Court File and Parties

COURT FILE NO.: CV-20-00645977-0000 DATE: 20240221 ONTARIO SUPERIOR COURT OF JUSTICE

RE: Domenic A. Rosso and Salvatore Rosso, Applicants -and- Bruno Rosso and Nancy Rosso also known as Ignazia Rosso, Respondents

BEFORE: Robert Centa J.

COUNSEL: Kevin Richard and Leanne Grupposo, for Domenic Rosso Edward Marrocco and Olivia Eng, for Salvatore Rosso Michael Gayed, for Bruno Rosso Marshall Reinhart, for Nancy Rosso Philip Hiebert, for Carmelina Rosso

HEARD: February 15, 2024

Endorsement

[1] Domenic, Salvatore, and Bruno Rosso are brothers. Bruno is married to Nancy. Domenic is married to Carmelina. For years, the brothers have engaged in an unusually large amount of litigation against each other.

[2] In January 2022, the parties signed minutes of settlement that settled some, but not all, of the outstanding proceedings. Now, however, Bruno alleges that Domenic breached the minutes of settlement. Bruno brings this motion to enforce the minutes of settlement. Domenic brings a cross-motion to set aside the minutes of settlement. Domenic alleges that the minutes are null and void, that he entered into the minutes of settlement because of duress or intimidation, or that he was induced to sign the minutes through a fraudulent misrepresentation, or that the minutes of settlement should be set aside because they are improvident.

[3] For the reasons that follow, I find that Domenic and Carmelina exercised their right under the minutes of settlement to declare the minutes of settlement null and void. The minutes of settlement must be set aside on that basis.

The minutes of settlement

[4] In August 2020, Domenic and Salvatore commenced this application against Bruno and Nancy. In November 2020, Bruno commenced an application against Domenic, Salvatore, Carmelina and others. [1] Both applications relate to property located at 519-521 Royal York Road, Toronto. Domenic, Salvatore, and Bruno held the Royal York property as joint tenants.

[5] Domenic then commenced two small claims court actions against Bruno and Core Mini-Bins Disposal and Demolition Inc. [2] In March 2021, Domenic commenced an action in the Superior Court of Justice against Bruno and others. [3]

[6] The minutes of settlement were signed as of January 28, 2022.

[7] In the recitals to the minutes of settlement, Domenic, Salvatore, Bruno, Nancy, Carmelina, and Core Mini-Bins expressed their desire to settle the two applications, the two small claims actions, and the Superior Court action (but only as between Domenic and Bruno). These five individuals, plus Core Mini-Bins, comprise the defined term “Settling Parties.”

[8] One of the primary terms of the minutes of settlement required Domenic and Salvatore to pay $500,000 to Bruno on or before July 25, 2022, to purchase the balance of Bruno’s interest in the Royal York property. The Settling Parties agreed to resolve some (but not all) of the litigation among them, and to exchange mutual releases. [4]

[9] Salvatore and Domenic did not make the $500,000 payment on July 25, 2022, as required. Section 21 of the minutes of settlement contained provisions that contemplated the possibility of a default and set out the options available to the Settling Parties in the event of an alleged default:

21. In the event of a default in the fulfilment of these Minutes of Settlement by any of the Settling Parties: a. The non-defaulting party shall provide notice of the default to the defaulting party, which notice shall identify the default. The Settling Parties confirm that notice of the default can be sent by email to the lawyer for the defaulting party, which email shall be copied to the remaining lawyers for the Application Settling Parties. For the purposes of any notice, Susan von Achten is the lawyer for Domenic and Salvatore Rosso, Philip Heibert is the lawyer for Carmelina, Michael Gayed is the lawyer for Bruno and Roberto Cucci is the lawyer for Nancy; b. The defaulting party shall be afforded seven business days to remedy the default; and c. In the event that the default is not remedied, any of the Settling Parties are at liberty to either declare these Minutes of Settlement null and void or to bring a motion to enforce these Minutes of Settlement.

[10] On July 26, 2022, Bruno sent a notice of default to Salvatore and Domenic (s. 21(a)), which opened a seven-day cure window. Salvatore and Domenic did not remedy the default (s. 21(b)).

[11] On September 20, 2022, Bruno served a motion to enforce the minutes of settlement pursuant to rule 49.09(a) of the Rules of Civil Procedure (s. 21(c)). [5]

[12] On November 24, 2022, Domenic and Carmelina, each a Settling Party, provided a written declaration that the minutes of settlement were null and void (s. 21(c)).

Are the minutes of settlement null and void?

[13] Domenic (supported by Carmelina) submits that the minutes of settlement are null and void pursuant to s. 21(c). They submit that they are each a Settling Party, that Bruno (the non-defaulting party) delivered a notice of breach to the defaulting parties (Domenic and Salvatore) but they did not cure the breach, that Bruno exercised his right under s. 21(c) to bring a motion to enforce the minutes of settlement, and that they exercised their rights under s. 21(c) to declare the minutes of settlement null and void.

[14] In response to my direct question, counsel for Bruno conceded that any Settling Party, even if that party was a defaulting party, had the right under s. 21(c) to declare the minutes of settlement to be null and void. My interpretation of the minutes of the settlement satisfies me that Bruno’s concession was appropriate.

[15] The general principles of contract interpretation apply when determining the meaning of s. 21 of the minutes of settlement. The Court of Appeal for Ontario has held that judges should:

a. determine the intention of the parties in accordance with the language they have used in the written document, based upon the "cardinal presumption" that they intended what they wrote;

b. read the text of the written agreement as a whole, giving the words used their ordinary and grammatical meaning, in a manner that gives meaning to all of the agreement’s terms and avoids an interpretation that would render one or more of its terms ineffective;

c. read the contract in the context of the surrounding circumstances known to the parties at the time of its formation. The surrounding circumstances, or factual matrix, include facts that were known or reasonably capable of being known by the parties when they entered into the written agreement, such as facts concerning the genesis of the agreement, its purpose, and the commercial context in which it was made. However, the factual matrix cannot include evidence about the subjective intention of the parties; and

d. read the text in a fashion that accords with sound commercial principles and good business sense, avoiding a commercially absurd result, objectively assessed. [6]

[16] I begin with the cardinal presumption that the parties intended what they wrote. In section 21, the parties used each of the terms “Settling Parties,” “non-defaulting party” and “defaulting party” in a precise way to set out the specific rights and obligations of each group in case of default. For convenience, I set out the provision again with the key words emphasized:

21. In the event of a default in the fulfilment of these Minutes of Settlement by any of the Settling Parties: a. The non-defaulting party shall provide notice of the default to the defaulting party, which notice shall identify the default…. b. The defaulting party shall be afforded seven business days to remedy the default; and c. In the event that the default is not remedied, any of the Settling Parties are at liberty to either declare these Minutes of Settlement null and void or to bring a motion to enforce these Minutes of Settlement.

[17] If, in the event of an uncured default, the parties intended to permit only a non-defaulting party to declare the minutes of settlement null and void, they would have used the words “the non-defaulting party” instead of the phrase “any Settling Parties” in section 21(c). The parties expressed their intentions clearly and I see no reason to depart from the presumption that the parties intended exactly what they wrote. Interpreting the agreement as a whole, I agree that any Settling Party, even a defaulting party, could declare the minutes of settlement null and void following a failure to cure a breach.

[18] During oral argument, counsel for Nancy suggested that the use of “Settling Parties” instead of “non-defaulting parties” in s. 21(c) “must have been a mistake.” I disagree.

[19] First, there is no evidence in the record that any of parties appearing on this motion believed that the minutes of settlement contained this alleged mistake. Second, Bruno conceded that even a defaulting party could exercise the rights under s. 21(c). Third, no one raised the issue of a mistake in any notice of motion or in the factums filed on the motion. In these circumstances, I do not find that the use of “Settling Parties” in s. 21(c) is a mistake.

[20] During oral argument, counsel for Nancy also suggested that permitting a Settling Party to declare the minutes of settlement null and void meant that s. 21(c) was a commercial absurdity. I disagree.

[21] First, none of the parties raised this as an issue in their motion materials, affidavits, or factums. Second, while it is unusual for minutes of settlement to contain a self-destruct clause such as s. 21(c), that alone does not make it commercially absurd. Third, it seems rational for the clause to permit any Settling Party who is not a defaulting party to declare the minutes of settlement null and void if there are defaults under the agreement. That is the situation here, where Carmelina is a non-defaulting Settling Party who issued a notice declaring the minutes of settlement null and void.

[22] None of the parties highlighted any parts of the factual matrix that I should consider when interpreting the clause. Having carefully reviewed the affidavits, I do not see anything that would cause me to depart from the plainly understood meaning of section 21(c). In my view, interpreting the contract as a whole and determining the intention of the parties from words they used, section 21(c) permitted Domenic and Carmelina to exercise their rights to declare the minutes of settlement null and void in light of the uncured default.

Does the delivery of Bruno’s motion to enforce the minutes of settlement affect the result?

[23] As noted above, Bruno concedes that both Domenic (a defaulting party and a Settling Party) and Carmelina (a non-defaulting party and a Settling Party) had the right to declare the minutes of settlement null and void. Bruno submits, however, that they made this declaration too late. Bruno submits that because he delivered his notice of motion to enforce the minutes of settlement before they delivered their declarations, the declarations are ineffective. I disagree.

[24] First, none of the cases Bruno relies on compels the result for which he argues. Bruno submits that the authorities on which he relies stand for the proposition that the court must consider a motion as at the date on which the notice of motion is served. [7] Bruno submits that this principle means that Domenic and Carmelina’s declarations that the minutes of settlement were null and void could have no force or effect because they post-dated his notice of motion. I disagree.

[25] The cases cited by Bruno do not suggest that a motion brought within a proceeding affects the contractual rights of the parties outside of that proceeding. The cases all address whether or not steps taken within the litigation can change the factual footing of a motion where the notice of motion has already been served. For example, Bruno relies on Kumar v. Heather, 2020 ONSC 6911. [8] That case stands for the principle that after a defendant brings a Rule 21 motion to dismiss a claim, a plaintiff’s motion to amend the statement of claim should not be entertained. Even assuming that approach is good law, it does not suggest that contractual rights are somehow stayed by serving a notice of motion. [9] It simply means that the service of a notice of motion may preclude the opposing party from taking certain other steps within the litigation.

[26] Second, there is nothing the language or the structure of the minutes of settlement to suggest that delivery of a notice of motion to enforce the minutes of settlement precludes the Settling Parties from exercising their contractual right to declare the minutes of settlement to be null and void. It would take clear and express language to deprive the Settling Parties of such an important right.

[27] Third, Bruno’s submission does not make sense given the balance of the minutes of settlement. The minutes of settlement were designed to achieve at least a partial peace among the brothers and other Settling Parties. The fact that one of the Settling Parties felt that another had breached the minutes of settlement and was going back to court to enforce their rights could be the very reason another Settling Party might throw up their hands and declare the minutes to be null and void. This is also the reason that the decision of Domenic and Carmelina to declare the minutes null and void cannot constitute a breach of the duty of good faith in contract performance. To the extent they exercised their discretion, they did so in a way connected to the purpose for which the discretion was granted. [10]

[28] Fourth, I would be reluctant to give effect to Bruno’s submission here, where he brought his motion to enforce the minutes of settlement under an inapplicable rule. Bruno moved under rule 49.09(a). This was not a case where a party made, and another party accepted, a Rule 49 offer. Rule 49.09 does not apply to settlements reached outside of a Rule 49 offer, for example, settlements among parties after negotiations between them and memorialized in minutes of settlement. [11] This does not mean the court does not have jurisdiction to enforce the minutes of settlement. [12] The applicable route for a party seeking to enforce minutes of settlement is under Rule 20. [13]

[29] In my view, there is nothing in the minutes of settlement to suggest that the parties agreed that the rights of the Settling Parties to declare the minutes null and void would be extinguished by another Settling Party moving to enforce. Similarly, the cases cited by Bruno do not compel such a conclusion.

[30] For these reasons, I find that Domenic and Carmelina exercised their rights to declare the minutes of settlement null and void. I dismiss Bruno’s motion to enforce the minutes of settlement, allow Domenic’s cross-motion, and declare the minutes of settlement to be null and void.

There are no other reasons to set aside the minutes of settlement

[31] For completeness, I will briefly consider Domenic’s allegations that the minutes of settlement should be set aside because of duress or intimidation, or because he was induced to sign the minutes through a fraudulent misrepresentation, or because the agreement was improvident. I do not accept any of Domenic’s submissions on any of these issues.

[32] The evidence of Domenic is contradicted by the evidence of both Bruno and Salvatore, who deny all of the misconduct alleged by Domenic. I am entitled to accept all, some, or none of the evidence of a witness. I have assessed the evidence before me according to many factors including:

a. whether the evidence makes sense by being internally consistent, logical or plausible;

b. whether there are inconsistencies or weaknesses in the evidence of the witness such as internal inconsistencies, prior inconsistent statements, or inconsistencies with the evidence of other witnesses;

c. whether there is independent evidence to confirm or contradict the witness’ evidence, or a lack of such evidence;

d. the witness’s demeanour, including their sincerity and use of language, although this must be considered with caution; and

e. whether the witness, particularly one that is a party in a case, may have a motive to fabricate. [14]

[33] In assessing their affidavits, I have considered the following factors:

a. presence or absence of details supporting conclusory assertions;

b. artful drafting which shields equivocation;

c. use of language in an affidavit which is inappropriate to the particular witness;

d. indications that the deponent has not read the affidavit;

e. affidavits which lack the best evidence available;

f. lack of precision and factual errors;

g. omission of significant facts which should be addressed; and

h. disguised hearsay. [15]

[34] Overall, I find the evidence of Salvatore (in particular) and Bruno more persuasive than the evidence of Domenic. There are a number of problems with Domenic’s evidence that cause me to disbelieve it.

[35] First, Domenic’s evidence is inconsistent with his own contemporaneous communications. For example, Domenic explains that on January 10, 2022, his brothers subjected him to improper and incredible levels of pressure to sign the minutes of settlement at a surprise meeting. However, Domenic’s text messages to Salvatore on January 12 and 14, 2022, make no mention of any improper pressure whatsoever. Indeed, the tone and content of Domenic’s text messages are entirely inconsistent with his description of the meeting on January 10, 2022.

[36] Second, Domenic’s actions in January 2022 are inconsistent with his description of the January 10 meeting. Although he spoke to his lawyer on January 12 and exchanged emails with her on January 14, 2022, there is no evidence that Domenic ever raised any concerns about duress or improper pressure. Indeed, the communications from his lawyer that are in the record suggest that Domenic never told her any such things. Domenic is an experienced paralegal. I infer that if he was subject to any such pressures, he would have raised those issues with his lawyer who would have raised the issue with the other counsel.

[37] To take another example, Domenic states that he received a series of promises from Bruno and Salvatore that adjusted the settlement terms. None of those terms are included in the minutes of settlement, which contains an entire agreement clause. His lawyer never wrote to any of the other counsel asking to include the terms Domenic now claims were essential to induce him to enter the minutes of settlement. I do not believe this evidence.

[38] Third, there are no contemporaneous documents that support Domenic’s version of events. He provided no text messages, email messages, or letters that he sent to third parties in early 2022 that describe his current version of events. Domenic has provided a set of handwritten notes that he claims to have made after the meeting on January 10, 2022. I place little weight on them as they are inconsistent with his actions and statements at the time. I am left with grave doubts regarding whether or not they represent a contemporaneous attempt to record Domenic’s thoughts after the meeting.

[39] I agree that the evidence of Bruno and Salvatore is not perfectly consistent and that there are inconsistencies in their account. However, on balance, I find their evidence to be far more plausible, coherent, and consistent than Domenic’s evidence.

[40] In particular, I find Salvatore’s evidence to be candid and helpful. It is consistent with the objective documents of the time. I accept that Salvatore had no axe to grind with Domenic. Indeed, but for Domenic’s late-breaking allegations of duress and intimidation, Salvatore would not have filed evidence at all. I accept Salvatore’s evidence over Domenic’s evidence. I disbelieve Domenic’s claims of intimidation and duress.

[41] Because I do not accept any of Domenic’s evidence, I also reject his claims of duress and intimidation, fraudulent misrepresentation, and secret agreements. I see nothing in the minutes of settlement or its negotiation that would meet the legal test to set aside a carefully negotiated contract as improvident.

Conclusion

[42] For the reasons set out above, I dismiss Bruno’s motion to enforce the minutes of settlement. I grant Domenic’s cross-motion and declare the minutes of settlement null and void by virtue of the declarations of Domenic and Carmelina.

[43] If the parties are not able to resolve costs of this action, the Domenic and Carmelina may each email their costs submission of no more than three double-spaced pages to my judicial assistant on or before February 28, 2024. Salvatore, Bruno, and Nancy may each deliver their responding submission of no more than three double-spaced pages on or before March 6, 20204. No reply submissions are to be delivered without leave.

Robert Centa J. Date: February 21, 2024

[1] Court file CV-20-651475-0000. [2] Court files SC-20-55760000, SC-20-5618-0000. [3] Court file CV-21-00658313-0000. [4] Section 11 reads: “The Settling Parties confirm that the Mutual Release will also specifically exclude the following as matters released by the Mutual Release: the court matters commenced by Bruno and others (Ontario Superior Court of Justice File No 2021-010363 and CV-21- 00659252-00ES, collectively the "Excluded Matters"). For greater certainty, Bruno will be at liberty to resume or continue the Excluded Matters in the ordinary course and without regard to these Minutes of Settlement.” [5] R.R.O. 1990, Reg 194. [6] Weyerhaeuser Co. v. Ontario (Attorney General), 2017 ONCA 1007, at para. 65, rev’d on other grounds, Resolute FP Canada Inc. v. Ontario (Attorney General), 2019 SCC 60, [2019] 4 S.C.R. 394; Thunder Bay (City) v. Canadian National Railway Company, 2018 ONCA 517, 424 D.L.R. (4th) 588, at paras. 30, 46; Ottawa (City) v. ClubLink Corporation ULC, 2021 ONCA 847, 159 O.R. (3d) 255 at para. 52; Dumbrell v. Regional Group of Companies Inc., 2007 ONCA 59, 85 O.R. (3d) 616, at para. 53. [7] Bruce v. John Northway & Son Ltd., [1962] OWN 150, [1962] C.C.S. No. 1108; Campbell v. The Sterling Trusts Corporation, 1948 CarswellOnt 246 (High Ct.). [8] Kumar v. Heather, 2020 ONSC 6911. [9] There are several lines of authority regarding best practices in such a situation, which are helpfully canvassed in Vale Canada Limited v. Solway Investment Group Limited et al., 2021 ONSC 7562, at para. 30 to 32; see also Cardinal Investments Inc. v. Ultra Depot (Ontario) Inc., 2022 ONCA 827. I also have doubts as to whether this approach is efficient or proportionate given the pressures on the civil justice system, or that it would have universal application. [10] Wastech Services Ltd. v. Greater Vancouver Sewerage and Drainage District, 2021 SCC 7, [2021] 1 SCR 32, at para 4. [11] 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; Kalinitchenko v. Allure at the Gates of Aurora Inc., 2021 ONSC 438. [12] Donaghy, at para 13. [13] Bross v. Bross, 2023 ONSC 2104, 167 O.R. (3d) 291, at para 11; Vanderkop v. Manufacturers Life Insurance Co. (2005), 78 O.R. (3d) 276 (S.C.), Exponents Canada Inc. v. Sharma, 2015 ONSC 2940. [14] Caroti v. Vuletic, 2022 ONSC 4695, at paras. 434-436; 1088558 Ontario Inc. v. Musial, 2022 ONSC 5239, at para. 83. [15] Konstan v. Berkovits, 2023 ONSC 497, paras. 8-12; Prodigy Graphics Group Inc. v. Fitz-Andrews, 2000 CarswellOnt 1178 (S.C.), at para. 46.