



COURT OF APPEAL FOR ONTARIO

CITATION: 1220510 Ontario Inc. v. Radium-O Developments Ltd.,
    2017 ONCA 490

DATE: 20170613

DOCKET: C63210

MacPherson, Blair and MacFarland JJ.A.

BETWEEN

1220510 Ontario Inc.

Applicant/Respondent
    by

Counter-Application (Respondent)

and

Radium-O Developments Ltd.

Respondent/

Counter-Applicant
    (Appellant)

Gregory Gryguc, for the appellant

Leonardo Mongillo and Sim Chahal, for the respondent

Heard: June 12, 2017

On appeal from the judgment of Justice Ruth E. Mesbur of
    the Superior Court of Justice, dated December 15, 2016.

REASONS FOR DECISION

[1]

The appellant Radium-O Developments Ltd. appeals from the judgment of
    Mesbur J. of the Superior Court of Justice dated December 15, 2016. In her
    judgment, the motion judge enforced a settlement between the parties.

[2]

The respondent 1220510 Ontario Inc. lent $6,000,000 to the appellant in
    a vendor take back mortgage. The mortgage matured on May 7, 2016. The appellant
    had not paid the principal owing and was in default as of that date. The
    respondent started an application for the appointment of a receiver.

[3]

After some negotiations, the respondent made a settlement offer for a
    total amount of $6,162,950.45. This amount included principal, interest, three
    months interest compensation, receivership and legal fees, other fees and
    taxes. The payment had to be made in full by July 8, 2016. The offer contained
    this condition:

[I]f there are any reservations, conditions, qualifications or
    protests attached to the Total Amount Due the payment shall be rejected and
    returned. Payment unreservedly of the Total Amount Due (above) by your and
    acceptance by my client, shall constitute a full and final consensual waiver by
    your client of your clients rights thereafter, if any, to make any
    re-imbursement claim, litigation related or otherwise, for the Total Amount Due
    (above), or any part, portion or fractional amount thereof, to be returned,
    recovered, repaid, assessed, reconsidered or in any way whatsoever recouped in
    favour of your client the defaulting mortgagor.

[4]

On July 8, 2016, the appellant paid the full amount and asked for a
    discharge. The respondent discharged the mortgage.

[5]

On July 11, the appellant disputed the amount charged, specifically the
    legal fees and discharge costs. On August 8, the appellant delivered a costs
    assessment notice. On August 12, the appellant commenced a counter-application
    seeking to be relieved of paying the three months interest compensation and
    receivership costs.

[6]

The respondent moved to enforce the settlement. The motion judge granted
    the motion. With respect to the appellants position, she said:

The respondent cannot now keep the benefit of the discharge and
    protest, after the fact how much was paid. The terms of the offer were clear.
    The respondent accepted them, delivered the funds without condition or protest,
    and took the benefit of the discharge.

[7]

The appellant appeals on two grounds.

[8]

First, the appellant asserts that the motion judge erred in finding that
    there was a settlement because the transaction was unconscionable; the
    appellant had no choice but to pay and the respondent used its position to
    charge for extra fees and costs.

[9]

We do not accept this submission. An agreement to settle an action is a contract.
    Here there was offer and explicit acceptance. Moreover, the appellant received
    the consideration it bargained for  a discharge of the mortgage.

[10]

Second, the appellant contends that the motion judge erred by approving
    the costs and fees relating to the respondents steps in pursuit of the
    appointment of a receiver. These costs and fees, say the appellant, are in the
    nature of a penalty and violated s. 8 of the
Interest Act
, R.S.C.
    1985, c. I-15.

[11]

Again, we are not persuaded by this submission. The steps taken to
    potentially appoint a receiver were entirely reasonable in light of the
    appellants default. And the three months interest compensation did not
    violate s. 8 of the
Interest Act
: see
Mastercraft Properties Ltd.
    v. EL EF Investments Inc.
(1993), 14 O.R. (3d) 519 (C.A.) and
Irwin
    Mintz, In Trust v. Mademont Yonge Inc. and Paul Montgomery
, 2010 ONSC 116.

[12]

The appeal is dismissed. The respondent is entitled to its costs of the
    appeal fixed at $20,000, inclusive of disbursements and HST.

[13]

For the sake of completeness, and in accordance with the agreement of
    the parties, we confirm that the costs assessment in the Superior Court of
    Justice is now moot.

J.C. MacPherson J.A.

R.A. Blair J.A.

J. MacFarland J.A.


