Court File and Parties
COURT FILE NO.: CV-19-00001093-0000
DATE: 2021/05/05
SUPERIOR COURT OF JUSTICE-ONTARIO
RE: JULANE BENNETT and DANEKA BENNETT, Plaintiffs
-and-
EMILY JOHANSEN, DANIEL BENNETT and JOAN BIRD, Defendants
BEFORE: Mr. Justice M. R. Gibson
COUNSEL: Garrett Harper, Counsel for the Defendant, Joan Bird (Moving Party) Kevin Pirak, Counsel for the Defendant, Emily Johansen (Responding Party) Amelia Theiss, Agent for Jasmine Daya, Counsel for Plaintiffs
HEARD: March 25, 2021
ENDORSEMENT
Overview
[1] The defendant Joan Bird (“Bird”, or “the moving defendant”) moves for an Order, on consent, to dismiss the action and all related crossclaims as against her, with costs. She also moves for an Order enforcing a settlement agreement reached between herself and the defendant Emily Johansen (“Johansen”, or “the responding defendant”), barring Johansen from revoking her consent to this relief.
[2] Bird requests an Order:
a. Finding that Johansen is unable to withdraw her prior agreement to resolve the crossclaim as against the moving defendant on a without costs basis;
b. For costs against Johansen for having to pursue the motion to enforce the settlement agreement; and,
c. For costs against the plaintiffs for defending the action from the date of the Offer to Settle to the date of its acceptance.
[3] The responding defendant Johansen opposes the motion brought by Bird on the basis that there was no accepted offer to settle. She submits that no Rule 49 offer was ever made or accepted by the responding defendant. She requests that Bird’s motion be dismissed with costs.
Issues
[4] The issues before the Court are:
Was an offer accepted by the moving defendant?
Was an offer accepted by the responding defendant?
Were offers withdrawn?
If the responding defendant Johansen accepted an offer, is she estopped from withdrawing her prior consent to a dismissal of her crossclaim as against the moving defendant?
Are costs payable by Johansen to the moving defendant, or payable by the moving defendant to the responding defendant and, if so, in what amount?
What amount of costs are payable by the plaintiffs to the moving defendant?
Facts
[5] This action arises as a result of a motor vehicle accident that occurred on or about August 10, 2018 in Waterloo, Ontario.
[6] The plaintiffs, Julane Bennett and Daneka Bennett (“the plaintiffs”), allege that they were passengers in a vehicle owned and operated by the defendant, Daniel Bennett (“Bennett”). The plaintiffs claim their vehicle was travelling eastbound on Bridgeport Road approaching Ellis Crescent when it collided with a vehicle owned and operated by the defendant, Johansen, which was travelling southbound on Ellis Crescent. This collision allegedly pushed Bennett’s vehicle into a vehicle owned and operated by Bird, which was travelling northbound on Ellis Crescent. However, it was in fact Johansen’s vehicle (not Bennett’s vehicle) that was pushed into Bird’s vehicle.
[7] Despite what is alleged in the plaintiffs’ Statement of Claim, the motor vehicle accident report completed by the attending police officer confirms the accident occurred when V1 (i.e. Bennett’s vehicle) was eastbound on Bridgeport Road; V2 (i.e. Johansen’s vehicle) was southbound on Ellis Crescent; V3 (i.e. Bird’s vehicle) was northbound on Ellis Crescent. The report indicates that the accident occurred when V1 (Bennett’s vehicle) struck V2 (Johansen’s vehicle), pushing it (and not Bennett’s vehicle, as is being alleged in the Statement of Claim) into V3 (Bird’s vehicle). Of note, the report’s diagram indicates that V1 (Bennett’s vehicle) T-boned the front passenger-side of V2 (Johansen’s vehicle), with the front driver-side corner of V2 then impacting the front driver-side corner of V3 (Bird’s vehicle).
[8] The motor vehicle accident report completed contemporaneous to the accident itself thus confirms that Bennett’s vehicle struck Johansen’s vehicle, pushing Johansen’s vehicle into Bird’s vehicle. As such, Bennett’s vehicle (in which the plaintiffs were passengers) made no direct impact with Bird’s vehicle; Johansen’s vehicle only impacted Bird’s vehicle after Johansen’s vehicle was struck by Bennett’s vehicle.
[9] The plaintiffs issued a Statement of Claim on August 20, 2019.
[10] Johansen’s Statement of Defence, Crossclaim and Jury Notice was served on September 25, 2019.
[11] Bird’s Statement of Defence and Crossclaim was served on October 28, 2019.
[12] Bennett’s Statement of Defence, Crossclaim and Jury Notice was served on November 1, 2019. Of note, however, is that Bennett did not crossclaim against Bird for contribution and indemnity towards the plaintiffs’ damages.
[13] Despite the fact that Bird’s vehicle never contacted the vehicle in which the plaintiffs were passengers, the plaintiffs’ lawyer nevertheless served Bird’s insurer with a notice letter dated January 18, 2019 announcing their intention to commence a civil action against the moving defendant.
[14] Thereafter, and on multiple occasions, the moving defendant’s insurer, and later her counsel, made repeated requests to be let out of the action, warning the plaintiffs that the continued involvement of the moving defendant would result in a demand for the plaintiffs to pay the moving defendant’s costs of having to unnecessarily defend the action.
[15] Once it became apparent that the plaintiffs would not dismiss their action against the moving defendant, the moving defendant filed a Statement of Defence on October 29, 2019, seeking costs against the plaintiffs. On that same date, counsel for the moving defendant also served an Offer to Settle, offering a dismissal of the action against the moving defendant, with costs (to defend the plaintiffs’ claim) to be paid by the plaintiffs in an amount to be agreed upon or assessed. Further, counsel for the moving defendant advised the parties of the moving defendant’s intention to proceed with summary judgment given that she faced no liability for the plaintiffs’ damages.
[16] Johansen’s lawyer wrote to the parties on December 5, 2019 agreeing to a dismissal of the action and crossclaims against the moving defendant. From that point on, the moving defendant’s demands for costs were made solely to the plaintiffs (whose lawyer had not responded to the moving defendant’s Offer to Settle), as Bird and Johansen had agreed to the dismissal of their respective crossclaims against each other on a without costs basis.
[17] On or about July 15, 2020, one of the plaintiffs’ lawyers contacted the moving defendant, for the first time indicating the plaintiffs would be prepared to recommend a dismissal of the plaintiffs’ claims against the moving defendant without costs. In response, the moving defendant, by her lawyer, reiterated her numerous prior demands for costs as a condition to any dismissal as against her. The moving defendant, by her lawyer, reiterated this position on July 16, 2020.
[18] On July 20, 2020, counsel for Johansen wrote to all parties to remind them that Johansen previously and “long ago” consented to a dismissal of the action and crossclaim against the moving defendant provided that no costs were being sought as against Johansen. On that same date, counsel for the plaintiffs finally confirmed that they were agreeable to dismissing the action against the moving defendant with costs to be agreed upon or assessed. The moving defendant subsequently provided the plaintiffs’ lawyer with her Bill of Costs which, at that time, totaled $7,544.45 in fees (including HST) and $753.24 in disbursement (including HST). Upon request from the plaintiffs’ lawyer, the moving defendant’s lawyer provided time dockets in support of the costs being claimed. The moving defendant’s lawyer offered to provide an explanation for any dockets that the plaintiffs believed were excessive or unreasonable despite the fact the moving defendant consistently advised the plaintiffs of the quantum of her increasing costs.
[19] On August 17, 2020, the plaintiffs offered $500.00 to settle the Moving Defendant’s costs - an amount that would not even cover the moving defendant’s disbursements. As of the date the within motion was served and filed, the plaintiffs had provided no further offers.
[20] On September 30, 2020, the moving defendant, by her lawyer, served a motion seeking a dismissal of the action on consent, with costs to be fixed by the Court. Thereafter, on October 6, 2020, newly assigned counsel for Johansen withdrew what the moving defendant says was Johansen’s prior acceptance of the moving defendant’s offer to settle initially made on December 5, 2019 pending review of the file.
[21] This revocation transpired after the moving defendant received Johansen’s various explicit agreements to consent to the dismissal of the action as against her, after the moving defendant waived solicitor-client privilege over her lawyer’s dockets, after examinations for discovery were completed without the moving defendant’s involvement, and after the moving defendant advanced several offers to the plaintiffs on the understanding that she would be dismissed from the action and all related crossclaims.
Analysis
[22] Pursuant to Rule 49.09(a) of the Rules of Civil Procedure, where a party to an accepted offer fails to comply with the terms of the offer, then the other party may make a motion to a judge for judgment in the terms of the accepted offer, and the judge may grant judgment accordingly.
[23] The test for granting judgment pursuant to a previously reached settlement agreement requires the judge to consider: a) whether an agreement to settle was truly reached, and b) whether the agreement should be enforced. In order to determine whether an agreement has been reached, there must be a finding that the parties intended to create a legally binding contract and that there was agreement on all essential terms of the settlement agreement: Olivieri v. Sherman, 2009 ONCA 772, at para 27.
[24] The party seeking to resile from the accepted offer bears the onus to show why the court should not enforce the terms of the offer: Gelber v. Gelber, 2020 ONSC 1570, at para 35.
[25] Courts have consistently held that settlement agreements amongst parties ought to be enforced unless there is a real risk of clear injustice, prejudice, mistake, or any other “good reason not to enforce”: L-Jalco Holdings Inc. v. Lawrynowicz & Associates, 2018 ONSC 4002, at para 34; Sentry Metrics Inc. v. Erenwein, 2013 ONSC 959, at para 16.
[26] A court only has discretion to refuse to enforce an agreement only where a material fact that was relevant and significant to the resolution was not disclosed and the existence of the material fact was or could reasonably have been within the knowledge of the party seeking to rely on the settlement agreement: Saballoy Inc. v. Techno Genia S.A., [1993] AJ No 276 (Alta QB), at para 22.
[27] The responding defendant’s position is that no acceptance of an offer occurred.
[28] Rule 49.07(1) provides that an offer may be accepted by serving an acceptance of offer in the form of Form 49C to the offer or at any time before the offer is withdrawn or the court disposes of the claim.
[29] In this case, the responding defendant says, no written or verbal acceptance of any alleged offer ever occurred, nor was a Form 49C completed before any alleged offer was clearly withdrawn on October 6, 2020.
[30] The moving defendant asserts that either they or the responding defendant accepted an offer to settle through their subjective intentions.
[31] The responding defendant submits that there were both written invitations to treat and written offers, which were never accepted in writing. Therefore, the moving defendant cannot rely on subjective intentions to accept an offer when written correspondence is available.
[32] The responding defendant submits that no unqualified and unconditional acceptance of any offer ever occurred and no evidence to indicate that an offer was accepted has been presented by the moving defendant or any other party to this action. Costs of an action are considered to be an essential term of a settlement. In this case, Johansen submits, there was never any agreement on the costs of the action.
[33] Given that the moving defendant continued to claim costs of defending the crossclaim throughout the entirety of the action and that the responding defendant only offered to dismiss the action against the defendant on a without costs basis, the essential terms of any alleged agreement were never met, the responding defendant submits. The moving defendant never formally accepted any offer presented to them by the responding defendant, nor did the responding defendant ever formally accept any offer presented to them by the moving defendant.
[34] The moving defendant's consistent history of claiming costs against the responding defendant illustrate that no consensus ad idem was reached, nor were the essential terms offered (i.e. the issue of costs) by either party ever accepted by the other.
[35] I do not accept the responding defendant’s submission.
[36] The court will consider the history and context of any correspondence relating to settlement and interpret it objectively to determine whether an agreement was reached, looking for evidence of mutual intention to create a legally binding agreement, and actual agreement on all essential terms of the settlement: Bank of Montreal v. Ismail, 2012 ONCA 129 at paras 7-20; Olivieri v. Sherman, 2007 ONCA 491 at para 41.
[37] In the present matter, as it relates to Johansen and the moving defendant, Johansen’s prior acceptance of the moving defendant’s offer on December 5, 2019 was clear and unequivocal. I find that there was agreement on the essential terms of that offer, reflecting a mutual intention to create a legally binding agreement and agreement on all the essential terms, being that Johansen agreed to dismiss her crossclaim as against the moving defendant and, in turn, the moving defendant agreed that dismissal would be without costs.
[38] The moving defendant’s reliance upon Johansen’s agreement to a dismissal without cost is further evidenced by the fact that her ongoing costs demands from that point onward were directed only to the plaintiffs.
[39] Moreover, the settlement agreement was confirmed by Johansen in further correspondence dated July 20, 2020. The agreement was again confirmed on July 21, 2020, at which point counsel for Johansen asked for the moving defendant’s contact information so that she could be contacted for an affidavit if needed in the future. It had consequently become clear at that time that the moving defendant and Johansen had reached a meeting of the minds—that Johansen would consent to a dismissal against the moving defendant in exchange for the moving defendant not seeking costs against Johansen. Based upon that agreement, the moving defendant’s demands for costs were only directed to the plaintiffs.
[40] The responding defendant, who seeks to resile from the accepted offer, has not met her onus to show why the court should not enforce the terms of the offer.
[41] I find that there is no legal basis for Johansen to withdraw her consent to a dismissal, as there are no new material facts that were not previously disclosed. Similarly, Johansen has not and will not experience any injustice or prejudice if the settlement is enforced.
[42] In fact, it is the moving defendant that would experience irreparable injustice and prejudice if the settlement is not enforced, as the moving defendant relied upon Johansen’s explicitly provided consent to her detriment (as she waived privileged over her lawyer’s detailed time dockets, exchanged settlement offers with the plaintiffs with respect to the within motion, and did not participate in any examinations for discovery).
[43] Bird’s agreement with Johansen ought to be enforced, thereby preventing Johansen from withdrawing her consent to a dismissal. Further, Johansen ought to bear the moving defendant’s costs from the time she improperly withdrew her previously provided consent to present, including (but not limited to) the costs incurred by the moving defendant for having to pursue this motion.
[44] The moving defendant’s motion will be granted.
[45] The responding defendant, who seeks to resile from the accepted offer, has not met her onus to show why the court should not enforce the terms of the offer.
Order
[46] The Court Orders that:
The moving defendant’s motion will be granted. The action against Bird, and all related crossclaims, are dismissed with costs, to be determined as indicated below; and,
The responding defendant Johansen is not able to withdraw her prior agreement to resolve the crossclaim as against the moving defendant Bird on a without costs basis. The settlement agreement will be enforced.
Costs
[47] The parties are encouraged to agree upon appropriate costs. If the parties are not able to agree on costs, they may make brief written submissions to me (maximum three pages double-spaced, plus a bill of costs) by email to my judicial assistant, Mona Goodwin at mona.goodwin@ontario.ca. The moving defendant Bird may have 14 days from the release of this decision to provide her submissions, with a copy to the responding defendant Johansen and the plaintiffs; the responding defendant Johansen and the plaintiffs a further 14 days to respond; and the moving defendant Bird a further 7 days for a reply, if any. If no submissions are received within this timeframe, the parties will be deemed to have settled the issue of costs as between themselves. If I have not received any response or reply submissions within the specified timeframes after Bird’s initial submissions, I will consider that the parties do not wish to make any further submissions, and will decide on the basis of the material that I have received.
M. R. Gibson, J.
Date: May 5, 2021