COURT FILE NO.: FS-21-00000123-0000
DATE: June 28, 2022
SUPERIOR COURT OF JUSTICE - ONTARIO
RE: JOY MARIE WILLIAMS v. MICHAEL WILLIAMS
BEFORE: JUSTICE MANDHANE
COUNSEL: William Humphrey, for the Applicant
Elli Cohen, for the Respondent
ENDORSEMENT
[1] On June 24, 2022, counsel appeared before me on the Mr. William’s motion for summary judgment. He seeks to enforce a comprehensive separation agreement reached by the parties on September 13, 2021 (“The Agreement”).
[2] The parties both submit that this matter is ripe for summary judgment since there is no genuine issue for trial. Family Law Rules, Rule 16(6). I agree that summary judgment is an efficient process to determine the preliminary matter of whether there is already an enforceable agreement between the parties. The matter largely turns on the interpretation of a series of emails, and there are no credibility issues: Hyrniak v Maudlin, [2016] S.C.J. No. 7.
[3] For reasons that follow, Mr. Williams’ motion is granted. The Agreement is binding and enforceable.
Overview
[4] The most contentious issue throughout the history of this matter has been the value of the matrimonial home for the purposes of Mr. Williams buying out Ms. Williams’ interest.
[5] On September 3, 2021, by way of email to the Mr. William’s then-counsel Ms. Liew, Mr. Humphrey made a comprehensive offer to settle on behalf of Ms. Williams. The offer was open until September 17th. This was the latest in a string of at least eight offers and counteroffers between counsel from December 31, 2020, onwards.
[6] In her affidavit, Ms. Williams explained that the offer was “based on a compromised house value of $538,000. This was the midpoint of the Respondent’s appraisal of $511,000 from February 2021 and my appraisal of $545,000 from March 2021. The value was still less than the current value in September, but at that time I was willing to take the loss if we could get settled right away.” She says that she set a deadline to accept the offer of September 17th “because the housing market in Saugeen Shores was hot, and housing prices were increasing at an alarming rate.”
[7] By way of return email on September 13th, Mr. Williams personally accepted the offer. He wrote to Mr. Humphrey directly, stating: “I would like to proceed with Option 1 as you outlined in your offer reproduced below. I want to avoid court, if you see fit.” On the most contentious issue, his buy-out of the matrimonial home (and a truck), pursuant to Option 1, Mr. Williams agreed to pay Ms. Williams $117,616.63.
[8] About an hour after Mr. Williams accepted the offer, Ms. Liew wrote to Mr. Humphrey indicating that she was no longer representing Mr. Williams.
[9] The next day, September 14th, Mr. Humphrey wrote to Mr. Williams directly stating that he had prepared a separation agreement in accordance with the Agreement. The same day, Mr. Cohen wrote to Mr. Humphrey and advised that he was in the process of being retained by Mr. Williams, whom he had not yet met. Mr. Humphrey replied as follows:
Mr. Williams advised me yesterday that he had accepted a deal that had been proposed to him earlier through his previous counsel. He also advised that he had terminated that retainer.
The urgency is really in getting the house dealt with sooner rather than later. This matter has been hotly contested over the past year with very little movement and two other lawyers before you. Of course, you will need to time to get up to speed and I can let my client know that you will get back to me as soon as possible.
If it will speed up the process, please let me know what I can provide to assist you. There really isn't much in dispute at this point from my perspective, other than the buy-out or sale of the house.
Please confirm if your client is now not agreeing to the previous email proposal, as attached. If not and we are starting over, then my client may decide that the house needs to be revalued or sold soon.
If the proposal is still accepted, as outlined in principle in the attached email, then I can further advise that I have already drafted a Separation Agreement and it is with my client for instructions. If I should place a hold on that now, please let me know.
[10] Just over one week later, on September 22, 2021, Mr. Humphrey wrote to Mr. Cohen again, stating:
I need to hear back on whether you are retained and if so, your client's position on settlement.
I have been instructed to proceed with a court application and/or increase the value of the home at this stage based on continued delay. You are probably aware that you are now the third lawyer (at least) for Mr. Williams and my client should not have to keep waiting on him to resolve these matters.
[11] Mr. Cohen responded the same day as follows:
I can confirm that we are retained by Mr. Williams. We are reviewing the settlement with alacrity. There is no delay on his end, and I expect firm instructions on same. From your email I reviewed, it appeared that a draft of a Separation Agreement was in hand with your office; if so, can you share that with me in Word format to consider with Mr. Williams?
Trusting this to be satisfactory for now, and look forward to hearing from you, and I will do the same on the substantive issues.
[12] Mr. Humphrey replied just over one hour later and stated:
As I mentioned, I am not sure if my client is still willing to proceed with the previously provided offer. If your client is serious about settling and has provided instructions that he will settle on the principles previously discussed, then I will seek instructions to provide you the draft agreement. If he still wants to negotiate the items we thought were finalized, then there is no sense in providing a draft on that basis.
[13] Mr. Cohen did not respond to this last email, and Mr. Humphrey never sent the draft separation agreement. Six days later, on September 28, 2021, Mr. Humphrey wrote to Mr. Cohen unilaterally “withdrawing all previous offers,” and stating that Mr. Williams would be commencing an Application since Mr. Williams was “delaying beyond reason.”
[14] Mr. Williams now seeks to enforce the Agreement. While counsel agreed before me that there was indeed an agreement in place on September 13th, Mr. Humphrey says that the Agreement should not be enforced because the subsequently emails between counsel clearly indicate that Mr. Williams had no intention of proceeding with the Agreement after retaining Mr. Cohen to represent him.
Issue
[15] The only issue is whether it the Agreement is binding on the parties.
Analysis
[16] The parties agree that the general law of contracts applies in the family law context such that settlement agreements are generally enforceable where there is a meeting of the minds: Lindsay v. Lindsay, 2021 ONSC 7085 (Div. Ct.) at paras. 32-42; see also Gorman v. Gorman, 2021 ONSC 2577 at paras. 64-69.
[17] Here, the Mr. Humphrey says that the Agreement should not be enforced because Mr. Williams repudiated the Agreement thereby depriving Ms. Williams of its benefit, and that Ms. Williams accepted Mr. Williams’ termination. Mr. Humphrey points to the emails as evidence that Mr. Williams repudiated the Agreement after retaining Mr. Cohen because Mr. Cohen refused to confirm the Agreement prior to the offer’s expiry on September 17th, and because a Settlement Agreement was not signed in a timely manner.
[18] The law of repudiation is summarized by the Court of Appeal in Glen Schnarr & Associates Inc. v. Vector (Georgetown) Limited, 2019 ONCA 1012 at paras. 29-32:
Anticipatory repudiation occurs when a contracting party, “by express language or conduct, or as a matter of implication from what he has said or done, repudiates his contractual obligations before they fall due”: G.H.L. Fridman, The Law of Contract in Canada, 6th ed. (Toronto: Carswell, 2011), at p. 585.
However, an anticipatory repudiation of a contract does not, in itself, terminate or discharge a contract; it depends on the election made by the non-repudiating party: Guarantee Co. of North America v. Gordon Capital Corp., 2000 SCC 25, [1999] 3 S.C.R. 423, at p. 440; Brown v. Belleville (City), 2013 ONCA 148, 114 O.R. (3d) 561, at para. 42. As Cronk J.A. stated in the latter decision at para. 45:
It appears to be settled law in Canada that where the innocent party to a repudiatory breach or an anticipatory repudiation wishes to be discharged from the contract, the election to disaffirm the contract must be clearly and unequivocally communicated to the repudiating party within a reasonable time. Communication of the election to disaffirm or terminate the contract may be accomplished directly, by either oral or written words, or may be inferred from the conduct of the innocent party in the particular circumstances of the case: McCamus, at pp. 659-61. [Emphasis added.]
[19] The test for repudiation is objective, requiring me to consider whether a reasonable person, considering the surrounding circumstances, would conclude that the breaching party no longer intends to be bound by the contract: Remedy Drug Store Co. v. Farnham, 2015 ONCA 576, at para. 45-46.
[20] Dennison J. in Gorman, supra, at para. 70, helpfully summarized the factors I am to consider when determining whether to enforce a contract in the family law setting, including: whether the parties were represented by counsel, whether the written material supports a prima facie agreement, whether the evidence supports a shared intention to be bound by the written negotiations, whether there was some final act or determination required prior to the settlement being final and binding, and any injustice occasioned by enforcing or not enforcing the agreement. At a policy level, I am to consider whether enforcement would encourage negotiated settlement and discourage litigation.
[21] Having reviewed the email correspondence between the parties and counsel in detail, I can find no cogent evidence of repudiation. The fact that the Mr. Williams sought new legal counsel to finalize the Agreement is not evidence of resiling from it. It is entirely reasonable for him to have retained Mr. Cohen for the limited scope of reviewing the Separation Agreement against the terms of the Agreement. I refuse to draw any adverse inference from the fact that the Mr. Williams had changed lawyers previously; the settlement discussions were proceeding in earnest throughout the relevant period despite his changes in counsel.
[22] Second, the signing of a settlement agreement was not a condition precedent to negotiation of a binding contract in this case insofar as there was a meeting of the minds on a comprehensive resolution of all issues on September 13th: Swift v Swift, 2010 ONSC 6049 at paras. 56-67. Indeed, Mr. Humphrey’s correspondence after the Agreement was reached made it clear that he was holding the pen on preparing the first draft of the Settlement Agreement, which Mr. Cohen requested for review on September 22, 2021, just seven business days after the Agreement was reached.
[23] The Applicant’s reliance on Mr. Cohen’s failure to confirm the agreement as evidence of repudiation is a red herring. Given the Applicant’s concession that there was a binding agreement on September 14th, neither Mr. Williams nor Mr. Cohen were under any legal obligation to “confirm” the Agreement after it was made. Mr. Humphrey’s repeated insistence on confirmation was unreasonable if his client truly intended to remain bound by the Agreement.
[24] Indeed, the emails suggest it was the Applicant who changed her mind about the Agreement in the 12 business days that passed between the offer being accepted by Mr. Williams and the offer being “withdrawn” by Mr. Humphrey. Mr. Humphrey’s first email to Mr. Cohen on September 14th offered Mr. Cohen the professional courtesy of a reasonable amount of time to get up to speed in the file. Yet just six business days later, on September 22, 201, it was Mr. Humphrey who wrote Mr. Cohen to state that his client was having second thoughts about the Agreement. In response, rather than accepting Mr. Humphrey’s anticipated repudiation, Mr. Cohen stated that he was expecting firm instructions on the Agreement and asked Mr. Williams to forward the Settlement Agreement so that it could be reviewed and signed expeditiously.
[25] Overall, I find that Mr. Williams, through her counsel, attempted to exploit Mr. Williams’ personal acceptance of the offer and his change in lawyers to resile from the Agreement she had just struck. Her Affidavit and Factum make it clear that Ms. Williams felt she had left money on the table in her September 3rd offer, repeatedly referencing the fact that housing prices in Saugeen Shores increased dramatically between the March 2021 appraisal and the Fall 2021 settlement discussions. On September 30th, Mr. Cohen wrote Mr. Humphrey lamenting that: “Mr. Williams ought to have been afforded a reasonable opportunity to let us get up to speed and attempting to take advantage of the change in lawyers to squeeze him into a position is not particularly fair or reasonable in the circumstances.” I agree with Mr. Cohen’s characterization of the events.
[26] There was binding Agreement between the parties that should be enforced.
Costs
[27] The parties both submitted their Bill of Costs. I also received Mr. Cohen’s offer to settle dated December 13, 2021, wherein he offered to settle the matter based on the terms of the Agreement.
[28] According to Rule 24(1) of the Family Law Rules, O. Reg. 114/99, Mr. Williams is presumptively entitled to costs as the successful party. However, in setting the proper amount of costs to award, I must consider the reasonableness and proportionality of each parties’ behaviour as it relates to the importance and complexity of the issues, including their time spent, any written offers, any legal fees, and any other relevant matter: Rule 24(12). I am not bound by the Rules of Civil Procedure, R.R.O., Reg. 194, since the Family Law Rules expressly provide that, depending on the conduct of the parties and the presence or absence of offers to settle, a judge may increase or decrease what would otherwise be the appropriate quantum of costs awarded: Beaver v. Hill, 2018 ONCA 840, 143 O.R. (3d) 519, at paras. 11-19.
[29] Given the Respondent’s offer to settle and my findings above that it was the Respondent who repudiated the Agreement and then insisted on filing this Applicant, I am prepared to order costs on a substantial indemnity basis. The filing of pleadings and materials for this motion should not have been required, especially when considering the Court’s overall objective to promote settlement and discourage litigation.
[30] The Applicant shall pay the Respondent $20,000 in costs forthwith.
MANDHANE J.
Date: June 28, 2022
COURT FILE NO.: FS-21-00000123-0000
DATE: June 28, 2022
SUPERIOR COURT OF JUSTICE - ONTARIO
RE: Joy Marie Williams and Michael Williams
BEFORE: Justice Mandhane
COUNSEL: William Humphrey, for the Applicant
Elli Cohen, for the Respondent
ENDORSEMENT
Mandhane J.
Date: June 28, 2022