Court of Appeal for Ontario

CITATION: Maraschiello-Basnett v. Ku, 2013 ONCA 185

DATE: 20130327

DOCKET: C56372

Gillese, Blair and Rouleau JJ.A.

BETWEEN

Chloe Maraschiello-Basnett, a minor by her Litigation Guardian, Whitney Basnett, Nicholas Maraschiello, and the said Whitney Basnett personally

Plaintiffs (Appellants)

and

J. Ku, P. Howard, H. Yang, D. Handley, Clinidata Corporation, The Royal Victoria Hospital of Barrie, D. McLaughlin, M. Wall, S. Hodge, D. Van Scoy, S. Manser, J. Farrell, J. Waugh-Vieira, T. Gilder and S. White

Defendants (Respondents)

Gavin MacKenzie and Mark Hines, for the appellants

Frank G. Csathy, for the respondents

Jaan Lilles, for the defendants J. Ku, P. Howard, H. Yang and D. Handley

Heard: March 21, 2013

On appeal from the order of Justice Mark L. Edwards of the Superior Court of Justice, dated November 23, 2012.

ENDORSEMENT

Overview

[1] This appeal arises in the context of a medical malpractice action concerning the care and treatment provided by the defendants to the plaintiff, Chloe Maraschiello-Basnett (“Chloe”), a minor.

[2] There are three groups of defendants in the action: (1) the defendant hospital and the defendant nurses (together, the “hospital defendants”); (2) the defendant physicians; and (3) the defendants related to Telehealth Ontario (the “Clinidata defendants”). In these reasons, the second and third groups of defendants are referred to collectively as “the remaining defendants”.

[3] Each group of defendants is represented by different counsel and has crossclaimed against the other defendants.

[4] By order dated November 23, 2012, the motion judge declared that the plaintiffs’ action against the hospital defendants had been settled and dismissed the plaintiffs’ claim as against those defendants (the “Order”). (The Order also provided for a motion to determine whether the settlement was in the best interests of Chloe.) Chloe’s parents, Nicholas Maraschiello and Whitney Basnett, appeal.

[5] In our view, the appeal must be allowed because the motion judge made a palpable and overriding error in finding that a concluded settlement had been reached.

Background in Brief

[6] Trial of the action was scheduled to begin on November 19, 2012.

[7] In a letter dated June 14, 2012, counsel for the plaintiffs offered to recommend to his clients that they consent to an order dismissing the action against the hospital defendants “provided the remaining defendants undertake not to make any allegations of negligence in any shape or form as against [the hospital defendants] at trial” (the “Undertaking”).

[8] Later, in a letter dated October 12, 2012, counsel for the plaintiffs wrote:

Further to my letter of June 14, 2012, I have instructions to consent to an Order dismissing the action as against [the hospital defendants] on a without costs basis.

[9] By letter dated November 5, 2012, counsel for the plaintiffs advised the defendants that due to a lack of compliance with the Undertaking, the plaintiffs would be proceeding with their claims as against the hospital defendants.

[10] By letter dated November 8, 2012, the Clinidata defendants advised the plaintiffs that they had instructions to consent to a dismissal of their crossclaim as against the hospital defendants and that they did not intend to call any evidence to allege negligence on the part of those defendants.

[11] By letter dated November 9, 2012, the physician defendants stated that they had already provided their consent to the dismissal of the action as against the hospital defendants and advised that they did not intend to call evidence to allege negligence as against those defendants at trial.

[12] A dispute arose as to whether a settlement had been reached. The hospital defendants moved for an order for summary judgment and dismissal of the action as against them.

[13] The motion judge found that although the plaintiffs’ October 12, 2012 letter could have been more clear, the plaintiffs’ offer to consent to an order dismissing the action as against the hospital defendants was contingent on the remaining defendants fulfilling the Undertaking. He further found that the Undertaking “has now been fulfilled”. Accordingly, he held that a concluded settlement had been reached between the plaintiffs and the hospital defendants, and he dismissed the action as against the hospital defendants.

Analysis

[14] There is some ambiguity around what the motion judge relied on in finding that the Undertaking had been fulfilled. As counsel for the plaintiffs on appeal candidly acknowledged, the motion judge could have been referring to either the letters of November 8 and 9, 2012, described above, or statements made by counsel for the remaining defendants at the oral hearing of the motion on November 14, 2012.

[15] Regardless of which of the two events was relied on in finding that the Undertaking had been fulfilled, the motion judge was in error.

[16] The letter of November 5, 2012, revoked the plaintiffs’ offer to settle. That is, the plaintiffs’ offer was withdrawn in writing before the delivery of the letters of November 8 and 9, 2012, which purported to fulfill the Undertaking.

[17] Similarly, whatever was said at the oral hearing of the motion on November 14, 2012, could not have constituted fulfillment of the Undertaking because the offer had been revoked on November 5.

[18] It appears clear from the record that in the period from June 14, 2012, to November 5, 2012, all parties conducted themselves on the expectation that a settlement agreement would be reached and that the action would be dismissed as against the hospital defendants. However, as the motion judge correctly found, the Undertaking was a condition precedent to the settlement agreement and by the time the remaining defendants purported to fulfill the Undertaking, the offer had been withdrawn. Accordingly, a settlement was never reached.

[19] In light of our conclusion on this issue, we need not consider the appellants’ alternative arguments, namely, that the letters of November 8 and 9, 2012, did not fulfil the Undertaking, and that the motion judge erred in failing to consider whether he should exercise his discretion and refuse to enforce the alleged settlement.

DISPOSITION

[20] Accordingly, the appeal is allowed and the Order is set aside with costs of the appeal and the motion below to the appellants, payable by the hospital defendants. Costs of the appeal and the motion below are set at $18,400 and $6,380, respectively. Both sums are all-inclusive.

“E.E. Gillese J.A.”

“R.A. Blair J.A.”

“Paul Rouleau J.A.”