Reasons for Decision

Court File No.: CV-24-245
Date: 2025/06/12
Ontario Superior Court of Justice

Between:
Complete Landscaping Inc., Plaintiff
– and –
Steve Touliopoulos and Veronica Kennedy also known as Veronica Touliopoulos, Defendants

Appearances:
Rahul Shastri, for the Plaintiff
Self-represented, for the Defendants

Heard: May 23, 2025

Released: June 12, 2025

Judge: M.G. Ellies

Overview

[1] The plaintiff moves under r. 49.09 of the Rules of Civil Procedure, R.R.O. 1990, Reg. 194, for an order for judgment against the defendants in accordance with an offer to settle which was made on the defendants’ behalf by their lawyer and accepted by counsel for the plaintiff.

[2] The defendants resist the motion on two bases. First, they say that their lawyer did not have authority to make the offer in question. Second, they contend that, at the same time that their lawyer was making the offer to settle on their behalf, they were discovering that they had been the victims of a billing fraud perpetrated by the plaintiff.

[3] Following the submissions of the parties, I allowed the motion for reasons to follow. These are my reasons.

Background

[4] In or about the month of April 2022, the plaintiff and the defendants entered into a contract for the installation of a swimming pool and the performance of landscaping at the defendants’ home, in North Bay. The price of the work to be undertaken was $317,212, including HST.

[5] On July 31, 2024, the plaintiff registered a claim for lien against title to the defendants’ home for the amount of $173,172.

[6] On November 8, 2024, the plaintiff commenced the action within which this motion was brought to preserve and protect its rights under the Construction Act, R.S.O. 1990, c. C.30.

[7] Pursuant to a timetable set by the court, the defendants were required to deliver their “Scott Schedule” of disputed charges and alleged deficiencies on or before April 15, 2025.

[8] On April 14, 2025, the defendants’ lawyer sent an email to the plaintiff’s lawyer offering to settle the action for the all-inclusive sum of $130,000. In a phone call between counsel later that day, the defendants’ lawyer advised that his clients were prepared to increase their offer to settle to $135,000 and to pay the said sum within 10 days.

[9] The next day, on April 15, 2025, the plaintiff’s lawyer sent the defendants’ lawyer an email at 1:06 p.m., confirming that his client was prepared to accept the defendants’ offer and that the case was “resolved at $135K.” The plaintiff’s lawyer attached a draft of minutes of settlement and invited the defendants’ lawyer’s comments on the draft. A short while later, the plaintiff’s lawyer sent another copy of the minutes, which corrected a typographic error in the original version. In addition, he sent a consent order.

[10] Less than an hour later, at 3:32 p.m., the defendants’ lawyer sent an email to the plaintiff’s lawyer, confirming the settlement. He wrote:

Thank you for your emails. I am glad we were able to bring this to a resolution. Thank you for your efforts.
I have provided the revised MOS [minutes of settlement] to my clients and will be in touch with a signed copy as soon as I’ve received it.
I will provide the signed consent and MOS in the same e-mail.

[11] However, the next day, on April 16, 2025, the defendants’ lawyer wrote to advise the plaintiff’s lawyer that his clients were resiling from the settlement.

[12] This motion was the result.

Issues

[13] Section 13 of O. Reg. 302/18 made under the Construction Act precludes a party to an action brought under the Act from taking any interlocutory steps other than those provided for under the Act without the consent of the court. The section requires that the party seeking to take such a step, including a motion like this one, satisfy the court that the step is “necessary or would expedite the resolution of the issues in dispute”.

[14] The defendants do not challenge the plaintiff’s request for leave under s. 13, and rightly so. Obviously, if the motion succeeds, it will not only expedite the resolution of the issues in dispute, but will resolve them entirely.

[15] Therefore, the only issue is whether the motion should succeed. As I will explain, there are two questions to be answered in resolving that issue.

Analysis

[16] Rule 49.09 provides:

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

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

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

[17] A motion to enforce a settlement involves two inquiries. The first is whether there is any genuine issue about the existence of an agreement to settle. The second is whether there is any reason not to enforce the settlement: Stargrove Holdings Inc. v. Al Noubani, 2022 ONSC 6066, para 4.

[18] I will deal with each inquiry in turn.

Was there an agreement?

[19] As the Court of Appeal held in Olivieri v. Sherman, 2007 ONCA 491, paras 41, 44, a settlement agreement is a contract. For a concluded contract to exist, the court must find that the parties: (1) had a mutual intention to create a legally binding contract; (2) reached an agreement on all of the essential terms of the settlement: Olivieri at para. 44, citing Bawitko Investments Ltd. v. Kernels Popcorn Ltd., at pp. 103-104.

[20] There is no question that, as between the lawyers representing the parties, there was an agreement. However, the defendants submit that their lawyer had no authority to enter into it. I am unable to accept this submission.

[21] Ms. Kennedy filed two affidavits in response to the motion: one dated May 9, 2025, and the other dated May 13, 2025. In her May 13 affidavit, Ms. Kennedy admits that she and Mr. Touliopoulos had “secured a financing to pay for this construction lien” at the time the offer to settle was made. Ms. Kennedy admits that the defendants had instructed their lawyer to make the $130,000 offer. However, she also deposes that, although her lawyer was aware of the amount available after refinancing, he was not aware that “a mandatory payment was not yet on [their] statement of payout”. Ms. Kennedy goes on to say that when they received the refinancing payout amounts on April 14, 2015, they could “automatically” see that they “were short, even with the offer of $130,000”. No details about the alleged mandatory payment, or the net amount available after making it, have been provided by Ms. Kennedy.

[22] Ms. Kennedy appears to rely on the defendants’ discovery of the mandatory payment to support an inference that they would not instruct their lawyer to offer $135,000 because it was more than they could afford. However, the defendants admit that they instructed their lawyer to offer $130,000, which was also more than they could afford based on the evidence referred to above.

[23] According to Ms. Kennedy, their lawyer emailed the defendants at 1:59 p.m. on April 14, 2025, telling them that he would be calling the plaintiff’s lawyer back within the next 10 minutes to tell him “…that $135,000 is the best your side is prepared to do, with payment to be made within seven days of acceptance”. She deposes that, at 2:19 p.m. (20 minutes after their lawyer said he would call the plaintiff’s lawyer in the next 10 minutes), she sent an email to their lawyer, saying:

Please just leave the $130,000 on the table. Do not raise it to $135,000.

[24] Ms. Kennedy does not depose that the defendants never gave their lawyer authority to go to $135,000. Nor does she say that in the message she sent to the lawyer. Had the defendants never given their lawyer authority to offer as much as $135,000, I would have expected Ms. Kennedy to say so in her message. Instead, she simply told him to hold at $130,000.

[25] I do not interpret Ms. Kennedy’s message to the defendants’ lawyer as one in which the defendants restricted the scope of his authority to negotiate. Instead, I interpret the message as one in which they sought to instruct him on how to do so. If the defendants’ lawyer received the message before making the impugned offer to settle, he appears to have interpreted it the same way.

[26] However, it does not appear that the defendants’ lawyer did receive Ms. Kennedy’s message. In the message the lawyer sent to plaintiff’s counsel on April 16, 2025, he wrote:

As of this week, my solicitor-client relationship has broken down irreparably. Despite providing me with clear instructions that $135,000 was their final settlement offer, my clients are now refusing to execute the Minutes of Settlement that reflect those terms. [Emphasis added.]

[27] While the lawyer’s email message is hearsay, hearsay evidence is admissible in a motion under r. 39.01(4).

[28] In any event, even if I accepted that the defendants’ lawyer did not have authority to make the offer in question, I would still find that a binding offer had been made. As the plaintiff correctly submits, a lawyer will bind his clients to an agreement unless his clients have limited his authority and the opposing side has knowledge of the limitation, subject to the discretion of the court: Scherer v. Paletta, paras 10-11; Dick v. McKinnon, 2014 ONCA 784, para 4.

[29] The defendants do not allege, nor is there any evidence to suggest, that the plaintiff’s lawyer was aware of any limitation on the defendants’ lawyer’s authority. Indeed, all the evidence is to the contrary.

[30] For these reasons, I reject the defendants’ submission that there was no binding agreement.

[31] I move now to the question of whether the agreement should be enforced and the defendants’ allegations of improprieties.

Should the agreement be enforced?

[32] There is a strong presumption in favour of the finality of settlements: Deschesnes v. Lalonde, 2020 ONCA 304, para 27. In Srebot v. Srebot Farms Ltd., 2013 ONCA 84, para 6, the Court of Appeal emphasized that a judge’s discretion not to enforce an agreement under r. 49.09 should be exercised only in the rarest of cases where “compelling circumstances establish that the enforcement of the settlement is not in the interests of justice.” The evidence adduced by the defendants in this motion fails to establish such circumstances.

[33] Ms. Kennedy deposes to a long list of alleged billing improprieties on the part of the plaintiff, ranging from the failure to properly account for payments made by the defendants in 2022 to deliberately overstating the quantity of materials installed, such as pavers and retaining stones. Many of these alleged improprieties, such as failing to install a non-slip surface on a wheelchair ramp into the pool and failing to install the pool cover, would have been obvious from the moment the plaintiff left the job site in July 2024.

[34] The evidence shows that even the less obvious alleged improprieties were known to the defendants before they instructed their lawyer to attempt to settle the case on April 15, 2025, whether it was for $130,000 or $135,000. According to Ms. Kennedy’s evidence, the defendants were asked by their lawyer to complete the Scott Schedule on April 11, 2025, four days before the April 15, 2025, deadline, which they did. In items 6 and 7 of the schedule, the defendants claimed deductions for overbilling with respect to both the pavers and the retaining wall.

[35] In light of this evidence, I am unable to accept Ms. Kennedy’s evidence that the defendants were only just discovering these alleged improprieties at the time their lawyer was settling the case.

[36] In these circumstances, there would be no injustice in enforcing the settlement agreement.

Conclusion

[37] For the foregoing reasons, the plaintiff’s motion is allowed. An order will issue granting judgment in the terms of the agreement reached on April 15, 2025.

[38] Since deciding the motion, I have received and reviewed a draft order prepared by counsel for the plaintiff. The draft includes a clause ordering the defendants to sign the minutes of settlement. I have concerns about including such a clause. In my view, the judgment itself is sufficient because it incorporates the operative terms of the minutes of settlement.

[39] If the plaintiff wishes to make further submissions on the propriety of such a clause, counsel for the plaintiff is directed to contact the office of the trial coordinator by no later than 4:30 p.m. on June 16, 2025, to arrange a date for further submissions, failing which the judgment will be signed without the said clause.

Costs

[40] The plaintiff seeks costs on an elevated scale because of the defendants’ conduct in alleging fraud against the plaintiff and professional misconduct against the plaintiff’s lawyer in response to the motion: Hunt v. TD Securities Inc., para 123; Nazarinia Holdings Inc. v. 2049080 Ontario Inc., 2010 ONSC 2559, paras 10-12; Preano v. Cirillo, 2021 ONSC 2944, paras 20-22; Tataryn v. Diamond & Diamond, 2021 ONSC 3575, para 6.

[41] The plaintiff’s bill of costs lists partial indemnity costs in the amount of $11,690.32, substantial indemnity costs in the amount of $17,517.67, and full indemnity costs in the amount of $19,459.70, all amounts being inclusive of disbursements and taxes.

[42] While I agree that some degree of elevated costs award is appropriate in the circumstances, I am not persuaded that it should be as high as either the substantial or full indemnity costs set out above. In my view, a costs award in the plaintiff’s favour in the amount of $15,000, all-inclusive, is sufficient to express the court’s disapproval of the plaintiff’s conduct in this case. The said costs shall be paid on or before June 30, 2025.

M.G. Ellies
Released: June 12, 2025