COURT FILE AND PARTIES

COURT FILE NO.: CV-13-486274

DATE: 20131213

SUPERIOR COURT OF JUSTICE - ONTARIO

RE: Sandra A. McGee-Maguire, Plaintiff

AND:

Dr. Christopher Tsang Dentistry Professional Corporation and Dr. Christopher Tsang, Defendants

BEFORE: Carole J. Brown J.

COUNSEL: Scott K. Gfeller, for the applicant

No one appearing for the respondents, although duly served

HEARD: December 12, 2013 at 12 noon

ENDORSEMENT

[1] The applicant seeks to enforce the terms of the settlement agreement in Ontario Superior Court action CV-12–464433–00 concluded between the parties in the court-mandated mediation held on January 28, 2013 as witnessed by the written minutes of settlement executed by the parties on that date.

[2] The action involved a claim for wrongful dismissal brought by the applicant/plaintiff, a registered dental therapist, as against the respondents/defendants. Pursuant to the terms of the settlement concluded at the mandatory mediation, the respondents agreed to pay the applicant a total of $18,500 with an initial payment of $5000 due within 10 days. The balance of the settlement payment was to be paid once the applicant determined, through Human Resources and Skills Development Canada ("HRSDC "), the extent of her employment insurance overpayment as a result of receiving the settlement funds, which overpayment had to be repaid to HRSDC. The respondents remitted the initial $5000 pursuant to the minutes of settlement.

[3] The parties, through their respective lawyers, consented to an order dismissing the action without costs which was done on February 5, 2013. It is due to the dismissal of the action, which was obtained following the settlement agreement, that the applicant brings this application.

[4] Pursuant to the terms of the minutes of settlement, the applicant determined through HRSDC the amount of employment insurance she was required to repay, given the amount of the settlement. The balance of the repayment to be made to HRSDC, taking into account amounts already paid, was in the amount of $2688, which was to be paid, pursuant to the terms of the agreement, by the defendants, directly to HRSDC, with the balance of the outstanding settlement amount of $10,812 ($18,500 less the $5000 paid by the defendants and less the amount of $2,688 payable to HRSDC directly by the defendants), was to be paid by the defendants to the plaintiff. HRSDC commenced deducting monthly amounts from the plaintiff’s monthly employment insurance benefits, based on the settlement amount, which deductions continue to date.

[5] On June 12, 2013, counsel for the applicant advised counsel for the respondents of the full amount owing by the applicant to HRSDC, requesting payment to HRSDC pursuant to the minutes of settlement and payment to the applicant of the balance of the settlement funds.

[6] On July 3, 2013, the applicant's counsel received correspondence from the lawyer for the defendants, which indicated that they were no longer retained by the respondents and advised the applicant to correspond directly with the respondents. The applicant’s counsel did this. Subsequently, the respondents resiled from the minutes of settlement and advised the applicant's counsel that they would not comply with the minutes of settlement.

[7] In determining whether to enforce a settlement agreement pursuant to Rule 49.09 of the Rules of Civil Procedure, the applicable test is as set forth in Dick v Marek, 2009 CanLll 27821 at paragraph 65-66. The applicant also relies on Whitehall Homes & Construction Limited v Hanson, 2012 ONSC 3307, 2012 ONSC3307 and Cellular Rental Systems Inc. v Bell Mobility Cellular Inc., 1995 CarswellOnt 4182 at paragraph 17. I have taken those cases into consideration.

[8] Firstly, the Court must determine whether an agreement to settle was reached. The test to be applied is in essence that applied for Rule 20 motions. In this case, conclusion of the settlement agreement is evidenced by the signed minutes of settlement dated January 28, 2013. Based on the evidence before me, I am satisfied that the full appreciation of the evidence and issues with respect to enforcement of the minutes of settlement can be achieved without the full machinery of a trial. I conclude that the parties, who had retained counsel and were attending at a scheduled court-mandated mediation session in the context of the legal proceeding, intended to create a legally binding relationship, based on the objective evidence contained in the signed minutes of settlement. I further take into consideration that, in the process of arriving at the minutes of settlement, both parties had legal counsel representing them.

[9] The parties agreed to all essential terms of the settlement which was then formalized in the minutes of settlement and signed by the parties prior to leaving the mediation. No further negotiation occurred after the minutes of settlement were signed. Accordingly, the parties are presumed to have intended the legal consequences of their actions, in particular in circumstances where they were each represented by counsel: Whitehall Homes & Construction Limited v Hanson, supra.

[10] The settlement clearly provided that the respondents were required to pay the employment insurance overpayment to HRSDC and then deduct same from the amount remaining to be paid to the applicant as part of the settlement. The language of this paragraph, and indeed, of the minutes of settlement, in general, is clear and unambiguous. There was consensus, on the face of the documents, on this essential term, as well as on the payment of the settlement amounts.

[11] Secondly, the Court must determine whether, on all of the evidence, the agreement should be enforced. With respect to the question of whether the minutes of settlement, which I have found to have been intended by the parties and legally binding, should be enforced, I have considered the cases relied upon by the applicants of Dick v Marek, supra, Richard v Worth, 2004 CanLll 34517, paragraph 16 and Vanderkop v Manufacturers Life Insurance Company, 2005 CanLll 39686 at paragraph 34. Based on the factors to be considered in Richard v Worth, supra, I find, based on the evidence, that this is not a case of mistake, that the agreement was reasonable, and that the only prejudice in this case is to the applicant who has suffered as a result of the employment insurance overpayment being deducted from her monthly benefits based on the settlement funds she never received.

[12] Accordingly, I find that the parties reached an agreement to settle, as evidenced by the signed minutes of settlement. I further find that the minutes of settlement are legally binding and are to be enforced. I find that the respondents are in breach of their obligations with respect to the minutes of settlement.

[13] In all of the circumstances, the applicant seeks an order that judgment be granted in the amount of the outstanding balance owing of $13,500. The applicant will deal directly with HRSDC regarding the overpayment of benefits, as she does not, given the respondents’ past conduct, have confidence that the respondents will fulfill the obligations vis-à-vis HRSDC.

[14] The applicant also seeks punitive damages based on the respondents' high-handed behavior in resiling from the settlement agreement. Based on our discussion in Court and on the decision in Tri Huynh et. al. v Alice Wan Lau, 2011 ONSC 3417, which Mr. Gfeller brought to the attention of the Court, I decline to award punitive damages.

The Order

[15] Based on the foregoing, this Court orders that:

1. Judgment is granted in the amount of $13,500 payable forthwith by the respondents to the applicant;

3. The respondents are to pay to the applicant her costs on a substantial indemnity basis in the total amount of $7052.56 forthwith.

Carole J. Brown J.

Date: December 13, 2013