DATE: 20060213

DOCKET: C43255

COURT OF APPEAL FOR ONTARIO

RE:

ORCHESTRAL CORPORATION (Applicant (Respondent in

Appeal)) – and – IVP TECHNOLOGY CORPORATION and ACTIVECORE TECHNOLOGIES LTD. (Respondent (Appellants))

BEFORE:

SIMMONS, CRONK AND ROULEAU JJ.A.

COUNSEL:

Chris Reed

for the appellants

Alan L. W. D’Silva and Anne C. McConville

for the respondent

HEARD & RELEASED ORALLY:

February 9, 2006

On appeal from the judgment of Justice Romain W. M. Pitt of the Superior Court of Justice dated February 16, 2005.

E N D O R S E M E N T

[1] The appellants argue that no binding settlement agreement was reached by the parties. In the alternative, if a binding settlement agreement was agreed upon, the appellants submit that the respondent subsequently accepted the appellants’ repudiation of the settlement agreement and that, having elected to so do, it cannot resile from that election. Finally, the appellants contend that because there was conflicting affidavit evidence before the application judge, the trial of an issue was required.

[2] In the circumstances of this case, we would reject these submissions.

Issue No. 1 – Did the parties enter into a binding settlement agreement?

[3] The application judge found that the parties had entered into a binding settlement agreement. He stated:

[19] Simply put, it seems obvious that the respondents are attempting to extricate themselves improperly from a settlement that they entered into either when they realized that their legal position was untenable or at any rate, when they believed it was in their interest to compromise.

[20] The correspondence between the parties made it clear that the respondents either had some problem funding the settlement, or made the settlement without due regard to its capacity to fund this settlement.

[4] These factual findings by the application judge attract deference from this court. Absent palpable and overriding error by the application judge, there is no basis for appellate intervention.

[5] On this record, it was open to the application judge to conclude that at least by January 20, 2003, the respondent had communicated to the appellants its willingness to accept a compromise solution concerning the sole term of the settlement still in controversy. Thereafter, the appellants’ counsel delivered to the respondent’s counsel the very document, in final form, that conformed to the terms of the agreement that by then had been reached by the parties. The application judge held that, from that point, all that was left to be resolved between the parties was “of a clerical nature”. These findings were supported by affidavit evidence filed by the respondent before the application judge.

[6] Although the language used by counsel for the parties in their electronic and written communications could have been more precise, we conclude that the evidence of those communications provided a clear foundation for the application judge’s holding that a binding settlement agreement had been entered into by the parties.

Issue No. 2 – Was the trial of an issue required?

[7] The appellants argue that there was conflicting affidavit evidence before the application judge on the issue of whether a settlement had been reached and that this required the trial of an issue. We disagree. The application judge had the benefit of a full documentary record, including affidavit evidence from both parties. Neither party sought the trial of an issue, either as primary or alternative relief, before the application judge. Indeed, the appellants, who now assert that credibility issues necessitate the trial of an issue, argued before the application judge that there were no credibility issues in play as the respondent’s affidavit evidence, on its face, was incapable of belief.

[8] In these circumstances, we do not agree that the application judge erred in the exercise of his discretion by failing to order the trial of an issue.

Issue No. 3 – The issue of repudiation

[9] The application judge determined that, viewed in context, two letters from the respondent’s counsel relied on by the appellants as constituting an acceptance of the appellants’ repudiation, were no more than a reminder to the appellants that they had not complied with the settlement agreement. On the record before him, that finding of fact was open to the application judge and we see no basis to interfere.

[10] The appellants also claim that the respondent accepted their repudiation of the settlement agreement by commencing a second action on the original contract. In light of the rights reserved by the respondent in its November 7, 2002 letter, in our view, commencing the second lawsuit did not amount to an acceptance of the appellants’ repudiation. In the end, therefore, it was open to the application judge to conclude that the respondent had not made an election precluding its right to commence an application for enforcement of the settlement agreement.

Disposition

[11] Accordingly, for the reasons given, the appeal is dismissed. Costs of the appeal are awarded to the respondent, fixed in the amount of $12,000, inclusive of disbursements and applicable G.S.T.

“Janet Simmons J.A.”

“E. A. Cronk J.A.”

“Paul Rouleau J.A.”