SUPERIOR COURT OF JUSTICE - ONTARIO

Court File No.: 50137
Date: 20130614

RE: MARY BRAY, Plaintiff

AND:

Willem Fijnheer, The H.E.L.P. Sign Inc. Cohen Highley, Rose Finance Corp., Rose London Inc., The Rose Corporation, 2040262 ONTario Inc. and Tim Bankier, Defendants

BEFORE: A.J. Goodman J.

COUNSEL:
Andrew C. Murray, for the Plaintiff

Stephen Schwartz, for the Defendants (Moving Parties), Rose Finance Corp., Rose London Inc., The Rose Corporation, 2040262 Ontario Inc. and Tim Bankier

HEARD: June 12, 2013

ENDORSEMENT

[1] This is a motion brought by defendants’ (Rose Finance Corp., Rose London Inc., The Rose Corporation and Tim Bankier) for an order dismissing the action against the defendants as a result of a settlement agreement allegedly reached in May 2007.

[2] In essence, this motion turns on whether there was an agreement to settle the action between the plaintiff and one or more of the moving party defendants.

[3] The defendants’ submit that the parties arrived at a settlement in May 2007 and this agreement was acknowledged and endorsed by [then] counsel for the plaintiff, Mr. Dewar by letter dated June 15, 2007.

[4] Mr. Schwartz submits that an offer was initiated by a telephone call to Mr. Bankier and a subsequent meeting was held between Mr. Nuttall and Mr. Bankier prior to Mr. Nuttall’s letter of May 25, (referring to Mr. Bankier’s affidavit, at paras. 11-14). Mr. Schwartz submits that Mr. Dewar’s letter of June 15, 2007 specifically acknowledged the settlement discussions advanced by Mr. Nuttall on behalf of the plaintiff and, in all respects, reinforced the plaintiff’s intention to discontinue as against all named defendants.

[5] Mr. Murray submits that Mr. Dewar’s letter of May 27, 2007 affirms that discussions were held by the parties/representatives and raises the discussion of a ‘proposal’. Mr. Murray submits that it is clear in Mr. Dewar’s letter that there was merely a proposal to address or remedy the litigation with the view to arriving at a mutually acceptable arrangement. Mr. Murray adds that the language in Mr. Dewar’s letter of June 15, 2007 suggests that the plaintiff was “prepared to do what she said she would do” in the May 25 document however, that was premised on an arraignment that had to satisfy both parties’ needs when read in conjunction with Mr. Dewar’s letter of May 27, 2007. Further, it is submitted that the inclusion or exclusion of the numbered company for purposes of the settlement had not been agreed upon by the parties.

[6] The plaintiff submits that all of the terms of the impugned settlement had not been addressed or agreed upon and that at its highest, the parties’ conduct in May and June 2007 was merely an attempt to agree to reach an agreement.

[7] In this case, the plaintiff and Mr. Nuttall declined to provide an affidavit. Aside from two competing affidavits filed in these proceedings, what I have are letters between the parties which include a flurry of correspondence between counsel as provided in Mr. Bankier’s affidavit. I also have one letter attached as an exhibit to Mr. Dewar’s affidavit. In particular, I have reviewed Mr. Dewar’s letters of April 14, June 15, and his letter dated May 27, 2007.

[8] The parties concede that Mr. Nuttall’s letter of May 25, 2007 is central to the issues in this motion. It is accepted that Ms. Bray signed Mr. Nuttall’s letter. I must also consider this letter in conjunction with Mr. Bankier’s affidavit which sets out the chronology of the events and his understanding of the settlement negotiations.

ANALYSIS

[9] I have reviewed the materials filed and have considered the oral submissions of counsel.

[10] For the moment, I will leave aside the issue of Mr. Bankier’s status as a personal defendant to these proceedings.

[11] The parties agree that the relevant test for my consideration is set out in Olivieri v. Sherman, 2009 CarswellOnt 9587(C.A.) at para. 27; which explains the two step analysis which must be applied in this case. I have also reviewed the previous Court of Appeal decision with respect to the same litigants, reported at 2007 CarswellOnt 4207 as well as other cases provided by counsel in applying my analysis as to whether the parties intended to create a legally binding relation or agreement.

[12] I am also guided by the principles in Milios v. Zagas (1998), 1998 7119 (ON CA), 38 O.R. (3d) 218 (C.A.) as it relates to the issue of releases and discussion of the essential elements required for a binding agreement. [^1]

[13] In submissions, Mr. Murray refers to the Rules of Professional Conduct in particular Rule 6.03, which I find is not helpful in this case. I agree with Mr. Schwartz that where a party has retained the services of counsel, there is no rule or authority that negates any valid agreement or settlement of issues being reached by non-lawyers or representatives acting on specific direction or on behalf of the parties. Of course, the legal requirements of a valid offer and acceptance of an agreement or contract must be established.

[14] Following the May 2007 exchange of correspondence, Mr. Schwartz repeatedly requested from Mr Dewar the receipt of duly executed releases and orders. I refer specifically to counsel’s letters of June 11, June 18, July 10, and July 24, 2007. The plaintiff neither responded to nor forwarded any release or court order to the defendants. There was no follow-up on this issue by defendants’ counsel following his final letter of July 24, 2007 until the Notice of Motion issued in late 2012.

[15] While I understand that there may have been some interim settlement discussions, the failure to address the alleged settlement either by further letters, directions or a motion pursuant to Rule 49.09 to enforce the settlement, is material to my understanding of the defendants’ true intention or understanding with respect to these settlement negotiations.

[16] Mr. Schwartz fairly points out that a court order, release or Notice of Discontinuance is merely the mechanism upon which a party may enforce a settlement or an agreement. While that may be true, in this case, the lack of timely follow-up or confirmation by the defendants coupled with the explanations provided by Mr. Bankier, do not enhance the defendants’ position that there was a valid settlement of the issues upon which the parties addressed all of the essential terms. In my opinion, this inaction is more than mere form over substance and is relevant to demonstrate the true nature of the defendants’ belief or intention at the relevant time.

[17] I do not find Mr. Bankier’s assertion as found at para. 20 of his affidavit as credible in so far as he purports that by July 24, 2007 and not having received a response or any release “he believed that the action was settled”. [^2] Had the defendants truly believed there was a binding agreement or settlement, surely they would have followed up by letter or by other legal means once they were placed on notice regarding the status hearing of December 18, 2009, or the motion of May 10, 2011 or the subsequent motion held on March 9, 2012. In these circumstances, one would have expected some immediate response in the face of Mr. Bankier’s belief that the litigation had, for all intents and purposes ceased against him and all of the various defendants identified in the Nuttall letter.

[18] While Mr. Schwartz submits that there were ongoing settlement discussions, I am also advised that these settlement discussions did not commence until after the second motions date of May 10, 2011. As the evidence before me demonstrates that the defendants remained silent on this issue until the genesis of this motion, I can only conclude that the defendants either acquiesced or abandoned their position with respect to the May 2007 discussions and correspondence.

[19] I have also considered the plain language contained in Mr. Dewar’s May 27 letter which must be juxtaposed with his follow-up letter of June 15. Admittedly there is some confusion when I review Mr. Dewar’s assertion in para. 6 of his affidavit, as I do not know exactly how or when Mr. Dewar found out about the Nuttall/Bankier discussions or meeting other than “learning of it after the fact”. I am satisfied that Mr. Dewar did not have a full understanding of those discussions by the time he drafted his May 27, 2007 letter. I have placed significant weight to Mr. Dewar’s letter of May 27, 2007 which was not responded to by the defendants. It is evident that Mr. Dewar’s May 27 letter places his subsequent June 15 2007 correspondence into context.

[20] I am of the view that having received no response to letters requesting a release, and the defendants not following up with a further demand or a Rule 49.09 motion, the defendants did not adopt the position that an agreement has been finalized or all of the essential terms had been settled.

[21] In addressing the initial May 2007 discussions, I am not satisfied that there was the requisite mutual intention or agreement between the parties. On Mr. Bankier’s affidavit evidence, I am not satisfied that an offer addressing all of the issues resulted from the meeting between the Mr. Bankier and Mr. Nuttall prior to Mr. Nuttall’s letter, and that Mr. Nuttall’s May 25 response is acceptance of such an offer. The evidence with respect to the specifics of the settlement discussions is vague. At its highest, I accept plaintiff’s counsel’s argument with respect to the intent of the parties in May 2007 to the effect that these discussions were an attempt to reach an agreement, in other words, the terms provided for some uncertainty and there was an agreement to agree.[^3] As I find that an agreement did not exist, I need not address the second stage of the test as enunciated in Olivieri.

[22] Notwithstanding the aforementioned and as Mr. Murray fairly concedes, the April 14, 2007 letter from Mr. Dewar to Mr. Schwartz is clear and unequivocal. It proves an offer to discontinue the action as against Mr. Bankier in his personal capacity without qualification. I find that this offer was accepted by the defendant in subsequent correspondence.

CONCLUSION

[23] The defendants’ motion is granted in part. I find that there was an agreement to discontinue the action as against Mr. Bankier personally. Therefore, para. 3 of the defendants’ Notice of Motion is granted; the remaining grounds for relief are hereby dismissed.

[24] In this case, success being somewhat divided, each party shall bear their own costs.

“A.J. Goodman

A.J. GOODMAN J.

Date: June 14, 2013

[^1]: See also Bogue v. Bogue (1999) CarswellOnt 3619 C.A. at paras. 12 & 13.

[^2]: I assume that Mr. Bankier is asserting his viewpoint on behalf of all the defendants.

[^3]: See Bawitko Investments v. Kernel, 1991 D.L.R. 4th, 97 (ONCA.) at 103-4.