COURT OF APPEAL FOR ONTARIO

CITATION: Dick v. McKinnon, 2014 ONCA 784

DATE: 20141107

DOCKET: C58362

Strathy C.J.O., Feldman and Lauwers JJ.A.

BETWEEN

Richard Dick, Steve Marek by his Litigation Guardian, David Marek and John Kuca

Plaintiffs (Appellant)

and

Robert Duncan McKinnon, Tubular Steel Inc. and 1086668 Ontario Inc.

Defendants (Respondents)

Daniel J. Dochylo, for the appellant

R. Jonathan McKinnon, for the respondents

Heard: October 31, 2014

On appeal from the judgment of Justice E.M. Morgan of the Superior Court of Justice, dated January 17, 2014 and February 7, 2014, with reasons reported at 2014 ONSC 342 and 2014 ONSC 917.

ENDORSEMENT

[1] The motion judge made an order under rule 49.09 of the Rules of Civil Procedure, R.R.O. 1990, Reg. 194, enforcing a settlement made in 2005 between the appellant and the respondents. The settlement called for the payment of $700,000 by the respondents in exchange for the appellant’s interest in shares of the corporate respondent, Tubular Steel Inc. The appellant resists enforcement of the settlement on the ground that at the time of the settlement in 2005 he lacked mental capacity to consent to the settlement and to instruct counsel.

[2] Before the motion judge, and in this court, the appellant argued the issue must be addressed under rule 7.08 of the Rules, dealing with the approval of a settlement made by a person under a disability. We agree with the motion judge that rule 7.08 does not apply, because the appellant had not been found to be under a disability and no litigation guardian had been appointed.

[3] A person who is eighteen years of age or more is presumed to be capable of entering into a contract: Substitute Decisions Act, 1992, S.O. 1992, c. 30, s. 2(1).

[4] This court has observed that it is well-established law that “a solicitor of record has the ostensible authority to bind his or her clients and that opposing counsel are entitled to rely upon that authority in the absence of some indication to the contrary”: Oliveira v. Tarjay Investments Inc., 2006 CanLII 8870 (ON CA), [2006] O.J. No. 1109, at para. 2 (C.A.), referring to Scherer v. Paletta, 1966 CanLII 286 (ON CA), [1966] 2 O.R. 524 (C.A.) and Mohammed v. York Fire and Casualty Insurance Co., 2006 CanLII 3954 (ON CA), [2006] O.J. No. 547, at para. 20 (C.A.).

[5] The motion judge found the appellant had received both legal and accounting advice and the settlement was negotiated and finalized by his solicitor of record. He clearly found the appellant had not discharged the onus of proving:

• that he lacked capacity;

• that his solicitor acted without instructions;

• that the respondents were aware of any lack of capacity or of any limits on the solicitor’s authority; or

• that the settlement was unfair.

[6] The motion judge’s conclusions on the latter two issues are dispositive and were open to him on the evidence. There is no basis on which we can interfere. We therefore dismiss the principal ground of appeal.

[7] We do, however, allow the appeal from the disallowance of interest on the purchase price of the appellant’s shares. The respondents have had the benefit of the shares in the intervening years. Mr. McKinnon candidly acknowledged the shares had appreciated in value, a circumstance that appears not have been brought to the attention of the motion judge. The appellant is entitled to interest on the sum of $700,000 at the rate of 2.8% per annum.

[8] In light of the divided success on the appeal, we are not inclined to award costs. If, however, the parties wish to make submissions, they may do so in writing, within 15 days.

“G.R. Strathy C.J.O.”

“K. Feldman J.A.”

“P. Lauwers J.A.”