COURT FILE NO.: 15-53346
DATE: 2019-01-28
ONTARIO
SUPERIOR COURT OF JUSTICE
B E T W E E N:
MINI RIAR and NADEEM AHMED
Plaintiffs
- and -
DALI HOMES INC., SOHAIL ALI HAMID CHAUDRY and DURIYA PATEL
Defendants
Eric K. Gillespie, for the Plaintiffs
Andrew J. Heal and Damon Stoddard, for the Defendants
HEARD: January 22, 2019
REASONS FOR JUDGMENT
SKARICA J.
OVERVIEW
[1] The plaintiffs originally brought an action against the defendants alleging overcharges, manipulated discrepancies, and deficiencies relating to the construction of a residence at 7 Model Avenue, Toronto.
[2] The plaintiffs and defendants retained a mediator and on October 19 and 21, 2015 both parties agreed to Minutes of Settlement.
[3] The plaintiffs allege that the defendants breached terms of the Minutes of Settlement and brought a motion for summary judgment, seeking $85,540 in damages for the costs incurred in the mediation, $51,170 for damages incurred from the defendants’ alleged breaches of the Minutes of Settlement, and $500,000 (since reduced to $50,000) for punitive damages.
[4] The defendants maintain that they complied with all the terms of the Minutes of Settlement. They move pursuant to Rules 20 and 49.09 of the Rules of Civil Procedure to enforce the executed Minutes of Settlement and obtain an order dismissing the plaintiffs’ action and Dali Homes’ counterclaim.
ISSUE
[5] The issue to be resolved is whether or not Dali Homes and/or the defendants breached or complied with the Minutes of Settlement.
FACTS
The Minutes of Settlement
[6] The Minutes of Settlement (the “Minutes”) are attached as Schedule A to this judgment.
[7] Paragraph 6 of the Minutes indicates that the terms of the Minutes are not severable and must be accepted in their entirety.
[8] Paragraph 1 of the Minutes stipulates that Dali Homes is to pay Simpson Wigle (originally the law firm representing the plaintiffs) $100,000. This sum is inclusive of all interest, costs, legal fees, and HST payable within five days after the Minutes were executed. Dali Homes complied with this term. The $100,000 was to be held in trust until both parties completed their obligations under the Minutes.
[9] Paragraph 1 of the Minutes required Simpson Wigle to hold the $100,000 until full and final releases were to be exchanged between counsel, releasing all post, present and/or future claims relating to the supply of services, materials and construction of the home at 7 Model Avenue. The releases were to be held in escrow pending completion of the remaining terms of the Minutes of Settlement. Paragraphs 1(c) and 1(d) required the plaintiffs to ensure stair railings and solar panels were brought up to Code.
[10] It is not disputed that both parties complied with their obligations as outlined in paragraph 1. Pursuant to paragraph 1, the $100,000 was distributed to the plaintiffs in late May, 2016.
[11] Paragraph 2 is the only paragraph of the Minutes in dispute. Paragraphs 2(a), (b), and (c) required the defendants to complete certain work within 30 days to close outstanding permits. Paragraph 2(d) required the defendant Dali Homes to provide the plaintiffs with any roofing warranty certificates that were provided to Dali Homes.
[12] Simply put, the position of the plaintiffs is that the defendants did not do any of the work as required by paragraph 2. The defendants contend that they satisfactorily complied with all of the terms set out in paragraph 2. Accordingly, it is important to analyze the evidence relating to the required work outlined in paragraphs 2(a), (b), (c) and (d) of the Minutes.
Paragraph 2(a) – Electrical Work
[13] Both parties are agreed that the electrical work was completed to close the outstanding permit. However, this work was completed in four months and not in 30 days. The question therefore becomes: Does this three month delay constitute a breach or not? The answer is difficult to ascertain, and must be done by looking to the particular circumstances of this case.
[14] The defendants do not give an explanation for this delay. Paragraph 15 of the October 4, 2018 affidavit of the defendant Chaudry (Chaudry affidavit), merely states that Exhibit C to the Chaudry affidavit includes an inspection report that the Electrical Safety Authority approved the electrical work on February 25, 2016.
[15] The affidavit of the plaintiff, Mini Riar, dated June 10, 2018, (Riar affidavit #1) states at paragraph 8 that the electrical work was not completed within 30 days. The Riar affidavit concludes “the electrical ESA was completed in 4 months.” A chart at paragraph 9 indicates that this three month delay cost the plaintiff $1,000 and under “Reasons”, no reason or explanation is given. No details relating to the $1,000 cost are provided in the chart.
[16] In submissions, the plaintiffs’ counsel indicated that the plaintiffs have occupied the home continually since 2013. There is no evidence that the delay of up to three months in completing the electrical work interfered with the plaintiffs’ ability to live in the home comfortably. To the contrary, on January 18, 2016, the plaintiffs’ lawyer provided a list of electrical work that needed to be done. These items are of a minor nature and would not significantly interfere with the plaintiffs’ lifestyle in my opinion – see Exhibit N of Chaudry affidavit. Within a month, all of this work appears to have been completed and the electrical permit was closed.
[17] According to paragraph 1 of the Minutes, the $100,000 had to be held in trust until the releases for all past, present and future claims were exchanged and held in escrow pending completion of the remaining terms of the Minutes. In late May 2016, the $100,000 was distributed to the plaintiffs, presumably in furtherance of paragraph 1(a) that releases relating to past, present and/or future claims would be in effect due to the completion of the Minutes of Settlement.
[18] I conclude therefore that, at most, the delays regarding the electrical work were technical and inconsequential breaches. The electrical work was done and shortly after, the $100,000 was paid over to the plaintiffs. I therefore reject the plaintiffs’ submission that there was a breach of paragraph 2(a) of the Minutes of Settlement – see LaScala v. LaScala, 2006 Carswell Ont. 1326, at paras. 5-8.
Paragraph 2(b) – The Shower Leak
[19] Paragraph 2(b) of the Minutes required Dali Homes to repair the master ensuite shower leak unless the shower drain or tile required replacing.
[20] Both the plaintiffs and the defendants produced affidavits from plumbers. The gist of these affidavits is that the plaintiffs installed a unique shower system that involves a linear drain which runs the whole length of the floor. The defendants’ plumber advised against it but the plaintiffs insisted on the linear drain. As the plaintiffs’ counsel submitted, all parties were aware of the special problems that a linear drain would produce and this accounts for the specific wording outlined in paragraph 2(b) of the Minutes.
[21] As predicted, there were problems with the linear drain which the defendants’ plumber had previously indicated that he was not comfortable with. The defendants’ plumber did not install the linear drain. However, presumably due to the Minutes of Settlement requirement, the defendants’ plumber attended the plaintiffs’ home in November 2015 and re-applied a silicone sealant. The plaintiffs’ plumber indicated that the cause of the leak is not the drain but a lack of or faulty waterproofing in the shower area.
[22] On October 9, 2018, the defendants’ plumber re-attended the plaintiffs’ home. Pictures were included in the defendants’ plumber’s affidavit which confirmed his opinion that someone had scraped away the silicone sealant on the linear shower drain and on the bathroom wall where it meets the floor. In the defendants’ plumber’s 30 years of experience, he has never seen silicone sealant wear out in three years’ time. The defendants’ plumber concluded, “it appears that someone deliberately removed the silicone sealant that I installed… in late 2015.”
[23] The defendants’ plumber also concludes that the work being recommended by the plaintiffs’ plumber would require the removal of the linear shower drain as well as replacing both the drain and tiles.
[24] Finally, the plaintiffs’ plumber in a final, final response, indicates that the silicone sealant is a temporary solution. The tile, glass panel and drain need to be removed and the entire floor and adjoining wall area needs to be waterproofed. The drain and tiles could then be replaced.
[25] The Minutes required the defendants to repair the leak in the shower within 30 days. The defendants retained Carlo Salituro, a master licensed plumber, to do this repair work in November 2015 and the repair was done. Exhibit E of the Chaudry affidavit indicates the plumbing permit was closed on May 25, 2016. Subsequently there is now a dispute post November 2015 repair and 2016 release of $100,000 as to whether the repair is of a permanent or temporary nature.
[26] After reviewing all of the plumbers’ reports, I have come to the conclusion that the real source of the shower problem is the plaintiffs’ decision to ignore Mr. Salituro’s expert advice to not install a linear drain in the first place. Now that the predictable problems have arisen, the plaintiffs seek to have the defendants pay for the plaintiffs’ original bad decision.
[27] I am satisfied that the defendants retained Mr. Salituro in November 2015 to repair the shower leaks as required by the Minutes. Mr. Salituro did the repair, and now indicates someone deliberately scraped away his repair. This was apparently done after the repair was done and after the plaintiffs’ received their $100,000 as required by the Minutes.
[28] I conclude that the defendants have not breached 2(b) of the Minutes but have in fact, complied with the paragraph 2(b) term.
Paragraph 2(c) – Complete the HVAC Work as Specified in Elite HVAC Invoice/Quote of December 1, 2012
[29] The HVAC permit closed on April 7, 2017, but the HVAC history of construction is convoluted.
[30] The plaintiff Mini Riar, in her affidavit sworn of October 5, 2018, (Riar affidavit #2) indicates that Dali Homes (through Elite HVAC) was required to provide a full set heat loss, heat gain and duct design ready for the HVAC permit. She attaches the December 1, 2012, invoice in her affidavit at Exhibit D. Her affidavit indicates a first set of drawings was submitted to the City of Toronto in January 2012 and appear to have been resubmitted in December 2015 shortly after the Minutes were agreed to.
[31] However, on January 13, 2016, a second set of drawings was submitted and on January 14, 2016, an HVAC permit was issued based presumably on the second set of drawings. However, the Minutes only required that the defendants’ complete the HVAC work as specified in the original December 1, 2012, Elite invoice.
[32] As seen in Exhibit N of the Chaudry affidavit, on January 18, 2016, the plaintiff’s lawyers Simpson Wigle indicated that “Mini has advised that an HVAC permit has been issued by the city and has provided the following list of items that remain unaddressed.” A list of 11 items was provided.
[33] Tab O of the Chaudry affidavit indicates that on May 17 and 18, 2016, all of these 11 items had been addressed. Three items could not be addressed as indicated in Tab O. However, the plaintiff Nadeem Ahmed “on behalf of myself and Mini Riar” confirmed and signed that all items had been completed to his satisfaction, and Mr. Ahmed signed the document dated May 18, 2016.
[34] The plaintiffs’ counsel submitted that Mr. Ahmed made a mistake but Mr. Ahmed never swore any affidavit saying so.
[35] As indicated, the HVAC permit closed on April 7, 2017. However, this closing related to the HVAC permit obtained in January 2016 after the Minutes were signed. Dali Homes was only required to do the work stipulated in the December 1, 2012 Elite quote.
[36] A number of submissions were made regarding details of the three items that were not completed exactly as outlined. However, given Mr. Ahmed’s May 18, 2016 signing that all 11 items were completed to his satisfaction, no further analysis is necessary – particularly in light of the fact that $100,000 that was then freed up to be distributed to the plaintiffs later in May 2016. As indicated at Tab G of the defendants’ motion record, the plaintiffs’ lawyer, Jordan Fletcher, confirmed on May 31, 2016, that the $100,000 had been distributed “in accordance with the Minutes of Settlement.”
[37] In short, the evidence is clear that the defendants’ completed the HVAC work on May 17/18, 2016, as stipulated in the December 1, 2012, Elite invoice, and the plaintiffs signed off on it confirming they were satisfied with the work. With the completion of the electrical work in February 2016 and the plumbing repair in November 2015 (plumbing permit was closed on May 25, 2016), all of the work as stipulated in paragraph 2 of the Minutes was now complete. Accordingly, this in turn triggered the release of the $100,000 in trust which was paid to the plaintiffs in late May 2016. Further, the executed full and final releases would now be in effect releasing the defendants from all past, present, and future claims relating to the construction work of the plaintiffs’ home at 7 Model Avenue.
[38] To conclude, the defendants performed their obligations under the Minutes to the plaintiffs’ satisfaction by May 2016. The plaintiffs then received $100,000 upon completion of the required work. By signing and delivering a full and final release and keeping the settlement funds of $100,000, the plaintiffs have waived their claims for additional damages.
Paragraph 2(d) – Provide Plaintiffs with any Warranty Certificate to Dali Homes by its Roofing Trade
[39] In an unusual development, the plaintiffs called the defendant, Duriya Patel, to provide viva voce evidence regarding this issue.
[40] Ms. Patel testified it was her intention to provide a roofing warranty certificate to the plaintiffs if Dali Homes got one. The reason for the paragraph 2(d) wording was Ms. Patel’s concern that the installation of solar panels on the roof would void any warranty; Ms. Patel testified there was a roofing warranty but she did not know the length of that warranty. In any event, no roofing warranty certificate was ever provided to Dali Homes and accordingly Dali Homes could not deliver one to the plaintiff.
[41] In my opinion, this testimony provides a complete answer to any of the plaintiffs’ concerns regarding paragraph 2(d). Dali Homes was only required to provide the plaintiffs with any warranty certificate provided to Dali Homes by its roofing trade. As Dali Homes was never provided with any warranty certificate, it could not provide what it did not have. Accordingly, the defendants are not in breach of paragraph 2(d) of the Minutes.
Overall Conclusions as to Facts
[42] As outlined above, by the end of May 2016 the defendants had completed all work to the plaintiffs’ satisfaction, as required by paragraph 2 of the Minutes. Accordingly, consistent with paragraph 1 of the Minutes, the plaintiffs received the $100,000 being held in trust by their lawyer as all of the terms of the Minutes had been complied with.
[43] Paragraph 5 of the Minutes indicates that once paragraph 2 of the Minutes was completed, the defendant Dali Homes shall provide the plaintiffs with a Form 5 Declaration of Last Supply under s. 31(5) of the Construction Lien Act. This document was provided to the plaintiffs and appears at Tab O, page 149 of the defendants’ motion record.
[44] Accordingly, on the evidence before me, the defendants have complied with each and every term of the Minutes. The only remaining matter is paragraph 4 which obligates the plaintiffs to obtain an order dismissing the plaintiffs’ action and Dali Homes’ counterclaim.
LAW
[45] On a motion to enforce a settlement, the Divisional Court has held that the motion judge is required to ask two questions: See Arisolft Inc. v. Ali, 2015 ONSC 7540 (Div. Ct.), at para. 19.
(a) Was there a settlement? and
(b) If so, should the Court exercise its limited discretion not to enforce the settlement?
[46] Regarding the first question, both parties agree there was a settlement as set out in the Schedule A Minutes.
[47] Regarding the second question, the Ontario Court of Appeal in Srebot v. Srebot Farms Ltd., 2013 ONCA 84, held at paras. 6-10:
[6] The discretionary decision not to enforce a concluded settlement, especially where the settlement has been partially or fully performed, should be reserved for those rare cases where compelling circumstances establish that the enforcement of the settlement is not in the interests of justice. The trial judge’s reasons indicate that she was alive to this issue. On the facts as she found them, the trial judge concluded that this is one of those rare cases. We see no basis for appellate interference with this conclusion.
[7] Importantly, we note that the appellants led no evidence of any particular prejudice arising from their acts of performance under the settlement. On the contrary, they candidly acknowledged before this court that they suffered no financial prejudice from implementation of the settlement.
[8] Further, in our opinion, the appellants’ post-settlement adjustment of the characterization, for tax purposes, of the nature of the underlying share transaction at issue does not prevent the appellants from fully defending the allegations in the respondent’s statement of claim.
[9] Nor do we accept that the steps taken by the parties after the settlement had the effect of granting the respondent the substance of the relief sought by him in his pleading. While resolution of the contested tax issue, pleaded as alternative relief in the respondent’s statement of claim, was in fact resolved by the post-settlement actions of the parties, this does not respond to the respondent’s additional damages claims as detailed in his pleading.
[10] At the end of the day, the critical issue in this case was whether, on consideration of all the relevant factors disclosed by the evidence, the enforcement of the settlement would lead to clear injustice: see for example, Royal Bank v. Central Canadian Industrial Inc., 2003 CarswellOnt 5214 (ONCA), Milios v. Zagas (1998), 38 O.R. (3d) 218 (CA). The trial judge concluded that in the circumstances of this emotionally-charged case, arising from the unfortunate estrangement of two brothers following a dispute concerning their respective interests in the family farming business, the interests of justice demanded that the settlement not be enforced and that the respondent’s action continue. This was her call to make.
[48] As I have indicated in my review of the facts, the defendants have fully complied with all the terms of the Minutes. Accordingly, I conclude that the Minutes should be enforced and I further find that it is in the interests of justice to enforce the Minutes of Settlement.
ORDER
[49] The relief requested by the defendants is granted. There will be the following orders made with respect to the defendants’ motion:
a) An order dismissing this action, Dali Homes’ counterclaim, and the plaintiffs’ motion;
b) A declaration that the Mutual Full and Final Release executed by the plaintiffs and defendants, is in full force and effect;
c) A declaration that all claims made by the plaintiffs in this action, and all counterclaims made by Dali Homes Inc., are released; and
d) Costs of this motion and for responding to the plaintiffs’ motion, will be awarded to the defendants.
[50] The relief requested by the plaintiffs in their summary judgment motion is denied in its entirety.
[51] Specifically, it is ordered:
The defendants have complied with the Minutes of Settlement dated October 19/21, 2015.
There will be no order for any damages/costs incurred for the purposes of settlement.
There are no breaches of the Minutes of Settlement by the defendants. Accordingly, the plaintiffs have not suffered any damages as the defendants have complied with the terms of the Minutes of Settlement.
The defendants have complied with the Minutes of Settlement and there will be no order for any punitive damages as any order for punitive damages would be inappropriate in these circumstances.
The defendants will be awarded costs for both the defendants’ successful motion for enforcement of the Minutes of Settlement and costs for the defendants’ successful response regarding the plaintiffs’ motion.
[52] If the parties cannot agree on an appropriate costs award, they are to attend, within 30 days of the release of this judgment, before the trial co-ordinator to arrange a date for a costs hearing before me.
Skarica J.
Released: January 28, 2019
SCHEDULE “A”
COURT FILE NO.: 15-53346
DATE: 2019-01-28
ONTARIO
SUPERIOR COURT OF JUSTICE
B E T W E E N:
MINI RIAR and NADEEM AHMED
Plaintiffs
- and –
DALI HOMES INC., SOHAIL ALI HAMID CHAUDRY and DURIYA PATEL
Defendants
REASONS FOR JUDGMENT
TS:mw;co
Released: January 28, 2019