BARRIE COURT FILE NO.: FC-15-746-00 DATE: 20160509 SUPERIOR COURT OF JUSTICE - ONTARIO

RE: Lloyd Hoadley, Applicant AND: Shelley Mile Hoadley, Respondent

BEFORE: THE HON. MR. JUSTICE G.M. MULLIGAN

COUNSEL: S. Duggan, Counsel for the Applicant M.Z. Tufman, Counsel for the Respondent

HEARD: April 28, 2016

Endorsement

Endorsement

1The respondent, Shelley Mile Hoadley, seeks an order flowing from an accepted offer to settle between the parties. The applicant, Lloyd Hoadley, opposes the motion on the basis that the offer to settle was not accepted by him. For reasons that follow, I find that the offer was not accepted by the applicant and I dismiss the respondent’s motion.

Background

Background

2The applicant commenced litigation on June 9, 2015. Among his claims for relief were support, custody, access and equalization of net family property. The parties have been represented by counsel throughout. They arrived at a temporary consent order on October 29, 2015, relating to a number of issues. On March 11, 2016, they attended a Settlement Conference and arrived at final Minutes of Settlement with respect to some issues, including custody and access. Prior to the Settlement Conference and immediately thereafter, the parties continued to negotiate the resolution of all issues through their counsel.

3Prior to the Settlement Conference, an Offer to Settle dated March 4, 2016 was executed by the applicant and applicant’s counsel. With respect to the equalization payment, the applicant offered to accept an equalization payment of $175,000 in exchange for the transfer of title of the matrimonial home to the respondent. The offer also contemplated that each party would be responsible for debts in their own names. Attached to the Offer to Settle was Mr. Hoadley’s Assessment Notice, together with an e-mail from his counsel stating:

[The applicant] has recently received the attached letter from CRA that there may be some taxes owing from 2004 and 2005 totalling $19,378.95. In the event that this is deemed to be owed, it will affect the equalization payment.

Legal Analysis

Legal Analysis

4Rule 18 of the Family Law Rules, O. Reg. 114/99, provides a complete code with respect to offers to settle in family law disputes. There are certain formalities required, expressed in r. 18. I summarize the following subrules as follows:

18(4) An offer shall be signed personally by the party making it and also by the party’s lawyer, if any.

(5) A party who made an offer may withdraw it by serving a Notice of Withdrawal, at any time before the offer is accepted.

(9) The only valid way of accepting an offer is by serving an acceptance on the party who made the offer, at any time before the offer is withdrawn. [Emphasis added.]

General Contract Law

General Contract Law

5In Smith v. Smith, [2007] O.J. No. 1947, Wildman J. dealt with litigation between two spouses where offers were not in compliance with r. 18. At para. 23, she provided the following guidance:

Rule 18 of the Family Law Rules creates a way for litigants to make formal offers to settle their cases and, possibly, to attract some cost benefit by doing so. Offers that do not meet the technical requirements of rule 18 are still valid offers. They may be taken into account in considering costs and they can still, of course, form the basis of a valid contract if accepted by the other side. However, offers that do not comply with rule 18 are governed by the principles of general contract law rather that the special provisions of the Family Law Rules.

6In Chan v. Lam, 24 R.F.L. (5th) 327, leave to appeal to SCC refused, 4 S.C.R. vi (note), the Court of Appeal for Ontario deal with a determination by the motions judge that the husband and wife had reached a settlement. The court noted at para. 15, “Wein J. found that the parties had reached a consensus ad idem.” The court also stated at para. 19, “A settlement will be binding if there is agreement on all essential terms”.

7In Swift v. Swift, 2010 ONSC 6049, 97 R.F.L. (6th) 470, DiTomaso J., in considering whether or not a settlement had been reached, provided the following guidance at para. 38:

In summary, the court is to make three distinct lines of inquiry. First, was there a “meeting of the minds” or consensus ad idem, that was manifest to the reasonable observer. Secondly, was there consensus on all of the essential terms of the agreement, for if a material term is not resolved, and is left vague and imprecise, without the tools to refine it, the agreement is illusory and the parties are simply asking the court to make an agreement for them. Thirdly, did the parties make their agreement conditional upon, and subject to execution of a formal contract.

Was an Agreement Reached?

Was an Agreement Reached?

8In order to determine this issue, the following correspondence as set out in the exhibits attached to the affidavits filed will provide context:

(a) March 4, 2016 – As previously noted, the applicant makes an offer to settle all issues. His Canada Revenue Agency (CRA) debt is referenced in counsel’s e-mail;

(b) March 11, 2016 – Settlement Conference conducted. At the conclusion of the Settlement Conference, counsel for Mr. Hoadley delivered a revised Offer to Settle, using the March 4 Offer to Settle with handwritten changes. The applicant indicated he would accept an equalization payment of $120,000 or in the alternative, an equalization payment of $150,000, with the applicant paying $100 per month in spousal support to the respondent for ten years;

(c) March 15, 2016 – Counsel for the respondent replied, “Please be advised that my client has accepted your client’s Offer to Settle that you handed me at our last court appearance.” Paragraph 9 of that letter said, “The payment of $120,000 from the respondent to the applicant is half the value of the home, $159,000 less in equalization payment of $9,000, and a lump sum spousal support payment of $30,000.” The letter continued, “For the sake of clarity, I added paragraph 9 because the breakdown that we had discussed was not reflected in the Offer to Settle. I trust this is satisfactory…” Clearly, the parties did not agree that an accepted offer had been arrived at because negotiations continued;

(d) March 16, 2016, 11:13 a.m. [The morning revisions] Counsel for the applicant e-mailed, “Thank you for your signed offer. My client seeks just two revisions as follows, ‘the cost to transfer the home to your client’s name is to be borne solely by Ms. Hoadley… the payment of $120,000 shall be made within 30 days…’”;

(e) March 16, 2016, 3:44 p.m. [The afternoon revision] Later the same day, counsel for the applicant wrote to say, “Mr. Hoadley advises that in the event the CRA debt is deemed to be owing, that the parties should share the cost. This too, needs to be added to the final settlement.”;

(f) March 17, 2016, 8:40 a.m. – Counsel for the respondent responds to the March 16, 2016, 11:13 a.m. e-mail stating: “…my client accepts your two revisions found in the e-mail of March 16 at 11:13 a.m., which finalizes the matter. Thank you very much for your cooperation; I am delighted that we were able to assist our clients in arriving at the settlement of this matter.” It should be noted that this e-mail and purported acceptance makes no reference to the CRA debt raised in an e-mail sent the afternoon before by counsel for Mr. Hoadley [the afternoon revision];

(g) March 17, 2016, 8:53 a.m. – With respect to the CRA debt, counsel for Ms. Hoadley responds, “I am in receipt of your latest e-mail with respect to your client’s CRA debt. We did not discuss this matter before, but if you provide me with the particulars of the indebtedness and the reason why in your client’s view this debt ought to be a liability or a partial liability of my client – I will be happy to discuss this with her, to see if she wishes to amend the agreement which has been reached.”;

(h) March 17, 2016 – Counsel for Mr. Hoadley e-mails as follows: “Mr. Hoadley is in the process of providing three proposals. I expect to e-mail them by Friday morning.”;

(i) March 18, 2016 – Counsel for Mr. Hoadley provides three options as final offers to settle, noting that they are signed and binding;

(j) March 18, 2016, 3:23 p.m. – Counsel for Mr. Hoadley e-mails counsel for Ms. Hoadley, stating, “All previous offers dated prior to March 18, 2016 are hereby withdrawn; and

(k) March 21, 2016 and following – Counsel for the parties engage in a series of correspondence as to whether or not the parties had achieved an agreement. The position of the applicant, Mr. Hoadley, was that his counsel’s two replies of March 16, 2016 [the morning and afternoon revisions] constituted a counter-offer not capable of partial acceptance. The position of the respondent is that an agreement had been reached based on the acceptance of the revised offer to settle from Mr. Hoadley and the “morning revisions”.

The CRA Debt

The CRA Debt

9It appears that the possibility of Mr. Hoadley’s CRA debt affecting the equalization payment was known to the parties at all material times. It was referenced in the initial offer to settle correspondence between counsel. According to the Affidavit of Tracey Adler, law clerk for counsel for Mr. Hoadley, at para. 14:

Before Mr. Hoadley received any correspondence to the e-mail of March 16, 2016, Ms. Duggan [counsel for Mr. Hoadley] sent another e-mail advising of the entire issue of the CRA debt outstanding, which had been discussed at court on Friday, March 11, but was nowhere to be found in Ms. Camlis’ correspondence of March 15, 2016. Mr. Hoadley’s original Offer to Settle indicated that each party would bear his or her own debts with an offered equalization settlement of $175,000.

10His next offer to settle indicated an equalization payment of $120,000, again with each party paying their own debts. However, before that offer was formally accepted, his counsel e-mailed on March 16 that the CRA debt “needs to be added to the final settlement”. The purported acceptance of the offer the next day by counsel for Ms. Hoadley made no reference to the CRA issue raised the day before. In my view, it was open to Mr. Hoadley to amend his offer, making reference to the CRA debt, until acceptance. Based on the correspondence between counsel on March 16, 2016, his offer to settle contained three components:

(a) his revised offer to settle with handwritten changes;

(b) the two revisions suggested by Mr. Hoadley’s counsel, raised in her e-mail of March 16, 2016 at 11:13 a.m. “the morning revisions”; and

(c) the further revision, the request to share the CRA debt, raised in the e-mail from his counsel of March 16, 2016 at 3:44 p.m. “the afternoon revision”.

11In my view, this was a complete offer by Mr. Hoadley. Therefore, as a matter of contract law, it was not open to Ms. Hoadley to accept some, but not all, of this offer. The acceptance of part but not all of these three components amounted to a counter-offer, not a final and binding acceptance. Clearly, the parties were not ad idem with respect to the allocation of his CRA debt and no final and binding settlement was arrived at.

Conclusion

Conclusion

12The respondent’s motion is dismissed.

Costs

Costs

13At the conclusion of the hearing, counsel agreed that costs would be payable in the amount of $2,000, all inclusive, to the party successful on the motion. I therefore fix costs in the amount of $2,000, all inclusive, payable by the respondent, Ms. Hoadley, to the applicant, Mr. Hoadley, within 30 days of the release of this endorsement.