CITATION: McLean and McLean v. O’Neill, 2023 ONSC 1224

Court File No.: CV-21-00000091-0000 Date: February 21, 2023

ONTARIO

SUPERIOR COURT OF JUSTICE

B E T W E E N:

Mary S. McLean and Francis John McLean Plaintiffs

Christopher Gash, for the Plaintiffs

• and -

Anne Esperanza Crawley O’Neill Defendant

Chantelle Bryson, for the Defendant

Heard: November 21, 2022, at Thunder Bay, Ontario via Zoom

Mr. Justice J.S. Fregeau

ENDORSEMENT ON MOTIONS

THE NATURE OF THE MOTIONS

[1] In this action, the plaintiffs claim title by adverse possession of a strip of land abutting their property and registered in the name of the defendant.

[2] The plaintiffs and defendant have each brought a motion seeking to enforce purported binding settlements resulting from the exchanges of offers to settle.

[3] The plaintiffs seek a declaration that their June 28, 2021 offer to settle was accepted by the defendant on August 19, 2021. The defendant denies that the plaintiffs’ June 28, 2021 offer to settle was accepted on August 19, 2021. The defendant seeks a declaration that her November 22, 2021 offer to settle was accepted by the plaintiffs on November 30, 2021.

BACKGROUND

[4] The Statement of Claim was issued on March 11, 2021 and served on the defendant on March 12, 2021. In the prayer for relief and throughout the Statement of Claim, the strip of land claimed by the plaintiffs is consistently described as the “Disputed Land highlighted on Schedule “A” hereto”.

[5] Schedule “A” attached to the Statement of Claim is a copy of a draft Reference Plan prepared following a May 3, 2018 Plan of Survey of the parties’ properties. On the draft Reference Plan attached as Schedule “A” to the Statement of Claim, the strip of property to which the plaintiffs claim ownership of by way of adverse possession is highlighted in yellow.

[6] On June 21, 2018, following the issuance of the plaintiffs’ claim, the Reference Plan was deposited with the Land Registrar for Thunder Bay as Plan 55R-1449. The disputed strip of land was designated as Part 1 on 55R-14449.

[7] The defendant delivered a Notice of Intent to Defend on March 23, 2021. The plaintiffs did not require the defendant to deliver a Statement of Defence at that time and a Statement of Defence has never been served or filed in this action.

[8] On June 7, 2021, the defendant’s counsel emailed a settlement proposal to the plaintiffs’ counsel. In this email, the defendant’s counsel referred to the strip of property claimed by the plaintiffs as the “disputed land” and the “disputed property” and proposed as follows:

[the defendant] proposes to resolve the matter by severing the disputed property according to the existing fence and curb lines, and transferring title to [the plaintiffs]. In return…[the defendant] seeks a financial contribution from the [plaintiffs] of $5,000 to resolve the matter.

[9] The plaintiffs’ counsel responded on June 28, 2021:

…my client is willing to pay to yours $1,000 all inclusive. The amount is to fully terminate any objections by your client to the transfer of property to mine.

[10] On July 6, 2021, the defendants’ counsel replied to the June 28, 2021 email from the plaintiffs’ counsel. That July 6, 2021 reply included the following:

[The defendant] wishes to proceed with the transfer of the disputed land…The [plaintiffs’] offer of $1,000 is insufficient to resolve the matter…[the defendant] repeats her offer to resolve the matter by severing the disputed property according to the existing fence and curb lines, and to transfer title to [the plaintiffs], and seeks a financial contribution from the [plaintiffs] of $3,000 to resolve the matter.

[11] The plaintiffs’ counsel replied to the July 6, 2021 email on July 14, 2021. That July 14, 2021 reply from the plaintiffs’ counsel included the following:

Should your client not agree to the offer of $1,000, my client will proceed with the hearing for the declaration stating that my client is the owner of the strip of land.

[12] The plaintiffs’ counsel emailed the defendant’s counsel again on July 21, 2021, as a follow-up to a telephone conversation the previous day. In this correspondence, counsel for the plaintiff reiterated the earlier $1,000 offer, referencing “the property” or “the strip of property”.

[13] On August 19, 2021, counsel for the defendant emailed counsel for the plaintiffs as follows:

[The defendant] accepts the [plaintiffs’] offer of $1,000 compensation to settle the matter as proposed below. Kindly advise how you would like to finalize the settlement.

[14] The term “as proposed below” refers to the email chain between counsel as set out above.

[15] On August 26, 2021, the plaintiffs’ counsel forwarded Minutes of Settlement to the defendants’ counsel. These Minutes of Settlement stated that the land to be conveyed from the defendant to the plaintiffs in settlement of the plaintiffs’ claim was:

“Part of Lot 5, Plan 122; Designated as Part 1 on 55R-1449, City of Thunder Bay”.

[16] This description corresponds to the strip of land highlighted in yellow on Schedule “A” to the Statement of Claim and referred to in the Statement of Claim as the “Disputed Land”.

[17] On September 13, 2021, a litigation assistant to the plaintiffs’ counsel sent a follow-up email to the defendant’s counsel as follows:

Kindly forward the signed minutes of settlement…In the alternative, please provide revisions to same.

[18] On Sept 16, 2021, the defendant’s counsel emailed the plaintiffs’ counsel apologizing for the delay in responding and requested the following:

Is it possible to provide a clearer copy of the survey to precisely describe the land to be severed and transferred?

[19] On November 16, 2021, the plaintiffs’ counsel followed up and again requested signed minutes of settlement from the defendant’s counsel.

[20] On November 22, 2021, the defendant’s counsel sent revised minutes of settlement to the plaintiffs’ counsel which contained a revision to the description of the land to be severed from the defendant’s property and transferred to the plaintiffs in settlement of their claim for adverse possession. The defendant’s counsel added the following clarification to the description of the land to be severed:

For clarity, the disputed strip of land shall, in reference to the survey conducted by J.D. Barnes Ltd. dated June 26, 2016…be parallel to the boundary line between Lots 5 and 6 and positioned by five (5) inches or 0.127 meters from Reference Point S as shown in the survey.

[21] On November 30, 2021, a litigation assistant to the plaintiffs’ counsel returned the revised November 22, 2021 draft minutes of settlement to the defendant’s counsel, unexecuted, with some minor deletions having being made by way of crossing out what the plaintiffs’ counsel did not agree with. The “clarification” added by the defendant’s counsel in the November 22, 2021 version of the minutes of settlement, as set out immediately above, was not deleted in the version returned to the defendant’s counsel with this November 30, 2021 email.

[22] On December 21, 2021, the plaintiffs’ counsel emailed the defendant’s counsel following a telephone discussion they had on December 8, 2021. In this email, the plaintiffs’ counsel advised the defendant’s counsel that the plaintiffs were “not willing to renegotiate the terms of settlement already agreed to by both parties with regards to the boundary line”.

[23] On January 14, 2021, the plaintiffs’ counsel emailed the defendant’s counsel asserting that the plaintiffs’ August 18, 2021 offer to settle had been accepted. The defendant’s counsel replied as follows on January 16, 2021:

There seems to be some confusion as to which version of the MOS is the latest version. Kindly provide the most up to date version so that I may forward to my client for review and consideration.

[24] In response to this request, on January 17, 2022, a litigation assistant to the plaintiffs’ counsel resent the revised November 22, 2021 minutes of settlement referred to above. The defendant promptly signed this version of the minutes of settlement and they were forwarded to the plaintiffs’ counsel on January 20, 2022.

[25] On February 4, 2022, the plaintiffs’ counsel emailed the defendant’s counsel in regard to the revision the defendant’s counsel had made to the minutes of settlement sent with his November 22, 2021 email and set out in paragraph XX above. The plaintiff’s counsel stated:

I think we both missed this in our review. There is no need for this sentence, as the property is already defined by the survey/PIN created and outlined in paragraph 3 of the Minutes, and that is what was agreed to for resolution.

[26] The plaintiffs’ counsel followed up with the defendant’s counsel a couple of times thereafter, requesting that the original minutes of settlement be executed in accordance with what the plaintiffs’ counsel asserted was the defendant’s counsel’s acceptance of the plaintiffs’ August 18, 2021 offer to settle.

[27] Soon thereafter, the defendant retained new counsel and the motions before the court then followed.

THE ISSUES

1. Was the plaintiffs’ June 28, 2021 offer to settle accepted by the defendant on August 19, 2021 and, if so, should it be enforced?

2. If not, was the defendant’s November 22, 2021 offer to settle accepted by the plaintiffs on November 30, 2021 and, if so, should it be enforced?

THE LAW

[28] In Olivieri v. Sherman, (2007) 2007 ONCA 491, 86 O.R. (3d) 778, at para. 41, the Ontario Court of Appeal stated as follows:

A settlement agreement is a contract. Thus, it 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 an agreement on all the essential terms of the settlement.

[29] In Smith v. Coca-Cola Bottling Company, 2017 ONSC 396, at para. 8, Madam Justice Rady reiterated the above as follows:

An accepted offer to settle is a contract. The plaintiff bears the onus to prove:

(a) That there was a mutual intention by the parties to create a legally binding agreement; and

(b) That there was agreement between the parties on all of the essential terms of the settlement.

[30] In Cox v. Baker, 2019 ONSC 2859, Dietrich J., at para. 25, adopted and endorsed the above statements of law from Olivieri and Coca-Cola Bottling.

THE PLAINTIFFS’ POSITION

[31] The plaintiffs submit that their June 28, 2021 proposal was a clear offer to settle their claim for $1,000 for the transfer of the “Referenced Lands”. The plaintiffs contend that the defendant, on August 19, 2021, clearly and unequivocally accepted their offer to settle.

[32] According to the plaintiffs, all essential terms of the contract were agreed to in these two emails:

1. The defendants would transfer the Referenced Lands (as defined by the Reference Plan included as Schedule “A” attached to the Statement of Claim);

2. The plaintiffs would pay $1,000 to the defendant; and

3. The parties would complete the necessary steps to complete the transfer.

[33] The plaintiffs submit that there were no discussions, negotiations or ambiguity with respect to the specific dimensions of the property to be transferred by the defendant to the plaintiffs in either their June 28, 2021 offer or the defendant’s August 19, 2021 acceptance.

THE DEFENDANT’S POSITION

[34] The defendant submits that the description of the property intended to be transferred from the defendant to the plaintiffs in settlement of the plaintiffs’ claim for adverse possession is an essential term of any purported settlement of this action.

[35] The defendant submits that the plaintiffs’ June 28, 2021 offer and her August 19, 2021 acceptance, viewed objectively, lacked a clear and unequivocal agreement as to the exact property to be transferred from the defendant to the plaintiffs.

[36] The defendant contends that the actual legal description of the land intended to be conveyed pursuant to settlement first appeared in the draft minutes of settlement prepared by the plaintiffs’ counsel and forwarded to the defendant’s counsel on August 26, 2021. The defendant submits that she never agreed, in her counsel’s August 19, 2021 email, or at any other time, to the transfer of property thus described as a settlement of the action. Absent agreement on this essential term, there is no contract and no settlement, according to the defendant.

[37] The defendant submits that the revised minutes of settlement sent to the plaintiffs’ counsel by her counsel on November 22, 2021 contained a complete and accurate description of the property to be conveyed from her to the plaintiffs in settlement of the action. The defendant contends that these revised minutes of settlement were accepted by the plaintiffs’ counsel on November 30, 2021, subject to only minor changes to non-essential terms of the settlement which did not relate to the description of the property to be conveyed.

[38] The defendant submits that the plaintiffs agreed to the essential terms of the settlement on November 30, 2021 when the revised minutes of settlement were returned to the defendant’s counsel with deletions having been made to non-essential terms but no amendments or deletions having been made to the description of the property to be conveyed, the only true essential term of the dispute, according to the defendant.

[39] The defendant submits that the settlement evidenced by the exchange of her November 22, 2021 email, with revised minutes of settlement attached, and the plaintiffs return of same on November 30, 2021, without the property description having been amended, should be enforced.

DISCUSSION

[40] On the facts of this case, the only essential term to be considered on the parties’ respective motions to enforce a settlement agreement is the description of the land to be conveyed from the defendant to the plaintiffs in satisfaction of the plaintiffs’ claim for adverse possession.

[41] The portion of the defendant’s property claimed by the plaintiffs is described in the Statement of Claim as the “Disputed Land highlighted on Schedule “A” hereto”. A draft Reference Plan was appended as Schedule “A” to the Statement of Claim and the land claimed by the plaintiffs was highlighted in yellow on that Reference Plan.

[42] In my view, there is no ambiguity in the Statement of Claim regarding what portion of the defendant’s property the plaintiffs were claiming adverse possession of.

[43] The first settlement proposal originated from the defendant’s counsel on June 7, 2021. In this email, counsel for the defendant proposed resolution by “severing the disputed property according to the existing fence and curb lines ”.

[44] The June 28, 2021 response of the plaintiffs’ counsel to this initial proposal addressed only the monetary component of the defendant’s June 7, 2021 offer.

[45] The defendant’s counsel responded on July 6, 2021 and repeated the defendant’s offer to resolve the plaintiff’s claim “by severing the disputed property according to the existing fence and curb lines”. The monetary component of the plaintiffs’ offer was also countered.

[46] The plaintiff’s lawyer responded on July 6, referring to “ the strip of land ” and reiterating her earlier offer as to the amount of money to be paid for the property.

[47] On August 19, 2021, the defendant’s counsel accepted the plaintiffs’ offer to settle the matter “as proposed below”, referring to the email chain above.

[48] The issue to be determined is whether this email exchange objectively establishes a mutual “meeting of the minds” as to the description of the property to be conveyed, the only contentious essential term of the purported settlement. In my opinion it does not.

[49] The defendant’s first proposal on June 7, 2021 described the property to be severed as “the disputed property according to the existing fence and curb lines ”. This description was repeated verbatim in the defendant’s July 6, 2021 offer.

[50] Counsel went back and forth on the dollar figure in issue but the plaintiffs’ counsel did not correct or modify the defendant’s description of the property to be severed and conveyed prior to the defendant’s counsel’s agreeing to settle the matter as proposed in the email exchange between June 7, 2021 and August 19, 2021.

[51] It is clear to me that the plaintiffs’ counsel was assuming all references were to the strip of property as highlighted on Schedule “A” appended to the Statement of Claim. However, the defendant’s counsel was clearly referring to something different in his offers and when he accepted the plaintiff’s offer – a severance and transfer of the disputed property according to the existing fence and curb lines .

[52] I find that the parties had not agreed on this essential term of the settlement and that a settlement had therefore not been completed as a result of this email exchange.

[53] I further conclude that there was not an unequivocal agreement between counsel to this same essential term pursuant to the defendant’s November 22, 2021 offer and the plaintiffs’ purported acceptance of that offer on November 30, 2021.

[54] On August 26, 2021, following what the plaintiffs’ counsel believed was a settlement to resolve the claim by transferring the portion of the defendant’s property highlighted on Schedule “A” appended to the Statement of Claim, minutes of settlement incorporating this property description were sent to the defendant’s counsel.

[55] The defendant’s counsel, however, revised/clarified the property description in the draft minutes of settlement and returned them to the plaintiffs’ counsel. These revised minutes of settlement were then revised again by the plaintiffs’ counsel, but the defendant’s counsel’s earlier revision of the description of the property to be severed and transferred was not amended or commented on in any way when the minutes were then returned to the defendant’s counsel.

[56] The defendant relies on this exchange in support of her submission that this represents an agreement on the description of the property in issue to resolve the plaintiffs’ claim. I reject this submission.

[57] In my view, the ambiguity as to the description of the property to be conveyed from the defendant to the plaintiffs to settle their claim which existed between counsel in regard to the initial email exchange, carried through into the second exchange of settlement proposals as contained in the draft minutes of settlement. I find that there was not, viewed objectively, an agreement as to this essential term of the settlement in the November 22/November 30, 2021 exchange of minutes of settlement.

[58] The motions of both parties are dismissed. In the unusual circumstances of this case, I order the parties bear their own costs.

The Honourable Mr. Justice J.S. Fregeau Released: February 21, 2023