Court of Appeal for Ontario

Citation: Pierce v. Belows, 2020 ONCA 41 Date: 2020-01-24 Docket: C67065

Before: Simmons, Lauwers and Nordheimer JJ.A.

Between:

Robert Edward Pierce Plaintiff (Appellant)

and

Lesley Karen Belows Defendant (Respondent)

Counsel: Lauren Tomasich, Elie Farkas and Sean Lawler, for the appellant Jordan Goldblatt, for the respondent

Heard: January 21, 2020

On appeal from the judgment of Justice Lorne Sossin of the Superior Court of Justice, dated May 16, 2019, with reasons reported at 2019 ONSC 3014.

Reasons for Decision

[1] The first issue we must address is whether an agreement by the appellant’s former counsel and respondent’s counsel to settle this matter should be enforced.

[2] On May 16, 2019 the motion judge granted summary judgment in the appellant’s favour in relation to a $12,000 loan but dismissed the bulk of his claims.

[3] In early June 2019, the appellant’s former counsel and the respondent’s counsel exchanged email correspondence concerning settlement.

[4] The appellant acknowledges that based on a review of the email correspondence between counsel an objective observer would conclude that this matter had settled on terms that included the appellant waiving his right of appeal from the May 16, 2019 order and forgiving the $12,000 loan plus interest in exchange for a waiver of costs.

[5] Nonetheless, the appellant submits his unchallenged evidence establishes he never intended to make a binding offer to settle. Relying on this court’s decision in Milios v. Zagas (1998), 1998 CanLII 7119 (ON CA), 38 O.R. (3d) 218 (C.A.), he submits that, in these circumstances, several factors support this court exercising its discretion not to enforce the settlement. These factors include: the short time – mere hours – that elapsed between the settlement and his former counsel’s repudiation of the settlement, thus leaving the parties’ pre-settlement positions intact; apart from losing the benefit of the settlement, the absence of prejudice to the respondent if the settlement is not enforced; the relative prejudice to the appellant in losing his right of appeal; and the fact that no third parties will be affected if the settlement is not enforced.

[6] We do not accept the appellant’s argument. As a starting point, Milios is distinguishable from this case. In Milios, this court acknowledged the well-established pre-rule 49 principle from Scherer v. Paletta, 1966 CanLII 286 (ON CA), [1966] 2 O.R. 524 (C.A.), that a solicitor whose retainer is established may bind his client to a settlement unless the client had limited the solicitor’s authority and the limitation was known to the opposing side.[^1] However, at para. 16 of Milios, this court held the facts of that case (Milios) involved a mistake, not a limitation of authority. Following consideration of the whole of the underlying circumstances, this court exercised its discretion not to enforce the settlement.

[7] Unlike Milios, this is not a rule 49 case. Further, the facts of this case are very different from the facts in Milios. In Milios the client’s wife advised counsel her husband was away but had told her “to go ahead with the settlement.” Acting on these instructions, counsel accepted an offer made by the opposing side. On his return, the client clarified he told his wife to go ahead with his (the client’s) previous settlement offer, not the offer from the other side.

[8] In this case, the appellant acknowledges instructing his former counsel “to open negotiations with [the respondent’s] lawyer about settling the dispute”. However, he asserts he did not authorize his former counsel to make an offer to settle. Unlike Milios, this is not an assertion of a mistake. Rather, it is an assertion that counsel’s authority was limited and did not extend to making an offer to settle.

[9] Although this court retains discretion not to enforce a settlement, the facts of this case do not compel that result. The appellant’s former counsel was retained, had authority to – and was instructed to – engage in settlement negotiations. No limitation on his authority was communicated to the respondent. Declining enforcement in the circumstances of this case could undermine the certainty that is essential to encouraging meaningful settlement negotiations between counsel.

[10] Given our conclusion that the settlement should be enforced, we decline to address the issues raised by the appellant, but in doing so we are not to be taken as necessarily agreeing with the motion judge’s reasons.

[11] The appeal is allowed, the order below is set aside and in its place an order in accordance with the settlement is substituted. In all the circumstances, we make no order as to the costs of the appeal or of the motion below.

“Janet Simmons J.A.”

“P. Lauwers J.A.”

“I.V.B. Nordheimer J.A.”

[^1]: Scherer was pre-rule 49 but – consistent with rule 49 – acknowledged the discretionary power of the court to inquire into the circumstances of a settlement and decide whether or not to enforce it.