Court File and Parties
COURT FILE NO.: CV-15-0070-00 DATE: 2017-03-17 ONTARIO SUPERIOR COURT OF JUSTICE
B E T W E E N:
John Brager and Nancy Brager Applicants
J. Douglas Shanks, Cheadles LLP, for the Applicants
- and -
Her Majesty the Queen in Right of Ontario Represented by the Minister of Natural Resources Respondent
Lisa Brost, Crown Counsel Law Office - Civil, for the Respondent
HEARD: January 18, 2017 at Thunder Bay, ON (Kenora File)
Madam Justice B. R. Warkentin, R.S.J.
Reasons on Motion
[1] The Applicants, John and Nancy Brager, seek an order enforcing Minutes of Settlement entered into by the parties dated October 24, 2016, pursuant to Rules 1.05 & 49.09(a) of the Rules of Civil Procedure.
[2] On September 11, 2015, the Applicants commenced an application against the Minister of Natural Resources (the Respondent) for an Order directing the rectification of the title of property owned by the Applicants on Crescent Island, near Kenora, Ontario.
[3] The application also sought a Declaration that the Applicants were entitled to register a proposed Reference Plan against the Crescent Island property together with an Order vesting in the Applicants particular lands shown in the proposed Reference Plan.
Background of the issues in this Motion
[4] In December 1998, the Applicants sought to purchase the road allowance on the Crescent Island property. They commissioned a survey from surveyor Ross Johnson, which was then registered on title on May 18, 1999. The Applicants have now alleged that the survey was conducted contrary to instructions given to Mr. Johnson by the Respondent, Ministry of Natural Resources (“MNR”) and that, as a result, the entry on the title to the Crescent Island property was incorrect.
[5] The central issue in this Application was whether the survey prepared by Mr. Johnson was accurate and whether it conformed to the instructions of the MNR.
[6] In a letter dated February 22, 2016, counsel for the Respondent wrote to counsel for the Applicants, that while they were of the view that the survey on title was accurate, counsel for the Respondent was willing “to resolve this matter without further litigation.”
[7] The parties then entered into negotiation and on October 2016 the parties reached a resolution. Minutes of Settlement were prepared and executed by the Applicants on October 13, 2016 and by the Respondent on October 24, 2016.
[8] Paragraphs 8 and 9 of the Minutes of Settlement require the parties to provide each other with a Full and Final Release. These paragraphs read as follows:
The Applicants shall provide the Respondent with a full and final release in a form and content satisfactory to counsel to the parties releasing all claims of the Applicants to the Crescent Island Property other than those lands conveyed to the Applicants as reflected by surveys registered on title to the Crescent Island Property.
The Respondent shall provide the Applicants with a full and final release in a form and content satisfactory to counsel to the parties releasing all claims of the Respondent as against the Applicants, their assigns, heirs, successors, agents and employees, for any and all work done on the lands and the boathouse on the Crescent Island Property, that occurred prior to the commencement of the Application.
[9] In an email dated November 4, 2016, counsel for the Respondent sent the Applicants’ counsel a draft Release for consideration that included the following terms:
The Applicants, their respective agents, representatives and assigns do hereby remise, release and forever discharge the Respondent, its agents, employees, officers, elected officials, consultants, successors and assigns, from any and all actions, causes of action, proceedings, duties, liabilities, suits, statutory entitlements, claims and demands for relief of any nature whatsoever for losses or damages of any kind which the Applicants have, may have had, or may hereafter have in relation to the Crescent Island Road Allowance or the Applicants’ acquisition of the Crescent Island Property.
The Claimants agree not to make any claim or commence any action or proceeding against any person, corporation or partnership who might claim contribution and / or indemnity from the Respondent, or its agents, employees, officers, elected officials, consultants, successors or assigns in respect of the matters discharged by this Release, and the Claimants hereby further agree to indemnify and save the Respondent harmless from any claims or demands of any nature in respect of the subject matter of this release which might be brought against the Respondent by the Claimants, their successors, heirs, assigns, administrators and/or attorneys.
[10] On November 8, 2016, counsel for the Applicants sent counsel for the Respondent proposed revisions to the draft Release by email with this explanation:
Attached is a revised version of your clients Release.
I’ve made changes to clauses 1&2 to reflect our clients’ claim against Ross Johnson and Ross Johnson Surveying Inc, which was filed and served in July 2015. No Statement of Defence has been filed yet as we’ve been awaiting the outcome of the matter with the MNR. While our clients are not claiming against the MNR in the action against Ross Johnson, and I imagine Third Party Claim against the MNR would be unlikely, I did want to canvass it in the Release nonetheless.
Let me know what you think.
[11] The proposed revisions included modifying paragraphs 1 and 2 to by adding “… , other than the Applicants’ claim against Ross Johnson and Ross M. Johnson Surveying Inc. filed in the Ontario Superior Court bearing Court File number CV 15-57” to the bottom of paragraph 1; and “… , other than the claim bearing Court File number CV 15-57 as described above” to paragraph 2.
[12] This was the first time that the Respondent and their counsel were informed that the Applicants had commenced a separate action against the original surveyor, Ross Johnson and his surveying company, Ross M. Johnson Surveying Inc. That action had been commenced in July 2015 and placed in abeyance pending the outcome of this Application against the Respondent. That action against Ross Johnson and the surveying company alleges damages flowing from the same issues in this Application, namely the Ross Johnson survey of the Crescent Island property.
Was there a settlement and if yes, what is the proper form of Release?
[13] The parties agree on the law as it pertains to whether or not an agreement to settle a matter was reached. They both referred to Rule 49.09 of the Rules of Civil Procedure, which says:
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.
[14] The Applicants maintained that they have reached a settlement of the issues in this proceeding and have agreed to release the Respondent accordingly. They claim to never having resiled from this obligation.
[15] Counsel for the Applicants allege that when they executed the Minutes of Settlement and during their negotiations, there had never been any discussion that the Release to be provided by the Applicants would contain a contribution and indemnity clause as set out in the draft release as prepared by counsel for the Respondents.
[16] The Applicants refuse to execute any Release that contains a contribution and indemnity clause claiming it was not part of the negotiation or settlement. The Applicants are prepared to enter into a Release with the contribution and indemnification clause varied as they proposed.
[17] The Respondent claims that: a) There was no agreement on all of the essential terms of the settlement contract. The scope of litigation that was being settled, in particular whether there was a specific exclusion of the Johnson action, was never discussed, negotiated, or agreed upon; and, in the alternative, b) The court should exercise its discretion not to enforce the settlement contract unless the Applicants execute the full and final Release without the exclusion of the Johnson action.
[18] Counsel for the Respondent argued that the MNR would be prejudiced if the settlement was enforced without the Applicants providing a full and final release using the terms of the Release that include the contribution and indemnity clauses. The Applicants’ terms added to the Release limiting those clauses to exclude the Johnson action would leave the Respondent open to further litigation on the same issue that they believed they had settled with the Applicants in the Minutes of Settlement.
[19] Counsel for the Respondent claimed that it would be unfair to allow the Applicants to avoid executing what, in their submission, was a standard form of release. It was incumbent on the Applicants to inform the Respondent during negotiations of any limitation that would be sought to a full and final release.
Analysis and Decision
[20] There is no dispute that the Respondent was never informed about the Johnson action until after the Minutes of Settlement were signed by all parties. Thus, the exclusion of the Johnson action from a contribution and indemnification clause in the full and final release was never anticipated by the Respondent. Therefore there is no basis upon which to require that the exclusions to the draft Release, as proposed by the Applicants, should form part of the full and final release.
[21] In this case then, was there a final settlement between the parties?
[22] I find that there was a final settlement between the parties, the terms of which were contained in the Minutes of Settlement that required the Applicants to execute a full and final release. The form of Release provided by counsel for the Respondent was a standard form of Release. The inclusion of a contribution and indemnity clause in a Release is standard in virtually every Release entered into by parties engaged in litigation. Without such a clause, the release would not be a full and final release.
[23] I do not find that there was an obligation on counsel to discuss the inclusion of a contribution and indemnity clause when agreeing to provide each other with a full and final release in the Minutes of Settlement.
[24] The Respondent would be prejudiced with the Release as proposed by the Applicants because it would expose them to the possibility of being added as third parties to a separate action brought by the Applicants on the same issues. It is also noteworthy that the Respondent could not otherwise become a party to such an action except as being added as a third party due to the expiration of the applicable limitation period.
[25] The Applicants agreed to execute a full and final release. They did not agree to put a limitation on the release that could see the MNR facing additional litigation on the exact issue the MNR agreed to settle with the Applicants in the Minutes of Settlement.
[26] It was incumbent on the Applicants to inform the Respondent about the Johnson action if the Applicants intended to seek an exception to the usual contribution and indemnification release clauses prior to entering into the Minutes of Settlement.
[27] I therefore find that the parties did reach a settlement as contemplated under Rule 49.09.
[28] The Respondent is therefore entitled to a full and final release as set out in the Minutes of Settlement. A full and final release implies that that there would be no further liability by the Respondent respecting the Crescent Island property.
[29] The Minutes of Settlement are a binding settlement agreement on all parties. The Applicants shall therefore enter into a full and final release as contemplated by the Minutes of Settlement. I find that the form of Release sent to the Applicants by the Respondent meets the requirement of a full and final release that was contemplated by the parties.
[30] Nothing in these Reasons prevents the Applicants from continuing to pursue further litigation on the issues related to the Crescent Island property in the Johnson action. The Respondents, however, shall be provided with contribution and indemnification by the Applicants with respect to claims that may be made against them in that or any other related action regarding the issues that were settled in this Application.
Costs
[31] The Respondent is entitled to costs of this Motion. If the parties are unable to agree on the quantum of costs they shall provide me with written submissions within 20 days. Their submissions shall be limited to four pages together with their Bills of Costs.
_________”original signed by” ____________
Madam Justice B. R. Warkentin, R.S.J.
Released: March 17, 2017