Court File and Parties

COURT FILE NO.: CV-12-453383 DATE: 20160608 ONTARIO SUPERIOR COURT OF JUSTICE

BETWEEN:

VENETA MILOUCHEVA, IVAN MILOUCHEV and DANIELA MILOUCHEVA Plaintiff – and – NEDIALKO (“NED”) MILOUCHEV Defendant

Counsel: Paul Trudelle for the Plaintiff Ryan Zigler for the Defendant

HEARD: June 6, 2016

Endorsement

DIAMOND J. :

[1] On October 15, 2015, the parties participated in a full day pre-trial. At the conclusion of that pre-trial, the parties entered into formal Minutes of Settlement which purportedly put this acrimonious litigation to bed.

[2] Unfortunately, the implementation of various settlement terms took longer than expected, and ultimately resulted in the defendant bringing this motion which seeks, inter alia, the following relief:

a) a declaration that the parties entered in a binding settlement that included a term that they sign a release dealing with “matters pleaded in the litigation and otherwise including any claims relating to property in Bulgaria including the property at 17 Alexander Battenburg, Dupnitza, Bulgaria (“the Alexander Property”)”, and

b) an Order directing that the paintiffs sign a Full and Final Release having the form and content of the Release attached as Schedule “A” to the Notice of Motion to deal with any claims “made in this litigation and otherwise including any claims relating to the property in Bulgaria as part of enforcing the settlement”.

[3] The signed Minutes of Settlement consist of 15 detailed paragraphs over the course of 10 pages. The paragraph giving rise to the outstanding dispute between the parties states as follows:

“12. Counsel for the defendant shall prepare a form of Mutual Release mutually acceptable to counsel releasing and discharging the parties from any claims made in this litigation, and otherwise, other than any claims related to the Minutes of Settlement.”

[4] The words “and otherwise” were inserted into the paragraph by counsel for the defendant during the negotiations leading up to the execution of the Minutes of Settlement.

[5] The parties cannot agree upon the form of the Mutual Release contemplated by paragraph 12 of the Minutes of Settlement. The plaintiffs’ draft Mutual Release contains standard, boilerplate language. The defendant’s draft Mutual Release includes several specific claims and/or causes of action which are not referenced in the pleadings (to be described hereinafter).

[6] The statement of claim was issued on May 10, 2012, and sought declaratory and injunctive relief relating to a residential property known as 1520 Otonabee Drive, Pickering, Ontario (“the Otonabee Property”). Apart from describing all parties as “originally from Bulgaria”, the balance of the allegations in the Statement of Claim relate to the Otonabee Property and claims being advanced in the province of Ontario.

[7] On August 15, 2012, the defendant delivered his Statement of Defence. At paragraph 19 of his Statement of Defence, the defendant alleged that in March 2007, he travelled to Europe for approximately 18 months and that during his stay, he and his father renovated a property belonging to one of the plaintiffs at the defendant’s own expense. The property was located at 56 Vasil Levski Street, Blajievo, Bulgaria (“the Vasil Property”).

[8] The defendant further alleged that he was never reimbursed for the costs of those renovations, and claimed a legal or equitable set-off equivalent to the value of his renovation work ($10,000.00) on any amount found owing by him to the plaintiffs.

[9] There is no mention whatsoever of the Alexander Property in the Statement of Defence.

[10] On or about October 20, 2014, the plaintiffs served a draft Amended Statement of Claim, which was never formally issued with the Court (as the defendant did not consent to the amendments). Paragraph 24(a) of the draft Amended Statement of Claim alleged that in 1999, the plaintiff Daniela Miloucheva transferred the sum of $37,666.11 (USD) to the defendant and that sum was in trust for her parents, the co-plaintiffs Ivan and Veneta Miloucheva.

[11] It is the defendant’s position that his insertion of the words “and otherwise” in paragraph 12 of the Minutes of Settlement was for the purpose of ensuring that there would be a “clean break” between the parties, and that any and all claims between them would be released. There is evidence in the record that during the negotiations, the solicitors for the parties do recall discussing the concept of a “clean break”.

[12] In York University v. Michael Markicevic 2013 ONSC 378, Justice Brown (as he then was) stated as follows:

“Finally, in its 2001 decision in Bank of Credit and Commerce International SA v. Ali, the House of Lords held that if parties to a release intend to provide for the release of rights and the surrender of claims of which they have no knowledge, then they should use specific language which leaves no room for doubt that such was their intention. Further, where the party receiving the benefit of the release knew that the other party might have a claim and also knew the other party was ignorant of the claim, taking a general release without disclosing the existence of the possible claim would constitute unacceptable sharp practice for which a remedy should be provided.”

[13] In interpreting paragraph 12 of the Minutes of Settlement, I must give meaning to the words “and otherwise” while determining what was contemplated by the parties. Under Rule 49.09 of the Rules of Civil Procedure, I have no jurisdiction to re-write the terms of the Minutes of Settlement, which the parties have treated as a binding contract (having performed all of the other terms therein to date).

[14] As held by Justice Granger in Harris v. Braithwaite 2006 ONSC 51172, in order to give effect to the defendant’s version of the draft Mutual Release, I must be satisfied on the record before me that the parties agreed to execute a complete and total release which would cover all potential claims between them.

[15] On the record before me, I am not prepared to afford the words “and otherwise” the interpretation suggested by the defendant. The Minutes of Settlement are extensive and cover numerous claims and issues. If the parties intended to release each other from matters over and above those raised in the pleadings, there was an obligation to use more precise language than “and otherwise”. This is especially so when the Alexander Property was never raised as an issue between the parties in this litigation until its insertion into the draft Mutual Release at the eleventh hour.

[16] I find that the draft Mutual Release prepared by the defendant is beyond the contemplation of the parties at the time of entering into the settlement. I agree with the plaintiffs that the words “and otherwise” relate to claims made within the litigation, and claims made otherwise (in other words, claims advanced in both the Statement of Claim and the draft Amended Statement of Claim).

[17] In my view, the causes of action in the pleadings exchanged between the parties (including the draft Amended Statement of Claim) are the matters to be released under the settlement. As such, claims relating to the Alexander Property are not part of the settlement reached between the parties, and the defendant’s draft Mutual Release does not codify what the parties agreed upon in paragraph 12 of the Minutes of Settlement.

[18] The defendant’s motion is therefore dismissed. At the conclusion of the hearing, counsel for the parties agreed that the successful party be awarded costs of the motion in the all-inclusive amount of $5,000.00. In accordance with that agreement, I order the defendant to pay the plaintiffs their costs of this motion fixed in the all-inclusive sum of $5,000.00.

Diamond J. Released: June 8, 2016