Mishukov v. Fatoullaeva et al., 2019 ONSC 5550
COURT FILE NO.: 07-CV-345668 PD1
DATE: 2019-10-09
ONTARIO
SUPERIOR COURT OF JUSTICE
BETWEEN:
ROMAN MISHUKOV
Plaintiff
– and –
LEILA FATOULLAEVA, CANADA HEALTH REHABILITATION & MEDICAL SUPPLIES INC. and CANADA HEALTH REHAB AND FOOT CARE MEDCLINIC LTD.
Defendants
Benjamin Salsberg and Felice Fay Zalsberg, counsel for the Plaintiff
Roberto R. Cucci, counsel for the Defendants
HEARD: SEPTEMBER 20, 2019
G. DOW, J.
REASONS FOR DECISION
[1] The plaintiff seeks an order setting aside the dismissal of this action arising from terms contained in Minutes of Settlement dated December 22, 2012. The underlying dispute between the parties is with regard to a failed partnership investment.
[2] As a preliminary matter, it was noted the plaintiff had yet to receive the $750.00 I ordered be paid to the plaintiff on May 17, 2019. This was a term of my granting the defendants’ request for an adjournment of the motion which was peremptory on them at that time. Defence counsel advised that he was unaware of this breach. Rather than rely on this breach of a court order, plaintiff’s counsel acceded to the personal undertaking given by counsel for the defendants in open court to deliver the funds on or before September 27, 2019. As a result, the motion proceeded.
Background
[3] The Minutes of Settlement provided for the dispute to be determined by arbitration with terms as to the selection of the Arbitrator, the holding of funds in trust, the limited length of the arbitration and costs. It also provided the process was to be concluded by March 31, 2012. Both sides were represented by counsel (but not their current counsel).
[4] Counsel for the plaintiff relied on ongoing and repeated contact between counsel wherein the individual agreed upon to decide who the Arbitrator would be was confirmed. A schedule of issues was determined and an Agreement to Arbitrate and a retainer circulated. Telephone discussions were conducted with dates set for the arbitration that were subsequently adjourned. All of this occurred after March 31, 2012 and before the defendants’ current counsel was appointed in July, 2016.
[5] The conduct of the parties, through counsel, included counsel for the plaintiff acknowledging in October, 2015 of a need to deliver a direction to have funds held in trust transferred to the Arbitrator. On January 19, 2016, counsel for the parties conducted a telephone discussion wherein dates in April, 2016 were discussed for the arbitration to proceed and counsel for the defendants advised that the defendant, Leila Fatoullaeva (“Fatoullaeva”) had executed the direction to have funds in trust transferred to the Arbitrator.
[6] At no time did either party raise an issue with respect to the proceeding being beyond the time set out in the Minutes of Settlement or that a two year limitation period began to run as of March 31, 2012.
[7] When new counsel was appointed in July, 2016, the position of the defendants became, for the first time, that the Arbitrator had not been properly appointed and the plaintiff had no authority to proceed.
[8] A Statement of Claim has been issued by the plaintiff against his prior counsel for breach of contract, negligence and breach of fiduciary duty. It alleges what the defendants submitted has occurred.
[9] All of the above evidence is from the plaintiff and his former counsel. That counsel was cross-examined. The evidence of the defendants was limited to an affidavit from Leila Fatoullaeva. That affidavit sets out the legal position of the defendants but does not contradict what actions former plaintiff’s counsel testified occurred between he and defence counsel in between December 22, 2012 and April, 2016. No evidence was tendered from the previous counsel for the defendants.
Analysis
[10] The plaintiff relied on that aspect of the law within estoppel based on the course of conduct which he maintained had occurred. This principle was summarized in Conwest Explorations Ltd. et al v Letain, [1963] S.C.C. 20 (at pages 29-30) where the court concluded a party that chooses to treat his contracts as subsisting cannot claim non performance at a later date.
[11] This principle was accepted in Tudale Explorations Ltd. v. Bruce et al (1978), 1978 CanLII 1471 (ON SC), 20 O.R. (2d) 593 (Div. Ct.) where the concept of a party “by their own act or with their own consent enter upon a course of negotiation which has the effect of leading one of the party to suppose that the strict rights arising under the contract will not be enforced, or will be kept in suspense, or held in abeyance, the person who otherwise might have enforced those rights will not be allowed to enforce them where it would be inequitable having regard to the dealings which have thus taken place between the parties” (at paragraph 11).
[12] This statement of the law was supported in two legal texts to which I was referred, Snell’s Equity, 33rd Ed., 2015 (at paragraph 12-005 and 12-006) and The Law of Contract, 14th Edition by Edwin Peel, 2015 (at paragraph 3-007).
[13] Plaintiff’s counsel also relied on Clatney v. Quinn Thiele Mineault Grodzki LLP, 2016 ONCA 377 where the court stated: “A consent order is not a judicial termination on the merits of a case but only an agreement elevated to an order on consent: (Rick v. Brandsema, 2009 SCC 10, [2009] 1. S.C.R. 295, at para. 64)” (at paragraph 92).
[14] Counsel for the defendants relied on the “authority of the calendar” and the need for the court to protect its integrity. The fact neither party addressed the consequences of their actions did not undermine the defendants’ right to now rely on its strict legal rights.
[15] It should be noted at this juncture that the Costs Outline of the defendant was not available at the hearing of the motion contrary to Rule 57.01(6). The plaintiff’s counsel did not object to the request it be delivered to me by September 23, 2019. It arrived on September 24, 2019 due to “a technical problem” according to defendants’ counsel. It contained additional submissions on the substantive issues. The defendants relied on the decision of Maracle v. Travellers Indemnity Co. of Canada, 1991 CanLII 58 (SCC), [1991] 2 S.C.R. 50.
[16] While inappropriate as not having been submitted in open court during the time for submissions, I reviewed that decision. I note the court accepted the finding of the trial judge that the words and conduct of the insurer “could not be interpreted as a promise, express or implied not to rely on the limitation period” (at page 59). I find in this matter before me that is precisely what has impliedly occurred. As stated at page 57 of that decision, for promissory estoppel to apply “there must be some evidence that one of the parties entered into a course of negotiations which had the effect of leading the other to suppose that the strict rights under the contract would not be enforced”. Again, that is what I find occurred here.
[17] I am reinforced in my conclusion by application of Rule 1.04(1) which provides for the rules to be “liberally construed to secure the just, most expeditious and least expensive determination of every civil proceeding on its merits”. I conclude it would be completely unjust not to grant the relief sought.
Conclusion and Costs
[18] An Order shall issue setting aside the consent of the parties to the dismissal of this action pursuant to the Minutes of Settlement executed December 22, 2012.
[19] The Costs Outline of the plaintiff sought partial indemnity fees of $24,862.50 plus an appearance fee to argue the motion which I assess at $900.00. This becomes $25,762.50 plus HST of $3,349.13 and disbursements of $1,992.89. The total is $31,104.57.
[20] By comparison, the Costs Outline of the defendants, if successful, claimed fees of $11,050.00 plus disbursements of $755.00. Within the Costs Outline of the defendants, counsel raised that the “entirety of the dispute between the plaintiff and the defendants was implicitly at issue”. I agree. Given that high level of importance of the issue to be determined, I award the full amount of partial indemnity costs sought by the plaintiff, that is, $31,102.26 payable by the defendants to the plaintiff forthwith.
Mr. Justice G. Dow
Released: October 9, 2019
COURT FILE NO.: 07-CV-345668 PD1
DATE: 20191009
ONTARIO
SUPERIOR COURT OF JUSTICE
BETWEEN:
ROMAN MISHUKOV
Plaintiff
– and –
LEILA FATOULLAEVA, CANADA HEALTH REHABILITATION & MEDICAL SUPPLIES INC. and CANADA HEALTH REHAB AND FOOT CARE MEDCLINIC LTD.
Defendants
REASONS FOR DECISION
Mr. Justice G. Dow
Released: October 9, 2019