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					 Ontario (Human Rights Commission) v. Shelter Corp.

                                   Between
         Ontario Human Rights Commission, Dawn Kearney, J.L. and
            Catarina Luis, complainants (respondents in appeal; D.
           Kearney, J.L. and C. Luis, appellants in cross-appeal, file
                               No. 43/99), and
        The Shelter Corporation, Bramalea Limited (now Bramalea Inc.)
            and Creccal Investments Ltd., respondents (The Shelter
            Corporation and Creccal Investments Ltd., appellants in
         Appeal; Creccal Investments Ltd., respondent in cross-appeal,
                                File No. 43/99)

                               [2001] O.J. No. 297
                               Court File No. 40/99

                      Ontario Superior Court of Justice
                     Divisional Court - Toronto, Ontario
                    O'Driscoll, MacFarland and Clarke JJ.

                    Heard: October 30-31 and November 1-3, 2000.
                            Judgment: February 1, 2001.
                                     (61 paras.)

Counsel:

     Martin J. Doane, for The Shelter Corporation.
     Gary Luftspring and P.A. Neena Gupta, for Creccal Investments Ltd.
     Anthony Griffin, for Ontario Human Rights Commission.
     Beth Symes, for Ms. Kearney, Ms. Luis and Ms. J.L.
     Sheena Scott and Marie Chen, for Intervenor: African Canadian Legal
     Clinic, Congress of Black Women in Canada and Jamaican Canadian
     Association.


    The judgment of the Court was delivered by

    O'DRISCOLL J.:—

Nature of the Proceedings

¶ 1 The Shelter Corporation (Shelter) appeals (40/99), to the Divisional Court from
the December 22, 1998 decision of an unanimous three (3) member Board of Inquiry
(Board), appointed under s. 38(1) of the Human Rights Code, R.S.O. 1990, c. H.19, as
amended (Code).

¶ 2 Creccal Investments Ltd. (Creccal), in a separate Notice of Appeal (43/99),
appeals to this Court from the same December 22, 1998 decision of the Board.

¶ 3 The complainants Dawn Kearney, J.L. and Catarina Luis are cross-appellants in
Appeal 43/99.

¶ 4 On April 19, 1995, Bramalea Inc., went bankrupt. Orders were obtained allowing
these proceedings to continue notwithstanding the bankruptcy.

¶5     The applicable appeal provisions are found in the Code:

      s. 42(1) Any party to a proceeding before the board of inquiry may
         appeal from a decision or order of the board to the Divisional Court in
         accordance with the rules of court.

          (3) An appeal under this section may be made on questions of law or
     fact or both and the court may affirm or reverse the decision or order of the
     board of inquiry or direct the board to make any decision or order that the
     board is authorized to make under this Act and the court may substitute its
     opinion for that of the board.

¶ 6 At issue in this appeal is the landlords' use of a rent/income criterion in deciding
whether to rent an apartment to a person or persons protected under s. 2, s. 4, s. 9 and s.
11 of the Code. Does the application of the criterion regarding those protected groups
result in indirect discrimination contrary to the Code?

¶ 7 On September 9, 1999, some ten (10) months after the Board of Inquiry's decision,
the Supreme Court of Canada released its reasons in British Columbia (Public Service
Employee Relations Commission v. BCGSEU, [1999] 3 S.C.R. 3 (MEIORIN). In her
reasons, McLachlin J., (for the full Court), abolished the distinction between "direct" and
"indirect" discrimination. On December 16, 1999, the Supreme Court of Canada released
its decision in British Columbia (Superintendent of Motor Vehicles) v. British Columbia
(Council of Human Rights), [1999] 3 S.C.R. 868 (Grismer). McLachlin J. (for an
unanimous 7 judge court), wrote:

     p. 880
     19 Meiorin announced a unified approach to adjudicating discrimination
     claims under human rights legislation. The distinction between direct and
     indirect discrimination has been erased. Employers and others governed
     by human rights legislation are now required in all cases to accommodate
     the characteristics of affected groups within their standards, rather than
     maintaining discriminatory standards supplemented by accommodation for
     those who cannot meet them. Incorporating accommodation into the
       standard itself ensures that each person is assessed according to her or his
       own personal abilities, instead of being judged against presumed group
       characteristics. Such characteristics are frequently based on bias and
       historical prejudice and cannot form the basis of reasonably necessary
       standards. While the Meiorin test was developed in the employment
       context, it applies to all claims for discrimination under the B.C. Human
       Rights Code.
       Once the plaintiff establishes that the standard is prima facie
       discriminatory, the onus shifts to the defendant to prove on a balance of
       probabilities that the discriminatory standard is a BFOR [a bona fide
       occupational requirement] or has a bona fide and reasonable
       justification. In order to establish this justification, the defendant must
       prove that:

             (1)   it adopted the standard for a purpose or goal that is rationally
                   connected to the function being performed;
             (2)   it adopted the standard in good faith, in the belief that it is
                   necessary for the fulfilment of the purpose or goal; and
             (3)   the standard is reasonably necessary to accomplish its purpose
                   or goal, in the sense that the defendant cannot accommodate
                   persons with the characteristics of the claimant without
                   incurring undue hardship.

See also: Entrop v. Imperial Oil Limited, (2000), 50 O.R. (3d) 18 (O.C.A.)

¶ 8 The case at bar was presented to the Board of Inquiry as a case of indirect
discrimination. It was so argued before us. In my view, the abolition of the distinction
between direct and indirect discrimination does not affect the result of this appeal.

 II.    Relevant Sections of the Code

        s. 2(1) Every person has a right to equal treatment with respect to the
           occupancy of accommodation, without discrimination because of race,
           ancestry, place of origin, colour, ethnic origin, citizenship, creed, sex,
           sexual orientation, age, marital status, family status, handicap or the
           receipt of public assistance.

                                               ....

        s. 4(1) Every sixteen or seventeen year old person who has withdrawn
           from parental control has a right to equal treatment with respect to
           occupancy of and contracting for accommodation without
           discrimination because the person is less than eighteen years old.

                                               ....
         s. 9 No person shall infringe or do, directly or indirectly, anything that
            infringes a right under this Part.

                                               ....

         s. 11(1) A right of a person under Part I is infringed where a requirement,
            qualification or factor exists that is not discrimination on a prohibited
            ground but that results in the exclusion, restriction or preference of a
            group of persons who are identified by a prohibited ground of
            discrimination and of whom the person is a member, except where,

              (a)   the requirement, qualification or factor is reasonable and bona
                    fide in the circumstances; or
              (b)   it is declared in this Act, other than in section 17, that to
                    discriminate because of such ground is not an infringement of a
                    right.

 III.     The Hearing

¶ 9 After its appointment on June 10, 1993, the Board held more than sixty (60) days
of hearings over a three (3) year period. The Board rendered its decision on December
18, 1998.

¶ 10      Shelter's Notice of Appeal (40/99) is dated January 20, 1998 [sic].

¶ 11 Creccal's Notice of Appeal (43/99) is dated January 20, 1999 and the
complainants' cross-appeal is dated February 4, 1999.

 IV.       The Complaints and their Chronology
  A.      Dawn Kearney v. Bramalea Inc.

¶ 12 On September 23, 1988, Dawn Kearney signed a complaint under the Code
against Bramalea and filed it with the Human Rights Commission (Commission). She
alleged that on September 14, 1988: she was seventeen (17) years of age, married,
pregnant and living with her in-laws and with her husband, Michael, then eighteen (18)
years of age. Michael Kearney was earning $9.24 per hour. The couple went to
Bramalea's rental office in Brampton and asked about a two (2) bedroom apartment for
rent in the range of $600.00 per month.

¶ 13    In its response to Ms. Kearney's complaint, Bramalea referred to the use of the
rent/income ratio as follows:

        My clients (referring to Bramalea) informed the complainant that in order
        to occupy an apartment with Bramalea Ltd., any and all applicants must be
        able to demonstrate an "on-going" ability to pay the monthly rental
        fees. As such, Bramalea Ltd. had established a policy whereby all
       applicants must be able to demonstrate that their total income would meet a
       guideline of 25% (or less) of total salary which can be paid towards rent.
       ...
            Furthermore, such a criteria is established uniformly and universally
       for all applicants to Bramalea.

¶ 14 The Commission investigated the complaint and found out that "there is no
evidence to indicate that the complainant was treated differently because of her age or sex
(pregnancy)" and that the "statistical evidence is at best inconclusive". (Commission
Case Summary, Appeal Book, Vol. X, Tab E).

B. J.L. v. Shelter Corporation

¶ 15 On June 25, 1990, J.L. filed a complaint against Shelter alleging that her right to
equal treatment without discrimination had been infringed by Shelter at Aquitaine Shores
on the basis of:

       (1)   age, contrary to s. 2(1), s. 3 and s. 8 (now s. 9) of the Code, or
       (2)   age and sex, contrary to s. 10 (now s. 11) of the Code. She alleged
             that Shelter's policy of disqualifying an applicant for an apartment
             when that person would be paying more than 25% of income for rent
             resulted in the exclusion of single women and young people.

¶ 16     The Commission investigated this complaint and concluded:

       (a)   There was insufficient evidence to support the allegation of direct
             discrimination based on age.
       (b)   There was insufficient evidence to support the allegation of
             constructive discrimination based on age or sex because 54% of the
             then current tenants at the apartment complex (Aquitaine Shores)
             were young people (ages 20-29) at the time they were approved and
             44% of the tenants were female.
       (c)   The matter be considered whether or not the 30% minimum
             rent/income ratio was a potential violation of the Code and whether a
             Board of Inquiry should be appointed.

    (Commission Case Summary: Appeal Book, Vol. X, Tab E)

C. Luis v. Creccal

¶ 17 On May 4, 1992, Catarina Luis filed a complaint against Creccal. She alleged
that her right to equal treatment without discrimination because of family status had been
infringed:

       (1)   contrary to s. 2 and s. 9 (now s. 10) of the Code, and
       (2)   contrary to s. 11 of the Code, there had been constructive
              discrimination because her right to equal treatment with respect to
              accommodation had been infringed because of sex, marital status,
              place of origin, citizenship and the receipt of public assistance. This
              allegation was based on Creccal's use of minimum income criteria.

¶ 18      The Commission investigated the allegation against Creccal. The record shows
that:

        (1)   Since at least 1988, the Commission knew that Creccal had used
              income criteria.
        (2)   In April 1988, a Commission employee made
              suggestions/recommendations regarding specific language used in
              Creccal's application form concerning minimum income
              criteria. Creccal amended its form as a result.
        (3)   After the receipt of Ms. Luis' complaint, another employee of the
              Commission made suggestions for further amendments to Creccal's
              application form. These, too, were implemented by Creccal.

V.      The Commission's Position in 1993 and 1994 regarding rent/income
        criteria

¶ 19    In its press release of February 1993, four (4) months before the appointment of
the Board, the Commission stated:

                               POSITION STATEMENT
                          THE MINIMUM INCOME CRITERION

        The application of the minimum income rule in determining qualification
        for tenancy has become almost universal in the province of Ontario since
        the 1970's. The rationale behind the rule was to develop affordability
        criteria which could also be used to assess ability to pay the rent. The
        continued use of the rule is due to the ease of administration and its ready
        display of disposable income. It is the common practice of most landlords
        to apply the 30% rule, whereby rental payments cannot exceed 30% of
        one's income.
        It is the Commission's position that the 30% rule, and other income criteria
        presently being applied by landlords, act as barriers for persons in receipt
        of public assistance and other disadvantaged groups protected under the
        Code. However, landlords argue that the practice is required to secure
        financial investments.

                                              ......

        It is the Commission's view that the most appropriate way to deal with the
        issue is to recommend the appointment of a Board of Inquiry to establish
        case law. At a Board of Inquiry, the Commission will seek, as remedy, the
       discontinuance of the application of the 30% rule. The Commission does
       not view credit checks, credit references, rental history or guarantors as
       appropriate alternatives.

¶ 20 On February 1, 1994, seven (7) months after the Board was appointed (June 10,
1993), the Chief Human Rights Commissioner, Rosemary Brown, appeared before the
Ontario Legislature's Standing Committee on Government Agencies. She indicated that
the Commission's position regarding the use of rent/income guidelines had changed from
its earlier position. Before the Committee, Ms. Brown took the position that only the
exclusive use of rent/income criteria was considered by the Commission to be
discriminatory; other financial criteria would be permissible as long as they were used as
part of a package of selection factors. The Hansard Report of February 1, 1994 shows:

       Mr. Cousens: I want to talk about the Fair Rental Policy Organization of
       Ontario, where it's a common practice for landlords to require that rental
       payments not exceed 30% of a prospective tenant's income. Could you
       explain the rationale for this policy?
       Ms. Rosemary Brown: We believe that such a practice constructively
       discriminates against people on public assistance and other groups, such as
       young people who are first-time renters and women, who are protected
       under the Human Rights Code. We believe that it is possible for landlords
       to screen the tenants on their ability to pay their rent by using other
       criteria. Some of the criteria that we suggest they look at would be rental
       history of people, doing a credit check on them, asking for personal
       references or asking for a guarantor. There are other means of getting the
       information they have without this blanket discriminatory decision.

VI. The Positions of the Parties before the Board of Inquiry
A. Counsel for the Commission

¶ 21 He submitted that the use of rent/income criteria constitutes adverse effect
discrimination under s. 11 of the Code because the application of the rule results in the
exclusion, restriction or preference of a number of designated groups set out in s. 2 and s.
4 of the Code.

B. Counsel for the Complainants

¶ 22     They submitted that:

       (1)   the landlords use of a rent/income ratio involved systematic
             discrimination excluding protected groups and constituted direct
             discrimination of the groups protected in s. 2 and s. 4 of the Code.
       (2)   The use by landlords of credit checks, co-signers and previous rental
             history also violated the Code.

C. Counsel for Shelter and Bramalea
¶ 23 Counsel for Shelter and Bramalea agreed that their clients had applied
rent/income criteria. However, they submitted:

       (1)   That the issue is whether or not the Code prohibits credit guarantors,
             such as landlords, from determining to whom they would extend
             credit on the basis of their ability to pay because, it was submitted,
             renting an apartment is in the nature of a credit transaction.
       (2)   That the rent/income ratio criterion does not discriminate or select on
             the basis of any of the prohibited grounds under the Human Rights
             Code.
       (3)   That the rent/income ratio criterion is bona fide and without the use
             of the ratio to screen prospective tenants and limit the risk, the
             landlord would suffer undue hardship. Indeed, the theory of the
             Commission and of the complainants is that the only form of
             allocation of rental accommodation that is able to avoid any illegal
             disparate impact on the groups of concern is a form of random
             allocation of accommodation - either first come, first served or a
             lottery between potential tenants.

D. Counsel for Creccal

¶ 24 Counsel for this respondent adopted the evidence and submissions presented by
counsel for Shelter and Bramalea. In addition, counsel for Creccal also took the position
that Ms. Luis did not have any ground for complaint because on the date of the alleged
discrimination, Creccal did not have a bachelor apartment to rent.

VII.       Findings of Fact by the Board of Inquiry
 A.      Dawn Kearney v. Bramalea Inc.

       The evidence is clear that Ms. Kearney was 17 years old at the time that
       she and her husband, who was then 18, searched for an apartment in
       September 1988. She was pregnant. They were thus both members of the
       group identified as "young" in the analysis carried out by Dr.
       Ornstein. Further, as a pregnant woman, Ms. Kearney also came within
       the group of persons identified by "sex."
       The Board concludes that all the components of a prima facie case are
       established against the respondent, Bramalea. Bramalea's use of an [sic]
       rent/income ratio constitutes prima facie constructive discrimination
       against Ms. Kearney, on the basis of age and sex.

                                              ....

  B.     J.L. v. Shelter

       Further, Shelter's response to the complaint stated "It is our company's
       policy that any applicant for tenancy meet our income criteria."
           In accordance with Shelter policy, the total amount of rent and
           utilities to be paid by the applicant should not exceed thirty percent
           (30%).

     Mr. Gonsalves, an employee of Shelter, testified that Shelter's rent/income
     ratio was in the range of 30% to 33.33% in June 1990. Mr. Gonsalves also
     testified that in June 1990, Shelter allowed couples to combine their
     incomes for the purpose of calculating the rent/income ratio, but did not
     permit two single people to do so.
     The evidence establishes that Shelter was using a rent/income ratio in
     assessing applications, and that in June 1990, the application of J.L. was
     rejected, either in whole or in part, because her income level, and that of
     her co-applicant Ms. Dickenson, did not meet the criterion.

                                            ....

     At the time J.L. applied at The Crossways [sic] she was a 16 year-old
     woman, a member of the groups identified by "age" and by "sex."

                                            ....

     The Board concludes that all the components of the prima facie case are all
     established against the respondent Shelter. Shelter's practice of using
     minimum income criterion to screen tenants constitutes prima facie
     constructive discrimination against J.L. on the basis of age and sex.

C.     Catarina Luis v. Creccal

     Mr. Di Geso, the manager of The Crossways, testified that in 1990 Creccal
     used income criteria. He said that if an applicant was making $17,000 per
     year, The Crossways would explain that the applicant could not afford the
     apartment. Since Creccal required $22,000 per year for a bachelor
     apartment, an applicant making $17,000, $18,000 or $19,000 per year did
     not meet the income criteria. Creccal would not put the applicant on a
     waiting list if the income criteria was not met.
     The evidence establishes that Creccal was using an income criterion when
     Ms. Luis applied for an apartment in 1990. To get a bachelor apartment,
     one needed an annual income of $22,000. Whether the criterion is
     expressed as a ratio or as an annual income determined after the landlord
     has made calculations, the result is the same.

     b) The Effect of the Factor

     Ms. Luis' complaint cites a number of grounds protected under the
     Code. The effect of a landlord's use of a rent/income ratio on people in
     receipt of public assistance is most telling.

                                             ....

     There is ample evidence, including evidence of the respondent's own
     witness, to support the finding that Creccal's income criteria excluded all
     recipients of social assistance from The Crossways.

                                             ....

     The Board concludes that all the components of the prima facie case are
     established against the respondent Creccal. Creccal's practice of using
     income criterion to screen tenants constitutes prima facie constructive
     discrimination on the basis of every ground cited in Ms. Luis' complaint.

¶ 25 Counsel for Creccal submitted that his client could not possibly have
discriminated against Ms. Luis because the record shows that on the day she sought to
rent a bachelor apartment none was available. In my view, if a prohibited discrimination
took place of Ms. Luis at the hands of Creccal, the availability or non-availability of a
bachelor apartment is of no significance.

D. The Board's Findings and Conclusions regarding "direct discrimination"

     Since we have decided that a landlord's use of income criteria to screen
     tenants results in adverse effect or constructive discrimination against the
     protected groups identified in the complaints, and that the use of income
     criteria is neither reasonable, bona fide, or would cause undue hardship if it
     was not permitted, we have decided not to address the argument that the
     use of income criteria to screen tenants amounts to direct
     discrimination. We make this decision in part because we have decided
     that the use of income criteria has an impact which is so pervasive that it is
     proper to declare that the rule is contrary to the Code, and strike it in its
     general application.

E. Other Findings of the Board

     The Board was persuaded by Dr. Hulchanski's evidence that rent-to-
     income ratios, presently used by landlords, are not a valid criterion for
     assessing a person's ability or willingness to pay rent, nor that it predicts
     default. Nothing on cross-examination or in the respondents' evidence
     persuaded us that his opinion was wrong.

                                             ....

     The respondents also called a number of expert witnesses to give evidence,
     which we will refer to as needed in our reasons for our decision. After
       careful review of the respondents' evidence we have decided that the
       respondents produced no evidence that the use of income criteria to screen
       tenants is a reliable predictor of default or the ability to pay
       rent. Furthermore, the respondents did not tender any evidence to support
       a finding that if landlords were not permitted to use income criteria to
       screen prospective tenants that they would suffer undue hardship.

                                             ....

       The evidence supports a conclusion that it is unexpected changes in one's
       circumstances after entering into a tenancy which are the most common
       cause of a tenant's default.

                                             ....

       The point is there is no evidence that the use of income criteria does what
       some landlords may well think it does - predict default. There is ample
       evidence from the experts and from academic research, cited by the
       experts, that it does not predict whether an individual will default on
       paying rent. Therefore, there is no reason to believe that landlords will be
       affected by not being able to use the income criteria they have been using.
       Moreover, the complainants were simply seeking the chance to pay market
       rent. They were not asking for special rates or special treatment.

                                             ....

       The evidence of the three landlords shows that they used various rent-to-
       income ratios - 25%, 27%, 30%, 33 1/3%, 34%. However, there is no
       empirical evidence that any of the ratios was picked because it had any
       predictive value with respect to the issue of whether a tenant would default
       in the payment of rent. The landlords were simply using "numbers" which
       had their historic bases as clearly outlined in the evidence of Dr.
       Hulchanski. The landlords were not using rent-to-income ratios because
       there was an objective rational basis for so doing.
       The evidence tendered by the respondents fails to show a connection
       between a rent-to-income ratio and the risk of default. The respondents did
       not submit empirical evidence comparing the default experiences of
       landlords who use rent-to-income ratios and those who do not.

¶ 26 The Board, after finding a prima facie case of constructive/adverse effect
discrimination had been established, held that none of the Appellants/landlords had
established, on a balance of probabilities, any of the three (3) necessary components of a
defence under s. 11 of the Code.

¶ 27     The Board summarized its findings in these words:
       ... we have decided that the respondents' use of income criteria to exclude
       the complainants from housing in their respective buildings constitutes
       adverse effect or constructive discrimination. The Commission and
       complainants' evidence established a prima facie case for each
       complainant. The evidence was clear that the use of income criteria is not
       a valid predictor of default. There was substantial evidence that the use of
       the criteria disproportionately excludes groups protected by the Code from
       rental housing. Once the Commission had proven a prima facie case, the
       respondents had to prove that the use of the income criteria was reasonable
       and bona fide and result in undue hardship to the respondents if they were
       required to accommodate the complainants. The respondents failed to put
       forth evidence before the Board to discharge this onus. There was simply
       no evidence to support a finding that the use of income criteria in the
       selection of tenants is reasonable and bona fide. We find that the use of
       income criteria to select tenants violates the Code, whether it is used by
       itself or in conjunction with other selection criteria.

VIII. Direct Discrimination

¶ 28     The Board found:

       Since we have decided that a landlord's use of income criteria to screen
       tenants results in adverse effect or constructive discrimination against the
       protected groups identified in the complaints, and that the use of income
       criteria is neither reasonable, bona fide, or would cause undue hardship if it
       was not permitted, we have decided not to address the argument that the
       use of income criteria to screen tenants amounts to direct
       discrimination. We make this decision in part because we have decided
       that the use of income criteria has an impact which is so pervasive that it is
       proper to declare that the rule is contrary to the Code, and strike it in its
       general application.

IX. Order of the Board of Inquiry

       Having found that a landlord's use of a rent/income ratio, or of an income
       criterion - whether alone or in combination with other assessment factors -
       in assessing applications for residential tenancy, breaches the Code, and
       having found that the rights of the three complainants were breached by the
       actions of the respective respondents herein, the Board makes the
       following orders:

             1.   The Board declares that the use of rent-to-income
                  ratios/minimum income criteria violate sections 2(1), 4, 9 and
                  11 of the Human Rights Code whether used alone or in
                  conjunction with other selection criteria or requirements.
             2.   The respondents, Creccal Investments, Shelter Corporation and
                Bramalea, shall cease and desist from using rent-to-income
                ratios or minimum income criteria in selecting prospective
                tenants whether alone or in conjunction with other selection
                criteria or requirements.
           3.   The respondent, Creccal, shall pay Ms. Luis specific damages of
                $460.00 for losses arising when she was denied housing at The
                Crossways.
           4.   The respondent, Creccal, shall pay Ms. Luis $5,000.00 as
                general damages for its breach of Sections 2(1), 9 and 11 of the
                Code.
           5.   The respondent, Creccal, shall pay Ms. Luis pre-judgment
                interest on the amounts set out in 3 and 4 above from May 4,
                1992 calculated in accordance with the Courts of Justice Act,
                R.S.O. 1990, c. C.43, Section 27 rate.
           6.   The respondent, Shelter, shall pay J.L. $4,000.00 as general
                damages for its breach of Sections 2(1), 4, 9 and 11 of the Code
                and pre-judgment interest on that amount from June 25, 1990
                calculated in accordance with the Courts of Justice Act rate.
           7.   The respondent, Bramalea, shall pay Ms. Kearney $4,000.00 as
                general damages for its breach of Sections 2(1), 4, 9 and 11 of
                the Code and pre-judgment interest on that amount from
                September 23, 1988 calculated in accordance with the Courts of
                Justice Act rate.
           8.   Post-judgment interest pursuant to the Courts of Justice Act
                shall begin to accrue on all damage awards one month from the
                date of this decision.

X.   What constitutes "constructive discrimination" also known as "adverse
     effect discrimination" also known as "disparate impact discrimination"?

¶ 29   In Canadian National Railway Co. v. Canada (Canadian Human Rights
Commission), [1987] 1 S.C.R. 1114, Dickson C.J.C. (for the Court) quoted, with
approval, from the Abella Report:

     Discrimination ... means practices or attitudes that have, whether by design
     or impact, the effect of limiting an individual's or a groups right to the
     opportunities generally available because of attributed rather than actual
     characteristics ...
     It is not a question of whether this discrimination is motivated by an
     intentional desire to obstruct someone's potential, or whether it is the
     accidental by-product of innocently motivated practices of systems. If the
     barrier is affecting certain groups in a disproportionately negative way, it is
     a signal that the practices that lead to this adverse impact may be
     discriminatory.
     This is why it is important to look at the results of a system.
¶ 30 The principles of constructive discrimination emerged in the decision of the
United States Supreme Court in Griggs v. Duke Power Co., 401 U.S. 424 (1971). The
Court held that the U.S. Federal Human Rights statute Title VII prohibited overt
discrimination and also "practices that are fair in form, but discriminate in operation" (p.
471).

¶ 31    In Canada, constructive discrimination was first recognized by the Supreme
Court of Canada in Ontario (Human Rights Commission) and O'Malley v. Simpsons-
Sears Ltd., [1985] 2 S.C.R. 536, 551 per McIntyre J.:

     A distinction must be made between what I describe as direct
     discrimination and the concept already referred to as adverse effect
     discrimination in connection with employment. Direct discrimination
     occurs in this connection where an employer adopts a practice or rule
     which on its face discriminates on a prohibited ground. For example: No
     Catholics or no women or no blacks employed here .... On the other hand,
     there is the concept of adverse effect discrimination. It arises where an
     employer for genuine business reasons adopts a rule or standard which is
     on its face neutral, and which will apply equally to all employees, but
     which has a discriminatory effect upon a prohibited ground on one
     employee or group of employees in that it imposes, because of some
     special characteristic of the employee or group, obligations, penalties, or
     restrictive conditions not imposed on other members of the workforce.

XI. Standard of Review

¶ 32 Section 41(1) and s. 41(3) of the Code (supra) provide an appellant with a right
of a full review by the Divisional Court "on questions of law or fact or both".

¶ 33 The Supreme Court of Canada has considered the standard of review of a Board
of Inquiry under the Code in:

      (a)   Zurich Insurance Co. v. Ontario (Human Rights Commission),
            [1992] 2 S.C.R. 321, 337-8, per Sopinka J.:

          This Court will normally overturn findings of fact only where there
     has been a palpable and overriding error made by the trier of fact. ... The
     Code, however, states [in s. 42(3)] that an appeal lies to a court on any
     question of law or fact and that the court may substitute its opinion for that
     of the Board of Inquiry ... Evidently, the Legislature was not of the opinion
     that the conclusions of the Board of Inquiry should be given great
     deference as a result of accumulated expertise or specialized
     understanding.

                                             ....
      In spite of the ability to overturn decisions of the Board on findings of
fact, this Court has indicated that some curial deference will apply even to
cases without privative clauses to reflect the principle of the specialization
of duties ... While some curial deference will apply to findings of fact,
which the Board may have been in a better position to determine, such
deference will not apply to findings of law in which the Board has no
particular expertise. The record provided to the Court and the judgments
below are not, in my view, in conflict on issues of fact but merely in
interpreting the legal implications flowing from those facts ... Accordingly,
... I have reviewed the evidence unconstrained by curial deference.

(b)   Dickason v. University of Alberta, [1992] 2 S.C.R. 1103, 1125-27,
      per Cory J.:

     However, the situation is different where there is neither specialized
skill and knowledge exercised by an administrative decision-maker nor a
statutory restriction imposed upon the Court's review of those
decisions. Here the IRPA [Individual Rights Protection Act, R.S.A. 1980,
c. I-12] has clearly indicated that a very broad standard of review would be
appropriate to decisions rendered by a Board of Inquiry under the
Act. Section 33(2) provides that a party may appeal a decision of the
Board on questions of fact or mixed law and fact with the leave of a judge
of the Court of Queen's Bench. In the case at bar, Murray J. granted leave
for an appeal on the facts. On a plain reading of the IRPA, it is clear that
the legislature specifically intended that appellate courts should examine
the evidence anew and, if deemed appropriate, make their own
findings. Under this Act, no particular deference is owed by the Court of
Appeal to the findings of the initial trier of fact. This court possesses the
same statutory jurisdiction as the Court of Appeal.
     In support of this position I would note that the provision for appeal in
the IRPA is similar to that in the Ontario Human Rights Code which this
Court considered in Etobicoke, supra. The statutory basis for an appeal
from an Ontario Board of Inquiry is found in s. 42(3) of the Code, R.S.O.
1990, c. H.19. It provides for an appeal on any question of law or fact and
states that the Court may substitute its opinion for the Board. In
Etobicoke, McIntyre J. held that this section (then s. 14d(4)) granted an
appellate court broader powers to review findings of the trier of fact than
exist at common law. The wording of s. 42(3) of the Ontario Code is more
explicit than that found in s. 33(2) of the IRPA. However, the import of the
two sections must be the same, as the right to an appeal on questions of
fact would be meaningless if the appellate court were not empowered to
substitute its own opinion for that of the Board. Nor is this a situation in
which the administrative decision-maker possesses a specialized expertise
which would merit curial deference. It can be seen that the IRPA grants
the Court of Appeal and thus this Court the jurisdiction to make findings of
fact based on a review of the evidence on the record, without deferring to
       the conclusions drawn by the Board of Inquiry.

XII. Conclusions

¶ 34     In my view, the Board of Inquiry proceeded as it was required to do and weighed
all the evidence.

¶ 35   In my view, the Board was entitled to weigh and compare the expert evidence
adduced by the various parties and accept the expert evidence adduced on behalf of the
Commission and the complainants in preference to the expert evidence adduced by the
Appellants/landlords. The Board of Inquiry, on the evidence, was entitled to say:

       ... we have decided that the respondents produced no evidence that the use
       of income criteria to screen tenants is a reliable predictor of default or the
       ability to pay rent. Furthermore, the respondents did not tender any
       evidence to support a finding that if landlords were not permitted to use
       income criteria to screen prospective tenants that they would suffer undue
       hardship.

¶ 36     In my view, there was evidence upon which the Board was entitled to make its
finding that, on a balance of probabilities, Bramalea's use of a rent/income ratio as the
sole basis for refusing her application for accommodation constituted prima facie
constructive discrimination against Ms. Kearney on the basis of age. Moreover, in my
view, the Board was justified in finding Bramalea did not, on a balance of probabilities,
call evidence to establish any one of the three (3) components of a defence under s. 11 of
the Code; namely:

         (i)   that the requirement was reasonable,
        (ii)   bona fide in the circumstances, and
       (iii)   that ceasing the use of the rent/income ratio would cause undue
               hardship to the landlords.

See:

        (1)    Ontario (Human Rights Commission) and O'Malley v. Simpson-
               Sears Ltd. (supra)
        (2)    British Columbia (P.S.E.R.C.) v. B.C.G.S.E.U. (MEIORIN), [1999]
               3 S.C.R. 3 at para. [54].

¶ 37    In my view, there was evidence upon which the Board of Inquiry was entitled to
make its finding that, on a balance of probabilities, Shelter's use of an income level/rent
to income ratio as the sole basis for refusing her application for accommodation
constituted a prima facie case of discrimination against Ms. J.L. on the basis of her age
and that Shelter had not established, on a balance of probabilities, any one of the three (3)
necessary ingredients of a defence under s. 11 of the Code.
¶ 38     In my view, there was evidence upon which the Board of Inquiry was entitled to
make a finding, on a balance of probabilities, that Creccal's use of income/rent ratio as
the sole basis for refusing her application for accommodation constituted a prima facie
case of constructive discrimination against Catarina Luis on the basis of "receipt of public
assistance" and that Creccal had not established, on a balance of probabilities, any one of
the three (3) necessary ingredients of a defence under s. 11 of the Code.

¶ 39 On the record before us, I see no reason to disturb the position adopted by the
Board of Inquiry at pp. 54-55 of its reasons (supra) - that is, because of the findings
regarding indirect discrimination, it is not necessary to discuss direct discrimination. It is
to be remembered that the process prescribed by the Code is complaint driven. Before
the Board, the whole thrust of the evidence was towards indirect
discrimination: "practices that are fair in form, but discriminate in operation" (Griggs
(supra): p. 431).

XIII.         Damages
   s.         41(1) of the Code: Where the board of inquiry, after a hearing, finds
              that a right of the complainant under Part I has been infringed and that
              the infringement is a contravention of section 9 by a party to the
              proceeding, the board may, by order,

        (a)     direct the party to do anything that, in the opinion of the board, the
                party ought to do to achieve compliance with this Act, both in
                respect of the complaint and in respect of future practices; and
        (b)     direct the party to make restitution, including monetary
                compensation, for loss arising out of the infringement, and, where
                the infringement has been engaged in wilfully or recklessly,
                monetary compensation may include an award, not exceeding
                $10,000, for mental anguish.

¶ 40 Counsel for Creccal submitted that the Board of Inquiry erred in awarding Ms.
Luis specific damages of $460.00 "in the absence of any evidence that Ms. Luis suffered
losses of any amount as a result of the alleged discriminatory behaviour" of Creccal.

¶ 41 The evidence shows that a bachelor apartment at The Crossways (Creccal) rented
at $585.00 a month. Ms. Luis paid $50 to a rent agency and then rented an apartment at
$630.00 per month for the ensuing year. $50 + (630 - 585) x 12 = $590.00. In my view,
Ms. Luis had specific damages exceeding the $460.00 awarded to her.

¶ 42 Counsel for Creccal, with counsel for Shelter joining in, submitted that the Board
of Inquiry had no jurisdiction to award general damages to Ms. Luis, Ms. J.L. or Ms.
Kearney because there was no evidence that any one of them suffered "mental
anguish". (s. 41(1)(b)).

¶ 43   In my view, a Board of Inquiry is entitled to award non-pecuniary intangible
damages arising out of the infringement of the Code. It is an award to compensate for the
intrinsic value of the infringement of the complainants' rights under the Code; it is
compensation for the loss of the right to be free from discrimination and the experience
of victimization. There is no ceiling on the amount of general damages.

¶ 44 Section 41(1)(b) of the Code provides a separate head of damages where the
complainant has proved "mental anguish". In this case, the Board did not make any
award for "mental anguish".

¶ 45   In my view, there is no merit to the submissions of counsel for the
Appellants/landlords on this ground of appeal.

See: Naraine v. Ford Motor Company of Canada (No. 5), [1996] O.H.R.B.I.D. 43,
(1996), 28 C.H.R.R. D/267, D/273-274 at paras. 39-44 (Ont. Bd. Inq.)

XIV. Interest

¶ 46 The Board awarded pre-judgment interest to each complainant on the awards of
specific and general damages from the date that each complainant had suffered the
constructive discrimination.

¶ 47 The Court of Appeal for Ontario in Ontario (Human Rights Commission) v.
Impact Interiors Inc., [1998] O.J. No. 2908, (1998), 35 C.H.R.R. D/477 and the
Divisional Court in London Monenco Consultants Limited v. Geiger et al. (October 6,
1998 - unreported), have held that a Board of Inquiry has jurisdiction to award pre-
judgment interest on any award of damages.

¶ 48 Here, the Board of Inquiry exercised its discretion. The record does not disclose
any error in the Board's exercise of that discretion.

XV. 1998 Amendments to the Code and O. Reg. 290/98

¶ 49 On June 17, 1998 (1998 Ontario Gazette: p. 1006), the following amendments to
the Code were proclaimed:

       s.   21(3) The right under section 2 to equal treatment with respect to
            the occupancy of residential accommodation without discrimination
            is not infringed if a landlord uses in the manner prescribed under this
            Act income information, credit checks, credit references, rental
            history, guarantees or other similar business practices which are
            prescribed in the regulations made under this Act in selecting
            prospective tenants.
       s.   48. The Lieutenant Governor in Council may make regulations,
    (a.1)   prescribing the manner in which income information, credit checks,
            credit references, rental history, guarantees or other similar business
            practices may be used by a landlord in selecting prospective tenants
            without infringing section 2, and prescribing other similar business
           practices and the manner of their use, for the purposes of subsection
           21(3);

¶ 50 On June 17, 1998 (1998 Ontario Gazette: p. 1006), Ont. Reg. 290/98 also
became law:

   1.(1)   A landlord may request credit references and rental history
           information, or either of them, from a prospective tenant and may
           request from a prospective tenant authorization to conduct credit
           checks on the prospective tenant.

      (2) A landlord may consider credit references, rental history information
    and credit checks obtained pursuant to requests under subsection (1), alone
    or in any combination, in order to assess the prospective tenant and the
    landlord may select or refuse the prospective tenant accordingly.
      (3) A landlord may request income information from a prospective
    tenant only if the landlord also requests information listed in subsection
    (1).
      (4) A landlord may consider income information about a prospective
    tenant in order to assess the prospective tenant and the landlord may select
    or refuse the prospective tenant accordingly only if the landlord considers
    the income information together with all the other information that was
    obtained by the landlord pursuant to requests under subsection (1).
      (5) If, after requesting the information listed in subsection (1) and (3), a
    landlord only obtains income information about a prospective tenant, the
    landlord may consider the income information alone in order to assess the
    prospective tenant and the landlord may select or refuse the prospective
    tenant accordingly.

   2.(1)   A landlord may require a prospective tenant to obtain a guarantee for
           the rent.

      (2) A landlord may require a prospective tenant to pay a security deposit
    in accordance with sections 117 and 118 of the Tenant Protection Act,
    1997.
      (3) In selecting a prospective tenant, a landlord of a rental unit described
    in paragraph 1, 2 or 3 of subsection 5(1) or subsection 6(1) of the Tenant
    Protection Act, 1997 may request and use income information about a
    prospective tenant in order to determine a prospective tenant's eligibility
    for rent in an amount geared-to-income and, when requesting and using the
    income information for that purpose only, the landlord is not bound by
    subsections 1(3) and (4).
      (4) Nothing in this Regulation authorizes a landlord to refuse
    accommodation to any person because of race, ancestry, place of origin,
    colour, ethnic origin, citizenship, creed, sex, sexual orientation, age,
    marital status, family status, handicap or the receipt of public assistance.
¶ 51 Counsel for the complainants' submits that s. 4 of O. Reg. 290/98 applies only to
s. 2 of the Code and not to s. 4 of the Code. In my view, this submission is without
substance because s. 2(1) of the Code prohibits discrimination based on any age with
respect to accommodation. Section 2 of the Code is not limited to sixteen or seventeen
year old persons as is s. 4.

¶ 52 The amendments to the Code (s. 21(3) and s. 48(a.1) and O. Reg. 290/98 became
law on June 17, 1998. The decision of the Board of Inquiry was released six (6) months
later on December 22, 1998. It will be recalled that the first two (2) paragraphs of the
Board's order (p. 61 of the Decision) state:

         1.   The Board declares that the use of rent-to-income ratios/minimum
              income criteria violate sections 2(1), 4, 9 and 11 of the Human
              Rights Code whether used alone or in conjunction with other
              selection criteria or requirements.
         2.   The respondents, Creccal Investments, Shelter Corporation and
              Bramalea, shall cease and desist from using rent-to-income ratios or
              minimum income criteria in selecting prospective tenants whether
              alone or in conjunction with other selection criteria or requirements.

¶ 53 The case presented by the Commission and by the complainants to the Board of
Inquiry was that the complainants' rights under s. 2(1), s. 4, s. 9 and s. 11 of the Code had
been violated when each Appellant/landlord refused an application for accommodation
based on a rent/income ratio or on a fixed annual income figure. The Board, on the
evidence presented, found that the Commission and the complainants had proved, on a
balance of probabilities, indirect discrimination.

¶ 54 The evidence showed that a survey had been conducted of Ontario's
landlords. Of those landlords who answered the survey, 27%-28% acknowledged that
they utilized the income/rent ratio to screen rental applicants.

¶ 55     If paragraph 1 or paragraph 2 of the December 22, 1998 Order of the Board is
allowed to stand, the Appellants/landlords would be forever prohibited by paragraphs 1
and 2 from utilizing the new s. 21(3) of the Code and/or O. Reg. 290/98,
entitled: "Business Practices Permissible to Landlords in Selecting Prospective Tenants
for Residential Accommodation".

¶ 56    If paragraph 1 and paragraph 2 of the impugned Order are allowed to stand,
because of the June 17, 1998 amendments, the Appellants/landlords would be bound, in
perpetuity, by a different set of rules than every other landlord in Ontario.

¶ 57 On several occasions during their submissions, counsel for the Respondents
reminded us that the Code was remedial and not punitive. That proposition alone points
out why those paragraphs cannot be allowed to stand.

Result
¶ 58     The cross-appeal of Catarina Luis in Appeal 43/99 is dismissed.

¶ 59 The appeal of Shelter and Bramalea (40/99) and the appeal of Creccal (43/99) are
allowed in part in that paragraph 1 and paragraph 2 of the December 22, 1998 Order set
out on page 60 of the Decision are struck out and replaced with the following:

       1-2. In the three (3) cases presented, the Board finds that the use by the
       Appellants (Landlords) of rent/income ratios or an income criteria as the
       sole factor in assessing the applications for residential tenancy of the
       complainants resulted in indirect discrimination and breached the rights of
       the three (3) complainants under s. 2(1), s. 4, s. 9 and s. 11 of the Human
       Rights Code.

¶ 60     In all other respects, appeals 40/99 and 43/99 are dismissed.

XVII. Costs

¶ 61     In all the circumstances, there will be no order as to costs.

O'DRISCOLL J.
MacFARLAND J.
CLARKE J.

				
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