Court File and Parties
Court File No.: CV-15-519879 Date: 2019/04/16 Ontario Superior Court of Justice
Re: Christina Atkinson, Applicant And: WHALEY ESTATE LITIGATION, Respondent
Before: Perell, J.
Counsel: Joseph Kary, for the Plaintiffs Matthew Rendely, for the Defendant
Heard: April 8, 2019
Reasons for Decision
[1] Pursuant to rule 49.09 of the Rules of Civil Procedure or the common law jurisdiction of the court, Christina Atkinson seeks: (a) a judgment in the terms of the settlement agreement reached between Ms. Atkinson and her former lawyers Whaley Estate Litigation; (b) approval of the mutual releases that she has drafted or in such other form as to the court seems just; (c) in the alternative such declarations and such directions to the parties concerning their mutual obligations as to this Honourable Court seems just; (d) costs of this motion; and (e) costs incurred to date in the assessment hearing.
[2] Whaley Estate Litigation brings a cross-motion for: (a) an Order dismissing the within proceedings, with substantial indemnity costs; or, (b) alternatively, an Order directing that this matter be heard in the Small Claims Court.
[3] The background to the motion and the cross-motion can be summarized as follows.
a. In 2014, Ms. Atkinson retained the law firm of Whaley Estate Litigation with respect to a guardianship application. b. Dissatisfied with the firm’s services, in January 2015, she discharged the law firm and retained another law firm to complete the guardianship application and to bring an application for an assessment of Whaley Estate Litigation’s legal fees. c. In the summer of 2017, there was an apparent settlement of the fee dispute between the client and her former lawyers, but the settlement fell apart because of the lawyer’s and the client’s inability to finalize the release being negotiated to implement the settlement. d. The parties proceeded to prepare for the assessment by the assessment officer. In the autumn of 2018, in preparing for the assessment hearing before the assessment officer, Ms. Atkinson decided instead pursuant to rule 49.09 to bring an application to enforce the settlement. e. The law firm, however, resisted the application to enforce the settlement and while the court application was scheduled and pending, the parties proceeded with four days of hearings before the assessment officer in December 2018 and February 2019. A fifth day of hearings is to be scheduled at a date to be determined. f. Meanwhile, while Ms. Atkinson’s application to enforce the settlement was still pending, on April 3, 2019, the law firm, on short notice, brought its cross-motion and delivered a voluminous motion record including an affidavit from Kimberley Whaley with 29 exhibits. g. The motion and the cross-motion were argued on April 9, 2019.
[4] I am dismissing both Ms. Atkinson’s application and also Whaley Estate Litigation’s cross-motion both without costs.
[5] A settlement agreement is a contract [1], and the court has jurisdiction at common law [2] and under rule 49.09 to enforce settlements. Rule 49.09(a), which is part of the offer to settle rule, stipulates that where a party to an accepted offer to settle fails to comply with the terms of the offer, the other party may make a motion to a judge for judgment in the terms of the accepted offer, and the judge may grant judgment accordingly.
[6] Where a party repudiates or fails to perform a settlement agreement, the other party has the choice to move to enforce the settlement or to treat the settlement as an end and to resume the litigation. If the party elects to proceed with the litigation, he or she cannot bring a motion to enforce the settlement agreement. [3] In Charter Building Co., a Division of Ladson Properties Ltd. v. 1540957 Ontario Inc. (c.o.b. Mademoiselle Women's Fitness & Day Spa), 2011 ONCA 487 [4], Justice Epstein stated for the Court of Appeal:
In my view, therefore, the law is clear. Once a party accepts repudiation of a contract [a settlement agreement] by pursuing a course of action that is inconsistent with the existence of the contract, that party is no longer entitled to assert its rights under the contract. The court has no discretion to rule otherwise.
Here, when the appellants failed to honour their obligations under the settlement agreement, the respondent could have sought to enforce the agreement. Instead, it made a binding election to treat the settlement agreement as if it had never been and to proceed with the litigation. It follows that, from the point in time that this election was communicated to the appellants, all rights and obligations of the parties to the agreement came to an end.
[7] In the immediate case, after the efforts to implement a settlement of the fee dispute proved futile in the summer of 2017, both parties have moved forward in 2018 and 2019 with the fees dispute litigation before the assessment officer, and it is now too late for either party to resort to rule 49.09 or to the court’s common law jurisdiction. I am, therefore, dismissing Ms. Atkinson’s application without costs.
[8] I am also dismissing Whaley Estate Litigation’s cross-motion without costs. The cross-motion was in truth just a defence or response to Ms. Atkinson’s application and the cross-motion thus was not a genuine cross-motion. The cross-motion was late served and the cross-motion should have been accompanied by a factum.
[9] Although Whaley Estate Litigation was successful in achieving a dismissal of Ms. Atkinson’s application and although normally costs follow the event, I am dismissing the application without costs because the dismissal was based on the principle that if a party elects to proceed with the litigation, the party cannot enforce the settlement agreement. Neither party brought this principle to my attention, and the dismissal of the application leaves the merits of Ms. Atkinson’s arguments undecided.
[10] Order accordingly.
[1] Donaghy v. Scotia Capital Inc./Scotia Capitaux Inc., 2009 ONCA 40, [2009] O.J. No. 178 at para. 41 (C.A.); Hodaie v. RBC Dominion Securities, 2011 ONSC 6881 at para. 17, aff’d [2012] O.J. No. 5428 (C.A.). [2] Donaghy v. Scotia Capital Inc./Scotia Capitaux Inc., 2009 ONCA 40, [2009] O.J. No. 178 (C.A.); Chytros v. Standard Life Insurance Co. (2006), 83 O.R. (3d) 237 (S.C.J.); U.S. Billiards Inc. v. Carr (1983), 44 O.R. (2d) 591 (Div. Ct.). [3] Charter Building Co., a Division of Ladson Properties Ltd. v. 1540957 Ontario Inc. (c.o.b. Mademoiselle Women's Fitness & Day Spa), 2011 ONCA 487. [4] 2011 ONCA 487 at paras. 30-31.
Released: April 16, 2019 Perell, J.