COURT FILE NO.: CV-16-555221
DATE: 20210401
ONTARIO
SUPERIOR COURT OF JUSTICE
BETWEEN:
DONALESSA SILVERA
Plaintiff
– and –
MICHAEL TAYLOR and THE MANUFACTURERS LIFE INSURANCE COMPANY
Defendants
Roy Tofilovski, for the Plaintiff
Sarah Reisler, for the Defendant Michael Taylor
Michael R. Kestenberg and Thomas M. Slahta for Nancy Young
HEARD: March 23, 2021
papageorgiou j.
[1] This is a motion to enforce a settlement pursuant to r. 49.09 of the Rules of Civil Procedure, R.R.O. 1990, Reg. 194 brought by the defendant.
[2] For the reasons that follow I am dismissing the motion.
Nature of the Action
[3] This action arises out of a motor vehicle collision. The plaintiff, Donalessa Silvera (“Ms. Silvera”) was a youth coordinator with the City of Toronto for 18 years earning approximately $70,000 per year. She has a Bachelor of Arts (Honours) from the University of Toronto. In this action, she alleges that in 2015 the defendant, Michael Taylor (“Mr. Taylor”), was negligent when he struck the side of her car as she was exiting a gas station causing her significant injuries. Although not in the record before me, counsel for Mr. Taylor concedes that Mr. Taylor was charged and convicted under the Provincial Offences Act, R.S.O. 1990, c. P.33 in connection with this collision.
[4] Ms. Silvera retained Nancy Young (“Ms. Young”) of Pace Law Firm. Ms. Silvera had three separate but related claims: an accident benefits claim with Silvera’s insurer (the “ABC Claim”), a long-term disability claim (the “LTD Claim”) and a negligence action against Mr. Taylor (the “Negligence Claim”)
The ABC
[5] The Accident Benefits Claim was settled on a full and final basis on April 28, 2017 for $40,000 ($20,000 for medical/rehabilitation and $20,000 for income replacement benefits). At the time of this settlement, Ms. Silvera had a number of debts related to her treatment including $7,018.71 of assessable disbursements, $10,742.40 to Scarborough Physiotherapy & Rehabilitation Centres for physical treatment, $5,424 to Excel Medical for assessments and approximately $11,000 for a litigation loan with Finance Bound Financial Services, a personal injury lender.
[6] Following the ABC settlement, Ms. Silvera instructed Ms. Young not to pay any of the amounts outstanding above.
The LTD Claim
[7] This claim involved Ms. Silvera’s employer’s denial of long-term disability benefits.
[8] Approximately one month after the ABC settlement in April 2017, the insurer approved Silvera’s long term disability, and paid her $145,316 representing her accrued entitlement from February 13, 2015.
[9] Ms. Silvera continues to receive monthly LTD payments of $4,110 although there is no evidence before me as to how long this will last. All parties concede it may not.
[10] Following the insurer’s agreement to pay LTD benefits, Ms. Young again recommended that Ms. Silvera satisfy her outstanding obligations, particularly her high interest loan to Finance Bound.
[11] Ms. Silvera declined to pay any of the outstanding debts at that time.
Negligence Claim
[12] Ms. Silvera commenced this action on June 21, 2016.
[13] The parties attended mediation on August 16, 2018. Ms. Silvera rejected the insurer’s last offer in the amount of $75,000. Mr. Taylor rejected Ms. Silvera’s last offer in the amount of $200,000.
[14] Mr. Taylor’s counsel then delivered an offer to settle on November 18, 2018 (the “Offer”) in the amount of $125,000. The Offer was time-limited and expired at 5:00 pm on December 14, 2018.
[15] In Ms. Young’s affidavit, she states that she “communicated Aviva’s Offer on the same day that [she] received it, and Silvera and I spoke at length by telephone on December 3, 2018 about the Offer.” I note that Ms. Young does not state when she communicated the Offer or provide any details as to how long the December 3, 2018 conversation was.
[16] Ms. Young says that she advised Ms. Silvera that the Offer was reasonable because Mr. Taylor’s insurer had a summary of surveillance which adversely affected Ms. Silvera’s credibility and because any LTD benefits would be credited against any damages quantification in the Negligence Claim. I note that the surveillance video and/or any summary of its contents is not before me.
[17] Ms. Young says that they discussed Ms. Silvera’s outstanding obligations and the “net” amount Ms. Silvera would receive if she accepted the Offer.
[18] Ms. Young says that Ms. Silvera instructed her to accept the Offer during the December 3, 2018 telephone conversation and that afterwards, Ms. Young communicated this acceptance by email to Mr. Taylor’s counsel.
[19] Ms. Young prepared a handwritten memo on or around the conversation which reflected the substance of their discussions which reads as follows:
[20] As is apparent, the handwritten note does not expressly acknowledge that Ms. Silvera accepted the Offer.
[21] On cross-examination, Ms. Young explained that it is her practice to scan such notes into legal software used by her law firm called Time Matters when she has instructions and the case is settled. She said that the Time Matters entry note reads “NY tort settlement note”, but the document was too unclear for me to read. Ms. Young said, “I save them as settlement notes because settlement means an acceptance of an offer to settle. That’s how I save my instructions on Time Matters.”
[22] Ms. Silvera describes the conversation which she says took place:
During our conversation, I instructed Ms. Young that I would not accept the settlement offer of $125,000 and that I would like for the matter to proceed to trial. I tried to explain to her my many complaints in regards to the injuries that I sustained as a result of my accident. I reminded her that I was still suffering from lower back pain and right knee pain. I also reminded her that I suffered psychological injuries, had surgery on my left shoulder, and suffered from spasms in my back and neck. In response, Ms. Young told me that I did not have anything broken. I responded by informing her that I would have to live for the rest of my life with these injuries, and that it was for these reasons that I could not accept the settlement offer. It was about this time in the conversation that Ms. Young began to speak to me rudely. Ms. Young became very angry because of my refusal to accept the offer. Our telephone conversation ended abruptly and contact from Ms. Young ceased until I sent her my e-mail dated February 26, 2019.
[23] Ms. Silvera denies Ms. Young discussing amounts which would have to be deducted from the proposed settlement or that she instructed Ms. Young to accept the Offer.
[24] Ms. Young says she provided her instructions to her assistant Chau Tran (“Ms. Tran”) with account instructions the same day.
[25] Ms. Tran gave evidence that she spoke with Ms. Silvera on December 4, 2018 to make an appointment for Ms. Silvera to attend and execute the release. Ms. Tran said that during the call, Ms. Silvera requested that Ms. Tran email a copy of the Aviva release and the law firm account for review before Ms. Silvera would make an appointment to execute the release. Ms. Tran emailed the release to Ms. Silvera.
[26] Ms. Silvera denies that she requested that Ms. Tran send her the proposed release and account, and says she told Ms. Tran that she was rejecting the $125,000 offer.
[27] On February 7, 2019 and February 19, 2019, Ms. Young emailed Ms. Silvera regarding the settlement. She attached the entire chain of communications with the insurer including Ms. Young’s December 3, 2018 email conveying Ms. Silvera’s acceptance of the Offer.
[28] Ms. Silvera responded by letter dated February 26, 2019 advising that the net amount she would receive from the $125,000 was too low and that she was declining to accept the Offer.
Rule 49.09
[29] The application of Rule 49.09 consists of a two-step analysis:
a. Did the parties reach an agreement to settle?
b. If an agreement exists, on all the evidence, should the Judge hearing the motion enforce the settlement?
See Capital Gains Income Streams Corporation v. Merrill Lynch Canada Inc. (2007), 2007 CanLII 39604 (ON SCDC), 87 O.R. (3d) 464 (Div. Ct.), at paras. 9-10.
[30] The plaintiff concedes the first part of the r. 49.09 test. That is, Ms. Young had ostensible authority to accept the Offer and there is no issue as to whether or not there is a settlement. The only issue is whether this Court, in its discretion, should enforce the settlement.
[31] The onus falls on the plaintiff to prove that the settlement agreement ought not to be enforced: Dick v. McKinnon, 2014 ONCA 784, at para. 5; Catanzaro v. Kellogg’s Canada Inc., 2015 ONCA 779, at para. 7; Homewood v. Ahmed, Chow et al, 2003 CanLII 19255 (Ont. S.C.), at para. 49; and Gelber v. Gelber, 2020 ONSC 1570, at para. 35.
[32] In Srebot v. Srebot Farms Ltd., 2013 ONCA 84, at paras. 6 and 10, the Court of Appeal described the following overarching guidelines applicable to a step two analysis:
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.
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 CanLII 41411 (ON CA), 2003 CarswellOnt. 5214 (Ont. C.A.); Milios v. Zagas (1998), 1998 CanLII 7119 (ON CA), 38 O.R. (3d) 218 (C.A.). 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. [Emphasis added.]
[33] In subsequent cases, the courts have affirmed that the discretion to refuse to enforce a settlement should be exercised rarely: Catanzaro, at para. 9; Srajeldin v. Ramsumeer, 2015 ONSC 6697, at para. 33.
[34] At para. 33 of Srajeldin, Molloy J. adopted the reasoning of Misener J. in Brzozowski v. O’Leary, 2004 CanLII 4805 (Ont. S.C.), at para. 44:
Those judgments emphasize the judicial obligation to consider all of the circumstances of the case at hand, and to then decide whether it is fair to enforce the settlement. Although I risk unduly limiting my discretion by saying so, I think the right approach is to consider that a settlement effected pursuant to Rule 49 ought to be enforced, and so judgment ought to be granted, unless the offeror satisfies the judge, that in all the circumstances, enforcement would create a real risk of a clear injustice. It seems to me that this approach is required because it is good public policy to encourage settlement, and it would be quite inconsistent with that policy to decline enforcement unless a good reason for doing so is shown.
[35] Ms. Silvera argues that this Court should exercise its discretion to refuse to enforce the settlement summarily because it is unreasonable and would result in an injustice.
[36] In my view, taking into account all of the circumstances, enforcement would create a real risk of clear injustice in this case for a number of reasons.
Did Ms. Silvera instruct Ms. Young to accept the Offer?
[37] There is a clear conflict in Ms. Young’s and Ms. Silvera’s evidence as to what was discussed on December 3, 2018. Mr. Taylor says that for Ms. Silvera to succeed, I must find as a fact on this record that she did not give Ms. Young instructions to settle, and that in essence, Ms. Young was on a frolic of her own pursuing a settlement that Ms. Silvera did not authorize.
[38] I disagree. There are many cases where courts have exercised their discretion to not enforce a settlement even where a party has explicitly agreed to it. See for example Srebot.
[39] On the record before me, it is difficult to resolve this conflict between Ms. Silvera and Ms. Young’s evidence as to the conversation which occurred.
[40] However, it is possible to put the December 3, 2018 conversation into a context which demonstrates that whatever conversation took place was insufficient for Ms. Silvera to have provided an informed agreement to the Offer.
The nature of the plaintiff’s injuries
[41] To properly consider the communications which took place between Ms. Silvera and her former counsel Ms. Young, it is important to take into account Ms. Silvera’s condition and deficits which medical records show she has sustained as a result of the accident. There are numerous reports before me which document these and no one objected to them being before the Court.
[42] In an orthopaedic surgeon’s report dated December 16, 2016, Ms. Silvera’s injuries were described as including left and right shoulder sprain, post-traumatic left shoulder adhesive capsulitis requiring physiotherapy, cortisone injection, and arthroscopic release and manual manipulation, persistent left shoulder global stiffness and pain despite surgery from adhesive capsulitis, myofascial cervical strain/sprain, left cervical arm radiculopathy, myofascial lumbar strain/sprain with ongoing mechanical low back pain, decreased mood, persistent headaches, sleep disturbances secondary to her shoulder, neck and back pain and decreased focus and concentration.
[43] An independent chronic pain assessment dated June 14, 2016 conducted by a chronic pain physician provided as follows:
In my opinion, Ms. Silvera sustained permanent and serious impairments of the important bodily functions, which are essential for her employment, housekeeping, social and recreational activities. The claimant’s physical impairments originate from multiple sources, such as spinal discs, facet joints, muscles, ligaments, tendons, neuronal pathways, and possible involvement of nerve roots Thus they affect her multiple important bodily functions which are associated with prolonged sitting, standing and walking on flat surfaces, as well as walking up and down stairs, squatting, kneeling, bending forward, sustaining a stooped position, heavy lifting, carrying and reaching overhead with the left hand.
In addition to physical impairments, after the subject accident, Ms. Silvera also developed mental impairment, such as anxiety and depressive symptomatology. This leads to various difficulties in their daily life that are adversely affecting her overall quality of life. Her ability to concentrate, sustain attention and interact with people efficiently was also impaired after the subject accident, due to mood disturbances and cognitive difficulties, associated with the chronic pain.
[44] A psychologist’s report dated March 22, 2018 documents Ms. Silvera’s diagnosis of psychological issues including Adjustment Disorder. The report says that she has difficulty coping with pain and continued to present with symptoms such as re-experiencing the traumatic and distressing memories of her motor vehicle accident; flashbacks, avoidance, nervousness, fears, negative mood, persistent thoughts and worry. She is further described as having feelings of unhappiness; frustration even over small matters; loss of interest in normal activities; insomnia; restlessness; slowed thinking; indecisiveness, distractibility; trouble thinking, concentrating, making decisions and remembering things; fatigue, tiredness and loss of energy; tearfulness; small tasks may seem to require a lot of effort; feelings of worthlessness and guilt. The report documents impairments in concentration and memory and that she was depressed and suffered from anxiety. The report concludes:
She has a psychological disability and impairment that will persist long-term. The severity of her presenting issues will require long-term therapy.
From a psychological perspective, Ms. Silvera is significantly impacted by her impairments.
[45] These are all reports that Ms. Young obtained in pursuance of her claims on behalf of Ms. Silvera. Therefore, Ms. Young was aware of the multiple impairments which Ms. Silvera had, which included: anxiety, depression, difficulty concentrating, cognitive difficulties associated with chronic pain, insomnia, slowed thinking, indecisiveness, distractibility, trouble thinking, and memory.
[46] A recent report dated November 22, 2019 from a psychologist documents that her impairments were ongoing at that time and may persist long term:
Ms. Silvera is limited in her ability to engage in or complete activities of daily living such as personal hygiene, sleep, eating, preparing food, shopping, and communication, caring for her home, walking, travelling, recreational and social activities, financial and pre-accident work activities. Her post-accident disability and impairment have not resolved and continue to affect her daily functioning. Her Global Assessment of Functioning is judged to be severe, score 49 at upper end of 41-50 scale meaning she has severe impairments in psychological, social and occupational functioning.
[47] On the record before me there is no evidence that Ms. Young forwarded any written copy of the Offer to Ms. Silvera. As well, although she has produced the above noted handwritten document summarizing the discussion which she had with Ms. Silvera about deductions which would be made from the Offer if accepted, Ms. Young did not forward Ms. Silvera any written correspondence describing these deductions and clearly advising Ms. Silvera as to what amount she would net from the Offer if accepted.
[48] Further, there is no evidence as to the length of the conversation on December 3, 2018.
[49] There is no evidence that Ms. Young suggested that Ms. Silvera take the time to consider the Offer given the impairments of which Ms. Young was aware. The Offer was open until December 14, 2018 and so there was no urgency to having Ms. Silvera’s decision on December 3, 2018.
[50] In Srebot, the Court of Appeal approved the motion judge’s decision to not enforce the settlement and referenced the motion judge’s findings that the defendant was stressed and emotional at the time of mediation where the matter was settled. As well, the case was settled quickly through a “truncated and brief nature of the mediation”: Srebot, at para. 4. One point could make a similar point here. Ms. Silvera suffered from psychological impairments and ongoing depression and anxiety and there is no evidence about how long the conversation lasted. And Ms. Silvera was never given any written information about the Offer and how it would impact her which she could review at her own pace.
[51] I do not say that the evidence goes as far as demonstrating a lack of capacity. However, I am saying that when a client is suffering from chronic pain, depression, anxiety and has the impairments set out in the reports before me, it is particularly important that the communication is clear, that the client has sufficient time to consider Offers presented and that the client provide clear authorization.
[52] In light of her documented impairments, even if Ms. Silvera had accepted the Offer, I am not satisfied that the communications which Ms. Young had with her about the Offer were sufficient to have given her a proper opportunity to consider and understand the Offer and make an informed decision to accept it.
[53] I note that Ms. Silvera’s counsel did not make this argument although he did refer to all of the above medical reports and the provisions I have set out above with reference to his argument that the settlement was not reasonable given Ms. Silvera’s injuries. During the argument, I raised my concerns about the sufficiency of the communications which Ms. Young had with Ms. Silvera in light of these medical reports and the parties had an opportunity to make submissions on the issue at that time.
Clarity in the communication of the Offer and the net amount that Ms. Silvera would receive after payment of expenses
[54] There is also contemporaneous evidence before me which supports that Ms. Young may not have been as clear as she thought. When she followed up with Ms. Silvera on February 7, 2019 about the settlement, she wrote as follows:
Please see email from Aviva below following up on signed documents.
Please confirm if you currently wish for me to accept the offer as your previous instructions or whether you would like me to reject same. I need instructions in writing.
[55] In her affidavit, Ms. Young states that she realizes her choice of language was not as clear as it ought to have been and that she “did not make it clear to Silvera that I had communicated her acceptance of Aviva’s Offer on December 3, 2018 as she had instructed me to do and that her acceptance gave rise to a settlement. To my mind when I asked Silvera if she would ‘like me to reject [the Offer]’, I was asking if she had changed her mind and wanted me to attempt to get her out of the settlement she had previously agreed to.” Despite this explanation, it is critical that this unclear communication occurs after Ms. Young already knows there is a problem—one would have expected more clarity in these circumstances and it leads me to question the clarity of the verbal communications which occurred at a time when there was no dispute between Ms. Young and Ms. Silvera.
[56] Ms. Silvera’s written response on February 26, 2019, supports her position that she did not think a settlement had been arrived at. She wrote:
I Donalessa Silvera am inclined to decline the offer of $125,000 all-inclusive the receipt and sufficiency of which is hereby acknowledged regarding the accident of February 13, 2015 that would lead me to walk away with $30,000 which is grossly unreasonable.
I require present and future treatment because of the accident. The accident has caused me to incur a lot of bills and fall behind on several bills. As a result of my loss of income, I have been put in the position of borrowing money in an attempt to stay afloat, however now I am vulnerable to being sued if I do not pay these debts.
[57] On its face, the February 26, 2019 letter shows that Ms. Silvera did not think that there was any settlement at that time. It also shows that she did not think that there would be sufficient payment to her after all bills were paid. In the letter she also refers to her ongoing depression and ongoing requirement for counselling. This letter was written contemporaneously to the events in question and there was not yet any proceeding to enforce any settlement.
[58] Ms. Young points out that she had sent Ms. Silvera the entire email chain at that time including the email she sent to Mr. Taylor’s counsel accepting the Offer and that Ms. Silvera’s response is not credible because given this email chain, she should have immediately taken the position that she had never agreed to the Offer. However, this presumes that Ms. Silvera reviewed the email chain attached to the letter.
[59] Ms. Young then responded to Ms. Silvera by letter dated March 6, 2019. Although the letter begins by referencing Ms. Silvera’s verbal instructions to accept the Offer, at the end Ms. Young states:
Based on the foregoing, I recommend that you accept the $125,000 (all-in) offer.
Your instructions continue to be unclear[…]
[60] Ms. Young concedes that this language was also unclear and suggested that Ms. Silvera had the option of accepting the $125,000 offer or not, and that the letter did not make it clear that she “was asking if she wanted me to attempt to get out of the settlement agreement.”
[61] I note as well that Pace Law subsequently moved to get off of the record. In one of the affidavits filed sworn August 20, 2019, one of Ms. Young’s colleagues, Michelle Arzaga, states:
The defendant has offered to settle Ms. Silvera’s claim, which offer my colleague recommended to her. Despite several attempts, my colleague has been unable to obtain clear settlement instructions from Ms. Silvera.
[62] While Ms. Young argues that this was put in the affidavit in this way because it was being filed publicly so as to not prejudice her case, it is yet another example of a lack of clarity in the way in which the law firm representing Ms. Silvera has communicated with respect to this matter. While technically the words used may all be true, when examined closely, the impression left is that no settlement was reached.
[63] As well, although Ms. Young says in her affidavit that she “communicated Aviva’s Offer to Silvera” in her factum she writes that she “sent Silvera the Offer”. In my view, “communicating” something is not the same thing as “sending” something which implies that the written Offer was forwarded. This is an instance of language being used by Ms. Young or on her behalf which does not reflect the evidence before me.
[64] The difficulty that I have is that there is a dispute as to what was discussed during an oral conversation on December 3, 2018, and I have one of the participants in this conversation specifically acknowledging that subsequent written communications from her were unclear and then providing this Court with communications which lack clarity and/or are incorrect. This evidence supports the inference that Ms. Young may not have been as clear as she should have been during the December 3, 2018 conversation, in particular about the overall amount that Ms. Silvera would net from the alleged settlement, which understandably appears to be Ms. Silvera’s consistent overall concern. I note that when cross-examined, Ms. Young conceded that during the December 3, 2018 conversation, Ms. Silvera told her that the deductions which would be made from the $125,000 would be too high.
[65] Ms. Young’s lawyer at the motion conceded that Ms. Young should have exercised better practice in this matter. She should have written to Ms. Silvera and confirmed the settlement and the net payment to Ms. Silvera before accepting the Offer.
Reasonableness of the settlement
[66] The reasonableness of the settlement is a recognized factor that the court ought to consider under a more comprehensive analysis of the second part of the settlement enforcement test: Galevski Estate, 2012 ONSC 3460, at para. 16, cited in Aganeh v. Mental Health Centre Penetanguishene Corporation, 2019 ONSC 5599, at para. 42.
[67] Mr. Taylor asserts that given the settlement of Ms. Silvera’s LTD claim, her only remaining claim was for general damages and that on any standard, $125,000 in general damages is extremely generous particularly taking into account the monetary deductible which Mr. Taylor says is currently approximately $39,750. Mr. Taylor provided me with multiple examples of case law that supported this argument.
[68] However, Ms. Silvera disputes that all she has left is a general damages claim. While she was reimbursed for 70 percent of her past income loss pursuant to the LTD settlement and would receive ongoing payments for income loss, she would only receive 70 percent in the future. At trial, she could still claim 100 percent of her future income loss and if successful or if she was awarded more than her LTD benefits, then her LTD benefits would be assigned to the insurer.
[69] Ms. Silvera was 54 years old at the time of the accident and is currently 59 years old. She was earning approximately $70,000 gross per annum or $5,850 per month not including collateral benefits such as employer-provided insurance coverage. The reports document that she is unemployable. Her LTD benefits are approximately $4,000 per month, leaving her with an income loss of $1,850 or $22,200 per year. Assuming a retirement age of 65, at this time there are six years of future income loss in the amount of $22,000 which is $132,000. The $125,000 settlement which nets her approximately $37,000 is arguably unreasonable as compensation for her remaining income loss and general damages for what appears on the record before me to be a significant chronic pain case, even taking into account the difficulty Ms. Silvera may have proving chronic pain, the risk of litigation, the monetary threshold and the deductible. I note and accept that part of the reason for this is that she has not paid off her litigation loans which have a high interest rate, but this does not change my view. Ms. Silvera says she is not able to pay her bills and there is no evidence that contradicts this.
[70] Further, there is no certainty that the insurer will continue to pay Ms. Silvera’s LTD claim until retirement. Indeed, that is one of the prejudices alleged by Mr. Taylor discussed below.
Prejudice
[71] Another factor for the court to consider is the degree of prejudice to either party if the settlement is or is not enforced: Milios.
[72] Mr. Taylor says that he would suffer prejudice which can be inferred from the years of delay between the date that the settlement was entered into and the hearing of the motion: Nithiananthan v. Thirunavukarasu, 2016 ONSC 2465, at para. 58.
[73] Mr. Taylor argues that he repeatedly followed up with Ms. Young regarding compliance and once it became clear there was a problem, he brought the motion without delay. Ms. Silvera is not responsible for the delay in Ms. Young advising Mr. Taylor that there were issues with the settlement.
[74] Mr. Taylor’s motion to enforce the settlement was originally returnable on September 10, 2019 but was adjourned when the plaintiff appeared in person and advised the Court that she would be challenging the settlement and retaining a new lawyer. Given the circumstances of the dispute between Ms. Silvera and Ms. Young, I cannot fault Ms. Silvera for taking this position.
[75] Thereafter the motion was rescheduled for January 20, 2020 but adjourned to March 31, 2020 at the request of Ms. Young who wished to respond to the motion. Again, I cannot fault Ms. Silvera for this.
[76] The March 31, 2020 hearing was adjourned because of the court’s emergency response to the COVID-19 pandemic. Again, I cannot fault Ms. Silvera for this.
[77] The matter was again delayed at a case conference on August 6, 2020 because Ms. Young attended and advised that she needed to notify LawPro of the potential claim. Again, I cannot fault Ms. Silvera for this.
[78] In my view, Ms. Silvera is not responsible for the bulk of the delay.
[79] Further, while Mr. Taylor argues delay as a generic prejudice, he does not provide any evidence as to why the delay causes prejudice. He has not referred to any evidence which no longer exists, or any witnesses that may no longer be available. Indeed, in a case like this where the issue appears to primarily be the plaintiff’s damages, there would seem to be little likelihood of prejudice. Mr. Taylor can still seek medical opinions about Ms. Silvera and conduct future defence medical examinations pursuant to the Rules. In Srebot, at para 7, the Court of Appeal upheld the motion judge’s finding that the settlement agreement was not enforceable and noted that the moving party did not lead evidence of any particular prejudice.
[80] Mr. Taylor also says that if Ms. Silvera can prove that Ms. Young acted negligently or intentionally contrary to her instructions, she might have a valid claim against Ms. Young. Mr. Taylor asserts that this is the appropriate remedy for an individual who says her lawyer acted improperly: Srajeldin, at paras. 29, 40. I note that in Srajeldin, the plaintiff had already chosen to commence litigation against her lawyer. I am not persuaded that in this case that would be the appropriate outcome. Forcing her to begin a new lawsuit, which she never intended to bring before, with added claims of negligence against her lawyer would be unfair in the circumstances of this case.
[81] Finally, Mr. Taylor also argues that a change in Ms. Silvera’s LTD entitlement before trial of this action could substantially increase Mr. Taylor’s exposure for past income loss. Ms. Silvera argues that is actually evidence of prejudice to her if the settlement is enforced. She says she would also suffer the following prejudice which greatly outweighs any prejudice to Mr. Taylor:
- She would lose the monetary value of her claim;
- She would be forced to face the stark choice of commencing a brand-new action against her former lawyer or simply forgoing a just resolution of her rights under law;
- Her express wishes regarding the last settlement offer would be nullified;
- Her lawyer’s conduct and behaviour would be legitimized; and
- She would lose her day in court.
[82] In my view, the prejudice to Ms. Silvera of enforcing the settlement is greater than the prejudice to Mr. Taylor of not enforcing the settlement. Mr. Taylor will still be able to pursue his defence if this action continues, but Ms. Silvera may lose the value of her claim, against her will. The opportunity to initiate another action, in my view, is not an adequate remedy in the circumstances of this case. Any action against Ms. Young would still necessitate Ms. Silvera proving her damages and it makes little sense for her to pursue them in an action against her lawyer instead of against the person who caused these injuries.
Conclusion
[83] This case is very important to Ms. Silvera. On the record before me, she has suffered significant injuries and her claim has allegedly been compromised pursuant to a settlement which she says she did not authorize. It was allegedly agreed to during a telephone conversation, the duration of which is unclear, without any written information provided to Ms. Silvera beforehand or any written authorization provided by her afterwards in circumstances where she has a proven mental impairment. There are four examples before me of Ms. Young or her agents being unclear in communications which support the inference that her communications with Ms. Silvera on the important date may not as clear as they ought to have been. There are reasons in support of Ms. Silvera’s argument that the settlement is not reasonable, although admittedly at this stage given the absence of any defence medicals, this could change. The prejudice to Ms. Silvera of enforcing the settlement exceeds any prejudice to Mr. Taylor of not enforcing it.
[84] In my view, this is one of those rare cases where compelling circumstances establish that the enforcement of the settlement would not be in the interests of justice on a consideration of all of the relevant factors, and that enforcement of the settlement would lead to a clear injustice. I am exercising my discretion to refuse to enforce the settlement.
[85] Accordingly, this motion is dismissed and pursuant to r. 49.09(b) I am directing that this matter continue as if there had been no accepted offer to settle.
[86] Regarding costs, the parties agreed that the successful party as between Ms. Silvera and Mr. Taylor would be awarded $5,000 in costs and that no costs would be payable by Ms. Young.
Papageorgiou J.
Released: April 1, 2021
ONTARIO
SUPERIOR COURT OF JUSTICE
BETWEEN:
DONALESSA SILVERA
Plaintiff/Respondent
– and –
MICHAEL TAYLOR and THE MANUFACTURERS LIFE INSURANCE COMPANY
Defendants/Moving Party
REASONS FOR JUDGMENT
Papageorgiou J.
Released: April 1, 2021