NEWMARKET COURT FILE NO.: FC-20-01575-00
DATE: August 11, 2022
ONTARIO
SUPERIOR COURT OF JUSTICE
FAMILY COURT
BETWEEN:
Jeff Butler
Applicant
– and –
Jennifer Butler
Respondent
C. Baker, Counsel for the Applicant
M. Tweyman, Counsel for the Respondent
HEARD: August 10, 2022
Ruling on motion
A.J. HIMEL J.:
[1] The Applicant “father” brings a motion to enforce the Memorandum of Understanding (the “MOU”) that was dictated (the “dictated MOU”) at the conclusion of a mediation held on January 18, 2022, and was provided to the parties thereafter (the “written MOU”). The Respondent “mother” states that there was no agreement. She also argues that it is improper for details respecting the alleged agreement to have been disclosed as part of the motion materials.
[2] The mediation relates to the parties’ property and support claims.
The Preliminary Issue: Granting of Leave
[3] The granting of leave issue was raised by me at the motion and cross-motion that I heard on July 17, 2022, when I made an order permitting the mother to relocate approximately 1.5 hours away, (2022 ONSC 4309). I directed that the leave issue be addressed by the judge hearing today’s motion.
[4] The question is whether leave was/is granted to bring this motion, as required by my August 11, 2021 order.[^1]
[5] At the commencement of this motion, I heard oral arguments and provided the decision orally.
[6] Notwithstanding that leave ought to have been sought months ago, I advised the parties that I am granting leave for the following reasons:
(a) Neither party raised the issue of leave when the motion was booked in February 2022, or before Macpherson J. at the conference in March 2022.
(b) It is both parties’ obligation to review the prior endorsements and ensure that they are followed. It seems that neither party turned their mind to this issue.
(c) Macpherson J. gave opinions about the MOU enforcement issue, which is the required precursor for a motion to be heard. His endorsement references that there are motions that have been scheduled by the parties. This is one of those motions.
(d) The Family Law Rules, O Reg 114/99 (the “Rules”) require the matters be dealt with justly and take into account fairness, delay, the court’s resources, access to justice, the use of court time and the expense to the parties.
(e) The parties have incurred costs and are ready to have this matter heard.
(f) If the matter is not heard, the trial, if one is required, will be longer than if I deal with the motion at this time; and,
(g) It is too late for the attendance to be allocated to another matter and, as such, it court time will be wasted if the motion is not heard.
The Merits of the Motion: Law and Analysis
[7] The parties are each represented by experienced counsel. They engaged Dani Fodis to conduct a mediation, which took place in the presence of counsel. They entered into a closed mediation agreement which was executed in January 2022.
[8] The relevant portions of the mediation agreement are summarized below:
(a) Paragraph 9 – All information, documents, notes, correspondence, calculations, memoranda of understanding, drafts or any other communications prepared or provided by any person for the purpose of the mediation shall, unless otherwise discoverable, be treated as without prejudice settlement discussions, and shall be inadmissible for any purpose, including the mediator’s file.
(b) Paragraph 11 – Closed mediation is a confidential, off-the-record process. Although the mediator cannot guarantee absolute confidentiality, the purpose of a confidentiality rule is to help parties feel comfortable freely exchanging information, ideas, options, offers and concerns. The parties agree not disclose any communications made during the mediation process to anyone who was not present, including memorandum of understanding and emails from or to the mediator or between themselves, unless they all consent.
The Settlement Privilege Exception
[9] The mother argues that the mediation agreement specifically addresses the confidential and without prejudice nature of the mediation. She posits that settlement privilege applies to the mediation. The materials before me include: the written MOU, a redacted[^2] email from the mother’s counsel, an email from the father and emails from Mr. Frodis. The mother objects to the disclosure of information about the mediation at this motion.
[10] The Supreme Court of Canada (“SCC”) recently dealt with the issue of the exception to settlement privilege in the context of mediation. The mother argues that this decision does not apply to mediations outside of Quebec. I disagree.
[11] The father argues that the settlement privilege exception applies. I agree.
[12] In Association de médiation familiale du Québec v. Bouvier, 2021 SCC 54, 464 D.L.R. (4th) 383 (“Bouvier”), at para. 97, the majority of the Supreme Court held that the settlement exception applicable in the context of commercial mediations, recognized in Bombardier inc. c. Union Carbide Canada inc., 2014 SCC 35, [2014] 1 S.C.R. 800, "generally applies" to communications in family mediations. In other words, a settlement exception allows the court to recognize and protect the confidential nature of family mediation while also allowing, as an exception, communications to be disclosed despite confidentiality if their disclosure is necessary to prove the existence or scope of an agreement.
In particular, Justice Kasirer for the majority in Bouvier held:
[95] Settlement privilege is a rule of evidence that protects the confidentiality of communications and information exchanged for the purpose of settling a dispute (Union Carbide, at paras. 1 and 31; Globe and Mail v. Canada (Attorney General), 2010 SCC 41, [2010] 2 S.C.R. 592, at para. 80; Lafond and Thériault, at No. 3‑9). It is recognized as fundamental to the making of an agreement between parties (Sable Offshore Energy Inc. v. Ameron International Corp., 2013 SCC 37, [2013] 2 S.C.R. 623; Union Carbide, at para. 1) because it promotes honest and frank discussions, which can make it easier to reach a settlement in all types of mediation (Union Carbide, at para. 31). The privilege applies in the general law of mediation without having to be invoked by the parties, because it [translation] “presupposes that all discussions in the course of mediation between the parties are protected at all times” (Piché, at Nos. 1284‑86; see also Union Carbide, at para. 34). Unlike a confidentiality clause in a contract, “settlement privilege applies to all communications that lead up to a settlement, even after a mediation session has concluded” (Union Carbide, at para. 51). This common law rule, often called the “duty of confidentiality” in Quebec law, has been codified in art. 4 N.C.C.P. since the reform of the Code of Civil Procedure (D. Ferland and B. Emery, Précis de procédure civile du Québec (6th ed. 2020), vol. 1, at No. 1‑41). The new Code of Civil Procedure also sets out the principle that mediators and mediation participants are non‑compellable (art. 606).
[96] Settlement privilege is not absolute, however. For one thing, the parties can change its scope by contract (Union Carbide, at paras. 39, 54 and 58), as long as they do not deprive a court of its supervisory jurisdiction over matters of public order. There are also some exceptions developed by the courts or established by law that allow confidentiality to be lifted on an exceptional basis, for example where there is fraud or professional misconduct by a mediator (Sable Offshore, at para. 19; Union Carbide, at paras. 34 and 49; art. 606 N.C.C.P.; 2016 Guide, at p. 11).
[97] In Union Carbide, this Court reiterated the importance of another exception developed by the courts, the settlement exception, which is central to this appeal. This exception allows protected communications to be disclosed in order to prove the existence or scope of a settlement arising from mediation (Union Carbide, at paras. 35‑36; Roberge (2017), at p. 104). It applies even where an agreement is not entered into until after mediation (Union Carbide, at para. 34). In keeping with its purpose, the exception applies only to what is necessary to prove the existence or scope of the settlement (ibid., at para. 35).
[98] In Union Carbide, Wagner J., as he then was, explained that the settlement exception serves the same public interest as the privilege itself, that is, the promotion of settlements: “Once the parties have agreed on a settlement, the general interest of promoting settlements requires that they be able to prove the terms of their agreement” (para. 35). It is in this sense, as Wagner J. observed, that disclosure to prove the terms of an agreement promotes settlements generally. It follows that the exception in no way weakens the principle of privilege in mediation. As noted by Paul M. Perell (now a justice of the Ontario Superior Court), “where the without prejudice settlement offer has been accepted, there is no longer any public policy reason to exclude the evidence, the goal of the policy having been achieved” (“The Problems of Without Prejudice” (1992), 71 Can. Bar Rev. 223, at p. 234). Within the limits of public order, this logic applies, in my view, both in family mediation and in civil and commercial mediation when parties opt for confidentiality to serve their primary objective of reaching a settlement. As the trial judge wrote: [translation] “Prohibiting the submission of such evidence based on the principle of confidentiality would make it impossible to homologate such an agreement once its existence is contested, which would make little sense” (para. 41).
[99] Nevertheless, parties are free to contract out of the settlement exception. Because a failure to apply the exception “could frustrate the broader purpose of promoting settlements”, parties must express this intention clearly in their mediation contract (Union Carbide, at para. 50; see also para. 54).
[13] The settlement exception to mediation privilege applies in this case. As summarized recently in a family law newsletter, “where one party denies an alleged settlement reached in mediation, the settlement exception will allow disclosure of the communications that are necessary to establish the existence or terms of the agreement (but no more than necessary to prove the agreement)”: Aaron Franks and Michael Zalev, “Can You Refer to an Agreement to Prove an Agreement?”, This Week in Family Law (17 January 2022).
[14] The parties’ mediation agreement contemplates that the materials may be discoverable (Paragraph 9), as may be required by law. They did not contract out of the settlement exception. The SCC’s recent ruling renders these materials discoverable. The impugned materials form the basis upon which the court can determine whether there is an enforceable agreement. The need to ensure that relevant evidence (on the issue of the enforceability of an agreement) is before the court overrides the parties’ intention that the process be closed.
The Enforceability of the Terms of the Memorandum of Understanding
[15] Prior to engaging in the mediation process the parties conducted questioning in December 2021, and exchanged financial disclosure. They retained Mr. Frodis in January 2022.
[16] The mediation was held on January 18, 2022, for approximately 8.5 hours. The session commenced at 10:00 a.m. and ended at 6:15 p.m. Mr. Frodis concluded the mediation by dictating the terms of the MOU. He states as follows:
It is late in the day – around 6:35 p.m. The parties and their counsel have heard me dictate the terms of this memorandum of understanding, which forms a binding agreement between the parties. To ensure that I have not missed any aspect of the parties’ agreement, the parties and their counsel will have an opportunity to review this Memorandum of Understanding. The parties will have an opportunity to canvas any concerns with respect to the terms of this Memorandum of Understanding with me, on notice to the other party. Such concerns must be received by 5 p.m. on Tuesday January 25, 2022. If necessary, I will convene a further brief videoconference to address any potential concerns.
[17] The written MOU is dated January 18, 2022, although it is unclear when it was provided to the parties. The mediator’s statements contemplate an opportunity after January 18, 2022, for the parties to review the written MOU, and to raise any concerns.
[18] A Net Family Property (“NFP”) statement produced by the mediator was also provided to the parties and lists the date of separation as March 27, 2020 (the mother’s stated valuation date).
[19] On January 25, 2022, the mother advised the mediator and the father that she had various comments and questions. The email states that she is not in agreement with certain terms.
[20] The father responds that the agreement is clear and unambiguous. He is not prepared to re-negotiate the terms.
[21] The mediator responds that there do not appear to be any ambiguities in respect of the binding MOU.
[22] The mother argues that the father’s preferred separation date (August 2020 rather than March 2020 as cited on the NFP statement) was mistakenly used for inputting values, and that there are errors in the calculations. The father disagrees, stating that the parties engaged in an 8.5 hour mediation and that he has made many concessions to arrive at the agreement.
[23] The parties disagree as to whether the mother’s requested changes are to correct errors in the calculations and the date of separation, or whether the mother merely changed her mind and regrets the terms of the agreement.
[24] The mediator’s emails do not address the mother’s concerns.
[25] It is not disputed that the terms of the dictated MOU were dictated in front of the parties at the end a long day of negotiation. Compromises and concessions were made.
[26] The parties did not have the opportunity to review the written MOU with their respective counsel when it was dictated on January 18, 2022, nor was any agreement signed by the parties. The written MOU does not comply with section 55(1) of the Family Law Act, RSO 1990, c F.3 (the “Act”).
[27] While the court can enforce a settlement in the absence of compliance with the Act, there must be a meeting of the minds: Williams v. Williams, 2022 ONSC 3867. Moreover, in order to relax the strict provisions of section 55(1) of the Act there must be consensus between the parties. In order to reach a consensus, the terms of an agreement must be clear enough to give effect to the reasonable expectations of the parties.: Aberback v. Bellin, 2019 ONSC 3866.
[28] The father relies on various cases to support the public policy arguments that favour enforcing an agreement whether, or not, it complies with section 55(1) of the Act. However, the court cannot enforce an agreement that does not comply with the Act, unless the agreement meets the test set out above. There are public policy reasons for the requirement that a higher standard must be met in the absence of compliance with section 55(1) of the Act.
[29] I am not prepared to find that the parties had the requisite meeting of the minds to enforce the terms of the MOU for the following reasons:
(a) The late hour of the day when Mr. Frodis dictated the terms of the MOU, following a long day of negotiation.
(b) The lack of opportunity on January 18, 2022, for each party to review the written MOU (which has twelve topics and various subtopics) with his/her counsel privately. This would have provided each party with the opportunity to compare the terms with the NFP statement, and to discuss the entirety of the final agreement.
(c) The statement made by Mr. Frodis that, “the parties will have the opportunity to canvas any concerns with respect to the terms of this memorandum of understanding with me, on notice to the other party. Such concerns must be received by me by 5 p.m. on Tuesday, January 25, 2022. If necessary, I will convene a further brief videoconference to address any potential concerns.”
(d) The absence of evidence before the court that either party stated that he/she agrees with, disagrees with, or wishes to vary any of the terms of the MOU, after hearing the mediator’s dictation.
(e) The disagreement between the parties as to whether there are errors in the written MOU and the calculations, or whether the mother merely changed her mind.
(f) The email sent by the mother on January 25, 2022, clearly indicating that she does not agree to certain terms contained in the written MOU.
[30] The parties both raise the issue that this motion is one of summary judgement. As per Rule 16(6) of the Rules, the court may grant summary judgement “[i]f there is no genuine issue requiring a trial of a claim or defence”. I find that the summary judgement rule does not apply here.
[31] The issue today is not whether a trial is required to determine the enforceability of the MOU. This motion is not for summary judgement, but for enforcement.
[32] For the reasons set out above I find that the MOU is not enforceable. Therefore, the trial shall proceed on the property and support claims (along with any parenting claims) in November 2022, unless the parties settle this matter. I implore the parties to end this litigation for the sake of their children, and for themselves.
[33] The father’s motion is dismissed with costs.
Costs
[34] The principles guiding the court’s exercise of its discretion pursuant to the Rules are well-established. The primary objective, of course, is to enable the court to deal with cases in a fair and timely manner. Four fundamental purposes are served: (1) to partially indemnify successful litigants for the cost of litigation; (2) to encourage settlement; (3) to discourage and sanction inappropriate behaviour by litigants: Serra v. Serra, 2009 ONCA 395; and (4) to ensure that cases are dealt with justly: Mattina v. Mattina, 2018 ONCA 867, at para. 10.
[1] The mother is successful in having the father’s motion dismissed.
[2] There are no offers to settle.
[3] The father asks for costs of $4,000 if he is successful, and that he pay costs of $3,000 if he is not successful.
[4] The mother asks for costs of $5,000 if she is successful, and that she pay costs of $4,000 if she is not successful.
[5] Both lawyers are experienced senior counsel. Both provided helpful factums to the court (and materials that comply with the page limits).
[6] In my view, the sum of $4,000 is reasonable and proportionate in the circumstances, irrespective of which party is successful.
[7] As the mother is the successful party, the sum of $4,000 shall be paid by the father, within 60 days.
Date Released: August 11, 2022
[^1]: I have repeatedly raised concerns with these parties about the excessive number of court attendances, the litigation costs and the impact of the high conflict. [^2]: An unredacted version of the email setting out the mother’s substantive concerns about the MOU was also provided, but I did not consider same as it is unnecessary to do so.