COURT FILE NO.: CV-20-000170-000

DATE: 2021 11 12

SUPERIOR COURT OF JUSTICE - ONTARIO

RE: Michael Rooney v. Estate of Denise Tipping

BEFORE: Fowler Byrne J.

COUNSEL: Sean S. Carter and Heidi LeBlanc, for the Applicant

Ethan Rogers, for the Respondent

HEARD: October 8, 2021, by videoconference

E N D O R S E M E N T

[1] There are two motions before me. The first is a motion brought by Respondent, the Estate of the Late Denise Tipping (“the Estate”), wherein it seeks a number of orders. For the purposes of this attendance, the Estate seeks:

a) An order declaring that a settlement was reached on September 30, 2020 and is enforceable; and

b) A declaration that the Applicant failed to comply with the settlement.

(hereinafter the “Settlement Motion”).

[2] The remainder of the relief sought by the Estate is to be adjourned, on consent.

[3] The second motion was brought by the Applicant, Michael Rooney (“Michael”), wherein he seeks an order abridging [sic] the time for service of his Response to Request to Admit, which was served approximately one month beyond the date required by the Ontario Rules of Civil Procedure, R.R.O. 1990, Reg. 194 (“Rules”).

[4] Accordingly, the following issues must be determined:

a) Was there a settlement?

b) Should the time required for Michael to respond to the Request to Admit be extended?

c) If there is a settlement, should it be enforced?

I. Has the Matter Been Settled?

[5] The Respondent, the Estate of the Denise Tipping, argues that this Application has settled. This is argued for two reasons: first, correspondence show that the parties agreed to the terms of resolution; and second, by failing to respond to a Request to Admit served by the late Denise Tipping (“Denise”) in the time required by the Rules, Michael has admitted that there was a settlement. I will address the issue of the Request to Admit first.

A. Failure to Respond to the Request to Admit

[6] For the reasons that follow, I do not find that Michael has admitted that a settlement was reached, and he should be permitted to withdraw any admissions that say otherwise.

i. Background

[7] On April 5, 2021, Denise served a Request to Admit. It contained a number of statements which basically confirmed Denise’s position.

[8] Shortly after it was served, the parties confirmed dates for cross-examinations. On the eve of the cross-examinations, Michael’s counsel, Mr. Carter, served Michael’s sworn reply affidavit. Counsel for the Estate, Mr. Rogers, argued that it was too late, and that in any event, Denise took the position that Michael has been deemed to admit the statements contained in the Request to Admit. Mr. Rogers elected not to examine Michael on the pre-arranged date of April 30, 2021.

[9] On May 2, 2021, Mr. Carter wrote to Mr. Rogers advising that Michael intended to respond to the Request to Admit, but that it was premature and was something properly brought prior to trial or a final hearing.

[10] Michael responded to the Request to Admit on May 23, 2021. Michael was cross-examined on September 1, 2021 and September 15, 2021.

ii. Analysis

[11] The Rules are clear. When a Request to Admit is served, the responding party has 20 days in which to respond. If they fail to do so, they are deemed to admit the truth of the facts mentioned in the Request to Admit: r.51.03(1),(2).

[12] The Rules though, also provide the Court with the power to abridge or extend the time provided in the Rules: r.3.02. The Court may also dispense with compliance with a rule if it is in the interests of justice to do so: r.2.03. The Rules are to be construed liberally to secure the just, most expeditious and least expensive determination of every civil proceeding on its merits: r.1.04(1).

[13] There are different considerations though, when a party seeks to withdraw a deemed admission. Rule 51.05 states a deemed admission may only be withdrawn on consent or with leave of the Court. Given that the Estate does not consent, I must decide whether leave should be granted.

[14] A party requesting leave to withdraw an admission bears the onus of establishing:

a) there a triable issue with respect to the amendments (or in our case the deemed admission);

b) there is a reasonable explanation for the change in position; and

c) there is no prejudice to the other party that cannot be compensated for in costs.

Dharsi v. Manji, 2016 ONSC 703 at para.21-22 (Div.Crt); 147619 Canada Inc. v Chartrand, 2006 25624 (Ont.C.A.) at para. 1-4, Szelazek Investments Ltd. v. Orzech,[1996] O.J. No 336 at par. 1 (Ont.C.A.).

[15] In this case, there were excess of 60 statements set out in the Request to Admit. The admissions which are of issue here - whether or not there was a settlement between Michael and his mother – are clearly triable issues. That is one of the reasons why this matter is proceeding to trial.

[16] With respect to the second part of the test, the Court has excepted a number of reasonable explanations as to why a position has changed. In Mining Technologies International, Inc. v Krako Inc., 2013 ONSC 7280 at para.180, the Court accepted the explanation that the defendants did not respond to a Request to Admit because it did not want to prejudice an upcoming motion.

[17] In Bannon v. Thunder Bay (City), (2000) 2000 5708 (ON CA), 48 O.R. (3d) 1 (C.A.), reversed on other grounds at 2002 SCC 20, [2002] 1 S.CR. 716, the Court of Appeal for Ontario affirmed the trial judge’s decision to allow a deemed admission to be withdrawn. In this case, the Request to Admit was served just before trial, but more than 20 days out. The Defendant, the City did not respond prior to trial. The trial judge determined that it was clear that Ms. Bannon did not admit the truth of the facts put to her, despite not answering. He determined that the deemed facts were a central issue at the trial, which was made very clear in the discovery process. The party who served the Request to Admit was not taken by surprise by Ms. Bannon’s position at trial and did not rely on the deemed admissions for trial preparation. The trial judge found that the City was not prejudiced by not holding Ms. Bannon to her admissions and the Court of Appeal agreed, determining that it was entirely appropriate for the trial judge to grant leave to withdraw the deemed admissions. In Bannon case, there was no allegation that the deadline to respond was missed due to inadvertence or a miscommunication in instructions.

[18] In this case, I am satisfied by Michael’s explanation. Before the 20 days were up, the parties were scheduling cross-examinations. The Estate originally scheduled the examinations for April 14, which was within the 20-day period. Mr. Carter required an adjournment to April 30, to which Mr. Rogers agreed. It was also anticipated that Michael would swear a reply affidavit in advance of the cross-examinations.

[19] The reply affidavit of Michael was received on the morning of April 30, 2021. His lawyer indicated it was a sworn copy of a draft that as forwarded several weeks prior, with no changes. The lawyer for the Estate indicated that they had not received the affidavit before, and that they had focused their cross-examination preparation on the deemed admissions of Michael. Given the late affidavit and the issue of the deemed admissions, Michael’s cross-examination was postponed.

[20] On May 2, 2021, Mr. Carter wrote to Mr. Rogers, explaining why he did not respond to the Request to Admit, and attaching case law. Basically, Mr. Carter took the position that the Request to Admit was unnecessarily long and highly premature. Mr. Carter cited the triable issues contained in the Request to Admit, of which Mr. Rogers was aware before the Request to Admit was served. Mr. Carter also took the position that a Request to Admit cannot take the place of basic discovery or cross-examination. Finally, Mr. Carter also took the position that the Request to Admit not only contained facts, but also statements of law and opinions on issues, which are not the proper subject of a Request to Admit. This letter was sent only seven days after the expiry of the 20 days. A Response to the Request to Admit was served only 19 days later.

[21] I do not accept that the length of a Request to Admit is a reasonable reason why one does not need to respond in time. That being said, I do find that the remaining reasons given by Mr. Carter are reasonable in the circumstances. The parties were in the process of arranging cross-examinations in order to test the facts. None of the key issues were determined. While there are no “pleadings” per se in an application, the affidavits that formed the basis of the parties’ positions, to be delivered prior to the cross-examinations, had not been completed. Michael had not even delivered his reply affidavit before the 20-day period had expired.

[22] There is also no prejudice to the Estate. The delay in delivering the Response was not inordinate. The Estate did not cross-examine Michael until the Response was delivered, so it had full opportunity to examine Michael on his position. There are no surprises. If the Estate incurred any expense by having to delay their cross-examination, it can be address in costs.

[23] Also, this Court is extremely uncomfortable with determining an Application on a technicality that eradicates one party’s position, when the true positions of all parties are known. It is always in the public interest to have matters decided on their merits, which should happen in this case.

[24] Accordingly, the court should accept and consider Michael’s Response to the Request to Admit.

B. Was a Settlement Reached?

[25] For the reasons that follow, I find that no settlement was reached.

i. Background

[26] Denise was Michael’s mother. She has three other sons, also the brothers of Michael, namely David Rooney (“David”), Paul Rooney (“Paul”) and Peter Rooney (“Peter”).

[27] Briefly, this litigation arose out a dispute between Michael and Denise over money Michael had advanced to Denise starting in 2016. Michael maintains he was purchasing equity in a home owned by Denise and in which he resided since December 2016. Denise denies any such agreement, but apparently was content to return the money. There was some disagreement about the exact amount advanced by Michael, whether anything was owed to Denise, and when the monies t should be returned.

[28] These motions address whether Denise and Michael actually reached a final resolution on the terms of this repayment. Denise, and later her Estate, maintain that Michael and Paul (as agent for Denise) reached an agreement in September 2020, on the terms of repayment. Michael claims that no such agreement was ever reached. No Minutes of Settlement were signed, nor was his lawyer involved in the discussions.

[29] Since the time the agreement was allegedly reached, and after Denise died, Michael amended his Application in September 2021 to include a claim for the accrued appreciation in Denise’s property, as well as compensation for his physical labour around the property while he lived there. The Estate vehemently disputes that the Application was properly amended as it did not consent and nor was it given any notice of the request to amend. Whether such amendment is appropriate after the death of a key witness is a matter left to another day.

[30] In any event, in the summer and fall of 2020, Denise was very ill. Prior to this Application being commenced by Michael, she did exchange emails with Michael on how to resolve their disagreement, but as of September 2020, it appears that Paul or David was speaking on Denise’s behalf in the email negotiations. It also appears that Michael was quite willing to correspond with his brothers in order to resolve the outstanding issues.

[31] On April 5, 2021, Paul swore an affidavit indicating that he acted as agent for Denise in negotiating a repayment schedule between Michael and Denise. In her affidavit dated April 5, 2021, Denise swore that Paul acted as her agent in his negotiations with Michael in leading up to an alleged agreement in September 2020. It does not appear that any of the email communication between Paul and Michael, or between David and Michael was copied to Denise, nor to anyone’s counsel, although it may have been shared afterwards. No one produced a Power of Attorney, or any signed direction by Denise, authorizing Paul or David to speak on her behalf.

[32] In September 2020, negotiations ensued between Michael and Paul. Not only were they discussing the money to be repaid to Michael, but also the return of an investment held with 3i Financial Services Inc. (“3i”) which everyone agreed Denise was holding on behalf of Michael. There was also some credit card debt incurred by Denise on behalf of Michael, which needed to be set-off against whatever Denise paid to Michael.

[33] A number of emails were produced dated September 22, 2020. While they all appear to be sent on this day, the time the emails were sent was not clear. It appears either Paul’s and Michael’s computer was not set to the proper time. Accordingly, sometimes a responding email appears to have been sent several hours prior to the email to which they wished to respond.

[34] Piecing together the sequence of emails on a logical basis as best as I could, I have concluded that on September 22, 2020, Paul sent a proposal by email to Michael wherein he confirmed that Denise and Michael were $5,000 apart on the amount to be repaid. Paul indicate that Denise agreed to forgive $1,739.64 of a $10,739.64 credit card debt, which would reduce their disagreement to $3,260.36. Paul then suggested that Denise would provide a cheque up front for $6,000 and a further $8,000 every six months thereafter, starting in only three months, rather than in 6 months, as previously offered.

[35] Michael responded indicating that he wanted his 3i monies signed over to him the next day, that Denise would have to deliver the first payment of $6,000 the next day, by way of bank draft, and accepted the concession on the credit card debt. He then calculated that the remaining amount owing as follows:

Debt: $80,000

First payment: -$6,000

Set off for CC debt: -$9,000

Amount Outstanding: $65,000

[36] The amount of $65,000 was to be paid in installments of $8,000 every six months, starting on January 1, 2021, until paid off. At the end of the email, it states,

The settlement agreement from Sean Carter to be Signed by both of us as agreed. Amendments to this could be made written in pen and initials. Please confirm this. Thank you Michael.

[37] This was in reference to earlier Minutes of Settlement prepared by Mr. Carter that contained other terms of repayment, but in essence finalized the outstanding litigation.

[38] Shortly thereafter, Paul wrote back:

We both understand and agree these are the numbers and the main points to put in the agreement. Please reply.

[39] In a further email, Paul stated:

Michael

See you at three o clock at the Tims Trafalgar and 401 today

As we are both working in good faith here until your lawyer can do up your final agreement

after release of $6000 today

the balance owing is $60,000 to you

The first payment coming three months after the settlement is signed

And every subsequent 6 months until the balance is paid

The language in the agreement to be changed so there is no demand or liens on her house / car / any assets

before or on her estate after her passing a5e760ea8874c148ea02c6c79bbe49a-10

However you need some protection in the final agreement if Mom doesn’t pay you the right amount or

every 6 months as agreed

Also some wording that she may pay you more than $8000 per payment money

Also within 6 months from her passing the estate will pay you any balance owing

I only have limited time right now

Please reply so there is a record here before I can give you the cheque today

Thanks Michael

Paul

[40] Michael later responded:

Yes Paul I have read the comments from you and I am in full agreement on exactly what you have put forward. I am in compliance with this. We can work to get some wording properly put forward and move on to get our lawyers to sign off on this. Look forward to seeing you at 3 PM this afternoon thank you again for all your help Michael. I am at my lawyers office right now Signing the condo deal.

[41] By the next day, the 3i investments were handed over as agreed, and Michael was given a cheque from Denise in the sum of $6,000. Unfortunately, that cheque was returned “non-sufficient funds” on October 3, 2020. Denise indicated while she intended to pay it but was in and of hospital at that time and did not have time to transfer the necessary funds. David arranged for the cheque to be replaced by a cash payment of $6,000 which Michael accepted shortly thereafter.

[42] When Michael received the replacement cash, he sent an email to David. In this email he stated:

David a quick mention of thank you to you for your efforts in this regard. I have some very severe reservations regarding mom's plan to follow through on her payment schedule. I would like to have some sort of assurance from you Peter Paul etc. about how exactly she plans to make these payments she needs a serious discussion with you guys about where this money is coming from in the future.

I will be discussing with Paul tomorrow the remaining details of the settlement and Obviously with my lawyer as well. These payments and the money that is owed is over an extremely long time 48 months (4 years) I will need this money tied to something secure either my Lincoln and the house as a matter of recourse. I plan to honour what I have talked to Paul about but I know as you can fully understand given what has happened to me and what has just recently happened with regards to this bounced first cheque of a nominal amount of money in the scheme of things does not give me any trust whatsoever in her. ….

[43] No Minutes of Settlement were ever signed.

[44] On December 30, 2021, Paul contacted Mr. Carter and indicated that he was ready to make the first payment of $8,000 as per their agreement. Mr. Carter responded that there was no formal agreement reached, and that his office was not involved in any negotiations. Mr. Carter also denied that Michael had received any money to date (which is now known not to be case). Nonetheless, Mr. Carter encouraged Paul to make the next payment, in certified funds.

[45] Denise (and Paul and David for that matter) were aware that Michael did receive $6,000, so they found his position to be deceitful. Accordingly, Denise refused to advance any more funds. If there were the makings of an agreement at that point, it was gone now.

[46] On or about November 24, 2020, Michael had commenced an Application wherein he sought the sale of the Property, and that $80,865 of the proceeds be paid to him. Given that no payment was forthcoming in January 2021, he proceeded with the Application.

ii. Analysis

[47] The Estate maintains that the exchange of emails comprises a settlement, similar to an offer made under r.49, that was accepted. If the Court accepts this, then it must embark on a two-step analysis. The first step is to determine whether an agreement to settle had been reached. If the Court does determine that there was an agreement to settle, the court then must determine if the settlement should be enforced: Hashemi-Sabet Estate v. Oak Ridges Pharmasave Inc., 2018 ONCA 839 at para. 27.

[48] When determining is a settlement had been reached, I must review the motion as if the Estate was seeking summary judgment pursuant to r.20. If I do find a genuine issues of credibility or material issues of fact, I must refuse to grant the relief sought and remit the matter to trial: Capital Gains Income Streams Corporation v. Merrill Lynch Canada Inc., 2007 39604 (Ont. Div. Crt.) at para. 9.

[49] There is no need for a trial if I can reach and fair and just determination on the merits of the motion. I will be able to do this if I can make the necessary findings of fact, I can apply the law to the facts, and this is a proportionate, more expeditious and less expensive means to achieve a just result.: Hryniak v. Mauldin, 2014 SCC 7, [2014] 1 S.C.R 87 at para. 49.

[50] In reviewing this matter, I must first review all the evidence submitted by the parties. Then, unless it is in the interests of justice to only exercise enhanced fact-finding powers at trial, I may weight the evidence, evaluate the credibility of the deponent and draw a reasonable inference from the evidence: Hryniak at para. 52.

[51] With respect to the two-part test under Hashemi-Sabet, I will first address whether a settlement had been reached.

[52] The parties will have fulfilled all the requisites for the formation of a binding contract when they agree on all the essential provisions to be incorporated in a formal document with the intention that their agreement shall thereupon become binding: Bawitko Investments Limited v. Kernels Popcorn Limited, 1991 2734 (Ont.C.A.) at page. 12; Olivieri v Sherman, 2007 ONCA 492 at para. 41.

[53] An agreement is binding on the parties if the parties consider that it contains all the essential terms, even if the parties agree that those terms will subsequently be recorded in a more formal document, together with the usual terms ancillary to that type of agreement. However, “…an agreement is not final or binding if it is merely an agreement to later agree on essential provisions or to deter the binding nature of the agreement until the execution of the proposed subsequent formal contract”: Ward v Ward, 2011 ONCA 178 at 53

[54] In determining this whether the parties believed their agreement encompassed all the essential terms, the conduct of the parties may be examined to determine if an objective person would find that there was an agreement present: Ward at para. 65; Olivieri at 44-45.

(i) Was there an intention to be bound?

[55] I have little difficulty in finding that Michael intended to be bound by an agreement. The wording in the email communication makes that very clear. When the first payment bounced, Michael expected to be reimbursed. He relied on his agreement with Paul so that he could proceed with a purchase of a condominium that day.

[56] I concede that Michael has taken a position somewhat adverse in his cross-examination. Nonetheless, utilizing my additional fact-finding powers under r.20.04(2.1), I have weighed the evidence of all parties and made an assessment of credibility on the affidavits and transcripts. Michael’s subsequent position that he did not intend this agreement to be binding, is not supported on the record.

(ii) Was there an agreement on all the essential terms?

[57] While the amount and timing of the payments was settled, I find that one essential term of the contract remained unsettled: security for the performance of the agreement. In the first draft Minutes of Settlement, there was a term that if Denise were to pass away, or if she missed a payment, that Michael would have a charge against Denise’s home or her estate. Michael asked that these Minutes be used, but just change and initialed the amounts and timing where appropriate.

[58] In one of Paul’s emails, after they agreed on the amount to be paid and the timing, Paul stated that the language in the draft Minutes of Settlement would have to be changed “so there is no demand or liens on her house / car / any assets before or on her estate after her passing.” Paul did acknowledge though, that some type of security would have to be set out. 10

[59] While Michael was in agreement, he anticipated his lawyer would draft something that would be suitable to all. Later, after Denise’s first payment bounced, Michael wrote to David:

…I will be discussing with Paul tomorrow the remaining details of the settlement and Obviously with my lawyer as well. These payments and the money that is owed is over an extremely long time 48 months (4 years) I will need this money tied to something secure either my Lincoln and the house as a matter of recourse. I plan to honour what I have talked to Paul about but I know as you can fully understand given what has happened to me and what has just recently happened with regards to this bounced first cheque of a nominal amount of money in the scheme of things does not give me any trust whatsoever in her. ….

[60] Accordingly, it appears clear on the record that “the remaining details” of the settlement, which deal with his security, have yet to be determined. They are even more important to Michael now that the first payment was missed. Clearly, Michael and Paul had different positions on what would be adequate security.

[61] Also, while Michael appeared content to discuss the terms of settlement with his brother, in the end, it was Denise who was agreeing to the settlement. It was Denise from whom Michael was seeking security. Given the absence of Denise from the negotiations, and given that no one had presented a power of attorney granting Paul or David the right to bind Denise, it would have been all the more important for Michael to have his Mother’s signature on the Minutes of Settlement.

[62] Unfortunately, it appears thereafter that both parties dropped the ball. While they agreed on some of the essential terms, Michael did not immediately pursue a signed agreement to protect his settlement. Neither did Denise though, or Paul or David on her behalf. It was as much of a benefit to Denise to have a written settlement to protect her against any further action, and to acknowledge the credit card debt owed to her, as it was for Michael to protect his settlement.

[63] Accordingly, I find that an agreement on all the essential terms of the settlement was not reached, and therefore there was no agreement to settle.

II. Enforcement

[64] Given my finding that there was no enforceable agreement, this issue is moot.

III. Conclusion

[65] It appears from the record that the parties agreed on the quantum that was advanced by Michael to Denise. While I have found that security for the payments was an essential term in the fall of 2020, it may be no longer be essential given Denise’s passing. She owned a home which no doubt must be sold or other transferred. This appears to be an opportune time to finalize this matter, especially when the parties have been so close in the past. The parties are urged to take the opportunity to resolve the matter before the remainder of the Estate is expended on legal fees.

[66] Accordingly, I make the following orders:

a) The time permitted to respond to the Request to Admit is extended to May 30, 2021;

b) Leave is granted to Michael to withdraw any deemed admissions he made by failing to deliver his Response to the Request to Admit beyond 20 days of service; and

c) The remainder of the relief sought by the Estate is adjourned to the assignment court on November 15, 2021.

Fowler Byrne J.

DATE: November 12, 2021

COURT FILE NO.: CV-20-000170-000

DATE: 2021 11 12

SUPERIOR COURT OF JUSTICE - ONTARIO

RE: Michael Rooney v. Estate of Denise Tipping

COUNSEL: Sean S. Carter and Heidi LeBlanc, for the Applicant

Ethan Rogers, for the Respondent

ENDORSEMENT

Fowler Byrne J.

DATE: November 12, 2021