CITATION: Karasiewicz v. Collins, 2021 ONSC 4953
DIVISIONAL COURT FILE NO.: 278/20
DATE: 20210915
ONTARIO
SUPERIOR COURT OF JUSTICE
DIVISIONAL COURT
Daley, Penny and Cullin JJ.
BETWEEN:
ADRIAN CHARLES KARASIEWICZ
Appellant
– and –
CHIEF PETER COLLINS as a representative and on behalf of the FORT WILLIAM FIRST NATION BAND, and PETER COLLINS in his personal capacity
Respondents
Nathan Wainwright for the Appellant
Bradley A. Smith and Meghan Payment for the Respondents
HEARD: June 23, 2021
Penny J.
Overview
[1] This is an appeal from the decision of W.D. Newton J., dated July 29, 2020, with reasons reported at 2020 ONSC 4601.
[2] The appellant accepted an outstanding offer of settlement. However, the respondents resiled from the settlement. Accordingly, the appellant brought a motion for enforcement of the settlement. The motion judge found that:
(a) the respondents’ settlement offer was a valid offer under r. 49 of the Rules of Civil Procedure, R.R.O. 1990, Reg. 194, the acceptance of which was presumptively enforceable;
(b) the settlement offer was outstanding at the time of its acceptance; and
(c) the appellant’s acceptance was neither a counteroffer nor conditional on any material grounds.
[3] While accepting that the policy of the courts is to promote settlement and that the discretion to refuse to enforce a settlement should be exercised rarely, the motion judge nevertheless concluded that the discretion to decline to enforce a settlement should be exercised in this case. He dismissed the appellant’s motion to enforce the settlement on the ground of mistake by the respondents’ counsel, but awarded costs of the motion to the appellant.
[4] For the reasons that follow, I would allow the appeal and grant an order that the settlement agreement is valid and enforceable in accordance with its terms.
Background
[5] The relevant offer was delivered in writing by counsel for the respondents on September 15, 2016. The respondents offered to settle all claims for $25,000. There were additional negotiations after this, but no settlement was reached.
[6] However, several events happened in the litigation process after this offer was made:
(a) the workplace safety claim was resolved by agreement after an appeal was made to the Workplace Safety and Insurance Appeals Tribunal;
(b) the $1,000,000 claim for intentional interference of mental suffering was dropped;
(c) the action against Chief Collins personally was dropped; and
(d) the Human Rights Commission complaint made by the appellant was stayed while this action was pending.
[7] The offer was accepted by counsel on the appellant’s behalf on February 14, 2020.
[8] The respondents resiled from their offer. They took the position before the motion judge that: (i) their offer to settle was not a r. 49 offer; (ii) the appellant did not properly accept the offer; and (iii) as a result of the events that occurred after the offer was made, the offer was no longer open or available for acceptance.
Decision of the Motion Judge
[9] The motion judge rejected all these arguments. He found that the offer was a r. 49 offer and that the offer was open for acceptance and had been properly accepted. He also found that the respondents did not argue that the offer was not withdrawn because of inadvertence or a misunderstanding in solicitor client communication. Instead, the respondents argued that the offer should be deemed to have been withdrawn because circumstances changed. The motion judge held that such a proposition is impractical and unworkable. Adopting such a rule as a basis for non-enforcement of an accepted settlement offer would promote uncertainty because the question of what circumstances justify “deemed withdrawal” of an offer would be totally uncertain, “limited only by the imagination of counsel.”
[10] However, the motion judge went on to hold that the failure of counsel “to place limits on the offer, or to clearly withdraw the offer after circumstances changed, was an error by the [respondents]. Saying that the offer should be deemed withdrawn because of the change in circumstances is an admission that an error was made.”
[11] The motion judge recognized that the policy of the courts is to promote settlement and that the discretion to refuse to enforce a settlement should be exercised rarely: Catanzaro v. Kellogg’s Canada Inc., 2015 ONCA 779, at para. 9. However, he noted that mistake, miscommunication, or misunderstanding with respect to fundamental facts, duress/unconscionability, and illegality constitute grounds for the exercise of discretion to decline enforcement of a settlement: Cox v. Baker, 2019 ONSC 2859, at para. 39. Accordingly, he found that the respondents’ failure to withdraw the offer was a “mistake” which justified the exercise of his discretion to decline enforcement.
Standard of Review
[12] The standard of review on an appeal from an exercise of discretion is whether the judge below committed an error that amounted to an injustice or that was clearly wrong, for example, by giving no or insufficient weight to relevant considerations or by relying on irrelevant considerations: Penner v. Niagara (Regional Police Services Board), 2013 SCC 19, [2013] 2 S.C.R. 125, at para. 27; see also Elsom v. Elsom, [1989] 1 S.C.R. 1367, at pp. 1374-75.
Analysis
[13] There are two problems with the decision of the motion judge. First, as he acknowledged, his decision is based on an argument that was never made by either party. The respondents argued that their offer should be deemed to have been withdrawn due to changed circumstances. The motion judge rejected that argument.
[14] As the Court of Appeal for Ontario stated in Labatt Brewing Company Ltd. v. NHL Enterprises Canada, L.P., 2011 ONCA 511, 106 O.R. (3d) 677, at para. 5, interpreting an agreement on a basis not being advanced by the parties is an error: “[t]he problem is that this central conclusion was not anchored in the pleadings, evidence, positions or submissions of any of the parties.”
[15] Like in Labatt, the problem with the motion judge’s central conclusion here – that the respondents made a “mistake” by not limiting or revoking their offer when circumstances changed – is that this conclusion was not anchored in the motion records, evidence, or the positions/submissions of either party.
[16] The second problem with the motion judge’s decision is related to the first and is highlighted by the language in Labatt. There was simply no evidence to find that the respondents made any “mistake” in communications with counsel, or with the other side, regarding the terms of the settlement or about the fundamental facts upon which the settlement agreement was based.
[17] The respondents relied heavily on the decision of the Court of Appeal in Milios v. Zagas (1998), 38 O.R. (3d) 218 (C.A.). Milios is a case where the decision of the motion judge to enforce a settlement was reversed by the Court of Appeal on the basis of mistake. However, in Milios, the uncontradicted evidence was that the plaintiff counsel’s acceptance of the defendant’s settlement offer was the product of a mistake caused by the plaintiff’s wife’s misunderstanding of her husband’s instructions. That is not the case here.
[18] The motion judge inferred that the failure to withdraw the offer must have been a mistake but there was no evidence upon which to base that inference. Further, the “mistake” inferred by the motion judge was not a mistake as to the facts – there was no evidence, for example, that the respondents were unaware of the alleged changes in circumstances. Rather, the inferred mistake appears to have been one of professional judgment. No authority was cited for the proposition that a mistake in this context includes the exercise of professional judgment. In any event, the inference drawn by the motion judge was expressly contrary to the respondents’ evidence and submissions on the motion.
[19] For these reasons, I would allow the appeal and order that the settlement agreement is valid and enforceable in accordance with its terms.
[20] The parties agreed that costs of $2,500 for the leave motion and $5,000 for the appeal should go to the successful party. It is so ordered.
Penny J.
I agree _______________________________
Daley J.
I agree _______________________________
Cullin J.
Released: September 15, 2021
CITATION: Karasiewicz v. Collins, 2021 ONSC 4953
DIVISIONAL COURT FILE NO.: 278/20
DATE: 20210915
ONTARIO
SUPERIOR COURT OF JUSTICE
DIVISIONAL COURT
Daley, Penny and Cullin JJ.
BETWEEN:
ADRIAN CHARLES KARASIEWICZ
Appellant
– and –
CHIEF PETER COLLINS as a representative and on behalf of the FORT WILLIAM FIRST NATION BAND, and PETER COLLINS in his personal capacity
Respondents
REASONS FOR JUDGMENT
Released: September 15, 2021