Court File and Parties
COURT FILE NO.: 01-3740/13 COURT FILE NO.: CV-14-516560 DATE: 20200316
ONTARIO SUPERIOR COURT OF JUSTICE
BETWEEN:
CONSTANCE ELIZABETH GELBER Applicant/Moving Party – and – SEAN GELBER, in his personal capacity and in his capacity as Estate Trustee for Herman Gelber, deceased Respondent/Responding Party
COUNSEL: David A. Brooker, for the Applicant/Moving Party Apeksha Jain, for the Respondent/Responding Party
HEARD: February 24, 2020
REASONS FOR DECISION
Dietrich J.
Overview
[1] When Herman Gelber (the “deceased”) passed away on September 6, 2013, he was survived by the applicant, Constance Elizabeth Gelber, his spouse of 27 years. He was also survived by the respondent, Sean Gelber, his only child, from a previous marriage.
[2] The deceased left a will in which he left the respondent a legacy of $400,000. To the applicant he left the remainder of his estate.
[3] The deceased and the applicant had been living in a residential unit in Toronto, Ontario pursuant to a life lease occupancy agreement. The notice of lease registered on title showed both the deceased and the applicant as tenants with the term ending on the death of the survivor of them. The applicant and the respondent disagreed on whether the lease passed to the applicant by right of survivorship, or formed part of the deceased’s estate. If the lease did not form part of the deceased’s estate, there would be insufficient value in the estate to pay the respondent the $400,000 legacy.
[4] The applicant sought a declaration that the unit passed to her by right of survivorship and was not an asset of the deceased’s estate. The respondent sought a declaration that the unit formed part of the deceased’s estate and was available to fund the legacy. Each brought a separate application seeking such relief.
[5] Settlement discussions failed and a couple of years passed, during which the applicant continued to reside in the unit and to make all payments related to it. Then the applicant retained a new lawyer, David Brooker. Mr. Brooker and the respondent’s lawyer, Felice Kirsh, exchanged offers to settle. They settled the matter on behalf of their respective clients. Minutes of settlement were prepared, but the respondent refused to sign the minutes. He claims that there was no formal acceptance.
[6] The applicant brings this motion to enforce the settlement.
[7] For the reasons that follow, I grant the applicant’s motion for judgment on the settlement between the respondent and her.
The Settlement
[8] On October 11, 2019, a few months before the applicant’s motion to determine the ownership of the unit, Mr. Brooker made an offer to settle to Ms. Kirsch. The applicant proposed to settle all matters between the parties on the following terms:
- The unit would be offered for sale in accordance with the terms of the life lease occupancy agreement;
- If it was necessary to list the unit with a broker, the applicant would retain a broker with access to MLS to list the unit in accordance with the advice of such broker;
- Upon the sale and closing, $60,000 would be paid to the respondent;
- The applicant would have sole discretion as to the listing price and acceptance of any offer received;
- The parties would co-operate with the respect to the listing and sale of the unit; and
- Upon the respondent receiving his payment, the parties would consent to an order dismissing all proceedings without costs and exchange mutual releases.
[9] Between October 11, 2019 and December 13, 2019, the lawyers for the parties exchanged correspondence regarding settlement. In a letter from Ms. Kirsh dated October 22, 2019, she asked that a real estate agent be permitted to appraise the unit. The applicant declined that request. Further correspondence and telephone calls were exchanged between the lawyers for the parties, and on December 2, 2019, Ms. Kirsh made a counter-offer on behalf of the respondent seeking $100,000, as opposed to $60,000.
[10] On December 13, 2019, Ms. Kirsch, on behalf of the respondent, sent an email in which she accepted the terms of the October 11, 2019 offer, but confirmed that the applicant had accepted the respondent’s counter-offer of $100,000, and that the applicant had agreed to the property being listed for sale on or before May 1, 2020. Ms. Kirsh asked Mr. Brooker to prepare minutes of settlement in accordance with the agreed terms and to vacate the court date for the applicant’s motion.
[11] On December 19, 2019, Mr. Brooker responded by email confirming the settlement stating that he would prepare draft minutes of settlement. Ms. Kirsh acknowledged receipt of Mr. Brooker’s confirmation that same day.
[12] On January 7, 2019, Mr. Brooker sent draft minutes of settlement to Ms. Kirsh for review. The respondent did not sign the minutes of settlement.
[13] On January 14, 2019, Mr. Brooker followed up with Ms. Kirsh, who told him that she was no longer acting for the respondent and that she expected that he had retained other counsel.
Positions of the Parties
[14] The applicant asserts that a settlement agreement was reached and should be enforced by this court.
[15] The respondent asserts that: a) there was no formal acceptance of any offer to settle; b) Ms. Kirsh pressured him to settle as quickly as possible and did not fully explain the settlement to him; c) at no point did he see any “so called ‘final’ settlement”; d) he never told Ms. Kirsh to accept any offer but told her that he may potentially settle the matter on markedly different terms; and e) Ms. Kirsh did not obtain his final instructions before soliciting minutes of settlement on his behalf. The respondent further asserts that the minutes of settlement sent were not final and he did not have any intention of accepting them.
[16] The respondent also asserts that there was no settlement agreement because there was no agreement on an essential term, being an appraisal of the unit.
Legal Principles
[17] Rule 49.09 of the Rules of Civil Procedure, R.R.O. 1990, Reg. 194, allows a party to an accepted offer to settle to move for judgment on the terms of the settlement, where the other party fails to comply with its terms. The judge may grant judgment accordingly or continue the proceeding as if there had been no accepted offer to settle.
[18] Pursuant to rule 49.09 and the jurisprudence, the test for granting judgment requires the judge to consider: a) whether an agreement to settle was truly reached, and b) whether the agreement should be enforced. In determining whether an agreement has been reached, the court must find that the parties intended to create a legally binding contract and that there was an agreement on all essential terms of the settlement agreement: Olivieri v. Sherman, 2009 ONCA 772, [2009] O.J. No. 6235, at para. 41.
[19] Settlement agreements among parties should be enforced unless the court is satisfied that, in all the circumstances, there is a real risk of clear injustice: L-Jalco Holdings Inc. v. Lawrynowicz & Associates, 2018 ONSC 4002, 294 A.C.W.S. (3d) 274, at para. 34; or there is prejudice, mistake or any other “good reason not to enforce”: Sentry Metrics Inc. v. Erenwein, 2013 ONSC 959, [2013] O.J. No. 685, at para. 16.
[20] A judge has discretion to refuse to enforce an agreement where: a) a material fact relevant and significant to the resolution has not been disclosed; and b) the existence of the material fact was or could reasonably have been within the knowledge of the party seeking to rely on the settlement agreement: Saballoy Inc. v. Techno Genia S.A., [1993] A.J. No 276 (Alta QB), at paras. 22-24.
[21] Where parties are engaged in litigation and have properly retained solicitors who enter into settlements on their behalf, these settlements ought to be binding upon the parties and the court should so order: Marcel Equipment Ltd. v. Equipements Benoit D’Armours et Fils Inc., [1995] O.J. No. 673 (Gen. Div.), at para. 78.
[22] The settlement agreement is an enforceable contract and the rules of contractual interpretation apply: L-Jalco Holdings Inc., at para. 34.
Analysis
Was an agreement to settle truly reached?
[23] The respondent asserts that there was no formal acceptance of any offer to settle or any offer made; that he never saw the draft minutes of settlement to which he supposedly agreed; that Ms. Kirsh was at most commenting on a draft offer and had no explicit instructions; and that he disagreed with the notion that the applicant should be entitled to significantly increase her stake in the estate when his father had left him a legacy of $400,000.
[24] The authority of a solicitor to enter into settlement discussions and compromise a client’s position is well-settled. In Scherer v. Paletta, [1966] 2 O.R. 524 (C.A.), Evans J.A., writing for the majority, at paras. 10 and 11, stated as follows:
The authority of a solicitor to compromise may be implied from a retainer to conduct litigation unless a limitation of authority is communicated to the opposite party. … 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.
[25] There is nothing in the record to suggest that Ms. Kirsh’s authority to accept the settlement was in any way limited. If the applicant believes that he was not properly represented in the negotiations, he may have other recourse, but any such belief does not lead to the result that no agreement to settle was reached. The acceptance language in Ms. Kirsh’s email of December 13, 2019 is clear:
To summarize, the terms of your offer of October 11, 2019 are accepted, subject to:
The payment to Sean shall be $100,000, as per your acceptance of our offer, in this regard, as contained in your email of December 3, 2019. The property will be listed for sale on or before May 1, 2020.
[26] Where a settlement is negotiated between duly appointed counsel with no limitation of authority, the settlement ought to be binding on the parties. I find that the settlement agreement as evidenced in the correspondence between the lawyers for the parties demonstrates a mutual intention to create a legally binding relationship and there was agreement on all essential terms of the settlement.
[27] A failure to enforce settlement agreements duly entered into by lawyers would be contrary to both the court and public policy of encouraging settlement and would result in chaos in the settlement process: Marcel, at paras. 77-78.
[28] The case at bar is similar to the case of Ferron v. Avotus Corp., [2005] O.J. No. 3511 (S.C.J.), aff’d 2007 ONCA 73, [2007] O.J. No. 353, where, in opposing judgment on settlement terms, the party raised as a defence to the creation of a binding settlement the fact that draft minutes of settlement had been forwarded by counsel but not executed. At para. 28, the trial court held:
I also conclude that the parties’ agreement as to the essential provisions was not conditional upon the execution of the Minutes of Settlement and Release. The straightforward draft Minutes of Settlement are just over two pages in length and in a widely spaced format, and the substantive provisions are consistent with the essential terms agreed to.
[29] The minutes of settlement in this case are also straightforward, only two pages in length, and the substantive provisions are consistent with the essential terms to which the parties agreed.
[30] The respondent also asserts that there was no agreement on an essential term, being the appraised value of the unit. He asserts that his request for an appraisal was denied, which forced him to undertake his own due diligence. He submits that his independent research caused him to believe that the unit had a value in excess of $630,000, as compared to the applicant’s estimate of $435,000. He asserts that knowledge of the fair market value of the unit was essential to the negotiation process and the agreement.
[31] I do not accept that an appraised value of the unit was an essential term of the agreement. There is no reference to an appraisal in the respondent’s counter-offer or in his acceptance of the applicant’s offer on December 13, 2019. Once the respondent had agreed to a fixed amount ($100,000), the value of the unit became academic to him. If the applicant’s assessment of the unit’s value was correct, the respondent would have known that he would receive approximately one-quarter of the unit’s value. If he believed the value of the unit was greater, he could have negotiated for a percentage of the proceeds as opposed to a fixed amount.
[32] The respondent also argues that he did not agree that the applicant would have complete control and discretion over the sales process and the sale price. Based on the correspondence exchanged and the offer he accepted, it is clear that he did agree that the applicant would have sole discretion as to the listing price and acceptance of any offer received. Again, there was no mention of any other term regarding the sales process and sale price in his acceptance of the applicant’s offer. Regardless, because the respondent had agreed to a fixed amount, the sale process and sale price would also be academic as long as the sale yielded net proceeds of at least $100,000. Beyond the $100,000 payable to him, he had no entitlement to share in the net proceeds.
Should the agreement be enforced?
[33] The exercise of the court’s discretion to decline to enforce a settlement is rare: L-Jalco Holdings Inc., at para. 39. Where an enforceable settlement between the parties has been found, the court must still decide whether to exercise its discretion to enforce the settlement.
[34] In L-Jalco Holdings Inc., at para. 38, the court set out the following five factors to be considered when determining whether to exercise discretion to enforce the settlement: a) whether the offer was clear and unequivocal; b) whether a mistake was made; c) whether the settlement was reasonable; d) the degree of prejudice to either party if the agreement is not given effect; and e) the effect of the settlement on third parties if the settlement is not enforced.
[35] The respondent bears the onus to show why the court should not enforce the terms of the settlement. He asserts that he would be seriously prejudiced if the settlement is enforced because he envisages further litigation in this matter. This assertion is based on his claim that his late father’s death, nearly seven years ago, was suspicious because there were traces of poison in the deceased’s body and no autopsy was performed. On the record, there is no compelling evidence to support the respondent’s belief that there is likely to be ongoing litigation in this estate based on circumstances surrounding the deceased’s death.
[36] Applying the factors in L-Jalco, I find that the facts militate in favour of enforcing the settlement agreement. The offer and acceptance were clear and unequivocal. There is no suggestion that a mistake was made in the drafting of the minutes of settlement. The respondent, in fact, acknowledges that settlement terms between the parties did exist, but that he, personally, did not agree with them. If the respondent believes that his lawyer did not follow his instructions, that matter is between the respondent and his lawyer and not between the parties to the settlement.
[37] The settlement appears to be a reasonable settlement in that it brings an end to five years of litigation and it allows the respondent to recover 25 percent of his maximum claim from the estate of $400,000. It will also allow the applicant, now 73 years of age, to sell the unit, which she can no longer afford to maintain, and to find suitable housing for herself and her disabled sister who is in her care. I am not satisfied that there will be any prejudice to the respondent in enforcing the agreement as evidenced in the minutes of settlement.
Disposition
[38] The applicant’s motion is granted. A judgment shall issue on the following terms:
- The unit shall be listed for sale in accordance with the terms of the life lease occupancy agreement on or before May 1, 2020.
- The unit shall be sold for a price and on such terms as determined by the applicant in her discretion, and she shall have exclusive authority over the acceptance or rejection of any offer.
- The applicant shall have exclusive authority to instruct her lawyer with regard to the sale and transfer of the unit, including authority to execute any documentation necessary to effect the transfer as required by the Land Registrar of Toronto, any relevant legislation or pursuant to the life lease occupancy agreement.
- Upon closing of the sale of the unit and receipt of the sale proceeds by the applicant, she shall pay the sum of $100,000 to the respondent or as he may direct.
Costs
[39] The applicant has succeeded on her motion and shall be entitled to her costs. Having reviewed the costs outlines of each of the parties and heard their submissions, I fix the costs in this proceeding at $8,000, inclusive of disbursements and HST. This amount shall be paid by the respondent personally or as Estate Trustee of the deceased’s estate.
Dietrich J.
Released: March 16, 2020
COURT FILE NO.: 01-3740/13 COURT FILE NO.: CV-14-516560 DATE: 20200316 ONTARIO SUPERIOR COURT OF JUSTICE
BETWEEN: CONSTANCE ELIZABETH GELBER Applicant/Moving Party – and – SEAN GELBER, in his personal capacity and in his capacity as Estate Trustee for Herman Gelber, deceased Respondent/Responding Party
REASONS FOR DECISION
Dietrich J.
Released: March 16, 2020