



COURT OF APPEAL FOR ONTARIO

CITATION:

Srebot v. Srebot
    Farms Ltd., 2013 ONCA 84

DATE: 20130211

DOCKET: C54246

Cronk, LaForme and Hoy JJ.A.

BETWEEN

Michael John Srebot

Plaintiff (Respondent)

and

Srebot Farms Ltd., Joseph Edward Srebot,
CCNE Investments Inc.
, and Steven M. Mucha

Defendants (Appellants)

David Rubin, for the appellants

Orie H. Niedzviecki and Evelyn Perez-Youssoufian, for
    the respondent

Heard: February 5, 2013

On appeal from the judgment of Justice Sandra Chapnik of
    the Superior Court of Justice, dated July 26, 2011.

ENDORSEMENT

[1]

The trial of various issues in this matter was directed by Grace J. of
    the Superior Court of Justice by order dated May 14, 2010.  Following the trial
    of those issues, the trial judge, in the exercise of her discretion under rule
    49.09 of the
Rules of Civil Procedure
, declined to enforce the terms
    of a settlement concluded by the parties at a mediation session, instead directing
    that the lawsuit between the parties continue as if there had been no
    settlement.

[2]

In our view, it is unnecessary for the disposition of this appeal to
    address all the appellants complaints regarding the trial judges decision. 
    During oral argument, the focus of the appellants challenge of the trial
    judges ruling was narrowed significantly.  As argued, the appellants
    essentially allege that the trial judge erred: (1) by making numerous factual
    errors occasioned by her misapprehension of the evidence, her failure to
    consider relevant evidence and her uncritical acceptance of evidence favourable
    to the respondent, to the exclusion of that favourable to the appellants; and
    (2) by finding that the settlement was unreasonable and that its enforcement
    would result in a real injustice to the respondent.  In the particular
    circumstances of this case, we would not give effect to these arguments.

[3]

The trial judges reasons indicate that she properly understood and
    correctly applied the governing principles guiding the exercise of her
    discretion under Rule 49.09.  She reviewed the evidence in detail, finding that
    a settlement agreement had been reached at the mediation, the terms of which
    were clear, specific and unequivocal.

[4]

However, the trial judge also evaluated the evidence concerning the
    respondents state of mind and condition at the time of the settlement, the
    truncated and brief nature of the mediation and the respondents alleged lack
    of understanding of what was agreed upon at the mediation, as well as the consequences
    of the settlement.

[5]

The trial judges appreciation of the evidence and her related factual
    findings attract great deference from this court.  In our view, contrary to the
    appellants submission, any misapprehension of the evidence by the trial judge
    does not reach the level of palpable and overriding error and, hence, does not
    taint the exercise of her discretion to decline to enforce the settlement.  Evidentiary
    support exists for the trial judges critical factual findings.  For example,
    the respondent provided evidence in his testimony sufficient to ground the
    trial judges impugned finding that he was both stressed and emotional at the
    time of the mediation.  While there was also evidence to the contrary on this
    issue, it was for the trial judge to determine which evidence to credit.

[6]

The discretionary decision not to enforce a concluded settlement,
    especially where the settlement has been partially or fully performed, should be
    reserved for those rare cases where compelling circumstances establish that the
    enforcement of the settlement is not in the interests of justice.  The trial
    judges reasons indicate that she was alive to this issue.  On the facts as she
    found them, the trial judge concluded that this is one of those rare cases.  We
    see no basis for appellate interference with this conclusion.

[7]

Importantly, we note that the appellants led no evidence of any
    particular prejudice arising from their acts of performance under the
    settlement.  On the contrary, they candidly acknowledged before this court that
    they suffered no financial prejudice from implementation of the settlement.

[8]

Further, in our opinion, the appellants post-settlement adjustment of
    the characterization, for tax purposes, of the nature of the underlying share
    transaction at issue does not prevent the appellants from fully defending the
    allegations in the respondents statement of claim.

[9]

Nor do we accept that the steps taken by the parties after the
    settlement had the effect of granting the respondent the substance of the relief
    sought by him in his pleading.  While resolution of the contested tax issue,
    pleaded as alternative relief in the respondents statement of claim, was in
    fact resolved by the post-settlement actions of the parties, this does not
    respond to the respondents additional damages claims as detailed in his
    pleading.

[10]

At
    the end of the day, the critical issue in this case was whether, on
    consideration of all the relevant factors disclosed by the evidence, the
    enforcement of the settlement would lead to clear injustice: see for example,
Royal
    Bank v. Central Canadian Industrial Inc.
, 2003 CarswellOnt.
5214 (Ont. C.A.);
Milios v. Zagas
(1998), 38 O.R. (3d) 218
    (C.A.).
The trial judge concluded that in the circumstances of this
    emotionally-charged case, arising from the unfortunate estrangement of two
    brothers following a dispute concerning their respective interests in the
    family farming business, the interests of justice demanded that the settlement
    not be enforced and that the respondents action continue.  This was her call
    to make.

[11]

Accordingly,
    the appeal is dismissed.  The respondent is entitled to his costs of the appeal,
    fixed in the amount of $12,500, inclusive of disbursements and all applicable
    taxes.

E.A. Cronk J.A.

H.S. LaForme J.A.

Alexandra Hoy J.A.


