Lumsden et al. v. The Toronto Police Services Board et al., 2019 ONSC 5052

COURT FILE NO.: CV-13-495324

DATE: 2019-09-11

ONTARIO

SUPERIOR COURT OF JUSTICE

BETWEEN:

BRIAN LUMSDEN AND DAVID LUMSDEN

Plaintiffs/Responding Parties

– and –

THE TORONTO POLICE SERVICES BOARD, CHIEF WILLIAM BLAIR, PAUL INGLEY, KEVIN WILLIAMS, MICHAEL SAMSON, PETER YAN, MARC BOWER AND DETECTIVE LINQUIST

Defendants/Moving Parties

Brian Lumsden, for the Plaintiffs/Responding Parties

Douglas O. Smith, for the Defendants/Moving Parties

HEARD: August 27, 2019

SCHABAS J.

REASONS FOR JUDGMENT

Overview

Overview

1The defendants move for judgment in accordance with a settlement they submit was agreed to and is binding on the plaintiffs. For the reasons that follow, I agree that there is a binding settlement agreement which should be enforced, and I dismiss the action without costs in accordance with that agreement.

Background

Background

2The action commenced in 2013 and arises from the arrest and detention of David Lumsden, when he was a youth, in 2011 and 2013. Brian Lumsden is David’s father and is a derivative claimant under the Family Law Act.

3The action has a long history. Despite case management by a Master and then a Judge, the setting of timetables, and interventions by other judges, the action has not advanced very far in the course of almost 6 years. While there has been documentary disclosure, there has still been no oral discovery. However, the plaintiffs, who are self-represented (or perhaps, more accurately, are represented by Brian Lumsden as David moved to France several years ago), have brought three motions for summary judgment, although none have been heard. They have also brought a motion for advance costs, and a motion to remove the lawyers for the defendants, both of which were dismissed, the second with costs to the defendants of $3,000, to be paid by December 31, 2019.

4In the course of argument, Brian Lumsden emphasized that he felt at an extraordinary disadvantage because he was unable to afford a lawyer and that this was denying him, and his son, their ability to advance a meritorious claim.

The Settlement Correspondence

The Settlement Correspondence

5On April 11, 2019, in accordance with a timetable set for the third summary judgment motion, Brian Lumsden was cross-examined by counsel for the defendants. At the outset of that cross-examination Mr. Lumsden stated that the plaintiffs were abandoning the claim arising from the 2011 arrest.

6Subsequently, on April 17, Brian Lumsden wrote to counsel for the defendants that the plaintiffs were “forced to abandon the claim” and asked how the matter could be resolved before the next case conference with a judge, which was scheduled for April 26.

7Defendants’ counsel, Mr. Smith, responded the same day, by email, and advised Brian (and David, who was copied) that he would “seek instruction to agree to a without-costs dismissal of this action if that would be acceptable to” the plaintiffs. Given the prospect of settlement, he cancelled the cross-examination of David that was to take place (by video conference) the following day.

8Some 7 minutes later, Brian responded, stating “[i]f the without costs includes the $3,000 payable in December then we have a deal. Congratulations Mr. Smith, good job.” Mr. Smith also asked to hear from David on this and the following morning, on April 18, David sent an email stating “I agree to droping [sic] without cost.”

9On the afternoon of April 18, 2019, Mr. Smith advised the plaintiffs that he had instructions to agree to a without-costs dismissal of the action, including the forgiveness of all outstanding costs already ordered, in exchange for an executed full and final release. He confirmed that the matter was settled and advised that a release and consent for dismissal order would follow shortly. Mr. Smith’s colleague, Ms. Bonanno, wrote to the Court to cancel the case conference for April 26, copying the plaintiffs.

10The Good Friday long weekend followed this exchange. On Monday April 22, Brian Lumsden sent a letter to Mr. Smith and Ms. Bonanno entitled “Notice of Claim” in which he stated that a video disc produced in the action by the Toronto Police Service (“TPS”) had damaged his computer and he intended to sue the TPS and Mr Smith for this damage if the matter could not be resolved. In the same letter, however, Brian Lumsden acknowledged the settlement of this action and requested that Mr Smith “ensure that the release that is drafted for the December 2013 claim does not encumber this new action in any way.”

11Later that day, after Mr. Smith sought particulars of this new claim, Brian Lumsden sent an email in which he stated: “If we receive a reasonable offer for the original claim then there would be no issues and we can get on with our lives.” Mr Smith responded promptly that same afternoon, stating that “the original action is settled and there will be no offer to reopen that settlement.”

12In correspondence with Ms Bonanno that afternoon after she sent him a draft Release, Brian Lumsden stated that “Mr. Smith has indicated that this matter is settled.” Ms. Bonanno confirmed that to be the case and explained that the Release and Consent reflected the settlement. The Release also included the exemption for the new allegation arising from the video disc, as Mr. Lumsden had requested.

13Brian Lumsden then appeared to take issue with having to sign a Release stating in an email that “[i]f it is settled and can not be reopened then no action should be required”. He then went on to say “[w]e were forced to accept an inadequate settlement” and that he needed to speak to a lawyer “for guidance”.

14Still on April 22, Mr. Smith emailed Brian Lumsden, saying “[y]ou know full well that you are required to sign a release”, and referred to Mr. Lumsden’s earlier letter asking that the Release not “encumber” his new action. Mr Smith said that if the Release was not signed then he would seek instructions to enforce the settlement.

15The following day, April 23, Brian Lumsden sent a letter to Mr. Smith stating that the action “is NOT settled.” Counsel for the defendants then rescheduled a case conference with a judge and on May 14 sent the plaintiffs the motion record to enforce the settlement, in draft form. Brian Lumsden responded to Ms. Bonanno by email stating that “[t]his matter could be settled before the case conference if the City agreed to cover some of the damage caused by the police”, and said “we will not consent to a release until we have been compensated for the damages.”

16Later, on May 17, Brian Lumsden sent a record of a hospital visit he made on April 9, 2019, which notes the reason for the visit, or chief complaint, was “SOB [shortness of breath], tingling fingers”. The assessment and history said he was experiencing “stress, unable to sleep, decreased appetite” and that he started to feel shortness of breath and a tingling finger that morning. Mr Lumsden states in his affidavit that he was “suffering from severe anxiety attacks” throughout the month of April, but he has filed no other evidence in support of any medical condition that might have affected his competence to make an agreement to settle on April 18, 2019.

Law and Analysis

Law and Analysis

17This motion is brought pursuant to Rule 49.09 of the Rules of Civil Procedure, which permits a party to make a motion for judgment where a party to an accepted offer to settle fails to comply with the terms of the offer. A settlement will be enforced where (a) there is a binding settlement agreement, and (b) there is no reason for the court to exercise its discretion not to enforce the settlement. See: Galevski Estate, 2012 ONSC 3460 at para. 5; Hedayat Amirvar v Murlee Holdings Limited, 2011 ONSC 5826 at para. 8; Capital Gains Income Streams Corp. v. Merrill Lynch Canada Inc., 2007 CanLII 39604 (ONSDC) at para. 9. I consider these two parts of the test below.

(a) Is there a binding settlement agreement?

18In Olivieri v. Sherman, 2007 ONCA 491, the Court of Appeal observed, at para. 41, that a settlement agreement is a contract. This requires a court to find that there was a mutual intention to create a legally binding contract and that the parties reached an agreement on all the essential terms of the contract. However, the Court noted at para. 44, that “whether a concluded agreement exists does not depend on an inquiry into the actual state of mind” of a party. Rather, where “as here, 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.” See also B.O.T. International v. CS Capital et al., 2013 ONSC 5329 at para. 20.

19There is no requirement, therefore, of formal minutes of settlement, and an email exchange can suffice. As Justice M.F. Brown stated in Amirvar at paras. 14, 15 and 19:

Although the plaintiff’s offer was made orally, it was accepted in writing through the emails sent between the lawyers for the parties. The emails demonstrate that the parties accepted the terms as a binding settlement, a position that is supported by Mr. Miller providing his consent to the defendant taking out a dismissal order and providing his authority to execute the consent for the same.

The Courts have acknowledged that the terms of a contract are often expressed orally before being drafted into a formal written document but the formal written document, itself, does not alter the binding validity of the original oral contract. There is no merit in the argument that a settlement cannot be reached until the execution of a written release or if a plaintiff has objections to a release. See Kaur v. The Manufacturers Life Insurance Company, [1999] O.J. No. 3564 (Ont. C.A.) at para. 3.

As well, the documentation of taking out the dismissal order and executing the full and final release were not terms of the contract, but simply the formal documentation of settlement. The terms of the release are not the terms of settlement, and any issue the plaintiff may have with the wording of the release is not a valid reason to suggest that the parties had not reached agreement on all the essential terms. See Bawitko Ltd. v. Kernels Popcorn Ltd., 1991 CanLII 2734 (ON CA), [1991] O.J. No. 495 (Ont. C.A.). [emphasis added]

20Similarly, in Cellular Rental Systems Inc. v. Bell Mobility Cellular Inc., 1995 CarswellOnt 4182, appeal dismissed, 1995 CarswellOnt 4172, Chapnik J. stated:

It is well established that settlement implies a promise to furnish a release unless there is agreement to the contrary. On the other hand, no party is bound to execute a complex or unusual form of release: although implicit in the settlement, the terms of the release must reflect the agreement reached by the parties. This principle accords with common sense and normal business practice.

21The Court of Appeal explicitly agreed with Justice Chapnik’s conclusions. It is therefore well established that a full and final release is an implied term of a settlement that has already been reached. A settlement is not tentative, therefore, because the parties must still agree on the wording of the Release. Or, to put it another way to address an argument made by Brian Lumsden, a settlement agreement is not “an agreement to agree”.

22Viewing the correspondence objectively, I conclude that there was a binding agreement reached on all essential terms between the parties. The straightforward terms were that the action would be dismissed without costs, and that other costs ordered to be paid would be forgiven. This was accepted by Brian and David Lumsden. The draft Release reflected the settlement, and included an exception for Brian Lumsden’s benefit, as he had requested. It was not open to the plaintiffs to object to the Release, and they cannot rely on it to resile from their agreement.

(b) Is There Any Reason Not to Enforce The Settlement?

(b) Is There Any Reason Not to Enforce The Settlement?

23The overarching policy consideration in these types of cases is that settlements are to be encouraged: Olivieri at para. 50. Where the first part of the test has been met, the party resisting settlement has a heavy onus to demonstrate why the court should not give effect to the agreement. As the Divisional Court stated in Arisoft Inc. v. Ali, 2015 ONSC 7540 at para. 19: “In answering the second question, the court is to be mindful of the fact that the discretion not to enforce a settlement is to be exercised rarely as per Srebot v. Srebot Farm Ltd., 2013 ONCA 84 at para. 6.”

24In this case, the plaintiffs have not satisfied me that this is one of those rare cases where there would be an injustice if the settlement is enforced. While Brian Lumsden argues that they are suffering financial hardship, this is not a basis to overturn the settlement. Brian has also asserted he was unwell, referring to the hospital visit on April 9, but there is no other evidence on this point and the hospital record falls far short of suggesting any incompetency or inability to enter into binding agreements. David Lumsden simply asserts that he did not believe he entered into a binding agreement.

25The plaintiffs also argued that the principles of duress and unconscionability apply here to vitiate the agreement. There is no merit to those submissions.

26The test for duress is set out in Arisoft at para. 22:

The test for duress was described by the Ontario Court of Appeal in Gordon v. Roebuck, (1992) 1992 CanLII 7443 (ON CA), 9 O.R. (3d) 1 at para. 8 wherein the Court adopted, and applied, the following test from the House of Lords:

On p. 8 of his reasons [p. 205 O.R., pp. 572-73 D.L.R.] the trial judge states:

To succeed on the ground of economic duress, the plaintiff must prove that his will was coerced and that the pressure exerted to do that was not legitimate. Lord Scarman (in Pao On v. Lau Yiu, [1979] 3 All E.R. 65, [1979] 3 W.L.R. 435 (P.C.), at p. 78 All E.R.) has set out four factors to consider in determining if a party's will has been coerced. They are:

(1) Did he protest?

(2) Was there an alternative course open to him?

(3) Was he independently advised?

(4) After entering the contract did he take steps to avoid it?

27There is no evidence of any pressure or coercion in this case, let alone any illegitimate pressure. Duress was not raised until the plaintiffs filed their factum on this motion. Brian Lumsden actually raised settlement first. He did not protest and had alternative courses open to him. Lack of independent advice, while a consideration, is “not a freestanding defence”: Arisoft at para. 27. The plaintiffs agreed to the settlement on April 18 and Brian Lumsden confirmed it on the morning of April 22. He appears to then have had second thoughts as he developed a new claim on April 22, and then attempted to use the threat of that claim to extract a better deal in the settlement. This is not duress.

28As to unconscionability, the test for this is set out in Thompson v. Rogers Communications Inc., 2013 ONSC 6975 at para. 22:

The Alberta Court of Appeal reviewed this issue in Cain v. Clarica Life Insurance Co., [2005] ABCA 437. As the Court stated at para. 32:

Those authorities discussed four elements which appear to be necessary for unconscionability.

The four necessary elements are:

i. a grossly unfair and improvident transaction; and

ii. victim’s lack of independent legal advice or other suitable advice; and

iii. overwhelming imbalance in bargaining power caused by victim’s ignorance of business, illiteracy, ignorance of the language of the bargain, blindness, deafness, illness, senility, or similar disability; and

iv. other parties knowingly taking advantage of this vulnerability.

29There is no evidence that this was an unfair or improvident transaction. Indeed, the action has been ongoing for 6 years, and the plaintiffs have made little progress. Undoubtedly, the defendants have incurred substantial costs that they agreed to forego in allowing the plaintiffs to drop the action. Similarly, there is no evidence of an overwhelming imbalance in bargaining power. Brian Lumsden raised the possibility of settlement first and has demonstrated in his materials and conduct that he understands the legal process and the steps he has taken. Illness and alleged vulnerability were raised after the fact and are unsupported by the evidence.

Conclusion

Conclusion

30The motion for an Order enforcing the settlement is therefore granted. The action is dismissed, without costs, including the forgiveness of all outstanding costs orders. The plaintiffs shall be deemed to have executed the Full and Final Release provided to the plaintiffs, a copy of which was provided to me during the hearing of the motion. The defendants are entitled to costs of this motion, if demanded. Submissions may be made to me as to quantum, if necessary.

Schabas J.