Editor’s Note: Addendum released June 11, 2002. Original judgment has been corrected with text of addendum appended.
DATE: 20020326 DOCKET: C36319
COURT OF APPEAL FOR ONTARIO
CARTHY, WEILER and CRONK JJ.A.
BETWEEN:
SIU MAN CHAN
Julie K. Hannaford, for the respondent
Petitioner (Respondent)
- and -
KENG TING LAM
Richard J. Worsfold, for the appellant
Respondent (Appellant)
Heard: January 10 and 11, 2002
On appeal from the judgment of Justice Bonnie J. Wein dated April 5, 2001.
WEILER J.A.:
[1] The issue on this appeal is whether Wein J. erred in finding that a settlement had been reached between Keng Ting Lam (“the husband”) and Siu Man Chan (“the wife”).
The Facts
[2] The wife issued a petition for divorce on August 15, 2000. The main issues between the parties related to the quantum of the equalization payment to be paid to the wife, when the equalization payment to the wife would begin, and over what time. Related to the issue of the quantum of the equalization payment was the use of monies in a joint bank account amounting to approximately $175,000 that the wife had transferred to her own name prior to issuing the petition for divorce. Custody of the three children of the marriage was also an issue and, as a result, on September 19, 2000 the court appointed a lawyer, Winnie Wong, to represent the interests of the children and ordered that these costs be shared equally. The source of funds for payment of each party’s equal share of the costs of Winnie Wong and the maintenance of insurance policies for the children were also in issue.
[3] On November 30, 2000, the wife and husband met a couple with whom they were friends and discussed settlement.
[4] The next day, December 1, 2000, the parties were in court on the return of the husband’s motion for interim custody and exclusive possession of the matrimonial home. Prior to the hearing of the motion, the husband’s counsel, Mr. Byrnes, served the wife’s counsel, Mr. Wong, with a letter containing a 23-point written offer to settle pursuant to Rule 49. The offer contained the following salient points:
• Point 1 – The husband was to have custody of the three children of the marriage;
• Point 2 – The husband would have exclusive possession of the matrimonial home;
• Point 3 – The wife would transfer her interest in the matrimonial home to the husband;
• Point 4 – The husband would release any claims he had to “any property under your client’s name and/or possession and any property your client identifies, save and except as provided for in these terms of settlement”;
• Point 7 – The husband would pay the wife $650,000;
• Point 11 – The amount of $650,000 would be paid within 12 months of the execution of a separation agreement;
• Point 12 – The amount of $650,000 would earn interest at the prejudgment rate under the Courts of Justice Act, from three months after the date of execution of the separation agreement until it was fully paid;
• Point 17 – The life insurance on the children’s lives would name the husband as the beneficiary and the children jointly as alternative beneficiaries;
• Point 18 – The amount of $650,000 would be paid in three instalments with no instalment being less that $200,000; and
• Point 20 – “The account of Winnie Wong for representing the children will be paid in full from the joint account funds taken by the wife.”
[5] Upon returning to his office, Mr. Wong wrote and faxed a letter to Mr. Byrnes which read as follows:
Dear Sir:
This will confirm our discussion outside the Courtroom today prior to our matter being heard, in which I accepted your client’s offer to settle as outlined in your letter of December 1, 2000, save and except the following:
The interest in the matrimonial home is to be transferred to [the] husband upon the first instalment payment of the settlement funds;
The account of Winnie Wong is to be paid by our client and your client equally and not from our client’s account of $175,000.00. Your client has already agreed to that in front of me, our client, the interpreter, Agnes Wong, Winnie Wong and yourself;
The life insurance of the children purchased by our client will remain our client’s assets, and the beneficiary under which remains to be our client unless your client wishes to pay our client the value of the policy. On the same token, the life insurance purchased by your client for the children remain his assets and he has the right to name his beneficiary. We understand that your client and our client will discuss this issue themselves and will instruct us accordingly;
You will draft the separation agreement according to the terms of the offer to settle and according to the above and will provide us with a draft within one week from today. Your client has made this promise to our client.
This will further confirm that you have advised us that for greater clarification of paragraph 4 of the Offer to Settle, the amount of deposit of $175,000 under our client’s name will remain our client’s assets only, and your client will release all his interests in same.
Furthermore, this will confirm that our client only consented to the interim order of the exclusive possession of the matrimonial home and custody of the children to your client in view of our client’s acceptance of your client’s offer to settle contained in your letter of December 1, 2000 with varied terms as above.
Lastly, we ask you to review your case law with respect to the principle of disclosure to the Court of [the] verbal offer to settle prior to commencement of legal proceedings.
We trust that your sarcastic remark in your previous letter suggesting that our client rented a basement from our office is an aberration of your professional behaviour and not the norm. We find it highly inappropriate and totally unprofessional. We believe no solicitor in good standing and in practice uninterruptedly would have made such [a] remark. Since this matter is now settled, we will not refer your remark to the Law Society.
Yours truly,
“Lawrence S. Wong”
[6] Mr. Byrnes replied by a faxed letter received on December 3, 2000. He confirmed that the matrimonial home would be transferred to the husband upon payment of the first instalment of the settlement funds. The letter continued: “With respect to items 2 and 3, we will take instructions from our client and advise you once we have them.” The letter did not dispute Mr. Wong’s interpretation of point 4.
[7] Insofar as drafting the separation agreement was concerned, Mr. Byrnes stated that he had no time that week to prepare the separation agreement and that Mr. Wong could provide a draft if he wished that deadline to be met. Mr. Byrnes then commented:
… Your client very wisely chose to settle. Keep in mind that it was your client who contacted our client to discuss settlement. This was largely, we expect, because your client was fairly certain that our client was going to secure custody and exclusive possession.
We also confirm that we told you our client has agreed to provide your client with a reasonable period of time to move her belongings out of the matrimonial home, despite his exclusive possession order. [Emphasis added.]
[8] Winnie Wong wrote to both Mr. Wong and Mr. Byrnes on December 4, 2000 stating that she was pleased that the parties had reached an agreement on December 1, 2000 whereby the wife had agreed to the husband having interim custody of the children and the wife having access. She added:
… Both parties should be commended for their efforts to achieve an agreement in the best interest of the children.
Since there is nothing more to be done on this case, I now proceed to close the file with this office. I enclose herein my statement of account and trust this is satisfactory to you.
[9] The account was in the amount of $4,922. At the bottom of the account was the following:
Note: Pursuant to court order on September 19, 2000, each party will be responsible for 50% of the account: Ms. Siu Man Chan = $2,461. Mr. Keng Ting Lam = $2,461.
[10] On December 20, Mr. Wong faxed a letter to Mr. Byrnes stating he had not heard from him with respect to items 2 and 3 in his letter of December 1, nor received the separation agreement. The letter continued:
Your client is putting our client in a disadvantage by not finalizing the settlement in good time, and thereby our client would not be able to receive the settlement amount of $650,000 and accrued interest from your client (items 7 and 18 in your settlement offer). It would not be fair to our client not to receive her end of the bargain after she complied with her parts of the settlement.
Since your client is deliberately delaying the preparation and execution of the separation agreement to settle, we will prepare the separation agreement and will provide same to you within five working days.
[11] By letter dated December 21, 2000, which was received the following day, Mr. Byrnes purported to withdraw the December 1st offer to settle. By the same letter, he forwarded a separation agreement to Mr. Wong which contained different and unfavourable terms for payment of the amount of $650,000 to the petitioner, namely that the payment be made over a period of eight years. On or about December 20, he forwarded a cheque to Winnie Wong in payment of one-half her account.
[12] Mr. Wong brought a notice of motion to enforce the settlement returnable on January 12, 2001. Winnie Wong sent a letter by fax dated January 11, acknowledging that she had been paid by both parties and reminding the parties that the children’s lawyer had to be served on matters relating to custody and access, that she had not been served with the materials respecting the motion and was unavailable on January 12. The motion was adjourned.
[13] Mr. Wong transferred the file to another lawyer and swore an affidavit on February 16. In it, he deposed that, upon receiving the offer to settle, the parties had reached an oral agreement respecting the timing of the transfer of the matrimonial home, payment of the fees of Winnie Wong and had “agreed that the details of the life insurance would be worked out in a draft agreement.” Mr. Wong’s affidavit states that the letter he wrote on December 1 was to confirm the oral discussion and to:
… clarify that our client would be free to deal with her own insurance as her own property and that the life insurance that was being referred to as naming the husband as the beneficiary was the life insurance held by the husband. Both parties had life insurance for the children, and the holder of the insurance named himself or herself as the beneficiary.
The wife also swore an affidavit in support of the motion.
[14] In response to the motion, Mr. Lam swore an affidavit stating that no agreement had ever been reached. He stated that, after the written offer to settle, agreement had only been reached respecting the timing of the transfer of the matrimonial home. His lawyer, Mr. Byrnes, did not swear any affidavit. Subsequently, on March 26, 2001, Mr. Lam swore a further affidavit in reply. The paragraphs respecting the insurance issue are as follows:
On the insurance point, I have never agreed at any time to deviate from terms set out in the December 1, 2000 written by Rod Byrnes and sent to Lawrence Wong.
Paragraph 17 speaks to the insurance point, and I was, and remain very concerned that my wife wants to cancel the Crown Life insurance policy on the children and cash in the policy to obtain the money.
It is for this reason that I insisted that in the event she did not want to pay the premiums, the policy ownership was to be transferred to me, the beneficiary was to be me, and the children were to be the contingent beneficiaries. [Emphasis added.]
Reasons of Madam Justice Wein
[15] Wein J. found that the parties had reached a consensus ad idem.
[16] There was no dispute about the first point, the timing of the transfer of the matrimonial home. With respect to the second point, she held it was agreed by the parties that each would pay half of the fees for the lawyer for the children and this agreement was consistent with the prior court order. She noted that the parties had agreed to the size of the overall equalization payment. She held that, in view of this, the source of the funds for the payment of the wife’s one-half share of Winnie Wong’s fees was irrelevant.
[17] Wein J. also found that there was an essential agreement respecting the life insurance. Relying on the husband’s affidavit in reply, she observed that the husband’s concern was that his wife would cancel her insurance policy on the children and cash in the policy to obtain the money. She stated:
Accordingly, he insisted that if she did not want to pay the premiums the policy ownership was to be transferred to him and the beneficiary was to be him with the children the contingent beneficiaries. By logical inference therefore it was agreeable to him that if his Wife kept the policy and paid the premiums, the policy ownership would not be transferred to him and the beneficiary could be her, but that she would be precluded from cashing in the policy.
[18] She held that, accordingly, on the affidavit material filed by the husband respecting insurance, the only outstanding issue was a unilateral determination to be made by the wife. If she agreed to continue payments on the life insurance policy, it could remain in her name. If not, it was to be transferred to the husband’s name with him as the beneficiary. She was not to cash in the policy if she chose the former. The agreement contemplated that there would be a decision by the wife concerning her continuing payments on the Crown Life insurance policy with the restriction against sale. Wein J. directed that the wife make that determination by April 20th, failing which by default she ordered that the insurance policy be transferred to the husband with further payments to be made by him and the husband to be the primary beneficiary with the children in the alternative.
Analysis
[19] A settlement will be binding if there is agreement on all essential terms: Bogue v. Bogue (1999), 46 O.R. (3d) 1 (Ont. C.A.) paras. 13 and 15.
(a) The fees of Winnie Wong
[20] Wein J. found that there was an agreement that each party pay one-half Winnie Wong’s fees. The evidence that supports this finding is the court order, Mr. Wong’s letter of December 1 stating that the husband had agreed to this in front of the children’s lawyer and the interpreter, the account from the children’s lawyer, Mr. Wong’s affidavit, and the wife’s affidavit. The letter of Mr. Byrnes does not deny that there was an agreement to pay the children’s lawyer’s fees equally. He simply states that instructions will be obtained from his client. The affidavit of the husband does not deny that there was an agreement to pay the fees of the children’s lawyer equally. The affidavit states instead that the source of the funds for payment was to be the money that had been in the joint bank account and that the husband regarded those funds as belonging to both of them.
[21] The parties agreed that the equalization payment was to be $650,000. This was in addition to the proceeds of the joint bank account totalling $175,000 that the wife was to retain. Contrary to the husband’s affidavit, the husband could no longer regard the $175,000 as being one-half his because the size of the equalization payment was predicated on the wife retaining all the proceeds from the joint bank account as her money. I would dismiss this ground of appeal.
(b) The life insurance policy
[22] With respect to the issue of the life insurance for the children, the reasons of Wein J. track the husband’s affidavit in reply in which he stated that, in the event the wife did not want to pay the insurance premiums, the policy was to be transferred to him. Accordingly, she did not err in concluding that there was only a unilateral election to be made by the wife concerning whether or not she wished to pay the premiums. I would dismiss the second ground of appeal.
(c) Other issues
[23] The offer to settle was a Rule 49 offer. The notice of motion before Wein J. states that the motion is brought under Rule 49. Rule 49 contemplates that the offer to settle and its acceptance be in writing to be enforceable. See Serra v. Paniccia, [1999] O.J. No. 4707 (C.A.). Here, the agreement was arrived at by a process and is not entirely in writing. This point does not appear to have been raised before Wein J. Where parties reach a settlement that does not arise from the operation of Rule 49, the settlement may be enforced by a motion for judgment. Where, as here, the issue of whether a settlement had been reached was fully argued, the fact that the notice of motion specified Rule 49 is an irregularity and the court is entitled to grant the relief necessary to secure a just determination of the matter in dispute. See Rule 2.
[24] The appellant further submits that, treating this as a Rule 20 motion for summary judgment, there is a genuine issue for trial respecting whether a settlement was reached that the motions judge could not decide on contradictory affidavit evidence. The letter from the husband’s lawyer received on December 3, 2000 does not suggest that there was no agreement between the parties on all the essential issues. Instead, the letter states that the wife wisely chose to settle. For the reasons I have given, the husband’s self-serving affidavit as to the source of payment of his share of Winnie Wong’s fees does not, in the circumstances, raise a triable issue. See Guarantee Co. v. Gordon Capital, [1999] S.C.J. 60 at p. 9. With respect to the life insurance, the motions judge accepted the husband’s affidavit in reply. Had this been a Rule 20 motion, the motions judge would have been entitled to grant summary judgment.
[25] For the reasons I have given, I would dismiss the appeal.
[26] In order to comply with the rule that now requires this court to fix costs, the respondent is requested to file a bill of costs for partial indemnity with the court in the appropriate form. The appellant may make submissions in writing thereon within 10 days after filing and the respondent may reply within 10 days thereafter.
Released: JJC MAR 26 2002 Signed: “Karen M. Weiler J.A.”
“I agree J.J. Carthy J.A.”
“I agree E.A. Cronk J.A.”
DATE: 20020611 DOCKET: C36319
COURT OF APPEAL FOR ONTARIO
RE:
SIU MAN CHAN (Petitioner/Respondent) v. KENG TING LAM (Respondent/Appellant)
BEFORE:
CARTHY, WEILER and CRONK JJ.A.
COUNSEL:
Julie K. Hannaford
for the Petitioner (Respondent)
Richard J. Worsfold
for the Respondent (Appellant)
HEARD:
January 10 and 11, 2002
On appeal from the judgment of Justice Bonnie J. Wein dated April 5, 2001.
ADDENDUM TO JUDGMENT
[1] Further to the reasons for judgment in this matter issued on March 26, 2002, we have reviewed the Responding Bill of Costs of the respondent, and the written submissions of the parties concerning costs. Having regard to the success on appeal and the Responding Bill of Costs filed by the respondent, we are of the view that the respondent should be awarded her costs on a partial indemnity basis fixed at $4,483.30, inclusive of Goods and Services Tax and disbursements.
“J.J. Carthy J.A.”
“K.M. Weiler J.A.”
“E.A. Cronk J.A.”