Court File and Parties

COURT FILE NO.: CV-18-594147

DATE: 20221013

SUPERIOR COURT OF JUSTICE - ONTARIO

RE: Manickam Kodeeswaran, Plaintiff

AND:

Coleridge Rawlins, Canada Post Corporation, and Ryder Truck Rental Canada Ltd., Defendants

BEFORE: W.D. Black J.

COUNSEL: Aaron Murray and David Edwards, for the Defendants (moving parties) George Pappas, for the Plaintiff (responding party) Jillian Van Allen, for the Intervenor Nedjo Bozalo

HEARD: October 3, 2022

ENDORSEMENT

Overview

[1] The defendants bring this motion to enforce a settlement agreement reached between the plaintiff and the defendants on December 3, 2020, and an Order granting judgment in favour of the plaintiff in accordance with the settlement agreement, for the sum of $50,000.00 all-inclusive.

[2] The plaintiff does not dispute that a settlement is clearly reflected in email correspondence between counsel for the plaintiff and counsel for the defendants on December 3, 2020, but maintains that the settlement was based on a mistake, and that the defendants will not be prejudiced if the settlement is set aside.

Relevant Facts (Largely Agreed)

[3] The facts are largely agreed (except as specifically noted below) and are as follows:

(a) The action arises from a motor vehicle accident on April 25, 2020;

(b) The plaintiff was examined for discovery on December 3, 2020;

(c) At the relevant time, the intervenor, Nedjo Bozalo, was the lawyer representing the plaintiff;

(d) On December 2, 2020, the day prior to the plaintiff’s examination for discovery, there was an email exchange between counsel for the defendants and Mr. Bozalo on behalf of the plaintiff, in which the defendants offered a settlement payment of $15,000.00 all-inclusive, which counsel for the defendants suggested could potentially be stretched to $20,000.00 all-inclusive;

(e) The plaintiff, in the form of an email from his counsel Mr. Bozalo, clearly declined this offer at 4:29 p.m. on December 2, 2020, which was the last email in the chain in which this initial offer from the defendants was discussed;

(f) There is uncontroverted evidence that Mr. Bozalo discussed this offer with the plaintiff, that he advised the plaintiff that the offer was too low in Mr. Bozalo’s opinion, and that the plaintiff agreed and instructed Mr. Bozalo to reject the offer;

(g) After the email chain described above, there was a further telephone discussion between defendants’ counsel and Mr. Bozalo, in the late afternoon or early evening of December 2, 2020, in which defendants’ counsel expressed a willingness to recommend a settlement payment of $40,000.00 all-inclusive;

(h) Following this discussion, Mr. Bozalo made arrangements for a Tamil-speaking paralegal at his law firm, Mr. Sornabala, to join him for a telephone call with the plaintiff to discuss the defendants’ potential willingness to offer $40,000.00;

(i) Mr. Bozalo and Mr. Sornabala called the plaintiff together that evening and their evidence is that they did so using the speakerphone from Mr. Bozalo’s office;

(j) Mr. Bozalo’s evidence is that he told the plaintiff about the potential offer of $40,000.00, and asked the plaintiff if he wished to accept the offer or to proceed with examination for discovery as scheduled the next day;

(k) Mr. Bozalo notes that he advised the plaintiff that there was no pressure to accept the offer. He told the plaintiff that he could ask for more money, but that there was no guarantee that the defendants would agree to pay more. Mr. Bozalo deposes that he believed that Mr. Sornabala was accurately translating his statements to the plaintiff, and Mr. Sornabala likewise confirms that he was;

(l) The upshot of the discussion was that the plaintiff instructed Mr. Bozalo not to accept the offer, and that the plaintiff would instead go ahead with his discovery the next day to see if they could get more money;

(m) I pause here to note that there is no suggestion that there was any confusion or misunderstanding during this initial call with Mr. Sornabala serving as translator. Both the content of the discussion and the plaintiff’s instructions not to accept the offer and instead to proceed with discoveries appear to be agreed;

(n) Consistent with this outcome, Mr. Bozalo wrote to the defendants’ counsel that evening to thank him for the offer, but to confirm that the discoveries would proceed the next day;

(o) Defendants’ counsel responded by saying in an email that he was prepared to recommend another figure and work on it with his client, “but not if [the plaintiff had] no interest in the range discussed”;

(p) Mr. Bozalo made a note to his file that evening stating “Client was offered $40,000 for Tort, netting $24,000 in pocket. Did not accept and will go through with discovery”;

(q) The examination for discovery proceeded via Zoom on December 3, 2020;

(r) After the discovery was completed, Mr. Bozalo and defendants’ counsel had a further settlement discussion, in which defendants’ counsel conveyed an offer to settle for the all-inclusive amount of $45,000.00;

(s) After this discussion with defendants’ counsel, Mr. Bozalo again asked Mr. Sornabala to translate for a further call with the plaintiff. The two of them called the plaintiff together that afternoon, again from Mr. Bozalo’s office on the speakerphone;

(t) They depose that during the call Mr. Bozalo advised of the offer of $45,000.00 all‑inclusive, and that again there was no pressure on the plaintiff to accept the offer;

(u) Mr. Bozalo advised the plaintiff that the plaintiff’s performance on discovery had been very poor, that the lawyer for the defendants was not convinced about the alleged extent of the plaintiff’s injuries, and that there was some risk that the offer would be reduced, but that it was the plaintiff’s decision whether or not to accept the offer;

(v) Mr. Bozalo and Mr. Sornabala say that the plaintiff instructed Mr. Bozalo that he would accept the offer of $45,000.00 all-inclusive, but asked Mr. Bozalo to attempt to negotiate a higher figure. Mr. Bozalo and Mr. Sornabala depose that the plaintiff communicated these instructions to Mr. Bozalo using his limited English, but assisted by Mr. Sornabala as translator;

(w) These events were confirmed by Mr. Bozalo in a further note to his file several days later, (in fairness made after Mr. Bozalo was aware of the issue at the heart of this motion);

(x) In keeping with the instructions he received, Mr. Bozalo sent an email to defendants’ counsel stating: “I have firm instructions on $50K all in. If your client is game we can finish today”;

(y) Defendants’ counsel subsequently sent an email confirming he had instructions to accept the offer and to settle the case for $50,000.00 all-inclusive;

(z) The next day, December 4, 2020, defendants’ counsel provided Mr. Bozalo with a full and final release to be signed by the plaintiff.

Plaintiff Equivocates About Deal

[4] The evidence seems clear that when Mr. Bozalo advised the plaintiff about the deal and told the plaintiff that Mr. Bozalo would be sending him the full and final release (provided by defendants’ counsel) for the plaintiff to sign, the plaintiff told Mr. Bozalo that he wished to take more time to contemplate the offer. Mr. Bozalo told the plaintiff that the offer had already been verbally accepted.

[5] Over the next two or three days, there were calls and messages between Mr. Bozalo and the plaintiff in which the plaintiff purported to balk at accepting the settlement offer, and in which Mr. Bozalo confirmed that the deal had been confirmed verbally, and that the plaintiff could not “go back on” his acceptance of the settlement offer.

Plaintiff’s Version of Events

[6] The plaintiff’s version of events alleges that in the phone call on the afternoon of December 3, 2020, Mr. Bozalo had recommended proposing a settlement for $48,000.00, that Mr. Bozalo also advised the plaintiff that Mr. Bozalo would soon be changing law firms, and that the plaintiff told Mr. Bozalo that he did not want to settle the matter for $48,000.00.

[7] The plaintiff deposes that it was only after this call with Mr. Bozalo that Mr. Bozalo put the plaintiff on the phone with an unknown Tamil-speaking male, who gave the plaintiff legal advice and “urged” the plaintiff to agree to settle. The plaintiff says he gave no such instructions, and that the call ended on the basis that the plaintiff would take more time to consider the offer.

[8] The plaintiff’s version of events makes no mention of an offer of $45,000.00 from the defendants, or of the figure of $50,000.00. It also makes no mention of the fact that this was the second call in which the allegedly unknown Tamil-speaking male had participated.

December 6 Email and Plaintiff’s Denial of Deal

[9] On December 6, 2020, the plaintiff sent an email to Mr. Bozalo’s firm stating that he would not agree to a settlement for $50,000.00 all-inclusive.

[10] Shortly thereafter the plaintiff hired his current lawyer, whose position on the plaintiff’s behalf from the outset of his retainer has been that the plaintiff disputed the settlement.

Case Law

[11] The parties agree that on a motion of this kind, pursuant to Rule 49.09 of the Rules of Civil Procedure, R.R.O. 1990, Reg. 194, to enforce a settlement, the Court is to engage in a two‑step analysis.

[12] First, the Court must consider if, on an objective review of the evidence, an agreement to settle was reached. Second, if an agreement is found to exist, the Court must decide whether or not to enforce it.

[13] The Court of Appeal for Ontario has established that the determination of whether or not a settlement was reached – the first stage of the two‑step inquiry – the Court need not inquire into the parties’ subjective intentions. Where the relevant communications were in writing, the Court should determine the issue based on an objective reading of the relevant correspondence: Olivieri v. Sherman, 2007 ONCA 491, 86 O.R. (3d) 778, at para. 44.

[14] The authorities are clear, and again, the parties appear to agree that for purposes of determining whether or not to enforce a putative settlement:

(a) The Court may exercise its discretion not to enforce a settlement where it considers that the settlement is unreasonable, the settlement would result in an injustice or there is another good reason not to enforce the settlement: Wilson v. Johnston, 2015 ONSC 3016, 54 R.P.R. (5th) 321, at para. 72;

(b) The Court will not refuse to enforce a settlement based on a party’s “second thoughts” about the merits of the settlement: Wilson;

(c) The onus is on the plaintiff to show that the settlement agreement reached between his counsel and the defendants should not be enforced: Catanzaro v. Kellogg’s Canada Inc., 2015 ONCA 779;

(d) Generally speaking, if a settlement in accordance with Rule 49 is apparent in the record, the settlement ought to be enforced except in exceptional and rare circumstances in which the party opposing the settlement satisfies the Court that enforcement would create a real risk of clear injustice. This is so even if the party disputes having instructed the lawyer to settle because, from a public policy perspective, in the absence of an express limitation on a lawyer’s authorization to settle issues on behalf of a client, litigants and their lawyers need to be able to rely on representations of counsel: Brzozowski v. O’Leary, 2004 CanLII 4805 (Ont. S.C.); Thompson v. Broeze, 2018 ONSC 4268, at para. 66;

(e) Dealing with a set of facts similar to the facts of the case before me, the Divisional Court in Srajeldin v. Ramsumeer, 2015 ONSC 6697, 343 O.A.C. 122 (Div. Ct.), at para. 21, has said:

It is well-established in the case law that a lawyer has ostensible authority to effect a binding settlement on behalf of his client. Unless the opposing side has knowledge of some limitation on the solicitor’s retainer, any settlement made by a lawyer will be binding on the client, regardless of any dispute between the lawyer and his own client as to the scope of the lawyer’s instructions. This general principle was described by the Court of Appeal in Scherer v. Paletta and has been applied by all levels of court for decades.

(f) The Divisional Court in Srajeldin, at para. 41, also emphasized the public policy concerns, saying:

The public policy concerns are even more pressing. Setting aside a settlement in circumstances where it was freely negotiated between two professionals would be highly unusual. To do so where there is no evidence of sharp practice or bad faith, no unequal bargaining power, and no suggestion that the settlement is unfair or improvident is, in my view, unprecedented. The only “injustice” to the plaintiff is that she must now litigate her claim against her former solicitor rather than the TTC. Given the very early stage of the litigation against the TTC, there is little to no prejudice in that regard.

Plaintiff’s Position

[15] As noted, the plaintiff, appropriately does not disagree with these propositions from the relevant case law, and fairly concedes (in paragraph 27 of his factum) that:

This is not an instance where there was no offer or acceptance of a settlement agreement. It is submitted and accepted by the plaintiff that there was an agreement between Mr. Bazalo (sic) and Mr. Murray. Further, Mr. Bozalo has authority arising from the retainer agreement between Pace Law firm and the Plaintiff to settle on behalf of his client. It is submitted that the issue is that Mr. Bozalo chose to rely on mistaken instructions stemming from misinterpretation from an unknown Male who is not a certified interpreter.

[16] The plaintiff maintains that this is “not a usual case” because “there was a clear mistake by Mr. Bazalo (sic) and that his claim that he had firm instructions from the plaintiff.”

[17] The plaintiff relies, essentially entirely, on the Court of Appeal for Ontario’s decision in Zhuppa v. Porporino (2006), 2006 CanLII 16532 (ON CA), 210 O.A.C. 126 (C.A.) .

[18] In Zhuppa, the Court of Appeal overturned the motion judge’s decision to enforce a settlement. It did so argues the plaintiff, on the basis of an allegedly faulty translation by the plaintiff’s 17 year old son.

[19] My read of Zhuppa is that the Court’s decision not to enforce the alleged settlement in fact primarily rested on two factors. First, Mr. Zhuppa’s spouse was also a plaintiff in the action, and the Court found “uncontradicted evidence” that “Mrs. Zhuppa never agreed to the settlement terms and therefore could not have ‘changed her mind’”.

[20] Second, the Court noted that the plaintiffs’ advice to their lawyer that there was no settlement (because Mrs. Zhuppa did not agree to settle on the basis proposed), was emailed to their lawyer “approximately one hour after the settlement meeting.”

[21] It also appears not to have been contested that the 17 year old son’s translation was imprecise.

Discussion of Plaintiff’s Argument

[22] The case before me is distinguishable from the Zhuppa decision on each of those parameters.

[23] First, the plaintiff is the only plaintiff in this matter. There is (and can be) no suggestion that the settlement is unenforceable because of “uncontradicted evidence” that another plaintiff, who had a right to accept or reject the settlement, was not ad idem.

[24] Secondly, while the plaintiff appeared to equivocate somewhat in communications immediately following Mr. Bozalo’s confirmation to him of the settlement, the plaintiff did not communicate clearly to Mr. Bozalo that he did not accept the settlement until December 6, 2020, three days after the settlement was confirmed.

[25] Third, Mr. Sornabala’s evidence is that he translated accurately, and Mr. Bozalo’s evidence is that it was apparent to him that the plaintiff understood Mr. Bozalo’s advice and gave responsive instructions. I also think it is of at least some moment that there is no allegation of mistranslation or misunderstanding relative to the first call for which Mr. Sornabala translated.

[26] The plaintiff has also not provided evidence to illustrate how it is that the settlement is unreasonable or unjust. Rather, the thrust of the plaintiff’s submission is that there is no substantial prejudice to the defendants if the deal is undone. Whether or not that is so, I do not understand it to be a significant consideration in my analysis.

Conclusions

[27] I find that the settlement reached here was clear and unequivocal.

[28] I also find that there is no basis in the record before me from which to conclude that this is one of the rare or exceptional cases where the settlement is unreasonable and likely to give rise to an injustice. As noted, the plaintiff has not put before me any evidence to support such a conclusion.

[29] In the circumstances, I grant the defendants’ motion to enforce the settlement and grant judgment in favour of the plaintiff for the sum of $50,000.00 all-inclusive.

Costs

[30] The defendants are entitled to their costs of this motion.

[31] The defendants have filed a costs outline seeking partial indemnity costs of $5,721.51.

[32] Counsel for Mr. Bozalo notes that in the costs outline the defendants say that they seek those costs “from the Plaintiff and/or the intervenor.”

[33] She notes that this is different than what is stated in the defendants’ factum, in which the costs are sought “payable by the Plaintiff to the Defendants” and to be “deducted from the judgment made in favour of the Plaintiff”.

[34] She argues that the intervenor is surprised by the late change in the defendants’ position, and that there is in any event no basis for a costs award against Mr. Bozalo.

[35] Leaving aside the timing point, I agree having regard to my findings, that the costs order should only be as against the plaintiff.

[36] The motion was necessitated by the plaintiff’s refusal to acknowledge the settlement, and I find nothing untoward about the time spent or the rates charged by defendants’ counsel.

[37] Accordingly, costs are to be payable by the plaintiff to the defendants on a partial indemnity basis in the amount of $5,721.51, and those costs may be deducted from the judgment in favour of the plaintiff.

W.D. Black J.

Date: October 13, 2022