COURT FILE NO.: 06-DV-1256

Ottawa

DATE: 20070412

SUPERIOR COURT OF JUSTICE – ONTARIO

DIVISIONAL COURT

RE: Douglas Yankey, Plaintiff, Respondent

-and-

Jody Wheeler, Defendant, Appellant

-and-

Ottawa-Carleton District School Board, Third Party

HEARD: April 4, 2007

BEFORE: Leitch, R.S.J., Lane and Hambly JJ.

COUNSEL: David Cutler, for the Plaintiff, Respondent

David Elliott, for the Defendant, Appellant

No one appeared for the Third Party

E N D O R S E M E N T

[1] This is an appeal[^1] by the defendant from the order of Forget J. dated June 2, 2006, dismissing the defendant’s motion to enforce a settlement of the action made July 15, 2005. Under the settlement, the plaintiff agreed to abandon his action in return for the payment of $5,000 towards his costs. The settlement was offered by letter from the solicitor for the plaintiff, Bryce Geoffrey and accepted by letter from the solicitor for the defendant, Ms. Catherine Coulter. No Minutes of Settlement were executed by the parties. The plaintiff denies having given any instructions to make this settlement and repudiated it promptly.

[2] The action arose from an incident at the J.S. Woodward High School in which the plaintiff was seriously injured while he and the defendant were wrestling during a drama class, while the teacher was out of the room. Both were Grade 12 students and members of the school wrestling team at the time. The plaintiff suffered a spinal cord injury and neck fracture for which he has undergone surgery.

[3] The plaintiff having refused to close the settlement, the defendant moved before Forget J. for an order enforcing it. Forget J. refused the order. In his reasons he acknowledged that a settlement entered into by a solicitor with ostensible authority to do so will be enforced against the client where no limitation of the solicitor’s ostensible authority has been communicated to the opposing party. He found, however, that the circumstances surrounding the settlement discussions put counsel for the defendant on notice of problems in her relying on the usual authority of the solicitor for the plaintiff. He wrote:

[8] The extensive correspondence exchanged between then counsel for the plaintiff and counsel for the defendant indicates quite clearly that there was a problem and this was known by the solicitor for the defendant who, in fact, raised it with then counsel for the plaintiff. From the tenor of said correspondence a red flag was being waved, which should have alerted counsel for the defendant of obvious difficulties even after receiving the offer of July 13, 2005.

[12] On the basis of the material filed in this motion, I have not been persuaded that then counsel for the plaintiff had the necessary authority to compromise the action as outlined in his offer of July 13, 2005.

[14] In effect, the evidence in this motion clearly demonstrates that the settlement obtained does not reflect the intention of the plaintiff and accordingly cannot stand.

[4] Having made these findings, he dismissed the motion and directed that the action proceed as if there had been no accepted offer to settle.

[5] The appellant submitted that the motion judge had asked himself the wrong question at paragraph 6 of the reasons. After acknowledging in paragraph 5 that enforcement should be ordered unless some limitation of authority had been communicated to the opposite party, he said in paragraph 6 that the issue was whether the former solicitor had authority to enter the settlement. This statement was criticized by counsel on the basis of Scherer[^2]. Taking paragraph 6 by itself, the criticism has validity, but the rest of the analysis, particularly paragraph 8, quoted above, makes it clear that the motion judge actually addressed the correct question.

[6] The findings of the motion judge in paragraphs 8 and 14 are questions of fact to which we must give the deference owed to the finder of fact. We ask therefore whether there was any evidence upon which the motion judge could reach the conclusions on which he based his findings. In our view there is evidence in the record to support the finding that there was a “red flag” which signalled problems with relying on the authority of then counsel for the plaintiff.

[7] In May, 2005, settlement proposals were being exchanged by fax and on the 17th Mr. Geoffrey proposed that the plaintiff’s costs should be paid as part of any settlement. On May 18th, by fax sent at 9:26 am, counsel for the defendant responded that her client would settle on a “walk-away” basis but there would be no payment to the plaintiff. At 9:41 am she received a fax from Mr. Geoffrey rejecting her proposal. She then wrote to Mr. Geoffrey as follows:

I write further to Mr. Geoffrey’s letter of this morning, which was in response to mine. Given the exceedingly fast turnaround between the letters, I suspect that my letter may not have been brought to the attention of Mr. Yankey. Mr. Geoffrey, while you state that Mr. Yankey has little to lose by proceeding to trial, I would ask that you please put this settlement offer before him, as required by the Rules of Civil Procedure and confirm to him that [he could find himself liable to pay costs if he lost the trial].

[8] When she was cross-examined about this exchange of letters, the following took place:

Q. 38 And the exceedingly fast turnaround is sort of the 15 minute period we were just talking about?

A. That’s correct.

Q. 39. And you were concerned, at that time, that Mr. Geoffrey had not brought your letter and the settlement offer contained therein to Mr. Yankey’s attention?

A. I was concerned that he was taking a negotiating position on behalf of his client without, perhaps, having run his letter by his client.

[9] None of the letters of Mr. Geoffrey to opposing counsel bear any indication that a copy had been sent to the client. There was other evidence, including a voice mail from Mr. Geoffrey of June 27th, which, taken together with the May incident, supports the view of the motion judge that counsel for the defendant was on notice of problems in relying on the usual authority of a solicitor.

[10] In our view, the facts found by the motion judge are supported in the evidence and there is no basis on which we could interfere with those findings. The motion judge held that those facts engaged the jurisdiction of the court to refuse to enforce the settlement. We could only interfere if we were persuaded that he was clearly wrong in that conclusion. We are not so persuaded. Once counsel had realized that Mr. Geoffrey might well be taking decisions without communicating with his client, she could no longer simply rely on the assumption of his authority without running the risk that the client would be able to repudiate any settlement reached. Minutes of Settlement sent to Mr. Geoffrey for execution by the client would have provided the certainty which was lacking.

[11] The appeal is dismissed with partial indemnity costs fixed at $6,000 plus disbursements of $500 and applicable taxes.

Leitch R.S.J.

Lane J.

Hambly J.

DATE: 2007/04/12

[^1]: Leave to appeal was granted by R.J. Smith J. October 4, 2006. [^2]: Scherer v. Paletta 1966 286 (ON CA), [1966] 2 O.R. 524, 57 D.L.R. (2nd) 532 (C.A.)