Court File and Parties

COURT FILE NO.: CV-18-4309 DATE: 2020 04 27 SUPERIOR COURT OF JUSTICE - ONTARIO

RE: Laura Mackiw, Plaintiff (Defendant by Counterclaim) AND: Madan Chauhan, Rana Chauhan, IPC Investment Corporation carrying on business under the Trademark Counsel Wealth Management and Madan Chauhan carrying on business under the Trademark Counsel Wealth Management, Rana Chauhan carrying on business under the Trademark Counsel Wealth Management, Defendants (Plaintiffs by Counterclaim)

BEFORE: Doi J.

COUNSEL: Kenneth A. Dekker, Counsel, for the Moving Defendants Patrick Di Monte, Counsel, for the Responding Plaintiff

HEARD: March 9, 2020

Reasons for Judgment

Overview

[1] The Defendants seek summary judgment according to settlement terms which they claim the Plaintiff accepted. The Plaintiff points to an outstanding minor error in the release as the basis for claiming that the parties did not agree to settlement terms.

[2] As explained below, I find that the subject of the Plaintiff's claim was fully resolved by a settlement agreement that is binding on the parties. Accordingly, summary judgment is granted and the action is dismissed.

Background

[3] The background facts are not in dispute, and briefly are stated as follows.

[4] On October 5, 2016, the Plaintiff and her husband, Stanley Mackiw, made a complaint to the Defendants, Rana Chauhan and IPC Investment Corporation ("IPCIC"). The complaint expressed dissatisfaction with the return on an investment and asked for compensation.

[5] On December 29, 2016, IPCIC responded to the complaint by addressing the investment and declining to pay compensation. IPCIC's response included the Mutual Fund Dealers Association of Canada ("MFDA") Client Complaint Information Form and advised of redress options through the Ombudsman for Banking Services and Investments ("OBSI") and the MFDA.

[6] On July 2, 2017, the Plaintiff referred her complaint to OBSI, which is an independent third-party that resolves disputes between participating financial services firms and customers. OBSI's dispute resolution service is free to financial services customers and offers an impartial and confidential alternative to the legal system. The Plaintiff appointed Mr. Mackiw to represent her in connection with the complaint.

[7] On November 13, 2017, OBSI made a confidential recommendation to resolve the dispute. Thereafter, IPCIC offered to settle the complaint by making a $26,060.00 payment in exchange for a full and final release. Mr. Mackiw later called Sarah Valin, IPCIC's Senior Complaints & Investigations Officer, to advise that the Plaintiff had agreed to accept IPCIC's offer to settle.

[8] Under correspondence dated November 20, 2017, Ms. Valin sent IPCIC's full and final release to the Plaintiff for signature. The release confirmed the $26,060.00 settlement payment in exchange for a full and final release that included non-disclosure and non-disparagement terms.

[9] On December 6, 2017, Mr. Mackiw asked Ms. Valin to edit or remove the non-disclosure and non-disparagement terms from the release. Ms. Valin responded that IPCIC would not change the terms of the release, and advised that its offer would remain open until December 13, 2017.

[10] On December 12, 2017, Mr. Mackiw returned to Ms. Valin a copy of the release which the Plaintiff had signed to accept the offer. Upon reviewing the release, Ms. Valin noticed a minor typographical error on its first page which incorrectly stated that the Plaintiff had filed her complaint to IPCIC on October 12, 2006 when the actual date was October 12, 2016. To correct this, Ms. Valin emailed Mr. Mackiw later that day to ask the Plaintiff to accept a revised first page of the release with the corrected date.

[11] On December 19, 2017, Mr. Mackiw responded to Ms. Valin by asking IPCIC to reconsider removing the non-disclosure and non-disparagement terms from the release, as he previously had asked for on December 6, 2017. IPCIC refused to delete these terms, and maintained the position that the parties had concluded a binding settlement agreement on December 12, 2017.

[12] The Plaintiff did not agree to correct the typographical error on the release. In turn, IPCIC did not release settlement funds to the Plaintiff.

[13] On October 11, 2018, the Plaintiff brought this action. The Statement of Claim clearly raises the same matters arising from her October 5, 2016 complaint to IPCIC, and advances claims that purportedly were resolved and released by the settlement agreement. Her claim seeks $87,459.69 in damages, which mirrors the amount that she claimed in her IPCIC complaint. The Defendants defended the action and counterclaimed for judgment based on the terms of the settlement that they claim was reached on December 12, 2017.

Law of Summary Judgment

[14] After delivering a statement of defence, a defendant may move for summary judgment to dismiss all or part of the claim: Rule 20.01(3) of the Rules of Civil Procedure.

[15] Summary judgment rules are interpreted broadly and favour proportionality and fair access to affordable, timely and just adjudications of claims: Hryniak v. Mauldin, 2014 SCC 7 at para 5.

[16] On a motion for summary judgment, the court must first decide whether there is a genuine issue requiring a trial based only on the evidence before it, without using the fact-finding powers under Rule 20.04(2.1) and (2.2) of the Rules of Civil Procedure. If there appears to be a genuine issue requiring a trial, the judge should then determine if the need for a trial can be avoided by using the fact-finding powers: Hryniak v. Mauldin, 2014 SCC 7 at para 66. Summary judgment shall be granted where the court is satisfied that there is no genuine issue requiring a trial: Rule 20.04(2)(a) of the Rules of Civil Procedure. This will be the case when the process: 1) allows the court to make the necessary findings of fact; 2) allows the court to apply the law to the facts; and (3) is a proportionate, more expeditious and less expensive means to achieve a just result: Hryniak at para 49.

[17] The court may assume that the record has all of the evidence that the parties would present if the matter proceeded to trial: Sweda Farms Ltd. v. Egg Farmers of Ontario, 2014 ONSC 1200 at paras 26-27, affd 2014 ONCA 878, leave to appeal refused, . Parties on a summary judgment motion must put their best foot forward: Mazza v. Ornge Corporate Services Inc., 2016 ONCA 753 at para 9.

[18] The evidence on a summary judgment motion must provide a sufficient evidentiary basis on which to determine the issues: Aird & Berlis LLP v. Oravital Inc., 2018 ONCA 164 at paras 7-8. The evidence need not be equivalent to that at trial, but must permit the court to confidently resolve the dispute: Hryniak, at para 57.

Law of Contract

[19] A settlement agreement is a contract that is subject to the general law of contract regarding offer and acceptance. For a contract to exist, the court must find that the parties: (1) had a mutual intention to create a legally binding contract; and (2) reached agreement on all of the essential terms of the settlement: Olivieri v. Sherman, 2007 ONCA 491 at para 41.

[20] To arrive at a binding agreement, the acceptance of an offer must be unconditional, clear and absolute: Copperthwaite v. Reed, 2016 ONSC 1824 at para 16, citing Timmy v. Campbell, 2014 ONSC 405 at paras 20-24; G.H.L. Fridman, The Law of Contract in Canada, 6th ed. (Toronto: Carswell, 2011) at 46. To form a binding contract, there must be an absolute and unqualified acceptance of the offer's material terms and conditions: Timmy at paras 21-26. A settlement agreement is not reached where the terms demanded by an offeror shift, or where the settlement terms were something of a moving target: Copperthwaite at para 18; Thai Agri Foods Public Co. v. Choy Foong Int'l Trading Co., 2013 ONSC 883 at paras 6-8.

[21] A party may repudiate a contract by breaching a sufficiently serious term that triggers the right of the non-breaching party to end the contract. Where the non-breaching party accepts the repudiation, the contract is over: Potter v. New Brunswick (Legal Aid Services), 2015 SCC 10 at paras 144-149.

[22] The repudiation test is objective and based on whether a reasonable person would find that the breaching party no longer intends to be bound by the contract, having regard to the surrounding circumstances: Potter at para 164; Remedy Drug Store Co. v. Farnham, 2015 ONCA 576 at paras 45-46; Guarantee Co. v. Gordon Capital Corp., [1999] 3 SCR 423 at para 40. The repudiation analysis focuses on what the party's words and/or conduct say about future performance of the contract: Potter at para 149. Although the subjective intention of the breaching party is not determinative, it may assist in deciding the party's objective intent by throwing light on how the alleged repudiatory conduct may reasonably be viewed: Remedy at para 49; Potter at para 171.

[23] Repudiation is a particularly exceptional remedy in the context of settlement agreements: Remedy at para 53; Bogue v. Bogue (1999), 46 O.R. (3d) 1 (C.A.) at paras 14-15; Whitehall Homes & Construction Ltd. v. Hanson, 2012 ONSC 3307 at para 31. Given everyone's interest to resolve disputes as agreed upon, courts are motivated to uphold settlements: Remedy at para 54.

Analysis

[24] By objectively looking at this case, I find that the parties concluded a binding settlement agreement on December 12, 2017. At the conclusion of an OBSI mediation, IPCIC offered to settle the complaint for a $26,060.00 payment in exchange for a full and final release. The Plaintiff verbally accepted the offer, and later returned a signed release to IPCIC a day before the offer was to expire. On these facts, I conclude that the Plaintiff clearly and unconditionally accepted IPCIC's offer to settle: Copperthwaite at para 16. In my view, the parties shared a mutual intention to enter into a binding contract and reached an agreement on all of its essential terms: Olivieri at para 41.

[25] The Plaintiff submits that her verbal acceptance of IPCIC's offer to settle did not bind her to the non-disclosure and non-disparagement terms of the settlement agreement because non-disclosure language is not an implied term of a standard release and must be specifically negotiated: Abouchar v. Conseil scolaire de langue francaise d'Ottawa-Carleton - Section publique (2002), 58 OR (3d) 675 (SCJ) at para 11. Although non-disclosure and non-disparagement terms are not implied terms of a standard release, these terms specifically were addressed in this case. The Plaintiff explicitly raised the non-disclosure and non-disparagement terms with IPCIC by trying to negotiate their removal from the release. After IPCIC refused to change the release, the Plaintiff signed and returned the release to accept IPCIC's offer to settle. In these circumstances, it is clear that the Plaintiff accepted the terms of the settlement agreement, which included the non-disclosure and non-disparagement provisions that stayed in the release. Objectively, by returning the signed release, the Plaintiff showed her unequivocal and absolute acceptance of these settlement terms: Timmy at para 20; Copperthwaite at paras 16-17.

[26] The Plaintiff also submits that IPCIC repudiated the settlement agreement by insisting on changing the release (i.e., to correct the typographical error) and by failing to release settlement funds to close the deal. She then claims to have accepted the repudiation by commencing her action. Respectfully, I do not agree with this submission.

[27] In my view, the Plaintiff seized on a minor and obvious typographical error to resile from the non-disclosure and non-disparagement terms that she wished to remove from the settlement: Remedy at para 72, citing AIC Ltd v. Infinity Investment Counsel Ltd (1998), 147 FTR 233 (FC) at para 42. In contrast, IPCIC consistently maintained that both parties had concluded a binding settlement, which it refused to renegotiate. As such, IPCIC did not evince an intention to not be bound by the settlement agreement: Remedy at para 64; Spirent Communications of Ottawa Ltd v. Quake Technologies (Canada) Inc., 2008 ONCA 92 at para 37.

[28] To ensure the accuracy of the release, IPCIC took steps to correct the wrong date reference which reflected an obvious and minor typographical error that was not material to the settlement or its financial terms. The Plaintiff refused to make the correction. Instead, she asked IPCIC to reconsider deleting terms from the release that she already had signed. IPCIC refused to change the release terms because it had concluded the settlement, which it wished to preserve. Although IPCIC did not release settlement funds because the Plaintiff refused to correct the typographical error, I accept that IPCIC's intention was to preserve the settlement with a corrected release for accuracy. Given these particular circumstances, I find that this is not one of those rare cases where post-settlement conduct implicates the repudiation of a settlement agreement: Remedy at para 66, citing Fieguth v. Ack/ands Ltd. at para 49.

[29] IPCIC awaited the Plaintiff's agreement to correct the obvious typographical error before it would release the settlement funds. By doing so, IPCIC took a firm position. However, IPCIC did not renounce its obligation to release settlement funds with an outright refusal to pay, or otherwise resile from the settlement. IPCIC's position was consistent with its intention to stand by the settlement agreement that the parties had concluded. Its refusal to amend or renegotiate the non-disclosure and non-disparagement clauses demonstrated its clear intention to remain bound by the agreement, rather than to renege on it. It also would be unjust to place too much emphasis on this one point without considering all of the surrounding circumstances that arose in this particular case: Potter at para 164; Remedy at para 70. On these facts, a reasonable person would find that the Plaintiff refused to make a minor and uncontroversial correction to the release in order to renegotiate the terms of the settlement agreement. In contrast, the objective intent of IPCIC was always to preserve and remain bound by the settlement, which it refused to renegotiate.

[30] Accordingly, I would not give effect to the Plaintiff's argument that IPCIC repudiated the settlement agreement, which remains binding. I also note the importance for the court to hold parties to their settlement agreements: Remedy at para 53.

[31] Given the parties' submissions and the record before me, I am in a position to fairly and justly adjudicate this motion: Hryniak at para 66. The claim in the main action was fully settled as evidenced by the signed release that the Plaintiff returned to IPCIC on December 12, 2017 to conclude the settlement. As there is no basis for the Plaintiff to not be bound by the settlement agreement, the main action is barred by the settlement and release. Accordingly, I find no genuine issue requiring a trial.

Outcome

[32] For these reasons, the Defendants' motion for summary judgment on the counterclaim is granted in accordance with the terms of the settlement agreement of December 12, 2017, and the Plaintiff's claim in the main action is dismissed.

[33] At the hearing of this motion, the parties agreed that costs of $10,000.00 should go to the successful side. As the Defendants were successful on this motion, the Plaintiff shall pay costs of $10,000.00, inclusive of taxes and disbursements, to the Defendants within 30 days.

[34] In the circumstances of the current COVID-19 pandemic emergency, these reasons are deemed to be an order of the court that is operative and enforceable from the date of release without a signed or entered formal order. [^1] Should they wish, the parties may later submit a formal order for entry once court operations resume, but these reasons shall remain an effective and binding order from the date of release.

Doi J. Date: April 27, 2020

[^1]: Given the serious health risks posed by the COVID-19 pandemic, the regular operations of the Superior Court of Justice have been suspended since March 15, 2020: Notice to the Profession for Civil and Family Matters by the Chief Justice of the Superior Court of Justice dated April 2, 2020, at https://www.ontariocourts.ca/scj/notice-profession-civil-family/.