Court File and Parties

COURT FILE NO.: CV-15-22063 DATE: 20180629 ONTARIO SUPERIOR COURT OF JUSTICE

BETWEEN:

DAVID CHARLES CHITTLE, 537848 ONTARIO LTD., and 627575 ONTARIO LTD. Plaintiffs – and – THE ESTATE OF DORIS MAE CHITTLE, SANDRA LYNNE FLOOD in her capacity as Estate Trustee, and EDWARD NEIL CHITTLE in his capacity as Estate Trustee Defendants

Counsel: Eric Florjancic, for the Plaintiffs Matthew R. Todd, for the Defendants

HEARD: November 2, 2017

REASONS FOR JUDGMENT

HOWARD J.

Overview

[1] This is a motion for summary judgment brought by the defendants pursuant to rule 20.01(3) of the Rules of Civil Procedure for summary dismissal of the plaintiffs’ claim and enforcement of minutes of settlement, which, the defendants maintain, were agreed upon on February 9, 2017.

[2] The position of the defendants is that the parties agreed to a settlement after their respective lawyers had several discussions and exchanged multiple drafts of minutes of settlement, with the final draft being agreed upon on February 9, 2017. The defendants maintain that there is a written, but unsigned, agreement between the parties, pursuant to which the parties had agreed upon all of the essential terms of the agreement and had codified those terms in writing in the form of the minutes of settlement that were finalized on February 9, 2017. The defendants state that counsel for the parties spoke on April 7, 2017, and no amendment was requested to the agreed-upon minutes of settlement of February 9, 2017. Subsequently, on April 10, 2017, a follow-up email was sent by counsel for the plaintiffs, stating that, “I confirm that David [i.e., the individual plaintiff] requires approximately two weeks to have the settlement documents signed and sent to me.” The defendants submit that, as there was no indication that any further amendments would be requested by the plaintiffs, the email of April 10, 2017, manifested the plaintiffs’ acceptance of the settlement, and the defendants accepted the representation by the lawyer for the plaintiffs that the minutes of settlement would be signed.

[3] The position of the plaintiffs is that while the parties have been in ongoing settlement negotiations since 2015, the parties have never reached an agreement to resolve the plaintiffs’ action. The plaintiffs dispute that summary judgement is available to the defendants because they never filed a statement of defence and there exists a genuine issue for trial. In the alternative, the plaintiffs submit that there is no evidence on an objective basis of a consensus ad item between the parties and no evidence of an unqualified acceptance by the plaintiffs of the defendants’ settlement offer.

[4] For the reasons that follow, while I have certain concerns regarding the position of the plaintiffs, I must conclude that the defendants’ motion for summary dismissal of the plaintiffs’ claim ought to be dismissed.

[5] Given my view that the case at bar is not appropriate for summary judgment, I make no binding findings of fact here, but, rather, I shall discuss the factual background only so far as necessary to explain my decision for dismissing the summary judgment motion, leaving it to the trial judge to determine the dispute between the parties.

Factual Background

[6] The plaintiff, David Charles Chittle, is an individual who resides in the State of Colorado within the United States of America (“David”). At all material times, David was an officer, director, and the only shareholder of the two plaintiff corporations.

[7] David is the son of Doris Mae Chittle, deceased, who passed on February 9, 2014, at the age of 89 years. Mrs. Chittle was survived by her children, Sandra Lynne Flood (“Sandra”), Edward Neil Chittle (“Edward”), Gary Chittle, Ronald Chittle, and David.

[8] Sandra and Edward were appointed as estate trustees for the estate of Mrs. Chittle under her primary and secondary wills dated April 5, 2005.

[9] David commenced this proceeding against the estate of his deceased mother and his siblings Sandra and Edward as estate trustees by issuance of a notice of action on March 31, 2015, which was followed by statement of claim delivered April 30, 2015.

[10] The plaintiffs’ claim seeks recovery of possession of a commercial property located in the Town of Tecumseh. The property consists of two parcels. The one smaller parcel consists of lands and a building municipally known as 13266 Tecumseh Road East, Tecumseh. The other, larger parcel consists of lands that were sold prior to the death of Mrs. Chittle to a third party and were subsequently developed as a medical plaza, now municipally known as 13278 Tecumseh Road East, Tecumseh.

[11] At the material times, the plaintiffs were represented by Ms. Sheri-Lynn Medaglia, and the defendants were represented by their corporate solicitor, Mr. Edwin Hooker.

[12] The defendants delivered an affidavit from Mr. Hooker on the motion before me. The plaintiffs did not deliver an affidavit from Ms. Medaglia. Rather, the plaintiffs filed an affidavit from David.

[13] The defendants delivered a notice of intent to defend on August 31, 2015.

[14] Mr. Hooker spoke with Ms. Medaglia on September 15, 2015, about dispensing with the need to file a statement of defence. By letter dated September 18, 2015, Ms. Medaglia wrote to Mr. Hooker to confirm that the plaintiffs would not require the defendants to deliver a statement of defence at that time. Ms. Medaglia said that, in the event that a statement of defence is required, “reasonable notice will be afforded to your clients to prepare and file the same.”

[15] Counsel for the parties then entered into prolonged settlement discussion that spanned over the course of many months.

[16] On October 28, 2016, Mr. Hooker sent an email to Ms. Medaglia attaching “the Draft Minutes of Settlement with proposed amendments.”

[17] It appears that in response to Mr. Hooker’s draft, Ms. Medaglia suggested some further alterations. On January 11, 2017, Mr. Hooker sent a further email to Ms. Medaglia, which reads, in part, as follows:

Sheri-Lynn,

Here are the finalized changes to the Minutes of Settlement. I have incorporated your changes, updated dates and added affidavits respecting the execution of these minutes of settlement given you had indicated that David would not be signing the documents in front of you. I also attach an I.D. verification statement we will need completed by the attorney who witnesses David’s signature and ILA certificate for execution given the witness will be different from the lawyer providing the advice. …

As the estate is now paying tax at the highest marginal rate, it is in all parties interest to get these documents signed. Please arrange for David’s execution of the documents. Upon confirmation that you are making these arrangements, I will have Sandy and Ed come in to sign at my end.

I am looking to have this fully executed and delivered by not later than January 25th, 2017 to keep things moving in a timely manner. I would appreciate [your] confirmation back by not later than Monday of next week.

[18] On January 16, 2017, Mr. Hooker sent a follow-up email to Ms. Medaglia, which reads, in part, as follows:

Sheri-Lynn,

I have not heard from you yet today. Please see small changes to note the additional company on the affidavit of execution and to note the settlement deals with the litigation on a “without prejudice” basis. This was a request from litigation counsel. Otherwise document has not been amended.

Please reply back and let me know if you intend to arrange for execution (if possible by reply today). My clients want this resolved by the 25th of January (i.e., all signed up) failing which I believe they wish to move the file along with litigation counsel.

[19] The evidence of Mr. Hooker is that he had a conversation with Ms. Medaglia on February 9, 2017, after which he made some further small amendments to the draft minutes of settlement at Ms. Medaglia’s request and thereafter forwarded her the agreed-upon form of the minutes of settlement. The email from Mr. Hooker to Ms. Medaglia of February 9, 2017, reads, in part, as follows:

Sheri-Lynn,

Further to our conversation, please see the amended Minutes of Settlement to add in the clause respecting ILA. I have also attached the I.D. verification form again if it assists in arranging for timely signing. Would like to hear back next week.

[20] The evidence of Mr. Hooker is that the matter in this litigation and corollary matters were settled on February 9, 2017. “At no time since February 9, 2017 have I been contacted by Ms. Medaglia advising that there is not a settlement or requesting any further amendments to the Minutes of Settlement.”

[21] Paragraph 4 of the draft minutes of settlement sent by Mr. Hooker to Ms. Medaglia on February 9, 2017, provides, in part, as follows:

The Plaintiffs specifically consent, authorize, and direct the Estate Trustees to sell 13266 Tecumseh Road E., Tecumseh, Ontario (herein “the Property”) for the sale price of $670,000.00 to any person including any beneficiary or party who may not be dealing at arm’s length with one or more of the Estate Trustees so long as the purchase price is satisfied by cash, wire transfer, or certified funds on closing. …

[22] On April 7, 2017, there was a conversation between Mr. Hooker and Ms. Medaglia. The particulars of what was discussed are not in evidence before me on this motion.

[23] However, on April 10, 2017, Ms. Medaglia sent an email to Mr. Hooker to say:

Hi Ed,

I am writing further to our telephone conversations of April 7, 2017.

I confirm that David requires approximately two weeks to have the settlement documents signed and sent to me.

As discussed, could you please let me know whether the Estate will be in a position to payout at least $100,000 to $125,000 of the settlement funds once the signed settlement documents are provided to you.

Thank you.

[24] The evidence of Mr. Hooker is that the defendants wish to resolve this matter in accordance with the minutes of settlement that were sent to Ms. Medaglia on February 9, 2017. “The Estate continues to own the Property and incur liabilities including tax liabilities. It is in the best interests of all parties including all beneficiaries of the Estate to complete the sale of the Property.”

[25] The evidence of the defendants is that a purchaser has been identified and is prepared to immediately pay the prescribed asking price of $670,000. The defendants state that they are ready and willing to sign what they say are the agreed-upon minutes of settlement (of February 9, 2017) but require the plaintiffs to do the same.

[26] As I have said, the plaintiffs did not deliver any affidavit from Ms. Medaglia.

[27] Instead, the evidence relied upon by the plaintiffs on the motion before me is an affidavit of David, sworn September 2, 2017. It is clear that David was not a direct participant in the settlement discussions between counsel for the parties.

[28] The evidence of David is that “[a]t no time during these negotiations have I agreed to the essential terms of the minutes of settlement and I have not executed or signed the Minutes of Settlement” sent by Mr. Hooker to Ms. Medaglia on February 9, 2017.

[29] In that vein, it is common ground that there exists no minutes of settlement actually executed by the parties.

[30] The defendants point out that there was no objection voiced by the plaintiffs to the minutes of settlement delivered on February 9, 2017, until June 27, 2017, and even then only after the plaintiffs retained new counsel of record.

Issues

[31] As reflected in para. 22 of the factum of the plaintiffs, the plaintiffs submit that the issues on this motion are:

a. Are the moving party defendants able to bring a summary judgment motion without filing a statement of defence? b. Have the defendants tendered sufficient evidence to satisfy the test for summary judgment? c. Was there a contract between the parties?

[32] In my view, in the circumstances of the instant motion, the second and third issues presented by the plaintiffs are really different aspects of the same basic issue, which I would frame as follows: is there a genuine issue for trial with respect to whether the parties reached a binding settlement agreement?

Analysis

Are the moving party defendants able to bring a summary judgment motion without filing a statement of defence?

[33] This motion was initially heard before me on Tuesday, October 3, 2017, on a regular Tuesday civil motions list. As I have said, and as is apparent from a review of the motion record of the moving party defendants, it was crafted as a summary judgment motion, brought under rule 20.01(3) of the Rules of Civil Procedure.

[34] Subrule 20.03(1) requires that on a motion for summary judgment, each party shall deliver a factum. Neither party had filed a factum on the motion before me, and I raised that with counsel at the outset of the hearing on October 3rd last. Following that initial query, there was a brief discussion between counsel for the parties as to how the motion had been framed – with counsel for the moving parties submitting that it was felt there was no other way to get the issue before the court other than to claim it as a motion for judgment – and then a preliminary canvassing of the relevant factual and legal issues.

[35] Ultimately, it was my view that the court required the assistance of the filing of a factum from each party in order to properly determine the issue before the court. As such, I seized myself of the motion, adjourned it to a one-hour special appointment before me on November 2, 2017, and set a schedule for the delivery of the parties’ respective factums.

[36] I note that in none of that initial exchange on October 3, 2017, did counsel for the plaintiffs voice an objection to the motion having been brought as a summary judgment motion under rule 20.01(3) by reason of the defendants having failed to file a statement of defence.

[37] However, upon the subsequent hearing before me on November 2, 2017, the first issue raised in the factum of the plaintiffs is their argument that summary judgement is not available to a defendant who has not filed a statement of defence. Counsel relies on the provisions of rule 20.01(3), which states:

A defendant may, after delivering a statement of defence, move with supporting affidavit material or other evidence for summary judgment dismissing all or part of the claim in the statement of claim. [Emphasis added.]

[38] It is common ground that the defendants did not deliver a statement of defence. Indeed, the plaintiffs advised the defendants through discussion between counsel and subsequently confirmed in writing that the plaintiffs did not require a statement of defence.

[39] However, that does not end the matter, in my view.

[40] When the motion first came before me on October 3rd, I was content to allow the motion to proceed on the basis of a summary judgment motion. As I will explain below, there is considerable overlap between the concepts that attend a summary judgment motion and a motion to enforce a settlement.

[41] In my view, if counsel for the plaintiffs were of the mind to object to the ability of the defendants to bring the issue before the court by way of a summary judgment motion under rule 20.01(3) on the basis that the defendants had not yet delivered a statement of defence, it certainly would have been of assistance to the court if counsel had given voice to that objection when we were discussing the issue on October 3rd. Had counsel done that, the defendants could have taken steps to address the objection as to the formal requirements of the Rules, either by filing a statement of defence or by re-casting the motion for judgment.

[42] However, counsel for the plaintiffs took no position on how the motion ought to have been framed.

[43] In my view, it was open to the defendants to cast their motion under the provisions of Rule 49 of the Rules of Civil Procedure. The defendants seek an order enforcing minutes of settlement, that is, enforcing an offer of settlement that, they say, was accepted by the plaintiffs. Subrule 49.07(6) provides that: “[w]here an offer is accepted, the court may incorporate any of its terms into a judgment.”

[44] Subrule 49.09(a) provides that: “[w]here a party to an accepted offer to settle fails to comply with the terms of the offer, the other party may … make a motion to a judge for judgment in the terms of the accepted offer, and the judge may grant judgment accordingly.”

[45] For the purposes of rule 49.09, it does not matter whether the “offer” was a formal offer to settle contemplated by subrule 49.02(1) or Form 49A. The case law is quite clear that provided an offer to settle is in writing, it need not be in the precise style of Form 49A to be within the rules: Bruce v. DPCE Computer Services Inc., [1992] O.J. No. 1442, 10 O.R. (3d) 630 (S.C.J.), at para. 10; and Martin v. St. Thomas–Elgin General Hospital, 2018 ONSC 799 (S.C.J.), at para. 38.

[46] In Hagel v. Giles, [2006] O.J. No. 556, 80 O.R. (3d) 170 (S.C.J.), at 179 (cited to O.R.), Power J. noted that there is a large body of common law precedent permitting a court to enforce an oral settlement under either rule 49.09 or Rule 20 by way of a motion for summary judgment, “as well as beyond the scope of these two rules.” On appeal, the Ontario Court of Appeal concluded that “the settlement agreement is enforceable as found by the motions judge”: Hagel v. Giles, [2006] O.J. No. 3471, 82 O.R. (3d) 470 (C.A.), at 471 (cited to O.R.).

[47] As such, pursuant to the holding in Hagel v. Giles, even if a settlement does not satisfy the formal requirements contemplated by subrule 49.02(1) or Form 49A, nevertheless, in appropriate circumstances, it may be enforced by way of either a motion under rule 49.09 or a motion for summary judgment under Rule 20.

[48] I would also note that in Capital Gains Income Streams Corp. v. Merrill Lynch Canada Inc., [2007] O.J. No. 3618, 87 O.R. (3d) 464 (S.C.J.), at 466 [cited to O.R.], Carnwath J. held that the correct test on a motion to enforce a settlement is the test for summary judgment, as follows:

The first step is to consider whether an agreement to settle was reached. In doing so, the proper approach is to treat the motion like a Rule 20 motion for summary judgment. If there are material issues of fact or genuine issues of credibility in dispute regarding whether (i) the parties intended to create a legally-binding relation or (ii) there was an agreement on all essential terms, a court must refuse to grant judgment.

[49] In Perrin v. Cara Operations Ltd., [2004] O.J. No. 1582, 5 C.P.C. (6th) 336 (S.C.J.), at para. 1, Hoy J. (as she then was) considered “a motion for summary judgment by the defendant, Cara Operations Limited, seeking dismissal of the plaintiffs’ claim on the grounds that the plaintiffs, through their solicitor, entered into a settlement agreement with Cara, the terms of which included a release by the plaintiffs of their claims in the within action. The settlement agreement was made before an action was commenced and is not a Rule 49 offer.” I note that in Perrin, the court concluded that the settlement agreement should be enforced, that there was no genuine issue for trial with respect to the plaintiffs’ claims, and it therefore granted summary judgment dismissing the plaintiffs’ claims.

[50] In the circumstances, given that the case law has regularly entertained motions to enforce settlements under either rule 49.09 or Rule 20, again, it would have been of assistance to the court if counsel for the plaintiffs had voiced the objection to the motion having been framed under Rule 20.

[51] In all of the circumstances, I am not inclined to determine the motion before the court on the seemingly technical ground that the defendants should not be permitted to bring a motion for summary judgment merely because they did not deliver a statement of defence, especially where the plaintiffs specifically advised the defendants that they did not require a statement of defence.

[52] In these circumstances, I exercise my discretion under rule 2.03, which provides that the “court may, only where and as necessary in the interest of justice, dispense with compliance with any rule at any time,” and find that it is necessary in the interest of justice to dispense with the defendants’ compliance with the prima facie requirement under subrule 20.01(3) that they deliver a statement of defence before moving for summary judgment. As such, I would determine the defendants’ motion for summary judgment on its merits, consistent with the general principle underlying the interpretation to be given to the Rules of Civil Procedure, namely, as enshrined in subrule 1.04(1), that the rules “shall be liberally construed to secure the just, most expeditious and least expensive determination of every civil proceeding on its merits.”

Is there a genuine issue for trial with respect to whether the parties reached a binding settlement agreement?

Principles governing motions for summary judgement

[53] Subrule 20.04 of the Rules of Civil Procedure provides, in part, that:

General

(2) The court shall grant summary judgment if,

(a) the court is satisfied that there is no genuine issue requiring a trial with respect to a claim or defence; or

(b) the parties agree to have all or part of the claim determined by a summary judgment and the court is satisfied that it is appropriate to grant summary judgment.

Powers

(2.1) In determining under clause (2) (a) whether there is a genuine issue requiring a trial, the court shall consider the evidence submitted by the parties and, if the determination is being made by a judge, the judge may exercise any of the following powers for the purpose, unless it is in the interest of justice for such powers to be exercised only at a trial:

1. Weighing the evidence.
2. Evaluating the credibility of a deponent.
3. Drawing any reasonable inference from the evidence.

Oral Evidence (Mini-Trial)

(2.2) A judge may, for the purposes of exercising any of the powers set out in subrule (2.1), order that oral evidence be presented by one or more parties, with or without time limits on its presentation.

[54] The principles governing summary judgment motions as articulated by the Supreme Court of Canada in its “culture-shifting” decision in Hryniak v. Mauldin, 2014 SCC 7, [2014] 1 S.C.R. 87 are conveniently and correctly set out in paras. 22-29 of the factum of the defendants and paras. 27-33 of the factum of the plaintiffs.

[55] As the Supreme Court in Hryniak concluded, the summary judgement rules must be interpreted broadly, favouring proportionality, and fair access to the affordable, timely, and just adjudication of claims. On the standard of fairness, the Court held that: “the standard for fairness is not whether the procedure is as exhaustive as a trial, but whether it gives the judge confidence that she can find the necessary facts and apply the relevant legal principles so as to resolve the dispute.”

[56] Writing for the unanimous Court in Hryniak, Karakatsanis J. summarized the proper approach to a summary judgment motion in the following roadmap:

On a motion for summary judgment under Rule 20.04, the judge should first determine if there is a genuine issue requiring trial based only on the evidence before her, without using the new fact-finding powers. There will be no genuine issue requiring a trial if the summary judgment process provides her with the evidence required to fairly and justly adjudicate the dispute and is a timely, affordable and proportionate procedure, under Rule 20.04(2)(a). If there appears to be a genuine issue requiring a trial, she should then determine if the need for a trial can be avoided by using the new powers under Rules 20.04(2.1) and (2.2). She may, at her discretion, use those powers, provided that their use is not against the interest of justice. Their use will not be against the interest of justice if they will lead to a fair and just result and will serve the goals of timeliness, affordability and proportionality in light of the litigation as a whole.

[57] As our Court of Appeal has expressly and repeatedly held, “[i]t is trite law that both parties on a summary judgment motion are required to put their best foot forward. Summary judgment motions are decided by evidence of the facts and by inferences drawn from those facts. Not by speculation about the facts”: Chernet v. RBC General Insurance Company, 2017 ONCA 337, at para. 12.

[58] There is no question but that on a motion for summary judgment, each side must put its best foot forward with respect to the existence or non-existence of material issues to be tried. A party is not entitled to sit back and rely on the possibility that more favourable facts may develop at trial. The summary judgment motion judge is entitled to assume that the evidence contained in the motion record is all the evidence the parties would rely on if the matter proceeded to trial. A responding party cannot rely on unsupported allegations in the pleadings or unfounded assertions that there is a genuine issue requiring a trial. As the courts have repeatedly said, a responding party must “lead trump or risk losing”: 790668 Ontario Inc. v. D’Andrea, 2014 ONSC 3312 (S.C.J., per Rady J.), at pars. 72 and 117, affirmed 2015 ONCA 557; and Spencer (Litigation guardian of) v. Switzer, 2014 ONSC 2344, 37 M.P.L.R. (5th) 286 (S.C.J.), at paras. 11-12. See also Gold Leaf Garden Products Ltd. v. Pioneer Flower Farms Ltd., 2015 ONCA 365, at para. 14, and 1061590 Ontario Ltd. v. Ontario Jockey Club (1995), 21 O.R. (3d) 547 (C.A.), at para. 35.

[59] At the same time, as our Court of Appeal has said in Baywood Homes Partnership v. Haditaghi, 2014 ONCA 450, 120 O.R. (3d) 438, at paras. 33-37, the summary judgment motion judge must “assess the advisability of the summary judgment process in the context of the litigation as a whole.”

Principles governing motions to enforce settlements

[60] In the very recent decision of Martin v. St. Thomas–Elgin General Hospital, 2018 ONSC 799, my brother Raikes J. had occasion to review the applicable legal principles on a motion to enforce an alleged oral settlement, reached between counsel for the parties. For the sake of convenience, I simply recite the analysis of Raikes J., as follows:

… To conclude a settlement, there must nevertheless be an offer and an unqualified acceptance of that offer: Lewis v. Walls, 2011 ONSC 6578 at para. 16.

The outcome of this motion depends upon determination of the following issues:

1. Was a binding settlement entered into as between the parties?
2. If so, should the court exercise its discretion to grant judgment enforcing the settlement?

A settlement agreement is a contract. For a concluded contract to exist, the parties must have had a mutual intention to create a legally binding contract and have reached agreement on all of the essential terms of the contract: Olivieri v. Sherman, 2007 ONCA 491 at para. 41, citing Bawitko Investments Ltd. v. Kernels Popcorn Ltd. (1991), 79 D.L.R. (4th) 97 (Ont. C.A.) at pp. 103-4.

The determination as to whether a concluded agreement exists does not depend on an inquiry into the actual state of mind of one of the parties or on the parole evidence of one party’s subjective intention. Where the agreement is in writing, it is to be measured by an objective reading of the language chosen by the parties to reflect their agreement: Olivieri, para. 44.

Where there is no meeting of the minds and the essential provisions have not been settled or agreed to, there is no agreement and the settlement will not be enforced: Bawitko (alternate citation: at p. 13). The court will not make a contract for the parties if they have not agreed on its essential terms: Picavet v. Clute, 2012 ONSC 2221 at paras. 12-13.

In Bawitko, Robins J.A. wrote:

However, when the original contract is incomplete because essential provisions intended to govern the contractual relationship have not been settled or agreed upon; or the contract is too general or uncertain to be valid in itself and is dependent on the making of a formal contract; or the understanding or intention of the parties, even if there is no uncertainty as to the terms of their agreement, is that their legal obligations are to be deferred until a formal contract has been approved and executed, the original or preliminary agreement cannot constitute an enforceable contract. In other words, in such circumstances the “contract to make a contract” is not a contract at all. …

Where there is agreement on essential terms, any disagreement with respect to the implementation of the essential terms does not change the fact that a settlement occurred: Oliver v. Racette, 2011 ONSC 5870 at paras. 44-47.

Finally, there is a residual discretion in the court, to be exercised in exceptional circumstances, to refuse to enforce a settlement agreement where doing so would create a clear injustice: Brzozowski v. O’Leary, [2004] O.J. No. 3230 at para. 44, cited with approval in Hilco Industrial Acquisition Canada ULC v. Engreen, 2016 ONSC 1792 at para. 61.

With respect to this discretion, Justice Sheard wrote in Hilco at para. 63:

In deciding whether or not to enforce an accepted offer, the court may consider whether the parties’ pre-settlement positions remain intact; whether there would be prejudice to the party seeking to enforce the settlement, if the settlement were not enforced; the extent of the prejudice to the party seeking to resist the settlement if the settlement was enforced and whether third parties who were awarded [would] be affected if the settlement was not enforced. (Centorame v. Centorame, 2012 ONSC 6405 at para. 65 citing Milios v. Zagas, [1998] O.J. No. 812 (Ont. C.A.) at para. 21).

Application

[61] In my view, the instant case turns on whether there is evidence before the court that establishes that there is no genuine issue for trial concerning the question of whether the parties entered into a binding settlement agreement and, in particular, the question of whether there was an “unqualified acceptance” by the plaintiffs of the defendants’ settlement position, as reflected in the draft minutes of settlement that were sent by Mr. Hooker to Ms. Medaglia on February 9, 2017.

[62] As I have said, it is common ground that there are no actual executed minutes of settlement.

[63] In a similar vein, there is no evidence before the court of any correspondence from counsel for the plaintiffs that expressly states anything like, “I confirm the plaintiffs’ acceptance of your minutes of settlement of February 9, 2017” or “the plaintiffs are content with your minutes of settlement of February 9, 2017” or “I confirm the settlement of this matter” or any express words to that effect.

[64] In terms of evidence establishing the plaintiffs’ acceptance of the settlement, and the requisite “meeting of the minds” of the parties, the defendants place principal reliance on the email of Ms. Medaglia dated April 10, 2017, which, the defendants submit, “when viewed objectively, can only mean one thing: that the Plaintiffs were going to sign the settlement documents but needed two weeks to complete the task. No other reasonable interpretation of her words is possible.”

[65] Respectfully, and after much difficult deliberation, I must disagree with counsel’s submission. In my view, there is more than one reasonable interpretation of Ms. Medaglia’s email of April 10, 2017.

[66] Somewhat reluctantly, and even considering the entire context and language of the communications between Mr. Hooker and Ms. Medaglia, I must conclude that Ms. Medaglia’s statement that “I confirm that David requires approximately two weeks to have the settlement documents signed and sent to me” does not necessarily mean – nor can mean only – that the plaintiffs had accepted the defendants’ draft minutes of settlement that were sent by Mr. Hooker to Ms. Medaglia on February 9, 2017.

[67] In my view, the language of Ms. Medaglia’s April 10th email is reasonably open to competing interpretations.

[68] On the one hand, to be sure, it could be read as if saying, “I confirm that the plaintiffs are content to accept your draft minutes of settlement sent February 9, 2017. Please note that David requires approximately two weeks to have the settlement documents signed and sent to me” or even, as one might think would be fairly common in practice, “further to the settlement of this matter, I confirm that David requires approximately two weeks to have the settlement documents signed and sent to me.”

[69] However, on the other end, it is equally plausible to read counsel’s April 10th email as if saying, “I will recommend your draft minutes of settlement sent February 9, 2017, to my client for acceptance and will advise once my client has confirmed my instructions. In any event, I confirm that David requires approximately two weeks to have the settlement documents signed and sent to me.” In that event, there would be no concluded agreement.

[70] And there are other possible, reasonable interpretations of counsel’s April 10th email.

[71] Bottom line, in my view, confirming the logistical arrangements of how long a party will need to execute any minutes of settlement (because he resides in Colorado) is not the same thing as confirming that the parties have in fact reached a settlement.

[72] I must conclude that the language of Ms. Medaglia’s April 10th email is equivocal and does not evidence the plaintiffs’ unqualified acceptance of the proposed settlement.

[73] As such, on the state of the evidentiary record before me, I cannot conclude that there is no genuine issue for trial that the parties reached a binding settlement agreement in this matter.

[74] That said, I have certain concerns regarding the evidentiary record before me. First of all, as I have already referenced, the plaintiffs did not submit an affidavit on behalf of Ms. Medaglia. I have some difficulty regarding that omission as anything but telling.

[75] Ms. Medaglia was the lawyer who, on behalf of the plaintiffs, had direction negotiations with Mr. Hooker, the solicitor for the defendants. Central to the determination of the issues before the court is the content and context of the negotiations and discussions that took place between the lawyers for the parties. The defendants submitted an affidavit from their lawyer, Mr. Hooker. The plaintiffs submitted no affidavit from Ms. Medaglia.

[76] Instead, the plaintiffs submitted only the one affidavit, sworn by David. Again, David’s evidence is that at no time during the negotiations did he agree to the essential terms of the minutes of settlement forwarded by Mr. Hooker.

[77] However, David was not directly involved in the negotiations between counsel for the parties. There is no evidence before me that David was a party to any of the discussions between Mr. Hooker and Ms. Medaglia. As such, the evidence from David, while perhaps informative, is certainly not dispositive of the issues before me, nor is it – from a certain perspective – even particularly helpful to me. In my view, on a motion of this nature, the plaintiffs ought to have filed an affidavit from the lawyer who was directly conducting the negotiations on behalf of the plaintiffs. The failure of the plaintiffs to do so is troubling to me.

[78] On this point, I note that while David may well take the position – and has – that he did not agree to the essential terms of the proposed agreement, given that David was not directly involved in the settlement negotiations, the more relevant question is what did Ms. Medaglia agree to or say on behalf of the plaintiffs.

[79] In this regard, to the extent that David may think that his statement in para. 5 of his affidavit of September 2, 2017, that at no time during the negotiations of the parties did he agree to the essential terms of the minutes of settlement or agree to execute the minutes of settlement sent by Mr. Hooker to Ms. Medaglia on February 9, 2017, should conclusively determine the issues before the court, I am reminded of the dictum of our Court of Appeal in Scherer v. Paletta, [1966] 2 O.R. 524, 57 D.L.R. (2d) 532 (C.A.).

[80] That case holds that any limitation on the authority of a solicitor does not affect the opposite party with whom a settlement has been reached unless that limitation of authority is communicated to the opposite party: Zhuppa v. Porporino, [2006] O.J. No. 2016, 210 O.A.C. 126 (C.A.), at para. 10.

[81] In particular, in Scherer v. Paletta, the Court of Appeal held that:

A client, having retained a solicitor in a particular matter, holds that solicitor out as his agent to conduct the matter in which the solicitor is retained. … Where a principal gives an agent general authority to conduct any business on his behalf, he is bound as regards third persons by every act done by the agent which is incidental to the ordinary course of such business or which falls within the apparent scope of the agent’s authority.

A solicitor whose retainer is established in the particular proceedings may bind his client by a compromise of these proceedings unless his client has limited his authority and the opposing side has knowledge of the limitation, subject always to the discretionary power of the Court, if its intervention by the making of an order is required, to inquire into the circumstances and grant or withhold its intervention if it sees fit; and, subject also to the disability of the client. It follows accordingly, that while a solicitor or counsel may have apparent authority to bind and contract his client to a particular compromise, neither solicitor nor counsel have power to bind the Court to act in a particular way, so that, if the compromise is one that involves the Court in making an order, the want of authority may be brought to the notice of the Court at any time before the grant of its intervention is perfected and the Court may refuse to permit the order to be perfected. If, however, the parties are of full age and capacity, the Court, in practice, where there is no dispute as to the fact that a retainer exists, and no dispute as to the terms agreed upon between the solicitors, does not embark upon any inquiry as to the limitation of authority imposed by the client upon the solicitor.

[82] Further, there are gaps in the evidentiary record. While the defendants have delivered an affidavit from the lawyer who engaged in the negotiations on their behalf, even Mr. Hooker’s affidavit does not set out all of the particulars of the conversations that he had with Ms. Medaglia. In short, I know from Mr. Hooker’s affidavit that he had certain discussions with Ms. Medaglia on certain dates, but I do not know the particulars of what was said by either of them on behalf of their respective clients.

[83] In these circumstances, given the deficiencies in the evidentiary record before me, I am unable to make a determination that there is no genuine issue for trial.

[84] Moreover, where one party asserts that the parties reached a binding settlement, but the other party asserts that he never agreed to the essential terms of an agreement, credibility issues naturally arise.

[85] While the court does have enhanced powers to evaluate credibility under subrule 20.04(2.1), given the deficiencies in the evidentiary record before me, I am unable to use my enhanced powers under subrule 20.04(2.1) to weigh the evidence before me and evaluate the credibility of the relevant witnesses because the necessary evidence is not before me.

[86] As such, considering all of the relevant circumstances, I regard the instant case as one in which it is appropriate to exercise the court’s discretion under subrule 20.04(2.2), which, again, provides that:

Oral Evidence (Mini-Trial)

(2.2) A judge may, for the purposes of exercising any of the powers set out in subrule (2.1), order that oral evidence be presented by one or more parties, with or without time limits on its presentation.

[87] Ordering a mini-trial on the issue of whether the parties reached a binding agreement in the instant case is not against the interest of justice. In my view, holding a mini-trial on the issue will lead to a fair and just result and will serve the goals of timeliness, affordability and proportionality in light of the litigation as a whole.

[88] I note that the discretion of the presiding motion judge under subrule 20.04(2.2) is broadly analogous to the discretion of a motion judge under clause 37.13(2)(b), which provides that a judge who hears a motion may “order the trial of an issue, with such directions as are just.”

[89] In the instant case, having considering all of the relevant circumstances, including particularly the deficiencies in the evidentiary record before me, I find that it is appropriate to direct, pursuant to subrules 20.04(2.2) and 37.13(2)(b), that a mini-trial be held before me and oral evidence be presented by the parties on the issue of whether the parties entered into a binding settlement agreement in respect of the matters in issue.

Conclusion

[90] For all of these reasons, I neither allow nor dismiss the defendants’ motion for summary judgment at this point.

[91] I direct, pursuant to subrules 20.04(2.2) and 37.13(2)(b), that a mini-trial be held before me and oral evidence be presented by the parties on the issue of whether the parties entered into a binding settlement agreement in respect of the matters in issue.

[92] That will necessarily entail certain ancillary trial management functions.

[93] As such, counsel for the parties are directed to contact the trial coordinator’s office in Windsor within the next 30 days in order to arrange for a mutually-convenient date for a case conference before me (which may be held by telephone conference call before or after regular court sitting hours) for the purposes of scheduling a litigation timetable in this matter to provide for the most effective, expeditious, and least expensive determination of the issues on the mini-trial.

[94] Costs of the instant motion for summary judgment are reserved to the judge hearing the mini-trial.

“original signed and released by Howard J. ” J. Paul R. Howard Justice

Released: June 29, 2018