Dhillon v. Brar, 2019 ONSC 6884

COURT FILE NO.: CV-17-4660-00

DATE: 2019 11 27

ONTARIO

SUPERIOR COURT OF JUSTICE

BETWEEN:

ATMA SINGH DHILLON

Applicant

– and –

PARAMJIT KAUR BRAR

Respondent

Amandeep Sidhu, for the Applicant

Obaidul Hoque, for the Respondent

costs endorsement

Shaw J.

1On July 2, 2019 I released reasons in this matter. I dismissed the applicant’s application and granted the respondent’s counter-application. I found that the applicant and respondent jointly owned the property in question and I ordered that the property be sold as the respondent requested in her counter-application. I also found that the respondent was entitled to her costs and requested each party file a costs outline and one page submission on costs by July 15, 2019 together with any relevant offers to settle. Based on the written submissions I received I requested counsel to appear before me on October 21, 2019.

2As part of his initial written cost submissions, the applicant filed a copy of unsigned Minutes of Settlement that were sent to respondent’s counsel in August 2018 wherein the applicant agreed to sell the property. He also filed copies of revised Minutes of Settlement from respondent’s counsel which included a paragraph that the respondent was to be paid $54,000 from the proceeds of sale before the balance was to be divided equally. There was also a clause that the applicant would pay the respondent $10,000 in legal fees. These Minutes of Settlement were exchanged in August 2018 before the application was heard.

3At the costs hearing on October 21, 2019, counsel for the applicant argued that the Minutes of Settlement he had sent to respondent’s counsel were a Rule 49 offer and his client was therefore entitled to his costs as his offer was essentially the same as my reasons.

4During submissions, counsel for the respondent then introduced an email from the applicant’s counsel dated August 13, 2018 at 5:35 p.m., which he had not filed as part of his written submissions which said as follows:

Without Prejudice,

Further to our conversation, attached please find the Minutes of Settlement which I have relied on. Again, I don’t have instructions yet, but this is what I am thinking of recommending to my client tomorrow. Please let me know your thoughts. I have left it in word format which will enable you to __ track changes. Thanks

5The underline emphasis was in the original email.

6The following day, on August 14, 2019, counsel for the respondent responded at 2:45 p.m. as follows:

Without Prejudice,

Please see attached our comments on your proposed terms of a settlement (on track changes). If you would like to discuss, I am available for a phone call for the remainder of the afternoon up to 7 pm.

7Given these emails, I adjourned the hearing on costs and asked for further written submissions with respect to whether there was a Rule 49 offer that I should consider. I also asked counsel why the application had to be heard at all if they had agreed to sell the property and the only issue was how funds were to be disbursed. It appeared from the exchanged Minutes of Settlement that the parties had been engaged in some type of discussions wherein they agreed that the property was to be sold. Unfortunately, when I heard the application full submissions were made and I reserved and had to determine if the applicant had established that based on resulting trust principles, the respondent owned the property in trust for him. In my reasons, I found that the applicant was not successful and, as indicated above, ordered the property sold.

8Unfortunately, the volume of material filed for these costs submissions exceeds what was filed on the main application. The tenor of the submissions clearly indicates that counsel have lost perspective and both are making negative allegations about the conduct of the other. The applicant has gone so far as to request costs against the respondent’s counsel personally which is not warranted.

9The sole issue is whether the Minutes of Settlement sent to respondent’s counsel on August 13, 2018 attached to the email from the applicant’s counsel constituted Rule 49 offer to settle.

10In my view, the Minutes of Settlement were not a Rule 49 offer. It is very clear from the email from applicant’s counsel to which he attached the Minutes of Settlement, that he did not have instructions from his client when he sent the Minutes. The Minutes of Settlement reflected what he would recommend.

11The applicant filed an Affidavit as part of his costs submissions and his evidence was that he met his lawyer on August 14, 2018 at 5:00 pm and reviewed the Minutes of Settlement sent on August 13 and he was content with the contents of the proposed settlement and that it was in accordance with what he had discussed with his lawyer shortly prior to August 13, 2018.

12There is no evidence of any subsequent email from applicant’s counsel to respondent’s counsel confirming he now had instructions from his client to settle as per the terms of the Minutes of Settlement emailed to counsel on August 13, 2018. What is also not clear is whether or not the applicant reviewed the revised Minutes of Settlement that the respondent’s counsel had sent to the applicant’s counsel by email on August 14, 2018, before the applicant met with his lawyer. He would have had the revised Minutes of Settlement but in his affidavit he does not depose if he reviewed that with his lawyer.

13The applicant’s position is that there were various phone calls with respondent’s counsel after the exchange of proposed Minutes of Settlement wherein settlement was discussed. According to the applicant, at no time did the respondent’s counsel raise any issue of whether the applicant’s counsel had authority from his client to make the alleged offer.

14An email attaching Minutes of Settlement that says the lawyer does not have instructions and the Minutes are only what he would recommend, does not constitute a Rule 49 offer. It was not served on the respondent’s counsel as per Rule 49.02(1). While applicant’s counsel may have subsequently received instructions, he did not convey that in writing to the respondent’s counsel. While there may have been ongoing settlement discussions that is separate from a Rule 49 offer. Rule 49 offers are distinctive as those offers have very specific costs consequences. To trigger those cost consequences, applicant’s counsel ought to delivered an offer that clearly reflected it was an offer being made pursuant to Rule 49 and that it was being served on respondent’s counsel. Respondent’s counsel would therefore know that the Rule 49 cost consequences were being triggered at that point. An exchange of proposed Minutes of Settlement does not trigger Rule 49 cost consequences. It is the manner by which counsel may engage in settlement discussions, as so often occurs in the litigation life of a file. To trigger cost consequences involves a distinct act that clearly reflects that the party making the offer is now seeking to engage the cost consequences that flow should that offer be accepted or denied.

15Proposed Minutes of Settlement is not a Rule 49 offer. As stated at para. 16 in Davies v. Clarington, 2009 ONCA 722, Rule 49 is a self-contained procedure that address the manner in which offers to settle are considered. Its specific objective is to deal with costs consequences. Those specific cost consequences were not triggered in this matter.

16I therefore find that there are no Rule 49 offers to consider in determining costs. As the respondent was successful in this application, I find that the respondent is entitled to costs on a partial indemnity basis.

17The respondent claims costs on a full indemnity basis for $13,531.75 plus $509.75 in disbursements for a total of $14,041.50. There is no basis to award full indemnity costs. I note that the respondent was not entirely successful as she had requested payment from the applicant for her share of rental income that she alleged the applicant had been paid. I declined that relief as it had not been sought in the counter-application.

18As the applicant had sought costs of $16,231 on a substantial indemnity basis, the quantum proposed by the respondent is not excessive and within the reasonable contemplation of the applicant (Boucher v. Public Accountants Council for the Province of Ontario (2004), 2004 CanLII 14579 (ON CA), 71 O.R. (3d) 291, [2004] O.J. No. 2634 (C.A.). I therefore find that the applicant is entitled to costs of $10,0000, inclusive of HST of $10,000 and disbursements of $509.75 for a total of $10,509.75.

19I have considered the factors set out on Rule 57.01(1) of the Rules of Civil Procedure in reaching this decision.

20I note that the applicant also sought costs of $3,089.90 on a partial indemnity basis for attendance in court on October 21, 2019 on the basis that the respondent ought to have raised the issue of the email dated August 13, 2019 prior to attendance on October 21, 2019. While I do not disagree with that submission, I find that it was also incumbent on the applicant’s counsel to have filed that email as part of his costs submissions it was directly relevant to the Minutes of Settlement he had filed.

21As both counsel ought to have filed that email prior to attendance in court on October 21, 2019, they are both responsible for the further adjournment and I make no order as to costs for that attendance.

L. Shaw J.