COURT FILE NO.: FS-18-0093521-00

DATE: 2021 04 12

ONTARIO

SUPERIOR COURT OF JUSTICE

B E T W E E N:

MARY ELLEN GORMAN

Applicant

• and -

BRIAN KIERAN GORMAN

Respondent

COUNSEL: J.J.D. MacKenzie, for the Applicant A. Huff, for the Respondent

HEARD: March 10, 2021

DECISION ON SUMMARY JUDGMENT MOTION

Introduction

[1] The parties separated on August 11, 2017. They attended mediation and tried to work out a separation agreement. They hired counsel to assist in finalizing the separation agreement.

[2] The Applicant submits that an oral agreement was reached between the parties’ counsel. Mr. Gorman was represented by Ms. Uppal. Ms. Gorman was represented by Mr. MacKenzie. The Applicant brought a summary judgment motion pursuant to r. 16 of the Family Law Rules, O. Reg. 114/99 (“FLR”) seeking to enforce the oral separation agreement.

[3] The Respondent submits that there was no agreement. The Respondent submits that Ms. Uppal told Mr. MacKenzie that she needed to review the offer and the revised draft separation agreement with her client to confirm his instructions. The discussion was a typical “without prejudice” discussion that lawyers regularly engage in to facilitate settlement.

[4] There are three issues that must be resolved on this motion:

1. Does the Court have jurisdiction to hear this motion?
2. Is there a genuine issue requiring a trial?
3. If there is a genuine issue requiring a trial that cannot be resolved by way of the additional powers set out in r. 16(6.1) and 16(6.2) such that the Applicant’s motion for summary judgment can be granted?

Background Facts

[5] Ms. Gorman and Mr. Gorman married on September 22, 2012. They separated on August 11, 2017. They have no children. They own two properties, one in Brampton and one in British Columbia.

[6] Mr. Gorman and Ms. Gorman used the services of Ms. Gille to prepare a separation agreement to avoid litigation in this matter.

[7] In June 2018, Ms. Gorman retained Mr. MacKenzie. Mr. Gorman retained Ms. Uppal on June 20, 2018. Counsel exchanged correspondence about trying to resolve the matter.

Discussions Between Counsel

[8] On June 27, 2018, Mr. MacKenzie forwarded correspondence to Ms. Uppal in response to her correspondence dated June 20, 2018. Mr. MacKenzie stated that he understood that Mr. and Ms. Gorman had resolved all issues aside from the equalization payment. He also stated that if Mr. Gorman was “not agreeable to resolving the matters pursuant to the parties’ original separation agreement we will commence preparation of further financial statements and net family property (NFP) statements”. Ms. Uppal responded that day via email that she would seek her client’s instruction.

[9] Ms. Uppal stated that the mediator made a material error in valuating Mr. Gorman’s pension, which impacted the equalization payment Mr. Gorman would owe to Ms. Gorman. Ms. Uppal stated that the error occurred because the wrong dates were sent to the valuator. The valuator used the date of cohabitation as the start date and not the date of marriage. The result was that the equalization payment was overvalued by $80,125.65. This meant that a new valuation had to be done. The new valuation valued the pension at $176,598.31, not $308,473.06. This meant that the equalization payment owed to Ms. Gorman was significantly lower.

[10] On July 5, 2018, Ms. Uppal wrote Mr. MacKenzie and advising that there was a “glaring error in the calculations” of Mr. Gorman’s pension. Ms. Uppal offered to settle this matter on a final basis based on the terms of the draft separation agreement except that Mr. Gorman would make an equalization payment of $25,000.00, not $53,000.00. The letter also noted that there would still be a full release of spousal support. The letter ended by stating that if Ms. Gorman accepted this offer, Ms. Uppal would amend the agreement and the parties could finalize this matter.

[11] On July 12, 2018, Mr. MacKenzie sent further correspondence to Ms. Uppal. The letter stated that Ms. Gorman is entitled to an equalization payment in excess of $53,953.00 but has chosen to accept the reduced amount with a view of resolving this matter without further conflict. The letter also noted that Ms. Gorman would be entitled to spousal support. The letter ended by saying that Ms. Gorman would accept the offer with the equalization payment in the amount of $53,953.00 and if Ms. Gorman did not receive a confirming response within ten days, she would proceed with an application.

[12] On July 24, 2018, Ms. Uppal contacted Mr. MacKenzie’s office and asked that they speak about possibly resolving the matter. The email from Mr. MacKenzie’s assistant to Mr. MacKenzie stated that “she has offered $440,000.00 [sic] as an equalization and you were asking $53,000.00”. Ms. Uppal did not recall whether she offered to settle for $40,000.00 in the message.

[13] On July 30, 2018, at 5:25 p.m., Mr. MacKenzie forwarded correspondence to Ms. Uppal via email stating that he would like to confirm her position and discuss resolution of the matter. He asked that she contact him the next day to discuss the matter. That evening, at 10:36 p.m., Ms. Uppal emailed Mr. MacKenzie advising that he could contact her the following day.

Mr. Mackenzie’s’ Evidence about the Telephone Calls

[14] Mr. MacKenzie stated that there were four telephone calls that took place between Ms. Uppal and himself on July 31, 2018. During the first call, Ms. Uppal advised that her client was agreeable to an equalization payment in the amount of $25,000.00. Mr. MacKenzie’s position was that Ms. Gorman had originally been seeking an equalization payment of $90,000.00 and had already agreed to $53,000.00, so, therefore, no further reduction was appropriate. Mr. MacKenzie stated that, if Ms. Uppal’s client were to offer an equalization payment in the amount of $40,000.00, Mr. MacKenzie would advise his client to accept the same with a view to resolving matters on a final basis. Ms. Uppal advised that she would seek instructions from her client and call Counsel back. Mr. MacKenzie similarly advised that he would seek instructions from his client and they would speak shortly. Mr. MacKenzie stated that at no time during the conversation did Ms. Uppal advise that the conversation was on a “without prejudice” basis. Mr. MacKenzie stated that it was clear they were discussing resolving the matter.

[15] Mr. MacKenzie stated that during the second telephone conversation, Ms. Uppal advised that her client was in fact agreeable to an equalization payment in the amount of $40,000.00 and emphatically stated to Ms. Uppal that this matter is settled. Mr. MacKenzie advised Ms. Uppal that he would make the necessary revisions to the Separation Agreement and would forward a revised copy for her client’s review and execution.

[16] It is Mr. MacKenzie’s evidence that following the settlement of this matter, he received a further telephone call from Ms. Uppal advising that her client wished to purchase Ms. Gorman’s share in the B.C. property. Mr. MacKenzie advised that he would seek his client’s instruction. Shortly thereafter, Mr. MacKenzie contacted Ms. Uppal and advised her that his client was not agreeable to sell the B.C. property as she intended to reside there. In support of his evidence regarding the telephone calls, Counsel filed a copy of his chargeable time slip dated July 31, 2018, which states: “tel calls (x4) to lawyers re: settlement/ tell calls (x2) to client/review of separation agreement, review of file/settlement discussions/ revisions to separation agreement.”

Ms. Uppal’s Evidence of the Telephone Calls

[17] Ms. Uppal stated that, near the end of July 2018, Mr. Gorman expressed a willingness to settle on the basis of an equalization payment in the amount of $40,000.00. However, before she even spoke to Mr. MacKenzie, Mr. Gorman changed his mind. In particular, Mr. Gorman did not want to sell his share of the B.C. property to Ms. Gorman. He wanted to buy out her interest in the B.C. property. This would have resulted in Ms. Gorman receiving a higher equalization payment.

[18] Ms. Uppal agreed that she received an email from Mr. MacKenzie to contact him to “confirm [my] position and discuss the resolution of the matter.”

[19] Ms. Uppal contacted Mr. MacKenzie on July 31, 2018. She recalled that he was preparing for a vacation with his wife. After exchanging pleasantries, Ms. Uppal told Mr. MacKenzie that Mr. Gorman wanted the B.C. Property and she asked whether his client would be agreeable to selling her interest to Mr. Gorman.

[20] Mr. MacKenzie told Ms. Uppal that he did not think Ms. Gorman would be interested in this proposal but would ask his client and get back to her. Ms. Uppal recalled that Mr. MacKenzie called her back and advised her that his client was not agreeable to sell her share of the B.C. property.

[21] At that point, Ms. Uppal stated that she inquired with Mr. MacKenzie whether his client might agree to a $40,000.00 equalization payment. He stated that he would recommend that to his client. Ms. Uppal stated that, if Ms. Gorman agreed to settle the matter on this basis, Ms. Uppal would seek Mr. Gorman’s instructions regarding the same. Ms. Uppal stated that in her mind, this was a typical “without prejudice” discussion in which Counsel regularly engage in to explore the parameters of possible settlement.

[22] Ms. Uppal stated that Mr. MacKenzie called her back and advised that Ms. Gorman was agreeable to settlement on the basis of the $40,000.00 equalization payment. In response, Ms. Uppal suggested that Mr. MacKenzie revise the draft agreement accordingly and send her a copy. She told Mr. MacKenzie that she would have Mr. Gorman come to her office to review the draft agreement and discuss the proposal. At no point did Ms. Uppal bind Mr. Gorman to an agreement. She stated that she knew that Mr. Gorman wanted the B.C. property and, therefore, she would have to convince him of this different arrangement. Ms. Uppal also stated that there were other concerns with the draft agreement provided by the mediator.

[23] After this conversation, Ms. Uppal had a meeting with another client and left her office to pick up her children for medical appointments. After the appointments, she was busy with her children and prepared for a settlement conference for the next day and worked on a disclosure brief. She described it as a very busy day.

[24] Ms. Uppal stated that this is her best memory of the events that day. She agrees that it is possible that she and Mr. MacKenzie had four calls that day not the two or three. She is sure that she did not confirm with Mr. MacKenzie that they had an agreement.

The Follow up Emails

[25] On July 31, 2018, at 11:56 a.m., Mr. MacKenzie sent an email to Ms. Uppal that stated the following,

This will confirm our telephone conversation of this morning and will confirm your client’s offer with respect to the settlement of this matter for an equalization payment from your client to my client in the total amount of forty thousand dollars ($40,000). Your client’s offer is accepted, and this matter is now settled.

[26] The email also indicated that Mr. MacKenzie would forward the fully executed amended separation agreements to Ms. Uppal’s office shortly.

[27] At 4:10 p.m. that day, Mr. MacKenzie sent another email to Ms. Uppal that attached the “draft revised separation agreement”. Mr. MacKenzie indicated that he revised paragraphs 7.5 and 7.7, adjusting the equalization amount to $40,000.00. He also stated that he removed the NFP as a schedule but, for clarification, added the following sentence to paragraph 10.3(i): “Mellen shall retain the survivor benefits associated with Brian’s pension, free and clear of any claim by Brian and Brian will not do anything to cause the survival benefits of his pension to cease to be available to Mellen”. The email ended by stating that Mr. MacKenzie would be meeting his client tomorrow, “please confirm the agreement is acceptable as soon as possible”.

[28] Mr. MacKenzie sent a further email at 4:20 p.m. advising that he was meeting with his client to sign the agreement at 10:00 a.m. tomorrow. He asked Ms. Uppal “to please confirm the agreement is acceptable prior to tomorrow morning”.

[29] Ms. Uppal did not respond to any of these emails. Ms. Uppal stated that, due to other file and personal commitments, she did not adequately read or appreciate Mr. MacKenzie’s email sent on July 31, 2018 at 11:56 a.m. She stated that this email misrepresented their conversation. The matter was not settled. In cross-examination, she agreed that she received the first email but did not look at the email until this issue arose. She stated that her understanding of the conversation “was very different” than what the email reflects. Ms. Uppal stated that the further emails sent that day demonstrate the agreement was not finalized because they asked her to confirm that the agreement was acceptable.

The Drafts Agreements are sent to Ms. Uppal

[30] On August 1, 2018, four original signed and witnessed copies of the separation agreement executed by Mr. Gorman were couriered to Ms. Uppal’s office. She agreed that she read the letter when she got it. At this point, her relationship with Mr. Gorman was already on a downward spiral. She explained that she “was not able to move forward with anything with him—he-- this was not--- his belief is what—that there was no agreement”.

[31] Ms. Uppal stated that she did not have a chance to review the revised draft agreement or receive instructions on the $40,000.00 equalization payment. She explained that she was also extremely busy. On August 1, 2018, she was at a settlement conference. On August 2, 2018, she had a four-way meeting with another client. On August 3, 2018, she was in the office but had other appointments. She never met with Mr. Gorman to discuss the agreement. Her client wanted to go in a different direction. He and Ms. Uppal had a disagreement, and the retainer was terminated. There is no evidence as to what the disagreement was about. When she saw the agreement, she tried to contact Mr. Gorman, but she was unable to reach him.

[32] On August 23, 2018, Mr. MacKenzie sent Ms. Uppal a letter stating that he had not yet received the fully signed separation agreement from Mr. Gorman. He asked that Ms. Uppal confirm that she would be meeting with her client immediately to proceed with the execution of the separation agreement. Ms. Uppal stated that she did not receive this letter until she returned from vacation after Labour Day.

[33] Ms. Uppal stated that she did not respond to Mr. MacKenzie’s letter of August 23, 2018, because it was clear to her by that time that Mr. Gorman had or was in the process of retaining new counsel.

Mr. Gorman Retains New Counsel

[34] Mr. Gorman retained Mr. Grossman to represent him. Mr. Grossman sent a notice in change of representation to Mr. MacKenzie on September 5, 2018, confirming that he now acted for Mr. Gorman. Ms. Uppal also learned that Mr. Gorman had retained new counsel because Mr. Gorman asked Ms. Uppal to transfer his file to Mr. Grossman.

[35] On September 7, 2018, Mr. Grossman contacted Mr. MacKenzie. Mr. MacKenzie advised him that the matter was settled, and that Mr. Gorman was to vacate the B.C. property immediately. Mr. MacKenzie sent a letter to Mr. Grossman on September 11, 2018 stating that the matter was settled via telephone conversations on July 31, 2018.

[36] On September 12, 2018, Mr. Grossman sent a letter to Mr. MacKenzie stating that “Mr. Gorman is confused about the alleged offer that was accepted and that he never provided his lawyer any instructions about settling for $40,000.00.”

[37] Mr. MacKenzie sent a further letter on September 17, 2018, advising that the matter had been settled with Ms. Uppal and that, if Mr. Gorman had concerns with his previous Counsel’s conduct, he should contact the Law Society.

[38] On September 24, 2018, Mr. MacKenzie received an email from Mr. Grossman with respect to his client purchasing the B.C. property. Mr. MacKenzie sent a letter back on September 26, 2018 stating that the matter was settled.

Ms. Uppal’s Conversation with Mr. MacKenzie

[39] Ms. Uppal stated that her assistant contacted her on October 4, 2018 and advised that Mr. MacKenzie wanted to speak to her. She was out of the office taking a friend to the hospital. She stated that she was puzzled as to why he would want to speak to her, but she told her assistant to give him her cell number.

[40] Ms. Uppal stated that Mr. MacKenzie called her that day. Ms. Uppal commenced the conversation by joking with Mr. MacKenzie that he probably wished that he could have resolved the matter with her. Ms. Uppal stated that Mr. MacKenzie aggressively and abruptly demanded to confirm that she had instructions from Mr. Gorman to settle the dispute on the basis of $40,000.00 equalization payment. Ms. Uppal stated that she felt ambushed. She began to explain to him that she had instructions to engage in settlement instructions, but, insofar as she had instructions to settle for the $40,000.00, those instructions had changed by the time she spoke to Mr. MacKenzie on July 31, 2018. Mr. MacKenzie cut her off and threatened to compel Ms. Uppal to attend an examination. At this point, Ms. Uppal became upset and told Mr. MacKenzie that he should have been upfront with her from the start of the call as opposed to probing for evidence. She told him that they were speaking off the record and that she was concerned about solicitor-client privilege. She hung up the phone in frustration.

[41] Mr. MacKenzie’s recollection of the conversation is that he contacted Ms. Uppal and she confirmed that she had instructions to settle. Mr. MacKenzie stated that Ms. Uppal said, “you are not going to tell anyone about this”. Mr. MacKenzie stated that he made no undertakings with respect to the confidentiality of the conversation. Ms. Uppal expressed her concerns about breaching solicitor-client privilege and advised that she could no longer speak with him.

[42] On October 15, 2018, Mr. MacKenzie sent Ms. Uppal a letter summarizing what he said occurred during the call on October 4, 2018. Ms. Uppal stated that the letter mischaracterized the conversation. Ms. Uppal did not respond to the letter because she was no longer retained by Mr. Gorman.

[43] Ms. Uppal sent a letter to Mr. Gorman, dated October 16, 2018, attaching Mr. MacKenzie’s October 15, 2018 letter. That letter, despite being protected by solicitor-client privilege, made its way into the Court file. The letter referred to a letter dated October 5, 2018. It also stated that “[w]hile I did have instructions from you on the $40,000, I told Mr. MacKenzie I had to review the agreement with you, and I never got that chance”. The letter asked Mr. Gorman to respond to Mr. MacKenzie.

Position of the Parties

The Applicant’s Position

[44] The Applicant brings this summary judgment motion pursuant to r. 16 of the FLR. Counsel submits that, because there is no written offer, r. 49.09 of the Rules of Civil Procedure, R.R.O. 1990, Reg. 194 (“the Rules”) and r. 18(13) of the FLR do not apply.

[45] The Applicant submits that the only issue to resolve in the draft separation agreement was the equalization payment. He submits that Ms. Uppal orally agreed to resolve this issue for $40,000.00. The Applicant submits that there is no genuine issue requiring a trial based on the emails sent and Ms. Uppal’s failure to respond to the emails. The Applicant submits that the emails Mr. MacKenzie sent confirms there was an agreement. Ms. Uppal’s failure to respond to Mr. MacKenzie’s subsequent emails demonstrates that they had an agreement. If they did not have an agreement, one would have expected Ms. Uppal to advise Mr. MacKenzie of this fact. She did not. The Applicant submits that the Court should reject Ms. Uppal’s evidence that she did not read the emails. In this case, there were multiple emails confirming that there was an agreement.

[46] The Applicant submits that this case is more than just about the credibility of the parties, it is about the operation of settlement discussions. It would be contradictory to the administration of justice to find that there was not an oral agreement where Counsel never responded to say that there was in fact no “agreement” for over three months.

The Respondent’s Position

[47] The Respondent takes the position that there was no offer to settle. The conversation was on a without prejudice basis, not an acceptance of an offer. The call was not recorded. No notes were taken of the call. There is no written confirmation from the Respondent that the offer was accepted. It appears that there was a misunderstanding between Counsel. The Respondent submits that it does not make sense that a respected family law practitioner of 22 years would make a firm settlement offer without her client’s instructions.

[48] In the alternative, The Respondent submits that there are material issues in dispute that raise significant credibility concerns including whether there was an oral agreement.

[49] The Respondent also submits that the inference the Applicant is asking this Court to draw from the evidence is unreasonable. The Applicant asks the Court to find that the reason Ms. Uppal did not respond to Mr. MacKenzie’s emails was because she did not want to lie, so she stayed silent. Now the Applicant is asking the Court to find that Ms. Uppal lied during cross-examination and to her client by saying there was no agreement. If that is the case, why would she not have lied from the beginning and said there was no agreement.

[50] In addition, the Respondent submits that the Applicant’s materials are unclear as to what rule the Applicant brought this motion under. The Respondent submits that it appears the Applicant is relying on s. 55 of the Family Law Act, R.R.O. 1990, c. F.3 (“FLA”) to enforce the agreement. The technical requirements of this section are not met and the motion for summary judgment should be dismissed on this basis

The Legal Principles

[51] The notice of motion seeks an order to enforce the terms of a separation agreement pursuant to the oral agreement made between counsel pursuant to r. 16 of the FLR.

[52] Rule 16(6) provides that if there is no genuine issue requiring a trial, the Court shall make a final order.

[53] In determining whether there is no genuine issue for trial, r. 16(6.1) provides that,

the court shall consider the evidence submitted by the parties, and the court may exercise any of the following powers for the purpose [of determining the summary judgment], unless it is in the interest of justice for such powers only to be exercised at trial:

1. Weighing the evidence.
2. Evaluating the credibility of a deponent.
3. Drawing any reasonable inference from the evidence.

[54] In exercising any of the powers under r. 16(6.1), the Court may order that oral evidence be presented: See FLR, r. 16(6.2).

[55] Rule 16 of the FLR reflects the principles enunciated by the Supreme Court of Canada in Hryniak v. Mauldin, 2014 SCC 7, [2014] 1 S.C.R. 87, which outlines the test for summary judgment: Philion v. Philion, 2015 ONSC 4255, at para. 17. At paras. 66-68, the Court in Hryniak instructs that a Court’s analysis on a summary judgment motion must take place in two stages:

1. First, the motion judge must determine if there is a genuine issue requiring a trial based only the evidence filed on the motion, without regard to the fact-finding powers. No genuine issue requiring a trial will exist if the evidence permits the motions judge to fairly and justly adjudicate the dispute in a timely, affordable, and proportional matter. If no genuine issue requiring a trial exists, the motion judge must render summary judgment.
2. If the motion judge concludes at the first stage that a genuine issue for trial exists, the motion judge is then directed to consider whether a trial may be avoided by using the enhanced fact-finding powers set out in the Rules. The motion judge may exercise those powers, unless doing so would be contrary to the interests of justice.

[56] The overarching concern with this test is whether summary judgment will provide a fair and just adjudication of the matter. The Supreme Court explained in Hryniak, at para. 50, that when a summary judgment motion allows the judge to find the necessary facts and resolve the dispute, proceeding to trial would generally not be proportionate, timely, or cost effective. Similarly, where the judge cannot have confidence in their conclusion, summary judgment is not a proportionate way to resolve a dispute. The trial judge has to be sure that they can find the necessary facts and apply the relevant legal principles to resolve the dispute.

[57] In a summary judgment motion, each party must put their best foot forward by setting out in the affidavit material or other evidence specific facts showing that there is or is not a genuine issue requiring a trial. For example, if there is a specific fact that must be proven to succeed at trial and the party having the onus to prove that fact cannot demonstrate there is sufficient evidence, then a trial is unnecessary: Pammett v. Ashcroft, 2014 ONSC 2447, at paras. 27, 29.

[58] The Court may determine issues of credibility if the Court finds that the record on the motion is sufficient to make that determination: Zhu v. Kendellhurst Academy Inc., 2018 ONSC 7685, at para. 12. However, as noted by the Court of Appeal for Ontario in Cook v. Joyce, 2017 ONCA 49, at para. 92, the more important credibility is to determining key issues, the harder it will be to fairly adjudicate those issues solely on a paper record.

Analysis

(i) What is the Court’s Jurisdiction to Hear this Motion?

[59] The Applicant brought a motion for summary judgment under r. 16 of the FLR to enforce the oral agreement that the Applicant submits was agreed to by counsel. The motion was not brough pursuant to r. 18(13) of the FLR or r. 49.09 of the Rules, and they are not relied upon as a basis for granting this motion.

[60] The Applicant submits that they are not seeking to enforce the separation agreement pursuant to s. 55 the FLA.

[61] The Respondent submits that s. 55 of the FLA governs the enforcement of the separation agreement.

[62] Section 55(1) of the FLA provides that a separation agreement “is unenforceable unless it is made in writing, signed by the parties and witnessed.”

[63] The Respondent submits that, while courts have upheld agreements that have not strictly complied with all of the requirements of s. 55 of the FLA, given the facts in this case, the agreement cannot be upheld under s. 55: see Virc v. Blair, 2014 ONCA 392, at para. 78; Gallacher v. Friesen, 2014 ONCA 399, at para. 27.

[64] I agree that this separation agreement does not meet the strict requirements of s. 55 of the FLA. However, the Court’s jurisdiction to enforce agreements made by parties is not limited to situations that strictly comply with s. 55 of the FLA.

[65] For example, in Geropoulos v. Geropoulos (1982), 1982 CanLII 2020 (ON CA), 35 O.R. (2d) 763 (C.A.), at pp. 768-69, the Court of Appeal for Ontario upheld a settlement agreement where the requirements of s. 55 had not been satisfied. In that case, the husband’s solicitor wrote to the wife’s solicitor, proposing that the husband would pay the wife a lump sum payment and the wife would release any interest she had in the family property. The wife’s solicitor replied that she had been instructed by the wife to accept the offer. The wife’s solicitor requested that the husband’s solicitor draft the necessary separation agreement. The wife subsequently refused to sign the agreement. In enforcing the settlement agreement, Robin J. explained that no purpose is served by limiting the court’s discretion to only enforce agreements that meet the strict requirements of s. 55 of the FLA. As Robin J. explained,

I share the view that settlement agreements concluded by solicitors or counsel resolving outstanding claims in pending litigation under the Act are beyond the reason and purview of s. 54(1). The formal requirements laid down by the section are intended to ensure that asserted domestic contracts, be they marriage contracts (s. 51), cohabitation agreements (s. 52) or separation agreements (s. 53), are reduced to writing and in fact agreed to by the parties as evidenced by their witnessed signatures; this in essence is a Statute of Frauds type of provision made referable to domestic contracts by the Family Law Reform Act.

In my opinion, the section plainly is not aimed at or intended to apply to authorized settlement agreements like the present, made with legal advice during the pendency of court proceedings which, to be effective, require the intervention of the court. Such agreements derive their effect from an act of the court; their authenticity is assured by the court's supervision and control over them; and ample protection is afforded the parties to these agreements, wholly independent of the section. The court's jurisdiction to enforce settlements or refuse to do so, notwithstanding any agreement between solicitors or counsel, is well established; whether they should be enforced or not, in the final analysis, is a matter for the discretion of the court and, in litigation under the Family Law Reform Act, a matter that would be subject to the court's overriding jurisdiction with respect to domestic contracts. Scherer v. Paletta, supra; 3 Hals. 4th ed., paras. 1182-83, pp. 650-651 and ss. 18(4) and 55 of the Act.

No purpose is to be served in compelling agreements of this kind to comply with the formalities of s. 54(1) and, if not, permitting parties to withdraw at will from compromises properly entered into by their legal representatives before trial of their action or, if the appellant's position were to be accepted, compromises concluded even during the trial of the action. It may well be that, given the nature of matrimonial litigation, prudence would dictate that lawyers ensure that settlement agreements are signed by the parties personally witnessed. But I cannot construe the section as requiring that an otherwise valid compromise of an action must be rendered void and defeated on this ground alone, nor do I believe that the legislation could have contemplated or intended that result. Such a construction would be wholly inconsonant with the established policy of encouraging the settlement of disputed claims and recognizing and preserving the validity of settlements freely and properly entered into under advice. [Emphasis added.]

[66] Subsequent jurisprudence has followed this line of reasoning. See for example, Lunardi v. Lunardi, [1988] O.J. No. 1882 (H.C.), at para. 37, citing Geropoulos, at p. 768 and Gallacher, at para. 27.

[67] Geropoulos dealt with a situation where the agreement was made after litigation commenced. However, the same rationale applies to agreements that are made before litigation commences, particularly where the parties are represented by counsel and enter into informed settlement agreements. The strict requirements of s. 55 of the FLA need not apply. For example, in Pastoor and Pastoor, 2007 CanLII 28331 (ON SC), [2007] O.J. No. 2851 (S.C.), Perell J. upheld minutes of settlement that were negotiated before any legal proceedings had commenced. The wife forwarded minutes of settlement to the husband for signature. The husband signed the minutes and returned the minutes to be signed by the wife and she refused. Perell J. concluded that while the strict requirements of s. 55 of the FLA were not satisfied the agreement should still be enforced.

[68] In finding that the agreement should be enforced Perell J. relied in part on the decision of Harris v. Harris, [1996] O.J. No. 2430 (Gen Div.), at paras. 9-10. In that case, Laforme J., as he then was, upheld a settlement agreement that was agreed to prior to litigation commencing. In enforcing the agreement, Laforme J. stated:

The Court reasoned [in Geropoulos v. Geropoulos] that the section [s. 55 of the Family Law Act] was not intended to conflict with the historic principles and practices of settlements being reached by counsel for the parties where they have acted properly on instructions and within their authority. To illustrate the principle the Court relied on comments made by Osborne J. in Gilbert v. Gilbert [(1980), 1980 CanLII 3805 (ON SC), 16 R.F.L. (2d) 26 (Ont. H.C.)] when he observed:

It is somewhat incongruous that a million-dollar lawsuit may be settled by a simple exchange of correspondence between the parties or between solicitors, while a division of family assets, however modest, cannot be agreed to in the form of a binding settlement in the absence of the formalities of the Family Law Reform Act being adhered to.

The authorities following Geropoulos have interpreted that judgment as establishing the principles of, (a) courts encouraging settlement and, (b) that it is within the discretion of the court as to whether such a settlement is enforceable. In other words, whether the parties will be bound by the terms of an agreement that does not conform to subsection 55(1) of the Family Law Act is a matter for the courts to determine and decide on a case by case basis. …

[69] Based on the jurisprudence, I find that this Court has the jurisdiction n to determine whether Counsel agreed to settle this matter and whether the agreement should be enforced despite the fact that the requirements of s. 55 of the FLA have not been complied with.

[70] Some factors that the Court will have to consider in determining whether to enforce an agreement were set out in Harris as follows:

1. Were either of the parties represented by legal counsel or the beneficiary of legal advice?
2. Was either party otherwise disadvantaged at any time during the course of the negotiations?
3. Can the written material the parties prepared, or the oral representations, that are being relied upon support a prima facie conclusion that there was a settlement agreement?
4. Does the evidence demonstrate that the parties intended that the written or oral representations or negotiations are to be binding on them?
5. Was there an intention that some final act or determination be made before the settlement was to be final and binding?
6. Does the enforcement or non-enforcement of the negotiated resolution result in an injustice to either of the parties?
7. Does enforcement encourage negotiated settlement and discourage litigation, and does it support the overall purpose and intent of the principles of the Family Law Act?

Harris, at para. 10.

(ii) Is there a Genuine Issue Requiring a Trial?

[71] Turning now to the test for granting summary judgment. First, I must determine if there is a genuine issue for trial. I am satisfied that there is a genuine issue for trial: whether there was an oral agreement to settle the matter. This is not a case where the Respondent put in writing that they accepted the terms of the separation agreement and then the Respondent refused to sign the agreement. It cannot be said that Respondent has no chance of success based on the material filed in the motion record.

(iii) Can the Court resolve the summary judgment motion using the additional powers set out in r. 16(6.1) and r. 16.(6.2)?

[72] I am not satisfied that a trial can be avoided by using the enhanced fact-finding powers in r. 16(6.1). I recognize that the court may use these powers provided that it is not contrary to the interest of justice to do so and it would lead to a fair and just result that serves the goals of timeliness, affordability, and proportionality. I do not find that I can come to a fair and just result by deciding this matter by way of summary judgment given the diametrically opposed versions of what took place. The credibility of each counsel is crucial in resolving this case. I cannot make the necessary factual determinations to decide this case based on the paper record.

[73] In concluding that this is not an appropriate case for summary judgment, I have considered that it is a long-standing principle to enforce family law settlements and to minimize and discourage litigation. Both written and oral agreements should be enforced so long as it is in the interest of justice to do so.

[74] I also have considered that in this case, both parties had very experienced legal counsel to protect their interests and that neither party was disadvantaged in the negotiations to settle.

[75] I am not satisfied that I can make the necessary factual determinations based on the paper given the significant credibility issues in this case or the following reasons.

[76] First, assessing the credibility of Mr. MacKenzie and Ms. Uppal is crucial in determining if there was an oral agreement, which is the determinative issue in the motion for summary judgment. For example, Mr. MacKenzie and Ms. Uppal gave diametrically opposed versions of events regarding the conversation they had on July 31, 2018. Ms. Uppal stated that she did not have instructions to settle. Their conversation was on a without prejudice basis and there was no agreement to settle. Mr. MacKenzie stated that Ms. Uppal confirmed that she had instructions to settle.

[77] Both Counsel also gave very different versions of the telephone conversation that took place on October 4, 2018. Mr. MacKenzie stated that Ms. Uppal admitted that she had instructions to settle. Ms. Uppal stated that is not what she said. Given the importance of the credibility of the Counsel, it is not in the interests of justice to determine these issues based on a paper record.

[78] Second, I do not find that the paper record definitively answers the question of whether there was an agreement. Rather the Court is asked to draw inferences based on the correspondence and to reject Ms. Uppal’s explanations. The credibility of both Counsel’s evidence is therefore critical in deciding how to interpret the documents and the weight to be attributed to the documents filed.

[79] For example, Mr. MacKenzie stated that the only outstanding issue was the equalization payment. Ms. Uppal stated that this was not the only outstanding issue. Her client wanted to purchase the B.C. property. In fact, both Counsel recalled a conversation about the Respondent wanting to buy out the Applicant of the B.C. property. Ms. Uppal stated that she was going to have to sell her client on the deal without the B.C. property. If her evidence is credible on this point, it would assist the Court in determining that there was not an agreement.

[80] The emails sent on July 31, 2018, also do not resolve the issue of whether there was an “agreement”. Again, it comes down to the credibility of the Counsel. The email at 11:56 a.m. states that “Your client’s offer is accepted, and this matter is now settled.” Ms. Uppal said she did not see or appreciate that email.

[81] One could understand missing one email, but there were subsequent emails sent. Unfortunately, the subsequent emails on their own do not assist in determining if there is an agreement. The email at 4:10 p.m. contains the “draft revised separation agreement”. In addition to adding the paragraph regarding the equalization payment, Mr. MacKenzie added another sentence into a paragraph about survivor benefits under Mr. Gorman’s pension. The email ended by stating “please confirm the agreement is acceptable.” The same language about confirming that the agreement is acceptable was also used in the email at 4:20 p.m. These emails and the added sentence about pension benefits could be read as suggesting that there was not a final agreement. The ambiguity in the emails further demonstrates the importance of Ms. Uppal’s and Mr. MacKenzie’s evidence and the need to assess their credibility through viva voci testimony.

[82] The Applicant submits that Ms. Uppal’s evidence – namely, that she did not review the emails – should not be believed, particularly given that she had previously responded to Mr. MacKenzie’s emails in a timely fashion. I agree that on its face, it does not seem like a credible explanation, but when all of the other evidence is considered I cannot make a fair determination of this issue based on the paper record.

[83] The Applicant submits the Court should find that an oral agreement was reached because the Respondent did not reach out to the Applicant for approximately a month to tell the Applicant otherwise. I agree that one would expect counsel to respond. However, Ms. Uppal provided various explanations for why she did not respond. The explanations on their face are not unreasonable if they are believed. I cannot make that assessment using the fact enhancing rules.

[84] For example, The Applicant submits that Ms. Uppal’s failure to respond to the Applicant once the signed agreements were sent on August 1, 2018, demonstrates that there was an agreement. Ms. Uppal’s evidence is that she did not have time to look at the agreement. She later stated that she looked at it, but that, by that point in time, her relationship with Mr. Gorman was on a downward spiral. As she stated in her cross-examination, she “was not able to move forward with anything with [Mr. Gorman]—he-- this was not--- his belief is what—that there was no agreement”. Ms. Uppal’s credibility on this point is important in determining whether there was an agreement.

[85] The Applicant submits that, even if Ms. Uppal missed or did not have time to look at the earlier emails, she knew and should have responded to Mr. MacKenzie’s August 23, 2018 letter and this further demonstrates that there was an agreement. Ms. Uppal provided a response to her failure to respond to that letter. Ms. Uppal stated that she did not respond immediately because she was on vacation until Labour Day and because, by then, she knew that Mr. Gorman was in the process of retaining new counsel. In support of this, she notes that a Notice of Change of Representation was filed on September 5, 2018. Her explanation for the lack or response from August 23 to September 5, 2018 does is not appear unreasonable on its face.

[86] The Applicant also relied on a letter dated October 16, 2018 that Ms. Uppal sent to Mr. Gorman in which she states that “while I did have instructions from you on $40,000, I told Mr. MacKenzie I had to review the agreement with you and I never got that chance.” Ms. Uppal stated that she did initially have such instructions, but those instructions changed by the time of the conversation on July 31, 2018. Ms. Uppal also pointed out that this letter was protected by solicitor-client privilege and, should not have been disclosed. As such, the letter should not be used by this court to suggest that Ms. Uppal was trying to protect herself, rather the letter reflects what actually took place. There is some merit to this submission.

[87] Mr. Gorman also disputes that he gave his lawyer instructions to settle the matter for $40,000.00. In a letter dated September 12, 2018, Mr. Grossman advised Mr. MacKenzie that Mr. Gorman stated he gave instructions to settle for $25,000.00; “His previous lawyer advised him that this number would not be accepted and that she was going to have a without prejudice call with [Mr. MacKenzie’s] office”. Interestingly, this letter was sent before Ms. Uppal wrote to Mr. Gorman in October 2018. Mr. Gorman’s recollection of what was said appears to corroborate Ms. Uppal’s evidence that she did not have instructions and was going to have a without prejudice discussion with Mr. MacKenzie.

[88] This is also not an appropriate case to have a mini trial on a particular issue pursuant to r. 16(6.21). This case turns on whose evidence should be accepted as to what took place on the telephone call on July 31, 2018. Assessing the credibility of the Counsel is not however limited to the events on that particular day. For example, the Court may reject Mr. MacKenzie’s evidence regarding the telephone call on October 4, 2018, which may in turn affect his credibility about his evidence regarding the calls on July 31, 2018. The reverse is true. If Ms. Uppal’s evidence regarding the call on October 4, 2018 is rejected, it may affect her credibility regarding the calls on July 31, 2018. A mini trial is not a viable solution in this case.

[89] The case of Lunardi, relied on by the Applicant, demonstrates that credibility may be a central issue in determining whether to enforce an agreement. After trial, Gray J. upheld a settlement agreement. In that case, the parties engaged in discussions on the eve of trial. The peremptory trial list had the word “settled” on it. Counsel agreed that they had an oral agreement. Gray J. found that he was not impressed with the Defendant, who changed her mind, and that Counsel for the Defendant tried to salvage the situation on his client’s behalf.

[90] The present case is also distinguishable from Pastoor, where the wife’s lawyer forwarded negotiated minutes of settlement to the husband’s lawyer. The husband signed the minutes, and they were returned to the wife’s lawyer for her signature. She refused to sign the documents. summary judgment was granted enforcing the agreement.

[91] This case is fundamentally different from the above cases. Ms. Uppal did not send the draft separation agreement from which it could be inferred that it was acceptable to her client. There is no written acknowledgement that there was an agreement, and no litigation ceased from which one can infer that an agreement was reached.

Conclusion

[92] The Court cannot make the necessary factual findings to resolve this matter by way of summary judgement. I do not find when the email chain is read together that it is clear an agreement was reached. The Applicant also submits that the court can find that the agreement was reached because Ms. Uppal did not respond for approximately two months. Ms. Uppal has provided explanations for this. Some of the explanations appear reasonable others do not. Her credibility explaining the delay in responding is a key issue to determine whether or not it could be inferred that there was an oral agreement. Finally, there is diametrically opposed evidence as to what occurred during the telephone calls on July 31, 2018 and October 4, 2018 counsel which goes to the determinative issue in this case. Given the significant credibility issues in this case, I cannot not make a fair determination of the facts based on the paper record. Maybe there was an agreement or maybe there was a miscommunication between Counsel, but without fully assessing the credibility of the counsel through viva voci evidence that is not a determination I can make.

[93] The motion for summary judgment is dismissed.

Costs

[94] If the parties are unable to resolve the issue of costs, the Respondent shall serve and file written submissions of no more than two pages (double spaced, twelve-point font), relevant case law, a detailed bill of costs, if not already provided, and any offers to settle within ten days of receipt of this Judgment.

[95] The Applicant may file a response consisting of written submissions of no more than two pages (double spaced, twelve-point font), relevant case law and a detailed bill of costs, if not already provided, and any offers to settle within ten days receipt of the Respondent’s submissions.

[96] The Respondent may file a one-page reply, double spaced, twelve-point font, within five days of receipt of the Applicant’s submissions on costs.

Released: April 12, 2021 Dennison J.