2009 BCSC 20 Moore v. Sundquist

Before: The Honourable Mr. Justice Williamson

Reasons for Judgment

Counsel for the Plaintiff:	R. Shaw
Counsel for the Defendant:	L. Giustra
Date and Place of Trial/Hearing:	January 7, 2009
	New Westminster, B.C.

[1] The plaintiff seeks an order that the settlement agreement she says was reached between counsel for the plaintiff and counsel for the defendant in November 2008 be enforced. The defendant says there was no agreement, and that if there was ever any agreement, that the agreement was repudiated by the plaintiff.

[2] This matter arises out of a motor vehicle accident which took place in British Columbia in March 2004. The defendant driver was a citizen of the United States of America and was insured by an American insurance company, Progressive Insurance Corporation (“Progressive”).

[3] The matter was to be heard by a jury, and the trial was scheduled for November 24, 2008. However, on November 18, 2008, after lengthy discussions and a mediation attempt, counsel for the defendant sent an email to counsel for the plaintiff confirming:

. . . that we have settled Mrs. Moore’s claims for $79,605.50 Cdn plus costs of no more than $19,767.13. We will arrive at a final figure for costs once you deliver your draft Bill of Costs or a reasonable summary of your costs and disbursements today.

[4] On the following day, November 19, counsel for the defendant confirmed the offer in the following terms:

I have instructions to accept your offer to settle the costs. The adjuster will be forwarding to your office a cheque in the sum of $97,936.70 Cdn to cover the settlement including costs. The funds will be sent on your undertaking not to release any part of them to the plaintiff until the Release and Consent Dismissal Order that I plan to fax to you today are fully executed, and on your further undertaking to return the executed documents to me as soon as reasonably possible.

[5] On the same day, counsel for the defendant forwarded to counsel for the plaintiff a release and consent dismissal order.

[6] On November 21, 2008, counsel for the plaintiff wrote to counsel for the defendant stating that her client was not prepared to execute the release because it referred to a “Part VII action”. It stated that the defendant was released from all claims:

…for benefits covered under Part 7 of the Revised Regulation (1984) to the Insurance (Motor Vehicle) Act or Insurance (Vehicle) Act and the Insurance (Vehicle) Regulation.

[7] The plaintiff had commenced a separate action against the Insurance Corporation of British Columbia claiming certain Part 7 benefits. The Writ of Summons and Statement of Claim in that proceeding were filed February 28, 2006. It appears the plaintiff wished to be able to continue the action against ICBC regardless of the settlement of this action against the defendant Sundquist who was, of course, not insured by ICBC, but by Progressive. Counsel for the defendant took the position that when the settlement was negotiated, it was expected to be a full and final settlement of all claims arising from the accident. The concern of counsel for the defendant was that if the plaintiff were successful in its Part 7 claim against ICBC, that it could open Progressive, or the defendant, to a claim by ICBC for reimbursement.

[8] Thus, the release specifically stated that the plaintiff would “release and forever discharge the releasees from any and all actions, claims, and demands” and included, as noted above, an express reference to any claim for benefits covered under Part 7. This was a reference to the parallel action commenced by the plaintiff against ICBC.

[9] The plaintiff declined to sign a release with such a provision. Counsel for the plaintiff wrote to counsel for the defendants stating that at no time during the subject litigation was there any mention or discussion of the Part 7 action and that the plaintiff was of the view that there should be no bar to her pursuing that litigation.

[10] As a result, counsel for both parties entered into discussions as to how to resolve this impasse.

[11] Counsel for the plaintiff took the position that the plaintiff should be free to continue her action against ICBC. Counsel for the defendant was not opposed to that, but said that course must be taken with “the view to protecting my clients against further claims that might be made against them as a result of this accident”.

[12] As part of the continuing discussions between counsel, counsel for the defendant was referred to counsel for ICBC in the Part 7 action. Indeed, counsel for the plaintiff put forward a suggestion as to how the matter might be resolved. She advised counsel for the defendant that the plaintiff was seeking $7,000 to settle the Part 7 action. She suggested counsel for the defendant enter into discussions with ICBC. The point of this suggestion was that if the Part 7 matter could be settled, the impediment to the execution of an appropriate release to give effect to the previously negotiated settlement might be removed.

[13] On December 1, 2008 counsel for the plaintiff sent an email to counsel for the defendant. In that email, she stated the following:

I advised that the Plaintiff was seeking $7,000.00 all in to settle the Part 7 matter. I suggested earlier to counsel for ICBC (Sandy McQuarrie at ICBC) that he discuss settlement with you. When you and I spoke on Friday, you had not talked to Sandy. Given my client’s position, I suggested that you each pay half. I did not suggest that your client pay $3,500 and then she would sign a Release with the current terms prohibiting her from proceeding with the Part 7 claim.

My client will sign a full release once she has been compensated for Part 7’s in the sum of $7,000.00, how that sum is divided between your client and ICBC is up to you and Mr. McQuarrie.

[14] The plaintiff relies upon Cellular Rental Systems Inc. v. Bell Mobility Cellular Inc., [1995] O.J. No. 721 (Ct. J. (Gen. Div.)). At para. 24 of that decision, Chapnik J. stated:

It is well established that settlement implies a promise to furnish a release unless there is agreement to the contrary. On the other hand, no party is bound to execute a complex or unusual form of release: although implicit in the settlement, the terms of the release must reflect the agreement reached by the parties. This principle accords with commons sense and normal business practice.

[15] And further, at para. 36, the learned judge stated:

The onus is on the party claiming repudiation to show that the disagreement consequent upon the settlement constitutes a repudiation of it. Subsequent disputes should be resolved by application to the court or by common sense within the framework of the settlement to which the parties have agreed and in accordance with the common practices which prevail amongst members of the bar. It will be rare for conduct subsequent to a settlement agreement to amount to repudiation.

[16] In so stating, Chapnik J. referred to a decision of McEachern C.J.B.C. in Fieguth v. Acklands Ltd. (1989), 59 D.L.R. (4th) 114, 37 B.C.L.R. (2d) 62 (C.A.). In Fieguth, the Chief Justice noted that once there has been an agreement, one party can tender whatever documents thought appropriate to complete the agreement without actually rescinding the settlement. At page 121, the Chief Justice stated:

If such documents are accepted and executed and returned then the contract, which has been executory, becomes executed. If the documents are not accepted then there must be further discussion but neither is released or discharged unless the other party has demonstrated an unwillingness to be bound by the agreement by insisting upon terms or conditions which have not been agreed upon or are not reasonably implied in these circumstances.

[17] Here, the release documents were not accepted. There was further discussion. The question is, in the words of McEachern C.J.B.C. as stated above, has one party demonstrated an unwillingness to be bound by the agreement by insisting upon terms or conditions which have not been agreed upon or are not reasonably implied?

[18] I conclude that is the circumstance here. The parties appear to have agreed to settle the matter for $97,936.70 Cdn. However, when the necessary documents, in particular the release, was forwarded to counsel for the plaintiff, the plaintiff declined to execute the release unless something was done about the plaintiff’s right to continue with the other action against ICBC.

[19] I have referred to the December 1, 2008, email from counsel for the plaintiff to counsel for the defendant. In my view, the wording of it is clear. It states “my client will sign a full release once she has been compensated for Part 7’s in the sum of $7,000”. In other words, the plaintiff took the position that she would not complete the November 19 agreement unless she was paid an additional $7,000 or, presumably, the defendant agreed that she could continue her action against ICBC. I conclude that to take such a position is to repudiate the agreement allegedly reached on November 19.

[20] In the circumstances, the plaintiff’s application is dismissed. The defendant will have its costs.

“The Honourable Mr. Justice Williamson”

Citation:	*Moore v. Sundquist,*
	2009 BCSC 20