SUPERIOR COURT OF JUSTICE - ONTARIO
COURT FILE NO.: CV-06-4123-00
DATE: 2015 07 15
RE: PREZEMYSLAW KRASUSKI and JAN ZARICZNIAK
BEFORE: Fragomeni J.
COUNSEL:
David F. Longley, for the Plaintiff
Amir Tamari and Dean Sloan, for the Defendant
HEARD: July 13, 2015
E N D O R S E M E N T
[1] The plaintiff brings a Motion for Summary Judgment on the basis that the parties entered into a binding settlement with respect to a personal injury action. The plaintiff seeks the following Judgment to issue:
The Court orders and…. That the plaintiff shall have judgment against the defendant for damages in the amount of $30,000 plus pre-judgment interest in the amount of $13,500.
The Court orders and …. That the plaintiff shall have judgment against the defendant for legal expenses assessed on a partial indemnity basis to be either agreed upon or assessed by the Assessment Officer in Brampton, Ontario.
Overview of the Facts
[2] The plaintiff commenced an action for damages on November 30, 2006 as a result of a motor vehicle accident occurring on December 9, 2004.
[3] The plaintiff was served with an Offer to Settle from the defendant on December 12, 2014. This was the first Offer to Settle the plaintiff received. This Offer to Settle set out the following:
The defendant will agree to settle this claim for the sum of $30,000, net of the statutory deductible of $30,000 for non-pecuniary damages, plus pre-judgment interest at the rate of 5 percent in the amount of $13,500 and costs in the amount of $6,500 in satisfaction of all claims for damages in this action.
This payment shall include all claims for damages and costs.
This offer shall remain open until five minutes after the commencement of trial after which it is automatically withdrawn.
[4] The plaintiff then sent the defendant the following e-mail:
Dear Dean,
I met with the plaintiff today. You will be served with a formal offer to settle on Monday which will reflect the following:
The plaintiff will settle the claim for damages in the amount of $30,000 net of the statutory deductible as set out in your offer to settle dated December 12, 2014;
The plaintiff will settle prejudgment interest payable on damages in the amount of $13,500 as set out in your offer to settle dated December 12, 2014;
The plaintiff will settle costs after assessment thereof on a scale providing for partial indemnity for legal expenses payable to the plaintiff.
I take the view that the case is settled on damages and interest and I will be asking the court in January to simply order that costs be assessed. Alternatively, I will prepare a Bill of Costs to have this dealt with at the inevitable pretrial which will precede the call to trial. Please let me know your preference.
[5] The plaintiff then served a Rule 49 Offer to Settle on December 15, 2014. This Offer to Settle set out the following:
The plaintiff withdraws all previous offers to settle in this matter.
The plaintiff will agree to settle this claim for the sum of $30,000 net of the statutory deductible of the $30,000 for non-pecuniary (general) damages.
The plaintiff will agree to settle his claim for prejudgment interest on those damages at the rate of 5 percent per annum in the amount of $13,500.
The plaintiff will agree to settle his claim for legal expenses after assessment thereof by the assessment officer in Brampton, Ontario.
[6] The plaintiff then attended at his counsel’s office and executed a full and final release which set out the terms of the Rule 49 offer, however, the legal expenses were different from the defendant’s Offer to Settle. The full and final release stated the following with respect to costs: “legal expenses and disbursements to be agreed upon or assessed.” The defendant’s initial offer stated, “costs in the amount of $6,500.00.”
[7] On December 18, 2014 the plaintiff sent the defendant the following Offer to Settle as it relates to costs:
The plaintiff offers to settle this proceeding on the following terms:
The plaintiff will accept the sum of Twelve Thousand, Five Hundred Dollars ($12,500.00) for legal expenses on a partial indemnity basis plus HST in the amount of One Thousand, Six Hundred Twenty-Five Dollars ($1,625.00).
The plaintiff will accept payment for disbursements incurred in the litigation in the amount of Seven Thousand, Nine Hundred Ninety-Six Dollars and Seventy-Four Cents ($7,996.74) as set out in the Schedule of Assessable Disbursements annexed as Exhibit “A” to this Offer to Settle.
[8] On December 31, 2014 the defendant responded with the following letter:
As you know, our office served your client with an Offer to Settle by way of correspondence dated December 12, 2014.
On December 13, you e-mailed us to indicate that you considered this matter settled and advised that your client was agreeable to our client’s offer for general damages of $35,000.00 and PJI of $13,500.00 and would agree to costs and disbursements to be agreed or assessed. This was reiterated in a signed Full and Final Release dated December 16, 2014. The implication from the above is that the case settled. We take the view that there was an intention to settle and accept our Offer to Settle and that this intention to settle was conveyed to us, including that $6,500.00 was offered for costs and disbursements to your client.
Alternatively, if your client’s position is that your client only accepted the above two figures and did not accept $6,500.00 for costs and disbursements, and offered to settle same for different amounts (see your client’s Offers to Settle dated 15 and 18, 2014) then your client has made a counter Offer or counter Offers. Please note that our client rejects both of your client’s Offers to Settle if they constitute one Offer to Settle but would agree to accept the December 18, 2014 Offer to Settle only, as it states that it settles this proceeding. However, we presume that this was written in error
We note that the case law noted below clearly states that a party cannot agree to only portions of an offer. To constitute acceptance of an offer, the offer must be accepted in its entirely [sic] unless the offer clearly states that the contents of the offer are severable, which ours does not state. The case law states that a Release served in which only portions of the offer are accepted and other portions are rejected is not considered acceptance of the offer, but rather a counter-offer.
To be clear once again, our client has rejected your client’s counter-offer of December 15, 2014 and the second counter-offer dated December 18, 2014 dealing with costs and disbursements.
We note that our original and only Offer to Settle of December 12, 2014 currently remains on the table and is the only Offer to Settle now available for acceptance.
[9] The plaintiff submits that in accordance with the legal principles set out in Hryniuk v. Mauldin, 2014 SCC 7, [2014] 1 S.C.R. 87, there is no genuine issue for trial. The parties reached a settlement on general damages and interest and therefore there is no triable issue on those matters. The plaintiff also submits that although the parties did not agree on the issue of costs, the matter is not a triable issue and the court should order that costs are to be assessed.
[10] The defendant submits that there were three parts to their Offer to Settle. Although the plaintiff agreed to the first two parts, namely, $30,000 in general damages and $13,500 in interest, the plaintiff did not agree to the third aspect of the offer, that is the $6,500 in costs. Instead the plaintiff sent a counter-offer which amended the settlement offer with respect to costs. The defendant rejected this counter-offer and as such there is no binding settlement. In these circumstances judgment cannot issue.
Analysis
[11] The defendant’s Offer to Settle was not severable with respect to any of the terms. The evidentiary record clearly establishes that there was no meeting of the minds on all material terms as the offers were different on the term relating to legal costs.
[12] In the Ontario Court of Appeal decision Estate of Mary Theresa McCunn by her executor McCunn v. Canadian Imperial Bank of Commerce et al, 2001 24162 (ON CA), 53 O.R. (3d) 304, in para. 19 the court stated:
An acceptance will be of no effect in law unless the parties have agreed upon every material term of the contract they wish to make.
[13] In Dick v Marek, 2009, 27821 ONSC the court stated at para. 65:
The first step is to consider whether an agreement to settle was reached, treating 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 contract or (ii) there was an agreement on all essential terms of the settlement the court must refuse to grant judgment.
[14] In Desanto et al v. Cretzman et al, 1986 2663 (ON SC), 53 O.R. (2d) 732, Borins A.C.J. set out the following at pages 3 and 4 of his decision:
It is my opinion that the submission of counsel for the plaintiffs is correct and that there has been no acceptance of the plaintiffs' offer to settle. As the person who prepared the defendants' "Acceptance of Offer'' recognized, it is a partial acceptance of the plaintiffs' offer to settle. As such it constitutes a counter-offer which is permissible and expressly sanctioned by subrule 49.07(2): cf., Cook v. Cook et al. (1980), 1980 3785 (ON SC), 16 R.F.L. (2d) 391. In my view, if there is an acceptance of an offer to settle it must be an unqualified and unconditional acceptance of the terms offered, subject to the right of a plaintiff in accepting a defendant's offer to require that the money be paid into court or to a trustee: subrule 49.07(4). Subject to subrule 49.07(4), a purported acceptance which contains any qualification or condition constitutes a counter-offer which, of course, the opposite party may accept or reject or, presumably, respond to with another counter-offer.
It is, of course, a fundamental principle of contract law that an offer is not accepted unless the offeree unreservedly assents to the exact terms proposed by the offeror. If, while purporting to accept the offer as a whole, the offeree introduces a new term which the offeror has not had the opportunity to examine, the offeree is making a counter-offer: see, e.g., Cheshire & Fifoot's Law of Contract, 8th ed. (1972), at p. 31. In this regard it is significant that subrule 49.07(2) affects a substantial change to the common law of contract as it expressly provides that a rejection of an offer to settle or the making of a counter-offer does not put an end to an offer to settle; unless withdrawn, the offer to settle remains open for acceptance until the court has disposed of the claim in respect of which it was made: cf., Tam v. Tam (1982), 1982 1868 (ON SC), 38 O.R. (2d) 718, 138 D.L.R. (3d) 302, 29 R.F.L. (2d) 162. That the rules committee may make rules which may alter the substantive law with respect to offers to settle and their legal consequences is expressly provided for by the Courts of Justice Act, 1984 (Ont.), c. 11, s. 90(1)(n).
[15] In Goodman and Doyon v. Lawpro et al, 2015 ONSC 2640 stated the following at paras. 18 to 21:
[18] On November 13, 2014 LawPRO purported to accept the Plaintiffs’ offer, but the acceptance was stated to be contingent on all parties with claims against LawPRO, including crossclaims, executing the releases enclosed in the letter.
[19] I find that the Plaintiffs and LawPRO were not in agreement on all of the terms of settlement. The addition by LawPRO of the condition that all the other parties who had claims, including crossclaims, against LawPRO must execute a release of LawPRO was a term that was not included in the Plaintiffs’ offer to settle. I find that LawPRO’s acceptance of the Plaintiffs’ offer to settle subject to the contingency regarding the cross-claims of the other parties to the proceeding, was not an unqualified and unconditional acceptance of the Plaintiffs’ offer by LawPRO. I find that the addition of that condition constituted a counter-offer by LawPRO to the Plaintiffs.
[20] I find that the Plaintiffs never accepted LawPRO’s counter offer made on November 13, 2014. I find that the Plaintiffs withdrew their Section 49 offer to settle on February 5, 2015 pursuant to Rule 49.04, and that LawPRO had not accepted the Plaintiffs’ Rule 49 offer to settle made on November 11, 2014 by the date of withdrawal of the offer.
[21] Accordingly, I find that there was no accepted offer to settle or counter-offer to settle, that the Plaintffs’ offer to settle was withdrawn prior to its acceptance, and that LawPRO is not entitled to a declaration that there was a binding settlement.
[16] The defendant acknowledges that if the plaintiff had accepted the defendant’s initial offer to settle in its entirety, then there is no genuine issue for trial. However, that was not the case. The plaintiff sent to the defendant a counter-offer which was not accepted. In para. 31 of its Factum the defendant submits the following:
- The Respondent further submits that if the Plaintiff is permitted to “cherry pick” portions of the Defendant’s Offer to Settle, then make an Offer to Settle in relation to those portions of the Offer that it did not accept, and claim this to be a settlement, it would turn all Offers to Settle on their head. Such a scenario would either allow one party to conclude a settlement without acceptance by the other party or to obscure when a settlement has been achieved, prolonging litigation and leading to unnecessary motion.
Conclusion
[17] There was no agreement on the issue of legal costs and disbursements, a material aspect of this matter, and as such there was no settlement. Only two aspects of the defendant’s initial offer was accepted by the plaintiff and the defendant’s offer made no reference to severability.
[18] In all of the circumstances the plaintiff’s motion cannot succeed. The Summary Judgment motion is dismissed.
[19] The parties shall file written submissions on costs within 10 days.
FRAGOMENI J.
DATE: July 15, 2015
COURT FILE NO.: CV-06-4123-00
DATE: 2015 07 15
SUPERIOR COURT OF JUSTICE - ONTARIO
RE: PREZEMYSLAW KRASUSKI and JAN ZARICZNIAK
BEFORE: Fragomeni J.
COUNSEL: David F. Longley, for the Plaintiff
Amir Tamari and Dean Sloan, for the Defendant
ENDORSEMENT
FRAGOMENI J.
DATE: July 15, 2015