
    asked her questions and interacted with the applicants was aggressive and
    demanding. He noted that, without introducing herself, she interrupted the
    first appellant while he was on the telephone. While noting that her requests
    of individuals to produce identification in the past had included instances in
    which there had been difficulties, he concluded from the evidence of how she
    generally carried out this function, including her own evidence, that the way
    in which the personal respondent approached the applicants and the blunt and
    demanding manner in which she asked her questions was not how she would
    approach and question persons that she imagined were lawyers and had a right to
    be in the lounge.

[15]

The
    Vice-Chair found that when asked why she was not checking the identification of
    other people in the room she claimed she knew everyone else in the lounge was a
    lawyer. In fact, the evidence established that there were two other people in
    the lounge who had never been there before and who the librarian did not know.
    One was not a lawyer.

[16]

The
    Vice-Chair concluded that there were sufficient facts to support a
prima
    facie
case of discrimination and required the respondents to provide a
    valid explanation that showed that the appellants race and colour were not
    factors in the librarians questioning them. He found that the only explanation
    provided had been proven false. He remarked that the respondents have failed
    to provide a credible and rational explanation for why the personal respondent
    stopped to question the applicants when she did and drew the inference that
    the decision to question them was, in some measure, because of their race and
    colour.

[17]

The
    Vice-Chair went on and drew the additional inference that the manner in which
    the respondent questioned the appellants was also tainted by their race and
    colour.

[18]

As
    mentioned, the Vice-Chair found the appellants rights under the Code had been
    infringed and awarded each of them $2000 compensation for the injury to their
    dignity.

(2)

Decision of the Divisional
    Court

[19]

The
    Divisional Court concluded that the Vice-Chair made two main errors that
    warranted quashing his decision:

i)

finding
    that a
prima facie
case of discrimination had been made out when there
    was an insufficient evidentiary basis to do so; and

ii)

improperly
    reversing the burden of proof, placing an impossible onus on the respondents to
    disprove discrimination.

[20]

The
    Divisional Court recognized that the highest degree of deference should be
    awarded to the Vice-Chair in respect of determinations of fact and the
    interpretation of human rights law.

[21]

The Court relied on this courts decision in
Ontario (Director,
    Disability Support Program) v. Tranchemontagne
, 2010 ONCA 593, 102 O.R. (3d) 97, for the proposition that a
prima
    facie
case test involves establishing
    substantive discrimination and...demonstrating a distinction that creates a
    disadvantage by perpetuating prejudice or stereotyping.

[22]

The Court then stated
    that [i]f [the applicant] establishes a distinction, he or she must then
    establish that there is a causal link or nexus between the distinction that
    imposes a disadvantage and a prohibited ground. The Court set out the
    following elements an applicant is required to prove to establish a
prima
    facie
case of discrimination:

a)

a distinction or
    differential treatment;

b)

arbitrariness based on
    a prohibited ground;

c)

a disadvantage; and

d)

a causal nexus between
    the arbitrary distinction based on a prohibited ground and the disadvantage
    suffered.

[23]

The
    Divisional Court observed that it is only after a
prima facie
case is
    made out that the onus shifts to the respondent to provide a non-discriminatory
    explanation for the conduct in question. The Divisional Court reasoned that the
    Vice-Chair had made findings of fact that were inconsistent with his conclusion
    that a
prima facie
case had been established. Consideration of all the
    evidence showed there was an insufficient basis to conclude a
prima facie
case had been made out.

[24]

First,
    the Court observed that it was a fact that the appellants were seated closest
    to the door through which the librarian entered and this was clear evidenceas
    to why [the librarian] approached the complainants for identification rather
    than anyone else. The Court reasoned, Accordingly, they were the first
    persons she would have encountered when she stopped in the lounge on her way to
    the robing room.

[25]

Second,
    the Vice-Chairs finding that the personal respondents focus was on the first
    appellant during the encounter was a credible explanation for the fact that
    she did not check the identification of other persons in the lounge.

[26]

Third,
    the Vice-Chair made a mistake by relying on the fact that the librarian
    interrupted her trip to the robing room. It was a mistake because the Vice-Chair
    had accepted evidence that she regularly checked both areas. The librarians
    duty to enforce the policy in both areas had to be kept in mind when evaluating
    her actions. Therefore, stopping on the way to the robing room to question the appellants
    could not support an inference of differential treatment.

[27]

Fourth,
    there was conflicting evidence as to whether the librarians demeanour was
    aggressive at the time.  Even if it was, this does not establish differential
    treatment as the Vice-Chair had found that her identification requests of
    others had at times led to difficulties. That this incident was contentious was
    not enough to establish differential treatment.

[28]

Fifth,
    the Divisional Court concluded that the finding that a
prima facie
case
    existed without a proper evidentiary foundation had the effect of reversing the
    burden of proof by calling upon the respondents to prove there was no
    discrimination. This placed the librarian in the difficult position of trying
    to prove a negative, that she was not

motivated by the appellants race
    and colour.

[29]

Sixth,
    the Divisional Court found that the Vice-Chairs reliance on police profiling
    cases to infer a nexus between the appellants race and colour and their
    treatment was misconceived.

[30]

Finally,
    the Divisional Court observed that the Vice-Chair had failed to resolve
    important issues of credibility. Given that the Vice-Chair had made a negative
    finding about the librarians credibility, he should also have resolved the
    credibility issues related to the first appellants conduct and whether the appellants
    were aware of PLAs policy restricting the lounge to lawyers.

[31]

The
    Divisional Court concluded that the evidence did not even meet the threshold of
    differential treatment and quashed the Vice-Chairs order without remitting the
    matter. The Court awarded the respondents $20,000 in costs.

C.

Positions of the Parties

(1)

The Appellants

[32]

The
    appellants argue that the Divisional Court departed from its proper role on
    judicial review and in effect applied a
de facto
correctness standard
    of review. The Divisional Court, the appellants submit, disregarded the
    findings of fact and determinations of credibility of the Vice-Chair and
    engaged in a whole scale reassessment of the evidence before the Vice-Chair. They
    also relied on explanations for the personal respondents conduct that were not
    advanced at the hearing. Although the Divisional Court correctly identified the
    standard of review as reasonableness, it did not apply it. The legislature intended
    that decisions of the HRTO should be accorded the highest degree of deference. Section
    45.8 of the Code provides:

Subject to section 45.7 of this Act, section 21.1 of the
Statutory
    Powers Procedure Act
and the Tribunal rules, a decision of the Tribunal is
    final and not subject to appeal and shall not be altered or set aside in an
    application for judicial review or in any other proceeding unless the decision
    is patently unreasonable.

[33]

The
    appellants submit that the Divisional Court applied an incorrect test for
    determining discrimination, one which is contrary to well-established human
    rights jurisprudence and to this Courts decision in
Shaw v. Phipps
,
    2012 ONCA 155, 289 O.A.C 163.

[34]

The
    appellants also submit that the Divisional Court erred by finding the Vice-Chair
    had reversed the burden of proof. Once the applicant establishes discrimination
    on a balance of probabilities in accordance with the proper
prima facie
test, the evidentiary burden, not the burden of proof, shifts to the respondent
    to provide a rational and credible non-discriminatory reason for its action.
    This is not a reversal of the legal onus to prove discrimination, which always
    rests with the applicant.

[35]

The
    appellants advance the argument, in the alternative, that the Divisional Court
    should have declined to hear the respondents application for judicial review because
    it was premature. The respondents failed to apply to the HRTO under s. 45.6(7)
    of the Code for a reconsideration of the Vice-Chairs decision.

(2)

The Respondents

[36]

The
    respondents recognize the high degree of deference to be accorded to a human
    rights tribunal generally. However, they submit that in this case the Divisional
    Court properly interfered with the Vice-Chairs conclusion because the Vice-Chair
    erred both in finding the appellants had established a
prima facie
case and in finding that there was a nexus between the respondents conduct and
    the appellants race and colour. Both of these errors were largely due to the Vice-Chairs
    compartmentalized analysis of the evidence. This led the Vice-Chair to make
    illogical findings of fact that were not supported by the entire body of
    evidence.

[37]

The
    respondents submit that this court made clear in its decision in
Shaw
that the concept of a
prima facie
case was not intended to introduce a
    compartmentalized analysis of the evidence. They submit that this Courts
    decision in
Shaw
means that the Vice-Chair must consider all the
    evidence at every stage of his analysis. Here, they argue, the Vice-Chair
    refused to consider the respondents evidence in determining whether there was
    a
prima facie
case. Then, when considering whether the
prima facie
case was rebutted, the Vice-Chair refused to consider any explanation that was
    not advanced by the personal respondent herself.

[38]

They
    submit that evidence led by the appellants and by witnesses other than the
    librarian disclosed non-discriminatory reasons for the librarian selecting the
    appellants for questioning. Specifically, the Vice-Chair failed to consider the
    fact that the appellants were seated closest to the door from which the
    librarian entered the lounge. This fact provides an explanation why she
    approached them for identification. As well, the Vice-Chair did not consider
    the evidence that a library staff member had told the librarian that she
    believed that the persons who had moved the furniture earlier that morning were
    sitting in the lounge area just outside the library doors. The Vice-Chair did
    not consider this as an explanation because, as the respondents counsel put
    it, it did not come out of the mouth of the librarian.

[39]

Second,
    the respondents submit that the evidence does not support a finding of a nexus
    to the appellants race and colour. They submit that the Vice-Chairs finding
    of a nexus to race and colour in this case was based solely on the Vice-Chairs
    resort to social science evidence introduced in another case involving racial
    profiling by a police officer.

[40]

The
    respondents argue that the Vice-Chairs use of social science not in evidence before
    him made the proceeding improper and unfair.

[41]

The
    respondents submit that these several errors by the Vice-Chair provided the Divisional
    Court with an ample basis to interfere. The appeal should be dismissed.

D.

Interverners positions

(1)

Human Rights Tribunal of Ontario (HRTO)

[42]

The
    HRTO, quite properly, takes no position on the factual findings in this case.
    The HRTO points out that the Divisional Court in this case did not have the
    benefit of this courts decision in
Shaw
. In
Shaw,
the court
    determined that a Vice-
Chair of the HRTO

must be accorded
the highest degree of
    deference with respect to determinations of fact and the interpretation and
    application of human rights law.  A reviewing court must defer to the Vice-Chair
    unless the decision is not rationally supported.

[43]

The
    Divisional Court in this case failed to apply that degree of deference.

(2)

The South Asian Legal Clinic of Ontario (SALCO)

[44]

The
    intervener SALCO asks this court to clarify a human rights tribunals ability
    to use social framework evidence. SALCO submits that the Divisional Courts rejection
    of the Vice-Chairs reliance on social science evidence could be read to
    require that social framework evidence be proven by expert evidence in every
    case.

(3)

Ontario Human Rights Commission (the OHRC)

[45]

The
    OHRC submits that the Divisional Court applied an incorrect test for proving
    discrimination. The traditional and correct test, the OHRC submits, is stated
    in the Supreme Courts decision in
Moore v. British Columbia (Education)
,
    2012 SCC 61, 351 D.L.R. (4
th
) 451, and this courts decision in
Shaw
.

[46]

The
    OHRC also submits that circumstantial evidence and the drawing of reasonable
    inferences are often required in racial discrimination cases and such
    inferences directly engage the tribunals specialized expertise. Deference is
    owed by reviewing courts not only to findings of fact made by the tribunal, but
    also to inferences drawn from facts. The Divisional Court failed to accord such
    deference in this case.

(4)

Just Society Group

[47]

The
    intervener Just Society Group points out that two of the three black persons
    approached by the respondent wore their hair in dreadlocks. Just Society submits
    that people with dreadlocked hair experience much discrimination. Just Society seems
    to suggest the Code should be amended to include hairstyle as a prohibited
    ground of discrimination.

(5)

The League for Human Rights of Bnai Brith Canada

[48]

Bnai
    Brith makes two submissions motivated by a concern that public support for the
    Code will be substantially diminished if the public perceives that a finger
    has been placed on the scales of justice in human rights tribunal cases.

[49]

To
    guard against this eventuality, the standard of review should not be so high as
    to immunize a decision of a human rights tribunal from supervision by the
    courts. They argue that a high standard of review will allow a decision of the tribunal
    to stand, even if it is unreasonable.

[50]

Public
    support for the Code will be eroded if complainants are allowed a shortcut
    around the need to provide evidence of a nexus of discrimination between a
    complainants membership in a protected group and an unwelcome outcome. Discrimination
    should be founded not on inferences or an assumption of discrimination, but on proof.

E.

Issues

[51]

This
    is not the case to consider the appellants argument that the respondents
    judicial review application was premature. When the Code was amended in 2006,
    s. 45.6(7) was added allowing a party to request that the Tribunal reconsider
    its decision. Whether as a matter of general practice, given this new
    provision, a party should request a reconsideration of the Tribunals decision
    before bringing an application for judicial review in the Divisional Court is
    an important one. However, the appellants do not seem to have strenuously
    pressed the issue below. In this court it was but a diversion. I would leave
    the question to another day.

[52]

I
    will not discuss issues raised by the interveners that are not directly
    pertinent to the appeal of the decision of the Divisional Court. The appeal
    raises the following issues:

1)

Did the Divisional Court apply the correct test for discrimination?

2)

Did the Divisional Court err by finding the Vice-Chair reversed the
    burden of proof?

3)

Did the Vice-Chair err by analyzing the evidence in a compartmentalized
    fashion?

4)

Did the Divisional Court err by finding the Vice-Chair disregarded
    evidence?

5)

Did the Vice-Chair err by referring to social science not in evidence
    before him?

F.

Analysis

(1)

Did the Divisional Court Apply the
    Correct Test for Discrimination
?

[53]

The
    Divisional Court set out the following test for discrimination. The Court said:

In order to prove a
prima facie
case of
    discrimination, there must be evidence to support the following findings:

a.    a distinction or differential treatment;

b.    arbitrariness based on a prohibited ground;

c.    a disadvantage; and

d. a causal nexus between the
    arbitrary distinction based on a prohibited ground and the disadvantage
    suffered.

[54]

The
    Court did not indicate from where it derived this test. The term causal nexus
    does not appear in
Tranchemontagne
,
    which the
Divisional Court cited before setting out this test. The
    test is not one that human rights tribunals have traditionally applied.

[55]

The
    traditional definition was applied in
Moore
,
where Abella J. said at para. 33:

As the Tribunal properly recognized, to demonstrate
prima facie
discrimination, applicants are required to show that they have a characteristic
    protected from discrimination under the
Code
; that they experienced an adverse impact
    with respect to the service; and that the protected characteristic was a factor
    in the adverse impact. Once a
prima
    facie
case has been established, the burden shifts to the
    respondent to justify the conduct or practice, within the framework of the
    exemptions available under human rights statutes. If it cannot be justified,
    discrimination will be found to occur.

[56]

Lang J.A., in this
    courts decision in
Shaw
,
    at para. 14, said the following three elements were required to establish a
prima
    facie
case:

1. That he or she is a
    member of a group protected by the Code;

2. That he or she was
    subjected to adverse treatment; and

3. That his or her
    gender, race, colour or ancestry was a factor in the alleged adverse treatment.

[57]

Lang
    J.A. drew this formulation from the decision of the Divisional Court majority
    in
Shaw
, which was cited by the Divisional Court in this case.

[58]

Neither
    the
Moore
nor
Shaw
statements of the test use the word
    nexus. In fact, Abella J. does not use the word nexus at all in her reasons
    in
Moore
. In
Shaw
, in discussing her articulation of the test, Lang
    J.A. uses the terms nexus, connection and factor interchangeably.

[59]

While
    the word nexus is perfectly acceptable, I think it preferable to continue to use
    the terms more commonly used in the jurisprudence developed under the Code. All
    that is required is that there be a connection between the adverse treatment
    and the ground of discrimination. The ground of discrimination must somehow be
    a factor in the adverse treatment.

[60]

I
    do not think it acceptable, however, to attach the modifier causal to nexus.
    Doing so seems to me to elevate the test beyond what the law requires. The
    Divisional Courts requirement of a causal nexus or a causal link between
    the adverse treatment and a prohibited ground seems counter to the evolution of
    human rights jurisprudence, which focuses on the discriminatory effects of conduct,
    rather than on intention and direct cause.

[61]

I
    conclude that the Divisional Court erred in law by applying an incorrect and
    stricter test of discrimination in deciding this case. This error necessarily
    affected the Divisional Courts analysis of whether the evidence could
    reasonably satisfy the test for discrimination.

[62]

The
    Divisional Courts error, however, does not put an end to the respondents
    arguments. Respondents counsel, in advancing his oral argument that the
    evidence in this case did not support a nexus, was circumspect in not using
    the modifier causal.

(2)

Did the Divisional
    Court Err By Finding the Vice-Chair Reversed the Burden of Proof?

[63]

The
    Divisional Court found that the Vice-Chair reversed the onus of proof in
    finding that the facts were sufficient to require the respondents to provide
    an explanation for their actions to support their position that the decision to
    question the applicants was not tainted by race or color.

[64]

Early
    in its decision, the Divisional Court referred to the definition of a
prima
    facie
case stated by the Supreme Court of Canada in
Ontario (Human
    Rights Commission) v. Simpsons Sears Ltd.
, [1985] 2 S.C.R. 536: a prima
    facie case of discrimination is one which covers the allegations made and
    which, if they are believed, is complete and sufficient to justify a verdict in
    the applicant's favour in the absence of an answer from the respondent.

[65]

As
    respondents counsel submitted, the
prima facie
case test defines what
    is necessary to establish substantive discrimination. It is no different than
    in every other evidentiary context. Since a
prima facie
case involves
    evidence that, if believed, would establish the claim, a respondent faced with
    a
prima facie
case at the end of the claimants case must call evidence
    to avoid an adverse finding.

[66]

A
    respondent may avoid an adverse finding by calling evidence to show its action
    is not discriminatory or by establishing a statutory defense that justifies the
    discrimination.

[67]

In
    a case in which the respondents answer is reliance on a statutory defense,
    the Supreme Court, in
Ontario (Human Rights Commission) v.

Etobicoke
    (Borough),
[1982] 1 S.C.R. 202, has made clear that the burden of proof
    does indeed shift to the respondent.

[68]

In
    a case in which the respondents answer is to lead further evidence to rebut
    the inference that its action was discriminatory, only the evidential burden
    shifts.

[69]

Shaw
is an example of such a case.
Shaw
involved allegations similar to
    those in this case. In responding to the applicants evidence, the respondent
    did not seek to invoke a statutory exception but merely sought to lead evidence
    to persuade the Vice-Chair his conduct was not discriminatory. Lang J.A. said
    at para. 12,
This means that the onus lies on
    the complainant to establish discrimination on the balance of probabilities and
    that, if the complainant does so,
the evidentiary burden
shifts to the
    respondent (emphasis added).

[70]

The
    shifting of the evidential burden, as opposed to the burden of proof, is common
    in innumerable other legal contexts. For example, in criminal law, which is
    fastidious in maintaining the legal burden of proof on the Crown, accused
    confronted with evidence that they are in recent possession of stolen goods
    face the prospect of an inference of theft unless they explain how they came
    into possession of the goods. Only the evidential burden has shifted. The
    accused maintains the unquestioned right to remain silent. However, the accused
    faces the tactical choice of explaining or risking being found guilty.

[71]

Sopinka
    J. explained the difference between the burden of proof and the evidential
    burden in
Snell v. Farrell,
[1990] 2 S.C.R. 311, a medical malpractice
    case. Medical malpractice cases are an apt comparison to discrimination cases
    because as Sopinka observed at p. 322, The physician is usually in a better
    position to know the cause of an injury than the patient. At pp. 328-329 he
    said that in medical malpractice cases because the facts lie particularly
    within the knowledge of the defendantvery little affirmative evidence on the
    part of the plaintiff will justify the drawing of an inference of causation in
    the absence of evidence to the contrary. He recognized that [t]his has been
    expressed in terms of shifting the burden of proof and went on to explain why
    that is not correct. At pp. 329-330 he said:

It is not strictly accurate to speak of the burden shifting to
    the defendant when what is meant is that evidence adduced by the plaintiff may
    result in an inference being drawn adverse to the defendant. Whether an
    inference is or is not drawn is a matter of weighing evidence. The defendant
    runs the risk of an adverse inference in the absence of evidence to the
    contrary. This is sometimes referred to as imposing on the defendant a
    provisional or tactical burden. In my opinion, this is not a true burden of
    proof, and use of an additional label to describe what is an ordinary step in
    the fact-finding process is unwarranted. [Citations omitted].

[72]

And
    so it is in discrimination cases. The question whether a prohibited ground is a
    factor in the adverse treatment is a difficult one for the applicant. Respondents
    are uniquely positioned to know why they refused an application for a job or asked
    a person for identification. In race cases especially, the outcome depends on
    the respondents state of mind, which cannot be directly observed and must almost
    always be inferred from circumstantial evidence. The respondents evidence is
    often essential to accurately determining what happened and what the reasons
    for a decision or action were.

[73]

In
    discrimination cases as in medical malpractice cases, the law, while
    maintaining the burden of proof on the applicant, provides respondents with
    good reason to call evidence. Relatively little affirmative evidence is
    required before the inference of discrimination is permitted. And the standard
    of proof requires only that the inference be more probable than not. Once there
    is evidence to support a
prima facie
case, the respondent faces the
    tactical choice: explain or risk losing.

[74]

If
    the respondent does call evidence providing an explanation, the burden of proof
    remains on the applicant to establish that the respondents evidence is false
    or a pretext.

[75]

Turning
    to this case, the Divisional Courts reasoning that the Vice-Chair reversed the
    burden of proof contains two errors.

[76]

First,
    the Divisional Court lost sight of the distinction between the burden of proof
    and the evidential burden. The Vice-Chair having found a
prima facie
case existed properly looked to the respondent to provide an explanation.

[77]

Second,
    the Divisional Court went on to state that by improperly reversing the burden
    of proof, the Tribunal placed [the librarian] in the difficult position of
    trying to prove a negative, namely, that her conduct in the performance of her
    routine duties was not motivated by race or colour. The shifting of the
    evidential burden does not put the respondents in the position of having to
    prove a negative. Rather, it puts them in the position of having to call affirmative
    evidence on matters they know much better than anyone else  namely, why they
    made a particular decision or took a particular action.

[78]

I
    conclude that the Divisional Court erred in law in finding the Vice-Chair
    reversed the burden of proof.

[79]

As
    with the error with the test for discrimination, this error does not dispose of
    the respondents argument. The respondents accepted the
prima facie
case framework in which there is a shifting of the evidential burden and
    advanced the argument dealt with in the next section.

(3)

Did the Vice-Chair Err
    By Analyzing the Evidence in a Compartmentalized Fashion?

[80]

Respondents
    counsel submitted that the
prima facie
case framework was not
    intended to introduce a compartmentalized notion of evidence that approaches a
    case of discrimination like a board game. In this board game approach, the tribunal
    considers the evidence called only by the applicant to determine whether a
prima
    facie
case has been established and then turns to consider only the
    evidence called by the respondent to determine if the inference of
    discrimination has been refuted. Instead, he submits that a tribunal must
    consider all the evidence before it at every stage of its analysis.

[81]

Respondents
    counsel argues that this compartmentalized approach led the Vice-Chair in this
    case to disregard two important items of evidence in the record. These are the fact
    that the appellants were seated near the doors of the library and the fact that
    a library employee had mentioned to the librarian that she suspected the people
    who had moved the furniture earlier that morning had returned to the library
    and were seated just outside the library doors.

[82]

I
    agree with the first part of respondents counsels submissions. A
prima
    facie
case framework in the discrimination context is no different than
    that used in many other contexts. Its function is to allocate the legal burden
    of proof and the tactical obligation to adduce evidence. It governs the outcome
    in a case where the respondent declines to call evidence in response to the application.

[83]

On
    the other hand, in a case where the respondent calls evidence in response to
    the application, the
prima facie
case framework no longer serves that
    function. After a fully contested case, the task of the tribunal is to decide
    the ultimate issue whether the respondent discriminated against the applicant.
    After the case is over, whether the applicant has established a
prima facie
case, an interim question, no longer matters. The question to be decided is whether
    the applicant has satisfied the legal burden of proof of establishing on a
    balance of probabilities that the discrimination has occurred.

[84]

Nevertheless,
    in cases that have been fully contested some human rights tribunals still employ
    the
prima facie
case framework as an analytical tool to structure and
    order their consideration of the evidence. Their analysis follows the order in
    which evidence is called even though all the evidence is in. Tribunals that use
    such an approach find it useful first to satisfy themselves that the record
    contains sufficient evidence to support a finding of discrimination before
    turning to consider evidence that might counter the inference of discrimination
    or establish a statutory defense.

[85]

Respondents counsel submits that it is an error for a tribunal
    to analyse the evidence in this fashion. He relies on this courts decision in
Shaw
. He says that this court decided in
Shaw
that a tribunal could consider evidence called by
    the respondent in deciding whether a
prima facie
case has been established. Hence, he reasons, it
    follows that a tribunal, when determining whether there is a
prima
    facie
case, must consider evidence
    that would establish a non-discriminatory basis for the respondents action
    even if it is introduced by the applicant or some other witness.

[86]

First, I do not agree with counsels reading of
Shaw
. In
Shaw
this court did not
purport to regulate
    how a tribunal should proceed with its analysis of the evidence. How a tribunal
    should conduct its analysis at the end of a fully contested case was not an
    issue in
Shaw
. In
Shaw
, the court rejected the respondents contention
    that the tribunal was obliged to declare whether the
prima facie
test
    was met at the end of the applicants case and before the respondent presented
    his case. Lang J.A. rejected that contention saying at para. 28 Where, as
    here, the person alleged to have discriminated chooses to give evidence, the
    Adjudicator must decide the case based on all the evidence.

[87]

I
    would leave to tribunals how they structure their analysis of the evidence. No
    matter how a particular tribunal conducts its analysis, at the end of the day, the
    tribunal must consider all the evidence that both supports and undermines the application
    in determining whether discrimination has occurred.

[88]

The
    approach respondents counsel advocates would make the question whether there
    is sufficient evidence to support a
prima facie
case indistinguishable
    from the ultimate question whether, at the end of the day, discrimination has
    been established. Both analyses would be identical because both would consider
    all the evidence in the record. Instead of conducting the analysis twice, it
    would make better sense for the tribunal to proceed directly to the ultimate
    question whether, on the whole of the evidence, there is discrimination.

[89]

Moreover,
    it seems to me that respondents counsel attaches too much consequence to a tribunal
    concluding that a
prima facie
case has been established. A
prima
    facie
case, by definition, is capable of being answered.  If a tribunal
    using the
prima facie
case framework as an analytical tool has only
    considered the evidence supporting the application at that stage, it must
    consider all the evidence supporting a non-discriminatory basis for the respondents
    action in the next stage of its analysis. The only thing that matters is that at
    the end of the day, the tribunal must take into consideration all the evidence.

[90]

The
    question in this case, it seems to me, is not whether the Vice-Chair
    disregarded evidence at a particular stage of its analysis, but whether the Vice-Chair
    disregarded evidence before reaching his final conclusion. I turn to a
    discussion of the two items of evidence that the respondents argue the Vice-Chair
    disregarded.

(4)

Did the Divisional
    Court Err By Finding that the Vice-Chair Disregarded Evidence?

(i)

The fact that the appellants were seated near the door to the library

[91]

The
    fact that the appellants were seated near the door to the library was a fact in
    evidence before the Vice-Chair. However, neither the librarian nor any other
    witness suggested that the location of the appellants near the door of the
    library explained why the librarian selected them for questioning. In fact, before
    the Vice-Chair, the respondents did not even argue that where the appellants
    were seated was a non-discriminatory explanation for why the librarian selected
    them for questioning.

[92]

On
    judicial review, the respondents argued the Vice-Chair was obligated to
    consider the appellants location as an explanation even if the respondents had
    not asked him to do so. The Vice-Chair should have inferred that the librarian
    naturally would have questioned the appellants first because she encountered
    them first on her way to the robing room. Therefore, the Vice-Chair had no
    basis for finding there was differential treatment of the appellants. The
    effect of the argument is to require the elimination of every conceivable possibility
    before an inference of discrimination may be made.

[93]

The
    Divisional Court entertained the argument even though it had not been advanced
    before the Vice-Chair. Accepting the argument, the Court said:

Firstly, there was clear evidence, which the Vice-Chair
    accepted, as to why [the librarian] approached the applicants for
    identification rather than anyone else. In particular, that they were situated
    nearest to the door from which she entered the lounge. Accordingly, they were
    the first persons she would have encountered when she stopped in the lounge on
    her way to the robing room.

[94]

Perhaps
    this passage is carelessly worded. For the Court to conclude that the
    appellants location was why the librarian approached the appellants would be
    nothing short of fact finding. Respondents counsel did not go so far. He did
    not seek this courts affirmation that the appellants location was why the
    librarian approached the appellants but merely that it could have been. He
    recognized it was the Vice-Chairs role to weigh the evidence and draw
    inferences from it. He argued that the Vice-Chair committed reversible error by
    failing to consider and discuss material evidence that might provide a
    non-discriminatory explanation why the librarian questioned the appellants.

[95]

I
    do not accept that the Vice-Chair failed to consider the location where the
    appellants were seated. The Vice-Chair included in his reasons the fact that
    the appellants were seated in an area of the lounge just outside the doors to
    the library. Pointedly, he found as a fact that the personal respondent did
    not intend to generally check identifications in the room. This finding of
    fact forecloses the inference that the librarian questioned the appellants first
    simply because she encountered them first.

[96]

The
    Divisional Court attached significance to the Vice-Chairs finding that the
    librarians focus was on the first appellant during the encounter. The Court
    said her focus on the first appellant provides a credible explanation for the
    fact that she did not check the identification of other persons in the lounge.
    This factual observation is contrary to the Vice-Chairs finding she had no
    intention of doing so. The Vice-Chair found her focus on the first appellant
    explained only why she did not look at the identification of three other lawyers
    who had proffered theirs. This finding is in no way inconsistent with the Vice-Chair's
    more general finding that the librarian did not intend to generally check
    identifications in the room.

[97]

It
    is beyond doubt that the Vice-Chair considered the appellants location as a
    potential explanation because he commented on it specifically. He observed that
    the librarian could not generate a credible non-discriminatory reason for why
    she was questioning the applicants, for example...that she was in the process
    of questioning everyone in the lounge she did not know and was beginning with
    the applicants. On my reading of his reasons, the Vice-Chair eliminated the
    appellants location as a non-discriminatory justification because he regarded
    it as an explanation that could have been very easily given. The fact it was
    not given led him to discount it. This reasoning was open to him.

(ii)

The
    moving of the furniture

[98]

The
    respondents submit that the Vice-Chair disregarded the fact that the librarian
    was told by another library employee that she suspected the persons who had
    moved the furniture earlier in the morning had returned and were seated outside
    the library doors. Respondents counsel argues the Vice-Chair did not consider
    this fact as a potential explanation because it did not come out of the mouth
    of the librarian. Had the Vice-Chair considered this fact, he argues, the
    Vice-Chair may well have decided not to infer that the librarians selection of
    the appellants for questioning was discriminatory.

[99]

The
    Divisional Court did not discuss the moving of the furniture in any detail. The
    Court did allude to it by observing that the actions of the librarian had to be
    viewed in the context of her responsibility to enforce the PLA policy, her
    established practice to ask for identification, the incident that had occurred
    earlier that day and the fact that the applicants were the first people she
    encountered upon entering the library.

[100]

The Vice-Chair
    took all these matters into account. The Vice-Chair emphasized the larger context
    of the incident. He set out at some length that controlling access to the
    library and lounge was an ongoing organizational concern for the PLA and that
    the librarian routinely asked persons for identification in carrying out the
    duties of her position.

[101]

The Vice-Chair also
    considered and discussed the moving of the furniture earlier that morning. He
    observed that the librarian never said a reason she questioned the appellants
    was because of a concern that they may have been the persons who re-arranged
    the furniture. As I noted above, he attached much weight to the librarians
    inability to offer any credible reason for questioning the appellants and he
    was entitled to do so.

[102]

The Vice-Chairs
    analysis, however, was more nuanced than that. Improperly moving furniture and
    entering the lounge without entitlement are two different matters. Lawyers
    entitled to use the lounge can improperly move furniture. The Vice-Chair made
    the point that a suspicion the appellants moved the furniture does not explain
    why the librarian challenged their entitlement to be in the lounge. He noted the
    librarian never said she had to address the issue of rearranged furniture with
    them and added I heard no evidence that the personal respondent suggested to
    the applicants that this was a reason she was asking them for their
    identification.

[103]

The Vice-Chairs
    reasoning on this point should be placed in the context of the overall
    encounter. At no point in the encounter in the lounge itself or when she walked
    with the first appellant to the library to retrieve her business card or when
    she accompanied the first appellant to the courtroom to retrieve his business
    card, did the librarian make any reference to the furniture as a reason she
    questioned the appellants. Rather, the Vice-Chair found that the personal
    respondent was questioning all three men as to their right to be in the lounge.

[104]

I see no error
    in the Vice-Chairs reasoning.

(iii)

The false explanation

[105]

The Vice-Chairs
    rejection of both the appellants location and the moving of the furniture as
    potential explanations should be considered in the context of his reasons as a
    whole. At the time, the librarian had falsely claimed that the reason she
    singled the appellants out was that she knew everyone else in the lounge. A
    false or shifting explanation for the impugned conduct can be used to support
    the inference of discrimination. It was open to the Vice-Chair to draw an
    adverse inference from this false claim. On my reading he did so.

[106]

The Vice-Chair considered,
    hypothetically, whether the librarian may have made the false claim in the
    heat of the moment, not knowing what to say when challenged by the applicants
    to explain her decision to question them. He went on,

But even if I accept that the applicant relied on this comment
    in the heat of the moment, it is nonetheless revealing that the personal
    respondent could not generate a credible non-discriminatory reason for why she
    was questioning the applicants, for example that she had to resolve the issue
    of who re-arranged the furniture or that she was in the process of questioning
    everyone in the lounge she did not know and was beginning with the applicants.

[107]

Later in his
    reasons he said:

I find the personal respondent's account of what took place
    during her interactions with the applicants not to be credible and I do not
    accept that the non-discriminatory reasons she gives account for why she chose
    to ask the applicants for their identification when she did. The inference I
    draw is that the applicants' race and colour was a factor which led to the
    personal respondent's decision to question them and affected the manner in
    which she questioned and interacted with them.

[108]

The Vice-Chair
    was entitled to place great weight on the false explanation given at the time,
    and the librarians inability to articulate any other reason for questioning
    the appellants. He was entitled to reason that if the location or the furniture
    had been what prompted the appellants questioning, it would have been easy
    enough to say so.

(5)

Did the Vice-Chair
    Err By Referring to Social Science Not In Evidence Before Him?

[109]

The Divisional
    Court found the Vice-Chairs resort to earlier tribunal decisions to infer a
    nexus between the appellants race and colour and their treatment was misconceived"
    because they involved racial profiling by police officers. The Court said
    there is a significant difference between what occurred here and a police
    investigation.

[110]

The respondents
    mount a broader attack, arguing that it was improper for the Vice-Chair to resort
    to social science not in evidence before him. The respondents argue that the
    social science he referred to

was the sole basis upon which he found the
    necessary nexus between the adverse treatment and the appellants race and
    colour.

[111]

At the outset of
    his analysis, the Vice-Chair referred to
Radek v. Henderson Development
    (Canada) Ltd.
(No.3) (2005), 52 C.H.R.R. D/430, 2005 BCHRT 302, and
Phipps
    v. Toronto Police Services Board
, 2009 HRTO 877 (CanLII) for the following
    propositions:

1)

the prohibited ground
    or grounds of discrimination need not be the sole or the major factor leading
    to the discriminatory conduct; it is sufficient if they are a factor;

2)

there is no need to
    establish an intention or motivation to discriminate; the focus of the enquiry
    is on the effect of the respondent's actions on the complainant;

3)

the prohibited ground
    or grounds need not be the cause of the respondent's discriminatory conduct; it
    is sufficient if they are a factor or operative element;

4)

there need be no
    direct evidence of discrimination; discrimination will more often be proven by
    circumstantial evidence and inference; and

5)

racial stereotyping
    will usually be the result of subtle unconscious beliefs, biases and
    prejudices.

[112]

The first four
    of these are long established propositions of law. The Vice-Chair did not refer
    to
Radek
and
Phipps
as sources of authority for these
    propositions but because they provided a convenient summary of them. I see no
    relevance to the fact that
Radek
involved security guards and
Phipps
involved a police officer.

[113]

This court has
    repeatedly recognized the fifth proposition as a sociological fact. For example,
    Doherty J.A. has said in
R. v. Parks
(1993), 15 O.R. (3d) 324, 84
    C.C.C. (3d) 353 (C.A.), at para. 54:

Racism, and in particular anti-black
    racism, is a part of our community's psyche. A significant segment of our
    community holds overtly racist views. A much larger segment subconsciously
    operates on the basis of negative racial stereotypes
.

[114]

The Supreme
    Court of Canada has also endorsed the proposition. For example L'Heureux-Dubé
    J. and McLachlin J. writing in
R. v. S.(R.D.)
, [1997] 3 S.C.R. 484, at
    para. 46, cited Doherty J.A.s statement with approval.

[115]

The Vice-Chairs
    reference to
Radek
and
Phipps
was not misconceived.

[116]

Later in his
    reasons the Vice-Chair did refer to expert social science evidence introduced
    and discussed in
Nassiah v. Peel Regional Police Services Board
, 2007 HRTO
    14 (CanLII), another case involving a police officer.

[117]

It is
    instructive to examine for what purpose and at what stage of his reasoning the
    Vice-Chair referred to
Nassiah
. Before he referred to
Nassiah
, the
    Vice-Chair had already found the appellants race and colour were factors in
    their selection for questioning. In para. 84, he had drawn the inference that
    the librarians decision to stop and question the appellants was in some
    measure because of their race and colour. At the end of para. 90, the Vice-Chair
    repeated the personal respondent's decision to question the applicants was
    indeed tainted by considerations of their race and colour.

[118]

After making
    this finding, the Vice-Chair, in para. 91, quoted a passage from
Nassiah
discussing the social science evidence led in that case:

racial profiling social science evidence is relevant because
    it speaks to, not just the initial decision to stop, detain, pursue an
    investigation, but also supports the general phenomenon that the
scrutiny
    applied to the subsequent investigation
is different, more heightened, more
    suspicious, if the suspect is Black. The stereotyping phenomenon is the same,
    whether it manifests itself in the discretion to stop/arrest/detain a person in
    part because they are Black, or whether it manifests itself in the form of
    greater suspicion, scrutiny, investigation in whole or part because a suspect
    is Black. [Emphasis in original.]

[119]

After quoting
    this passage, the Vice-Chair drew a second inference, that the way in which
    [the librarian] interacted with the applicants was tainted by consideration of
    their race and colour. His reference to
Nassiah
related to this second
    inference about the manner of the appellants questioning. It did not relate to
    his earlier inference about their selection for questioning.

[120]

I accept the
    respondents contention that a tribunal needs to exercise care in taking
    judicial notice of social science not introduced in evidence before it. The
    parties do not have the opportunity to challenge the matter judicially noticed and
    it may be wrong. At the same time, social science can deepen the understanding of
    interactions between individuals generally, thus assisting the adjudication of
    a particular case. Balance and judgment is necessary to ensure that judicial
    notice of social science not in evidence does not result in unfairness.

[121]

In this case, I
    am not persuaded that any unfairness resulted from the Vice-Chairs reference to
Nassiah
. The reference did not affect his disposition of what I regard
    to be the main issue in the casewhether the appellants race and colour were factors
    in their selection for questioning. At most they played a minor role in his
    finding that their race and colour were factors in the manner in which they were
    questioned. After referring to
Nassiah
, the Vice-Chair was careful to point
    out he had already made findings about the manner in which the librarian had
    questioned the appellants. The librarian had interrupted [the first appellant]
    while he was on the telephone and, it appears, did not introduce herself to the
    applicants and [the articling student]. Furthermore, [f]rom all the evidence,
    including the personal respondent's testimony of how she generally carried out
    this function, the Vice-Chair concluded that the blunt and demanding manner
    in which she asked her questions was not how she would approach and question
    persons that she imagined were lawyers and had a right to be in the lounge.
    These findings of fact relate to the particular encounter in this case; they
    are not based on generalizations drawn from social science.

[122]

Setting aside the
    fact the social science was not in evidence, the Divisional Court should have
    deferred to the Vice-Chairs greater expertise in assessing whether the
    difference between what occurred here and a police investigation was so
    significant that
Nassiah
was unhelpful. The Vice-Chair, no doubt, had
    read the entire review of the expert evidence in
Nassiah
. The expert
    testified at paras. 127 and 129 that:

127    Some police officers,
like some members of the
    general public
have specific racial prejudices and deliberately single out
    and treat some members of racial minorities more harshly than others.

129    The third potential cause of racial profiling is that
    police officers,
like all members of society
, develop unconscious
    stereotypes about racial groups and subconsciously act on those stereotypes
    during routine police investigations. [Emphasis added].

[123]

Finally on this
    point, I note that neither the Divisional Court nor the respondents expressed any
    issue with the actual proposition the Vice-Chair drew from
Nassiah
. The proposition
    that implicit stereotyping can affect the manner in which individuals continue
    to deal with others after an encounter begins does not seem to me to be a
    matter that would provoke much controversy.

[124]

While I accept
    that a tribunal must exercise care and caution in taking judicial notice of
    social science evidence introduced in another case, there was no unfairness
    done in this case. The Vice-Chairs resort to
Nassiah
was of no material
    consequence to his decision.

[125]

I would not give
    effect to this ground of appeal.

G.

Summing Up

[126]

To find discrimination,
    the Vice-Chair had to be satisfied, after considering all the evidence, that
    the appellants were members of a group protected by the
Code
, that they were subjected to adverse treatment, and
    that their race and colour were factors in the adverse treatment.

[127]

The first two
    elements are not at issue in this case. The ultimate question disputed before
    the Vice-Chair was whether the appellants race and colour were factors in
    their questioning.

[128]

The following evidence,
    relied upon by the Vice-Chair, provided an ample basis to support the inference
    that the appellants race and colour were factors in the librarians
    questioning of them:

§

that she only challenged the right of the three black men to be
    in the lounge;

§

that she had no intention of challenging any of the other persons
    in the lounge;

§

that she interrupted her planned trip to the robing room to stop
    and question the appellants;

§

that she approached them in an aggressive and challenging manner,
    not identifying herself and interrupting the first appellant on the phone;

§

that the blunt and demanding manner in which she questioned the
    appellants was not consistent with how she generally carried out her function;

§

that she falsely claimed, at the time, that she had singled them
    out because she knew everyone else in the lounge to be a lawyer;

§

that she denied having made that claim;

§

that she was completely unable to offer a credible
    non-discriminatory explanation for her decision to challenge the appellants;
    and

§

that her version of the encounter, including her denial of asking
    the first appellant for identification, was largely rejected.

[129]

Moreover, many
    of his findings were supported by the evidence of an independent witness whom
    the Vice-Chair had found to be credible.

[130]

The Divisional
    Court did not indicate and the respondents did not argue that these facts, if considered
    in isolation, would be insufficient to support the inferences the Vice-Chair made.
    The Divisional Courts view and the respondents argument is that the Vice-Chair
    unreasonably rejected or disregarded other material facts that would exclude
    his inferences.

[131]

My review of the
    Vice-Chairs reasons demonstrates that he discussed the very evidence he is
    said to have disregarded. The Vice-Chair carried out his statutory task of
    sifting through all the evidence and arriving at a difficult decision. He
    provided clear, intelligible reasons justifying his conclusions.

[132]

The only issue
    on judicial review was whether the Vice-Chairs decision fell within the range
    of reasonable outcomes. On judicial review it is not enough that the reviewing
    court be persuaded that one could arrive at a different decision based on the
    same evidentiary record. To succeed on judicial review in this case, it was
    necessary to show the tribunal could not reasonably arrive at the decision it
    did.

[133]

I am satisfied
    the Vice-Chair could reasonably arrive at the decision he did. His decision
    fell well within the range of reasonable outcomes.  The Divisional Court erred
    in concluding that it did not.

[134]

I need not deal
    in any detail with the Divisional Courts other criticisms of the Vice-Chairs
    reasons. Whether the appellants saw the posted signs indicating the lounge was
    reserved for lawyers and whether the first appellant reacted heatedly to what
    he perceived to be racial profiling are not material facts. While they could
    possibly have some bearing on credibility, credibility is very much the
    province of the decision-maker. The Vice-Chair found it unnecessary to resolve
    these questions to arrive at his decision. He committed no error.

[135]

Finally, I will comment about
    respondents counsels complaint that there was no record of the proceedings
    before the Vice-Chair. We were advised that the HRTO does not
normally record or transcribe its proceedings. This is
    difficult to understand given the availability of modern and simple to operate digital
    recording equipment.
It seems to me that the advantages of recording the
    proceedings to the parties, the reviewing courts and to the tribunal itself
    outweigh any perceived difficulties.
Certainly
    equipment problems can arise, but the impossibility of guaranteeing a reliable,
    quality recording is hardly a good reason for not
recording at all.

H.

Conclusion

[136]

I would allow
    the appeal, set aside the decision of the Divisional Court and reinstate the
    decision of the Vice-Chair. I would fix the appellants costs of the judicial
    review application in the Divisional Court, and of the leave application and
    appeal in this court in the total amount of $30,000 inclusive of disbursements
    and HST.

R.G. Juriansz J.A.

I agree E.A. Cronk
    J.A.

I agree S.E. Pepall
    J.A.

Released: June 13, 2013

[1]
Section 34 of the Code, as amended by S.O. 2006, c. 30, s. 5, permits a person
    who believes that any of his or her rights have been infringed to apply to the
    HRTO for a remedial order. The terms complaint and complainant, which are
    not used in the amended
Code
except in the transitional provisions,
    have given way to applicant and application.

[2]
There was before the Vice-Chair a second issue whether the applicants' race and
    colour were factors in the respondents' action subsequent to the incident. He
    found they were not. No appeal is taken from that decision. That aspect of the
    decision is not pertinent to this appeal.


COURT OF APPEAL FOR ONTARIO

CITATION: Power Workers' Union (Canadian Union of Public
    Employees, Local 1000) v. Ontario (Energy Board), 2013 ONCA 359

DATE: 20130604

DOCKET: C55602, C55641 and C55633

Rosenberg, Goudge and Blair JJ.A.

BETWEEN

Power Workers Union, Canadian Union of Public
    Employees, Local 1000

Appellants

and

The Ontario Energy Board, and Ontario Power
    Generation Inc.

Respondents

AND BETWEEN

Ontario Power Generation Inc.

Appellant

and

Ontario Energy Board

Respondent

AND BETWEEN

Society of Energy Professionals

Appellant

and

The Ontario Energy Board and Ontario Power
    Generation Inc.

Respondents

Richard Stephenson and Emily Lawrence, for the appellant
    Power Workers Union

John B. Laskin and Crawford Smith, for the appellant Ontario
    Power Generation

Paul Cavalluzzo, for the appellant Society of Energy
    Professionals

Mark Rubenstein, for the intervenor Ontario Education
    Services Corporation

Robert B. Warren, for the intervenor Consumers Council
    of Canada

Glen Zacher and Patrick Duffy, for the respondent
    Ontario Energy Board

Heard: January 29, 2013

On appeal from the order of the Divisional Court (Justice
Catherine D.

Aitken, Justice
Katherine E.

Swinton and Justice Alexandra Hoy),
    dated February 14, 2012.

By
    the Court:

Introduction

[1]

This is an appeal from the order of the Divisional Court dismissing the
    appeal from a decision of the respondent Ontario Energy Board (the OEB) in
    which the OEB reduced by $145,000,000 the revenue requirements sought by the
    appellant Ontario Power Generation Inc. (OPG) to cover its nuclear compensation
    costs for 2011 and 2012.

[2]

The sole issue is whether the OEBs decision was reasonable or not.  The
    majority of the Divisional Court found that it was.

[3]

In dissent, Aitken J. found that it was not.  For the reasons that
    follow, we agree with her.  We would therefore allow the appeal.

Background

[4]

OPG is Ontarios largest electricity generator.  Its three nuclear
    generating stations comprise two-thirds of its generation capacity.  The
    remainder comes from six hydro-electric stations.

[5]

OPG employs approximately 10,000 people in its regulated business, about
    95 percent of whom are associated with its nuclear generation business.

[6]

Some 90 percent of OPGs regulated workplace is unionized.  The
    appellant Power Workers Union (the PWU) represents approximately two-thirds of
    the unionized staff.  The appellant Society of Energy Professionals (the
    Society) represents the remainder of its unionized workforce.

[7]

The
Ontario Labour Relations Act
, S.O. 1995, c. 1, sched. A, s.
    17 compels OPG and its unions to bargain in good faith and make every
    reasonable effort to reach a collective agreement.  Once reached, a collective
    agreement is legally binding on the parties to it for the duration of its term.

[8]

OPG entered into a collective agreement with the PWU for the period
    April 1, 2009 to March 31, 2012.  OPG also has a collective agreement with the
    Society for the period January 1, 2011 to December 31, 2011.  These agreements
    prescribe the compensation rates for each staff position held by its
    represented employees.  They also provide strict terms regulating the staff
    levels at OPGs stations.  Under these agreements OPG is not free to reduce
    compensation rates unilaterally.  Nor can it reduce staffing levels
    unilaterally, as it wishes.  For example, the PWU collective agreement provides
    that no employee will be involuntarily laid off during the term of the
    collective agreement.

[9]

Independent of the collective agreements, the Canadian Nuclear Safety
    Commission has also imposed staffing requirements on OPG to ensure safe and
    reliable operation of its nuclear stations.

[10]

On
    May 26, 2010, OPG filed an application seeking approval of the rates its
    customers must pay for its electricity.  The rates sought provide the revenue
    required by OPG to cover its projected costs for operating and maintaining its
    assets, for making new investments, and for earning a fair rate on invested
    capital.

[11]

The
    application was for the period from January 1, 2011 to December 31, 2012.  The
    terms of the two collective agreements cover the same period, save for nine
    months, in the case of the PWU contract.  The application was for a future
    period, in other words a forward test period in the language used by the OEB.

[12]

In
    the application, OPGs single largest projected cost related to the operation,
    maintenance and administration of its nuclear facilities.  By far the biggest share
    of this was the compensation to OPGs unionized staff in its nuclear
    operations.  That compensation is a product of both compensation rates and
    staffing levels.

[13]

OPGs
    application was filed under s. 78.1 of the
Ontario Energy Board Act
,
    1998
, S.O. 1998, c. 15, sched. B (the Act).  It empowers the OEB to fix
    the rates that OPG is entitled to charge its customers.  Section 78.1(5)
    requires that those rates be just and reasonable.  In such an application, s.
    78.1(6) places the burden of proof on the applicant.  As long ago as 1929, the
    Supreme Court of Canada established that just and unreasonable rates are rates
    which, under the circumstances, would be fair to the consumer on the one hand,
    and which, on the other hand, would secure to the company a fair return for the
    capital invested.  See
Northwestern Utilities Ltd. v. Edmonton (City)
,
    [1929] S.C.R. 186 at pp. 192-3.

[14]

The
    OEB heard OPGs application over 16 days in the fall of 2010.  It issued its
    decision on March 10, 2011.

[15]

At
    pp. 18 and 19 of that decision, the OEB described two approaches it uses to
    determining rates that are just and reasonable.  In the case of forecast costs
    that can be managed by the applicant going forward, the OEB can and does have
    regard to a wide variety of considerations including current economic
    conditions, analyses of economic trends and benchmarking data comparing other
    entities.

[16]

On
    the other hand, when committed costs are at issue, that is costs that cannot be
    reduced by the applicant in the test period, the OEB undertakes a prudence
    review.  In
Enbridge Gas Distribution Inc. v. Ontario (Energy Board)
(2006), 210 O.A.C. 4 (C.A.), leave to appeal to S.C.C. refused, [2006] S.C.C.A.
    No. 208, this court accepted that approach and outlined what it entails at p.
    5:

The Board agrees that a review of prudence involves the
    following:

·

Decisions made by the utilitys management should generally be
    presumed to be prudent unless challenged on reasonable grounds.

·

To be prudent, a decision must have been reasonable under the
    circumstances that were known or ought to have been known to the utility at the
    time the decision was made.

·

Hindsight should not be used in determining prudence, although
    consideration of the outcome of the decision may legitimately be used to
    overcome the presumption of prudence.

·

Prudence must be determined in a retrospective factual inquiry,
    in that the evidence must be concerned with the time the decision was made and
    must be based on facts about the elements that could or did enter into the
    decision at the time.

[17]

The
    OEB summarized these two approaches at p. 19 of its decision in this case:

The benefit of a forward test period is that the company has
    the benefit of the Boards decision in advance regarding the recovery of
    forecast costs.  To the extent costs are disallowed, for example, a forward
    test period provides the company with the opportunity to adjust its plans
    accordingly.  In other words, there is not necessarily any cost borne by
    shareholders (unless the company decided to continue to spend at the higher
    level in any event).  Somewhat different considerations will come into play
    when undertaking an after-the-fact prudence review.  In the case of an
    after-the-fact prudence review, if the Board disallows a cost, it is
    necessarily borne by the shareholder.  There is no opportunity for the company
    to take action to reduce the cost at that point.  For this reason, the Board
    concludes there is a difference between the two types of examination, with the
    after-the-fact review being a prudence review conducted in the manner which
    includes a presumption of prudence.

[18]

In
    the end, the OEB reduced by $145,000,000 the nuclear compensation costs applied
    for by OPG: $55,000,000 for the 2011 year, and a further $90,000,000 for the
    2012 year.  The OEB did so because it concluded that OPGs compensation rates
    and its staffing levels were both too high.

[19]

In
    reaching this conclusion, the OEB relied on information, including staffing and
    compensation comparison reports, that was not in existence at the time OPG
    entered into the collective agreements with the PWU and the Society.

[20]

The
    OEB decided that OPG should manage its projected nuclear compensation costs
    downward over the two years by this total of $145,000,000. OPG should achieve
    this reduction by reducing the compensation rates it pays to its unionized
    staff positions sufficiently to move these costs from the 75th to the 50th
    percentile in the benchmarking study of comparator employees, and by reducing
    the number of its staff positions.

[21]

The
    OEB treated both compensation rates and staffing levels as forecast costs that
    OPG could manage downward.  Neither was treated as committed costs.  Nowhere
    did the OEB engage in a prudence review.  It did not inquire into whether OPGs
    decision to enter the collective agreements was prudent based on the
    information that was known or ought to have been known at the time.

[22]

The
    majority of the Divisional Court found that both the OEBs use of hindsight in
    determining the reasonableness of OPGs nuclear compensation costs as well as its
    ultimate decision to require a reduction of $145,000,000 were reasonable, and
    should therefore not be disturbed on appeal.  The majority agreed with the OEB
    that OPG could manage these costs downward within the framework of the
    collective agreements.  The majority of the Divisional Court concluded that a
    prudence review was not required, would not permit the OEB to fulfill its
    statutory objective of promoting cost effectiveness in the generation of
    electricity, and would not allow the OEB to act as a market proxy.

[23]

The
    dissent, on the other hand, concluded that the collective agreements imposed
    compensation costs on OPG that are committed costs.  Rates proposed to recover
    these costs should therefore be subject to a prudence review to determine
    whether they are just and reasonable.  The OEB did not undertake such an
    analysis, but assessed the reasonableness of those costs using information that
    came into existence after the collective agreements were made.  The dissent
    found the OEBs approach to contravene both the principles of the prudence
    review and the decision of this court in
Enbridge
.

Analysis

[24]

As
    in the Divisional Court, the parties all take the position that the appropriate
    standard of review is one of reasonableness.  We agree.

[25]

The
    issue, therefore, is simply whether the OEBs decision of March 20, 2011,
    including its reasoning and analysis, was reasonable.

[26]

The
    appellants say that it was not.  They all argue that the OEB impermissibly used
    hindsight in relying on current information that was not available when the
    collective agreements were made, and in not conducting a prudence review of the
    nuclear compensation costs proposed by OPG,.  The appellants argue that the
    compensation costs applied for are committed costs because of the collective
    agreements and that the OEB unreasonably evaluated these costs without a
    prudence review.

[27]

The
    OEBs position, supported by the two intervenors, is that a prudence review was
    not needed because such a review does not apply to forecast compensation costs,
    and in any event is simply a regulatory tool developed for past capital
    expenditures.  The OEB says that these compensation costs can be managed by OPG
    regardless of the collective agreements.  It argues that it was entitled to
    rely on current information in finding these compensation costs excessive and
    that its decision that these costs must be reduced by $145,000,000 over the two
    years was reasonable.

[28]

In
    resolving the issue in appeal, it is important to reiterate the difference
    between committed costs and forecast costs, a difference well-known in the
    regulation of utilities such as OPG and well-described in the decision of the
    OEB in this very case in the passage quoted above.

[29]

When
    an application is made by a utility for the approval of rates for a timeframe
    to cover the costs in that time frame, its committed costs are those that it is
    committed to pay in that time frame.  Those costs cannot be managed or reduced
    by the utility in that time frame, usually because of contractual obligations.
    When, as in this case, the timeframe of the application stretches into the
    future, costs that have been contractually incurred to be paid over the
    timeframe are nonetheless committed even though they have not yet been paid.

[30]

The
    OEBs assessment of the reasonableness of committed costs is by way of a
    prudence review.  The OEBs jurisprudence says as much.  Moreover, this
    approach was sanctioned by this court in
Enbridge
, at para. 8.

[31]

A
    prudence review of committed costs is not confined to capital costs or to costs
    that have been paid at the date of the application.  In
Enbridge
, no
    one contested that a prudence review was warranted even though the case involved
    operating costs rather than capital costs, as well as costs that had not yet been
    paid as of the date of the application.

[32]

Moreover,
    the rationale behind the prudence review is inconsistent with confining the approach
    to a certain subset of committed costs.  All committed costs must be paid
    during the time frame under review.  The regulator is required to maintain a
    balance of fairness between the utility and the consumer.  It would upset that
    balance to evaluate the reasonableness of these costs with the benefit of
    hindsight using current information that had not been available to the utility
    when it made the commitment to pay them,

[33]

Forecast
    costs, on the other hand, are costs that the utility can alter by managing them
    during the timeframe under consideration.  The regulator is free to assess the
    reasonableness of these costs using current information.  This approach is
    sensible because the utility may act on that same information if it chooses to
    alter these costs during the timeframe under consideration.

[34]

In
    this case, the OEB found that OPGs nuclear compensation costs for 2011 and
    2012 were forecast costs and, because of current information, must be reduced
    by $145,000,000 through a reduction in the compensation rates for unionized
    positions and a reduction in the number of staff positions over these two
    years.  The OEB did so without conducting a prudence review of these costs.

[35]

In
    our view, the compensation costs at issue before the OEB were committed costs.
    Compensation rates for unionized staff positions are, save for several months
    for the PWU, fixed for 2011 and 2012 by OPGs collective agreements.  OPG is
    legally bound to pay them.  It could not reduce the rates, or compel a
    re-opening of the agreements.  OPG is also constrained by safety requirements.
    Equally, the number of staff positions is strictly regulated by the collective
    agreements.  OPG could not unilaterally reduce that number, nor could it compel
    unionized staff to retire.

[36]

We
    would conclude, therefore, that the OEB acted unreasonably in two respects.
    First, the OEB unreasonably assessed the reasonableness of these committed
    costs using the hindsight of current information unavailable when the
    collective agreements were made.  Second, the OEB unreasonably failed to
    conduct a prudence review of these costs.  Its resulting decision is therefore
    also unreasonable.

[37]

We
    say this for two reasons.  First, the Boards approach to these committed costs
    is contrary to the approach required by its own jurisprudence and accepted by
    this court.  Second, it is unreasonable to require that OPG manage costs that,
    by law, it cannot manage.

[38]

Our
    conclusion does not mean that the OEB is powerless to review the compensation
    rates for OPGs unionized staff positions or the number of those positions.  In
    a prudence review, the evidence may show that the presumption of prudently
    incurred costs should be set aside, and that the committed compensation rates
    and staffing levels were not reasonable; however, the OEB cannot resort to
    hindsight, and must consider what was known or ought to have been known at the
    time.  A prudence review allows for such an outcome, and permits the OEB both to
    fulfill its statutory mandate and to serve as a market proxy, while maintaining
    a fair balance between OPG and its customers.

Disposition

[39]

As
    a result, we conclude that the OEB acted unreasonably.  The appeal must be
    allowed and the OEBs decision set aside.  OPGs application is remitted to the
    OEB to be heard in accordance with the principles in these reasons.

[40]

The
    parties have not sought costs.  None are ordered.

Released: June 4, 2013 (S.T.G.)

M. Rosenberg J.A.

S.T. Goudge J.A.

R.A. Blair J.A.