COURT FILE NO.: CV-10-396131 DATE: 20160421 SUPERIOR COURT OF JUSTICE – ONTARIO
RE: Yamunakumari Nithiananthan, Plaintiff
- and - Thirukumar Thirunavukarasu, M.P.I.R.E. Realty Group Inc., V.K.T. Financial Concept Inc., Vigneswaran Ponnampalam, Sutharvili Thirukumar, Sanjaykumar Doshi, Thangavel Kesavan, Leslie Philpotts and 1769656 Ontario Inc., Defendants
BEFORE: Spies J.
COUNSEL: Todd Robinson and Kate Byers, for the Plaintiff Bradley Phillips, for the Defendant Thangavel Kesavan Bryan Skolnik, for the Defendant Sanjaykumar Doshi
HEARD: April 11, 2016
Endorsement
Introduction
[1] This action was commenced in 2010 and concerns a dispute with respect to the title to the property at 22 Gaitwin Place in Scarborough, Ontario that was owned by the plaintiff. The plaintiff alleges that both a second mortgage and a third mortgage were fraudulent and that the power of sale proceedings brought by the second mortgagee in November 2009, which resulted in her losing the property, was also fraudulent. As a result, the plaintiff seeks damages from numerous defendants. Sanjaykumar Doshi was the plaintiff’s lawyer on the second mortgage and Thangavel Kesavan was her lawyer on the third mortgage, registered in March 2008.
[2] The plaintiff seeks an order declaring that the Full and Final Releases she signed on July 28, 2011 in favour of the defendant, Sanjaykumar Doshi and the Full and Final Releases that she and her husband signed in favour of the defendant Thangavel Kesavan (referred to collectively as the “lawyer defendants”) are invalid and of no force and effect and an order declaring that the Notice of Discontinuance, dated May 7, 2012, as against the lawyer defendants is invalid and of no effect and that it be set aside.
[3] The position of the plaintiff is that immediately after signing the Releases, she and her husband, who signed the Release in favour of Mr. Kesavan, decided not to proceed with any settlement with the lawyer defendants. The plaintiff maintains that contrary to her instructions, her former lawyer, Mr. Goswami, mistakenly delivered the Releases to counsel for the lawyer defendants just before getting off the record and then Mr. Morton, who took over as her counsel, failed to follow her instructions and mistakenly served a Notice of Discontinuance as against the lawyer defendants which was served on counsel for the lawyer defendants and counsel for the other defendants. Counsel who received these documents were Mr. Phillips, counsel for Mr. Kesavan and Mr. Skolnik, counsel for Mr. Doshi.
The Evidence
[4] The motion proceeded on the basis of affidavit evidence only. The plaintiff swore an affidavit. On behalf of Mr. Kesavan, an affidavit was sworn by Adam Hummel, an associate at Mr. Phillips’ firm. On behalf of Mr. Doshi, Judy Chang, an assistant at Mr. Skolnik’s firm, swore and was filed an affidavit, essentially adopting the contents of Mr. Hummel’s’ affidavit. No affidavits were filed by any of the lawyers who have direct personal knowledge of this matter. None of the parties sought to conduct any cross-examinations on the affidavits or Rule 39.03 examinations of the lawyers who have personal knowledge of the matters in issue.
[5] A preliminary issue raised by Ms. Byers is that the responding affidavits are inadmissible and unreliable as they contain hearsay evidence from Mr. Phillips and Mr. Skolnik with respect to contentious issues that go to the heart of the matter and that they have attempted to circumvent the rule that a barrister cannot be both a witness and counsel.
[6] In particular Ms. Byers complains that the affidavits allege that a settlement was agreed to with Mr. Goswami. As Mr. Phillips submitted, in the Fresh as Amended Notice of Motion, one of the grounds for the motion is stated to be that on February 17, 2012, without the knowledge of the plaintiff and contrary to her instructions, her former counsel confirmed a settlement and sent the Releases to counsel for the lawyer defendants.
[7] I accept the submissions of Mr. Robinson that the plaintiff is not bound by a statement of fact set out in the grounds in support of her motion but I do not fault counsel for the lawyer defendants arranging to have others in their firm swear affidavits. This is commonly done on motions so that counsel familiar with the action can argue the motion. An affidavit can be made on information and belief where the source is stated. In addition to the Notice of Motion which confirmed that a settlement had been reached, the thrust of the plaintiff’s affidavit is that her counsel were mistaken or acted contrary to her instructions, not that there was no completed settlement agreement. That was something that is now argued by counsel for the plaintiff. It is only with hindsight that it can be said that it would have been preferable for Mr. Phillips and Mr. Skolnik to swear the affidavits on this motion.
[8] There is no dispute that the documents filed in the motion records, being copies of emails and letters, are authentic. As set out in para. 28 of the plaintiff’s Factum, there is no dispute that signed releases were sent by Mr. Goswami and the Notice of Discontinuance was sent by Mr. Morton to counsel for the lawyer defendants. For the reasons that I will come to, this motion can be determined by relying solely on the undisputed facts as reflected by those documents, without regard to the contested hearsay evidence concerning oral communications between counsel. I will however include this evidence in my chronology although I have identified it as hearsay to indicate that I have placed no reliance on this evidence in deciding this motion.
The Chronology
[9] In July 2011, the plaintiff retained Suvendu Goswami to act as her counsel. She admits that at that time, Mr. Goswami recommended she discontinue the action against Messrs. Doshi and Kesavan.
[10] In a letter from Mr. Skolnik to Mr. Goswami, sent by fax on July 25, 2011, Mr. Skolnik stated that when he and Mr. Goswami last spoke, Mr. Goswami had advised he would seek instructions from his client to discontinue the action against Mr. Doshi (double hearsay). Mr. Skolnik stated that he had received instructions and “can advise that my client is prepared to consent to the delivery by your client of a Notice of Discontinuance on a without-cost basis, provided the enclosed Release in favour of my client is executed by yours”. Mr. Skolnik stated that he was sending a copy of this correspondence to Mr. Phillips as he suspected that Mr. Phillips would be seeking similar instructions. He finished the letter by asking that Mr. Goswami have his client “execute the Release and return same to me along with a Notice of Discontinuance”.
[11] By letter dated July 26, 2011, Mr. Phillips confirmed to Mr. Goswami that further to their recent telephone conversation (contents not disclosed but would be double hearsay) and Mr. Skolnik’s letter of July 25, 2011, that he similarly had instructions that his client was prepared to consent to the delivery by Mr. Goswami’s client of a Notice of Discontinuance on a without-costs basis, provided that the enclosed Release in favour of his client was executed by both the plaintiff and her husband, who was a signatory to the subject mortgages.
[12] On July 28, 2011, the plaintiff and her husband attended at Mr. Goswami’s offices and signed the Releases although she swears that they did so “reluctantly”. She claims that immediately afterward she contacted Mr. Goswami to inform him that she did not want to discontinue her action or release either lawyer “given their significant involvement in the fraudulent transactions at issue in this action”. There is no evidence that these new instructions were put in writing at that time.
[13] Mr. Phillips sent a follow-up letter to Mr. Goswami by fax on October 7, 2011. In that letter, Mr. Phillips stated that his letter of July 26, 2011 “was sent following your confirmation that your client is prepared to discontinue this matter on a without-costs basis, as against my client” (double hearsay). Mr. Phillips requested that Mr. Goswami return three originally executed copies of LawPro’s standard Full and Final Release which had been previously sent and that the Notice of Discontinuance be served and filed so that “we may close out our file”. Mr. Skolnik was copied on the letter. To be clear, given the submissions of counsel for the plaintiff, for the purpose of this motion I do not rely on the truth of the statement made by Mr. Phillips in this letter that Mr. Goswami confirmed that the plaintiff was prepare to discontinue the action on a without-costs basis.
[14] A few months later, in an e-mail to the plaintiff dated February 9, 2012, Mr. Goswami stated, “I have not proceeded to discontinue the action against the two lawyers as we awaited the results of the Newmarket motions and your further instructions .” [emphasis added] Counsel advised me that there was related litigation in a separate action in Newmarket. I note that this email does not make any reference to the Releases already signed and suggests that the plaintiff had only told Mr. Goswami to hold off on the Notice of Discontinuance. By this point Mr. Goswami had decided to remove himself from the record. He ended the e-mail with the statement that he left it to the plaintiff’s “new lawyers” to deal with the outstanding issues.
[15] In a letter dated February 9, 2012 faxed to Mr. Goswami and copied to Mr. Skolnik, Mr. Phillips stated that Mr. Goswami had, on two prior occasions, promised to provide his client’s executed Release (double hearsay) and it had still not been received. The letter concluded:
Please ensure that the executed Release is provided by no later than Friday, February 17, 2012.
We trust it will not be necessary to seek instructions to enforce the terms of the settlement, at which time costs will be sought as against your client. [Emphasis added]
[16] On February 17, 2012 Mr. Goswami sent a fax to Mr. Phillips attaching the Full and Final Release executed by the plaintiff. In the cover sheet he stated, “Original will be mailed soon. Please be advised that I am moving to remove myself from the Record in this action unless the plaintiff sends a notice of change of lawyer or a notice of intention to act in person.”
[17] I presume the same fax was sent to Mr. Skolnik. He wrote to Mr. Goswami by letter faxed on February 17, 2012 acknowledging receipt of the faxed copy of the Release, duly executed by his client. He stated, “While I thank you for same, I am curious as to why this Release which was executed on July 28, 2011 is just being delivered now.” Mr. Skolnik also expressed confusion about the fact that the fax cover sheet indicated Mr. Goswami would be moving to have himself removed as lawyer of record, given the only step remaining in the action was for him to deliver a Notice of Discontinuance. He went on to state:
You have previously written to both Mr. Phillips and I advising that the plaintiff was prepared to deliver a Notice of Discontinuance. Certainly, the execution of the Release would seem to confirm that view. I am therefore at a loss to understand why you do not simply deliver the Notice of Discontinuance and file same with the court.
Mr. Phillips and I do not want to have to be in a position to move to enforce the settlement. That would be needless waste of time and expense, the bulk of which would be borne by your client. [Emphasis added]
[18] I note that no letters are in evidence where Mr. Goswami advised counsel for the defendants that the plaintiff was prepared to deliver a Notice of Discontinuance although having signed the Release that would have necessarily followed as she had released the lawyer defendants from all claims.
[19] On April 3, 2012, Mr. James Morton served a Notice of Change of Lawyer on the defendants. By e-mail dated April 4, 2012, Mr. Morton wrote to the plaintiff and stated that he had been going through the file and that fully executed Releases were delivered to the lawyers for the lawyer defendants and he attached a copy of the Releases. He also referred to the fact that a motion was being brought by the remaining defendants to set aside the noting in default and default judgment, returnable April 13, 2012. He concluded with the request that he be given instructions as soon as possible. A portion of the letter is redacted on the basis of solicitor-client privilege.
[20] Presumably in response to that letter the plaintiff sent an e-mail to Jennifer Blaney of Mr. Morton’s firm at 4:39 p.m. on Friday, April 6, 2012. She apologized for the delay in responding and stated:
Mr. Goswami forced me to sign the document for removing Kesavan and Doshi and informed me that he wouldn’t file the document unless needed and without my instructions, I told him not to continue to releasing these individuals numerous times. Please let Mr. Morton know I agree with his suggestion to set aside the default and move forward. Can Mr. Morton please advice (sic) what would be the best way to continue with or without Mr. Doshi and Mr. Kesavan. [(Emphasis added])
[21] This email suggests that the plaintiff was still undecided about whether to continue her action against Mr. Doshi and Mr. Kesavan and wanted advice on that issue from Mr. Morton.
[22] At 9:16 p.m., on the same day, Mr. Morton responded by email:
I think releasing the lawyers was a mistake (Goswami’s mistake) but will proceed on the basis of this e-mail. Thanks again. (Emphasis added)
[23] The plaintiff relies on this email in support of her position that Mr. Morton made an error when he sent out the Notice of Discontinuance. She does not allege, however, having any further conversations with Mr. Morton and his email to her is ambiguous. It could be interpreted as Mr. Morton confirmed that he would decide what to do with the lawyer defendants as she was relying on him to advise her in that regard.
[24] On Sunday April 8, 2012, at 5:19 p.m. Mr. Skolnik sent an e-mail to Mr. Morton, copied to Mr. Phillips and Mr. Valitutti, who was acting for the remaining defendants, which stated in part:
As you know, my client (as well as Mr. Phillips’ client) entered into a settlement agreement with the plaintiff. To that end, the plaintiff has executed a release in favour of my client. Attached is a copy of same. The only remaining item to complete the settlement is for the plaintiff to deliver a Notice of Discontinuance. Despite repeated requests to the plaintiff’s previous counsel, the Notice of Discontinuance has not been forthcoming.
[25] Mr. Skolnik concluded by advising Mr. Morton that if his client was forced to remain in the action beyond that week, he would move for an order enforcing the settlement and seek costs for doing so. [Emphasis added]
[26] A few minutes later at 5:28 p.m., on the same evening Mr. Morton responded to Mr. Skolnik’s e-mail, stating:
This day I dictated letters which will resolve all these concerns; specifically, I agree to either a discontinuance from my office or consent to an order dismissing the action.
[27] The letters Mr. Morton was referring must be the letter dated April 9, 2012 faxed to the attention of Mr. Skolnik and Mr. Phillips which states, in part, as follows:
From discussions and materials provided by Mr. Skolnik, it appears that releases were delivered to your respective clients, but the action was not dismissed or discontinued as against them. I have sought and received instructions to discontinue the action as against both of your clients. It is my understanding that this discontinuance is what was agreed upon. The purpose of my letter is to confirm that this understanding is correct; should either or both of you wish to obtain an order (without costs) dismissing the action as against your clients, I would be content to be in a position to sign the appropriate consents. [Emphasis added]
[28] This letter is the strongest evidence that the plaintiff’s position that she did not instruct Mr. Morton to send the Notice of Discontinue is false. Although Mr. Morton appears to have been of the view that releasing the lawyers was a mistake on the Friday, two days later he dictated the letter confirming his instructions to discontinue the action or, if preferred, consent to an order dismissing the action, both without costs.
[29] By e-mail dated April 10, 2012, Mr. Skolnik confirmed that he and Mr. Phillips were content to receive Mr. Morton’s Notice of Discontinuance on a without-costs basis. Mr. Morton responded by an e-mail to Mr. Skolnik and Mr. Phillips which was copied to a “Jennifer Packwood,” I presume someone at his firm, asking that she prepare “same to serve and file”.
[30] By letter dated May 7, 2012, sent by fax to Messrs. Skolnik and Phillips and counsel for the other defendants, Mr. Morton enclosed a Notice of Discontinuance, which he served pursuant to the Rules of Civil Procedure, R.R.O. 1990, Reg. 194. There is no dispute that this document was then filed with the court, as it is referred to in subsequent court endorsements.
[31] Mr. Morton obtained an order removing his firm as solicitors for the plaintiff in August 2012. The plaintiff alleges that at a later assessment of his accounts, Mr. Morton apologized for delivering the Notice of Discontinuance. Presuming this is correct for the purpose of this motion, it is clear that by August 2012 the plaintiff knew that both the Releases and the Notice of Discontinuance had been sent to counsel for Mr. Doshi and Mr. Kesavan.
[32] The plaintiff was now self-represented. She took no immediate action to deal with the alleged mistakes of her two former lawyers.
[33] On June 4, 2013, the Registrar dismissed this action for delay. It was only then; almost a year after the plaintiff knew of the mistakes that she now alleges, that she prepared a Notice of Motion dated July 16, 2013 asking to reinstate the action. No relief was sought with respect to Mr. Doshi or Mr. Kesavan although in the grounds for the motion she stated her position that she had not instructed Mr. Morton to serve a Notice of Discontinuance.
[34] Master Glustein (as he then was) heard this motion six months later on January 7, 2014. He stated in his endorsement that the plaintiff’s position was that the discontinuance and releases against the lawyer defendants were effected contrary to her instructions. He noted that there was no existing claim against these two defendants and that the Master did not have jurisdiction to make a declaration as to whether a discontinuance or release was valid. As a result he made no order as against these defendants. He did, however, order the plaintiff to deliver an Affidavit of Documents within 60 days.
[35] In October 2014, the plaintiff attempted to bring a motion for 24 different orders including a request for punitive and exemplary costs and damages. There does not appear to be any claim dealing with the Releases. There may be relief sought with respect to the Notice of Discontinuance in issue on this motion although the plaintiff referred to a Notice of Discontinuance order given by Master Dash on May 10, 2012 that was obtained by Mr. Morton using improper invalid documents to mislead the court.” I am not aware of any order by Master Dash.
[36] On December 16, 2014, the plaintiff was still self-represented. She attended before Justice Himel in order to schedule this motion. Mr. Gaudreau as counsel for Mr. Kesavan attended the hearing. The scheduling of the plaintiff’s motion was adjourned to February 3, 2015. The plaintiff must have retained Mr. Robinson and Ms. Byers shortly thereafter. By letter dated February 3, 2015, Mr. Robinson confirmed that the motion scheduling date had been cancelled. The motion before me was not brought until February 1, 2016, another significant delay.
[37] I am advised that the plaintiff did prepare an Affidavit of Documents but no other defendants still in the action, nor Mr. Doshi or Mr. Kesavan, have done so. In other words, at most it can be said that since this action was commenced six years ago, the action is still at the pleadings stage.
Analysis
Merits of the motion
[38] Based on these uncontested facts and ignoring the impugned hearsay evidence, and having considered the submissions of counsel and the relevant case law, I have reached a number of conclusions as follows:
a) Although there is no evidence that I can rely upon of a formal offer and a formal acceptance, it is clear from the delivery of the Releases and the Notice of Discontinuance filed that there was a settlement agreement communicated between counsel that the plaintiff’s action against her former lawyers Mr. Doshi and Mr. Kesavan was to be discontinued without costs in exchange for the plaintiff and her husband signing the Releases;
b) Even accepting for the purpose of this motion that the plaintiff’s evidence that her two former counsel acted in error or disregarded her instructions, both Mr. Goswami and Mr. Morton had ostensible authority that counsel for the lawyer defendants could rely upon to complete the settlement agreement by providing all of the documentation required to their counsel;
c) Although I have discretion to not enforce the settlement agreement this is not a case where I should exercise that discretion.
[39] My reasons for coming to these conclusions are as follows.
[40] Ms. Byers submitted that there is no evidence of a settlement agreement because there is no evidence of negotiations between counsel leading to an offer to settle and an acceptance of that offer. As I have already stated, for the purpose of this motion I have not relied on the hearsay statements in the correspondence that states that such discussions in fact took place. This would be fatal in most motions to enforce a settlement agreement because the court would not be able to determine the terms of the agreement. That is not the case here.
[41] A settlement agreement is a contract and is subject to the general law of contract. As such there must be an intention to create a contract and agreement on all essential terms; Olivieri v. Sherman, 2007 ONCA 491, at para. 41.
[42] In this case even though there is no formal offer or acceptance in writing, there could be no doubt about the terms of the settlement agreement reached between counsel for the plaintiff and counsel for the lawyer defendants in that all of the terms of the settlement have been completed. This is not a case where a party is attempting to resile from a settlement where the court has to determine whether or not all of the essential terms were agreed upon. The plaintiff and her husband executed the Releases provided by counsel for these defendants without any modification and Mr. Goswami delivered those Releases to the lawyer defendants’ counsel. Mr. Morton then confirmed that a Notice of Discontinuance or consent dismissal would be without costs and served and filed a Notice of Discontinuance. There could be no clearer form of acceptance of the offers from the defendants to agree to a discontinuance of the actions without costs provided the plaintiff and her husband signed the standard LawPro Release. No costs were ever sought by these defendants after the Notice of Discontinuance was filed.
[43] In my view the delivery of the Releases and the Notice of Discontinuance to counsel for the lawyer defendants was as good as, if not better than, formal acceptance of the offer by a letter from counsel for the plaintiff advising that the plaintiff agreed to the terms of their offer namely that she was prepared to sign the standard LawPro release in exchange for the lawyer defendants consenting to a discontinuance of the action against them without insisting on their costs.
[44] There is no suggestion that counsel for the plaintiff sent these documents to counsel for the lawyer defendants inadvertently. Rather it is alleged that they either misunderstood or failed to follow the plaintiff’s instructions. As for the absence of evidence of negotiations, that is not relevant. The length of time parties negotiate an agreement is irrelevant to the question of whether or not a binding agreement was reached.
[45] On the issue of ostensible authority, Ms. Byers argued that Mr. Phillips and Mr. Skolnik could not have reasonably believed that Mr. Goswami and Mr. Morton had authority to provide the documents in issue. With respect to Mr. Goswami, the plaintiff relies on what Ms. Byers submitted were “red flags”; the fact that Mr. Goswami did not deliver the Releases until seven months later and only then after advising defence counsel that he was going to remove himself from the record. She submitted as well that this was possibly because of a breakdown in the solicitor-client relationship but she conceded that counsel for the lawyer defendants were not told what the reason was.
[46] In my view these facts do not undermine the well established principle of law that a lawyer has ostensible authority to effect a binding settlement on behalf of his client and unless the opposing side has knowledge of some limitation on the lawyer’s retainer, any settlement made by the lawyer will be binding on the client, regardless of any dispute between the lawyer and his own client as to the scope of the lawyer’s instructions; see Srajeldin v. Ramsumeer, 2015 ONSC 6697 (Div. Ct.) at para. 21, citing Scherer v. Paletta, [1966] 2 O.R. 524 (Ont. C.A.), see also Sahota v. Sahota, 2016 ONSC 314 (Div. Ct.) at para. 15.
[47] In my view the fact that Mr. Goswami advised counsel that he was going to move to get off the record does not change the fact that he had ostensible authority to provide counsel with the signed releases that had been signed by the plaintiff and her husband many months earlier. Mr. Goswami was still on the record and counsel for the lawyer defendants had no way of knowing why he was getting off the record. As for the delay, Mr. Goswami did not provide any explanation and in particular did not suggest it had to do with any change in instructions. The Releases were properly signed and witnessed and in the form sent by counsel for the lawyer defendants to Mr. Goswami.
[48] As for Mr. Morton, although it was not necessary for him to state that he had instructions from the plaintiff (see Srajeldin at para. 27), he did so. Ms. Byers did not make any submission that Mr. Morton did not have ostensible authority when he sent the Notice of Discontinuance to counsel for the lawyer defendants except that counsel should have realized that he had not had enough time to get instructions from the plaintiff since it was the weekend. That is not a submission that has any merit in my view.
[49] Ms. Byers submitted that the case at bar differs from the facts in Srajeldin because there were a lot of negotiations in that case and evidence of a clear an unambiguous offer and acceptance. I have already dealt with this issue. In my view the case at bar is on all fours with Srajeldin as Justice Molloy refused to set aside the settlement even accepting for the purpose of the motion that the lawyer for the plaintiff was acting without instructions; at para. 24.
[50] As for the argument that the Notice of Discontinuance is a nullity in that it was not validly served and filed because not all counsel consented, it was copied to Mr. Valitutti who was acting for the remaining defendants and he made no objection, which is consistent with the fact that his clients had not asserted any cross-claim against the lawyer defendants. Furthermore, the Notice of Discontinuance was filed and accepted by the court. The cases relied upon by the plaintiff are all cases where a Notice of Discontinuance was inadvertently filed. There is no evidence that this is the case here. As already stated Mr. Morton’s intention was obvious and deliberate. Furthermore, there is Rule 1.04(1) which provides that the Rules are to be liberally construed. I find that any technical breach of the Rules was just that; technical. The Notice of Discontinuance is valid.
[51] The question remaining then is whether or not I should exercise my discretion to set aside the Notice of Discontinuance and the signed Releases. In that regard, Justice Molloy succinctly summarized the law in Srajeldin starting at para. 33 where she reviewed the factors to be considered set out in Milios v. Zagas (1998), 38 O.R. (3d) 218 (Ont. C.A.).
[52] Considering the ten questions from Milios, identified by Molloy J., I conclude as follows. With respect to the first three questions, there is no evidence that the settlement is unconscionable or improvident. In fact the plaintiff admits that Mr. Goswami recommended that she not continue her action against the lawyers and they did not seek costs from the plaintiff at the time of the discontinuance, which they would otherwise have been entitled to. There is no evidence of unequal bargaining power in that all parties were represented by counsel at the relevant time. There is no evidence of any party acting in bad faith.
[53] The fourth question asks whether or not counsel acted without authority, which is a factor in favour of not enforcing the settlement. I have accepted that as a fact for the purpose of this motion but I must say that I find the plaintiff’s position that not one but two, litigation counsel either ignored her instructions or where somehow mistaken about her instructions difficult to believe. I would not be surprised if Mr. Goswami and Mr. Morton take a very different position. I note that in each case they responded to letters from counsel for the lawyer defendants threatening to enforce the settlement agreement and seek costs against the plaintiff. In any event, if the plaintiff’s position is correct she has a remedy against her former counsel for any losses suffered. Furthermore, confirming the settlement agreement does not prevent the plaintiff from seeking leave to examine the defendant lawyers in this action to obtain any relevant evidence they might have.
[54] Returning to the questions, the terms of the settlement agreement are clear in that they have been completed. The agreement encompasses all of the issues in dispute since Full and Final Releases were provided in favour of the lawyer defendants. The settlement was not negotiated with the parties physically in each other’s presence but as Justice Molloy observed in Srajeldin at para. 39, this is an irrelevant consideration in this case, which is not a family law case.
[55] With respect to the final three questions, it is now five years since the settlement agreement was reached and eight years since the events underlying the claim took place. As I have set out in the chronology, once Mr. Morton was off the record the plaintiff took no immediate action to deal with the alleged mistakes of her two former lawyers. In fact she did not do anything until almost a year later when the Registrar dismissed her action for delay in June 2013. Although I accept that as a self-represented litigant it is significant that she made no attempt to deal with this issue for many months.
[56] Once the plaintiff decided to take action I accept that she may have not known how to proceed, evident by the fact no relief was sought with respect to Mr. Doshi or Mr. Kesavan before Master Glustein (as he then was). She did state in the grounds for the motion that she prepared in June 2013 that she had not instructed Mr. Morton to serve a Notice of Discontinuance. However, the fact that the plaintiff delayed almost a year before taking this step is a factor in favour or not setting aside the settlement.
[57] Ordinarily the fact that this action is still at the pleadings stage might be a factor in favour of not enforcing a settlement. However, in this case it demonstrates the lack of commitment the plaintiff has to this action. It has been six years since the action was commenced. Furthermore, since her alternative is to claim any alleged losses from her former lawyers the fact she had not advanced this action beyond the pleadings stage means little to no prejudice in that regard, see Srajeldin at para. 41.
[58] I come then to the final question which is whether or not the lawyer defendants will suffer a disadvantage or other prejudice if the settlement is set aside. Ms. Byers submitted that apart from losing the benefit of the impugned settlement the defendants will not be prejudiced if the settlement is not enforced as they will still have an opportunity to defend the action. It is true that the lawyer defendants have not provided any evidence of any actual prejudice. However, in my view prejudice can be inferred from the sheer delay. Although I realize that the lawyer defendants will still have their files, to the extent the allegations of the plaintiff depend on their memory, and the memory of other witnesses, they will necessarily have been prejudiced in that memories fade over time. They settled the action in good faith five years ago and reasonably believed that this matter was closed four years ago. They were entitled to rely on the settlement. To require them to defend the action again means that they will lose the benefit of the settlement that they reasonably believed was reached years ago.
[59] Ms. Byers submitted that if I do not set aside the Releases and Notice of Discontinuance in this case I will be sending a “chilling message to the public and could well discourage open and candid settlement discussions and considerations”. In my view the opposite is true. Anecdotally it can be said that at least if not more of 95% of all civil actions settle at some point before trial. If in these circumstances the court were to set aside a settlement agreement, negotiating the settlement of claims would be discouraged as lawyers could not have any confidence that a settlement agreement reached with opposing counsel would not be interfered with by the court.
[60] As Justice Molloy noted in Srajeldin at para. 41, the public policy concerns are pressing;
Setting aside a settlement in circumstances where it was freely negotiated between two professionals would be highly unusual. To do so where there is no evidence of sharp practice or bad faith, no unequal bargaining power, and no suggestion that the settlement is unfair or improvident, is, in my view, unprecedented. There only injustice to the plaintiff is that she must now litigate her claim against her former solicitor rather than the TTC. Given the very early stage of the litigation against the TTC, there is little to no prejudice in that regard.
[61] In my view this is not a case where I should exercise my discretion to set aside the settlement.
[62] For these reasons the motion for an order declaring that two Full and Final Releases signed on July 28, 2011 in favour of the defendants, Sanjaykumar Doshi and Thangavel Kesavan are invalid and of no force and effect and an order declaring that the Notice of Discontinuance, dated May 7, 2012, as against Mr. Doshi and Mr. Kesavan is invalid and of no effect and that it be set aside is dismissed with costs payable to Messrs. Doshi and Kesavan on a partial indemnity basis.
[63] With respect to costs, all counsel provided Cost Outlines to me at the conclusion of the hearing of the motion. The plaintiff’s Cost Outline totals $13,368 for fees and disbursements on a partial indemnity basis. It reflects a lot of duplication between Mr. Robinson, a 2008 call and Ms. Byers a 2015 call; it was not necessary in my view for two counsel to prepare and argue this motion.
Costs
[64] Although the plaintiff is not entitled to costs, having lost this motion, this Cost Outline is relevant to the expectations of the parties. Although I appreciate that counsel for the plaintiff had to do more work to put the Motion Record together, once that was done the time spent preparing the factum and argument should have been comparable to the Cost Outline of Mr. Phillips who took the lead on the defence of the motion since the interests and position of Mr. Kesavan and Mr. Doshi is the same.
[65] Despite the amount claimed by counsel for the plaintiffs, Mr. Robinson submitted that the costs claimed by Mr. Phillips and Mr. Skolnik were too high because they did not have to file much in the way of a responding Motion Record and as counsel for LawPro they are used to these types of motions. I do not accept those submissions.
[66] Mr. Phillips claims costs on a partial indemnity in the amount of $4,518.63 for fees and disbursements. He is a 2000 call and his hourly rate on a partial indemnity basis is $250 (as compared to Mr. Robinson, a 2009 call at $250). Mr. Phillips did all the work himself save for one hour spent by a law clerk. His time for preparing a Responding Motion Record, factum, Book of Authorities and for preparation and attendance totaled 16.7 hours. As compared to the 53 hours of time spent by counsel for the plaintiff, I find that his request for costs is entirely reasonable.
[67] As for Mr. Skolnik, a 1996 call, his Cost Outline totals $2,016.70 on a partial indemnity basis. His hourly rate on this basis is a very reasonable $195. His time totaled 7.2 hours (although only one hour for the attendance which took two hours) and he did all of the work save for .6 of an hour by a law clerk. Mr. Skolnik did prepare a brief affidavit but did not prepare a factum. I accept that he needed to review all of the materials prepared by counsel for the plaintiff and Mr. Kesavan. As compared to the hours claimed by Mr. Phillips, Mr. Skolnik’s time does seem a little high. I fix the costs of Mr. Skolnik for fees and disbursements in the amount of $1,800.
Spies J. Date: April 21, 2016