McPherson v. McPherson

COURT FILE NO.: FS-15-83500 (Brampton)

DATE: 20210603

ONTARIO

SUPERIOR COURT OF JUSTICE

BETWEEN:

Joan Deloris McPherson

Applicant

-and-

Neville Alexander McPherson

Respondent

Granville Cadogan, for the Applicant

Vanessa Sampogna, for the Respondent

Heard: February 5, 2021 by video conference; written submissions filed March 1, 2021

Chown J.

ENDORSEMENT

[1] The parties in this divorce proceeding have twice reached settlement agreements only to find themselves unable to agree on what they agreed on. They both move to enforce the agreements, with each advancing their own version of what the agreements mean.

[2] I have spent a great deal of time reviewing the notices of motion, the affidavits and the factums filed in this matter, as well as doing my own legal research. The parties have not addressed several important issues. I need to hear further from the parties before making a decision on the motions.

Did the Parties Reach a Binding Agreement?

[3] Both sides say they settled this matter by “Final Minutes of Settlement” on January 7, 2020. To succeed, both parties need their own interpretation of the minutes of settlement upheld. Their arguments as to what the minutes of settlement mean are so divergent that it is a real possibility the correct outcome will be to find that the parties do not have an agreement. That would be most unfortunate, and something that neither side wants.

[4] There are strong reasons why the court should strive to avoid finding that there is no agreement. It is desirable to bring an end to the dispute. The parties here incurred the expense of getting ready for a January 2020 trial. They face a long wait for another trial date. The fact that they negotiated minutes of settlement and they both seek to enforce the settlement shows that neither party wants a trial. The agreement was reduced to writing, so the parole evidence rule would typically limit the extraneous evidence that can be considered anyway. The procedural fairness of a full trial may not be required to fairly determine the parties’ dispute.

[5] This is not a case where one party says there was no agreement and the other says there was, or where one party says the agreement should not be enforced. However, where the parties have such divergent views on how their agreement should be interpreted, the possibility that they did not have the required meeting of the minds is very real.

[6] The first task is to determine whether the parties in fact reached a binding settlement.

[7] The dynamic here is unusual because neither party is arguing there was no agreement. Perhaps for this reason, I have not been provided with any authorities on what is the appropriate test to assess whether there is a binding agreement. The trite answer is that there must be “a meeting of the minds,” or “agreement on the essential terms.” But to get beyond such aphorisms, I would benefit from receiving authorities showing how courts have approached similar cases, and argument on the test that should be applied.

Procedural Issues

[8] Neither party clearly frames their motion as being brought under rule 18(13) (motion to enforce a settlement) or as being brought under rule 16 (motion for summary judgment through application of common law principles to enforce the settlement). Neither rule 16 nor rule 18(13) is mentioned in any of the materials and neither rule was cited to me by either side. However, those are the only rules I am aware of that may give a procedural option to resolve this matter by way of a motion, and without a trial.

[9] I emphasize “may,” because it is not obvious that rule 18(13) of the Family Law Rules is a procedural option. It says:

If a party to an accepted offer does not carry out the terms of the offer, the other party may, (a) make a motion to turn the parts of the offer within the court's jurisdiction into an order; or (b) continue the case as if the offer had never been accepted.

However, at least for the 2020 “Final Minutes of Settlement,” this is not a case where one party accepted the other party’s offer to settle. Rather, the parties developed minutes of settlement after negotiations.

[10] MacLeod’s references West v. Oreskovich, 2009 CarswellOnt 1957 (S.C.J.) for the proposition that “The issue of whether or not parties have reached an agreement is properly addressed in the context of a motion for summary judgment.” (See L. Madsen et al, MacLeod’s Ontario Family Rules Annotated 2020-2021 (Toronto: Thomson Reuters Canada, 2020) at p. 270.) Unfortunately, West v. Oreskovich is no longer available on Westlaw. I have not found any other family law case which directly addresses whether minutes of settlement, as opposed to an accepted offer, can be enforced under rule 18(13). In Nashid v. Michael, 2010 CarswellOnt 7902 (S.C.J.), a motion was brought under rule 18(13); however, in that case the genesis of the minutes of settlement were an offer to settle, and the motion was not successful. The question of whether rule 18(13) provided an appropriate procedural option was not addressed.

[11] I have found several cases which consider this issue under the parallel rule in the Rules of Civil Procedure, rule 49.09. Motions under rule 49.09 have sometimes failed on the basis that the rule only applies to accepted offers to settle, not negotiated settlement agreements. See, for example, Exponents of Canada Inc. v. Sharma, 2015 ONSC 2940 at para. 7 and Kalinitchenko v. Allure at the Gates of Aurora Inc., 2021 ONSC 438 at para. 21.

[12] It is therefore not clear that rule 18(13) is even an avenue that can be used to determine the issues between the parties. I did not receive any argument on this point.

[13] Also, where courts have proceeded under rule 49.09, most often they approach the decision using the same test as in a summary judgment motion. For example, in Capital Gains Income Streams Corp v. Merrill Lynch Canada Inc. (2007), 2007 39604 (ON SCDC), 87 O.R. (3d) 464 (Div. Ct.), the court said at para. 9:

The first step is to consider whether an agreement to settle was reached. In doing so, the proper approach is to treat the motion like a Rule 20 motion for summary judgment. If there are material issues of fact or genuine issues of credibility in dispute regarding whether (i) the parties intended to create a legally-binding relation or (ii) there was an agreement on all essential terms, a court must refuse to grant judgment.

[14] Similarly, in Dick v Marek, [2009] O.J. No 2241, 2009 27821 (S.C.J.) at para. 65, the court said: “If there are material issues of fact or genuine issues of credibility in dispute regarding whether … there was an agreement on all essential terms of the settlement the court must refuse to grant judgment.”

[15] I have not seen much similar authority in family law cases. Some motions to enforce settlements in family law cases have been brought as summary judgment motions: see, for example, Steine v. Steine, 2010 ONSC 4289; Hillis v. Hillis, 2018 ONSC 3944; and Vollmer v. Jones, 2007 7999 (ON SC), [2007] O.J. No. 956 (S.C.J.). In those cases, obviously the court applied the test for a summary judgment motion.

[16] In Shen v. Shen, 2007 48642 (ON SCDC), [2007] O.J. No. 4361 (Div. Ct.) a motion “was brought under Rule 18 of the Family Law Rules and Rule 49 of the Rules of Civil Procedure for a judgment in the terms of the offer to settle accepted by the wife when she signed the minutes of settlement.” The motions judge held “that he could not on a summary application determine credibility issues as to what was or was not agreed to post-settlement and, as a result, directed that there be a trial of those issues.” The Divisional Court overturned the judge’s decision on the basis that he found credibility issues in an issue that was not before him (whether there had been a subsequent oral variation of the agreement).

[17] There may be a significant impact if I am required to approach the motions using the test, “is there a genuine issue requiring a trial?” Neither party addressed this question. If I were to decide these motions on the existing record, without clarifying the parties’ positions on whether they are moving under rule 16 or rule 18(13), and without allowing the parties to address the question of whether or not the summary judgment test should be applied, the decision would be vulnerable to an appeal on this basis. This would not serve either party’s interest.

Rationality of the Agreement

[18] As I was reflecting on the 2016 agreement and the 2020 agreement, it occurred to me that the parties’ respective positions could be bolstered if it were shown that their interpretations of the agreements is rational, and the other party’s is irrational. But neither party provided detailed submissions on why they consider their interpretation to be fair and rational, or why they consider the other party’s to be irrational. For instance, neither side provided a calculation showing how their interpretation of the settlement accords with a rational NFP equalization.

[19] Rationality may not be determinative, of course, because parties sometimes act irrationally, and sometimes parties may find one element of an agreement so attractive that they will enter into an agreement that is irrational in other respects. However, if a party’s interpretation of the agreement points towards a settlement that is economically rational for both parties, that would lend support to their interpretation of the agreement.

[20] I would benefit from receiving the parties’ submissions on why their interpretation of the agreement is consistent with equalization and support rules.

July 18, 2019 Order of Justice Shaw

[21] On July 18, 2019 Justice Shaw ordered the respondent to pay $63,164.56 for matrimonial expenses. Her endorsement said that the respondent “consented to an order on August 6, 2018 that he contribute $3,334.55 towards his daughter’s education expenses,” and she ordered that that amount plus $59,829 for his share of “the expenses for the home” were to be released from Mr. Lewis’s trust account.

[22] It is by no means clear that Justice Shaw intended to make a final and binding determination that the applicant was entitled to recover “expenses for the home” from the respondent. To the contrary, it appears Justice Shaw may have been attempting to carry on the effect of the June 7, 2016 endorsement which said that the respondent was to “continue to pay the payments on the matrimonial home as per the status quo pending further order of this court.”

[23] Typically, interim rulings are not binding on the trial judge as the record before the trial judge is likely to be different and usually more expansive than the record before the motion judge. There is a significant body of law on this issue (see, for example, Skunk v. Ketash, 2016 ONCA 841 at para. 35) that neither party has mentioned.

[24] Justice Shaw’s order is not mentioned in the 2020 agreement. I received submissions about how the $63,164.56 is to be treated in the calculation, but neither party has addressed the question of whether Justice Shaw’s order was a final order or an interim order, or how this may impact the outcome of the motions.

Child Support

[25] The respondent denied that child support is owing. He approached the question of whether there were arrears of child support based on the June 7, 2016 endorsement, but did not address why he should not be obliged to pay $1,000 per month in accordance with the minutes of settlement.

[26] Neither the 2016 agreement nor the 2020 agreement state when child support at $1,000 was to begin. Neither party specifically addressed the implications of this in their materials or argument.

Next Steps

[27] As indicated, I need to hear from counsel before proceeding. Counsel are to consult with each other regarding the foregoing and regarding a date for a further hearing, and then contact my judicial assistant to arrange a further hearing date. Given my hearing schedule, I can only offer a hearing at 8:30AM, but I am available most days for such a hearing, and I have availability as early as next week.

[28] I do not intend this hearing to address all the issues I have raised above.

[29] Counsel should be prepared to provide preliminary submissions on whether I can grant the relief requested in either motion if I conclude there are “genuine issues requiring a trial.”

[30] One way to avoid the potential for a finding that the issues require a trial may be for the parties agree to have the matter decided based on affidavit evidence, regardless of whether there may be credibility issues to resolve that might normally require a trial. Counsel should discuss this with their clients and be prepared to address whether they wish to agree to such an approach. Counsel should also be prepared to provide submissions on whether this is even an option, given that the summary judgment rule in the Family Law Rules does not contain anything equivalent to rule 20.04(2)(b) of the Rules of Civil Procedure. Perhaps this is not a barrier as it may be implied that the parties can consent to disposition of a matter by way of summary judgment, but if both parties want to proceed in that way, I would like clear consent from the parties and submissions on whether this procedure would be appropriate.

[31] I also want to hear from counsel on: (a) whether the parties wish to file amended notices of motion or additional materials to address the issues I have raised above; (b) whether is there any reason why this should not be permitted; and (c) whether a further oral hearing is required for these motions.

“Justice R. Chown”

Released: June 3, 2021