Court File and Parties

Court File No.: FS-20-43384-00 Date: 2024 04 19 Ontario Superior Court of Justice

Between: N.C., Applicant/Respondent on Motion And: M.D., Respondent/Moving Party

Counsel: John Bruggeman, for the Applicant/Respondent on Motion Andrew Feldstein and Rachel Zweig, for the Respondent/Moving Party

Heard: April 17, 2024

Reasons for Decision

I. Introduction

[1] On August 31, 2020, the Applicant wife, N.C., commenced an application alleging that the Respondent husband, M.D., was in breach of the parties’ separation agreement dated November 5, 2018.

[2] The parties married in June 1999 and separated in August 2016. They have two children, now both adults, although the youngest child just turned 18 years old.

[3] In the application, N.C. sought an order that M.D. pay child support, a parenting schedule, and other relief.

[4] The proceeding has resulted in many endorsements to date and has progressed to the point where the parties have filed materials for a trial management conference.

[5] There are competent, experienced counsel on both sides. To their credit, they have assisted their clients in settlement negotiations, culminating in a flurry of correspondence exchanged between the lawyers in October 2023.

[6] The issue for this Court to decide is whether a settlement was reached. The husband says yes, and he has brought a motion for summary judgment to that effect. The wife says no.

[7] M.D.’s motion for summary judgment was heard by this Court as a regular motion (less than one hour total) on April 17, 2024. The presentations on both sides, written and oral, were excellent. This Court does not benefit frequently from that level of advocacy, and I am grateful for it.

[8] It is a relatively close call. After my careful consideration of the materials filed and the submissions advanced by counsel, I am not satisfied on a balance of probabilities that there is no genuine issue requiring a trial. More specifically, I am not satisfied that there was a meeting of the minds that would be manifest to the reasonable observer, and I am not satisfied that there was a consensus reached on all of the essential terms of the agreement.

[9] Consequently, the husband’s motion for summary judgment is dismissed.

II. The Law on Summary Judgment

[10] Rule 16 of the Family Law Rules, O. Reg. 114/99, clause (6), sets out the test for summary judgment in a family law proceeding – a final order shall be made if there is no genuine issue requiring a trial.

[11] The moving party, M.D., has the burden of proof. The standard of proof is on a balance of probabilities.

[12] The principles in Hryniak v. Mauldin, 2014 SCC 7, have been applied to summary judgment motions in family law cases since the amendments to Rule 16 became effective on May 2, 2015.

[13] The amended Family Law Rules send a message to judges, counsel, and litigants alike: where possible, matters should be dealt with expeditiously, balancing procedure with the interest of access to justice by providing a timely, proportionate, and affordable process while determining a fair and just result for the parties. Philion v. Philion, 2015 ONSC 3587, as summarized by authors Coats, Perkins, Lenkinski, and James in volume 1 of the 2024 edition of Ontario Family Law Practice (LexisNexis Canada Inc. 2023), at page 1958.

[14] Recently, in CIBC Investor Services Inc. v. Chan, 2024 ONSC 1628, this Court, referring to the decisions in Oliver et al v. Herold et al, 2021 ONSC 376 and Zaky v. 2285771 Ontario Inc., 2020 ONSC 4380, summarized the current approach to motions for summary judgment. Paragraph 29 of CIBC v. Chan, supra is set out below.

[29] In Oliver et al v. Herold et al, 2021 ONSC 376, Harper J. stated the following at paragraphs 12 and 13, referring to the decision in Zaky v. 2285771 Ontario Inc., 2020 ONSC 4380.

[12] In Zaky v. 2285771 Ontario Inc., 2020 ONSC 4380, Conlan, J. reviewed the principles to guide the court when considering summary judgments. I agree with his review that commences at para.13:

[13] The following principles may be gleaned from a careful review of the leading decision of the Supreme Court of Canada in Hryniak v. Mauldin, 2014 SCC 7.

[14] First, it is the principle of proportionality that ought to drive the Court’s decision on a request for summary judgment. There will be no genuine issue requiring a trial when the judge hearing the motion is able to reach a fair and just determination on the merits.

[15] Second, what does that mean – a fair and just determination on the merits? It means (i) that the judge hearing the motion is able to make the necessary findings of fact, (ii) is able to apply the law to the facts, and (iii) the process employed to do those things is a proportionate, more expeditious and less expensive means to achieve a just result (as compared to a trial).

[16] The judge must be able to have confidence in the conclusions reached on the motion, otherwise, the case ought to proceed to trial.

[17] Third, the judge hearing the motion should follow a two-stage procedure. Initially, consider only the evidence filed without regard to the expanded powers. Then, afterwards, if there appears to be a genuine issue requiring a trial, the judge may (but does not have to) weigh the evidence, evaluate credibility and draw reasonable inferences.

[18] Fourth, there is certainly a culture shift that was signalled by the decision of the Supreme Court of Canada referred to above. The Courts have been encouraged to, wherever possible, deal with matters expeditiously. Cases should proceed to trial only if they really have to. The summary judgment process can, where employed properly, increase access to affordable and timely justice. A trial should no longer be viewed as the default procedure.

[13] Hryniak v. Mauldin does not alter the principle that the court will assume that the parties have placed before it, in some form, all the evidence that will be available for trial. The court is entitled to assume that the parties have advanced their best case and that the record contains all the evidence that the parties will present at trial.

III. The Law on Settlement

[15] An agreement is binding if the parties consider that it contains all of the essential terms. That the parties intend those terms to be incorporated into a formal document, like minutes of settlement or a consent, together with the usual provisions ancillary to that type of agreement, does not defeat the fact of an agreement having been reached. An agreement is not final or binding, however, if it is nothing more than an agreement to later agree on essential terms or to defer the binding nature of the agreement until execution of a formal document. Further, to be binding, it is not necessary that the agreement include all of the ancillary terms that are already implicit in its content. Ward v. Ward, 2011 ONCA 178, at paragraphs 53-54, Bogue v. Bogue, at paragraphs 12-13, Bawitko Investments Ltd. v. Kernels Popcorn Ltd., at pages 103-104 of the decision reported at 79 D.L.R. (4th) 97 (C.A.).

[16] In determining whether there was a meeting of the minds – whether the parties reached a settlement, it is important to discern the intention of the parties, including by looking at the conduct of the parties. Here, “intention” is not used in a subjective sense. Rather, it refers to whether, from the perspective of a hypothetical observer, the parties appeared to have reached an agreement. Ward, supra, at paragraph 66, Andrews v. Lundrigan, 2009 ONCA 160, at paragraph 8, citing Bawitko, supra, at page 104 and G.H.L. Fridman, The Law of Contract in Canada, 5th edition (Toronto: Thomson Carswell, 2006), at page 6.

IV. The Law as Applied to our Facts

[17] I agree with Mr. Feldstein, counsel for the husband moving party, that the only material differences in the draft orders filed by the parties is with regard to clauses 1(k) and 1(l) of the draft order filed by the husband.

[18] Hereinafter, I shall refer to clause 1(k) as the “indemnity clause”. I shall refer to clause 1(l) as the “$350,000.00 clause”.

[19] The indemnity clause provides that “[i]f a child brings an action against either party, the other party shall indemnify the other for any child support and legal fees they are ordered to pay”. The clause then goes on to try to further explain what that means.

[20] The $350,000.00 clause provides that “[i]f either party brings a claim against the other for retroactive or ongoing child support (table or section 7), the other party shall receive a credit in the amount of $350,000 as a payment towards child support to be credited in any action. If either party commences a court action to set aside, they will need to deposit the above mentioned $350,000 into their solicitors trust account as security”.

[21] On September 28, 2023, counsel for the parties were in the midst of settlement negotiations. On that date, counsel for the husband wrote to counsel for the wife by email sent at 9:13 a.m. That correspondence referred to, among other things, both the indemnity clause [16(a)(xi)] and the $350,000.00 clause [16(a)(xii)].

[22] On September 29, 2023, counsel for the wife replied to that correspondence, stating that “substantial progress is made towards achieving a final resolution”. Clearly and unequivocally, however, counsel for the wife objected to what the husband was proposing in terms of both the indemnity clause (see the paragraph beginning at the very bottom of page 2 of Mr. Bruggeman’s letter) and the $350,000.00 clause (see the second last full paragraph of Mr. Bruggeman’s letter – although the $350,000.00 was not explicitly mentioned, that paragraph is obviously about the $350,000.00 clause because of the reference to “depositing a large sum of money in their lawyer’s trust account”).

[23] In my view, Mr. Bruggeman and his client never resiled from their objections to the two clauses in question.

[24] It is true that counsel for the husband sent to counsel for the wife another email at 5:09 p.m. on October 3, 2023, replying to Mr. Bruggeman’s September 29th letter. In that email, the indemnity clause was referred to. The $350,000.00 clause was not referred to. On the indemnity clause, counsel for the husband proposed a revision, but the wording of the proposed revised clause was not set out in the email. Rather, only the substance of the revision was set out, stating essentially that the husband was “okay to make a revision that is in line with the notion that any child support ordered to be paid against one parent should be shared equally between the parties as opposed to 100% by the other parent”. The email went on to say that the proposed revision that the husband was okay with was on condition that the equal sharing between the parties would only be the case where “the child funds the litigation themselves”.

[25] On October 5, 2023, counsel for the wife replied by email to the October 3rd email sent by counsel for the husband. In Mr. Bruggeman’s email of October 5th at 12:07 p.m., he stated that “[e]verything in your email dated October 3, 2023 is acceptable, except for 1(1)(b)”. For our purposes, 1(1)(b) is irrelevant.

[26] On October 6, 2023, at 3:58 p.m., counsel for the husband sent an email to counsel for the wife, stating that the husband would agree to the wife’s position on 1(1)(b) and, thus, “I confirm that we now have a binding agreement to all essential terms”. Draft revised minutes of settlement and a draft order were enclosed for the review of Mr. Bruggeman.

[27] The draft minutes of settlement, at clause 16(a)(xi), included lengthy wording of an amended indemnity clause. That would have been the first time that the wife and her counsel saw that wording. The precise wording of that indemnity clause was crucial, in my view. It is an unusual provision. Where it exists, which is infrequently, it exists in a contract (like a separation agreement) and not typically in a court order. Mr. Bruggeman and his client had always been focused on the precise wording of the indemnity clause, as evidenced by Mr. Bruggeman’s September 29, 2023 correspondence, wherein he stated that “we are puzzled by the wording used”. In addition, the draft minutes of settlement, at clause 16(a)(xii), included the $350,000.00 clause, amended. That wording, and the $350,000.00 clause generally, had not been referred to at all in the correspondence between counsel that was exchanged post-September 29, 2023, the date of Mr. Bruggeman’s letter wherein he and his client clearly objected to the proposed clause.

[28] On October 16, 2023, counsel for the husband sent a follow-up email enquiring about the signed minutes of settlement.

[29] On October 24, 2023, counsel for the wife replied, stating “[w]e apologize for the delay”; “[w]e wished to ensure that the proposed settlement would be effective and enforceable”; “enclosed a copy of revised Minutes of Settlement, with Tracked Changes”; and “[w]e believe that the revisions are consistent with the parties’ settlement discussions and at the same time will be acceptable to a judge who will need to approve the draft Order”. The indemnity clause was struck out. The $350,000.00 clause was struck out. A few other changes were suggested.

[30] On October 26, 2023, counsel for the husband responded, saying “[w]e are very disappointed by your letter. We are extremely disappointed that after 3 weeks of silence, you are attempting to walk back a binding deal”.

[31] The husband’s within motion for summary judgment followed, in due course.

[32] But was there a binding deal? With respect, I think not. More accurately stated, I am not persuaded on balance that there is no genuine issue requiring a trial on that question.

[33] From the eyes of a hypothetical observer, would it appear that the parties had reached an agreement on the essential terms of the deal, which essential terms (both sides agree) included the indemnity clause and the $350,000.00 clause? Respectfully, I think not.

[34] Nothing that transpired after September 29, 2023 suggests that the wife had suddenly changed her mind and decided to agree to the proposed $350,000.00 clause. That clause was not a part of the ensuing discussions between counsel, based on the evidence filed.

[35] The indemnity clause was a part of the ensuing discussions between counsel, and the October 5, 2023 email from Mr. Bruggeman to Ms. Zweig is some evidence that the wife then agreed with the husband’s proposed revised indemnity clause. But, with much respect for Ms. Zweig, the wording of that proposed amended indemnity clause ought to have been included in the October 3, 2023 email. If the clause was a typical one, or if counsel for the wife had not previously been focused on the precise language of the clause, as evident in the September 29, 2023 correspondence from Mr. Bruggeman, then perhaps the said inclusion would not have been necessary. But neither of those things apply here.

[36] I stress the unusual nature of the indemnity clause. Some judges are reluctant to approve of such a clause in that it is designed to preclude, or at least dissuade, a future child support claim but without any input from or agreement of the child.

[37] This Court is not suggesting that such an indemnity clause cannot form part of a domestic contract, but my point is that the specific wording of such a clause, generally, is crucial, and I find that the precise wording of the indemnity clause here was crucial before it could reasonably be said that the parties had a meeting of the minds on that term.

[38] Without a meeting of the minds on these two essential terms of the agreement, there was no binding agreement. It follows that the husband’s motion for summary judgment must be dismissed.

[39] On costs, if not resolved between the parties, the Court will accept written submissions from counsel. The wife shall file hers within thirty (30) calendar days after April 19, 2024. The husband shall file his within fifteen (15) calendar days after his counsel’s receipt of the wife’s submissions. There shall be no reply permitted by the wife. Each written submission shall be strictly limited to three pages in length, excluding necessary attachments.

[40] Finally, I commend all counsel and both parties for getting very close to settling this case. If the parties and counsel thought that they might benefit from a further settlement conference, with a view to putting the matter to rest, I would be willing to conduct that conference. I would devote even as much as a full day to the matter, if it meant that we could likely get it done without a trial. Counsel are free to contact the trial office to schedule that, if they wish. If both sides wanted to do that without deciding the costs of the motion, then I am prepared to change the directions noted above upon mutual request by counsel.

Conlan J. Released: April 19, 2024