Court File and Parties

Court File No.: CV-19-69363 Date: 2025-09-29 Ontario Superior Court of Justice

Between:

NADIA DITRAGLIA and STEFAN NEAL Applicants

– and –

TATJANA WRIGHT personally and in her capacity of Estate Trustee for the Estate of Gene Ivan Alexei Neal, Respondent

Counsel:

• Shene Harris, for the Applicants
• Andrew Keesmaat, for the Respondent
• Susan Stamm, Office of the Children's Lawyer, for the non-party minor

Heard: August 12, 2025

Reasons for Decision on Motion to Approve Settlement

Justice S. Antoniani

Background

[1] The parties seek approval of minutes of settlement, pursuant to Rule 7.08 of the Rules of Civil Procedure.

[2] At issue between them was the validity of the last will and testament executed on August 28, 2017 ("2017 will"), by Gene Ivan Alexei Neal ("Gene"), born January 23, 1925, and deceased February 25, 2019.

[3] Gene is survived by three children: the applicants, Nadia and Stefan, and the respondent, Tatjana. He is also survived by grandchildren, one of whom is the minor non-party represented in this motion by the Office of the Children's Lawyer ("OCL").

[4] On the same date that he executed the 2017 will, which left the bulk of his estate to Tatjana, Gene also transferred the real property at 57 Hepburn Crescent to her.

[5] The same counsel, Norm Watson, prepared both the 2017 will, and the transfer of the real property.

[6] The applicants, Gene's other children, brought an application, seeking a declaration that the 2017 will was invalid, and other relief.

[7] Gene's prior will, executed February 4, 2016 ("2016 will"), left a potential 1/6 of the residue of his estate to his minor grandson, Tatjana's son. The minor grandson is 14 years old. It is uncontested that the value of the potential 1/6th of the residue was about $35,000.

[8] If the matter had proceeded to a hearing, the applicants indicate that they would have also challenged the validity of the 2016 will. It was on the basis of their intention to challenge the 2016 will that the applicants put the OCL on notice of the proceeding, because of the minor grandson's potential interest in the residue if that will was found to be the valid last will and testament.

[9] Once the parties put the OCL on notice of the within application, the OCL filed a statement of submission of rights on behalf of the minor grandson, pursuant to r. 75.07.1. The minor grandson remains a non-party to the litigation.

[10] The parties attended private mediation after the examination under oath of Norm Watson in relation to his preparation and witnessing of the execution of the 2017 will, and as to his opinion of the capacity of Gene to instruct him at that time. Thereafter, the parties entered into the minutes of settlement which are the subject of this motion. In these minutes of settlement, the parties agree that the 2017 will is valid, but they propose a distribution of Gene's estate in a manner that is not in accordance with the terms of that will.

[11] Under the minutes of settlement before me, the parties agree to the following:

• the real property at 57 Hepburn shall be sold, with net proceeds distributed 60% to Tatjana and 40% to the applicants, and
• the cash assets of the estate shall be distributed on a 50/50 basis between Tatjana on one part and the applicants on the other part.

[12] The minutes of settlement do not make any provision for Gene's minor grandchild. A notice of the proposed settlement was provided to the OCL, and the OCL filed a notice of rejection of settlement.

[13] At the hearing of the motion before me, the OCL took the position that if the 2016 will had been the valid will, the minor grandchild would have received some funds, and therefore the settlement ought to have included him. It is clear that the minor grandchild is not a beneficiary under the 2017 will.

[14] The applicants would have received only $25,000 each under the 2017 will, but they negotiated a much better result for themselves in challenging the 2017 will and then arriving at minutes of settlement.

[15] The OCL objects to the fact that the proposed settlement does not provide anything for the minor grandchild.

Issue

[16] Should the court grant judgment as per the minutes of settlement executed on June 27, July 2 and July 3, 2025, pursuant to Rule 7.08 of the Rules of Civil Procedure, given the rejection of settlement served on behalf of the minor grandchild, who filed a statement of submission of rights, pursuant to Rule 75.07.1?

Decision

[17] Judgment is granted as per the minutes of settlement.

Law

[18] A decision as to whether or not to approve a settlement and grant judgment requires consideration of the following rules of civil procedure:

Representation of Non-Parties Under Disability

Litigation guardian for party

7.04 (1) Unless there is some other proper person willing and able to act as litigation guardian for a party under disability, the court shall appoint,

(a) the Children's Lawyer, if the party is a minor;

(b) the Public Guardian and Trustee, if the party is mentally incapable within the meaning of section 6 or 45 of the Substitute Decisions Act, 1992 in respect of an issue in the proceeding and there is no guardian or attorney under a power of attorney with authority to act as litigation guardian;

(c) either of them, if clauses (a) and (b) both apply to the party. O. Reg. 69/95, s. 5.

Legal representative for minor who is not a party

(2) Where, in the opinion of the court, the interests of a minor who is not a party require separate representation in a proceeding, the court may request and may by order authorize the Children's Lawyer, or some other proper person who is willing and able to act, to act as the person's legal representative. O. Reg. 69/95, s. 5.

Approval of Settlement

Settlement Requires Judge's Approval

7.08 (1) No settlement of a claim made by or against a person under disability, whether or not a proceeding has been commenced in respect of the claim, is binding on the person without the approval of a judge. R.R.O. 1990, Reg. 194, r. 7.08 (1).

(2) Judgment may not be obtained on consent in favour of or against a party under disability without the approval of a judge. R.R.O. 1990, Reg. 194, r. 7.08 (2).

Statement of Submission of Rights

75.07.1: Where a person files a statement of submission of rights to the court in response to service of a statement of claim or on a motion or application for directions,

(a) the person is not a party to the proceeding and is entitled only to service by the plaintiff of written notice of the time and place of the trial and a copy of the judgment disposing of the matter;

(b) the person is not entitled to costs in the proceeding and is not liable for costs, except indirectly to the extent that costs are ordered to be paid out of the estate; and

(c) judgment on consent following settlement shall not be given without,

(i) the written consent of the person, or

(ii) an affidavit of a lawyer of record in the proceeding attesting that a notice of settlement (Form 75.11), appended as an exhibit to the affidavit, has been personally served on the person and no rejection of settlement (Form 75.12) has been filed with the court within 10 days after service of the notice. O. Reg. 740/94, s. 6; O. Reg. 575/07, s. 32.

[19] The primary issue for resolution on this motion is the interpretation and application of the bolded portions of 75.07.1(c), above.

Discussion

[20] The OCL submitted that it would have been open to someone else in the family who is not in a conflict of interest with the minor grandchild to apply to act as litigation guardian and to retain counsel and participate in the litigation to protect the minor grandchild's potential rights under the 2016 will. However, the OCL agreed that this would be unlikely in this circumstance, where the value of the minor's potential interest does not warrant the retaining of counsel and full involvement as a party to the litigation.

[21] The OCL determined that the minor grandchild's potential interest in the outcome of the litigation is relatively modest, and therefore it did not join the litigation as a party.

[22] As the minor grandchild is not a party to the litigation, approval of the settlement is not governed by Rule 7.08(1) in isolation. In an effort to protect the minor grandchild's interest, the OCL filed a statement of submission of rights on behalf of the minor. Consequently, per r. 75.07.1(a), the minor is not a party to the proceeding and is only entitled to written notice of the time and place of the trial, and to a copy of the judgment disposing of the matter.

[23] When the parties to the litigation entered into minutes of settlement, they provided a copy of the proposed settlement to the OCL, in hopes of obtaining a consent judgment pursuant to r. 75.07.1(c). Thereafter, the OCL filed a rejection of settlement (Form 75.12).

[24] The OCL rejects the settlement because it does not take into account the minor grandchild and only provides for the children of the deceased. The OCL position is that the adult children of the deceased preferred their own interest when they agreed that the 2017 will is valid but then agreed to terms which are much more favourable to the applicants than what is provided for under that will, and which terms do not include anything for the minor grandchild.

[25] Upon the Form 75.12 being filed, judgment on consent is prohibited by the operation of r.75.07.1(c), which states that judgment on consent following settlement shall not be given without the written consent of the person.

[26] There is no direct guidance in common law as to the interpretation and operation of r.75.07.1(c), and to what follows when the non-party rejects the proposed settlement. The OCL takes the position that the rule must be interpreted to state that the court lacks the jurisdiction to approve any settlement, because r. 75.07.1(c) is entirely mandatory, and as such, it is not possible to have settlement over the objection of a non-party participant.

[27] I reject this interpretation of Rule 75.07.1(c). I agree that the rule provides individuals with lesser interests in litigation a vehicle by which regard must be had to their interests and rights, without requiring them to formally join the litigation as a party, and without exposing them to costs. However, I do not agree that, absent the consent of the Rule 75.07.1 participant, no judgment can be granted without a trial.

[28] On a plain reading of the rule, it is clear that a "judgment on consent" cannot follow where the r. 75.07.1 participant files a rejection of settlement, within 10 days after service of the notice of settlement. However, it cannot have been the intention of parliament to permit a non-party to prevent the resolution of litigation without a trial, where the parties to the litigation have otherwise settled their differences. Similarly, it cannot be the intention of parliament to require that the parties to litigation settle in a manner which is to the satisfaction of the non-party, which party has had no burden to provide evidence or to participate in the proceeding.

[29] What then would be the logical conclusion of the non-party's position in this motion? If no judgment can be granted, and settlement with the non-party cannot be compelled, presumably the matter would be required to go to trial. However, if the non-party remains outside the litigation, there would be no point in requiring the conduct of a trial between two parties who agree as to the outcome, as the parties do here. It cannot be the intention of parliament to compel that a trial occur in these circumstances.

[30] In prohibiting judgments on consent where a r. 75.07.1 non-party participant rejects a settlement, parliament must have intended that the court is required to assess the settlement giving regard to that non-party's rights, and it follows that the court may refuse to approve a settlement where it is of the opinion that the settlement fails to fairly take into account the rights of the r. 75.07.1 participant.

[31] Although the provision and the impact of the non-party's rejection of settlement does not appear to have been considered by any other court, the motion record includes an article by Karen Watters, senior estates litigator at Devries Litigation, wherein Ms. Watters opined that, upon service of a Notice of Rejection, "The court may then scrutinize and consider the reasons given for rejecting the settlement. However, that does not mean that the reasons will be accepted or the settlement rejected based on the person's opinions of the settlement, however meritorious the reasons may be.": Karen Watters, Opting Out: Submitting Rights to the Court (June 8, 2022), online: de Vries Litigation LLP <www.devrieslitigation.com/opting-out-submitting-rights-to-the-court/>. This is the position adopted by the litigants herein, and I agree that it is the only viable interpretation of the outcome after a non-party's rejection of a settlement.

[32] It is no longer a judgment "on consent." In these circumstances, the court is required to consider whether the proposed settlement is just, with consideration given to the non-party's rights, and to their reasons for rejecting the settlement. In making the assessment, the court may take into account factors akin to those required in the context of an uncontested trial, or a default judgment. Rule 19.06 governs motions for default judgment, and it provides that "A plaintiff is not entitled to judgment on a motion for judgment or at trial merely because the facts alleged in the statement of claim are deemed to be admitted, unless the facts entitle the plaintiff to judgment."

[33] Accepting that I am required to consider the settlement in light of the non-party's potential rights, I have considered the evidence provided, and the minutes of settlement, and the OCL's reasons for rejecting the settlement on behalf of the minor grandchild.

[34] I have taken into consideration that while the parties agree, in the minutes of settlement, that the 2017 will is the last will and testament of the deceased, the proposed settlement does not in fact distribute the estate according to that will, which left the entirety of the real property to the non-party minor's mother, Tatjana. I have considered that the settlement appears to have been a compromise, wherein Tatjana has foregone 40% of the value of the real property and 50% of any cash residue, which she would have been entitled to under the apparently valid 2017 will. Tatjana's counsel submits that the settlement took into account factors such as delay, litigation risk, and the expense already incurred by the parties during the course of the protracted legal battle, as well as other costs which would have continued to accumulate.

[35] In considering whether to grant judgment on the terms of the minutes of settlement, I have considered whether the settlement unfairly disregards any potential rights of the minor grandchild, and in doing so have taken into account the following factors:

(a) The application materials include copies of the 2017 will and the executed real property transfer, of the minutes of settlement, and excerpts of the transcript of the examination under oath of the drafting solicitor.

(b) The drafting solicitor testified that he received instructions from the deceased, and that the instructions remained consistent from the time he first received them and over a number of interactions which occurred over a period of several months.

(c) The drafting solicitor opined that the deceased was of sound mind and able to provide instructions on August 28, 2017, when he executed the will. There is no doubt that the opinion and evidence of the drafting solicitor would have been heavily relied upon as evidence which supports the validity of that will.

(d) The applicants and respondent, whose interests are in conflict, all agreed for the purposes of settlement after the examination of the drafting solicitor, and after attending private mediation, that the 2017 will is the valid last will and testament of the deceased.

(e) The minor grandchild is 14 years old and has been diagnosed with autism spectrum disorder and ADHD. His mother, the respondent Tatjana, swore an affidavit in support of the motion to have the settlement approved, attesting to the fact that the minor has always been in her care and that he will remain in her care.

(f) I have considered that, if an amount of less than $35,000 was payable to the minor grandchild, the court would have the discretion, pursuant to the Children's Law Reform Act, R.S.O. 1990, c. C.12, to direct that the amount be paid directly to his mother, Tatjana.

(g) If the matter had proceeded to a hearing, the applicants would have also challenged the validity of the 2016 will. It was on the basis of this intention to challenge the 2016 will that the applicants put the OCL on notice of the proceeding. I have no evidence, and the OCL does not argue, that the minor grandchild would have realized any benefit from any will prior to the 2016 will.

(h) Given the evidence of the drafting solicitor and of the respondent mother Tatjana, there would be, at minimum, significant hurdles to overcome in disproving the validity of the 2017 will. Even if successful, challenges to the validity of the 2016 will would follow.

(i) It would be left to the 14 year old minor grandchild and his counsel to argue in support of the 2016 will as the valid last will and testament of the deceased. The OCL admits that the relatively minor sum of money the minor might realize would not make it likely that he would join the litigation as a party.

(j) The sum of money the minor could realize could be largely or entirely consumed in the conduct of any litigation. I note that the minutes of settlement before me for approval provide for about $60,000 in legal fees which have already been incurred by the applicants and respondent to date, combined, to be paid out of the proceeds of the sale of the real property. I note that the litigation had already been ongoing for about 5 years. There would be litigation risk to all parties in the event of a full hearing on all matters.

[36] Considering all the above, I find that granting judgment on the terms of the minutes of settlement is reasonable and fair in all of the circumstances.

Costs

[37] The parties agree that Rule 75 provides that a non-party filing a statement of submission of rights is not liable for costs. However, the respondent argues that having inserted itself into the litigation by rejecting the settlement, the OCL should now be liable for the costs incurred by the parties in thwarting their motion for judgment on consent.

[38] I disagree with this position. Rule 75.07.1 does provide for a non-party to submit a statement of submission of rights and contemplates that the non-party's consent is required for the court to grant judgment on consent.

[39] It would be contrary to the intention and principle of permitting a non-party to submit their statement of submission of rights, if that non-party were then penalized for declining to consent to a settlement which, in their view, gave no consideration to their rights. I have found that the purpose of the section is to provide, in exactly these circumstances, that the court shall take into account the statement of submission of rights of the non-party, and the notice of rejection of settlement, in determining whether judgment should be granted on the terms of any settlement negotiated between the parties. The section prohibits the court from granting judgment on consent specifically, such that, if the parties did not fairly or reasonably consider the non-party's potential rights in their settlement negotiations, the court shall consider those rights, and may refuse to grant judgment.

[40] I find that the intention of the section is to provide the non-party an opportunity to have their rights considered, without the risk of liability for costs, even when they do not give their consent to any proposed settlement.

Order

[41] Judgment is granted as per the minutes of settlement.

[42] There shall be no order as to costs against the OCL.

Justice S. Antoniani

Released: September 29, 2025