ONTARIO
SUPERIOR COURT OF JUSTICE
COURT FILE NO.: 08-CV-353753
DATE: 20140718
BETWEEN:
ZAID HAWA
Applicant
– and –
NADA SALIM RAZZOUKI HAWA
Respondent
H. Keith Juriansz, for the Applicant
Anton M. Katz, for the Respondent
HEARD: June 12, 2014
b. p. o’marra j.
reasons for judgment
[1] This is an application by Zaid Hawa to enforce settlement of an offer accepted on February 7, 2014. The respondent, Nada Hawa, filed an application seeking advice and directions related to the settlement. The issues raised require an examination of a prior settlement process that began in July of 2008.
[2] The parties are siblings.
the original application
[3] A joint bank account was opened in a Zurich branch of UBS AG in 2001 in the names of the applicant and his mother, Felem Jirgis. The funds in that account are frozen and a withdrawal requires the joint written authority of both account holders. Counsel advised that the amount currently in the account is approximately £167,000.00.
[4] The applicant commenced an application in April of 2008 against the respondent. The issues in dispute involved an interest in certain property and the funds held in the joint account. The applicant’s position was that the funds in the joint account were deposited by his late father for his benefit and that his father intended that those funds would be for his use only.
first settlement
[5] On July 4, 2008 then counsel for the respondent offered to settle on the following terms:
(a) Payment to the applicant of the sum of £55,000 British pounds;
(b) the respondent shall arrange for Felem Jirgis “to sign documents prepared by the applicant removing all existing restrictions” on the subaccount to the joint account “such that the applicant shall have unfettered access to that account”; and
(c) that in consideration of the above, the applicant shall withdraw the application and execute a release prepared by the respondent, etc., which release shall be in favour of and enure to the benefit of the respondent and certain members of the Hawa family.
[6] The applicant submits that during a series of telephone calls on July 11, 2008 counsel for the applicant made an oral settlement agreement with counsel for the respondent on the following terms which resolved all of the main issues in contention (the “first settlement agreement”) as follows:
(a) the respondent shall pay to the applicant the sum of £62,000 British pounds within 30 days;
(b) the respondent shall use best efforts to arrange for Felem Jirgis to sign documents prepared by the applicant removing all existing restrictions on the joint account;
(c) if any monies have been removed without the knowledge of the applicant from the joint account since the date it was opened, the respondent shall reimburse such amount to the applicant (the “repayment term”); and
(d) in consideration of the above, the applicant shall withdraw the application and execute a release prepared by the respondent and to the satisfaction of both parties fully and finally settling any all claims regarding any issues that are set out in or could have been litigated in the application which release shall be in favour of and enure to the benefit of the respondent and the Hawa family.
[7] The applicant asserts that counsel specifically agreed that removal of the existing restrictions on the joint account meant that the applicant would thereafter be entitled to withdraw the monies from the joint account and deposit same into an account in his own name. During a telephone call on July 11, 2008, counsel for the applicant asserts that he told counsel for the respondent that once the restrictions were lifted from the joint account the applicant intended to take the money out and put it in an account in his name alone to which counsel for the respondent replied “okay”.
[8] By email dated July 11, 2008, counsel for the respondent emailed counsel for the applicant a copy of a release and settlement agreement which incorporated the terms of the first settlement agreement which had been executed by the respondent.
[9] The release and settlement agreement provided in part as follows:
“Now therefore this agreement witnesses that in consideration of the mutual covenants and agreements herein, and the arrangement by the respondent for Felem Jirgis to sign documents prepared by the applicant removing all existing restrictions on a joint account held with the applicant and payment of the sum of £62,000 British pounds to be transferred to the applicant within 30 days of the date of this agreement (herein the “settlement consideration”) to the applicant by and on behalf of the respondent, the sufficiency of which each of the parties hereto acknowledges, the parties hereto and each of them hereby covenant and agree as follows” ---
[10] The applicant submits that the reference in the above clause to “removing all existing restrictions on a joint account” meant that the applicant would be at liberty to remove the monies in the joint account and deposit same in an account in his name alone, as had been agreed between counsel.
[11] Paragraph 2 of the said agreement provided that “the applicant does hereby represent and declare that he alone is entitled to receive the settlement consideration …”. The applicant asserts that the language chosen indicates that the applicant is solely entitled not only to the sum of £62,000 British pounds but also to the funds in the joint account.
[12] The applicant submits that on July 14, 2008 the respondent resiled from the first settlement agreement and took the position that the application had not been settled. However, the respondent was willing to settle the application on the terms of the first settlement agreement as incorporated in the release and settlement agreement provided that the repayment term was excluded. The respondent did not want to commit herself to be responsible for something outside of her control or knowledge related to whether funds had been withdrawn from the joint account.
[13] The applicant brought a motion for judgment to enforce the first settlement agreement which was originally returnable June 13, 2012 but was rescheduled from time to time thereafter.
the new settlement
[14] On January 16, 2014 new counsel for the respondent served counsel for the applicant with an offer to settle the application which incorporated, verbatim, the entirety of the release and settlement agreement except for the repayment term.
[15] By letter dated February 7, 2014, counsel for the applicant accepted the offer to settle on behalf of the applicant.
[16] The accepted offer to settle requires the respondent to arrange for Felem Jirgis “to sign documents prepared by the applicant removing all existing restrictions on a joint account”. The applicant submits that the meaning of those words is that the applicant would be at liberty to remove the monies in the joint account and deposit same into an account in his name alone and that this is therefore an expressed or implied term of the settlement made on February 7, 2014. Clause #2 of the agreement is a declaration by the application that he alone is entitled to the settlement consideration.
[17] The accepted offer to settle defines the terms “settlement consideration” in precisely the same way as in the release and settlement agreement.
payment of £62,000 to counsel for the applicant in trust
[18] The respondent concedes that this sum was payable to the applicant in accord with the settlement. On February 21, 2014 the applicant signed a direction that these funds be made payable to Juriansz and Li in trust. The respondent since then unreasonably balked at making the cheque payable to counsel as per the direction.
[19] This issue should have been rectified before the date of hearing this application. On June 12, 2014 counsel for the respondent presented a cheque made payable to the applicant notwithstanding the direction of February 21, 2014.
[20] The respondent was present in court with her counsel on June 12, 2014 and consented to an order that the sum of £62,000.00 payable to Juriansz and Li in trust be delivered no later than July 14, 2014. The respondent acknowledged in court and through her counsel that she is in funds to make this payment on time and in accord with the direction and my order.
settlement term related to the joint account
[21] By email to Mr. Juriansz dated March 27, 2014 counsel for the respondent enclosed a letter to UBS in Zurich that included a letter to be signed by the respondent and Felem Jirgis. The letter includes the following:
“As joint account holders we hereby authorize and instruct you to remove any and all restrictions previously placed on the above-noted account.” [Underlining added]
[22] The respondent submits this fulfills her obligations under the settlement.
[23] The applicant submits that the intent of the settlement was twofold:
(i) that all restrictions on the joint account be removed; and
(ii) that the applicant is solely entitled to all funds in the account.
[24] The respondent has declined to sign documents that purport to ensure that the applicant will obtain all of the monies in the joint account.
the law
[25] Where a party to an accepted offer to settle fails to comply with the terms of the offer, the other party may make a motion for judgment in terms of the accepted offer, and the judge may grant judgment accordingly.
Rules of Civil Procedure, R. 49.09(a).
[26] 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.
Cellular Rental Systems Inc. v. Bell Mobility Cellular Inc., [1995] O.J. No. 721 (H.C.J.) at para. 17; affirmed [1995] O.J. No. 3773 (CA).
[27] The test for determining whether a settlement ought to be enforced pursuant to Rule 49 is as follows:
(a) was a settlement agreement reached; and
(b) if a settlement agreement was reached, in all the circumstances, should the settlement be enforced.
B.O.T. International Ltd. v. CS Capital Ltd., 2014 ONSC 1461 at para. 6.
[28] On the first stage of the test, whether a settlement agreement was reached, the proper approach is to treat the motion like a Rule 20 motion for summary judgment. If there are material issues of fact or genuine issues of credibility in dispute regarding whether i) the parties intended to create a legally-binding relation, or ii) there was an agreement on all essential terms, a court must refuse to grant judgment.
Capital Gains Income Stream Corp. v. Merrill Lynch Canada Inc., 2007 39604 (ON SCDC), 2007 CarswellOnt 6003 (Div. Crt) at para. 9.
analysis
[29] There are two fundamental impediments to the applicant’s assertion that he, and he alone, must be entitled to withdraw all funds from the joint account:
(i) the executed settlement does not explicitly state that the funds are to be for his exclusive use after restrictions on the joint account are removed. I am not satisfied there was an agreement on this term.
(ii) Felem Jirgis is not a party to the application or the settlement.
[30] If the restrictions on the joint account are removed either the applicant or Felem Jirgis would have unfettered access to the proceeds.
[31] I do not see how an agreement that does not include Felem Jirgis can bind her or allow this court to order that the applicant alone is entitled to the proceeds of the account.
result
[32] The respondent consented to an order on June 12, 2014 that she provide a cheque payable to Juriansz and Li in trust in the amount of £62,000.00. The cheque was to be delivered no later than July 14, 2014. The applicant is entitled to interest at the rate prescribed in the Courts of Justice Act from March 9, 2014 to July 14, 2014. The respondent consents to an order that she is to arrange for Felem Jirgis to sign documents prepared by the applicant removing all existing restrictions on the joint account.
[33] I will consider brief written costs submission (no more than 3 pages) from the parties. The applicant will have 14 days from this date and the respondent a further 7 days.
B. P. O’Marra J.
Released: July 18, 2014
COURT FILE NO.: 08-CV-353753
DATE: 20140718
ONTARIO
SUPERIOR COURT OF JUSTICE
BETWEEN:
ZAID HAWA
Applicant
– and –
NADA SALIM RAZZOUKI HAWA
Respondent
REASONS FOR JUDGMENT
B. P. O’Marra J.
Released: July 18, 2014