Court File No.: FS-19-10764 Date: 2020-06-19 Superior Court of Justice - Ontario

Re: Orville Frederick Osborne, Applicant And: Susan Aylmer Osborne, Respondent

Before: Nishikawa J.

Counsel: Peter Callahan for the Applicant/Responding Party Yunjae Kim for the Respondent/Moving Party

Heard: June 17, 2020, by teleconference

Endorsement

Overview and Procedural Background

[1] The Respondent, Susan Aylmer Osborne, brings this motion to enforce the terms of a settlement that she alleges she entered into with the Applicant, Orville Frederick Osborne.

[2] The motion was originally scheduled to be heard on March 12, 2020. The hearing was adjourned at the Applicant’s request, as he had recently retained new counsel and had not filed responding materials. Due to the suspension of regular court operations, the motion was not heard on the scheduled hearing date, which was peremptory on the Applicant. Further to the endorsement of Hood J. dated June 9, 2020, in which he found some urgency to the motion, the motion was scheduled to be heard by teleconference.

[3] The issue on this motion is whether the parties entered into a binding settlement agreement regarding the sale of a property at 5294 The Grange Sideroad, Caledon, Ontario (the “Robin Hill Farm.”)

Factual Background

[4] The Applicant and the Respondent were separated on March 18, 2019 after 61 years of marriage. The Applicant is 84 years old and the Respondent is 85 years old. They have four children who are all now adults.

[5] The Respondent is the sole owner of the Robin Hill Farm. The Applicant has primarily been residing there since approximately 2017. The Respondent has not stayed at the Robin Hill Farm since the mid-1960s. The Respondent admits that the Applicant has a beneficial interest in the property.

[6] The Respondent’s evidence is that the Applicant lives “off the grid” at the Robin Hill Farm, and that since the hydro is disconnected, he relies on gas-powered generators and open-flame fire for cooking and heating. The Respondent further states that the property is in a state of disrepair, and the structure of the building is rotting and compromised. None of this evidence was challenged by the Applicant. According to the Respondent, the property insurance expired in November 2019 and replacement insurance could not be secured. As a result of the condition of the property and the lack of insurance, the Respondent is concerned about the risk of liability to third parties, including workers who attend the property at the Applicant’s request. At the March hearing, I made an interim order prohibiting the Applicant from having third parties attend at the property.

Analysis

The Parties’ Positions

[7] The Respondent’s position is that the parties had extensive negotiations regarding the sale of the Robin Hill Farm both before and at a case conference before Paisley J. on January 15, 2020. The Respondent submits that their respective counsel continued the discussion thereafter and agreed to the terms of a draft order. The Respondent maintains that all of the essential terms were agreed to, as embodied in a draft order sent by her lawyer to the Applicant’s previous lawyer, Fred Streiman, on February 6, 2020 (the “Draft Order”).

[8] The Applicant’s position is that no agreement was reached between the parties. In addition, the Applicant submits that Mr. Streiman lacked authority to agree to the terms on his behalf. Nonetheless, the Applicant is not opposed to the sale of the Robin Hill Farm, provided that, among other conditions, he is able to stay there until the closing and the proceeds of the sale are divided equally between the parties.

Applicable Legal Principles

[9] In Ward v. Ward, 2011 ONCA 178, at para. 53, the Court of Appeal stated as follows:

At common law, an agreement is binding if the parties consider that it contains all essential terms, even if the parties also agree that those terms will subsequently be recorded in a more formal document together with the usual terms ancillary to that type of agreement. However, an agreement is not final or binding if it is merely an agreement to later agree on essential provisions or to defer the binding nature of the agreement until the execution of the proposed subsequent formal contract.

[10] The Court went on to consider the proper approach articulated in Bawitko Investments Ltd. v. Kernels Popcorn Ltd., [1991] O.J. No. 495 (C.A.) and applied in Bogue v. Bogue, [1999] O.J. No. 4310 (C.A.). In essence, while parties may agree to execute a formal agreement at a future date, where they have agreed on all the essential provisions to be incorporated into the formal document with the intention that their agreement be binding, they will have fulfilled the requisites for the formation of a contract. The agreement may be expressed orally or by way of memorandum, by exchange of correspondence or other informal writings: Ward v. Ward, at para. 53.

[11] Generally speaking, litigation is settled on the basis that a final agreement has been reached which the parties intend to record in formal documentation. “[P]arties who reach a settlement should usually be held to their bargains”: Bogue v. Bogue, at para. 15. In Geropoulos v. Geropoulos, [1982] O.J. No. 3179, at para. 20, the court held that a settlement agreement contained in an exchange of correspondence between counsel settling the claims in an action was binding and enforceable.

[12] In addition, a solicitor is the client’s authorized agent in all matters that may be reasonably expected to arise for a decision in the particular proceeding for which they have been retained. The authority of a solicitor to settle a claim may be implied from a retainer to conduct litigation, unless a limitation of authority is communicated to the opposing party: Scherer v. Paletta, [1966] O.J. No. 1017, at paras. 10-11 (C.A.).

[13] A client, having retained a solicitor in a particular matter, holds that solicitor out as his agent to conduct the matter in which the solicitor is retained: Scherer v. Paletta, at paras. 10-11. The opposing party is thus entitled to rely on the ostensible authority of the other party’s lawyer.

Was There Agreement on the Essential Terms?

[14] Based on the evidentiary record on this motion, I find that the parties agreed to all of the essential terms in relation to the sale of the Robin Hill Farm. In so finding, I rely upon the following evidence:

• After the case conference, at which the sale of the Robin Hill Farm was negotiated at length, on January 20, 2020, Respondent’s counsel, Nicola Savin, sent a draft order and consent to Mr. Streiman. She followed up a couple of times subsequently;
• On January 29, 2020, Mr. Streiman sent Ms. Savin an email stating that he would be meeting with the Applicant and his daughter over lunch the following week, to “hopefully push the football across the goal line”;
• On February 5, 2020, the date on which Mr. Streiman was meeting with the Applicant and his daughter, Mr. Streiman sent a text message to Ms. Savin with a change requested by the Applicant. Ms. Savin sent a text message accepting the change;
• Approximately 10 minutes later, Mr. Streiman sent Ms. Savin a text message stating “He has signed my authority re consent to order i will dictate a letter now but not likely to receive till tomorrow”;
• After the lunch, on February 5, 2020, Mr. Streiman sent a letter to Ms. Savin stating that he had “instructions to consent to the revised Consent Order largely relating to the Robin Hill Farm” but requested certain changes as previously discussed. Mr. Streiman further stated that he would sign the consent if Ms. Savin “would be kind enough to make the changes to the draft Order”;
• In the same email message, Mr. Streiman requested that both counsel jointly instruct the real estate lawyer to release funds in relation to the sale of the matrimonial home “in accordance with the draft order”; and
• On February 6, 2020, Ms. Savin sent Mr. Streiman a revised Draft Order to include the changes requested by Mr. Streiman.

[15] At this point, since Mr. Streiman stated that he had instructions to consent to the terms of the draft order, with certain changes, and Ms. Savin accepted those changes, the parties were ad idem on all the essential terms. Mr. Streiman’s acceptance of the terms, on the Applicant’s behalf, was clear and unequivocal. See Lavoie v. Chambers, [2009] O.J. No. 1622, at paras. 58-63.

[16] When Ms. Savin made Mr. Streiman’s requested changes, she made a couple of additional changes to the wording of the Draft Order for the purposes of clarity, and forwarded the revised Draft Order to Mr. Streiman. In a responding email on the same day, Mr. Streiman stated that he agreed that the “intent is unchanged” but that he would check with the Applicant “[b]ecause the wording is slightly different out of an abundance of caution.” The Applicant relies on this email to argue that there was no agreement on the essential terms or that Mr. Streiman lacked authority to agree to the terms of the Draft Order. However, the parties had already agreed to the essential terms before that email. Unless the additional changes in wording made by Ms. Savin materially altered an essential term, they did not undo the parties’ agreement.

[17] The change in wording made by Ms. Savin was to a term regarding reasonable access to the property by the Applicant. The wording of the original draft order was changed from the following:

After vacating Robin Hill and prior to the closing of its sale, and upon 24 hours advance notice between counsel, the Applicant shall be granted reasonable access to the property to inspect and remove his personal possessions.

To read as follows:

After vacating Robin Hill Farm, the Applicant shall not re-enter the property except for the purpose of inspecting and removing his contents and property. Should he wish to do so, he shall provide the Respondent with at least 24 hours notice of the dates he wishes to attend at the property. The notice shall be given in writing by his lawyer to the Respondent’s lawyer and will not be unreasonably excessive.

[18] This was a minor change that attempted to clarify how the Applicant could access the property. It did not change the agreement that he would have reasonable access the property to inspect and remove his belongings on 24 hours’ notice through counsel. The change did not affect the essential terms to which the parties had already agreed to bind themselves. See Lavoie v. Chambers, at paras. 58-63. Similarly, an additional sentence regarding any arrangement between the Applicant and a prospective purchaser about the storage of his belongings did not affect any essential terms to which the parties had agreed.

[19] The Applicant’s argument that no formal settlement agreement was signed does not assist him, because the law is clear that where the parties have agreed to the essential terms with the intent to be bound, a formal written agreement is not required. A formal agreement would only be necessary if the parties agreed that they would not be bound until the execution of a written agreement. There is nothing in the communications between counsel to suggest this was the case here. Mr. Streiman’s request that both counsel jointly request the release of funds in relation to the matrimonial property is consistent with a finding that the parties understood that they had entered into an agreement to which they would be bound.

[20] Similarly, the agreement between the parties was not simply an “agreement to agree.” The terms of the Draft Order were detailed and had been vigorously negotiated. There was nothing further to be drafted. The only step that did not take place was the signing of a consent.

[21] The Applicant also points to the fact that the Respondent continued to negotiate a resolution regarding the Robin Hill Farm after the purported settlement was concluded as support for his position that there was no agreement. The Respondent objects to the Applicant’s argument and evidence on this issue on the basis that the subsequent negotiations were without prejudice communications to resolve this motion. The Respondent submits that she sought to resolve this motion because, after the suspension of regular court operations, it was unclear when it would be heard and because she was concerned about the hazardous conditions at the property.

[22] I draw no conclusions from the Respondent’s continued efforts to negotiate a resolution in relation to the Robin Hill Farm. By bringing this motion in a timely manner, the Respondent’s position on the settlement was clear from the outset. It was nonetheless reasonable to attempt to resolve the matter given the suspension of regular court operations and the continued risks in relation to the property.

Did the Applicant’s Counsel Lack Authority to Enter into the Settlement?

[23] The Applicant argues that Mr. Streiman lacked authority to agree to the terms of the Draft Order, as evidenced by the fact that he was dismissed shortly after. The only evidence submitted to support this position is an affidavit of Krina Mahaisuria, an associate of Mr. Callahan’s firm. Ms. Mahaisuria deposes that the Applicant informed her that he did not authorize his former solicitor to enter into any kind of settlement agreement on his behalf.

[24] Submitting a lawyer’s affidavit as evidence regarding material issues in dispute is inappropriate, since the lawyer has no personal knowledge of the matters in dispute on the motion: Ramirez-Scrimshaw, 2020 ONSC 2278, at para. 8. See also: Farooq v. Hawkins, 2018 ONSC 4841, at paras 16 and 19. While Applicant’s counsel submits that the Applicant was unable to attend at his office to swear an affidavit personally due to his ill health and COVID-19 risks, this does not justify submitting a lawyer’s affidavit instead. Due to the exceptional circumstances of the current pandemic, the court has been flexible in accepting affidavits sworn remotely or unsworn affidavits, as stated in the Notice to Profession.

[25] In any event, there is no evidence in the record to support the Applicant’s position that Mr. Streiman did not have authority to agree to the terms of the Draft Order. To the contrary, the text messages from Mr. Streiman to Ms. Savin suggest that Mr. Streiman was meeting with the Applicant when he sent the messages and received his instructions.

[26] Moreover, there is no evidence that the Respondent or her counsel were aware of an issue between the Applicant and his counsel: Lavoie v. Chambers, at pars. 80-83. In the circumstances, the Respondent was entitled to rely Mr. Streiman’s authority to enter into the settlement.

[27] In addition, despite having put his instructions to Mr. Streiman squarely in issue, the Applicant has refused the Respondent’s requests to produce his former solicitor’s file. Given my findings on the evidence regarding Mr. Streiman’s authority, it is unnecessary to draw an adverse inference. However, under the circumstances, I note that it would be appropriate to draw an adverse inference from both the Applicant’s failure to give evidence on the motion and his failure to produce documents from his former counsel’s file.

[28] In any event, in the absence of any indication to the contrary, the Respondent and her counsel were entitled to rely upon Mr. Streiman’s ostensible authority to bind the Applicant.

Conclusion

[29] The Respondent’s motion to enforce the terms of the settlement agreement is granted with costs. The sale of the Robin Hill Farm is to be conducted in accordance with the terms agreed to between the parties, as contained in the Draft Order.

[30] While this endorsement is effective as an order of this court without the need for a further order, counsel for the Respondent may submit a draft order to me through the Family Schedule Office.

[31] Costs were not addressed at the motion hearing because the parties indicated that offers to settle had been made in relation to the motion. Given the court’s limited resources at the present time due to the ongoing pandemic, the parties are strongly encouraged to agree on costs: see Booth v. Bilek, 2020 ONSC 2523, at para. 9. If the parties are unable to agree, the Respondent shall serve and file her costs submissions within 14 days of this decision. The Applicant’s responding costs submissions shall be served and filed within 14 days of receipt of the Respondent’s cost submissions. No cost submissions shall exceed 3 double-spaced pages, not including a costs outline and offers to settle. Costs submissions are to be submitted through the Family Scheduling Office. If no costs submissions are received within 28 days, the parties will be deemed to have resolved costs.

Nishikawa J. Date: June 19, 2020