Court File and Parties
COURT FILE NO.: CV-20-00650435-00CL (formerly CV-14-499913)
DATE: 20230118
ONTARIO
SUPERIOR COURT OF JUSTICE (COMMERCIAL LIST)
BETWEEN:
NORTH YORK EXCAVATING & CONTRACTING LIMITED, N.Y. LEASING INC., CARMEN D’URZO, RALPH D’URZO and FRANCESCO D’URZO
Plaintiffs
– and –
NICK D’URZO, D’URZO DEMOLITION INC., 1699942 ONTARIO INC. and NORTH YORK ENVIRONMENTAL INC.
Defendants
AND BETWEEN:
NICK D’URZO, D’URZO DEMOLITION INC., 1699942 ONTARIO INC. and NORTH YORK ENVIRONMENTAL INC.
Plaintiffs by Counterclaim
– and –
NORTH YORK EXCAVATING & CONTRACTING LIMITED, N.Y. LEASING INC., CARMEN D’URZO, RALPH D’URZO, FRANCESCO D’URZO, FRANK D. D’URZO & SONS LIMITED, NIPOTI INVESTMENTS INC., FRANK D’URZO AND SONS LTD., NIPOTI INVESTMENTS INC. c.o.b. as NORTH YORK EXCAVATING, 1245724 ONTARIO INC., 1302488 ONTARIO INC., BOARDWALK EXCAVATING & CONTRACTING LIMITED, FLINT DEMOLITION INC., R.F.S. LEASING INC., WELTON CONSTRUCTION LIMITED, RI-CON, PAUL-CON, NORTH-CON, NORTHAMPTON DEVELOPMENTS INC., ONTARIO CORPORATION 123, ONTARIO CORPORATION 345, ONTARIO CORPORATION 567 and JOE DOE
Defendants to the Counterclaim
COUNSEL:
Fred Tayar, for the Plaintiffs/Defendants by Counterclaim, Francesco D’Urzo and Ralph D’Urzo
Lindsay Moffatt, for Carmen D’Urzo
Marco Drudi, Defendants/Plaintiffs by Counterclaim
HEARD: November 4, 2022
REASONS FOR DECISION
KIMMEL J.
[1] The defendants/plaintiffs by counterclaim, Nick D’urzo (“Nick”), D’urzo Demolition Inc., 1699942 Ontario Inc. and North York Environmental Inc. (the “moving parties” or the “Nick Parties”), seek an order enforcing a settlement said to have been entered into on or about March 31, 2017 (the “Settlement”). They also ask for an order, if necessary, directing a reference to an associate judge in Toronto to oversee the implementation of the Settlement and to provide guidance and direction in connection with the accounting and reconciliation that the Settlement contemplates and/or that may be necessitated by the passage of time since the Settlement was entered into.
[2] The motion is supported by two plaintiffs, Ralph D’Urzo (“Ralph”) and Francesco D’Urzo (“Frank”). It is opposed by a third plaintiff, Carmen D’Urzo (“Carmen”). Carmen’s position is that the parties simply entered into an agreement to agree to terms of settlement that were never finalized or implemented, and that the parties instead have chosen the path of litigation through this continuing action. Although the individual parties also have companies associated with them, for convenience they may each together with their affiliated companies simply be referred to by their first names. As the context requires, these reasons should be read to include reference to the associated companies as appropriate.
Summary of Outcome
[3] For the reasons that follow, the motion is granted and the Settlement is ordered to be enforced and implemented with assistance and/or oversight from an associate judge if necessary. There was a binding Settlement, the only condition to which was fulfilled in a timely manner. All parties have, at various times, relied upon and attempted to enforce the Settlement. Moreover, aspects of the Settlement have been performed. The general policy favours the enforcement of settlements.
[4] There has been an unfortunate delay in the complete implementation of the Settlement but that is no reason to unwind it. The implementation of the Settlement shall be based upon the value of the assets as at September 30, 2016, as agreed.
[5] The parties should, with the assistance of the family’s long-time accountant Nick DeLuca (“DeLuca”), be able to finalize the Settlement based on the accountant’s draft financial statements as at September 30, 2016. If difficulties arise, an associate judge of this court shall be appointed to oversee the implementation, which may entail directions regarding the creation of financial statements for the companies as at September 30, 2016, as contemplated by the Settlement, as well as directions regarding their interpretation and eventual value attributions as may be required to complete the intended separation of the parties’ financial interests.
[6] This may also entail the court’s consideration of and directions regarding any other accounting inputs (such as, for example, tax implications of notional or actual transfers of property as at the valuation date and the pre-September 30, 2016 GST/HST, WSIB, corporate tax and tax assessments and CRA assessments that may need to be equalized and shared by the Parties). The court may provide such further directions as necessary to complete the contemplated equalization of assets as between the three brothers (Carmen, Ralph and Nick) on the basis of the estimated values as at September 30, 2016 to achieve the stated objective of each of them receiving assets and cash at that time valued at approximately $2,950,000 (or such other roughly equal value to each of them as may be determined from the accounting exercise and resulting proportionate division of assets as at the September 30, 2016 valuation date).
[7] Eventually, the parties will need to fulfil all aspects of the Settlement, including the exchange of mutual releases in respect of all existing litigation between them, including this action, which is the continuation of the 2014 Action (defined below) that existed at the time the Settlement was entered into.
Factual and Procedural Background
[8] Nick, Ralph and Carmen are brothers. Frank is their father. They all work, or have worked, in the excavation and construction business that Frank founded. The personal and business relationships between the brothers soured over ten years ago. Initially, Nick was at odds with Ralph and Carmen. They (and their companies) sued Nick (and his companies) in 2014 (in an action under Court File No. CV-14-499913 – the “2014 Action” – that was subsequently transferred to the commercial list following various pleading amendments, given a new court file number in 2020 and has continued in this proceeding).
[9] The parties worked with their family and company accountant, DeLuca, to explore the tax and other implications of the division of the family business. DeLuca provided advice and input prior to the Settlement to assist in the determination of the estimated asset values upon which the Settlement Agreement was predicated.
[10] The three brothers eventually executed a document titled “Settlement Agreement” dated March 31, 2017 (the “Settlement Agreement”) that was expressly stated to be “entered into by and among [Carmen, Ralph and Nick] … in regards to their [sic]separating their financial affairs”. The Settlement Agreement contained the following provisions:
a. The Parties signing this agreement understand that this is what they all have agreed to in order for them to separate their financial interests and equalize their finances.
b. The Parties sign mutual releases and dismiss all litigation without costs. All GST/HST, WSIB, corporate tax and tax assessments and CRA assessments prior to September 2016 shall be shared by the Parties.
c. This agreement and valuations are to coincide with draft interim financial statements prepared by DeLuca as at September 30, 2016.
d. This agreement is contingent upon execution of Schedule A > Settlement Agreement Re: 10547 Keele St., Maple Ontario.
[11] The Schedule A Agreement Re: 10547 Keele St., Maple Ontario (the “Keele Street Agreement”) also required Frank’s signature (he was not a signatory to the Settlement Agreement, which was only among his three sibs). The Keele Street property is owned by 1302488 Ontario Inc. (“130 Ontario”), a corporation in which each of the four parties had a 25% interest. All four parties had signed the Keele Street Agreement by, and it is dated, May 15, 2017, thereby satisfying the condition of the Settlement Agreement that required its execution.
[12] The Keele Street Agreement was focused on the sale of that property and outlined pre-sale rights and restrictions on the four parties and their companies in dealing with that property. The parties to the Keele Street Agreement further agreed, among other things, to enter into a formal shareholders’ agreement within thirty days of entering into that agreement. Drafts were exchanged and issues associated with that agreement were seemingly resolved, but that shareholders’ agreement was never signed.
[13] In the meantime, in addition to executing the Keele Street Agreement, the parties also, eventually, instructed the law firm Fogler, Rubinoff LLP (“Fogler”) to release $409,000 plus costs that it held in trust. This was one of the terms of the Settlement Agreement that was performed. Nick and Ralph point to other aspects of the Settlement Agreement that have been performed to Carmen’s benefit. For example, Carmen’s exclusive use and benefit of the rental income from the property he was supposed to keep under the terms of the Settlement and the payment in full by Nick upon discharge of the mortgage he (and Ralph, or their respective companies) held on title to the property at 700 Flint Street (the “Flint Street Property”) that Nick was keeping as detailed below.
[14] The only litigation pending at the time of the Settlement Agreement was the 2014 Action.
[15] After the Settlement Agreement was signed, various procedural steps were taken:
a. The plaintiffs delivered an Amended Statement of Claim dated November 14, 2017 in the 2014 Action. In that amended pleading, Carmen and Ralph added claims relating to the performance of some of the terms of the Settlement. The additions included terms having to do with the payment of the trust monies held by Fogler, as well as terms associated with the Flint Street Property that Nick was to keep and the payments Nick was supposed to make to discharge the mortgage on that property. Ralph and Carmen (through his company, Matjenn Investment Inc.) held that mortgage.
b. Nick commenced an application in the fall of 2017 to address the Settlement term relating to the discharge of the mortgage on the Flint Street Property (under Court File No. CV-17-157840, the “Mortgage Discharge Application”).
c. Affidavits were delivered by Ralph (and adopted by Carmen) in the Mortgage Discharge Application. They relied upon the Settlement and sought to ensure its performance. They also sought to force Nick to fulfill, in escrow, his obligations with respect to the discharge of the mortgage on the Flint Street Property pending the performance of other aspects of the Settlement. Reference was made in these affidavits to an application that they were about to issue.
d. On November 27, 2017, Carmen and Ralph commenced a separate application for an order to implement certain terms of the Settlement (under Court File No. CV-17-587279, the “Implementation Application”), which they asked be heard together with the Mortgage Discharge Application.
e. Certain aspects of the Mortgage Discharge Application and the Implementation Application were settled by a consent order signed by Favreau J. December 19, 2019 in the Implementation Application (the “Consent Order”).
f. The Consent Order:
i. Implemented aspects of the discharge of the Flint Street Property mortgage and released funds from trust held by Fogler;
ii. Required the parties to continue to hold the properties as they had been (e.g. maintain the status quo regarding property ownership);
iii. Dismissed both the Mortgage Discharge Application and the Implementation Application;
iv. Directed the parties to apply to transfer the 2014 Action to the Commercial List.
g. In December 2019, in conjunction with the Consent Order and dismissal of the Mortgage Discharge Application and Implementation Application, Nick delivered a Statement of Defence and Counterclaim in the 2014 Action in which he sought (at paragraphs 44(d) and (e)) a declaration that the Settlement was binding and enforceable and that the defendants by counterclaim (Carmen and Ralph) had breached it and a declaration that it be enforced such that they be ordered to comply with it.
h. Carmen, Ralph, Frank and their companies delivered a Reply and Defence to Counterclaim dated February 24, 2020 in the 2014 Action (before it was transferred to the Commercial List). In it, they denied that they had breached the Settlement (paragraph 7) and asserted that it was Nick who had breached it. Importantly, they relied upon the Settlement.
i. The order transferring the 2014 Action to the Commercial List was eventually signed on February 26, 2020, just before the COVID-19 pandemic suspended court services. It was assigned Court File No. CV-20-00650435-00CL (the “Continuing Commercial List Action”).
j. Plaintiffs’ counsel originally acting for both Carmen and Ralph and their respective companies determined that there was a conflict that prevented counsel from continuing to jointly represent Carmen and Ralph. They each eventually retained new counsel. Carmen now has his own new lawyer, and Ralph and Frank are represented by the same (new) lawyer.
[16] This motion was initially brought by Nick (Notice of Motion dated March 18, 2022) and first returnable on September 29, 2022 in accordance with a timetable set early in 2022 (and was then adjourned to November 4, 2022). The motion seeks declarations regarding a threshold issue in this proceeding: the enforcement and implementation of the Settlement that could fundamentally impact the course of this proceeding.
Issues to Be Decided
[17] The issues to be decided, having regard to the written and oral submissions of the parties, are as follows:
a. Did the parties enter into a binding and valid Settlement that can be enforced?
i. Do the terms of the Settlement Agreement meet the requirements for certainty of contract or are they too vague and uncertain for it to constitute a valid contract?
ii. Has it been demonstrated that the parties had the requisite intention to enter into a binding and enforceable settlement?
At the time it was entered into?
By the manner in which they conducted themselves after they signed the Settlement Agreement?
iii. Was the Settlement conditional and, if so, were the conditions fulfilled?
b. Should the court exercise its discretion not to enforce the Settlement?
c. Is there a procedural impediment to the enforcement of the Settlement?
d. If the Settlement is to be enforced, what are the logistics of its implementation?
e. Are there any issues that remain to be determined in this proceeding if the Settlement is enforced on this motion?
Positions of the Parties and Factual Predicates
The Nick Parties
[18] Nick reluctantly brings this motion to enforce the Settlement.
[19] Nick maintains that the Settlement Agreement was duly executed and its one condition (the execution of the Keele Street Agreement) was fulfilled in a timely manner. The parties expressly stated in the Settlement Agreement that they intended for it to be a binding agreement: “The Parties signing this agreement is their understanding [sic]hat this is what they all have agreed to in order for them to separate their financial interest and equalize their finances.” Carmen admits that the Settlement Agreement was the result of months, if not years, of negotiations with the assistance of DeLuca. Carmen acknowledges that he duly executed and initialed the Settlement Agreement and that he had read and understood that was what he was signing at the time.
[20] After signing the Settlement Agreement, further implementation and enforcement steps were taken, beyond the execution of Schedule A to the Keele Street Agreement, which satisfied the only condition of the Settlement. Through the Mortgage Discharge Application (commenced by Nick) and the Implementation Application (commenced by Carmen and Ralph), all parties were seeking to enforce the Settlement terms and hold each other to their respective obligations under the Settlement.
[21] These steps resulted in the Consent Order and the part performance of certain additional Settlement terms, such as the full payment and discharge of the mortgage on the Flint Street Property and the release of trust monies held by Fogler. The trust funds were then distributed indirectly by Nick, a portion of which was equally divided such that each of the brothers received $86,000 plus HST.
[22] The brothers each thereafter sought to enforce the Settlement through their subsequent pleadings in this action.
[23] Other terms of the Settlement, which benefited Carmen, were also performed. He has received and had the exclusive control and use of the rental income from a property at 10138 Keele Street that the Settlement Agreement contemplates will be kept by him. While he says “most” of that income has remained in the company, he acknowledges that approximately 20% has been used for his exclusive benefit. He has also had the exclusive control and use of all assets and income from the company North York Excavating & Contracting Limited that he was to keep as part of the Settlement.
[24] Since the Settlement Agreement was signed, and following the implementation steps, Nick and Ralph have had the exclusive use and control of the properties that were to be retained by each of them. However, there has been no formal transfer of title to properties or of shares in companies to give effect to the intended equalization of cash and assets that the Settlement specified they would receive. Based on DeLuca’s advice, taking into account certain tax consequences, there were to be payments between the various companies to reallocate corporate dividends that have not occurred.
[25] Aside from Nick discharging the mortgage on the Flint Street Property (and paying $1.2 million to Carmen and Ralph to do so), there have not been any further steps taken to finally separate the three brothers’ interests and reallocate the business assets despite the lengthy period of negotiations.
[26] Nick submits that any regrets that Carmen may now have, in hindsight, about the (relatively lower) value of the properties that he wanted to keep for himself at the time of the Settlement is not a reason for the Settlement not to be enforced today. Furthermore, Carmen has not tendered any evidence on this motion of the disproportionate values of the allocated properties that he claims to be concerned about.
Ralph and Frank – Responding Parties
[27] Ralph and Frank agree with the Nick Parties and support the relief sought by this motion. They rely on the same grounds and arguments.
[28] Ralph emphasizes that when his interests were aligned with Carmen’s they launched the Implementation Application, in support of which Carmen swore an affidavit deposing that the Settlement Agreement was binding and enforceable and he adopted Ralph’s affidavit. Ralph, in his affidavit, swore that the parties had entered into the Settlement Agreement and that Ralph and Carmen were ready, willing and able to complete it. Now, having received most of the valuable consideration under the Settlement Agreement (none of which he proposes to disgorge) Ralph and Frank take issue with Carmen claiming that it is not binding and enforceable on him. Ralph and Frank argue that this is improper and that the Settlement should be enforced in accordance with the terms of the Settlement Agreement.
[29] Ralph in particular is dependent upon Carmen’s performance of his obligations under the Settlement to convey valuable assets that Carmen has title to and controls, but that were supposed to be transferred to Ralph This includes the ownership of two companies (N.Y. Leasing Inc. and D’Urzo Demolition Inc.) and the property at which Ralph resides, 12470 Keele Street, which is burdened by a mortgage that Carmen placed on title without Ralph’s knowledge.
[30] There will need to be an accounting and reconciliation given the passage of time. For example, Ralph and Frank have been paying the realty taxes with respect to the property owned by 130 Ontario since the execution of the Settlement Agreement. Neither Nick nor Carmen has contributed their respective 25% share.
Carmen – Responding Party
[31] Despite all parties having pleaded reliance upon the Settlement Agreement (and alleging breaches by the others) in the subsequent applications and in their amended pleadings in the 2014 Action (that has since been transferred to the Commercial List), Carmen now opposes the enforcement of the Settlement Agreement on various grounds.
[32] Carmen argues that:
a. The Mortgage Discharge Application and the Implementation Application were seeking to enforce the Settlement; those applications were dismissed by the Consent Order and therefore the enforcement of the Settlement is res judicata;
b. The parties instead elected to continue litigating their remaining disputes that had been the subject of the Settlement (after the narrow implementation of selective terms by the Consent Order) by their continued pursuit of the 2014 Action and the Continuing Commercial List Action;
c. The Settlement Agreement was conditional upon the sale of the Keele Street Property and/or the signing of a shareholders’ agreement among the shareholders of 130 Ontario, the company that owned the Keele Street Property and neither condition has been met; and
d. The Settlement Agreement is void and unenforceable because: (i) it contains uncertain terms. It was no more than an agreement to agree, by which the brothers would: “try to equalize [their] separation whereby each party would more or less receive equalization of asset and cash of approximately $2,950,000”; (ii) it uses non-legal terms to describe the assets the brothers would each “get” and “keep” based on values to be determined with reference to “draft” financial statements as at September 30, 2016; and (iii) it uses equivocal terms like “would” rather than “will” and the parties will “try” to equalize their separation; and (iv) it does not address how the equalization will account for tax consequences of any transfers or liabilities associated with the various assets to be equalized.
[33] Carmen acknowledges that he considers the Settlement to be unfair to him because he believes, with the benefit of hindsight, that the values of the properties he was to receive have not increased as significantly as the values of the properties that his brothers were to receive over the nearly eight years since the Settlement Agreement was signed.
[34] Carmen would like to wind back the clock and engage in a procedure that would result in a re-allocation of the properties so that the parties receive an equalization of properties and cash based on the current asset values, rather than the values coinciding with the draft interim financial statements as at September 30, 2016, as the Settlement Agreement provided for.
Analysis
[35] The law in this area is settled and most of the leading authorities are referenced by the parties (collectively). This case turns upon the application of the law to the particular circumstances of this case.
[36] There is a two-step analysis when considering a motion for the enforcement of an alleged settlement agreement:
First, the Court must initially make a finding as to whether the parties reached an agreement.
Second, if it finds that they did so, it must decide whether to exercise its discretion to enforce the agreement.
See: Srajeldin v Ramsumeer, 2013 ONSC 6178 at para. 36.
[37] In this case, once those two issues are addressed, the court must also address the practical and logistical considerations that arise from the lapse of time since the Settlement Agreement was signed, if it is going to be implemented and enforced.
a) Did the Parties Enter into a Binding Settlement Agreement?
[38] Since a settlement agreement is a contract, it is subject to the general rules of contract formation. Moreover, contractual principles form the basis of the analysis under the first step of the court’s analysis on a motion to enforce a settlement agreement: see Olivieri v. Sherman, 2007 ONCA 491, 86 O.R. (3d) 778, at para. 41. In Olivieri, at para. 44, the Court of Appeal for Ontario held that:
[a] determination as to whether a concluded agreement exists does not depend on an inquiry into the actual state of mind of one of the parties or on the parole evidence of one party’s subjective intention. See Lindsey v. Heron & Co., (1921), 1921 CanLII 538 (ON CA), 64 D.L.R. 92 (Ont. S.C. (App. Div.)). Where, as here, the agreement is in writing, it is to be measured by an objective reading of the language chosen by the parties to reflect their agreement.
i) Did the Parties Agree on the Essential Terms?
[39] A settlement agreement, like any agreement, is created once there is a matching offer and acceptance on all essential terms. In other words, there must be a meeting of the minds on all essential terms of the contract.
[40] An agreement conditional upon “reaching a formal agreement” is not effective until the subsequent contract is executed. This is a tell-tale sign that there may be essential terms not yet agreed to. Carmen relies upon the Court of Appeal’s discussion in Bawitko Investments Ltd. v. Kernals Popcorn Ltd. (1991), 1991 CanLII 2734 (ON CA), 79 D.L.R. (4th) 97 (Ont. C.A.), at para. 21 (and other cases), to draw this distinction between a validly formed contract and a “contract to make a contract”:
When they agree on all of the essential provisions to be incorporated in a formal document with the intention that their agreement shall thereupon become binding, they will have fulfilled all the requisites for the formation of a contract. The fact that a formal written document to the same effect is to be thereafter prepared and signed does not alter the binding validity of the original contract.
However, when the original contract is incomplete because essential provisions intended to govern the contractual relationship have not been settled or agreed upon; or the contract is too general or uncertain to be valid in itself and is dependent on the making of a formal contract … the original or preliminary agreement cannot constitute an enforceable contract.
[41] Carmen seeks to characterize the Settlement Agreement as a “contract to make a contract” because of the language chosen by the parties to express what they were going to do, which he says is equivocal and not sufficiently certain. Examples (noted above) include the use of the word “would” rather than shall or will, or that they will “try” to equalize the cash and assets. Carmen is trying to take advantage of the fact that this was not a contract drafted by lawyers.
[42] However, despite its non-legalistic terms, the document clearly expresses itself to be a “Settlement Agreement” being entered into for a specified purpose (separating their financial affairs) and to be a recording of what has been agreed to, duly signed, dated and initialed.
[43] The non-legalistic choice of words does not diminish this clear and unambiguous language about it being an agreement: see Canada Square Corp. v. Versafood Services Ltd. (1981), 1981 CanLII 1893 (ON CA), 34 O.R. (2d) 250 (C.A.), at para. 36. As the court stated at paragraph 37:
Further, a more sophisticated document would probably have covered several other matters in addition to those dealt with in it. Nonetheless, accepting that the parties intended to create a binding relationship and were represented by experienced business[person] who had full authority to represent their respective companies, a court should not be too astute to hold that there is not that degree of certainty in any of its essential terms which is the requirement of a binding contract.
[44] There was no contemporaneous suggestion by Carmen that the Settlement terms were uncertain. The steps taken by the parties to enforce the Settlement are inconsistent with Carmen’s suggestion now that there was uncertainty rendering it unenforceable.
[45] Carmen points to other aspects of the Settlement Agreement that he claims are lacking in certainty about what he suggests are essential terms, such as:
a. There is no prescribed process to identify and adjust the equalization amounts based on the September 30, 2016 draft financial statements.
b. There are no provisions for dealing with the tax implications of the equalization if assets have to be transferred.
c. There is no indication of how to account for liabilities associated with the specified assets (except the Flint Street Property mortgage).
d. There is no provision for what will happen if the Keele Street Property is not sold, which it has not been, although the Keele Street Agreement contemplated it would be.
[46] Whether terms will be considered essential depends on the nature of the transaction, the context in which the agreement is made and the parties’ interests: see Cdn. Northern Shield v. 2421593 Canadian Inc., 2018 ONSC 3627, 86 C.C.L.I. (5th) 273, at para. 88.
[47] The allegedly “uncertain” terms identified by Carmen are not essential terms when considered in the context of the terms that the parties agreed to.
[48] The parties did agree to the essential terms. Namely, that they would equitably divide up all of the business and other assets that they had been discussing for the months prior to signing the Settlement Agreement with DeLuca. This agreement was based on their understanding of the then current net value of those assets, which would result in an apportionment of value as at September 30, 2016 (based on draft financial statements prepared by DeLuca) to each of the brothers in the estimated amount of $2.95 million. In furtherance of this agreement, some of the mechanics were spelled out, such as:
a. They identified which assets they each expected to own at the end of the process based on the draft financial statements and value estimates;
b. They agreed that if the values agreed to were adjusted up or down in the completed September 30, 2016 financial statements to be prepared by DeLuca, they would share any difference in the ultimate equalization proportionately;
c. They provided for how to account and redistribute dividends and monies received so as to equalize these receipts, taking into account tax consequences;
d. They agreed upon payments (notional or actual) to be made as between the brothers based on DeLuca’s tax and other professional advice with the overall objective of the proportionate equal sharing of the September 30, 2016 net asset values;
e. They agreed to equally share the responsibility for all GST/HST, WSIB, corporate tax and tax assessments, and CRA assessments prior to September 2016;
f. They agreed upon the discharge of the mortgage registered against title to the Flint Street Property;
g. They agreed to enter into a mutual release and consent to the dismissal of all litigation among and between them, without costs;
h. They agreed that the Keele Street Property would be sold through the corporation in which it was held (130 Ontario) and net proceeds distributed to the shareholders.
[49] There is no indication that there were, or are, other liabilities associated with the assets that were not already accounted for in the “as at September 30, 2016” values that the Settlement Agreement was based upon, or that there are other tax implications that have not been considered. In any event, the basic framework of the agreement is sufficient to allow for those to be addressed. According to Carmen, DeLuca prepared the September 30, 2016 financial statements. Although Carmen undertook to produce these financial statements on his cross-examination, he had not done so as of the hearing of this motion.
[50] A speculative concern about possible adjustments that might need to be made to the values and equalization of assets that Carmen had the ability to specify with reference to the financial statements, but failed to do so, cannot be a foundation for a finding of uncertainty or a missing essential contractual term.
[51] Further, parties often agree to sell property with the mechanics to be sorted out later. Those mechanics are not essential to the agreement to sell. Nor can it be fairly assumed that the property on Keele Street owned by 130 Ontario, will never be sold. I can take judicial notice of the general ease with which properties in Toronto are sold on the open market. There is no evidence to indicate that there is anything unique about this property on Keele Street that would preclude its eventual sale. In these circumstances, a provision to address what might happen if that property is not sold is not an essential term. Dealings with this property will take place within the corporation that all three brothers and Frank are equal shareholders of. There is available recourse in the corporate context for dealing with the sale of a corporate property held in a company that does not have a shareholders’ agreement.
[52] The parties clearly contemplated enlisting the assistance of the corporate accountant to not only provide them with the financial statements that would form the basis of the equalization of assets, but to also provide advice about tax efficiencies. The parties did turn their mind to liabilities at least to some extent because there were specific obligations on the Nick Parties to discharge the mortgage in favour of Carmen and Ralph registered on the Flint Street Property.
[53] Absent any evidence to the contrary, it is reasonable to assume that third-party liabilities that existed as at the September 30, 2016 valuation date could be factored into the “value” ascribed to the asset, or addressed through some other accounting adjustment. The overall duty of good faith and honest performance of contractual obligations will inform the manner in which these details get sorted out in the process of equalizing the assets. See Bhasin v. Hrynew, 2014 SCC 71.
[54] Carmen has not established that there are any uncertain or missing “essential” Settlement terms. Rather, there implementation details and mechanics that the parties have an obligation to negotiate in good faith to finalize as part of the Settlement, discussed in more detail below.
ii) Did the Parties Have the Requisite Intention to Create a Legally Binding Relationship?
[55] Another way of assessing whether terms not included in a settlement agreement are essential is by asking “whether the parties intended to be legally bound by what was already agreed or, in other words, whether an ‘honest, sensible business[person] when objectively considering the parties’ conduct would reasonably conclude that the parties intended to be bound or not’ by the agreed-to terms.” (citations omitted): Allergan Inc. v. Apotex Inc., 2016 FCA 155, 483 N.R. 131, at paras. 18, 32.
[56] The question of whether the parties intended to create a legally binding contract is determined objectively. If the words or acts of a person, judged by a reasonable standard after looking to the parties’ language used in formation of the contract, their outward expressions, and inferred intentions, manifest an intention to agree to the matter in question, that agreement is established. Unexpressed intentions and subjective intent do not factor into this analysis: Olivieri, at paras. 44-45.
[57] In applying the law to the facts of this case, the following questions must be considered:
i. Has it been demonstrated that the parties had the requisite intention to enter into a binding and enforceable settlement?
At the time it was entered into?
By the manner in which they conducted themselves after they signed the Settlement Agreement?
a. In the litigation; and
b. In performance of the terms of the Settlement
i. Considering part performance?
ii. Consider non-performance?
[58] The evidence of the parties’ intention to enter into a legally binding and enforceable Settlement is clear from the title they gave to the document: “Settlement Agreement”, stated to be “entered into by and among the three brothers for the stated purpose of separating their financial affairs”. The word agreement or agreed appears throughout the document. They all signed it and acknowledge that they understood that it was an agreement they were signing.
[59] Evidence of the parties’ conduct can be a relevant consideration in the determination of whether they were ad idem on all essential terms and whether a binding agreement was reached: see Ward v. Ward, 2011 ONCA 178, 104 O.R. (3d) 410, at paras. 65-76.
[60] The parties all relied upon the existence of a binding Settlement in the positions they took in pleadings and affidavits filed in the 2014 Action (now this proceeding), the Discharge Application and the Implementation Application, all of which were with a view to enforcing the Settlement. It is difficult to imagine any clearer evidence of an expression of an intention and understanding that they had entered into a legally binding and enforceable Settlement than that.
[61] The part performance of certain of the terms of the Settlement Agreement (the discharge of the mortgage on the Flint Street Property, distribution of trust monies, exclusive use and benefit of income receipts from various properties “assigned” to each of the brothers) are further indicia of an intention and understanding that there was a legally binding agreement.[^1]
[62] Conversely, the fact that not all aspects of the Settlement have been performed does not undermine the overwhelming evidence supporting the conclusion that the parties intended to enter into a binding and enforceable agreement when they signed the Settlement Agreement, particularly when many aspects of the non-performance have given rise to accusations of breach of contract which have persisted in the continuing allegations in this action. The litigation has continued as a means of enforcement of the Settlement, not as Carmen has more recently suggested, as some kind of election to proceed as if there had been no settlement and to litigate the original and underlying business disputes (that were settled).
[63] In these circumstances, I have no difficulty finding that the parties had the requisite intention to enter into a legally binding and enforceable settlement when they signed the Settlement Agreement.
iii) Was the settlement conditional and, if so, were the conditions fulfilled?
[64] Carmen relies on the “contract to make a contract” cases to argue that because the Settlement Agreement was conditional upon the execution of the Keele Street Agreement, and that agreement in turn, contemplated that a further shareholders’ agreement for 130 Ontario would be entered into, there was no binding Settlement.
[65] First, Carmen’s characterization of the condition is inaccurate. The condition in the Settlement Agreement was for the execution of the Keele Street Agreement, not its implementation or performance. It was executed and therefore the only stated condition of the Settlement Agreement was satisfied.
[66] The enforceability of the Keele Street Agreement is not at issue at this time. However, it seems unlikely that a shareholders’ agreement for 130 Ontario would be considered to be essential to the fundamental objective of the Keele Street Agreement, namely the sale of the property. There are other means by which the sale of the property can be implemented and the net sale proceeds appropriately distributed. In any event, whether the term of that agreement that the parties enter into a shareholders’ agreement was a fundamental term that could lead to the unwinding of the Keele Street Agreement, or a term for which time was not of the essence and may still be performed or its objectives achieved through other means with the good faith efforts of all parties, need not be determined at this time.
[67] That said, in light of the court’s decision on this motion, the parties would be well-advised to dust off the original drafts of that shareholders’ agreement and apply their good faith efforts towards finalizing it. Alternatively, they can look to other corporate recourse and remedies to list, market and sell the property on Keele Street owned by that company and distribute the sale proceeds to the shareholders of 130 Ontario in accordance with their respective interests.
[68] Further, the “contract to make a contract” cases put forward are about parties whose agreement is not binding or formed unless and until it has been documented. That is not this case, for reasons discussed earlier in these reasons. The Settlement Agreement is the contract. It was subject to one condition, the execution of Schedule A to the Keele Street Agreement. That condition was satisfied in a timely manner shortly after they entered into the Settlement Agreement, further conduct consistent with the conclusion that they considered themselves bound by the Settlement Agreement.
[69] Supplementary agreements and mutual releases are merely “the mechanics required to complete the settlement agreement”: Olivieri, at para. 48.
b) Should the Settlement Agreement be Enforced?
[70] The court has the residual discretion not to enforce a settlement.
[71] Carmen’s primary argument against the enforcement of the Settlement Agreement is the alleged inequity said to be created by the passage of time. Carmen is concerned that: “the circumstances between the parties have changed significantly over the intervening five and a half years, including the values of the subject properties included within the Agreement. … If the Agreement is enforced today based on the 2016 valuations, the enforcement would likely result in an injustice to all parties. Enforcing the Agreement now is not consistent with the contemporaneous terms and discussions had, which goal of equal asset distribution.”
[72] Carmen is also concerned that Ralph has had the benefit (for outside storage uses) of the property on Keele Street owned by 130 Ontario over the intervening timeframe. Carmen claims that is an unfair advantage since he has not paid rent for this use.
[73] Nor is Ralph’s use of the property on Keele Street for storage inconsistent with the existence of a binding Settlement. The Settlement Agreement did not assign the Keele Street Property to the exclusive use of any party, but rather contemplated that it would be sold. If there is some disproportionate benefit that any of the parties have enjoyed from their jointly owned property, that can be addressed in the final accounting and reconciliation.
[74] For that matter, while this was not argued in any detail, to the extent there is an issue about any benefits enjoyed by any party since the Settlement Agreement was entered into that would not have been enjoyed (or at least not for free) if it had been implemented earlier, those can be identified, notionally valued and accounted for through some form of equitable compensation. The enjoyment of these alleged, but not yet valued, benefits is not a prejudice that justifies the unwinding of the entire Settlement
[75] Further, this case is different from other cases that Carmen relies upon, where parties’ pre-settlement positions remained intact when the balancing of relative prejudice was undertaken. See Srajeldin, at paras. 42 and 43. See also Millios v. Zagas (1998), 1998 CanLII 7119 (ON CA), 38 O.R. (3d) 218 (C.A.). Although developed in the family law context, none of the factors typically considered in decisions not to enforce settlements are present in this case:
a. The Settlement is not unconscionable or improvident;
b. There was no inequality of bargaining power between the parties;
c. It has not been demonstrated that any of the parties propounding the Settlement acted in bad faith;
d. There has been no suggestion that counsel acting for any of the parties in connection with the Settlement acted without authority;
e. The terms of the Settlement have been found to be sufficiently clear to enable enforcement;
f. The Settlement encompasses all that was in dispute between the parties at the time it was entered into; and
g. The parties were physically present for their negotiations; and
h. A significant period elapsed after the Settlement Agreement was signed before Carmen purported to resile from it.
[76] Carmen claims to have suffered a disadvantage as a result of the Settlement Agreement. That disadvantage is unproven and speculative. He does not allege that the assets that he was to receive under the Settlement did not have the estimated value ascribed to them at the time, or that the values ascribed to the assets that Nick and Ralph were to receive were not roughly equivalent to the value of the assets Carmen was to get. That was the agreement and speculation about disproportionate value increases since then with the benefit of hindsight is not a disadvantage or prejudice. It is the bargain.
[77] Carmen agrees that in this case the parties’ pre-Settlement positions are not intact (paragraph 34 of his factum). Nick has discharged the mortgage on the Flint Street Property and permitted the payment of funds out of the Fogler trust account, some of which have been distributed, in turn, to Carmen and Ralph, but who has not received the distributions and transfers of assets that he was supposed to.
[78] As a matter of policy, the court should rarely exercise its discretion not to enforce a settlement. Rather, the policy of the courts is to encourage the settlement of litigation: see Srajeldin, at para. 43.
[79] The importance of this policy to the overall administration of justice is outlined in Sparling v. Southam Inc., (1988), 1988 CanLII 4677 (ON CA), 66 O.R. (2d) 255 (Ont. H.C.), at p. 230, and cited in Sable Offshore Energy Inc. v. Ameron International Corp., 2013 SCC 37, [2013] 2 S.C.R. 623, at para. 11:
[T]he courts consistently favour the settlement of lawsuits in general. To put it another way, there is an overriding public interest in favour of settlement. This policy promotes the interests of litigants generally by saving them the expense of trial of disputed issues, and it reduces the strain upon an already overburdened provincial court system.
[80] There is a strong presumption in favour of enforcing the Settlement. No good reason has been proffered by Carmen not to. His perceived disappointment in the performance of the business properties and assets that were selected for him to keep under the binding Settlement Agreement that he agreed to is not a valid justification for the court to exercise its jurisdiction not to enforce the Settlement, and I decline to do so.
c) Are There Procedural Impediments to Enforcing the Settlement Agreement?
[81] Carmen raises two procedural impediments to the enforcement of the Settlement: first, that there have already been enforcement proceedings and this is now res judicata. Second, (and presumably in the alternative) that the parties elected not to enforce the Settlement and instead to continue litigating their dispute, as they are entitled to do under r. 49.09 of the Rules of Civil Procedure, R.R.O. 1990, Reg. 194.
i) Is the Enforcement of the Settlement Res Judicata?
[82] When invoked, either branch of res judicata prevents a litigant from re-litigating the same issue in a subsequent proceeding. Carmen contends that the relevant branch of res judicata is that of issue estoppel.
[83] There are three requirements for invoking issue estoppel: (i) the same question has or could have been decided in a prior proceeding; (ii) the decision giving rise to estoppel is final; and (iii) the parties to the decision giving rise to estoppel are the same as the parties to the subsequent proceeding in which estoppel is claimed: see The Catalyst Capital Group Inc. v. VimpelCom Ltd., 2019 ONCA 354, 145 O.R. (3d) 759, at para. 25, citing Danyluk v. Ainsworth Technologies Inc. 2001 SCC 44, [2001] 2 S.C.R. 460, at para. 25.
[84] Carmen suggests that the Mortgage Discharge Application and the Implementation Application, and their dismissal by the Consent Order, renders the enforcement of the Settlement res judicata because those applications involved the enforcement of the Settlement and they were ultimately dismissed.
[85] This fails to portray those applications in their proper light. Carmen’s attempt now to characterize the Consent Order as a dismissal of the request to implement the Settlement takes too narrow a view of the issues raised and disposed of by the settlement of the Implementation Application and its consent dismissal. Those proceedings were accelerating the implementation of certain discrete aspects of the Settlement, not the entirety of the Settlement. The best evidence of that is that the parties then continued to pursue the enforcement of the Settlement in their amended pleadings in the 2014 Action after the Consent Order was signed, each relying on the Settlement, accusing the other(s) of having breached it, and asking the court to enforce it.
[86] The enforcement and implementation of the Settlement (and/or Settlement Agreement) have not been decided in a prior proceeding (neither the Mortgage Discharge Application nor the Implementation Application). The enforcement and implementation issues raised in the 2014 Action have been carried forward into this action and they are precisely what the court is now deciding on this motion.
ii) Have the Parties Elected not to Enforce the Settlement and to Continue Litigating?
[87] Where one party to a potential settlement agreement believes a settlement agreement between the two parties was reached, they may apply to the court to enforce the settlement. Rules 49.09(a) and (b) of the Rules, and the common law, govern the court’s discretion. Rule 49.02(2) provides that r. 49.09 applies, with necessary modifications, to motions.
[88] Under r. 49.09, where a party fails to perform a settlement agreement, the other party has the choice or election to move to enforce the settlement or to treat the settlement as at an end and to resume the litigation as if there had been no accepted settlement. If the party elects to proceed with the litigation, they cannot thereafter bring a motion to enforce the settlement agreement: see Charter Building Company v. 1540957 Ontario Inc. (Mademoiselle Women’s Fitness & Day Spa), 2011 ONCA 487, 107 O.R. (3d) 133, at paras. 25-27.
[89] This case is somewhat unique in that the Settlement was broader than the issues in the litigation that existed at the time it was entered into, although it did provide for the exchange of mutual releases and the dismissal of all litigation without costs. Carmen contends that Nick elected to resist the enforcement of the Settlement by not agreeing to Carmen’s position and continuing with both the 2014 Action and eventually the Continuing Commercial List Action (once it was transferred to the commercial list).
[90] This contention completely ignores the substance of the pleading amendments and positions that the Nick Parties advanced. That the parties chose to pursue the enforcement of the Settlement through the existing proceeding (the 2014 Action) rather than through the discrete applications that were commenced to accelerate the enforcement of certain terms of the Settlement is not an election to pursue litigation instead of the Settlement. It was quite the opposite, an election to enforce the Settlement through the existing litigation.
d) Settlement Implementation Logistics
[91] The delay in implementing the Settlement does present potential logistical issues, but none are insurmountable. Nick’s request for the oversight of an associate judge to provide directions, with the benefit of input from DeLuca in respect of any issues identified by him or by the parties, is reasonable. The appointment of an associate judge, if needed, is made as a term of the order granting Nick’s motion.
[92] The first step in implementing the Settlement is for the September 30, 2016 financial statements to be produced. If Carmen already has them (as he indicated he did, or at least some of them, on cross-examination) then they should be provided to the other parties. If Carmen does not have them, or if any party considers what Carmen does have to be incomplete, then DeLuca should be asked to provide the financial statements that he has prepared and should be asked to prepare any that are incomplete or missing, as at the September 30, 2016 valuation date. DeLuca shall be paid by all three parties equally (or by the company 130 Ontario if all four shareholders agree) for any work he does to assist in the implementation of the Settlement.
[93] The parties should each have an opportunity to consider these financial statements, take advise from their own professional advisors and then should each present a proposal to the others for how best to implement the Settlement and the final accounting and reconciliation, including with respect to the treatment of any unaccounted for liabilities or tax consequences.
[94] There will likely be other issues, such as accounting for the sale of equipment by Carmen belonging to one of the companies that Ralph was intended to get and the storage of equipment by Ralph at the property on Keele Street. This is a function of the delay in implementation of the Settlement and not an impediment to its enforcement.
[95] Any sales or uses of assets since the execution of the Settlement Agreement by or for the benefit of someone other than the party designated to “keep” or “get” that asset under the terms of the Settlement should be accounted for. Each party should also take into account any disproportionate funding of carrying costs for the benefit of other intended “owners” of the affected asset. All of this should be considered with regard to the overarching objective of the Settlement Agreement, which was to separate their financial interests and equalize their finances as at September 30, 2016.
[96] If based on this exchange of proposals, the parties can agree on the final steps for implementation and the final accounting and reconciliation, they should proceed to implement the Settlement. Once completed, the final steps should be for them to exchange mutual full and final releases and arrange for the consent dismissal of all outstanding litigation.
[97] If the parties are unable to agree on the final steps for implementation and the final accounting and reconciliation, then an associate judge shall be appointed to consider their competing proposals, seek further inputs and submissions as deemed appropriate (including with respect to tax and accounting considerations that might be relevant to the ultimate equalization exercise as at September 30, 2016) and provide orders and directions to implement the Settlement and the final accounting and reconciliation between the parties.
[98] If need be, the parties may request a case conference before me for further advice and directions regarding Settlement implementation or to assist in further defining the role of the associate judge.
e) What Remains to be Determined in this Proceeding Upon Settlement Implementation?
[99] No detailed analysis of the pleadings was presented that would allow me to understand whether any issues have been raised in this action that are outside of the scope of the Settlement. If such issues exist, some procedural mechanism will need to be established for narrowing those remaining issues for their eventual determination. The parties intended that all outstanding litigation between them at the time of the Settlement be dismissed as part of the Settlement, so any remaining issues would have to be completely unrelated to the Settlement and to have arisen entirely after the Settlement Agreement was concluded. It seems unlikely that such issues exist, but without the benefit of any analysis on this point, if such issues exist it will be incumbent upon the party advancing them to satisfy the court that they do in fact fall entirely outside of the scope of the Settlement.
Final Disposition and Costs
[100] For the foregoing reasons, the Nick Parties’ motion is granted. The Settlement shall be implemented and enforced based on the terms generally outlined in the Settlement Agreement based on the financial statements as at September 30, 2016 prepared (or to be prepared) by DeLuca, and with the guidance and oversight (through directions and orders) of an associate judge, as may be needed, to fill in gaps and assist with accounting issues that may have arisen, and reconciliations that may be necessary, due to the passage of time since the Settlement Agreement was signed on March 31, 2017.
[101] The parties completed their exchange of cost outlines and were asked to advise the court by November 11, 2022 if they had reached an agreement regarding costs. The court did not receive any communication from the parties to indicate that an agreement had been reached. The cost outlines were uploaded into CaseLines for the court to access.
[102] Carmen’s Costs Outline indicates all-inclusive partial indemnity costs of $21,888.95 (approximately 66 hours of lawyer time including estimated time for the hearing, with the most senior counsel having been called to the bar in 1995).
[103] Ralph and Frank’s Costs Outline indicates all-inclusive partial indemnity costs of this motion of $19,903.36 (approximately 65 hours of lawyer time including estimated time for the hearing, with the most senior counsel having been called to the bar in 1984).
[104] The Nick Parties’ Costs Outline indicates all-inclusive partial indemnity costs of $22,822.53 plus $5,000 for the hearing (a little over 32 hours of total lawyer time, with the most senior having been called to the bar in 1987).
[105] The cost amounts claimed by each party on a partial indemnity basis are consistent.
[106] No party suggested that there were any circumstances that would justify an award of a higher scale of costs. Costs ordinarily follow the event and are awarded to the successful party, to be paid by the unsuccessful party.
[107] The moving parties (Nick and his companies) were successful on this motion. The relief they sought, supported by Ralph and Frank, was granted. In the exercise of my discretion under s. 131 of the Courts of Justice Act, R.S.O. 1990, c. C.43, and having regard to the applicable factors under r. 57, Carmen is ordered to pay to the moving parties forthwith their partial indemnity costs fixed in the all-inclusive amount of $27,500.00.
[108] This amount is reasonable having regard to the experience of counsel, the rates charged and the time spent. The Nick Parties carried the burden of proof on this motion and it is reasonable for them to have retained senior counsel (who works at a higher hourly rate but for significantly fewer hours than the other parties’ counsel). An award of partial indemnity costs in this case is consistent with the principle of indemnity. The amount of costs awarded reasonably corresponds with the nature, complexity and importance of the issues at stake.
[109] These costs shall be discounted by 30% to reflect a proportionate sharing of the burden of the additional cost associated with the delay (of all parties) in taking steps to implement the Settlement.
[110] In the exercise of my discretion, Carmen is also ordered to pay partial indemnity costs to Ralph and Frank in the all-inclusive amount of $10,000.00. While the Nick Parties’ lawyer carried the burden, Ralph and Frank’s evidence and submissions were important contributions to the record that the court needed to decide this motion. They were successful in their support of the position of the Nick parties. They should not be penalized for the efficiency of their approach in supporting Nick rather than bringing their own separate and duplicative motion. These costs shall also be discounted by 30% to reflect a proportionate sharing of the burden of the additional cost associated with the delay (of all parties) in taking steps to implement the Settlement.
[111] These reasons contain orders and directions that shall have the immediate effect of a court order without the necessity of a formal order being taken out. Any party may take out a formal order by following the procedure under r. 59.
Kimmel J.
Released: January 18, 2023
COURT FILE NO.: CV-20-00650435-00CL (formerly CV-14-499913)
DATE: 20230123
SUPERIOR COURT OF JUSTICE - ONTARIO
RE: NORH YORK EXCAVATING & CONTRACTING LIMITED, N.Y. LEASING INC., CARMEN D’URZO, RALPH D’URZO and FRANCESCO D’URZO
Plaintiffs
– and –
NICK D’URZO, D’URZO DEMOLITION INC., 1699942 ONTARIO INC. and NORTH YORK ENVIRONMENTAL INC.
Defendants
AND BETWEEN:
NICK D’URZO, D’URZO DEMOLITION INC., 1699942 ONTARIO INC. and NORTH YORK ENVIRONMENTAL INC.
Plaintiffs by Counterclaim
– and –
NORTH YORK EXCAVATING & CONTRACTING LIMITED, N.Y. LEASING INC., CARMEN D’URZO, RALPH D’URZO, FRANCESCO D’URZO, FRANK D. D’URZO & SONS LIMITED, NIPOTI INVESTMENTS INC., FRANK D’URZO AND SONS LTD., NIPOTI INVESTMENTS INC. c.o.b. as NORTH YORK EXCAVATING, 1245724 ONTARIO INC., 1302488 ONTARIO INC., BOARDWALK EXCAVATING & CONTRACTING LIMITED, FLINT DEMOLITION INC., R.F.S. LEASING INC., WELTON CONSTRUCTION LIMITED, RI-CON, PAUL-CON, NORTH-CON, NORTHAMPTON DEVELOPMENTS INC., ONTARIO CORPORATION 123, ONTARIO CORPORATION 345, ONTARIO CORPORATION 567 and JOE DOE
Defendants to the Counterclaim
BEFORE: Kimmel J.
COUNSEL: Fred Tayar, for the Plaintiffs/Defendants by Counterclaim, Francesco D’Urzo and Ralph D’Urzo
Lindsay Moffatt, for Carmen D’Urzo
Marco Drudi, Defendants/Plaintiffs by Counterclaim
HEARD: November 4, 2022 (with supplementary cost submissions received January 20, 2023)
ADDENDUM TO JANUARY 18, 2023 REASONS FOR DECISION (COSTS)
[1] In Reasons for Decision dated January 18, 2023 (see North York Excavating & Contracting Limited v. D’Urzo, 2023 ONSC 473), the motion by the Defendants/Plaintiffs by Counterclaim, also supported by the Plaintiffs/Defendants by Counterclaim, Francesco D’Urzo and Ralph D’Urzo, was granted and the Settlement (as defined in those Reasons for Decision) was ordered to be enforced and implemented.
[2] The court’s Reasons for Decision also made certain orders regarding costs, on the basis of cost outlines that had been provided.
[3] After the Reasons for Decision were released, the parties advised that they had previously reached an agreement regarding costs that was different than what the court had ordered. Although they say that they communicated this agreement to the court prior to the release of my Reasons for Decision, it was not uploaded onto CaseLines and the communication about their agreement on costs was not received, and therefore not considered, by me in reaching my decision on costs.
[4] The parties have provided to the court a copy of their agreement as to costs, which states as follows: If Carmen D’Urzo is successful, he is entitled to costs fixed in the sum of $20,000.00, all-inclusive, payable by the Moving Parties [Plaintiffs/Defendants by Counterclaim] and the Ralph D’Urzo Parties equally; however, if the Moving Parties are successful, the Carmen D’Urzo Parties will pay the Moving Parties and to the Ralph D’Urzo Parties $20,000.00, all-inclusive, each.
[5] The Moving Parties were successful. Therefore, in accordance with the parties’ agreement, the court’s order for costs (as set out in paragraphs 107 to 110, inclusive, of the court’s January 18, 2023 Reasons for Decision) is vacated and replaced with an order that, in accordance with the parties’ agreement as to costs, Carmen shall pay $20,000 in all-inclusive costs to each of the Plaintiffs/Defendants by Counterclaim and the “Ralph D’Urzo Parties” (however those latter parties are defined for purposes of the parties’ agreement as to costs).
[6] All other aspects of the court’s reasons for decision, and the court’s orders and directions contained therein, remain in full force and effect.
Kimmel J.
Date: January 23, 2023
COURT FILE NO.: CV-20-00650435-00CL
DATE: 20230118
ONTARIO
SUPERIOR COURT OF JUSTICE
BETWEEN:
NORTH YORK EXCAVATING & CONTRACTING LIMITED, N.Y. LEASING INC., CARMEN D’URZO, RALPH D’URZO and FRANCESCO D’URZO
Plaintiff
– and –
NICK D’URZO, D’URZO DEMOLITION INC., 1699942 ONTARIO INC. and NORTH YORK ENVIRONMENTAL INC.
Defendants
AND BETWEEN:
NICK D’URZO, D’URZO DEMOLITION INC., 1699942 ONTARIO INC. and NORTH YORK ENVIRONMENTAL INC.
Plaintiffs by Counterclaim
– and –
NORTH YORK EXCAVATING & CONTRACTING LIMITED, N.Y. LEASING INC., CARMEN D’URZO, RALPH D’URZO, FRANCESCO D’URZO, FRANK D. D’URZO & SONS LIMITED, NIPOTI INVESTMENTS INC., FRANK D’URZO AND SONS LTD., NIPOTI INVESTMENTS INC. c.o.b. as NORTH YORK EXCAVATING, 1245724 ONTARIO INC., 1302488 ONTARIO INC., BOARDWALK EXCAVATING & CONTRACTING LIMITED, FLINT DEMOLITION INC., R.F.S. LEASING INC., WELTON CONSTRUCTION LIMITED, RI-CON, PAUL-CON, NORTH-CON, NORTHAMPTON DEVELOPMENTS INC., ONTARIO CORPORATION 123, ONTARIO CORPORATION 345, ONTARIO CORPORATION 567 and JOE DOE
Defendants to the Counterclaim
REASONS FOR DECISON
Kimmel J.
Released: January 18, 2023
[^1] Nick also relies upon the equitable doctrine of part performance as a further ground for the enforcement of the Settlement. In light of the findings and analysis on the other points, this doctrine need not be considered.