Court File and Parties

COURT FILE NO.: CV-17-133230 DATE: 20240215

ONTARIO SUPERIOR COURT OF JUSTICE

BETWEEN:

Theodore Sipidias Applicant – and – Evangeline Sipidias in her personal capacity and in her capacity as Estate Trustee of the Estate of Basile Sipidias and Constantin Sipidias (also known as Danny Sipidias) in his personal capacity and in his capacity as Estate Trustee of the Estate of Basile Sipidias Respondents

Counsel: Jason K. Allan, for the Applicant Joanna Lindenberg and Christopher Cook, for the Respondent, Evangeline Sipidias Matthew W. Mulholland, for the Respondent, Constantin Sipidias (also known as Danny Sipidias) Irena Karaoulis, Interested Party

HEARD: January 12, 2024

Reasons for Decision

CHARNEY J.:

Introduction

[1] This litigation concerns the Estate of Basile Sipidias (“Basile”), who died on September 6, 2011. He was predeceased by his wife, who died in 2005.

[2] Basile was survived by his five children: Theodore Sipidias (“Ted”), now age 69, Evangeline Sipidias (“Vangie”), now age 66, Irena Karaoulis (“Irena”), now age 63, Constantin Sipidias (“Dan”), now age 62, and George Sipidias (“George”), now age 59 (collectively, “the children”).

[3] In his Last Will and Testament, dated September 26, 2005, Basile left his Estate in equal shares to all five of his children. Vangie and Dan were appointed as executors.

[4] The youngest son, George, is developmentally delayed. His share of the Estate was to be set aside and kept invested as a separate fund. Dan and Vangie were to exercise discretion to pay to or spend on behalf of George from that fund. Only the funds paid to or paid on behalf of George were to vest to him. Upon George’s death, the remaining funds in George’s Trust were to be divided among the surviving children equally.

[5] The five children have been involved in litigation over the Estate ever since Basile’s death.

[6] The issue before me on this motion is whether the children finally settled their dispute at a judicial mediation on January 17, 2023, or whether their dispute was left unresolved.

[7] Prior to Basile’s death, title to his home, located at 112 Hickory Nut Drive in Toronto, was transferred from his name to Irena. The home was Basile’s most significant asset. After Basile died, Irena took the position that title to the home was gifted to her and was therefore not part of Basile’s Estate for the purposes of distribution in accordance with the terms of his Last Will.

[8] The four other children brought an application against Irena for an Order that the Toronto home was held by Irena on a resulting trust and that it be declared part of Basile’s Estate.

[9] The matter eventually proceeded to trial before Bird J. in November 2015. At trial, Justice Bird found that the home was in fact an asset of Basile’s Estate and she set aside the transfer of title to Irena and declared the Estate of Basile to be the beneficial owner of the property.

[10] Bird J. ordered Irena to pay the Estate $107,038 costs. This amount was never paid, and there is no dispute that Irena’s share of the Estate is set off by this debt.

[11] Following the decision, title to the Toronto home was transferred from Irena’s name into the names of Vangie and Dan, who were the estate trustees.

[12] Vangie and Dan sold the Toronto home in September 2017, and used part of the $980,000 proceeds to purchase another home in Barrie for $500,000. Title to the Barrie home was taken in Vangie and Dan’s names personally. According to Dan and Vangie, they purchased the Barrie home so that Dan could live there with George.

[13] In 2017, Ted commenced this Application against Vangie and Dan under s. 37 of the Trustee Act, R.S.O. 1990, C. T-23. The parties came to court on January 11, 2018 and June 14, 2018, and obtained judicial orders setting out a schedule of mediation and a timetable for litigation. The mediation did not occur.

[14] Ted returned to Court in November, 2019 with a motion to compel the sale of the Barrie home. This motion was heard by Sutherland J. in November, 2019. The motion was adjourned to June 19, 2020 to allow Vangie and Dan time to obtain legal advice. The June 19, 2020 date was vacated as a result of the COVID pandemic.

[15] In February, 2021, Vangie and Dan listed the Barrie home for sale.

[16] Vangie retained a lawyer in May 2021, who advised that she would provide an informal accounting so that the parties could then proceed to have meaningful settlement discussions. That accounting was provided in November 2021.

[17] The validity of many of the expenses in the accounting is questioned by Ted. He takes the position that none of them are proper expenses for the Estate to have paid. For the purposes of my analysis of the present motion, I do not have to assess the validity of any party’s position on this issue, only to note that it continued to be an area of dispute throughout the negotiations that led to the purported settlement.

[18] The dispute relating to the Estate involved only Ted, Vangie and Dan. Irena was not involved in the dispute, because her debt owed to the Estate resulting from the costs ordered in the 2015 litigation (plus interest) exceeds her share of the proceeds however the dispute is finally resolved.

[19] George is under legal disability, and all of the siblings agree that he is dependant on the Estate and is therefore entitled to a larger share of the Estate. He has not participated in the litigation.

[20] The Estate has been administered, and the only outstanding items are the distribution of $560,662, which currently sits in a lawyer’s trust account, and $18,928 in a CIBC bank account (the Estate account).

Private Mediation

[21] The first mediation was conducted privately by Charles Ticker on January 20, 2022. Given George’s incapacity, the Public Guardian and Trustee (the “PGT”) was put on notice, but did not send a representative to attend. Similarly, Irena was put on notice but did not attend. At the January 2022 Mediation, Vangie, Ted and Dan were each represented by counsel. They were unable to reach a settlement.

Judicial Mediation

[22] The parties then participated in case conferences with Sutherland J. on October 20, 2022 and November 3, 2022. At the November 3, 2022 Case Conference, Sutherland J. indicated that the parties “have agreed to a judicial mediation conference in an attempt to resolve this matter”. Sutherland J. agreed to conduct the judicial mediation for one half day on December 15, 2022. If the mediation was not successful, the matter would proceed to trial. Sutherland J. stated:

To be clear, this matter will be proceeding to a hearing and an order will be made at the mediation or a timetable if the matter does not settle.

[23] Vangie, Ted and Dan were each represented by counsel at the December 15, 2022 Judicial Mediation, which lasted approximately 2.5 hours. Each party filed a comprehensive mediation brief.

[24] Some, but not all, issues were resolved. As more time was required, Justice Sutherland ordered that the mediation continue before him on January 17, 2023 for an additional two hours.

[25] On January 9, 2023, Dan discharged his lawyer and advised the other parties that he would represent himself.

[26] The January 17, 2023 Judicial Mediation lasted 4.5 hours. Following the mediation, Sutherland J. issued the following Endorsement:

Mediation conducted. Matter tentatively settled. Parties have to complete the settlement and finalizing settlement documents and serve OPGT and all beneficiaries to obtain their written consent.

Motion for judicial approval may be made to me in writing.

If an issue arises that the Court may assist, either party may request a civil conference with me.

[27] Immediately following the conclusion of the January 2023 Judicial Mediation, Ted’s counsel circulated a copy of the Estate Calculations, setting out each party’s share of the remaining Estate. Dan raised no objection to the Estate Calculations.

[28] Subsequently, Ted’s counsel discovered that his Estate Calculations failed to account for Irena’s approximate $109,000.00 (plus interest) debt owed to the Estate pursuant to Bird J.’s January 5, 2016 Judgment.

[29] The Estate Calculations were therefore revised and recirculated to the parties on January 23, 2023, to reflect Irena’s debt and the corresponding set-off against her entitlement as a beneficiary of the Estate. This resulted in a net increase to the shares provided to Vangie, Ted and Dan, since Irena’s share was divided among them.

[30] In response, Dan delivered a list of concerns.

[31] Subsequently, and in the process of preparing draft minutes of settlement, Vangie’s counsel found a second error in the Estate Calculations. The revised spreadsheet failed to adjust for Vangie’s RRSP withdrawal, contrary to what was agreed to at the January 2023 Judicial Mediation. The RRSP adjustment had been included in the original Estate Calculations circulated by Ted’s counsel on January 17, 2023, but not in the updated January 23, 2023 version. The Estate Calculations were therefore revised and circulated to the parties on January 24, 2023.

[32] The final calculations for the division of the Estate as set out in the Minutes of Settlement is as follows:

• Ted: $136,661
• Vangie: $134,673
• Dan: $98,662
• George: $196,836
• Irena: 0

Total Estate: $566,832

[33] The Minutes of Settlement provide that George’s share shall be placed in an investment account in the joint names of Ted, Dan and Vangie for the sole benefit of George. Ted, Dan and Vangie will have signing authority, but only two signatures will be required to authorize any transaction. Ted, Dan and Vangie will obtain professional advice to ensure that George’s government benefits (ODSP) are not jeopardized by any payments to George, and any transaction will be made by certified cheque or money order (no electronic transfers or cash withdrawals). Upon George’s death, the balance of George’s share will be divided equally between Ted, Vangie, Dan and Irena.

[34] On February 6, 2023, Dan advised the other parties that he “could not move forward with the results of the mediation”. Although Ted and Vangie have signed the Settlement Agreement, Dan refused to sign it.

[35] The parties requested another case conference before Sutherland J. to see if the Settlement Agreement could be saved. On March 2, 2023, Sutherland J. conducted another case conference, and issued the following Endorsement:

1. Conference held. The applicant and Evangeline Sipidias intend to sign the drafted and agreed upon minutes of settlement based on the settlement from the mediation held in January 2023. Constantin Sipidias indicates he requires a lawyer and has refused to sign. I have been told that this would be his fifth lawyer in this proceeding.
2. If the minutes of settlement are not executed by all parties, the applicant may bring a motion to enforce the settlement and should serve the PGT with that motion material. I have cautioned all parties on cost consequences if such a motion is necessary.
3. If a timetable and fixed date for the anticipated long motion is required, either party may request a conference with me.

[36] Based on these directions, Vangie brought this motion for an Order enforcing the settlement that she alleges was reached by the parties at the January 2023 Judicial Mediation before Sutherland J., and as set out in the Minutes of Settlement that she and Ted have since executed.

[37] In the alternative, she seeks an Order approving and implementing the terms of the Minutes of Settlement on the grounds that it is in the best interest of the Estate and all beneficiaries.

[38] Ted supports Vangie on this motion.

[39] Dan opposes the motion, arguing that no settlement was reached at the January 2023 Judicial Mediation.

[40] Ted, Vangie and Dan have each filed extensive affidavits setting out the history of this litigation, the various issues that gave rise to disagreement among the siblings, their respective positions at various times, the conduct of the mediation discussions, and the various discussions and correspondence following the mediation. My summary of their respective positions and the evidence barely scratches the surface of their long-standing disagreements.

Position of Vangie and Ted

[41] Vangie and Ted take the position that all parties to the mediation unequivocally manifested an intention to be bound by the terms that had been agreed to at the January 2023 mediation before Sutherland J. The parties discussed all of the issues that had been raised, each party compromised on their respective positions, and agreed to all of the essential terms.

[42] As the mediation continued, the Estate Calculations were continually updated, so that all parties could see the amounts that were at issue and the compromises being made.

[43] While the parties did not have time to draft the Minutes of Settlement, Sutherland J.’s Endorsement makes clear that, in his view, the parties had reached a settlement of all issues.

[44] The Final Estate Calculations did not change the substance of what had been agreed to; only mathematical errors were corrected. The final Minutes of Settlement that were signed by Vangie and Ted comprise what was specifically agreed to by all the participants at the January 2023 Judicial Mediation.

[45] Moreover, Vangie and Ted argue that Dan’s claim that he did not agree to the settlement at the Judicial Mediation is not consistent with Sutherland J.’s various Endorsements. By his words and conduct, Dan led Vangie, Ted, and Justice Sutherland to believe that the matter had settled at the end of the January 2023 Judicial Mediation. If this were not the case, Justice Sutherland’s January 17, 2023 Endorsement would not have provided that the matter had tentatively settled, subject only to finalizing minutes of settlement and approving the settlement on notice to the PGT. Nor would Sutherland J. have directed the parties to bring a motion in writing before him to have the settlement approved on George’s behalf. In fact, had the matter not settled, Sutherland J. would have ordered a timetable and scheduled a hearing, as contemplated in his November 3, 2022 Endorsement.

Dan’s Position

[46] Dan opposes the enforcement motion brought by Vangie. He denies that the parties settled the issues at the January 2023 Judicial Mediation.

[47] In the alternative, he takes the position that any agreement must be vitiated because Vangie withheld or misrepresented important information about a joint bank account she held with Basile. If Dan did agree to the settlement, it was based on information provided by Vangie about the date that the joint bank account was opened. Evidence subsequent to the settlement indicates that that information was not correct.

[48] Dan has sworn a lengthy affidavit, setting out his recollection of the January 2023 Judicial Mediation. Dan maintains that he never reached an agreement with Ted and Vangie during the January Mediation on the numbers outlined in the spreadsheet that Ted’s counsel was sharing on his screen. He believed he would have an opportunity to address those amounts after the break. However, instead, when Justice Sutherland returned, he concluded the mediation. Dan states in his affidavit that he was in shock because he had never agreed to the amounts in the spreadsheet.

[49] Dan argues that the fact that the spreadsheet was amended twice after the mediation is evidence that the parties did not reach an agreement at the January 2023 Mediation. He also argues that his words and actions following the mediation have been consistent with his belief that he did not agree to a settlement at the January Mediation.

Analysis

[50] The test on a motion to enforce a settlement agreement is two-pronged:

(a) Is there a genuine issue about the existence of an agreement to settle? (b) If a settlement agreement is found to exist, should the court nevertheless exercise its discretion not to enforce the agreement?

[51] The law relating to the enforcement of a settlement agreement was summarized by Ramsay J. in Dodla v. Dodla, 2022 ONSC 5648, at paras. 15, and 17 – 19:

However, it is well established by the authorities and the jurisprudence that at common law, parties who have reached a settlement may enforce the settlement agreement by way of motion for judgment in the action: Paul M. Perell & John W. Morden, The Law of Civil Procedure in Ontario, 4th ed. (Toronto: LexisNexis, 2020) at 729-730; GMBR Capital Corp. v. Parmar, 2021 ONSC 7798, at para. 25; Donaghy v. Scotia Capital Inc./Scotia Capitaux Inc., 2009 ONCA 40 at para. 11, leave to appeal dismissed, .

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 (C.A.).

It is trite law that a settlement agreement is a contract: Donaghy, at para. 41; Hodaie v. RBC Dominion Securities et al., 2011 ONSC 6881 at para. 17, aff’d 2012 ONCA 796.

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

[52] Also relevant is the decision of Perell J. in Sumarah v. International Property Group (Toronto) Limited, 2024 ONSC 334, at paras. 58 – 59 (footnotes omitted):

A settlement agreement is subject to the ordinary rules of contract. For there to be a binding settlement agreement, there must be a mutual intention to create a legally binding agreement and the essential terms of the agreement must have been agreed upon. The conduct of the parties, including the language they used, is viewed objectively in order to determine whether a contract has been made. However, it is not necessary to have reached agreement on incidental matters, such as the method of payment or the exchange of releases. An enforceable settlement agreement may be made orally, in writing, by correspondence, or by an exchange of emails.

The policy of the court is to encourage settlements and in matters of interpretation, courts are not inclined to find that the settlement agreement does not have the requisite certainty in its essential terms. If the settlement agreement is silent, there is an implied term that the parties will execute a release consistent with the terms of the settlement.

[53] See also: Remedy Drug Store v. Farnham, 2014 ONSC 4391, at para. 37, per Mew J.:

It is not unusual, after the parties have entered into a settlement agreement, for there to be disagreement as to what they have agreed to. In Fieguth v. Acklands Limited (1989), 37 B.C.L.R. (2d) 62, 59 D.L.R. (4th) 114 (C.A.), McEachern C.J.B.C. noted that settlements are often concluded before the documentation (such as releases or formal minutes of settlement) can be completed. In such cases, “the settlement will be binding if there is agreement on the essential terms” (at para. 49). Subject to the question of whether a dispute arising in connection with the settlement gives rise to a repudiation of the settlement agreement (discussed below), parties who reach a settlement should usually be held to their bargains.

[54] The fact that a party does not sign the final and formal settlement agreement is not an impediment to enforcing the settlement: Crooks v. Foley, 2013 ONSC 3282, at para. 16.

[55] In my view, the best evidence of what happened at the January 17, 2023 Judicial Mediation comes not from the competing affidavits of Dan, Vangie and Ted, but from the various Endorsements of Sutherland J., who conducted the mediation.

[56] As indicated above, Sutherland J.’s November 3, 2022 Endorsement indicated that if the mediation was not successful, a litigation timetable would be established and the matter would proceed to trial.

[57] Following the January 17, 2023 Judicial Mediation, Sutherland J. issued the following Endorsement:

Mediation conducted. Matter tentatively settled. Parties have to complete the settlement and finalizing settlement documents and serve OPGT and all beneficiaries to obtain their written consent.

Motion for judicial approval may be made to me in writing.

If an issue arises that the Court may assist, either party may request a civil conference with me.

[58] The settlement was, as Sutherland J. indicated, “tentative”, in the sense that the parties had agreed on all matters, but, as is often the case following a judicial mediation, formal minutes of settlement had to be drawn up and signed by each party. The Minutes of Settlement would then require notice to the OPGT and judicial approval because George is a party under a disability, and the Minutes determine his share of the Estate. Sutherland J. would not have directed the parties to serve the OPGT and bring a motion for judicial approval if there had not been a settlement.

[59] Significantly, Sutherland J.’s Endorsement did not make any reference to a timetable for future litigation. Had there been no settlement, it is clear from his November 3, 2022 Endorsement that a timetable would have been established.

[60] In my view, it is clear from Sutherland J.’s January 17, 2023 Endorsement, particularly when read together with his November 3, 2022 Endorsement, that, in his view, the parties had agreed on the essential elements of the settlement, and that the only steps left were the drafting of formal Minutes of Settlement and judicial approval after notice to the OPGT. The matter would not proceed to a hearing.

[61] This view is further confirmed by the March 2, 2023, Endorsement, where Sutherland J. stated:

Conference held. The applicant and Evangeline Sipidias intend to sign the drafted and agreed upon minutes of settlement based on the settlement from the mediation held in January 2023. Constantin Sipidias indicates he requires a lawyer and has refused to sign. I have been told that this would be his fifth lawyer in this proceeding.

If the minutes of settlement are not executed by all parties, the applicant may bring a motion to enforce the settlement and should serve the PGT with that motion material. I have cautioned all parties on cost consequences if such a motion is necessary. [Emphasis added.]

[62] Given Sutherland J.’s Endorsements, I find that a settlement of the essential terms was arrived at in the Judicial Mediation on January 17, 2023.

[63] I am also satisfied that the Final Estate Calculations that formed part of the Minutes of Settlement did not change the substance of what had been agreed to on January 17, 2023, but corrected mathematical errors and was consistent with the essential terms established for the distribution of the Estate at the January 17, 2023 Judicial Mediation.

The Joint Bank Account

[64] One of the issues that was not resolved at the December 15, 2022 Judicial Mediation related to the joint bank account held by Basile and Vangie. The balance in the joint bank account at Basile’s death was $29,780. Vangie took the position that Basile intended the joint bank account to be a gift to her when Basile died.

[65] When a parent adds an adult child to a bank account, creating a joint bank account, the account is subject to a presumption of resulting trust: Pecore v. Pecore, 2007 SCC 17.

[66] Sanfilippo J.’s decision in Bradshaw v. Hougassian, 2023 ONSC 3266, at paras. 38 – 39, provides a useful summary of the law of resulting trust:

As the Supreme Court has explained, “the underlying notion of the resulting trust is that it is imposed ‘to return property to the person who gave it and is entitled to it beneficially, from someone else who has title to it. Thus, the beneficial interest ‘results’ (jumps back) to the true owner’”

A resulting trust arises where the property is in one party’s name, but impressed with an obligation to return the property either because the holder is a fiduciary or because the transferee gave no value for the property. To determine whether the transfer of property was made for no value, the actual intention of the transferor at the time of the transfer is the governing consideration. Where a gratuitous transfer is made, there is a rebuttable presumption that the transferor intended to create a trust rather than to make a gift, on the principle that “equity presumes bargains and not gifts”. The onus is on the person receiving the transfer to demonstrate that a gift was intended, failing which the transferee holds the property in trust for the transferor. [Footnotes omitted.]

[67] The issue of resulting trust commonly arises where a parent transfers property, such as a bank account, to an adult child to enable the adult child to assist with the management of the parent’s financial affairs: Pecore, at para. 36.

[68] The presumption of resulting trust means that the onus is on Vangie to rebut the presumption. If she is succesful, the bank account would not become part of Basile’s Estate, but would pass directly to Vangie as the survivor of the joint account. If Vangie could not rebut the presumption of resulting trust, the bank account would return to the Estate and be divided among the beneficiaries in accordance with the terms of the Will.

[69] In Pecore the Court noted, at para. 56, that the most important evidence of intention will generally be evidence that is contemporaneous to the transfer:

[E]vidence adduced to show the intention of the transferor at the time of the transfer “ought to be contemporaneous, or nearly so”, to the transaction…The reason that subsequent acts and declarations have been viewed with mistrust by courts is because a transferor could have changed his or her mind subsequent to the transfer and because donors are not allowed to retract gifts.

[70] The issue of the joint bank account and the presumption of resulting trust was one of several outstanding issues when the Judicial Mediation ended in December, 2022. Prior to the January 17, 2023 Judicial Mediation, Ted and Dan took the position that, by virtue of the presumption of resulting trust, the Joint Account was an asset of the Estate.

[71] Following the December 15, 2022 Judicial Mediation, Vangie produced a letter from the CIBC Bank dated December 16, 2022, which confirmed that Vangie “opened… [the Joint Account] with her father Basile Sipidias on March 20, 2008”. Vangie took the position that the fact that the account was opened by her and Basile three years before his death rebutted the presumption of resulting trust and demonstrated Basile’s intention to give her the balance of the funds in the joint account after his death.

[72] This letter was by no means determinative of the legal issue of resulting trust. It was, at best, circumstantial evidence from which Basile’s intention might be inferred. The parties, however, accepted the letter at face value, and settled this issue by agreeing that the funds in the joint account would be treated as a gift to Vangie and not become part of the Estate.

[73] Following the January 17, 2023 Mediation, Dan contacted the CIBC to make further inquiries. On February 7, 2023, he was advised by the CIBC that the information in their letter of December 16, 2022 was not correct. While the account was opened on March 20, 2008, it was not initially opened as a joint account, but was opened in Basile’s name only. The CIBC could not confirm the date on which the account was made a joint account with Vangie.

[74] Dan takes the position that Vangie misrepresented the date on which the bank account was made a joint bank account, and that she knew, or ought to have known, that the information in the December 16, 2022 letter from the CIBC was not correct. He argues that, whether the error was deliberate or not, he never would have agreed to exclude the joint account from the Estate but for the December 16, 2022 letter from the CIBC confirming that the joint account was opened as a joint account by Basile and Vangie.

Analysis

[75] The record does not support the allegation Vangie knew, or ought to have known, that the information contained in the December 16, 2022 letter from the CIBC was not correct. The information in the letter coincided with Vangie’s memory of when the joint bank account was opened some 14 years earlier. The CIBC has not been able to provide the actual date that the bank account was made joint. It may have been soon after March 20, 2008. Few people could remember the precise date that they opened a bank account 14 years earlier.

[76] If there was a misrepresentation, I will treat it as an innocent misrepresentation, since the December 16, 2022 letter did come from the CIBC, and the CIBC has provided no explanation as to how the error occurred.

[77] The legal principles relating to misrepresentation were set out by the Court of Appeal in Deschenes v. Lalonde, 2020 ONCA 304, at paras. 27 – 30 (citations omitted):

I begin by setting out the relevant legal principles. The point of departure is that there is a strong presumption in favour of the finality of settlements: ... A settlement agreement will not be rescinded on the basis of information that has come to light following the settlement that indicates that a party has entered into an improvident settlement. As the motion judge recognized here, “it is not enough to revisit a settlement decision based on the better vision of hindsight”: at para. 2.

A settlement agreement, as a contract, may be rescinded on the basis of misrepresentation. The interest in the finality of settlements will not “trump” the need to rescind a settlement agreement in such cases. In Radhakrishnan v. University of Calgary Faculty Association, 2002 ABCA 182, 215 D.L.R. (4th) 624, at paras. 30, 43, Côté J.A. stated that “[t]he recognized ways to upset a settlement contract are the same as those to upset any other contract”, and that “[in a settlement] [i]nterests of finality prevail, unless there are contractual problems such as fraud, misrepresentation, duress, undue influence, unconscionability, or mutual or unilateral mistake”…

The equitable remedy of rescission is available for a false or misleading representation that induces a contract… Rescission requires proof that the misrepresentation was material and was relied on by the party seeking to rescind the contract... To be material, a misrepresentation must relate to a matter that would be considered by a reasonable person to be relevant to the decision to enter the agreement, but it need not be the sole inducement for acting... Whether a contracting party did in fact rely on the misrepresentation, at least in part, to enter into the agreement is a “question of fact to be inferred from all the circumstances of the case and evidence at trial”…

The remedy of rescission is available even if the misrepresentation was made innocently, that is, by a party who believed it was true: “Where rescission is claimed it is only necessary to prove that there was misrepresentation. Then, however honestly it may have been made, however free from blame the person who made it, the contract, having been obtained by misrepresentation, cannot stand”... McLachlin J.A. (as she then was) set out a list of requirements for rescission of a contract on the basis of innocent misrepresentation. In addition to the requirement of a positive misrepresentation of an existing fact that induced the plaintiff to enter into the contract, in order for rescission to be granted, the plaintiff must have acted promptly upon discovery of the misrepresentation to disaffirm the contract, no third party may have acquired rights for value as a result of the contract, and it must be possible to restore the parties substantially to their pre-contract position…

[78] In determining whether the settlement agreement should be rescinded for innocent misrepresentation, therefore, I must consider:

a. Whether Vangie made a misrepresentation; b. Whether the misrepresentation was material to the settlement; and c. Whether Dan had relied on the misrepresentation in agreeing to the settlement at the Judicial Mediation.

[79] Rescission based on innocent misrepresentation does not require a finding that Vangie had actual or constructive knowledge that the representation was false at the time it was made. An innocent misrepresentation is one that is made without knowledge that it is wrong: Deschenes, at para. 40.

[80] Vangie and Ted argue that Vangie’s reliance on the December 16, 2022 CIBC letter was not a misrepresentation because she accurately stated the information that she was given by the CIBC.

[81] That, however, is exactly why it was an innocent misrepresentation. I accept that Vangie had no intention to mislead Ted and Dan when she relied on the CIBC letter, and that she honestly believed the information in that letter to be true. But, as events unfolded, CIBC provided a subsequent correction, advising that the information in the December 16, 2022 letter was not correct – the bank account was not opened as a joint bank account on March 20, 2008, but was opened by Basile alone on that date. The bank was unable confirm when the bank account was made joint. While innocent, the information in the December 16, 2022 letter was a misrepresentation.

[82] Vangie and Ted argue that the misrepresentation was not material to the settlement. There was only $29,780 in the account when Basile died. If that amount were divided five ways, Dan would benefit from, at most, a one-fifth share, or approximately $6,000. Even if he was given 25% of Irena’s share, this would increase his share to $7,500. Assuming that the funds in the joint account were distributed on the same basis as the other Estate assets, with George receiving a larger share than the other siblings, Dan’s share would be closer to $5,000.

[83] While I accept that Dan would not have agreed to exclude the joint account from the Estate if not for the misinformation contained in the December 16, 2022 CIBC letter, I conclude that, in the context of an Estate valued at approximately $580,000, an error of approximately $6,000 - approximatley 1% of the value of the Estate – is not sufficiently material to merit recission of the settlement agreement.

[84] In arriving at this conclusion, I must ask myself whether the game is worth the candle. Does this innocent misrepresentation merit setting aside the settlement agreement and sending the parties off to litigate this dispute, recognizing that the cost of litigation will greatly exceed the $5,000 to $6,000 at stake and likely leave each beneficiary with less than the amount agreed to in the settlement?

[85] The answer to those question is no. Thirteen years of litigation is enough.

Approval of Minutes of Settlement on Behalf of George

[86] Vangie and her lawyer, Justin de Vries, have each filed affidavits to support the settlement on behalf of George, pursuant to Rule 7.08 of the Rules of Civil Procedure.

[87] Vangie’s May 31, 2023 Affidavit states as follows:

a) George lives in the basement apartment of Vangie’s house; b) George is mostly self-sufficient in terms of his activities of daily living; c) George does not cook so Vangie provides a hot dinner for him every night; d) George takes care of his own breakfast and lunch; e) George’s only source of income is $596.60 from ODSP and $737.49 from CPP Disability, for a total of $1,334.09 per month; f) Vangie applied for a special diet supplement for George through ODSP in 2021 (prior to which George was receiving $86.00 less per month); g) George pays $800.00 per month in rent to Vangie. Prior to September 2022, his rent was $775.00 per month. This includes utilities, cable TV and 2-3 loads of laundry with detergent provided by Vangie; h) Once his rent is paid, George is left with $534.09 for food, clothing and any other incidentals; i) Vangie has had to purchase a new mattress and winter coat for George, as well as a $60.00 apparatus to help him put on his compression stockings; and j) George has a physical condition called venous stasis. Vangie has indicated that George needs an electric bed that can elevate his legs and feet to prevent the blood from pooling in his lower extremities.

[88] On July 30, 2018, a future care assessment was conducted upon George. The assessment concluded that George’s yearly expenses for his lifetime were approximately $94,000.00, plus another $60,000.00 (yearly) if George is to move into a private adult supportive facility, such as a retirement home.

[89] The Minutes of Settlement establish an Investment Account and requires the signatures of two of Dan, Vangie and Ted before funds can be withdrawn. It would likely be financially prohibitive to have a neutral third party oversee and manage George’s share of the Estate.

[90] The PGT was provided with a copy of the Motion Record and advised of the hearing date. On October 13, 2023, the PGT advised the parties that since it was not George’s guardian in any capacity, it had no authority to take a position in this proceeding.

[91] Vangie and Ted note that if the Court declines to enforce the Minutes of Settlement, the litigation would continue and George would require a litigation guardian. None of Vangie, Dan, nor Ted can act as litigation guardian for George as they are conflicted out because they all have an equal financial interest in the Estate. Appointment of a litigation guardian in this case would further deplete the Estate’s assets, and, by extension, George’s share of the Estate.

[92] In my view, the agreement achieved at the January 17, 2023 Judicial Mediation, as reflected in the Minutes of Settlement, is in George’s best interest, and the agreement is approved.

Conclusion

[93] This Court Orders that

a. The Minutes of Settlement executed by Evangeline Sipidias on March 8, 2023, and by Theodore Sipidias on March 14, 2023, be enforced as an Order of this Court. b. The Minutes of Settlement are approved pursuant to Rule 7.08 on behalf of George Sipidias. c. The Application (CV-17-133230-00) is dismissed.

[94] If the parties are not able to agree on costs, Vangie and Ted may each file costs submissions of no more than 3 pages plus costs outline and any offers to settle, within 15 days of the release of this decision. Dan may file responding submissions (total 5 pages) plus costs outline and any offers to settle, within a further 15 days.

Justice R.E. Charney

Released: February 15, 2024