Court File and Parties

Court File No.: CV-22-00683233 Date: 2023-10-29 Superior Court of Justice - Ontario

Re: Anthony Laud, Plaintiff And: Southwestern Legislative Safety Consulting Inc., c.o.b. as Rolling in Green and Darren Varga, Defendants

Before: Justice A.P. Ramsay

Counsel: Aaron Kleinman, for the Plaintiff No one appearing for the defendants

Heard: September 29, 2023

Endorsement

I. Nature of the Motion

[1] The plaintiff moves under r. 49.09 of the Rules of Civil Procedure, R.R.O. 1990, Reg. 194 to enforce a settlement agreement reached on November 16, 2022, and further seeks costs of the motion on a substantial indemnity basis.

II. Notice to the defendants

[2] The motion was not opposed by the defendant Southwestern Legislative Safety Consulting Inc. c.o.b. as Rolling in Green (“Southwestern”) and was consented to by Darren Varga. Mr. Varga is the former CEO of Southwestern. After submissions from counsel for the plaintiff, I am satisfied that the motion materials were served on all defendants.

III. Background

[3] The plaintiff’s employment with the defendant, Southwestern, was terminated on November 29, 2021. The plaintiff subsequently commenced an action on June 27, 2022, for damages for, inter alia, wrongful dismissal, breach of contract, unpaid wages, aggravated damages and punitive damages.

[4] The defendants delivered their statement of defence on August 15, 2022.

[5] Counsel for the parties exchanged proposals and a counterproposal in October 2022. Aside from one amendment to a proposal initially advanced by the defendants, it was the defendants’ proposal that the plaintiff now contends that he accepted on November 16, 2022, and with respect to which he now maintains that there was an enforceable agreement.

[6] On October 26, 2022, Mr. Michael Wills, counsel for the defendants, sent an email to counsel for the plaintiff, which stated, in part: “Aaron. I have to head back to the judge at 130. He seems quite keen to have a ‘final answer’ if we can get it." He also included a "Rough sketch of the proposal.”

[7] On October 26, 2022, Mr. Wills wrote to counsel for the plaintiff to advise that he had neglected to add that any payments and subsequent judgment on default will be with the corporation.

[8] On October 26, 2022, counsel for the plaintiff indicated that he had instructions from his client and made what he called a counteroffer. The counteroffer included amounts for the items noted in Mr. Wills’ email, except for the interest, and an amount for HST.

[9] On November 14, 2022, Mr. Wills wrote to counsel for the plaintiff to advise of a continuation of the judicial pretrial for all matters in Windsor. In his email, he indicated that his retainer was confirmed. He went on to state:

However, the expectation remains that your clients matter be resolved on the same terms as the other related and very similar litigation, which has been resolved. In the sense of the resolution of all matters, this is what your client has to work with. It’s just my opinion, but it strikes me as a far better option than protracted litigation, mitigation considerations, and the requirement to collect on any distant future judgement.

I would add that since Justice Bondy was actively pressing the deal we have made, I suspect he would present equally hard for an in-kind resolution at your end. But, I can’t speak for the judge. You may get your chance to hear it first hand on Wednesday…

[10] On November 15, 2022, Mr. Wills indicated that his client had rejected the plaintiff’s counterproposal. Mr. Wills noted that his clients were ready willing and able to settle the matter on the “same terms/structure” as the settlement with another individual. He noted that the structure was strongly urged on that individual when he agreed to settle his claim. He went on to state the following, which the plaintiff claims, at paragraph 17 of his affidavit, constitutes the offer and the material terms:

In short, it’s the same deal or no deal. If it is no deal, which I hope is not the case, then you and I will be required to attend before Mr. Justice Bondy tomorrow morning to pitch our respective cases. The basic format is :

1. Unpaid wages and termination pay in accordance with the contract and amounts unpaid to date;
2. Payments commencing February 1 2022 and amortized over two (2) years;
3. 12% interest annually; Fully open;
4. Judgment for the balance in the event payment missed for greater than 15 days.
5. Full and final, immediate, release of Varga.

I have attached the draft minutes in default judgment for your consideration. We will of course have to quickly settle on the math, based on the above/attached . [Emphasis added]

[11] The Notice of Motion and the plaintiff’s affidavit indicates that the plaintiff is seeking to enforce an agreement reached on November 16, 2022, when counsel for the plaintiff accepted what the plaintiff says was the defendants’ offer.

[12] In other words, it is this November 15, 2022 email that the plaintiff argues constitutes the offer to settle. The plaintiff argues the terms of the offer are:

1. Unpaid wages and termination pay in accordance with the contract and amounts unpaid to date;
2. Payments commencing February 1, 2022 and amortized over two (2) years;
3. 12% interest annually; Fully open;
4. Judgment for the balance in the event payment missed for greater than 15 days.

[13] On November 17, 2022, Mr. Wills sent an email to counsel for the plaintiff requesting his comments and changes on the draft Minutes of Settlement.

[14] On the same day, counsel for the plaintiff sent an email to counsel for the defendants and forwarded amended draft Minutes of Settlement for his review. He noted:

I inserted the payment amounts and based them the agreed upon amount, $101,635.71, 12% interest annually, and amortized over two years. […] Let me know if you have any questions or if you have different payment amounts. If there are no further changes, please send me a PDF copy for my client to sign.

[15] Counsel for the plaintiff sent several emails to counsel for the defendant following up on the Minutes of Settlement. During these exchanges, Mr. Wills advised that Mr. Varga had resigned. On December 5, 2022, Mr. Wills advised that he had spoken to his client and that the document was good to go as is.

IV. Disposition

[16] For the reasons below, the plaintiff’s motion is dismissed.

V. Analysis

[17] Both in the Notice of Motion and in his affidavit, the plaintiff relies on the November 15, 2022 email as being the offer (stated perhaps in error as October 26 in the plaintiff's affidavit). The plaintiff’s reliance on rule 49.09 is not supported by the authority. The starting point is r. 49.02 which allows a plaintiff or defendant to serve an offer to settle. The provision provides that:

49.02 (1) A party to a proceeding may serve on any other party an offer to settle any one or more of the claims in the proceeding on the terms specified in the offer to settle.

[18] Rule 49.09, relied upon by the plaintiff, permits a party to an accepted offer to settle to move for judgment or, alternatively, continue with the proceeding. The provision reads:

49.09 Where a party to an accepted offer to settle fails to comply with the terms of the offer, the other party may,

(a) make a motion to a judge for judgment in the terms of the accepted offer, and the judge may grant judgment accordingly; or

(b) continue the proceeding as if there had been no accepted offer to settle.

[19] The Ontario Court of Appeal has made it clear that r. 49.09 is not applicable to a situation where the settlement occurred outside the scope of r. 49: Haider v. Rizvi, 2023 ONCA 354, at para. 20; Donaghy v. Scotia Capital Inc./Scotia Capitaux Inc., 2009 ONCA 40, 93 O.R. (3d) 776, leave to appeal refused, [2009] S.C.C.A. No. 92. While there is a prescribed form (Form 49A) for Rule 49 offers to settle, the jurisprudence establishes that an offer to settle made at least seven days before the commencement of the hearing and that is not withdrawn or has expired as required by rule 49.10(2) meet the criteria of being a Rule 49 offer to settle.

[20] Where there is no settlement reached as a result of the exchange of an offer made under Rule 49, r. 49.09, which “is a procedural rule applicable to the acceptance and subsequent non-compliance with an offer to settle,” is inapplicable: Gianopoulos v. Olga Management Ltd., at para. 3.

[21] The plaintiff may still bring a motion to enforce a settlement at common law: Dodla v. Dodla, 2022 ONSC 5648, at paras. 14-16.

[22] Parties who have reached a settlement may enforce the settlement agreement by way of motion for judgment in the action: Paul M. Perell & John W. Morden, The Law of Civil Procedure in Ontario, 4th ed. (Toronto: LexisNexis, 2020) at 729-730; GMBR Capital Corp. v. Parmar, 2021 ONSC 7798, at para. 25; Donaghy, at para. 11.

[23] On this motion for judgment to enforce the Minutes of Settlement, the court must deal with two issues: First, was there a settlement? And second, if there was, should the court exercise its discretion to enforce the settlement?: see Milios v. Zagas (1998), 38 O.R. (3d) 218 (C.A.); Capital Gains Income Streams Corp. v. Merrill Lynch Canada Inc., 2007 ONCA 497, 87 O.R. (3d) 443.

[24] A settlement agreement is a contract: Olivieri v. Sherman, 2007 ONCA 491, 86 O.R. (3d) 778; Donaghy, at para. 41; Hodaie v. RBC Dominion Securities et al., 2011 ONSC 6881, 108 O.R. (3d) 140, at para. 17, aff’d 2012 ONCA 796.

[25] A settlement agreement is subject to the general law of contract regarding offer and acceptance. For a concluded contract to exist, the court must find that the parties: (1) had a mutual intention to create a legally binding contract; and (2) reached agreement on all of the essential terms of the settlement: Bawitko Investments Ltd. v. Kernels Popcorn Ltd. (1991), 79 D.L.R. (4th) 97 (Ont. C.A.), at pp. 103-04.

[26] As indicated above, the plaintiff seeks to enforce the November 16th agreement. The plaintiff submits that not only did Mr. Wills provide the essential terms of his clients’ offer to settle in his email, but he also provided a copy of the proposed draft Minutes of Settlement. To create a legally binding contract the parties must have reached an agreement on all the essential terms of the contract. Whether the parties have manifested mutual assent to specific terms is usually determined from their overt acts: Bogue v. Bogue (1999), 46 O.R. (3d) 1 (Ont. C.A.). However, Mr. Wills’ email clearly stated: “We will of course have to quickly settle on the math.” In this case, the use of the words “The basic format is” before Mr. Wills introduces the proposed terms, before concluding with the sentence: “We will of course have to quickly settle on the math, based on the above/attached.”, suggests the parties had not reached an agreement on the essential terms of their agreement.

[27] There is some confusion in the materials as to whether the plaintiff is seeking to enforce the October 26th proposal, set out in the plaintiff’s factum, which does not refer to the release of the Mr. Varga or the November 15th proposal. The plaintiff’s affidavit is also not clear on this point. Regardless, on the material before me, there were further discussions about numbers, and counsel for the plaintiff conceded as much during oral submssions.

[28] The draft Minutes of Settlement proposed by Mr. Wills are embedded in the document and not available for review by the court. The materials before the court suggest that the draft Minutes of Settlement forwarded by Mr. Wills was not the same draft that the plaintiff ultimately signed. At paragraph 19 of his affidavit, the plaintiff states:

Amended draft Minutes of Settlement (the “Terms of Settlement” or “Minutes of Settlement”), which include the total payment amounts and representing the understanding of the agreement reached, were provided to Mr. Wills on November 17, 2022. Mr. Kleinman requested that the Defendants confirm if they require any changes to be made to the Terms of Settlement.

[29] At paragraph 24 of his affidavit, the plaintiff deposed that: “Pursuant to the agreed Terms of Settlement, Rolling in Green was required to provide the first biweekly settlement payment on February 1, 2023, in the amount of $3,654.58.”

[30] Neither the amounts to be paid nor a schedule for payment are set out in the email, which the plaintiff says constitutes the offer that was accepted by the plaintiff.

[31] During oral submissions counsel for the plaintiff submitted that he and Mr. Wills did ultimately agree on the numbers. That evidence is not before me in proper form, nor is this a motion to enforce a settlement reached based on the Minutes of Settlement. It is however evident that the parties continued to negotiate and discussed the dollar amounts which were contemplated by the penultimate sentence in Mr. Wills’ email, which I note is absent from the plaintiff’s affidavit.

VI. Conclusion

[32] I cannot find, on the materials before me, that the parties had reached agreement on all the essential terms of the settlement.

[33] In the result, the motion to enforce the settlement agreement is dismissed.

A.P. Ramsay J. Date: October 29, 2023