CITATION: Prince v. Nytschyk Estate, 2016 ONSC 7459
COURT FILE NO.: 15-51282
DATE: 2016/11/29
SUPERIOR COURT OF JUSTICE – ONTARIO
IN THE MATTER OF THE ESTATE OF JOSEPH PETER NYTSCHYK, deceased
BETWEEN: BLAKE LOUIS PRINCE, in his capacity as Estate Trustee for the Estate of CHERIE LEWICKI, Applicant
AND:
ESTATE OF JOSEPH PETER NYTSCHYK, Deceased, JOHN NYTSCHYK, MICHAEL NYTSCHYK, and ROSEMARY NYTSCHYK, Respondent
BEFORE: The Honourable Mr. Justice Robert B. Reid
COUNSEL: R.D. Elliott, Counsel, for the Applicant
R.A. Fisher, Counsel, for the Respondents
HEARD: November 24, 2016
ENDORSEMENT
[1] The applicant and the personal respondents have competing claims to an asset of the estate of Joseph Peter Nytschyk, the net value of which is about $400,000.
[2] The applicant is the son and sole beneficiary of Cherie Lewicki. The respondents are the siblings and heirs at law of Joseph Nytschyk.
[3] The applicant bases his entitlement on a purported settlement of a claim made by Cherie Lewicki against the estate of Joseph Nytschyk, which he asks the court to enforce. The respondents deny that a settlement was made.
Background:
[4] The background facts are not contentious.
[5] Cherie Lewicki and Joseph Nytschyk lived together in a common-law relationship for about 15 years. During most of that time, they lived in the premises at 16 Campview Road, Stoney Creek, Ontario. Title to that property was held in the name of Joseph Nytschyk.
[6] Joseph Nytschyk died intestate on November 14, 2013.
[7] Cherie Lewicki continued to live in the Campview Road home until her death on October 14, 2015.
[8] An agreement was reached between Cherie Lewicki and the estate of Joseph Nytschyk in July, 2014, pursuant to which she renounced any claim to be appointed estate trustee without a will. Michael Nytschyk and John Nytschyk were to take on that role. The proposed trustees undertook not to distribute the estate assets without court order or consent, including that of Cherie Lewicki. They undertook to pay Cherie Lewicki $30,000 as an interim payment to be applied to any “final settlement”, presumably related to any claim she might have against estate assets.
[9] On January 16, 2015, Cherie Lewicki began an application for dependent’s relief under the Succession Law Reform Act[^1]. As part of the relief claimed in that application, she sought a declaration that the Campview premises was held in trust for her based on a resulting or constructive trust. The estate of Joseph Nytschyk defended the claim. When the application was begun, the $30,000 interim payment had not been made.
[10] Upon payment of all taxes owing to the Canada Revenue Agency, the respondent estate tendered to the applicant a cheque for $30,000 in April, 2016. That cheque has not been cashed.
[11] The Campview premises has been sold and the net proceeds, in the approximate amount of $400,000, are being held in trust pending the outcome of this litigation.
The issue for this motion:
[12] Through legal counsel, settlement discussions took place between Cherie Lewicki and the estate of Joseph Nytschyk.
[13] Several versions of draft minutes of settlement were exchanged. None were signed by the parties. Following the death of Cherie Lewicki, no steps were taken as to the completion of minutes of settlement.
[14] The sole question for this motion is whether a binding settlement was made between Cherie Lewicki and the estate of Joseph Nytschyk, despite the lack of signed minutes of settlement.
Legal framework:
[15] The parties agree about the applicable requirements for determining whether a settlement was reached. They also agree that the court has discretion to refrain from granting an order enforcing a settlement.
[16] The Ontario Court of Appeal confirmed in Olivieri v. Sherman[^2] that a settlement agreement is a contract, and that for a contract to exist, the court must find that the parties to the agreement (a) had a mutual intention to create a legally binding relationship, and (b) reached agreement on all of the essential terms of the settlement.[^3]
[17] There is no requirement to consider the parties’ state of mind to determine whether an agreement existed.[^4]
[18] The fact that a settlement may be subject to the execution of a mutually agreeable written document does not make it less of a binding contract. The manner in which the settlement is to be formalized is not critical if the essential terms are clear.[^5]
[19] As to the process for considering whether a settlement was reached, it is reasonable to treat the matter as equivalent to a Rule 20 summary judgment motion.[^6] The requirement is that each party would put its best foot forward. Following the recent decision of the Supreme Court of Canada in Hryniak v. Mauldin[^7], the court could be expected to use its expanded powers for considering the matter. As such, where matters of fact or credibility might previously have prevented the court from concluding that a binding settlement was made, a more robust inquiry may now be made.
[20] As a matter of public policy, settlement of litigation is to be encouraged and therefore settlement agreements are normally to be enforced where a contract is found to exist.
[21] The court has discretion not to enforce an otherwise binding settlement. This discretion could be invoked, for example, when the circumstances that existed at the time the settlement was made have changed such that the anticipated end to litigation would not occur.[^8]
Facts surrounding the settlement discussions:
[22] Since no minutes of settlement were signed, the parties rely on correspondence between counsel.
[23] By letter from the respondents’ counsel dated June 5, 2015, the respondents proposed a settlement (by way of counter-offer) as to three matters: (a) “My clients will, upon the approval of Canada Revenue Agency, transfer title to the Campview property to your client”; (b) Cherie Lewicki was to retrieve her personal items from the cottage and the corporate office of Joseph Nytschyk; and (c) no cash was to be paid by the estate. By way of response to the previous offer by Ms. Lewicki, counsel for the estate, did not see the counter-offer as “retrenchment” since, as she said, “the Estate continues to offer Campview to [Cherie Lewicki]”.
[24] Counsel for Ms. Lewicki responded by letter dated June 15, 2015. advising that she accepted the terms of the offer in principle. Counsel sought confirmation that taxes owing to C.R.A. would be paid from the proceeds of sale of the cottage or other estate assets. Counsel also responded that Ms. Lewicki’s acceptance of the offer was on the understanding that she would continue to receive health insurance coverage from the company benefit plan for two years following Mr. Nytschyk’s death. There was no issue about the personal effects.
[25] The following day, on June 16, 2015, counsel for the estate of Mr. Nytschyk advised in writing that she understood the insurance coverage would continue but would confirm that fact. There was a mention of the date by which personal effects would be picked up from the company office by Ms. Lewicki. Counsel also confirmed that taxes owing to the C.R.A. would be paid from the proceeds of sale of the cottage or other sources such that the estate would not be looking to the Campview property to satisfy those obligations. Counsel concluded by anticipating receipt of draft minutes of settlement from Ms. Lewicki’s counsel.
[26] On June 23, 2015, the insurance coverage issue was confirmed by counsel.
[27] Since no draft minutes were received from Ms. Lewicki, counsel for the estate prepared an initial draft forwarded on July 22, 2015. When no response was received, counsel also sent a letter dated July 31, 2015, and an email dated August 13, 2015, to counsel for Ms. Lewicki, threatening to bring a motion to enforce the settlement. Dates for the motion were discussed. Further drafts of minutes of settlement were subsequently exchanged.
[28] Each party found areas of disagreement with the other in their respective draft minutes of settlement. For example, the respondents’ July 22, 2015, draft provided that the transfer to Ms. Lewicki would be subject to prior receipt by the estate trustees of a clearance certificate from the C.R.A. The response by Ms. Lewicki’s counsel provided that all transfer costs for the Campview property would be borne by the estate. It also contained an acknowledgment that the property was subject to a constructive trust in favour of Ms. Lewicki, that the transfer was for natural love and affection and that if land transfer tax was deemed owing, it would be based on a value of $300,000. A later draft from the estate included an agreement to pay for the transfer fees, but no agreement as to the constructive trust or value for land transfer tax purposes.
[29] While the draft minutes were being exchanged, neither party suggested that there was not a deal.
[30] All communication as to settlement documents stopped once it became known to the estate that Cherie Lewicki had died. A letter from the estate counsel to Michael Nytschyk dated October 19, 2015, indicated that discussions with Ms. Lewicki’s representative were “at an end”.
[31] By letter dated October 23, 2015, counsel for the estate took the position that there had never been an agreed resolution, and that the revised terms from counsel for Ms. Lewicki contained in the draft minutes constituted a counter-offer.
Analysis:
[32] The applicant submits that exchanges of correspondence on June 5, 15, 16 and 23 constituted evidence of a binding agreement where all essential terms were agreed.
[33] The respondents submit that subsequent exchanges of minutes of settlement, and disagreement as to their terms, indicate that no agreement was reached and that each of the further exchanges constituted a counter-offer.
[34] I am satisfied that the essential terms of the settlement were in fact established by the estate and accepted by Ms. Lewicki in June, 2015. Thereafter, each counsel attempted to add terms providing protection for their respective clients in the execution of the agreement. I do not consider those additional terms to be essential. In my view, either party could have insisted on completion of the deal as originally contemplated.
[35] Correspondence from counsel for the estate to which I referred makes it clear that there was, in counsel’s opinion, a binding agreement after June 23 as demonstrated by her plan to bring a motion for enforcement.
[36] It is clear what happened: the estate was prepared to resolve the litigation on the basis that Ms. Lewicki would release all claims in exchange for transfer to her of the Campview premises. Based on the fact that she was 52 years of age at the date of Joseph Nytschyk’s death, she had a potentially large claim for dependent’s relief and possibly a constructive trust claim against the premises. As a result of her death, the claim may well have been drastically reduced. It was no longer a good deal, and the respondents preferred not to proceed with the settlement that they had been insisting was enforceable until a month or two before.
[37] I find that the additional proposals made by both sides in the respective draft minutes were not essential terms of the agreement, and that, in fact, a binding contract had been established based on the June correspondence to which I have referred.
[38] The final question is whether I should exercise my discretion not to enforce the agreement because of the changed circumstances. Clearly Ms. Lewicki no longer needs the financial benefit to be derived from the value of the Campview property, and the addition of the funds to her estate is a windfall to her heir, Mr. Prince. Whether a constructive trust could be established if the litigation proceeds is a matter for another court to determine. From another perspective, should the Nytschyk estate and the three heirs-at-law receive a gratuitous benefit from the death of Ms. Lewicki?
[39] I have already identified the policy pursuant to which courts support settlements. It discourages litigation, reduces costs and adds certainty to relationships.
[40] This is a case where, as I have found it, the parties made a binding deal. Both of them tried to add terms to improve the deal from their respective positions. However, those efforts do not diminish the fact that the essential terms of the deal were clear. It is true that Ms. Lewicki’s death meant that she would not live to enjoy the benefits of the settlement. However, the deal is not costing the estate any more than was originally anticipated. I am unconvinced that I should exercise my discretion against enforcing the settlement in the particular circumstances of this case in order to provide an unexpected benefit to the Nytschyk heirs. Although it might be said that Mr. Prince is receiving an inheritance that may be larger and is certainly coming to him sooner than he might have otherwise anticipated, it is not unfair that he receive whatever inheritance is available in accordance with Ms. Lewicki’s will.
Conclusion:
[41] For the foregoing reasons, the applicant’s motion is granted to the effect that the net proceeds of the sale of the property at 16 Campview Road, Stoney Creek, Ontario be transferred to the applicant. I find that implied in the settlement was a conclusion to the application, and therefore as claimed in the motion, the applicant is to abandon any other claims against the respondents.
Costs:
[42] I have encouraged the parties to resolve the issue of costs consensually. In the event that they are not able to do so, I am prepared to receive written submissions according to the following timetable:
a) The applicant is to serve the respondents with written costs submissions and a bill of costs on or before December 12, 2016.
b) The respondents are to serve the applicant with written costs submissions and a bill of costs on or before December 30, 2017.
c) The applicant is to serve the respondents with any responding submissions on or before January 9, 2017.
d) All submissions are to be filed with the court by no later than January 13 2017. If submissions are not received by that date or any agreed extension, the matter of costs will be deemed settled.
Reid J.
Date: November 29, 2016
CITATION: Prince v. Nytschyk Estate, 2016 ONSC 7459
COURT FILE NO.: 15-51282
DATE: 2016/11/29
ONTARIO
SUPERIOR COURT OF JUSTICE
IN THE MATTER OF THE ESTATE OF JOSEPH PETER NYTSCHYK, deceased
BETWEEN:
BLAKE LOUIS PRINCE, in his capacity as Estate Trustee for the Estate of CHERIE LEWICKI,
Applicant
- and -
ESTATE OF JOSEPH PETER NYTSCHYK, Deceased, JOHN NYTSCHYK, MICHAEL NYTSCHYK, and ROSEMARY NYTSCHYK,
Respondent
ENDORSEMENT
Reid J.
Released: November 29, 2016
[^1]: RSO 1990, c S.26 [^2]: 2007 ONCA 491 [^3]: Ibid. at para. 41 [^4]: Ibid. at para. 44 [^5]: Orchestral Corp. v. IVP Technology Corp., [2005] O.J. No. 581, 137 A.C.W.S. (3d) 276 at para. 24 [^6]: Dick v. Marek et al., (2009), 72 C.P.C. (6th) 374 (Ont. S.C.J.) [^7]: 2014 SCC 7 [^8]: M (SE) v. M (DL), 1997 CanLII 12241 (ON SC), [1997] O.J. No. 1989; 28 R.F.L. (4th) 352 (OCGD)