Court of Appeal for Ontario

Date: 2021-11-08 Docket: C68944

Before: MacPherson, Simmons and Nordheimer JJ.A.

Between:

Ahmad Thoba and Leisure Investments Inc. Plaintiffs (Respondents)

And:

Ahmad Yousif Srajeldin, 1661603 Ontario Inc. and 2520336 Ontario Corp. c.o.b. X-Play Defendants (Appellants)

Counsel: Pathik Baxi, for the appellants Robert Hine, for the respondents

Heard: November 3, 2021 by video conference

On appeal from the order of Justice Barbara Conway of the Superior Court of Justice, dated December 14, 2020.

Reasons for Decision

[1] The appellants appeal from an order enforcing the terms of a settlement agreement. At the conclusion of the appeal hearing we dismissed the appeal for reasons to follow. These are our reasons.

Background

[2] In December 2019, the respondents brought an action for declaratory relief and oppression against the appellants.

[3] Following settlement negotiations, on January 16, 2020, appellants' counsel confirmed in e-mail correspondence with respondents’ counsel that the appellants had agreed to a global settlement under which the appellants would buy out the respondents’ interest in the corporate appellants on specified terms.

[4] Further negotiations ensued. On February 2, 2020, the parties' accountant confirmed via e-mail to all counsel that a deal had been reached by the personal respondent and the personal appellant and his lawyers and listed the details. In an e-mail to all counsel the following day, respondents’ counsel confirmed the details were correct.

[5] Minutes of settlement were subsequently finalized. However, prior to the exchange of signed minutes of settlement, the personal appellant advised through counsel that his financing had fallen through.

[6] On a motion to enforce the settlement, the motion judge held that the parties had agreed upon the essential terms of a settlement as of February 2/3 2020 and that there was nothing in the record to indicate that minutes of settlement were required for the deal to be legally binding. She rejected the appellant's claim that he did not intend to create a legally binding agreement in the absence of minutes of settlement.

Appellants' Submissions

[7] On appeal, the appellants contend that the motion judge made a palpable and overriding error in:

i. finding the settlement was binding despite the fact that executed minutes of settlement were not exchanged; and ii. finding that the parties had an intention to create a binding agreement in the face of the personal appellant's evidence that counsel informed him the settlement would not be binding absent the exchange of minutes of settlement;

In the alternative, if a settlement is found to exist, the appellants submit that the motion judge erred in failing to exercise her discretion to decline to enforce the settlement.

Analysis and Decision

[8] We do not accept these submissions. On the record before her, it was open to the motion judge to conclude, as she did, that the communications between the parties' representatives objectively reflected an enforceable agreement between the parties that was not conditional on the exchange of minutes of settlement. The fact that the personal appellant may have subsequently instructed his counsel not to release his signed minutes of settlement to the respondents or received advice that the settlement was not binding in the absence of minutes of settlement does not undermine this finding. The motion judge's findings were premised on the communications between the parties' authorized representatives.

[9] Further, we see no error in the motion judge's decision not to exercise discretion to decline to enforce the settlement. She noted that the agreement reached was not conditional on financing and found that the personal appellant had agreed to the original terms and that his evidence that he did not intend to create a legally binding agreement was an after-the-fact construct. These findings were open to her on the record. We see no basis on which to intervene.

Costs

[10] Costs of the appeal are to the respondents in the agreed upon amount of $15,000 inclusive of disbursements and applicable taxes.

“J.C. MacPherson J.A.”

“Janet Simmons J.A.”

“I.V.B. Nordheimer J.A.”