SUPERIOR COURT OF JUSTICE - ONTARIO
COURT FILE NO.: 13-44340
DATE: 2014-06-26
RE: James Hillgartner, applicant
AND: Stephen Barber, respondent
BEFORE: Mr. Justice Parayeski
COUNSEL:
Mr. Sharoon Gill, for the Applicant
Mr. Rick Simmons, for the Respondent
HEARD: June 20th, 2014 at Hamilton
E N D O R S E M E N T
PARAYESKI, J.
[1] The applicant moves for an order enforcing what he says was a settlement of the issues raised by the application. The respondent denies that there was an enforceable settlement.
[2] Rule 49 addresses the enforcement of settlements. It creates a two step test. The first is to consider whether an agreement to settle was reached. In other words, were the parties ad idem at some point, and if counsel was involved, was there any communicated limitation on the authority to bind the relevant client? The second test is to determine whether any such should be enforced.
[3] The applicant registered a construction lien on a piece of realty over which the respondent held (and holds) a mortgage. The primary issues have to do with: a) the validity of the lien; and b) the question of priority as between the lien and the mortgage. This is an oversimplification of the issues, but I believe that it serves as sufficient background information to make what follows intelligible.
[4] The first test mentioned above obliges me to consider, firstly, whether there was an offer on the one hand and acceptance of that offer on the other. It is the applicant’s position that his counsel made an offer to settle orally on December 30th, 2013, and that it was accepted by the respondent’s alleged solicitor on January 2nd, 2014.
[5] The applicant was, and is, represented by A. Douglas Burns. The respondent’s retainer of counsel, and the extent of that retainer is in issue, however it is plain that there were several representations made by that alleged solicitor, one David Bartkiw. He represented that he was acting for the respondent in some capacity for those occasions.
[6] On or about December 30th, 2013, Mr. Burns made a proposal to settle the application by way of the applicant taking an assignment of the respondent’s mortgage in return for the payment of $75,000 and 50% of the net proceeds of the sale of the property. These terms were expressed orally to Mr. Bartkiw.
[7] On January 2nd, 2014 Mr. Bartkiw wrote to Mr. Burns. It is appropriate to reproduce here the full terms of that letter. They are as follows: “Please be advised that I have had the opportunity to speak with my client with respect to the above noted matter. We (sic.) are prepared to sell our (sic.) first mortgage for the amount of $75,000. However, as we discussed we (sic.) want fifty percent (50 %) on the resale of the mortgage.
Given the above, in totality my client requires to be compensated in the area of $100,000.
If these terms are not acceptable to your client then we will be preparing our responding material to your client’s application. Please advise as time is of the essence.”
[8] The applicant asserts that this exchange constitutes an offer and acceptance creating a settlement (leaving aside for the moment the issue of binding authority).
[9] The respondent asserts that Mr. Bartkiw’s letter constitutes, at its highest, a counter offer, rather than an acceptance. He argues that this exchange demonstrates that the parties were not ad idem. There is no evidence that the counter offer, if indeed it was such, in the letter of Mr. Bartkiw dated January 2nd, 2014, was itself accepted by the applicant.
[10] I agree with the respondent that there was no meeting of the parties’ minds in respect of the terms being discussed. I do so for the following reasons:
The Bartkiw letter neither expressly accepts the terms of the Burns oral offer nor does it mirror them.
It demands, inter alia, “fifty percent (50%) on the resale of the mortgage.” I do not know if 50% of the net proceeds of the sale of the realty is the same thing as 50% “on the resale of the mortgage”, but to be sure, the realty and the mortgage on it are two different things.
[11] Moreover, I am unsure of the precise meaning intended by Mr. Burns’ phrase “the net proceeds from the sale of the property”.
[12] This flows from Mr. Burns’ amplification of what he meant as set out in his letter of February 19th, 2014. The relevant portion of that letter reads as follows: “Of course, included in our discussion was the fact that if after payment of legal fees, real estate commission and any taxes, there was a surplus over the funds owing to our client and paid to your client [the respondent], this surplus would be divided amongst Mr. Hillgartner and Mr. Barber.” Without certainty as to meaning, the applicant, by definition, has a problem in seeking to enforce the alleged agreement.
[13] Similarly, I am somewhat confused by the sentence in the Bartkiw letter which reads “Given the above, in totality my client requires to be compensated in the area of $100,000.” I am urged by the applicant to consider this irrelevant as merely being the expression of subjective intention on the part of the respondent. In simple terms, the applicant describes this sentence as some expression of the respondent’s rationalization of his position and his desired outcome. While I agree that the phrase “in the area of $100,000” is vague, it is prefaced by the word “requires”. In my view, the vagueness of the demand called out for clarification at least. Thirdly, if Mr. Bartkiw’s intention was to simply accept the oral terms conveyed by Mr. Burns, there would be no reason for him to threaten getting on with the litigation “if those terms are not acceptable”. This phrasing, in my mind, is more appropriate in asking for a response to a counter offer than the acceptance of an offer.
[14] In my view there was no meeting of the minds on the essential terms of the alleged settlement. Accordingly there was no settlement at all, much less and enforceable one.
[15] Despite this ruling, I shall go on to briefly address the issue of authority, that being the second part of the first test under Rule 49.
[16] There is no dispute that Mr. Burns was acting for the applicant throughout and that he had authority to propose the oral terms set out above. I am of the view that despite the respondent vacillating with respect to Mr. Bartkiw’s retainer and the extent of his authority, the latter had, at the material time, ostensible authority to settle the issues between the parties.
[17] Before Mr. Burns’ oral communication to Mr. Bartkiw of December 30th, 2013, Mr. Bartkiw repeatedly referred to the respondent as ” my client” in correspondence. Although the respondent attended at an application hearing on December 12th, 2013 and represented to the court that Mr. Bartkiw was not his lawyer and that he would require an adjournment to retain counsel, the respondent also wrote to Mr. Burns on January 9th, 2014 stating, inter alia, that “Mr. Bartkiw was only acting on my behalf to assist in coordinating a settlement on the issue thru (sic.) negotiation.” The letter goes on to say “As of this date, January 9, 2014, I will negotiate and/or defend myself…”. I find as a fact that either Mr. Bartkiw was authorized to negotiate settlement on behalf of the respondent at the time of the alleged offer and acceptance, or minimally, that there had been no restriction on that authority intelligibly expressed to Mr. Burns. The respondent cannot take advantage of his own inconsistencies to limit the authority of Mr. Bartkiw to negotiate on his behalf. Similarly ineffective in this regard is Mr. Bartkiw’s attempt in a letter dated January 13th, 2014 to somehow distinguish between his “corporate client” and Mr. Barber [the respondent]. There is no corporate respondent in the underlying application.
[18] Accordingly I find that if there had been an agreement reached as a result the combination of Mr. Burns’ oral offer and Mr. Bartkiw’s letter of January 2nd, 2014, Mr. Bartkiw did not lack authority to write that letter and to bind the respondent at that time.
[19] The second test under Rule 49 entails consideration of whether, on all of the evidence, an agreement found to exist should be enforced. The question, as articulated by the Ontario Court of Appeal in Fox Estate v. Stelmaszyk 2003 36922 (ON CA), [2003] O.J. No. 2619, at paragraph 11, is whether the Court’s sense of justice is satisfied that the settlement ought to be enforced (assuming, of course, that there was an agreement already in existence). Here, minimally, there were unresolved issues with respect to the value of the statutory priority to which the mortgage holder was entitled. As these issues are going to have to be either resolved or litigated, there does not appear to be much gained in terms of costs savings or finality itself in enforcing the alleged settlement. I am not satisfied that the respondent has met the onus raised by the second test either.
Accordingly, the motion to enforce the alleged settlement is dismissed. If the parties cannot agree upon costs with respect to the motion before me, they may make brief submissions in that regard. Each set of submissions shall be no more than two type written pages in length, not including a costs outline. The respondent’s submissions, if any, should be forward to me on or before July 30th, 2014, and those of the applicant are to be forwarded on or before August 15th, 2014.
Mr. Justice Parayeski
DATE: 26th June 2014
COURT FILE NO.: 13-44340
DATE: 2014-06-26
SUPERIOR COURT OF JUSTICE - ONTARIO
RE: James Gartner v. Stephen Barber
BEFORE: Mr. Justice Parayeski
COUNSEL: Mr. Sharoon Gill, for the Applicant
Mr. Rick Simmons, for the Respondent
ENDORSEMENT
Parayeski, J.
DATE: 26th June 2014