Court File and Parties
COURT FILE NO.: CV-15-541379
DATE: 20221012
SUPERIOR COURT OF JUSTICE - ONTARIO
RE: JOHN-FINNEY EDWIN DODLA
AND:
ROHANNA DODLA and SRINIVAS BONDAKADI
BEFORE: Madam Justice A.P. Ramsay
COUNSEL: Jordan N. Potasky, for the Plaintiff
Kelsey Gordon and Anna Matas, for the Defendants
HEARD: In Writing
ENDORSEMENT
A. Overview
[1] The plaintiff moves for judgment pursuant to r. 49.09(a) of the Rules of Civil Procedure, R.R.O. 1990, Reg. 194, to enforce the terms of Minutes of Settlement dated February 18, 2022 (the “Minutes of Settlement”), purportedly executed by the parties following a pre-trial to end all litigation between the parties. The plaintiff also seeks corollary relief presumably incidental to the enforcement of the judgment including certain declaratory relief to effect the transfer of real property registered in the defendants’ names.
B. Background
[2] The underlying dispute involves a brother, the plaintiff John-Finney Dodla (“the plaintiff”), his sister, Rohanna Dodla (“Ms. Dodla”), and his sister’s husband, Srinivas Bondakadi (collectively, “the defendants’). The defendants are the registered owners of two condominium properties municipally located at 130 Neptune Drive and 150 Neptune Drive (“the properties”). The plaintiff contends that he is the true beneficial owner of the properties as a result of a constructive or resulting trust. In April 2015, the plaintiff sued the defendants seeking, inter alia, a declaration that he was the real owner of the properties, claiming damages for unjust enrichment, and seeking leave to issue a certificate of pending litigation against the properties.
[3] In turn, the defendants counterclaimed, seeking damages for unjust enrichment and alleging that they were the sole beneficial owners of the properties.
[4] By consent order of Gray J. dated May 14, 2015, certificates of pending litigation were placed on the properties. Paragraph six of the Minutes of Settlement before me indicate that the order of Gray J. will be vacated on consent, though it is not specified whether the consent applies to both properties.
[5] By order of Associate Judge Abrams dated July 13, 2016, the plaintiff, who resides in Australia, was directed to post security for costs. Paragraph seven of the Minutes of Settlement indicate that the monies posted would be paid out to the plaintiff on consent.
[6] The parties proceeded to a pre-trial conference before Stinson J. on February 18, 2022, in advance of a trial scheduled for February 22, 2022. The plaintiff argues that the parties ultimately settled the case at that pre-trial conference and thereafter executed Minutes of Settlement. The plaintiff submits that one of the provisions of the Minutes of Settlement was that the defendants would transfer 130 Neptune to him based on a transfer from trustee to beneficial owner. He argues that he has a valid and independent entitlement as a result of a binding contract to ownership of the property and, in the result, also seeks a vesting order.
[7] The relief sought in the Notice of Motion include relief not specifically spelled out in the Minutes of Settlement. The relevant relief sought are as follows:
(a) A Declaration that the Minutes of Settlement executed by the parties on February 18, 2022, form a binding contract;
(b) Judgment in favour of the Plaintiff in accordance with the terms of the said Minutes of Settlement;
(c) An Order that title to real property municipally known as 130 Neptune Drive, Toronto,
Ontario, M6A 1X5 and legally described as:
PIN: 11067-0132 LT UNIT 4, LEVEL 14, YORK CONDOMINIUM CORPORATION NO. 67, BLOCKS 2 & 4 PLAN 66M1298 AS DESCRIBED IN SCHEDULE ‘A’ OF DECLARATION B310997 TWP OF YORK/NORTH YORK, CITY OF TORONTO. SAVE AND EXCEPT PART OF BLOCK 4 PLAN 66M1298, DESIGNATED AS PARTS 1 AND 2 ON PLN 66R – 19808 vests in the Plaintiff;
(d) An Order directing the Land Registrar for the Land Registry Office for the Land Titles
Division of Toronto (No. 80) to convey title to and register the said real property in the name of the Plaintiff;
(e) An Order to vacate and discharge the Order of the Honourable Mister Justice Gray dated May 14, 2015, from the said real property as well as real property municipally known as 150 Neptune Drive, Toronto, Ontario, M6A 1X5 and legally described as:
PIN: 11222-0001 LT UNIT 1, LEVEL 2, YORK CONDOMINIUM PLAN NO. 222, PT BLK ONE PLAN M1298 & PT BLK A PLAN M1382; AS DESCRIBED IN SCHEDULE ‘A’ OF DECLARATION B472910. TWP OF YORK/NORTH YORK, CITY OF TORONTO;
(f) An Order to release and pay the funds posted by the Plaintiff in his lawyers’ trust account as security for costs pursuant to the Order of Master Abrams dated July 13, 2016, to the Plaintiff;
(g) An Order to dismiss this action, including the Counterclaim, without costs;
[8] Aside from the provision with respect to vacating the Certificate of Pending Litigation and payment of monies posted for security for costs to the plaintiff, other relevant provisions of the Minutes of Settlement are as follows:
The parties agree to settle the action and counterclaim on the following terms:
The Defendants shall execute such documents and take all required steps to transfer the property at 130 Neptune Drive, Toronto (the “subject property”) that is the subject of this action to the Plaintiff or as he may direct, subject to the existing mortgages in the amounts outstanding as of this date which the Plaintiff will either assume or payout (sic) in order to discharge same.
The transfer shall be made on the basis that it is a transfer from Trustee to beneficial owner and shall be completed within 30 days of the date of these Minutes subject to any extension at the request of the Plaintiff.
The subject property shall be assumed by the Plaintiff “as is”, including assumption of the existing tenancy by the….”
…
The parties shall exchange Mutual Full and Final Releases which will include an Acknowledgement that the Plaintiff has no beneficial or any other interest in the property at 150 Neptune and that the Defendants have no beneficial or any other interest in the property at 130 Neptune, both of which properties are the subject of this action.
C. The Issues on the Motion for Judgment
[9] There are two issues raised on this motion:
i. Did the parties have a binding agreement to settle the action and the counterclaim? If so, what was the nature of the agreement between the parties to settle the action?
ii. If there is a binding settlement between the parties, should the agreement be enforced by the court?
D. Analysis
[10] It is evident that there was some compromise between the parties as the trial did not proceed. The question, however, is the nature of the agreement between the parties. Neither party has satisfactorily addressed this issue. And, in the result, the motion is dismissed, for the reasons that follow.
[11] Where there is no dispute of a lawyer’s retainer, the authority of a solicitor to compromise may be implied from a retainer to conduct the litigation unless a limitation of authority has been communicated to the other side: Scherer v. Paletta, [1996] 2 O.R. 524 (C.A.), at paras. 10 & 11.
[12] The defendants were formerly represented by solicitor Eddy Battiston. There is no evidence before me to suggest there is any dispute regarding Mr. Battiston’s authority to settle. Both defendants have sworn affidavits in response to the motion, with Mr. Bondakadi essentially adopting the statement of facts in Ms. Dodla’s affidavit. While the defendants have raised other concerns surrounding the execution of the Minutes of Settlement, they do not deny that their former lawyer, Mr. Battiston, had implied authority to engage in settlement negotiations and to compromise on their behalf.
[13] The defendants do not dispute that they agreed to transfer 130 Neptune to the plaintiff. The defendants contend, however, that there was no discussion regarding the transfer of 130 Neptune on the basis that it was a transfer from trustee to beneficial owner. The defendants oppose the enforcement of paragraph two (2) of the Minutes of Settlement.
Court’s Jurisdiction to Enforce Settlement
[14] The plaintiff relies on r. 49.09 for the court’s jurisdiction to enforce the Minutes of Settlement. However, the applicability of r. 49.09 is in doubt, as the rule applies to circumstances where one party fails to comply with an accepted offer to settle: Vanderkop v. Manufacturers Life Insurance Co. (2005), 2005 CanLII 39686 (ON SC), 78 O.R. (3d) 276. There is no evidence of any accepted offer to settle before the court. R. 49.09 provides that:
49.09 Where a party to an accepted offer to settle fails to comply with the terms of the offer, the other party may,
(a) make a motion to a judge for judgment in the terms of the accepted offer, and the judge may grant judgment accordingly; or
(b) continue the proceeding as if there had been no accepted offer to settle.
[15] However, it is well established by the authorities and the jurisprudence that at common law, parties who have reached a settlement may enforce the settlement agreement by way of motion for judgment in the action: Paul M. Perell & John W. Morden, The Law of Civil Procedure in Ontario, 4th ed. (Toronto: LexisNexis, 2020) at 729-730; GMBR Capital Corp. v. Parmar, 2021 ONSC 7798, at para. 25; Donaghy v. Scotia Capital Inc./Scotia Capitaux Inc., 2009 ONCA 40 at para. 11, leave to appeal dismissed, 2009 CanLII 27234 (SCC).
[16] The plaintiff seeks certain declaratory relief ancillary to the relief sought to enforce the Minutes of Settlement. The court’s jurisdiction to make the kind of binding declarations of rights sought by the plaintiff is also rooted in s. 97 of the Courts of Justice Act, R.S.O. 1990, c. C.43. The Ontario Court of Appeal made this clear in Donaghy stating, at para. 11:
The authority of the court to hear a motion to enforce a settlement is beyond question. Pursuant to s. 97 of the Courts of Justice Act, R.S.O. 1990, c. C.43 "the Court of Appeal and the Superior Court of Justice . . . may make binding declarations of right, whether or not any consequential relief is or could be claimed". Section 96 also preserves the common law.
[17] On this motion for judgment to enforce the Minutes of Settlement, the court must deal with two issues: First, was there a settlement? And second, if there was, should the court exercise its discretion to enforce the settlement? See: Milios v. Zagas (1998), 1998 CanLII 7119 (ON CA), 38 O.R. (3d) 218 (C.A.); Capital Gains Income Streams Corp. v. Merrill Lynch Canada Inc. 2007 ONCA 497, 87 O.R. (3d) 443 (C.A.).
[18] It is trite law that a settlement agreement is a contract: Donaghy, at para. 41; Hodaie v. RBC Dominion Securities et al., 2011 ONSC 6881 at para. 17, aff’d 2012 ONCA 796.
[19] Thus, the settlement agreement is subject to the general law of contract regarding offer and acceptance. For a concluded contract to exist, the court must find that the parties: (1) had a mutual intention to create a legally binding contract; and (2) reached agreement on all of the essential terms of the settlement: Bawitko Investments Ltd. v. Kernels Popcorn Ltd. (1991), 1991 CanLII 2734 (ON CA), 79 D.L.R. (4th) 97 (Ont. C.A.), at pp. 103-04.
[20] But, what is the agreement between the parties. The only evidence from the plaintiff regarding any settlement comes from a Reply affidavit of the plaintiff to his sister’s affidavit, in which he deposes that: “I was clear in my position at the pre-trial, specifically, that settlement of the case required the transfer of ownership of one of the condominium properties into my name.” There is no direct evidence from the plaintiff regarding the terms of the contract, and more importantly, no direct evidence from the plaintiff that he signed the Minutes of Settlement.
[21] The principal affidavit in support of the motion for judgment is by a legal assistant, Ms. Brenda Tilner. Subrule 39.01(4) of the Rules of Civil Procedure provides that: “An affidavit for use on a motion may contain statements of the deponent’s information and belief, if the source of the information and the fact of the belief are specified in the affidavit.” Throughout the affidavit, the source of Ms. Tilner’s information and the fact of her belief is not specified. Ms. Tilner deposes that “At an urgent pre-trial conference held before the Honourable Mr. Justice Stinson in order to facilitate a potential settlement the parties agreed to a settlement which was ultimately reduced to writing by counsel for the Defendants shortly thereafter and executed by all of the parties and their counsel.” There is no evidence before the court of any communication between counsel for the parties showing what the terms of the agreement to settle were that the parties gave them instructions to accept. Similarly, there is also no evidence from the parties themselves, with direct knowledge of the matters in issue, as to what the terms of the agreement was. The plaintiff appears to rely solely on the Minutes of Settlement as an independent agreement, and I will say more about that document below.
[22] Aside from failing to comply with r. 39.01(4) of the Rules, as noted above, the plaintiff’s reply affidavit is deficient, being silent on the actual terms of the agreement. In Capital Gains Income Streams Corp. v. Merrill Lynch Canada Inc. (2007), 2007 CanLII 39604 (ON SCDC), 87 O.R. (3d) 464 at para. 9 (Div. Ct.), Carnwath J. held that the correct test on a motion to enforce a settlement is the test for summary judgment, as follows:
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.
[23] I take this to mean, not that the test under r. 20 would apply, but that the proper evidentiary record should be before the court. Therefore, in my view, at a minimum, the evidence of the parties, who have personal knowledge of the nature of the settlement is preferable to evidence from a third party based on information and belief. There is significant controversy between the plaintiff and the defendants regarding a key aspect of the supposed settlement. The affidavits on this motion therefore should comply with rr. 4.06(1)(d) and 4.06(2), which govern the form and content of affidavits in a proceeding. The relevant provisions read:
4.06 (1) An affidavit used in a proceeding shall,
(d) be divided into paragraphs, numbered consecutively, with each paragraph being confined as far as possible to a particular statement of fact; and
(2) An affidavit shall be confined to the statement of facts within the personal knowledge of the deponent or to other evidence that the deponent could give if testifying as a witness in court, except where these rules provide otherwise. [Emphasis Added].
[24] For their part, the defendants suggest that there were original Minutes of Settlement prepared by their former lawyer, which was forwarded to counsel for the plaintiff, and then revised. They claim it is not possible to determine what changes took place. In support of their position, they point to the email exchanges that afternoon between the lawyers. The defendants argue that they did not agree to the trustee issue and ask the court not to enforce paragraph two of the Minutes of Settlement. The defendants contend that they felt rushed and pressured to sign the Minutes because of the emails from their former lawyer. They assert that their lawyer did not explain the paragraphs in the Minutes of Settlement, and Ms. Dodla claimed that English is not her first language. She does not state, however, that she has any difficulty in reading or comprehending English, nor, for that matter, is there any attestation that the affidavit she swore, which is eleven pages, and in English, was translated to her in any other language before she swore the affidavit.
[25] Despite this, I am not satisfied that the Minutes of Settlement before me were executed by all parties. At the most, I am only able to infer from the exchange of emails between the solicitors, and the various emails between the plaintiff’s lawyer and the defendants’ former lawyer, as well as the exchanges between the defendants and their former lawyer, that the Minutes of Settlement were being signed in counterparts. In fact, paragraph 9 of the Minutes of Settlement indicated “the Minutes of Settlement may be executed in counterpart and all such counterparts shall constitute one agreement, provided each party has executed at least one counterpart.”
[26] However, there are three different versions of the Minutes of Settlement before me and no explanation from any of the parties, or anyone, as to why this is the case. The Minutes of Settlement attached to Ms. Tilner’s deficient affidavit has an initial or signature for each signature line for the parties and their counsel. That version has not been acknowledged by any of the parties as being the actual executed Minutes of Settlement. The version of the Minutes of Settlement attached to Ms. Tilner’s affidavit is referred to by the plaintiff and attached to an affidavit to deal with the transfer, but again, the plaintiff does not indicate in that affidavit either that he signed the document. The Minutes of Settlement attached to the plaintiff’s affidavit is unsigned and the plaintiff suggests this was the initial draft. The content of the document however is the same in all three versions. The Minutes of Settlement referred to and attached to Ms. Dodla’s affidavit is signed only by the defendants.
[27] In my view, the plaintiff’s evidence raises more questions than answers questions, and appears to support the defendants’ argument that there were revisions to the Minutes of Settlement. For instance, the plaintiff deposes that there was a discussion at the pre-trial about the most efficient and inexpensive manner that the property could be transferred to him. The plaintiff indicates that the Minutes of Settlement were drafted by the defendants’ former lawyer “immediately following the settlement, and any variations involving revisions to the Minutes, which would have been minimal, were exchanged and reviewed between my counsel and me. I can only presume the Defendants and their counsel also reviewed any changes and revisions that formed the final draft Minutes of Settlement that were ultimately signed.” The plaintiff attaches what he says, “is the initial letter from counsel for the defendants forwarding the draft Minutes of Settlement that he had initially prepared and that made reference to the transfer from trustee to beneficiary.” The draft is an unsigned document, and the content is the same as the version attached to Ms. Tilner’s affidavit and Ms. Dodla’s affidavit. On the evidence before me, the plaintiff has not acknowledged signing the Minutes of Settlement.
[28] I also have some concern with the Minutes of Settlement affixed to Ms. Tilner’s affidavit. The plaintiff’s signature on his affidavit in support of this motion for judgment appears to be different from the signature on the Minutes of Settlement.
[29] On a motion to enforce a settlement, judgment may be granted only if there are no genuine factual disputes that require a trial for their resolution: Bayerische Landesbank Girozentrale v. R.S.W.H. Vegetable Farmers Inc. (2001), 2001 CanLII 28050 (ON SC), 53 O.R. (3d) 374 (Ont. S.C.); GMBR Capital Corp.
[30] I cannot find, on the evidence before me, that there is a contract evidenced by the Minutes of Settlement attached to Ms. Tilner’s affidavit, which constitutes a binding agreement.
[31] On evidence before me, I cannot determine what the agreement was between the parties. In my view, even if the Minutes of Settlement were an independent agreement enforceable as a contract, I am not satisfied, on the record before me, that there is a binding contract executed by all parties, in counterpart, or otherwise.
[32] In the circumstances, I need not consider whether the agreement should be enforced by the court.
E. Conclusion
[33] The motion to enforce the Minutes of Settlement is dismissed.
[34] I would direct a trial of whether there was in fact a settlement agreement, and counsel for the plaintiff is at liberty to contact the Motions Office to obtain a date for the hearing, which should not take more than half a day.
[35] If the parties are not able to resolve the issue of costs, they may contact Ms. Diamante to schedule a conference call to address costs.
A.P. Ramsay J.
Date: October 12, 2022