ONTARIO
SUPERIOR COURT OF JUSTICE
COURT FILE NO.: 06-CV-321548PD1
DATE: 20130107
BETWEEN:
BATTISTA DI GENNARO, FRANCO DI GENNARO and PAULA DI GENNARO
Plaintiffs
– and –
BMO NESBITT BURNS INC., ANGELO MATTINA and THE BANK OF MONTREAL
Defendants
James A. Brown, for the Plaintiffs
David Quayat, for the Defendants
HEARD: December 11, 2012
t. mcewen j.
reasons for decision
[1] The Defendants bring this motion for an order enforcing the Settlement Agreement reached between the Plaintiffs and the Defendants during a civil pre-trial.
background facts
[2] The parties attended at a civil pre-trial before Sanderson J. on February 24, 2011. At that time they entered into a settlement, by way of Minutes of Settlement that were executed by their solicitors, that provided the following three terms:
Defendants shall pay the plaintiffs $100,000 all-inclusive;
Plaintiffs shall execute a Release satisfactory to all parties; and
Parties shall consent to a dismissal of the action on a without costs basis.
[3] Thereafter, the solicitors for the parties had some disagreement as to the wording of the Release that was to be executed. The form of Release that was prepared by the Defendants’ solicitor Mark Veneziano (“Veneziano”) was rejected by the Plaintiffs’ solicitor Brian Jenkins (“Jenkins”). Jenkins, in response, had his clients execute a Release that deleted two paragraphs that had been in the Release prepared by Veneziano concerning issues of confidentiality and claims against third parties.
[4] Veneziano objected to the deletions. Ultimately, after discussions and correspondence between counsel, Jenkins agreed to execute the original form of Release on the basis that the confidentiality clause was restricted to the terms of the settlement. After initially objecting to this, Veneziano ultimately wrote to Jenkins advising that the Defendants would accept the initial release that had been signed by all Plaintiffs with the two aforementioned deletions.
[5] Veneziano continued to pursue the conclusion of the matter without response from Jenkins. Ultimately, several months later, the Plaintiff, Battista Di Gennaro (“Battista”), wrote to Veneziano advising that he had terminated the services of Jenkins.
[6] As a result, the Defendants now bring this motion to enforce the settlement.
defendants’ position
[7] The Defendants submit that the Minutes of Settlement reflect a clear agreement between the parties without ambiguity. They further submit that this is evidenced by the fact that, subject to the negotiation of the exact wording of the Release, the Plaintiffs never took the position, up until they discharged their counsel, that there was not a full agreement but rather that the terms of the Release had to be modified.
[8] In this regard, the Plaintiffs rely upon a number of cases as follows:
Cellular Rental Systems Inc. v. Bell Mobility Cellular Inc., [1995] O.J. No. 721 (Gen. Div.) aff’d [1995] O.J. No. 3773 (C.A.), in which Chapnik J., in a similar case held:
17 An agreement to settle a claim is a contract. To establish the existence of a contract, the parties’ expression of agreement must demonstrate a mutual intention to create a legally binding relationship and contain agreement on all of its essential terms: see Canada Square Corp. v. VS Services Ltd. (1981), 1981 1893 (ON CA), 34 O.R. (2d) 250 (C.A.); and Bawitko Investments Ltd. v. Kernels Popcorn Ltd. (1991), 1991 2734 (ON CA), 79 D.L.R. (4th) 97 (Ont. C.A.).
20 In the context of a dispute regarding proper documents to be signed on settlement of litigation, McEachern C.J.B.C. in Fieguth v. Acklands Ltd. (1989), 1989 2744 (BC CA), 59 D.L.R. (4th) 114 (B.C.C.A.), concluded at page 121:
The first question is whether the parties have reached an agreement on all essential terms.
The next stage is the completion of the agreement. If there are no specific terms in this connection either party is entitled to submit whatever releases or other documentation he thinks appropriate. Ordinary business and professional practice cannot be equated to a game of checkers where a player is conclusively presumed to have made his move the moment he removes his hand from the piece. One can tender whatever documents he thinks appropriate without rescinding the settlement agreement. If such documents are accepted and executed and returned then the contract, which has been executory, becomes executed. If the documents are not accepted then there must be further discussion but neither is released or discharged unless the other party has demonstrated an unwillingness to be bound by the agreement by insisting upon terms or conditions which have not been agreed upon or are not reasonably implied in these circumstances. (Emphasis added.)
Bogue v. Bogue, 1999 3284 (ON CA), [1999] O.J. No. 4310 (C.A..), in which the Court of Appeal stated:
13 Although the motions judge did not hear any oral evidence, his findings of fact are entitled to deference on appeal: Milios v. Zagas (1998), 1998 7119 (ON CA), 38 O.R. (3d) 218 (C.A.) at 222. In my view, there was evidence upon which the motions judge was entitled to find that a final settlement of all the issues had been reached on December 10th and that there was an agreement in respect to the essential terms. While there was no express discussion about a release, the settlement of the action implied an obligation to furnish releases: Fieguth v. Acklands Ltd. (1989), 1989 2744 (BC CA), 59 D.L.R. (4th) 114 (B.C.C.A.). At the end of those negotiations, the parties had bound themselves to the settlement. It only remained for the lawyers to reduce the terms to a formal document. This was not simply an agreement to agree.
Oliveira v. Tarjay Investments, 2006 8870 (ON CA), [2006] O.J. No. 1109 (C.A.), in which the Court of Appeal stated at para. 5:
… the appellants contend in their factum that the motion judge erred in approving the Minutes because they did not settle all the essential terms and therefore, did not evince a mutual intention to enter into a binding agreement. More specifically, they argue there was only an agreement to agree because the Minutes call for the execution of a release that was never signed. We do not agree. The motion judge reviewed the language of the Minutes and noted that they say “the undersigned agree the above matter has been settled in the following terms” (underlining added). The requirement that a full and final release be signed does not mean that a binding agreement has not been reached. [Emphasis added.]
Lastly, Hodaie v. RBC Dominion Securities, 2011 ONSC 6881; [2011] O.J. No. 5282 in which Dambrot J. held:
20 Fourth, if one party submits a form of release that is not accepted by the other party, then there must be further discussion, but neither party is released from the settlement unless the other party has demonstrated an unwillingness to be bound by the agreement by insisting upon terms or conditions which have not been agreed upon or are not reasonably implied in these circumstances: see Cellular Rental Systems Inc. v. Bell Mobility Cellular Inc. at para. 24.
[9] The Defendants therefore submit that the fact that the terms of the Release had not been agreed upon at the time that the Minutes of Settlement were executed does not in any way affect the fact that a binding agreement had been entered into between the parties.
[10] In any event, Veneziano, on behalf of the Defendants, agreed to accept the original, edited Release that had been executed by the Plaintiffs.
[11] With respect to the Plaintiffs’ alternative argument that there was undue influence exerted upon Battista by Jenkins to accept the settlement or that Jenkins did not have authority to execute the settlement, the Defendants rely upon the aforementioned Oliveira decision in which the Court of Appeal stated:
2 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: see Scherer v. Paletta 1966 286 (ON CA), [1966] 2 O.R. 524 (C.A.) and Mohammed v. York Fire and Casualty Insurance Co., 2006 3954 (ON CA), [2006] O.J. No. 547 at para. 20 (C.A.). There was no such indication here. Consequently, as between these parties, the plaintiffs are bound by the act of their solicitor.
[12] The Defendants also rely on the decision of Day J., in Sign-O-Lite v. Bugeja, [1994] O.J. No. 1381 (Gen. Div.) in which he held at paras. 9 and 15:
…It is important to stress that the relationship between a solicitor and client is separate and apart from the relationship between a solicitor and third parties and has different rules and ramifications. A solicitor who settles a lawsuit may be in breach of her obligations to her principal and liable to her principal, but the settlement may nevertheless be binding as between the principal and a third party.
Any dispute between the solicitor and her client is a matter between those parties. If there was a limitation on the agent’s authority, or the agent acted fraudulently, then the remedy for the principal is against the agent for breach of agency obligations, not against the third party. The third party is entitled to rely upon the actions of the agent. Once an action has been commenced and a solicitor has been retained, the solicitor’s authority to settle the actions has been established, whatever the client’s instructions may be. This interpretation is essential for certainty and stability to the negotiation and settlement of disputes…
[13] The Defendants therefore submit that the Minutes of Settlement constitute a binding agreement.
[14] In this regard, the Defendants submit that while they would prefer that the settlement incorporate the original, unedited Release that was provided to Jenkins they are prepared to accept the edited Release that was ultimately agreed to by Veneziano.
plaintiffs’ position
[15] Firstly, it should be pointed out, that counsel for the Plaintiffs’ at the motion, did not represent the Plaintiffs in the action. He advised at the motion that he was acting for Battista, only, for the purposes of the motion. After some discussion counsel confirmed that Battista, who was also present at the motion, spoke for all of the Plaintiffs. Accordingly, counsel felt that he could make submissions on behalf of all Plaintiffs. Based on the above, and since the motion materials of the Defendants had been properly served upon all of the Plaintiffs, I concluded it was appropriate to proceed with the motion in this fashion. The parties agreed.
[16] With respect to the issue of the wording of the Minutes of Settlement, counsel for the Plaintiffs submitted that the paragraph referring to the preparation of the Release was ambiguous and contradictory. As a result, the terms of Release had to be agreed upon before it could be said that there was a binding contract. Thus, the Minutes of Settlement did not constitute an agreement but rather amounted to “an agreement to agree” that was open to further negotiations. In this regard, the Plaintiffs rely upon the exact same quotation relied upon by the Defendants in Oliveira as well as the decision of the Court of Appeal in Bawitko Investments Ltd. v. Kernels Popcorn Ltd. (1991), 1991 2734 (ON CA), 79 D.L.R. (4th) 97 (Ont. C.A.), at paras. 20-21, in which it was stated as follows:
As a matter of normal business practice, parties planning to make a formal written document the expression of their agreement, necessarily discuss and negotiate the proposed terms of the agreement before they enter into it. They frequently agree upon all of the terms to be incorporated into the intended written document before it is prepared. Their agreement may be expressed orally or by way of memorandum, by exchange of correspondence, or other informal writings. The parties may “contract to make a contract”, that is to say, they may bind themselves to execute at a future date a formal written agreement containing specific terms and conditions. When they agree on all of the essential provisions to be incorporated in a formal document with the intention that their agreement shall thereupon become binding, they will have fulfilled all the requisites for the formation of a contract. The fact that a formal written document to the same effect is to be thereafter prepared and signed does not alter the binding validity of the original contract.
However, when the original contract is incomplete because essential provisions intended to govern the contractual relationship have not been settled or agreed upon; or the contract is too general or uncertain to be valid in itself and is dependent on the making of a formal contract; or the understanding or intention of the parties, even if there is no uncertainty as to the terms of their agreement, is that their legal obligations are to be deferred until a formal contact has been approved and executed, the original or preliminary agreement cannot constitute an enforceable contract. In other words, in such circumstances the “contract to make a contract” is not a contract at all. The execution of the contemplated formal document is not intended only as a solemn record or memorial of an already complete and binding contract but is essential to the formation of the contract itself …
[17] The Plaintiffs therefore submit that once Veneziano initially rejected the amendments made to the Release, all of the essential terms set out in the Minutes of Settlement had not been agreed to and there was no contract. Thereafter, Veneziano could not change his mind and agree to accept the Release with the deletions made by Jenkins.
[18] In essence, therefore, the Defendants’ position is that paragraph 2 constituted an agreement to agree and no such agreement was ever reached; therefore, the Minutes of Settlement cannot be enforced.
[19] The alternative argument raised by the Plaintiffs is that its solicitor Jenkins exerted undue influence on Battista and did not have authority to enter into the Agreement. The Plaintiffs argue that Battista, who attended at the pre-trial conference with Jenkins, became upset during the negotiations and left the room. This should have made it clear to Veneziano that Battista was not agreeable to accepting the offer. Battista further deposes in his affidavit that he never authorized Jenkins to enter into the Minutes of Settlement.
[20] The Plaintiffs concede, however, that there is nothing in the record and the email correspondence between Battista and Jenkins wherein Battista, or any of the Plaintiffs, ever stated that Jenkins entered into the settlement without their authorization. The Plaintiffs further concede that Jenkins was the Plaintiffs’ lawyer at all relevant times and that, absent evidence to the contrary, Jenkins had the ability to settle the action on behalf of the Plaintiffs.
analysis
[21] I agree with the Defendants that a binding settlement was reached between the parties as per the terms set out in the Minutes of Settlement. The case law, in my view, overwhelmingly supports the Defendants’ contention that at the time that the Minutes of Settlement were executed the parties had bound themselves to the settlement subject to the execution of a Release. Although the Minutes of Settlement are brief, they are concise. The requirement that a Release be signed, as agreed to by the parties, does not mean that a binding agreement had not been reached. Clearly any difficulty with respect to the wording of the Release could either be agreed upon by the parties (and Veneziano ultimately did agree in this case) or settled by the court, if necessary.
[22] Secondly, I do not accept the Plaintiffs’ argument that the settlement should be set aside by virtue of the fact that Jenkins exerted undue influence over Battista at the pre-trial or that Jenkins entered into an agreement on behalf of the Plaintiffs without authority. The only evidence that supports these contentions are the bald allegations set out in Battista’s affidavit. They are not supported by any documentation whatsoever during the entire time Jenkins and Veneziano attempted to negotiate the terms of the Release. These arguments were not even raised until the Plaintiffs delivered their motion materials. Accordingly, I do not find that there is any evidence whatsoever to support Battista’s statements in this regard.
[23] Furthermore, I do not accept the Plaintiffs’ argument that, by Battista leaving the pre-trial room and leaving Jenkins to sign the Minutes of Settlement, Veneziano was given constructive notice that the Plaintiffs would not accept the offer. If indeed this happened, at best, it might demonstrate that Battista was unhappy with the settlement. It cannot, however, be construed to mean that he was not agreeing to the offer. In my view, the simple act of leaving a room could not suggest such a state of mind. I therefore find that this argument of the Plaintiffs should fail as well. Once again, the case law overwhelmingly supports the Defendants’ position that they are able to rely on Jenkins’ actions in settling the action.
[24] With respect to the form of release, as noted above, counsel for the Defendants would prefer the initial, unedited Release but conceded that it would be prepared to accept the Release that was amended by Jenkins. Since Veneziano did expressly agree to accept the amended Release, I find that it would be reasonable that the amended form of Release should be delivered.
disposition
[25] I therefore order as follows:
The Plaintiffs shall, within 21 days of this Order, deliver to counsel for the Defendants, an executed Release in the same form as the Release executed by the Plaintiffs on March 22, 2011.
The Defendants shall, within 21 days of receiving the executed Release, deliver to counsel for the Plaintiffs, the settlement funds in the amount of $100,000.
Within seven days of the receipt of the settlement funds described above, counsel for the Plaintiffs shall deliver a Consent, in writing, to the Defendants’ solicitors with respect to the dismissal of this action with prejudice and without costs.
[26] With respect to the issue of costs, the amount sought by the Defendants is very reasonable. It is not opposed by counsel for the Plaintiffs. I therefore award costs payable to the Defendants in the amount of $2,395.11 to be paid within 21 days. If the costs are not paid within 21 days they can be deducted from the settlement amount of $100,000 that is to be paid by the Defendants.
T. McEwen J.
Released: January 7, 2013
COURT FILE NO.: 06-CV-321548PD1
DATE: 20130107
ONTARIO
SUPERIOR COURT OF JUSTICE
BETWEEN:
BATTISTA DI GENNARO, FRANCO DI GENNARO and PAULA DI GENNARO
Plaintiffs
– and –
BMO NESBITT BURNS INC., ANGELO MATTINA and THE BANK OF MONTREAL
Defendants
REASONS FOR DECISION
T. McEwen J.
Released: January 7, 2013