Court File and Parties

Court File No.: CV-19-00079530-0000

SUPERIOR COURT OF JUSTICE

DEEPAK MUNYAL

v.

ROBERT BALDWIN

BEFORE HIS HONOUR JUSTICE PIERRE E. ROGER

on May 23, 2024, at OTTAWA, Ontario

APPEARANCES:

A. Campbell Counsel for the Plaintiff

R. Brown Counsel for the Defendant

Transcript Information

ONTARIO COURT OF JUSTICE

T A B L E O F C O N T E N T S

LEGEND [sic] Indicates preceding word has been reproduced verbatim and is not a transcription error. (ph) Indicates preceding word has been spelled phonetically.

Transcript Ordered: July 9, 2024

Transcript Completed: July 10, 2024

Ordering Party Notified: July 10, 2024

Reasons for Decision

Justice Roger, P (Orally):

The defendant brings a motion seeking to enforce the terms of an alleged settlement concluded on December 8, 2023.

This action is a professional negligence action against the plaintiff’s former lawyer, relating to that lawyer’s handling of a collection action seeking a debt of about $240,000 plus interests and other amounts, which action was administratively dismissed.

This action was started in 2019 and was ready for trial at the time of the alleged settlement. A pre-trial conference had occurred on Wednesday, December 6, 2023. The action did not settle at the pre-trial, and the trial was scheduled to start a few weeks later on January 2, 2024. As often happens, the parties had further settlement discussions following the pre-trial conference.

The plaintiff was represented by two lawyers from two separate firms. These two lawyers were both involved in all relevant settlement discussions.

On December 7th, 2023, the plaintiff met his two lawyers by Zoom conference. The plaintiff’s evidence is that he then instructed his two lawyers to settle for $163,000 plus interests since 1994. I note that $163,000 plus interests since 1994 leaves a lot of room or uncertainty as the plaintiff’s expert quantified interests since 1994 at between approximately $600,000 and 10.4 million dollars.

The documents indicate that the plaintiff’s lawyers asked the plaintiff to confirm his instructions to settle for $163,000 all inclusive. The plaintiff answered “yes of 1994 dollars”. Further conversations occurred between the plaintiff and his lawyers, and the plaintiff sent another email about half an hour later to his lawyers indicating “$163,000 global”. The plaintiff’s evidence on this motion is that he was told to email this and actually meant $163,000 plus interest. There is no further email from the plaintiff about this until his email to his lawyers at about 12:17 on December 10, 2023, which is found at A546.

In the interim, the plaintiff’s lawyers held a Zoom meeting with the defendant lawyer at about 11 a.m. on December 8th, 2023. During that meeting, the plaintiff’s lawyers offered to settle this action for $163,000 all inclusive. Later that same day, the defendant lawyer communicated a refusal and a counteroffer of $120,000 all inclusive in exchange for a release containing a confidentiality clause and a dismissal order.

During his cross-examination, the plaintiff admitted to a conversation with his lawyers during which he instructed them not to accept the $120,000 offer. The plaintiff denies ever instructing his lawyers to offer to settle for $137,500 and says that his instructions were throughout to settle for $163,000 plus interest.

Later on Friday, December 8th, 2023, the plaintiff’s lawyers communicated to the defendant’s lawyer an email that provided “we are instructed to propose that proceedings conclude at $137,500 all inclusive, with customary LawPro release and dismissal”. Later that same day, the defendant’s lawyer accepted that offer if time to pay and a release was acceptable to the plaintiff.

The documents indicate that at about 10:20 on Saturday, December 9, 2023, the plaintiff’s lawyer sent an email to the plaintiff confirming that as per his instructions, opposing counsel had accepted to settle for $137,500 all inclusive. Thereafter, still on December 9, 2023, plaintiff’s counsel sent an email to the lawyer for the defendant acknowledging the settlement, and on December 10, defence counsel sent a release and draft order for signature.

This brings up to the December 10, 2023, email of the plaintiff to his lawyers found at A546, where at 11:46, he tells his two lawyers “I cannot go forward without personally meeting so hold your horses to finalize anything or continue for trial.” It appears that his lawyers responded at about 12:35 that they had made this offer as per his instructions of Friday, that it had been accepted, and that the parties had reached an agreement, to which the plaintiff responded that he did not authorize this settlement. Additional emails between the plaintiff and his two lawyers seem to indicate a disagreement between them regarding the plaintiff’s instructions.

Rule 49.09 of the Rules of Civil Procedure is applicable and the test on such a motion is to determine whether an agreement was reached and if so, whether it should be enforced.

Here, it is clear from the correspondence exchanged between the lawyers for the plaintiff and the lawyer for the defendant that an agreement was reached. Viewed objectively, this correspondence communicated a mutual intention to create a legally binding contract on all essential terms of the settlement.

Any error or misunderstanding on any fundamental term was between the plaintiff and his own two lawyers, not between the parties. This is an important distinction which explains away the plaintiff’s arguments on this point and distinguishes many of the cases relied upon by the plaintiff.

With regards to the court’s discretion of whether in the interest of justice and fairness the settlement should not be enforced, I see no sufficient reason not to enforce this settlement.

Here, the only evidence of a possible mistake is between the plaintiff and his own two lawyers. His two lawyers are from different firms and were involved in all relevant communications. Yet, the plaintiff did not file an affidavit from his lawyers, did not waive privilege, and did not explain why he did not call evidence from his lawyers. As a result, I can properly infer that the evidence of his two lawyers would not have been helpful or supportive of his position.

This is therefore a case where there appears to be a dispute between the plaintiff and his two lawyers about the scope of their authority. This distinguishes this case from the facts and from the reasoning of this court in the decision of Smith v. Robinson. In Smith v. Robinson, there was no dispute that the earlier offer should have been withdrawn and, in that case, it seemed fair on the very specific circumstances of that case not to enforce the settlement.

The facts here are more like those in the decision of the Court of Appeal in Scherer v. Paletta, where there was also a dispute between the lawyer and the client about the lawyer’s scope of authority. In Scherer v. Paletta, the Court of Appeal indicated, which has been followed in countless decisions: “If, however, the parties are of full age and capacity, the Court, in practice, where there is no dispute as to the fact that a retainer exists, and no dispute as to the terms agreed upon between the solicitors, does not embark upon any inquiry as to the limitation of authority imposed by the client upon the solicitor”.

In this case, it is not disputed that the offers were communicated and that the lawyer for the defendant did not know that the plaintiff allegedly did not agree or did not authorize these offers. It would be impractical to require counsel to confirm the instructions of their counterparts and it makes sense to hold, as was done in many decisions, including that of Aganeh v. Mental Health Centre, that settlements entered into with the assistance of counsel should be upheld except in the clearest and most exceptional of cases.

Furthermore, the settlement was arguably reasonable when one considers that the plaintiff admits at paragraph 26 of his affidavit that he provided written instructions to his lawyers on December 7 to explore a settlement for “$163,000 global”. I understand the underlying dispute between the plaintiff and his lawyers about what he alleges he meant when he wrote this, but that dispute is for another day.

Prejudice does not assist the plaintiff because his arguments in that regard actually cut both ways. For example, the plaintiff’s age, his impecuniosity, his desire for finality or a resolution go just as well in favor of enforcing the settlement. As well, many of his arguments of prejudice would be applicable in most cases where an agreement is sought to be enforced. For example, litigation against the settling lawyers is always a possibility in such cases and arguments that the opportunity to go to trial is lost is also always applicable.

Consequently, the defendant’s motion is granted, and a judgment will issue enforcing the terms of the agreed upon settlement reached on December 8, 2023, including requiring the plaintiff to sign the release agreed upon by his lawyers. I have reviewed the release and find it acceptable.

As for costs, $14,218 is awarded for the costs of this motion payable by the plaintiff to the defendant by way of a deduction from the agreed upon settlement amount.

The defendant’s costs are reasonable and comparable to those of the plaintiff. The difference of about $6,000 is explained by the fact that this is the defendant's motion which always require more costs by the moving party, the defendant spent time preparing and attending at an urgent case conference with costs of about $2,000 which was not incurred by the lawyer retained on this motion, and the defendant spent time to prepare for the cross-examination of the plaintiff.

The amounts sought by the defendant are reasonable and within the reasonable expectations of a losing party.

However, this is not a case that warrants substantial indemnity costs because the alleged special circumstances do not rise to the threshold of awarding such costs and because the plaintiff’s position in resisting this agreement rests on an alleged dispute or disagreement with his lawyers. If he has a dispute with his lawyers, then it was reasonable for him to oppose the settlement and therefore I award costs to the successful party on a partial indemnity basis. As indicated, I fixed costs in the all-inclusive amount of $14,218.

I omitted to include in the reasons for decision that I read to the parties an element of my reasoning which, however, was discussed with counsel during their oral submissions. As I explained to counsel, this is not a case of the plaintiff being incapable or having health issues that requires the intervention of the court in the form of its approval of the settlement. Here, the health concerns raised by the plaintiff on this motion when he was represented by two lawyers are of no consequence. This is not a case where the intervention of the court was required to finalize the settlement. As mentioned in Scherer v. Paletta, if however, the parties are of full mind and capacity, the court does not embark on an enquiry of limitations imposed by the client on the lawyer that are not brought to the attention of the other party.

End of Transcript

Form 2

CERTIFICATE OF TRANSCRIPT (SUBSECTION 5 (2)) Evidence Act

I, Santana Stallberg (Name of Authorized Person) certify that this document is a true and accurate transcript of the recording of MUNYAL v BALDWIN in the Superior Court of Justice (Name of Case) (Name of Court) held at 161 Elgin Street Ottawa ON (Court Address) taken from Recording Recording 0411_MR52_20240523_085320__10_ROGERP.dcr, which has been certified in Form 1.

July 10, 2024 (Date)

(Signature of Authorized Person(s))