Court File and Parties

COURT FILE NO.: CV-19-00014784-00ES, CV-21-00664428, CV-19-0062684-0000 DATE: 20240423 SUPERIOR COURT OF JUSTICE – ONTARIO TORONTO ESTATES LIST

RE: Jeffrey Chong, Stephen Chong and Anne Chong, Applicants/Moving Parties AND: David Oymon Chong aka David Chong and Julietta Pangilinan, Respondents/Responding Parties

BEFORE: C. Gilmore J.

COUNSEL: Shawn Pulver and Jackie Bartlett, Counsel for the Applicants/Moving Parties David Brooker and Daria Kyrsic, Counsel for the Respondent/Responding Party David Chong Andrew Ballantyne, Counsel for the Respondent/Responding Party Julietta Pangilinan (not appearing)

HEARD: December 22, 2023

Endorsement on Motion

Introduction

[1] This is a case of settler’s remorse. The Respondent David Chong (“David”) entered into a comprehensive settlement of the three Applications that were scheduled to be heard in this matter on June 21 and 22, 2023, before Justice Myers. David had legal advice and the opportunity to comment on the settlement when it was reviewed in its entirety in open court by the presiding judge. David took no steps until a draft Order reflecting the terms of the settlement was circulated almost a month later. He then wrote to the presiding judge claiming that he did not agree with the settlement.

[2] In his affidavit and cross-examination evidence, David’s reasons for resiling from the settlement were contradictory, uncorroborated and failed to meet the high threshold required to defeat a r. 49.09 motion. Further, the affidavit of his then-counsel confirms that David knew and understood the implications of the settlement. The Applicants’ motion to enforce the settlement must succeed for the reasons set out below.

Background Facts

[3] The background facts to this matter are complicated as there are three outstanding Applications. However, some understanding of the entire background of this matter is required in order to put the within motion in context.

[4] The Applicants’ great-grandfather purchased a property at 27 McGill Street (“McGill”) in Toronto in the 1940s. The Applicants’ grandfather Kingsley Chong inherited McGill from his father in the 1950s. Kingsley Chong’s will set out that McGill was to be left as follows: 1/3 to Kingsley’s son Gary Chong (“Gary”), 1/3 to his grandchildren Jeffrey Chong (“Jeff”) and Stephen Chong (“Stephen”), and 1/3 to his grandchildren Jason Chong (“Jason”) and Taryne Chong (“Taryne”). Kingsley’s other two sons are David and Donald Chong (“Don”). Jeff and Stephen are Don and Anne Chong’s (“Anne”) children. Jason and Taryne are David’s children. Don and Gary are deceased.

[5] In 1993, Kingsley’s estate transferred the interest in McGill as follows: 2/6 to Gary, 1/6 to Jeff, and 3/6 to David to be held equally for Stephen, Jason and Taryne in trust. Don agreed that David would hold Stephen, Jason and Taryne’s 3/6 interest in McGill as they were minors at the time. No written trust agreement was signed to reflect this agreement. The further agreement was that as those children became adults, David would transfer their 1/3 interest to them. Those transfers never occurred. Jeff’s 1/6 interest was transferred to him directly as he was an adult in 1993.

[6] In 1995, the Ontario Land Titles System was converted into Land Titles. Title to McGill after the conversion was shown as being owned 2/6 by Gary, 1/6 by Jeff and 3/6 by David. There was nothing on title that indicated that David held his 3/6 share in trust for Stephen, Jason and Taryne.

[7] Between 1991 and 2003, David and Don and their spouses Sharon and Anne lived at McGill and paid all of the carrying costs. Gary also lived at McGill until he passed away in 2007.

[8] In 1993, David and Don registered a mortgage on McGill for $145,000. David received $50,000 of the proceeds and Don received $95,000 of the proceeds. David paid $400 per month and Don paid $800 per month towards the mortgage. There was no evidence that Stephen, Jason and Taryne were aware of the registration of the mortgage at the time or that they consented to it.

[9] David claimed that at one point Don and Anne approached him and advised they could no longer make the monthly mortgage payments. According to David, it was agreed that Jeff and Stephen’s 1/3 share in McGill would be transferred to David in exchange for David taking over Don’s mortgage payments (the “Transfer Agreement”).

[10] The Transfer Agreement was signed on October 27, 2003, and purports to transfer Stephen and Jeff’s joint 1/3 interest in McGill to David in trust for Taryne and Jason. Jeff’s interest was allegedly transferred by way of a Power of Attorney given in favour of Anne. The Applicants’ position is that the Transfer Agreement was falsified by David in order to obtain Stephen and Jeff’s interest for no consideration. Specifically, the Applicants alleged that David somehow inserted Anne and Stephen’s signature onto the Transfer Agreement.

[11] Anne denied that any Transfer Agreement had been signed. Rather, the parties signed a handwritten agreement that David would pay their share of the mortgage for six months, after which he would be reimbursed by Anne and Don. While David asked that Jeff and Stephen’s share be transferred to him, Anne refused as she felt it was her children’s decision to make. Further, she would never have executed such an agreement on behalf of her sons without independent legal advice. Stephen has no recollection of the Transfer Agreement. Once he became aware of it through this litigation, his position is that he would have never agreed to the terms of the Transfer Agreement. Jeff’s evidence was that he was not aware of his mother signing the Transfer Agreement on his behalf. He did not become aware of the Transfer Agreement until this litigation was commenced.

[12] Anne and Stephen did not deny that the signatures on the Transfer Agreement were theirs, but they denied signing the Transfer Agreement document itself. They alleged that David had altered the document to put their signatures on it.

[13] No transfer of title was ever registered pursuant to the Transfer Agreement. Currently, title to McGill is still held by David, Jeff and Gary. The Applicants argued that the limitation period had passed with respect to David making any claim under the Transfer Agreement and would have expired in October 2013. David’s first claim was not made until 2019.

[14] David submits that the Applicants’ claim is also statute barred. The Applicants’ response is that the limitation period on their claim in relation to McGill did not begin to run until they sent their initial demand letter to David in June 2019 and the response from David’s counsel that their interest had been transferred to him pursuant to the Transfer Agreement.

[15] David and Sharon solely occupied McGill as of 2004. They still reside there. Anne and Don’s position is that David and Sharon paid all the carrying costs of McGill in exchange for not paying occupancy rent to Jeff and Stephen.

[16] Jeff, Stephen and Anne alleged that David would not respond to them when they enquired about Jeff and Stephen’s interest in the property. Jeff and Stephen sent a demand letter to David in June 2019 and commenced their Application in September 2019 as David continued to avoid their enquiries.

[17] In response to the within Application, David sought compensation claiming that when he moved into McGill, it required extensive renovations, and he spent $160,000 putting the property into reasonable condition. Jeff and Stephen’s position was that this was a bald assertion for which David had no proof. David claimed that the carrying costs for McGill between 2003 and 2021 were $700,000. David’s Application also sought a declaration that the Transfer Agreement transferred Stephen and Jeff’s interest in McGill to David in trust for Taryne and Jason.

[18] Gary made a Will dated June 12, 2007, just two days before his death and while in hospital (“Gary’s Will”). Gary’s Will leaves $50 to Don and the rest of his estate to David, including his 2/6 interest in McGill. The estate trustee named in Gary’s Will is the Respondent Julietta Pangilinan, whose daughter Jacqueline is married to Jason. The witnesses to Gary’s Will were Jacqueline and Arvie Kwan, who is married to Taryne. Gary’s Will was not signed but marked with “X”. Julietta was represented by counsel at the hearing in June 2023.

[19] David admitted during cross-examination that he wrote out the section in Gary’s Will which purported to transfer Gary’s interest in McGill to him.

[20] Gary allegedly had a prior Will which also left McGill to David. The Applicants query why a new Will was needed if it was the same as the prior will.

[21] The Applicants brought an Application to challenge Gary’s 2007 Will on the grounds that there were suspicious circumstances surrounding its execution, the Will was not properly signed, and Gary did not have the requisite capacity to sign the Will. An intestacy would result. The Respondents to that Application submit that even if the Will challenge succeeds, the prior will leaves McGill to David, so the Will challenge is futile.

The Hearing Date and Settlement Discussions

[22] All of the Applications were scheduled to be heard on June 21 and 22, 2023. The issues to be determined were whether the Transfer Agreement was valid, whether Jeff still had an interest in McGill, whether David was still holding a 3/6 interest in McGill in trust for Stephen, Jason and Taryne, whether David’s claim was statute barred, whether Jeff and Stephen’s claim was statute barred, and whether Gary’s Will was valid.

[23] The parties attended before Justice Myers for the scheduled hearing. After the first day of submissions and encouragement by the judge to try to settle, the Applicants’ counsel reached out to David’s counsel on the evening of June 21, 2023 to have discussions. David, his then counsel Nicolas Canizares, the Applicants and their counsel all met at court on the morning of June 22, 2023.

[24] According to the Applicants, the parties, including counsel for the trustee of Gary’s estate, reached an agreement. The proposed terms of the settlement were read out to Justice Myers by the Applicants’ counsel with all parties and their counsel in the courtroom. Thereafter, a discussion ensued with Justice Myers and counsel regarding the specifics of the settlement. A recess was taken, and Justice Myers returned to the court and read out his endorsement containing the settlement terms to all parties and their counsel. He then invited counsel to make comments on the endorsement. No concerns were raised by any party or counsel, and Justice Myers expressed that he thought the settlement was fair. The relevant terms of the June endorsement are set out below:

1. The property at 27 McGill will be sold consensually;
2. Counsel acting reasonably will jointly select a realtor by August 1, 2023;
3. David Chong will vacate the McGill St. property on or before December 31, 2023;
4. The parties will make best efforts to agree to a sale that closes January 1, 2024;
5. The acceptance of any offer to sell requires the input and signatures of all of Jeffrey, Stephen, Jason, and Taryne Chong. They each understand that the property will be sold. They agree to review offers in good faith to that end;
6. The proceeds of sale shall be held in trust by the real estate lawyer who is retained by the parties to handle the sale subject to the following: a. Registered encumbrances and reasonable costs of sale (including commission to the realtor and reasonable legal fees to the real estate lawyer) will be paid on closing in the ordinary course; b. If any of the parties incurs out-of-pocket costs for the sale, they may submit proof of payment to the lawyer who shall provide notice to all parties of the amount claimed and shall pay the amount unless a party objects. This is intended to deal with relatively minor costs such as items needed for staging the property. Disputes shall be resolved by the parties themselves first or, in default, by Myers J summarily; c. $175,000 shall be paid to David Chong; and d. The amount after payment of the foregoing amounts form the gross proceeds of sale which shall be split into four equal parts. One of the four parts of the remaining proceeds shall be paid out to each of Jeffrey, Stephen, Jason, and Taryne Chong respectively.
7. The parties acknowledge that some structuring of a transaction will be required to convey title. This may involve a need as well for the involvement of Julietta Pangilinan in her capacity as estate trustee of the estate of Gary Chong. The parties wish to avoid incurring substantial time and cost on technicalities of conveyancing if possible;
8. The burial rights to seven plots at Mount Pleasant Cemetery that remain available under the certificate in the names of both Don and David Chong shall be split so that three plots go to the Applicants, or as they may direct, and the remaining four go to David Chong and his family as he may direct;
9. The parties agree to sign such further documents and provide such further assurances as may reasonably be required to implement this settlement;
10. Both proceedings will be dismissed without costs subject only to the settlement approval order.
11. Each party will bear his or her own costs;
12. The parties (and Jason and Taryne Chong) will exchange mutual releases in standard form to be agreed by counsel acting reasonably.

[25] Later in the day on June 22, 2023, Justice Myers’ endorsement was circulated to counsel. A correction was made to the McGill address. Mr. Canizares did not raise any issues with the endorsement.

[26] On July 17, 2023, the Applicants’ counsel wrote to Mr. Canizares requesting that counsel come to an agreement on the terms of an Order reflecting the June endorsement. On July 19, 2023, David emailed Justice Myers’ assistant to complain about the settlement and advise that he did not agree with it. This was the first time that the Applicants had heard of any discontent with respect to the settlement. The email sent to Justice Myers’ assistant is set out below in its original format:

I have spoken to my wife Sharon and my children Jason and Taryne regarding Judge Myer's endorsement of the estate of 27 McGill Street solely solely on the lawyers' decision. They are the owners of the property. They were very upset with me and said I had no right to sell their property without their consent and signature. The property owned by Jason and Taryne Chong therefore I cannot sign for them.

I am 82 years old with disabilities (eyesight, hearing, and family history of dementia).On the morning of Thursday, June 22, Nicolas [Canizares] urgently called me to come to the courthouse. Nicolas informed me that the judge would take my family home if i do not sign paper. I informed him that I needed to discuss this matter with my wife, son and daughter, but he insisted that I need to sign right away I was force to sign under duress and on a small piece of paper without any details of the agreement and without any of my family member present. The details were put in after I sign which is illegal.

In Ontario, a husband cannot sell a matrimonial home without wife's consent and her signature or it would be illegal.

Base on the draft endorsement, noting number12, " the parties (and Jason and Taryne Chong) will exchange mutual releases in standard form. Jason and Taryne Chong disagree with the endorsement of the estate of 27 McGill Street, therefore will not sign.

Respectfully, David Chong court file no. cv-21-00664428-000/cv-19-00626864-000 /cv-19-00014784-00es

The Positions of the Parties on the Motion

A. The Moving Parties

[27] Jeff Chong swore an affidavit on October 27, 2023 in support of the motion. He deposed that he was in court on June 22, 2023, when Justice Myers read out his endorsement which reflected the parties’ settlement. He noted that his Uncle David and his lawyer Mr. Canizares were present in the courtroom. Justice Myers asked if anyone had any comments about his endorsement. Neither David nor his lawyer raised any concerns. Jeff’s lawyer circulated a draft Order containing the terms of the settlement on July 17, 2023. David’s lawyer did not respond. On July 19, 2023, Jeff’s lawyer received a copy of an email from Justice Myers’ assistant forwarding David’s email in which he advised that the endorsement was based on his lawyer’s decision and that he did not agree with the settlement. This was the first time that Jeff became aware that David had any issue with the settlement.

[28] Jeff was cross-examined on his affidavit on November 30, 2023. Jeff’s evidence was that after the first day of the hearing on June 21, 2023, Justice Myers strongly encouraged the parties to discuss a settlement. No settlement had been reached at that point although Jeff was aware that the lawyers had been communicating the evening before about possible terms of a settlement. When he arrived at court on June 22, he saw David and his lawyer talking in the hallway. His understanding was that terms of a settlement were to be discussed that morning.

[29] Jeff was never asked to sign a settlement document. Once the terms were agreed upon, they were read to Justice Myers by Jeff’s lawyer after which a discussion took place in open court between Justice Myers and the lawyers. Justice Myers then prepared an endorsement and came back into court to read it. He asked Jeff and David and their lawyers if they understood and agreed to the settlement. They both acknowledged that they did. Justice Myers then asked Jeff to contact Stephen and Anne to confirm that they also agreed. Jeff did so and confirmed to the judge that Stephen and Anne agreed to the settlement.

[30] The Applicants submit that David simply had buyer’s remorse about the settlement. The settlement was accepted by all parties with legal advice. It should be enforced. The Applicants also noted that Justice Myers told everyone in court on June 22, 2023 that he thought the settlement was fair.

B. The Responding Parties

[31] David was cross-examined on his affidavit relating to the settlement. He confirmed at his examination that he did not understand what was going on the day the settlement was reached. He knew that a two-day hearing had been scheduled. However, his understanding was that his lawyer would raise the limitation period arguments and that would be the end of it. His lawyer told him he did not need to attend the hearing on the first day (June 21, 2023). However, that evening he called David and told him to attend in person on June 22, 2023.

[32] David attended at the courthouse and met his lawyer on June 22nd. His evidence was that his lawyer told him in a very short conversation outside the courtroom that he would lose his house if he did not settle. He testified that this conversation with his lawyer lasted at most five minutes in total, at which point he signed the settlement under duress. He says he was tricked into signing a blank piece of paper by his lawyer. It was suggested to him that the document he signed was in fact written instructions to his lawyer, but he could not recall.

[33] David also testified that he is hard of hearing, but he did not convey this to the judge when the endorsement reflecting the settlement was read out to him. He deposed that he either did not hear the judge or he had left the courtroom by that point. At another point in his examination, he said that it was both a hearing problem and a lack of comprehension.

[34] In any event, he did not know what to do and he did not trust his lawyer at that point, so he did not ask him to intervene. He gave evidence that his “head was not clear at the time.” He later said that he did not trust anyone after he had been tricked into signing a blank document. He deposed that he thought he was in a nightmare, and he had been robbed of his house and that “they” were going after Jason and Taryne’s money. He agreed, however, that he did not tell anyone that he had been tricked or that he had not heard what went on in the courtroom on that day.

[35] Despite David’s alleged despair about what had gone on in the courtroom on June 22, 2023, he did not call his daughter to let her know about the settlement for several weeks.

[36] Taryne swore an affidavit on November 24, 2023, in support of David’s position on this motion. She deposed that she never questioned her father about the proceedings that were commenced in 2019 because she aware that her cousins had transferred their interest in McGill to her father and that her Uncle Gary had left his share of McGill to her father in his Will. This was well known in the family.

[37] David did not inform Taryne about the court proceedings on June 21 and 22, 2023. She did not learn about the results of the settlement until July 2023 when she received a copy of the endorsement. Taryne was shocked as she was certain that the property belonged to her and her brother Jason. Her father told her that his lawyer forced him to sign a piece of paper and that if he had not signed it, he would have lost all of their interest in McGill.

[38] Taryne deposed that the settlement requires her and her brother Jason to sign a release. Taryne was never consulted by David or his lawyer about any release or about giving up her rights to the property. She does not agree to sign any release.

[39] Taryne was cross-examined on her affidavit on November 30, 2023. Taryne’s evidence was that when she was in high school, she learned that her father was holding property in trust for her and her brother and that the property had been left to them in her grandfather Kingsley’s Will. She was not aware of what percentage interest she and her brother would eventually own. Taryne further deposed that in 2003, her father told her that Jeff and Stephen had transferred their interest in the property to him. Taryne did not ask for or see any documentation related to the alleged transfer.

[40] In 2019, Taryne learned from her father that her cousins had brought the within Application. She was not concerned because her information was that as a result of the 2003 transfer from Jeff and Stephen and the inheritance from her Uncle Gary’s Will, she and Jason would eventually become the owners of the property.

[41] Taryne was asked about the mortgage placed on the property by her father and uncle. She responded that notwithstanding her understanding of the trust arrangement, her view was that her father could mortgage or sell the property at will. All she really understood was that when her father died, the home would belong to her and her brother. She was not concerned about the litigation because she believed she and her brother fully owned the property. Her confidence in having an ownership interest in the property came from seeing her grandfather’s Will, her husband telling her that her Uncle Gary left his share of the property to her father (he had witnessed Gary’s 2007 Will), and conversations she had with her father over time.

[42] Taryne’s evidence was that she did not speak to her father about the particulars of this litigation. She viewed it as a money grab by her cousins. She did not seek out her own counsel or receive any legal advice about the potential impact of this litigation on her interest in McGill.

[43] Jason swore an affidavit dated November 24, 2023, in support of his father. He deposed that he was aware that he inherited a 1/6 interest in McGill from his grandfather Kingsley and that his father held his interest in trust. He was aware that his cousins Jeff and Stephen had commenced litigation against his father, but he was not aware of any details of the litigation or of the dates of the hearing in June 2023. Like his sister, he was confident in his ownership interest in McGill and believed that his cousins just wanted money.

[44] Jason received a copy of Justice Myers’ endorsement from his wife, whose mother is the executor of his Uncle’s Gary’s estate. When he called his father about it, his father told him he was coerced into a settlement that he did not understand or want and that he intended to obtain a new lawyer. His father’s lawyer, Mr. Canizares, never contacted Jason about the case, the settlement or signing a release. Jason will not sign a release.

[45] Jason was cross-examined on November 24, 2023. His evidence was that he did not become aware that his father held his interest in McGill in trust until many years after his grandfather died. He was aware that his father and his Uncle Don had registered a mortgage against McGill. He was not concerned because he deposed that he did not own McGill but likely had an interest in it when his father passed away.

[46] He learned of the within litigation from his father in 2019. He trusted his father to deal with the litigation. While he was aware that a possible result of the litigation could be that McGill was sold, he did not think this was realistic. His father did not tell him that a mediation had taken place. He did not consult a lawyer about the litigation nor did his father tell him about the June 2023 court dates. After he received a copy of the endorsement, he was concerned but he did not contact his sister.

[47] Jason confirmed that he understood that the effect of the settlement meant that he would receive a fourth of the sale proceeds of McGill net of the amount payable to his father.

[48] David has provided some new evidence by way of a handwriting expert’s report from Graham Ospreay prepared on November 20, 2023. Mr. Ospreay is a well-known handwriting expert. His report concluded that the Transfer Agreement was prepared before the signatures were affixed to it and that the signatures and dates were originals and not copies.

The Evidence of Mr. Canizares

[49] After hearing the submissions of counsel on December 22, 2023, and considering the matter, I issued an endorsement on December 23, 2023. In that endorsement I required that the evidence of Mr. Canizares be provided as to the events which occurred on June 22, 2023. Given that David’s counsel had waived solicitor-client privilege with respect to communications between David and Mr. Canizares regarding the settlement, it was my view that the evidence of Mr. Canizares was necessary in order for the court to have a complete record.

[50] As such, I required Mr. Canizares to provide an affidavit as to the events which occurred on June 22, 2023, and a transcript of any cross-examination on that affidavit.

[51] On March 1, 2024, I received a copy of Mr. Canizares’ affidavit sworn February 18, 2024, and a copy of the transcript of his examination taken on February 23, 2024. Mr. Canizares was represented by experienced LawPro counsel for the preparation of his affidavit and during his examination. Counsel were also permitted to file a supplementary factum with respect to the new evidence from Mr. Canizares. The last factum was received on March 22, 2024.

[52] In his affidavit, Mr. Canizares deposed that he had reviewed the pleadings and David’s affidavit and provided his evidence in accordance with the court’s direction on December 23, 2023.

[53] Mr. Canizares’ summary of the events of June 22, 2023 is set out below:

• The Applicants made an offer to settle after submissions had been made to the court by both parties. The matter was held down to permit further settlement discussions.
• Mr. Canizares met with David privately outside of the courtroom. He had recorded the terms of the settlement in the form of written instructions and reviewed all of the terms with David. He verbally confirmed David’s understanding of each term as it was read to him.
• David confirmed his agreement to the settlement as per the terms read out to him and that he was authorized to agree to the settlement on behalf of his children Jason and Taryne.
• Mr. Canizares then requested that David sign the document which contained the list of settlement terms. Both David and Mr. Canizares signed the document. That document was produced at the examination.
• Mr. Canizares advised opposing counsel of his client’s acceptance of the settlement terms.
• The parties and their counsel returned to the courtroom. Justice Myers read out his proposed endorsement to everyone present. He asked if anyone had concerns about the manner in which he had recorded the terms or any objection to the terms of settlement. No one raised any objection or question.
• Justice Myers then signed his endorsement.

[54] Mr. Canizares specifically denied David’s allegation that he was required to sign a blank piece of paper. He further noted that David was present in the courtroom when the endorsement was read out and had an unobstructed view of Justice Myers. David did not complain that he was hard of hearing.

[55] Mr. Canizares deposed that his articling student, Ms. Kiran Sahota, was seated only a few feet away when he reviewed the written instructions with David. Ms. Sahota saw David sign the instructions. She was also in court when the endorsement was read out.

[56] At his examination on February 23, 2024, Mr. Canizares gave the following pertinent evidence:

• David was present in court for both days of the hearing: June 21 and 22, 2023. David was not telling the truth when he said that Mr. Canizares told him that he did not need to attend for the first day of the hearing.
• On June 22, 2023, Justice Myers gave some views about the evidence and then asked the parties to go outside and discuss settlement indicating that otherwise “someone is going to be very, very disappointed.”
• The Applicants then made a verbal offer to settle, and Mr. Canizares had discussions with his client about a possible settlement. Much of the discussion focused on how much money would be paid to David on settlement. After David agreed to receiving $175,000 from the house sale proceeds, Mr. Canizares began writing up the terms of settlement in the form of written instructions.
• Mr. Canizares spent 20 to 30 minutes going over the written instructions and discussed each term of the settlement with David. David verbally confirmed his understanding of the settlement and did not have any questions.
• He discussed possible outcomes with David if the matter did not settle, including occupation rent which may be owing by David for the 20 years in which he had been living in McGill.
• Mr. Canizares was aware that David did not want to move out of McGill, but David owned another home he could live in. David understood he would have to move out of McGill if he agreed to the settlement. Mr. Canizares did not discuss with David whether Sharon agreed to move out of McGill.
• David confirmed to Mr. Canizares that he was signing the settlement on behalf of everyone in his family including Sharon, Jason and Taryne. David was authorized by his family to provide instructions to Mr. Canizares. Mr. Canizares did not request that David contact his children as he did not act for them.
• David is lying when he says that Mr. Canizares asked him to sign a blank document.
• At Mr. Canizares’ request, Ms. Sahota prepared a memo dated July 22, 2023, which reflected what had happened at the hearing in June 2023. Mr. Canizares had not seen the memo until it was produced at his examination. The memo indicates that David initially refused to sign the written instructions, claiming he was being “robbed.” Mr. Canizares reminded David of the weaknesses of his case and that they would then return to court to complete the hearing, but that David should consider the possibility that he would lose. David then signed the document. The memo was marked as Exhibit “A” to the examination.
• After signing the document, David went into court and heard Justice Myers recite his understanding of the terms of the settlement. David did not say anything or raise any question when invited to by the judge.
• Mr. Canizares had no dockets for the attendance, nor did he bill David for it. He had received a retainer of $10,000 from David which had been entirely used by the date of the hearing. He agreed with David that he would not seek any further legal fees. He sent a reporting letter to David on June 23, 2023, by mail.

[57] A copy of Ms. Sahota’s memo dated July 22, 2023 was produced. The memo sets out that she was present in court on June 21, 2023, when Justice Myers encouraged the parties to discuss a settlement. She noted that David was not present in court on June 21, 2023. Ms. Sahota returned to court on June 22, 2023, and was present when the settlement was discussed between David and Mr. Canizares.

[58] Ms. Sahota recorded that Mr. Canizares wrote out the terms of the proposed settlement and read them aloud to David. Mr. Canizares had a discussion with David about the weaknesses of his case, including issues with the burial plots and suspicious circumstances surrounding the signing of Gary’s Will.

[59] According to the memo, Mr. Canizares stated that if David did not agree with the settlement, he would advise Justice Myers that the trial should proceed but that Mr. Canizares would not be acting for David at trial. Ultimately David signed the document which reflected the terms of settlement in the court endorsement.

[60] Mr. Canizares sent a reporting letter to David by mail. The letter is dated June 23, 2023. Mr. Canizares reviewed his concerns with David’s case in the letter, including that the limitation period would not apply to the Applicants’ case because David had breached his fiduciary duty as a trustee by mortgaging the subject property and when Stephen’s interest was allegedly transferred to him by Anne. The letter also raised issues related to Gary’s Will, which would result in an intestacy whereby the property would be owned 50 percent by Jason and Taryne and 50 percent by Stephen and Jeffrey. The trust arrangement was made because the children were minors. The property should have been transferred to them when they reached the age of majority but was not.

[61] The letter also addressed the agreement that David would receive $175,000 from the sale proceeds to compensate him for improvements. Mr. Canizares wrote that this was a reasonable amount given that David and his wife had not paid rent since they began living in the property in 2003.

[62] The reporting letter then went on to review the terms of the settlement and confirmed that Mr. Canizares would not be charging David any more fees despite his initial retainer having been exhausted.

The Issues

A. Were the Terms of the Settlement Unconscionable?

[63] David’s counsel did not rely on the issues of either duress or lack of capacity in his argument. Rather, his position is that the terms of the settlement were unconscionable and that the settlement relied on fraudulent misrepresentation and a misapprehension of facts.

[64] The parties agree that the settlement agreement is a contract which can only be set aside on the grounds of mistake, unconscionability, fraud, misrepresentation, or misapprehension of a material fact.

[65] David relies on the test for unconscionability set out in Uber Technologies Inc. v. Heller, 2020 SCC 16, [2020] 2 S.C.R. 118. In that case a prospective Uber driver, Mr. Heller, was required to accept the terms of Uber’s standard form Service Agreement before he could become a driver. There was no negotiation in relation to the terms; it was simply an online form with a box to click on for acceptance.

[66] Subsequently, Mr. Heller started a class proceeding against Uber in 2017 for violations of the Employment Standards Act, 2000, S.O. 2000, c. 41. Uber brought a motion to stay the class proceeding on the grounds that the Service Agreement required any dispute to be mediated and arbitrated in the Netherlands. The dispute process required an up-front filing and administration fee of US$14,500 plus other fees and costs. Mr. Heller earned between $400 and $500 per week. He argued that the arbitration clause in the Service Agreement was unconscionable.

[67] The Supreme Court, at para. 64, adopted a two-step process to prove the elements of unconscionability. It required the court to find 1) proof of inequality in the positions of the parties, and 2) proof of an improvident bargain.

[68] David argues that he was at a disadvantage in the bargaining process due to his age and hearing deficiencies. He did not understand the terms that were being proposed and was therefore in an unequal bargaining position.

[69] The within case is quite different from the facts in Uber. In that case, Mr. Heller clicked a box on an online agreement. He either agreed to its terms or he could not become an Uber driver. He did not have legal advice. As later became apparent, the terms of the Service Agreement with respect to any dispute with Uber were impossible for their drivers to comply with given the average income of the drivers and the cost of the mandatory arbitration/mediation in the Netherlands.

[70] Specifically with respect to an inequality of the positions of the parties in the case at bar, I find that the parties were in equal bargaining positions as they were both represented by counsel throughout the settlement negotiations, the finalizing of the terms of the settlement, and the enquiries of the court as to whether the parties had any concerns with respect to the settlement terms.

[71] David submits that he is hard of hearing and elderly and did not understand what was happening on June 22, 2023. That evidence is entirely uncorroborated. There is no medical evidence to confirm that David suffered from any physical disability that would have changed his bargaining position. There is no evidence from any other party that David raised any issues with respect to hearing problems or a lack of comprehension of the process. In any event, he had counsel throughout. Without any evidence to the contrary, the court must presume that David’s counsel was representing his best interests.

[72] David also gave evidence that he was “tricked” by his lawyer into signing a document. There is no evidence to corroborate this allegation. The settlement was not one that was signed by the parties on June 22, 2023. Rather, it was a settlement whose terms were confirmed by the court after discussions with the parties and their counsel present and validated by the court after no party objected to its terms.

[73] There is also the information contained in Ms. Sahota’s memo that what David signed was a set of settlement instructions which were carefully read to him.

[74] I do not find, therefore, that David was tricked nor that he signed a blank document. Those bald allegations are offered by David solely to support his remorseful hindsight view of the settlement.

B. Should the Settlement be Set Aside on the Grounds of Fraudulent Misrepresentation?

[75] Rule 59.06(2)(a) of the Rules of Civil Procedure, R.R.O 1990, Reg. 194 (the “Rules”), permits a court to set aside an agreement if there is fraud or facts arising or discovered after the settlement was made. David submits that the Applicants misrepresented that the Transfer Agreement was false. The expert opinion rendered by Mr. Ospreay is evidence that the Transfer Agreement was validly executed. The Applicants relied on false representations to deprive David of his property. Now that the new evidence of Mr. Ospreay is available, the settlement ought to be set aside. Further, David alleges that Mr. Canizares did not explain to him the significance of the possible authenticity of the Transfer Agreement even before the Ospreay evidence was available.

[76] David submits that Mr. Canizares did not raise the issues related to the validity of Gary’s 2005 Will (if Gary’s 2007 Will was set aside) during his discussions with David about the settlement terms. It is unconscionable that the Applicants knew of Gary’s 2005 will, which was produced on David’s May 2023 examination, yet chose to ignore it. Their silence has resulted in David being deprived of his rightful inheritance from Gary’s estate.

[77] There are responses to the arguments raised by David including arguments that David breached his fiduciary duty as trustee by mortgaging McGill and using the Transfer Agreement to transfer property to himself. However, it is not necessary to address those arguments for the purpose of this motion. If David is of the view that his counsel did not raise all necessary arguments or properly represent him, those issues would form the grounds for a separate legal proceeding.

C. The Releases

[78] The settlement requires that Jason and Taryne sign a release to ensure that they will not commence litigation against any of the parties. David submits that his children cannot be bound by the terms of the settlement to sign a release. If the court orders that they are not required to sign a release, they will undoubtedly commence litigation against their father or their father and the Applicants. The litigation will never end.

[79] I do not agree. Both Jason and Taryne provided evidence that they would not sign a release. However, they were not there on June 22, 2023. They left this matter entirely to their father who did not keep them informed of the progress of the litigation, including the mediation. Further, he did not advise them that the matter had settled until a month later. I note as well that neither Jason nor Taryne are parties to this litigation.

[80] The only evidence of Jason and Taryne’s position at the relevant time is that of Mr. Canizares, who deposed that his client’s settlement instructions were given on behalf of his entire family including Jason, Taryne and his wife Sharon. While Mr. Canizares agrees that he did not ask David to contact his children about the terms of the settlement, I do not find that to be a bar to enforcing the settlement given that Mr. Canizares was led to believe that all of the instructions he received from David were given on behalf of his “family”.

[81] As such, while the settlement terms require the signing of a release, I do not find that a release is required. The terms of the settlement were agreed upon by David on behalf of his entire family, none of whom were parties to the litigation and whom David failed to keep advised of the litigation until it went in a direction he later regretted.

D. Alleged Prejudice to David

[82] David alleges that if the settlement is enforced it will result in extreme prejudice to him. He and his wife will be required to leave the home they have lived in for the last 20 years. David is in his 80s and his wife Sharon is in her 70s.

[83] Further, if the settlement is enforced, Stephen and Jeff will receive a far greater portion of the property than they could ever have hoped to receive if the terms of Gary’s Will were enforced and the Transfer Agreement was found to be valid. This is unjust and unfairly prejudicial to David.

[84] However, David did not protest when the terms of the settlement were read out in court by Mr. Pulver, nor did he protest when Justice Myers read out his endorsement incorporating the terms of the settlement. The evidence is contradictory as to whether David was specifically asked by Justice Myers whether he agreed with the settlement, but the evidence is consistent that the court invited the parties to comment on the settlement if they wished to do so. At that point, David could have protested, asked questions, or refused to participate in the settlement. He did nothing.

[85] David’s evidence was that he did nothing because he trusted no one after he was forced to sign a blank document by his lawyer. This evidence is not tenable. I accept Mr. Canizares’ evidence, supported by Ms. Sahota’s memo, that David was requested to sign a set of written instructions. Those instructions reflected the terms of the settlement but was not the actual settlement document. The settlement was contained in Justice Myers’ endorsement after he had discussed its terms with counsel and confirmed with all counsel and parties that they had no concerns with it.

[86] The alternative course open to David at the relevant time was to refuse the settlement. His evidence that his head was not clear and that he was “in a nightmare” is not credible. There is no evidence from anyone who was present in court when the settlement was read out that David was in distress. Jeff’s evidence was that his uncle simply said nothing when the terms of the settlement were read out by the court. This is confirmed by Mr. Canizares and Ms. Sahota’s memo.

[87] I accept Mr. Canizares’ evidence (confirmed in Ms. Sahota’s memo) that David initially resisted the settlement, claiming he was being “robbed.” However, when the weaknesses of his case were reviewed with him (as set out in the June 23, 2023 reporting letter) he ultimately agreed to the settlement. David’s reaction to the proposed settlement does not change this court’s view with respect to enforcement of the settlement. It would not be unusual for a litigant to take a negative view of a proposed settlement on first review. It is the role of counsel to provide advice on the advantages and disadvantages of a particular settlement.

[88] Further, David’s protests that Mr. Canizares would essentially abandon him if he did not agree to the settlement are insufficient to set aside the settlement. I accept Mr. Canizares’ evidence that based on Justice Myers’ comments, he recommended the settlement to his client. He was obviously concerned about returning to the courtroom and resuming the hearing given what he set out in his reporting letter: “Justice Myers sent a clear message that you would not be very happy with his decision if the lawsuits had not been settled”.

[89] I have reviewed the case of Davis v. Cooper, 2010 ONSC 4230, as provided by the Applicants. In that case a plaintiff brought a motion to set aside a release in which she agreed to accept a settlement of $30,000. The grounds for the motion have some similarities to the within motion. The plaintiff complained that she was under duress, that her counsel failed to fully explain the release to her, and that she did not sign Minutes of Settlement.

[90] Specifically with respect to the complaint of duress, the plaintiff submitted that the duress arose because her lawyer told her he would not continue to act for her unless she signed the release. The court differentiated between stress and duress and said, at para. 13: “Stress is a very common reaction during settlement negotiations which cannot alone be a sufficient basis to void an agreement.”

[91] I accept the proposition set out in Davis that settlement negotiations cause stress for litigants. Duress is a different matter. There is no evidence, other than that of David, that he was under any form of duress from Mr. Canizares. David’s conduct in the courtroom belies any suggestion that he was being forced into anything. Like any litigant, he always had option to tell the court that he wanted to change counsel.

[92] In Hanna v. Polanski, 2012 ONSC 3229, the plaintiff offered to settle a personal injury action with the defendant insurance company for $5,000 which was accepted. The parties executed a final release. The plaintiff later argued that the release should be set aside as unconscionable, signed under duress or signed as a result of negligent misstatements by the insurance adjuster.

[93] The Court granted the defendant’s motion for summary judgment stating: “The fact that a settlement agreement may not have been a desirable one from the point of view of one party, or that fact that the party may have received poor legal advice, or the fact that the party later changed their mind cannot provide grounds for setting aside the settlement agreement, or a refusal to enforce it.” at para 29 citing Robertson v. Walwayn Stodgell Cochran Murray Ltd. (1988), 24 B.C.L.R. (2d) 385 (C.A.). I note that in Robertson the plaintiffs had similarly argued that they received erroneous advice from their lawyer; that the advice induced them to make the settlement agreement; that the settlement agreement was unfair; and that the Court should not enforce the settlement agreement.

[94] Further, in Dos Santos v. Waite, 1995 CarswellOnt 3384 (Gen. Div.), the parties attended a mediation session with counsel regarding the purchase and sale of a property. They exacted independently witnessed minutes of settlement, but the defendant refused to sign the mutual release it called for. He alleged that the settlement was incomplete, that he was under pressure from his then lawyer to sign the settlement, and that his then lawyer did not fully inform him of what was going on. As in the case at bar, the defendant in Dos Santos claimed that he was under stress because his lawyer claimed that if he did not sign, he could not represent him anymore. The court noted that stress is not duress and is not a basis for refusing to enforce a settlement. Citing Robertson with approval, the court declared the settlement valid and binding.

[95] David submits that Mr. Canizares’ evidence should be given less weight due to inconsistencies in his evidence when compared to Ms. Sahota’s memo and issues related to the June 2023 reporting letter. He raises specific issues as follows:

• Mr. Canizares insisted that David was in court and present on both June 21 and June 22, 2023. Ms. Sahota’s memo sets out that David was not present on June 21.
• Mr. Canizares’ evidence was that David was initially resistant to the settlement but ultimately agreed to it. Ms. Sahota’s memo sets out that David was adamantly opposed to the settlement, refusing to sign the letter of instruction, and claiming he was being “robbed.”
• David deposed that he never received a reporting letter from Mr. Canizares. There is no evidence as to how the letter was sent and it was only produced when a request for Mr. Canizares’ file was made. A request for metadata in relation to the letter was refused. Mr. Canizares did not produce a copy of the reporting letter as an exhibit to his affidavit. David submits that the authenticity of the reporting letter is therefore in question and should not support any statements made by Mr. Canizares.

[96] I disagree that those inconsistencies should result in this court attributing less weight to Mr. Canizares’ evidence. First, it does not appear that the settlement was discussed on June 21, 2023, whether or not David was in court. It is unclear what happened on that date other than the fact that no viva voce evidence was given. In any event, the focus of this court is the on the events of June 22, 2023.

[97] As for the degree of resistance exhibited by David regarding the settlement terms as presented, this issue has been reviewed above, but the degree of David’s initial resistance is not an issue to be parsed through by the court in the context of this motion.

[98] As for the reporting letter, once again, the within motion does not require this court to make determinations as to its authenticity. I have inferred that the contents of the reporting letter may have been similar to the types of discussions held with David on June 22, 2023, because the reporting letter recounts the issues raised by Justice Myers as to possible problems with David’s case.

[99] In summary, I find that there is insufficient evidence to prove that David was coerced into agreeing to the settlement. While Mr. Canizares’ evidence was that David’s initial reaction to the settlement was that he was being “robbed”, he ultimately came around and agreed to its terms after the weaknesses in his case were explained to him. I infer that those weaknesses were the same ones set out in the June 23, 2023 reporting letter and were not ones to be ignored when considering a possible settlement.

Orders and Costs

[100] Given all of the above, I find that the relief sought by the Moving Parties is granted.

[101] The McGill property shall be sold immediately, and the terms of the settlement carried out.

[102] No release is required from Taryne, Jason or Sharon Chong as I have accepted the evidence of Mr. Canizares that he received instructions from David which represented instructions from his family including Sharon, Taryne and Jason.

[103] With respect to costs, the Applicants seek substantial indemnity costs of $20,775.62 given their success. This scale of costs is sought because the Applicants had every right to believe the matter was over on June 22, 2023. As a result of David’s actions, they were required to bring the within motion and cross-examine David, Taryne and Jason, attend at Mr. Canizares’ examination, and prepare a supplementary factum.

[104] David’s counsel does not think the amount sought by the Applicants is unreasonable.

[105] I note that the costs sought by David were more than those of the Applicants. In fairness, this was because David’s counsel at this motion was required to review an entirely new file before preparing responding material.

[106] I also note that the Bill of Costs provided by the Applicants does not include attendance at Mr. Canizares’ examination or preparation of a supplementary factum. I have added an additional $1,500 onto the costs sought by the Applicants for those tasks and to avoid the additional cost of preparing another Bill of Costs or making further submissions such that these parties can have the closure they have been seeking since June 2023.

[107] The Moving Parties’ costs are therefore fixed at $22,275.62 payable from David’s share of the sale proceeds.

C. Gilmore, J. Date: April 23, 2024