Court File and Parties

Citation: Mountain v. TD Canada Trust, 2015 ONSC 4030 Court File No.: 12915/04 Date: 2015-06-22 Superior Court of Justice - Ontario

Re: William Gary Mountain, Plaintiff And: TD Canada Trust Company, as Estate Trustee During Litigation for the Estate of John Nixon Mountain, deceased, TD Canada Trust Company, as Estate Trustee During Litigation for Helen Elizabeth Mountain and Louanne Mountain, Defendants

Before: Gray J.

Counsel: Kenneth Prehogan, Counsel for the Plaintiff Peter Griffin, Counsel for Louanne Mountain C. Melville and Jay Krotz, Counsel for TD Canada Trust Company

Heard: June 19, 2015

Endorsement

[1] On Friday June 19, 2015, I heard a motion for an order implementing Minutes of Settlement that were arrived at with the assistance of Justice Murray on March 19, 2014. I need not go into the background to any significant extent, but I will simply note that the Minutes of Settlement had been preceded by a lengthy trial before Lemon J. and an appeal from his decision to the Court of Appeal. By its decision, the Court of Appeal ordered a new trial, and required that before the holding of the new trial the case should be mediated.

[2] It was the mediation conducted by Justice Murray that led to the execution of the Minutes of Settlement.

[3] At the mediation, both parties were represented by experienced counsel. While the Canada Trust Company was not a party to the Minutes, and did not sign them, it was consulted during the process that led up to the Minutes and gave some advice on some aspects of them. For our purposes, it can be assumed that Canada Trust Company was content with the Minutes as drafted.

[4] One of the essential elements of the Settlement was the payment of $1,325,000 by the plaintiff to Louanne Mountain. It was expressly required to be paid by May 7, 2014. The second essential element was a vesting order, under which the farm property in dispute was to be vested absolutely in the plaintiff. The vesting order was to be effective November 22, 2012 as a consequence of the death of Helen Mountain.

[5] The dispute that has developed since the execution of the Minutes has to do with the tax consequences of certain transactions, and the tax plan developed by the plaintiff, or the lack thereof, and its potential impact on Louanne Mountain.

[6] As I advised counsel at the hearing of the motion, as a result of vacation plans it is unlikely that I will be in a position to decide all of the issues arising on the motion for some time. However, this matter has dragged on, and it is important that this matter be finalized quickly. Mr. Griffin advises me that Louanne Mountain is very short of funds, and it is important that she receive the benefit of the Minutes of Settlement as soon as possible.

[7] I advised counsel that I saw two possible things I might do immediately:

a) issue a "bottom line" decision now, with reasons to follow;

b) issue an interim order requiring only the payment of $1,325,000 to Louanne Mountain, and order the registration of the vesting order for the benefit of the plaintiff.

[8] Mr. Prehogan, on behalf of the plaintiff, expressed a preference for the first option. Mr. Griffin, for Louanne Mountain, expressed a preference for the second option. Mr. Melville, for Canada Trust, did not state a preference for either option, but submitted that in any event the indemnification of Canada Trust contemplated in the Minutes should be in place, and the collateral mortgage, also contemplated in the Minutes, should be registered.

[9] I have decided that it is appropriate to make an interim order, which would have the effect of requiring the immediate payment of $1,325,000 to Louanne Mountain, and the immediate registration of a vesting order and collateral mortgage.

[10] I see no prejudice to either party. There is no dispute that the Minutes of Settlement were executed and are binding. The only dispute is as to the interpretation of certain provisions. The payment of $1,325,000 and the registration of a vesting order will occur regardless of how the other issues are resolved. It has been over a year since the $1,325,000 was supposed to be paid, and I see no reason why it should not be paid now, provided Mr. Mountain gets the benefit of the vesting order.

[11] Mr. Prehogan's objection to an interim order was based on the proposition that it would be preferable that all matters be resolved at the same time, and on the assertion that if Mr. Mountain's interpretation of the disputed clauses of the Minutes is not sustained, it is possible that he might take the position that the Minutes of Settlement should be rescinded.

[12] I acknowledge that generally speaking all matters should be determined at once. However, in the special circumstances of this case, having regard to the lengthy delay, I think it is better that the non-controversial parts of the settlement be implemented now. As far as the possibility of rescission is concerned, I think that is a long shot. Both parties entered into the Settlement with their eyes open, and with the assistance of experienced counsel. As is the case with any agreement reduced to written form, there is always the possibility of ambiguity and different interpretations. I do not see any realistic possibility of rescission if Mr. Mountain's interpretation is not sustained.

[13] Mr. Griffin requests a provision that specifically states that any order will be implemented regardless of an appeal, and that payment is not stayed. I decline to include such a provision. I doubt that I have jurisdiction to make such an order. If my interim order is considered to be final, a judge of the Court of Appeal would have jurisdiction to lift a stay. If it is considered to be interlocutory (which I think is more likely), a stay comes into effect only on delivery of a notice of appeal. A notice of appeal cannot be delivered until leave is granted. A judge hearing a motion for leave to appeal can deal with any issue regarding a stay.

[14] For the foregoing reasons, I order as follows:

a) The plaintiff shall, on or before July 20, 2015, deliver certified funds in the amount of $1,325,000 payable to the solicitors for Louanne Mountain, Lenczner Slaght Royce Smith Griffin LLP, to be held in escrow pending the delivery of the vesting order and collateral mortgage described hereafter;

b) Counsel for the plaintiff and Louanne Mountain shall, within 15 days after the delivery of the funds referred to in (a), present for my signature a vesting order as contemplated in paragraph 5 of the Minutes of Settlement; If there is any dispute as to the form of the vesting order I may be spoken to; my assistant will see to the entry of the vesting order;

c) The signed and entered vesting order shall be delivered to the plaintiff's solicitors for registration;

d) Contemporaneously with the delivery of the vesting order referred to in (b) and (c), the plaintiff shall deliver to the solicitors for Louanne Mountain the collateral mortgages referred to in paragraph 7(b) of the Minutes of Settlement;

e) The mortgages shall be in the form attached to the draft order presented to me by Mr. Griffin, except that all of what appears under "Additional Provisions" shall be replaced by the following:

This charge/mortgage is given as continuing collateral security for the obligations of the Chargor to the Chargees pursuant to an indemnity reflected in paragraph 7 of certain Minutes of Settlement dated March 14, 2014.

[15] I realise that some amendment to the collateral mortgage will likely be required once I have ruled on all the outstanding matters, and the form of indemnity must be finalized. However, I see no impediment to the collateral mortgage being registered in the form that I have now specified. With the registration of the mortgage, the plaintiff will effectively be unable to deal with the farm property, and I think Louanne Mountain and Canada Trust will be fully protected, as a practical matter, in the meantime. For the same reason, I do not think I need to consider the additions to the draft order as proposed by Canada Trust at this point. I will consider this more fully when I decide the entire matter.

[16] I expect counsel to cooperate in implementing this interim order.

Gray J.

Date: June 22, 2015