COURT FILE NO.:
04-CV-29511SR
DATE:
2006/02/14
ONTARIO
SUPERIOR COURT OF JUSTICE
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B E T W E E N:
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TIM HAGEL
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Alan D. Reid, Q.C., for the Plaintiff as agent for
Binavince & Associates, solicitors for the Plaintiff
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Plaintiff
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- and -
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ANDREW B. GILES, JENNIFER S. ARNOLD and THE QUEEN IN RIGHT
OF ONTARIO
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Fiona E. S. Porter, for the Defendants
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Defendants
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HEARD: January 31, 2006
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Power J.
The Motion
[1] The
Defendants seek judgment in accordance with an alleged settlement of this
proceeding which, they say, was reached at a mediation held on July 20, 2005.
They say that, on that date, the parties agreed to an order or judgment
dismissing this action on a without costs basis and upon the delivery by the
Plaintiff of a written full and final release of the Defendants.
[2] The
Defendants rely on r. 49.09 and r. 20 of the Rules of Civil Procedure,
and the common law, as authority for the granting of the requested relief.
The Plaintiff denies that a legally enforceable settlement was concluded at the
mediation.
Relevant Facts
[3] On
November 30, 2004, Mr. Hagel commenced this action against the Defendants, two
O.P.P. police officers and the province. Mr. Hagel alleged that all three
Defendants were liable for torts committed by the police officers in the course
of their employment. Mr. Hagel alleged that the officers in question committed
the torts of intimidation, abuse of power, and misfeasance in public office
when, on June 28, 2004, they responded to an unjustified complaint filed by his
next-door neighbour. The Defendants denied all allegations of wrongdoing. In
essence, the Defendants’ pleaded version of the events in question is that,
when the officers arrived at the Plaintiff’s door in response to a complaint
from the neighbour, they requested him to turn down “his music.” They pleaded
that the Plaintiff responded sarcastically that he would “take it under
advisement.” Among other things, they alleged that, “Constable Arnold then
advised the Plaintiff that if they received another noise complaint, she would
return and charge him under the municipal by-law” whereupon “the Plaintiff then
demanded that Constable Arnold get off his property and slammed the door in her
face.”
[4] In the
prayer for relief in his statement of claim, the Plaintiff sought general
damages in the amount of $35,000 for the alleged torts and for breaches of his
sections 7 and 12 Charter rights. He also claimed special damages in
the amount of $10,000, as well as punitive and/or exemplary damages in the
amount of $5,000.
[5] On July
20, 2005, the parties attended a mandatory mediation before a mediator, Ms.
Anne Mullins, an Ottawa lawyer.
[6] The motion
record contains references to facts and allegations suggesting that the lawyer
that represented the Plaintiff at the mediation had limited authority. It is
stated in the Plaintiff’s record that his authority was limited “to exploring
possibilities of settlement and that the client (Mr. Hagel) should consult with
me (senior counsel) before finalizing any settlement” and that he, the junior
lawyer, “pursued the matter beyond his delegated mandate.” However, on the
return of the motion, counsel for Mr. Hagel advised me that the Plaintiff was
not, on this motion, relying on any issue of limited or excess of authority on
the part of counsel.
[7] I make a
specific finding that all parties involved in the mediation were represented by
legal counsel throughout without any restriction on their respective authority.
[8] Prior to
the mediation, counsel agreed that the Defendants would participate in the
mediation “by conference call.” This meant that throughout the mediation the
Defendants would be accessible to their own counsel and/or the mediator by
means of a telephone call or calls. This was acceptable to the mediator.
However, the Plaintiff and his wife were in attendance throughout the mediation
process, which lasted between three and four hours.
[9] I
acknowledge at this point that I am aware of the confidentially concerns attaching
to the mandatory mediation process. However, the issue on this motion is
whether a settlement was concluded and whether a judgment should issue
accordingly. Therefore, in my opinion, where a settlement is alleged to have
occurred by one party, but is denied by another party, the court, of necessity,
must examine what transpired at the mediation. In this particular matter, the
Defendants have filed an affidavit sworn by the mediator. Without making a
ruling on the propriety of filing a mediator’s affidavit, I have decided that I
will ignore the affidavit. It is unnecessary.
[10] The mediation proceeded without a
written mediation agreement. It is argued on behalf of the Plaintiff that the
mediation did not proceed in the “usual” fashion. In his affidavit filed on
this motion, the Plaintiff details a number of the procedures that were
followed that day. I have concluded that there is nothing unusual in what
transpired on the mediation notwithstanding that the Plaintiff and his wife
found it somewhat unusual. The simple fact is that there is no fixed “usual”
procedure. Mediators must be given the latitude to conduct the mediation as
they see fit. One would hope that they would be creative. However, the
mediations must be conducted in a fashion that is fair to all participants. I
find that, even if the procedures were “unusual”, there is no evidence to
suggest that the mediation process was so defective as to have been unfair to
the Plaintiff.
[11] In his affidavit, Mr. Hagel
deposes that, “For much of the two hours (while he, his wife Margaret, and his
counsel met with the mediator) the mediator explained why she considered it was
not a good idea for me to proceed with my action, citing such factors as courts
favouring police officers (adding her own professional experience in that
regard); my appearance; the potential impact of the litigation on our marriage;
the unsuitability of the claim for litigation; the unlikelihood of my
recovering anything; the risk of substantial expense, win or lose.” He goes on
to depose that, “As I listened, and as discussion progressed, it seemed as
though my claim was being totally debased by the mediator, without her or my
having had any opportunity to question the Defendants about their response to
my claim.”
[12] In my opinion, even if I accept
the entire passages quoted above, I say again that there is nothing in them
that would cause me to conclude that the process was defective or unfair.
Obviously, the mediator expressed her opinion. She is entitled to do so.
[13] The Plaintiff’s affidavit goes on
to say:
After approximately two hours of meeting with us, the mediator indicated
to us that it was time for us to make a decision and that she would give us a
few minutes to consider what she had said to us. She excused herself, and
Margaret and I returned to Mr. Eng’s office to discuss the matter.
When Mr. Eng (legal counsel) joined us he indicated that he agreed with
the mediator’s suggestion that I settle…
These facts, obviously, are very important to the
disposition of this motion. In other words, the Plaintiff had advice from his
own solicitor who, presumably, was acting on his client’s best interests, that
he should settle on the terms suggested by the mediator.
[14] Mr. Hagel then deposes as follows:
…Mr. Eng then left the office, returning a few minutes later to tell us
that the Defendants’ lawyer was on the phone with her client to determine
whether her clients would assume their own costs. We were then informed that
the client had agreed to this. It was my understanding, erroneously, that my
solicitor, Mr. Binavince, (Mr. Eng’s senior), was also aware of and in
agreement with this proposed resolution.
In fact, Mr. Binavince was not personally involved at
that particular time. However, in my view, his lack of involvement is
irrelevant to the outcome of this motion. As noted above, Mr. Hagel was
represented by legal counsel – i.e., Mr. Eng.
[15] Mr. Hagel states that they then
went back to the conference room where, for the first time, he met counsel for
the Defendants. He then deposes as follows:
12. I have no
knowledge of whether the settlement offer was formally proposed by Mr. Eng or
by Ms. Arrigo (legal counsel for the defendants). I do know that the proposed
settlement was not my idea, and I believe it may have been initiated by the
mediator. Although at the time I reluctantly accepted the proposed resolution,
I felt coerced by the process. I was in a state of despair and hopelessness
and I was anxious to leave the building as quickly as possible. I did not sign
an agreement to settle at that time or at any later time. I would not have
signed any settlement in the state I was in at the end of the session. Mr. Eng
was not authorized to sign an agreement on my behalf and I am informed that he
did not sign any such agreement.
[16] In my view, it matters not who
initiated the proposal. In any event, there is other evidence on this point.
According to the affidavit filed by Jennifer Arrigo, “The Plaintiff, through
counsel, made an offer to settle the action on the terms that the action would
be dismissed, on consent, without costs.” Ms. Arrigo goes on to say, “I
accepted the offer on behalf of the Defendants. We further agreed that the
Plaintiff would execute a full and final release.” I accept Ms. Arrigo’s
evidence as truthful.
[17] I further accept as truthful the
following extracts from Ms. Arrigo’s affidavit:
14. The mediation ended with all
parties together in the boardroom. Ms. Mullins explained to the Plaintiffs the
effect of the settlement, including that there would be paperwork such as a
full and final release to be signed. Mr. Hagel reaffirmed the agreement to
settle and said that his mind was made up, that this was a final decision, and
that he had moved on with his life. He reinforced these sentiments several
times. (Underlining added)
15. It was agreed amongst
counsel that minutes of settlement need not be signed and that I would deliver
a consent and draft order for execution and approval by Mr. Eng, together with
a full and final release for execution by Mr. Hagel. (Underlining added)
16. Upon return to my office, I
prepared a draft order and consent, together with a full and final release, and
delivered same by fax to Mr. Eng at 5:13 p.m. on July 20, 2005. A copy of my
correspondence is attached as Exhibit “D” to this my Affidavit.
…
[18] This letter reads as follows:
July 20, 2005
BY FACSIMILE
Michael Eng
Binavince & Associates
600-116 Lisgar Street
Ottawa, ON K2P 0C2
Dear Mr. Eng
Re: Tim
Hagel v. Andrew B. Giles et al
Court
File No. 04-CV-29511SR
Our File No.
T955076
I write at this time to
confirm that this matter has been settled on the following terms:
1.
The action will be dismissed on consent without costs and I have agreed
to take out the Order; and
2.
Your client will execute a Full and Final Release.
I enclose at this time a
copy of the draft Order for your approval as to form and content, together with
a Consent to the Order. I am also enclosing a Release for signature by your
client.
I thank you for your
assistance in bringing this matter to a conclusion.
[19] I return now to paragraph 12 of
Mr. Hagel’s affidavit. I note that Mr. Hagel concedes that he “reluctantly
accepted the proposed resolution.” He goes on to say, however, that he “felt
coerced by the process” and that he was “in a state of despair and hopelessness
and was anxious to leave the building as quickly as possible.” In my opinion,
even if I accept the totality of the foregoing as credible, his feelings do not
vitiate his acceptance of the proposal. No professional evidence was put
before the court on this motion with respect to the Plaintiff being in a state
of despair and hopelessness. In any event, I dare say that Mr. Hagel is not
the first litigant to have similar feelings. In my view, the evidence falls
short of justifying a finding that the settlement should be found to be
unenforceable on the grounds of coercion. No improper conduct is alleged
against the Defendants or their counsel to substantiate the allegation of
coercion.
[20] I do not accept as credible the
Plaintiff’s statement that he “would not have signed any settlement in the
state I was in at the end of the session.” Further, as mentioned above,
counsel for the Plaintiff does not rely on the contents of the last sentence of
paragraph 12 concerning Mr. Eng’s authority. In this regard, I observe that no
affidavit was delivered with respect to Mr. Eng’s personal recollections of
what transpired. The lack of an affidavit from Mr. Eng has had an impact on my
credibility findings.
[21] In paragraph 13 of his affidavit
the Plaintiff deposed as follows:
13. It was later in the day that
I learned from my solicitor, Mr. Binavince, that he had not been informed of
the proposed settlement until sometime after we had left the building. Had I
realized at the time that Mr. Binavince had not been consulted about the
proposed resolution, I would not have indicated a willingness to accept the
proposal.
The timing of Mr.
Binavince’s knowledge of the proposed settlement is irrelevant. I do not
accept Mr. Hagel’s comment that had he known that Mr. Binavince had not been
consulted, he would not have indicated a willingness to accept the proposal.
According to Mr. Hagel’s affidavit, he was represented by counsel who advised
him to settle along the lines proposed by the mediator and the Plaintiff agreed
to do so. That is the clear evidence.
[22] In paragraph 14 of his affidavit
the Plaintiff says:
14. Whatever acceptance I may
have given to the proposal that day, I do not consider that it was voluntary.
I felt under considerable pressure to settle, and I did not have any reasonable
opportunity to reflect upon the arguments presented by the mediator in support
of my withdrawing my claim. I also indicated my acceptance under a
misapprehension that Mr. Binavince was in agreement with the proposal.
Mr. Hagel’s opinion as expressed in paragraph 14 is of
no assistance to the court. There is absolutely no evidence to suggest that he
did not have a reasonable opportunity to reflect upon the mediator’s
arguments. Once again, the absence of an affidavit from Mr. Eng suggests that
what is stated in paragraph 14 is after-the-fact thinking and an attempt to
repudiate the settlement. I make the same comments with respect to paragraph
16 of Mr. Hagel’s affidavit which reads as follows:
16. The
process, as it unfolded at the session, was extremely prejudicial to my
interests and my intentions, and resulted in an outcome that was not voluntary
on my part, for reasons I have explained.
[23] Ms. Mullins delivered her
Mediator’s Report on August 2, 2005. The report, an Ontario government form,
notes that a “complete settlement occurred at the end of the mediation
session.” Ms. Mullins sent the report to Mr. Binavince. In her covering
letter she said: “I enclose the Mediator’s report. This report is in
accordance with the result of the mediation which was that the parties settled
the claim, on terms that the action would be dismissed, on consent, without
costs.” This evidence is found in Ms. Arrigo’s affidavit.
Decision
[24] On the basis of the foregoing
facts, and pursuant to common law principles, I find that there was a
settlement concluded at the mediation. I find that the terms of the settlement
are as indicated by the Defendants. Notwithstanding that this settlement was
reached at a mandatory mediation, I find that there are no facts or legal or
public policy principles upon which I could reasonably exercise my discretion
to withhold a judgment based on the settlement.
[25] The Plaintiff argues that because
the settlement was reached at a mandatory mediation, it is not enforceable
because the settlement does not comply with the requirements of r. 24 of the Rules
of Civil Procedure. As mentioned above, he argues that the mediation was
not a proper one and that, in any event, an oral settlement or agreement
concluded at a mediation is not enforceable.
[26] Since the mandatory mediation
process applied to this action, it is necessary to review the mandatory
mediation rule, r. 24.1. in some detail.
[27] The purpose of mandatory mediation
is to “reduce cost and delay in litigation and facilitate the early and fair
resolution of disputes.” (See r. 24.1.01). The mediator’s role is to “act as
a neutral third party to facilitate communication among the parties to a
dispute, to assist them in reaching a mutually acceptable resolution.” (See r.
24.1.02). The rule does not spell out how the mediator is to accomplish
his/her task; however, the mediator is required to comply with r. 24.1. (See
r. 24.1.08(3)).
[28] Rule 24.1.11(1) states that, “The
parties, and their lawyers if the parties are represented, are required to
attend the mediation session unless the court orders otherwise.” As noted
above, the parties agreed beforehand that the Defendants could attend by way of
telephone conference. No court order was issued on consent or otherwise.
However, in light of the fact that the parties consented to a variation of the
rule, I find that the failure to obtain a court order is irrelevant to the
relief being sought in this motion. In my opinion, the rule would have to
contain clear language to warrant a conclusion that the failure to obtain a
court order vitiates a settlement. There is no such language in the rule.
[29] Rule 24.1.14 states that, “All
communications at a mediation session and the mediator’s notes and records
shall be deemed to be without prejudice settlement discussions.” I have
already dealt with this issue earlier in these reasons. As aforesaid, the
requirement of confidentiality cannot be relied on to prevent a party from
attempting to establish that a settlement was reached at a mediation.
[30] In Rogacki v. Belz 2003 CanLII 12584 (ON C.A.), (2003),
67 O.R. (3d) 330, 232 D.L.R. (4th) 523 (C.A.), Borins J.A. had the following to
say about r. 24.1.14 at para. 18:
By deeming “all communications at a mediation session and the mediator’s
notes and records . . . to be without prejudice settlement discussions”, rule
24.1.14 codifies the principle that communications made without prejudice in an
attempt to resolve a dispute are not admissible in evidence unless they result
in a concluded resolution of the dispute. As such, rule 24.1.14 is a necessary
ingredient of Rule 24.1 as it furthers the public interest in promoting free
and frank settlement discussions by protecting communications for that purpose
from compelled disclosure in subsequent proceedings involving the parties to
the settlement discussions, such as discovery or trial, in circumstances where
the mediation fails to resolve the litigation.
The exception noted by Borins J.A. is pertinent. In
this regard, I note also the words of Lederman J. in Rudd v. Trossacs
Investments Inc., [2004] O.J. No. 2918 (Sup. Ct.) with which I agree:
[14] Borins J.A. expressly stated that the communications are not
admissible “unless they result in a concluded resolution of the dispute” and
there is protection from compelled disclosure “in circumstances where the
mediation fails to resolve the litigation”. By this, he is implying that
mediation privilege is not absolute. If the settlement discussions are,
indeed, successful and result in a consensual agreement, then the
communications may be tendered in proof of a settlement where the existence or
interpretation of the agreement is itself in issue (see, for example, Cross and
Tapper on Evidence, 9th ed., (London: Butterworths, 1999) at p. 469).
[31] Rule 24.1.15(3) states that, “If
there is an agreement resolving some or all of the issues in dispute, it shall
be signed by the parties or their lawyers.” As previously stated, nothing was
signed. Notwithstanding this, Ms. Porter argues that there was an agreement
and that the failure of the parties or their lawyers to sign the agreement does
not vitiate, nullify, or somehow render the agreement unenforceable. On the
other hand, Mr. Reid argues that there is no enforceable agreement unless there
is a signed agreement. In support of his argument he relies on, among other
things, the decision of Lederman J. in Rudd, supra. In Rudd, a
settlement was reached at a mediation. Minutes of settlement were drafted by
the mediator with input from counsel; however, the name of one of the
defendants did not appear on the signature page. The plaintiffs argued that
this was simply due to inadvertence; accordingly the settlement was
enforceable. The defendants denied that the defendant in question was a party
to the settlement. The motion before Lederman J. was for an order rectifying
the minutes of settlement. The plaintiffs also moved for an order requiring
the mediator to give evidence as to what transpired at the mediation session,
including the terms of the settlement reached. Lederman J. held that the
motion should be granted, but with the questions to the mediator being limited
to the mediator’s knowledge and understanding, if any, as to whether the
defendant in question was or was not a party to the settlement agreement. I
fail to see the relevance of Lederman J.’s decision to the issue before this
Court – i.e., whether the lack of signing is fatal to an agreement.
[32] Mr. Reid submits that the
requirement for signing re-enforces the confidentiality of mediations by
avoiding the need for motions such as this one. Mr. Reid claims that this kind
of motion opens up the mediation in a public proceeding and places the mediator
as a witness on one side or the other of the issue between the parties. He
argues that a signed agreement can be enforced on its own terms without
further parol or affidavit evidence of what transpired during the mediation.
There is nothing in the r. 24.1 or the Rudd case that stands for the
propositions that Mr. Reid advances. I do not accept these submissions as
compelling.
[33] There is a large body of common
law precedent permitting a court to enforce an oral settlement under r. 20 and
r. 49.09, as well as beyond the scope of these two rules. Accordingly, to oust
the court’s jurisdiction to enforce an oral settlement under the rules, or otherwise,
would require some very clear language in the mandatory mediation rule. In my
opinion, no such language can be found in the rule. The requirement that the
agreement be signed is a practical rule; however, in my view, the failure to
comply with it does not lead to a conclusion that an agreement reached during
mediation without signatures is an unenforceable agreement.
[34] The terms of the agreement, or
settlement, alleged by the Defendants to exist in this matter are simple and
basic with no ambiguities. It seems to me that the court’s refusal to enforce
this settlement would result in defeating the purpose of the rule and all of
the efforts over many years to encourage settlement between parties.
[35] I also observe that there is no
evidence before the court to demonstrate that the settlement that was concluded
is, in any manner whatsoever, an unreasonable one.
[36] No issue arises in this proceeding
with respect to whether a client is bound by his/her solicitor’s actions on
behalf of his/her client. The evidence before me warrants a finding that the
client himself clearly expressed his acceptance of the settlement proposal.
[37] I also note that there is no
evidence before the court to suggest that anyone made a mistake that might
impact on the issue of whether there was an agreement. In my opinion, the
position Mr. Hagel finds himself in results not from any coercion or mistake,
but from his having second thoughts about the deal he made. Second thoughts do
not constitute a valid reason for refusing to enforce agreements. (See Belanger
v. Southwestern Insulation Contractors Ltd., [1993] O.J. No. 3095 (Gen.
Div.); Stoewner v. Hanneson, [1992] O.J. No. 697 (Gen. Div.); and Trembath
v. Trembath, [1993] O.J. No. 202 (Gen. Div.)).
[38] Mr. Reid argues that the provisions
of r. 24.1.15(5) are relevant. It says:
Failure to Comply with Signed Agreement
(3) Where
a party to a signed agreement fails to comply with its terms, any other party
to the agreement may,
(a)
make a motion to a judge for judgment in the terms of the agreement, and
the judge may grant judgment accordingly; or
(b)
continue the action as if there had been no agreement.
[39] I understand his submission to be
that sub-rule (5) leads to the conclusion that a court can enforce an agreement
reached at mediation only if it is “a signed agreement”. However, I do not
read the rule in that fashion. The sub-rule is a permissive rule. Again, it
would require strong language to jump to a conclusion that the intent of the
drafters of the rule was to displace all of the existing common law precedents
as well as the provisions of r. 20 and r. 49. Similarly, I do not accept as
compelling the argument of counsel for the Plaintiff that “the refusal of a
party to sign an agreement is evidence that the mediation did not succeed in reaching
a voluntary, mutual acceptable settlement.” Even if it can be said that the
lack of a signature is some evidence that no settlement was reached, the other
evidence in this case is much stronger and compelling in support of an opposite
conclusion – i.e., that there was a settlement concluded between the parties.
Conclusion
[40] In conclusion, the Defendants are
entitled to judgment in accordance with the settlement effected between the
parties. Accordingly, the action is dismissed without costs and the Plaintiff
will execute a full and final release of the Defendants.
Costs
[41] In the event that within 30 days
from the release of these Reasons for Decision the parties are unable to
conclude an agreement with respect to legal costs, they may make brief written
submissions to me.
___________________________
Power J.
Released: February
14, 2006
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