Court File and Parties

COURT FILE NO.: CV-11-440600 DATE: 20160726 ONTARIO SUPERIOR COURT OF JUSTICE

BETWEEN:

ROMAIYA AHMED Plaintiff – and – SHI SHANG, JIAN YANG and WAWANESA MUTUAL INSURANCE COMPANY Defendants – and – WAHAJ AHMED Third Party

COUNSEL: J. De Carli, for the Plaintiff C. Morano, for the Defendants Shi Shang and Jian Yang A. Khan, for the Defendant Wawanesa Mutual Insurance Company and the Third Party, Wahaj Ahmed

HEARD: July 19, 2016

M. D. FAIETA, J.

REASONS FOR DECISION

INTRODUCTION

[1] An automobile operated by the Plaintiff, Romaiya Ahmed (“Romaiya”), was struck by an automobile operated by the Defendant, Shi Shang (“Shang”) and owned by the Defendant Jian Yang (“Yang”). Romaiya brings this action for personal injuries that she suffered in this collision. She also claims against her automobile insurer, Wawanesa Mutual Insurance Company (“Wawanesa”), under the uninsured and underinsured provisions of automobile insurance policy. The Defendants Shang and Yang commenced a Third Party Claim against the owner of the Plaintiff’s automobile, Wahaj Ahmed (“Wahaj”). Wahaj delivered a Statement of Defence and Crossclaim against Shang and Yang.

[2] Another personal injury action was also commenced by two passengers of the Ahmed vehicle against Shang, Yang, Romaiya and Wahaj: see Murtuza v. Shang, Court File No. CV-11-442109.

[3] Romaiya, Shang and Yang agreed to a dismissal of the main action as against Wawanesa, as well as a dismissal of the Third Party Claim, on a “without costs” basis. The two Orders dismissing these proceedings were issued on October 9, 2014.

[4] Wawanesa and Wahaj bring this motion for an order requiring Romaiya, Shang and Yang to deliver a full and final release on the basis that it was a term of the settlement.

[5] For the reasons that follow, I grant the relief sought.

BACKGROUND

[6] Wawanesa states that the collision was caused by an improper left turn made by Shang. As a result, the following letter was sent on April 28, 2014 by Safina Khan (“Khan”), counsel for Wahaj and Wawanesa to Val Chowbay (“Chowbay”), counsel for Muturza (one of the passengers in the Ahmed vehicle), and to Melinda Baxter (“Baxter”), counsel for Shang and Yang, which, in part, states:

Accordingly, as the evidence shows – our clients are not liable for this accident. Therefore, we ask that you please obtain instructions to consent to discontinue all actions (Court files No. CV-11-442109, CV-11-440600-A1 against Romiya Ahmed, Wahaj Ahmed and the Wawanesa Mutual Insurance Company, on a without costs basis. Should you fail to accept such offer, we will be forced to proceed with a summary judgment motion.

Please find enclosed the following:

• Three (3) copies of the Order;
• Three (3) copies of the Consent; and
• Three (3) copies of the Full and Final release for your review and execution,

Paragraph kindly return the executed copies of same though by no later than May 12, 2014.

[7] Another letter was sent by Khan to Baxter on July 8, 2014:

Kindly advise if you have instructions regarding a dismissal without costs as against our clients.

[8] The following email message was sent by Khan to Baxter on July 17, 2014 at about 10:26 a.m.:

Hi Melinda, it was a pleasure speaking with you today. I confirm that you now have instructions to dismiss the above actions as against my clients, Romiya [sic] Ahmed, Wahaj Ahmed and The Wawanesa Mutual Insurance Company, on a without costs basis. I will have my assistant circulate draft orders and a consent shortly. I would greatly appreciate it if you can send me the executed copy by the end of this week so that I may take out the orders.

[9] In her affidavit, Baxter states:

On July 17, 2014, I spoke with Ms. Khan by telephone and advised that I had secured instructions to agree to a dismissal of the claim against her clients Wawanesa and Mr. Ahmed on a without cause basis. During this conversation we did not discuss the delivery of a full and final release or any other terms that would be required in order to resolve the claims against her clients.

[10] By letter dated July 18, 2014, Khan sent the following letter to Chowbay and Baxter, as well as Allan S. Blott, Q.C., counsel for the Plaintiff, Romaiya Ahmed, which in part states:

Further to my teleconference with Ms. Baxter today, I confirm that Ms. Baxter now has instructions to dismiss my clients, Romiya [sic] Ahmed, Wahaj Ahmed and The Wawanesa Mutual Insurance Company, on a without costs basis from the above matters.

Please find enclosed the following:

• Three (3) copies of the Order;
• Three (3) copies of the Consent; and
• Three (3) copies of the Full and Final Release.

Kindly return the executed copies of same by no later than July 24, 2014 or in the alternative you may provide me with your consent and I may sign on your behalf. [Emphasis in original.]

[11] On August 8, 2014 Khan sent the following email to Baxter:

Hi Melinda,

As you know I sent a draft consent and dismissal order for your review and signature a few weeks ago. I wish to follow up with you regarding same. Can you please advise if I can execute the consent for the dismissal of this action as against my clients without costs on your behalf? I received plaintiff’s counsel’s consent already. I look forward to hearing from you.

[12] On August 15, 2014, Baxter sent the following email to Khan:

Hi Safina: This will confirm that you have my authority to execute the consent on my behalf.

[13] Counsel for Murtuza provided her client’s Full and Final Release to Khan on September 5, 2014.

[14] On September 17, 2014, the following letter was sent by Khan to Blott:

We write to advise that Ms. Baxter’s office has admitted liability in this matter. We would ask that you provide your consent for the dismissal of this action as against our client, The Wawanesa Mutual Insurance Company, as soon as possible. Please be advised that we will be seeking costs as against your client going forward.

[15] Further letter was sent to Blott by Khan on October 2, 2014. It states, in part, that:

We would appreciate receiving any evidence, information or explanation as to why our client could even possibly be found liable. We doubt any such information or reason exists.

In light of the above, we ask that you obtain immediate instructions as to dismiss your claim against our client. …

We enclose a further copy of the dismissal order and consent sent to your office on July 18, 2014 and ask that you execute and return same by no later than by October 6, 2014.

[16] Khan sent a further letter on October 7, 2014 which confirmed that Blott’s client, Romaiya Ahmed, had agreed to dismiss her action against Wawanesa. The letter attaches a release and states:

Further to our telephone call with Paul Murphy of your office yesterday, we confirm that your office is agreeable to the dismissal of this action as against our client. We will take out the dismissal Order in this respect and provide you with a copy when we are in receipt of same. We enclose herein another copy of the Full and Final Release to be executed by your client. We look forward to hearing from you.

[17] Khan also sent a letter on October 7, 2014 to Baxter:

We enclose herein another copy of the Full and Final Release to be signed by your client. We will provide your office with a copy of the dismissal Order as against our client shortly.

[18] Two Orders were issued on October 9, 2014.

[19] The first Order states:

THIS COURT ORDERS that the within action as against the Defendant, Wawanesa Mutual Insurance Company, and any crossclaims by and against said Defendant, shall be and hereby are dismissed without costs.

[20] The second Order states:

THIS COURT ORDERS that the within action as against the Third Party, Wahaj Ahmed, and any counterclaims by and against said Third Party, shall be and hereby are dismissed without costs.

[21] By letter dated October 16, 2014 Khan sent the following letter to Chowbay, Baxter and Blott:

We enclose herein the dismissal Orders dismissing the actions as against our clients, Romiya [sic] Ahmed, Wahaj Ahmed and The Wawanesa Mutual Insurance Company.

We would ask that Ms. Chowbay and Mr. Blott send us a copy of the Release executed by your respective clients.

[22] Joseph A. Baldanza (“Baldanza”) appears to have assumed carriage of this file from Khan in November 2014.

[23] On November 17, 2014, Baldanza sent the following letter to Blott:

This follows our letter to dated October 16, 2014. We await receipt of the executed release signed by your client so that we can close our file. We await your prompt response.

[24] On December 2, 2014, Baldanza sent the following letter to Blott:

This follows our letter to you dated November 17, 2014. Should we not receive the executed release signed by your client by December 15, we shall schedule a motion without further notice, for an Order enforcing the settlement and our costs. We await your prompt response.

[25] On February 20, 2015, Baldanza sent the following letter to Blott and Baxter:

We note that despite our repeated follow-up letters, we are still to receive the executed full and final releases in favour of our clients. We enclose another copy of the release to be signed by the plaintiff Romaiya Ahmed in favour of The Wawanesa Mutual Insurance Company. We also enclose the release to be signed by Shi Shang and Jian Yang in favour of Wahaj Ahmed, who is named as third party in action number CV-11-440600. We would ask that you arrange to have the releases signed and forward the originals to the writer forthwith. Should we not receive them by March 6, we expect we will proceed with a motion to enforce the settlement and we will be demanding our costs.

[26] On March 10, 2015, Baldanza sent the following letter to Blott and Baxter:

This follows our letter of February 20, 2015 (copy enclosed). Can you please advise when we can expect to receive the executed Releases? Should we not hear from you by March 13, 2015, you will be hearing from our office with respect to the scheduling of a motion to enforce the settlement

[27] On April 9, 2015, Baxter provided the following response:

This is further to receipt of Mr. Baldanza’s correspondence dated April 7, 2015. Quite frankly, I am at a loss as to the request outlined therein.

I had previously been dealing with Ms. Safina Khan, counsel at Bell Temple, with respect to having her clients Ahmed, dismissed on a without costs basis from the Murtaza action, and her client Wawanesa dismissed on a without costs basis, from the Ahmed action. Consent for same was provided by all counsel and Ms. Khan proceeded to obtain the requisite orders which were obtained on October 8, 2014 and October 9, 2014, respectively, concluding the issue.

As such, I question what basis there would be for Mr. Baldanza to be suggesting that a motion be brought to enforce settlement. Based upon my interaction with Ms. Khan there was no “settlement” per se, simply an agreement to let her clients out of both actions. As there was no exchange of funds, and her clients were simply let out of the action, there would be no requirement or need for the execution of a release. Furthermore, at no time did I nor would I, have agreed to same for the aforementioned reasons.

I trust this letter satisfactorily outlines our position, but would be happy to speak to counsel, if required.

[28] On May 1, 2015, Baldanza responded to Baxter as follows:

Further to your correspondence dated April 9, 2015, we note that the execution of a Full & Final Release was a term of settlement. We draw your attention to our correspondence dated July 18, 2014, in which we enclose the draft Order, Consent and Full & Final Release, and on the basis of which we obtained an order dismissing the action as against our clients.

Would you kindly advise whether you are now prepared to provide our office with an executed Full & Final Release in the attached form. If we are not in receipt of an executed copy of same by May 15, 2015, we intend to proceed with a motion to enforce the settlement, for which we will be seeking our costs. [Emphasis in original.]

[29] A very similar letter was sent by Baldanza to Blott on May 1, 2015.

[30] Almost a year later, on April 1, 2016, Baldanza sent the following letter to Blott and Baxter:

We have now obtained instructions from our client to bring a motion to enforce the settlement in this matter.

As outlined in our previous correspondence, the execution of a Full & Final Release was a term of settlement. It is well-established that a settlement implies a promise to furnish a Full & Final Release, in a customary form, unless there is agreement to the contrary. As there was no agreement to the contrary, we are rightfully owed a Full & Final Release from your clients. In support of our position we refer you to Cellular Rental Systems Inc. v. Bell Mobility Cellular Inc., [1995] O.J. No. 721, a case decided by the Ontario Superior Court of Justice and upheld by the Court of Appeal.

We refer you to our letter of July 18, 2014, wherein we enclosed draft Releases for your clients to sign. Please find enclosed the Full & Final Releases, which we would ask that you have your clients execute within the next ten (10) days. Otherwise, kindly provide our office with your availability to attend Toronto Court for a motion to enforce the settlement. [Emphasis in original.]

ANALYSIS

[31] Rule 49.09 of the Rules of Civil Procedure, R.R.O. 1990, Reg. 194, provides:

Where a party to an accepted offer to settle fails to comply with the terms of the offer, the other party may,

(a) make a motion to a judge for judgment in the terms of the accepted offer, and the judge may grant judgment accordingly; or

(b) continue the proceeding as if there had been no accepted offer to settle.

[32] In Capital Gains Income Streams Corp. v. Merrill Lynch Canada Inc., [2007] O.J. No. 3618, the Ontario Divisional Court applied a two-step analysis in determining whether a settlement agreement should be enforced. The first step is to determine whether the parties agreed to settle the action. This determination must be made applying Rule 20 of the Rules of Civil Procedure which is used on a motion for summary judgment. A Court must refuse to grant judgment if there are material issues of fact or genuine issues of credibility in dispute regarding whether: (a) the parties intended to create a legally binding relation, or (b) there was agreement on all essential terms. If a settlement agreement is found to exist, then the second step is to determine whether the settlement agreement should be enforced in light of all of the relevant factors disclosed by the evidence. In this second step, Rule 20 is not applied.

Issue #1: Did the Parties Agree to Settle the Actions?

[33] Romaiya, Shang and Yang provided their consent to an Order dismissing the Third Party Claim against Wahaj on a “without costs” basis. This agreement is reflected by Baxter’s affidavit evidence regarding the conversation that she had on July 17, 2014 with Khan. It is also confirmed in Khan’s email dated July 17, 2014.

[34] Similarly, there is no dispute that Romaiya, Shang and Yang provided their consent to an Order dismissing Romaiya’s action against Wawanesa. Khan’s letter dated October 7, 2014 to Blott confirms a discussion whereby counsel for the parties confirmed such agreement on a “without costs” basis.

Issue #2: Under the Terms of the Settlements, did the Moving Parties Agree that a Release from the Responding Parties Would Not Be Required?

[35] It is well established that the delivery of a full and final release, in a customary form, whose terms give effect to common sense and normal business practice, is an implied term of the settlement of an action unless the parties otherwise agree: see Cellular Rental Systems Inc. v. Bell Mobility Cellular Inc., [1995] O.J. No. 721 (Gen. Div.), at para. 24, aff’d [1995] O.J. No. 3773 (C.A.)](https://www.canlii.org/en/on/onca/doc/1995/1995canlii1000/1995canlii1000.html); Ferron v. Avotus Corp., [2005] O.J. No. 3511 (S.C.), at para. 26, aff’d 2007 ONCA 73; and Hodaie v. RBC Dominion Securities, 2012 ONCA 796, at para. 3.

[36] I find that the Moving Parties did not agree that the Responding Parties would not have to provide a Release as a term of the settlement of these actions. The evidence outlined above shows that the Moving Parties were adamant in their insistence that the Responding Parties deliver a Release. In particular: (1) In respect of the settlement with Shang and Yang, see Khan’s letter dated July 18, 2014, which notes the settlement and requires delivery of an executed release; (2) In respect of the settlement with Romaiya Ahmed, see Khan’s letter dated October 7, 2014 to Blott which confirms that the parties agreed to a dismissal of the action and requires that an executed Release be delivered. Although it is unnecessary to this analysis, I find that there was nothing stated by the Responding Parties to the Moving Parties at the time that the settlements were reached that they would not deliver a Release to the Moving Parties.

[37] The Responding Parties also submit that the draft Releases are overly broad in that each Release prevents the Responding Parties from bringing a claim against a person who might claim contribution or indemnity from the Moving Parties in relation to this collision. The Responding Parties have not provided any evidence or precedent to support its assertion that the draft Releases are not in the customary form and, as a result, I reject that submission. Further, there is nothing in the Record to show that this concern was raised by the Responding Parties prior to the exchange of materials for this motion.

Issue #3: Should the Settlement Agreement be Enforced?

[38] In Milios v. Zagas (1998), 38 O.R. (3d) 218 (C.A.), at para. 21, the Ontario Court of Appeal stated that the following matters may be considered in deciding whether to enforce a settlement:

• Has an order giving effect to the settlement has been taken out?
• Will the Moving Parties be prejudiced if the settlement is not enforced?
• What is the relative prejudice to the parties in the event that the settlement is enforced or not enforced?
• Would third parties be affected if the settlement was not enforced?

[39] In Srebot v. Srebot Farms Ltd., 2013 ONCA 84, at para. 6, the Ontario Court of Appeal stated:

The discretionary decision not to enforce a concluded settlement, especially where the settlement has been partially or fully performed, should be reserved for those rare cases where compelling circumstances establish that the enforcement of the settlement is not in the interests of justice.

[40] The Orders dismissing the actions without costs have been taken out. By agreeing to the dismissal of this action on a without-costs basis, the Responding Parties avoided the risk of an adverse costs award under Rule 23.05 of the Rules of Civil Procedure had it chosen to move unilaterally: see 1724674 Ontario Inc. v Albino Silva, 2015 ONSC 4634, at paras. 35-36.

[41] The Responding Parties submit that the Moving Parties are protected from any future claims being brought by the Responding Parties by the doctrine of res judicata. They have provided no authority for this proposition. In any event, that argument does not address the risk of a claim over by a person who is sued by the Responding Parties. The Responding Parties have not advanced any compelling reason for refusing to enforce the settlement in the interests of justice.

[42] As noted above, a full and final release is a normal term of a settlement agreement. The interests of justice in bringing finality to a proceeding would be undermined if a party were permitted to refuse to provide a release where it decided to take the position, after an action had been dismissed pursuant to a settlement, that the delivery of a release was unnecessary.

CONCLUSIONS

[43] I grant the Orders sought by Wawanesa and Wahaj to compel the delivery of a Full and Final Release executed by Romaiya, Shang and Yang in the forms delivered by letter dated July 18, 2014 from Khan to Baxter and Blott.

[44] I encourage the parties to make best efforts to resolve the issue of costs even though they were unable to do so prior to the hearing of this motion. If they are unable to do so, then the parties shall attend the Judicial Administration Office at Room 170, 361 University Avenue, Toronto at 4 p.m. on Friday, July 29, 2016 to make submissions on costs. The parties shall provide an Outline of Costs at that time.

JUSTICE M. D. FAIETA Released: July 26, 2016