



COURT OF APPEAL FOR ONTARIO

CITATION: Chatsikiriakos v. Kilislian, 2020
    ONCA 378

DATE: 20200612

DOCKET: C67935

Doherty, Hourigan and Fairburn
    JJ.A.

BETWEEN

Kathy Chatsikiriakos

Plaintiff (Respondent/Appellant by
    Cross-Appeal)

and

Rita Kilislian and Rita
    Kilislian Dentistry Professional Corporation, C.O.B. as Downtown Dental
    Associates

Defendants (Appellants/Respondents by
    Cross-Appeal)

Mark H. Arnold, for the respondent (plaintiff)

Avrum D. Slodovnick, for the appellants
    (defendants)

Heard: In-writing

On appeal from the judgment of Justice Cavanagh
    of the Superior Court of Justice, dated December 23, 2019

REASONS FOR DECISION

[1]

The appellants (Kilislian) were defendants in
    a wrongful dismissal action brought by the respondent (Chatsikiriakos). It
    appeared the parties had settled the action on the eve of trial. When the
    settlement funds were not forthcoming, the respondent brought a motion under r.
    49.04 of the
Rules of Civil Procedure
for judgment in the terms of the
    settlement. The motion judge granted judgment. The appellants appeal from that
    judgment.

[2]

The motion judge also fixed the costs of the
    action on a partial indemnity basis in favour of the respondent in the amount
    of $51,557.12. The respondent seeks leave and, if leave is granted, appeals
    from that costs order.

[3]

For the reasons that follow, the appeal is dismissed,
    and the motion for leave to appeal costs is dismissed.

[4]

The appellants operated a dental practice. The
    respondent worked at the practice as a dental hygienist. The respondent claimed
    in about April 2017, the appellants proposed to unilaterally and fundamentally alter
    the terms of her employment, including her compensation. She eventually
    commenced a lawsuit, alleging constructive wrongful dismissal.

[5]

The appellants defended on various grounds. They
    alleged there had been no material change in the respondents working
    conditions, and the respondent had indicated she was anxious to continue her employment.

[6]

The respondent served two Offers to Settle on
    the appellants, one in April 2018 and the second in May 2018. In May 2019, right
    before the trial was scheduled to begin, the appellants accepted the second
    offer made a year earlier. That offer had two terms:

·

payment to the plaintiff of
$75,000
(emphasis in the original); and

·

costs to the plaintiff in an amount to be agreed
    upon by counsel or following an assessment.

[7]

The appellants, through counsel, unequivocally
    accepted the offer. In accepting the offer, counsel for the appellants
    indicated, we consider the case settled.

[8]

The parties advised the trial court the matter
    had been settled and made arrangements to speak to costs. In June 2019, about
    one month after the appellants had accepted the settlement offer, counsel for
    the appellant advised the trial court the settlement was in place and he
    expected to be in funds that day. The funds were not paid to the respondent.

[9]

On the motion, the appellants argued that
    judgment should not issue in the terms of the settlement agreement for two
    reasons. First, the terms of the purported settlement were uncertain and did
    not contain terms essential to the settlement. The appellants submitted, in the
    settlement of wrongful dismissal claims, the classification under various heads
    of damages of the amount paid in the settlement is an essential element of the
    settlement agreement. Without that classification, the agreement to pay $75,000
    to settle the claim, did not constitute a settlement agreement.

[10]

Second, the appellants argued, if there was a
    settlement agreement, the motion judge should exercise his discretion and
    decline to enforce the agreement on public policy grounds. The appellants
    submitted, among other things, the manner in which the respondent litigated the
    claim, in particular the use of threats and misrepresentations to intimidate
    and defame Mr. Curnew, the husband of Rita Kilislian, required the court to
    reject the settlement which was the product of those tactics.

[11]

The motion judge considered and rejected the
    arguments. The same arguments are renewed on appeal. We, too, reject them.

Did the agreement contain the essential terms
    of the settlement?

[12]

It cannot be argued the classification of the
    amount of a settlement into various heads of damages is always an essential
    element of any agreement to settle a wrongful dismissal claim. This court has
    held the exact opposite:
Perri v. Concordian Chesterfield
, 2003
    CarswellOnt 6240, aff 2004 CanLII 2904.

[13]

A settlement is an agreement. The categorization
    of the parts of the settlement under various heads of damage may or may not be
    an essential term of any particular settlement agreement. In the present case,
    there was nothing in the language of the Offer to Settle, or in the terms of
    the appellants acceptance of the offer to suggest the characterization of the
    amounts of the settlement under various damage heads was essential to, or played
    any part in, the agreement. Nor do any of the communications by the parties with
    the trial court, immediately after the settlement, lend any credence to the
    appellants assertion they regarded the characterization of the amounts of the
    settlement under various heads of damage as essential to the existence of the
    agreement they had entered into on the advice of counsel.

[14]

The two emails relied on by the appellants do
    not assist their argument. The first, dated May 19, 2019, specifically acknowledges
    the $75,000 settlement and goes on to propose a variation of that settlement.
    The variation in the settlement agreement proposed by the appellants addresses
    various concerns, including costs of the action, and the allocation of the
    settlement amounts as aggravated and moral damages.

[15]

The June 21, 2019 email also offers no support
    for the position there was no settlement agreement. Instead, in that email, counsel
    for the appellants suggests certain advantages to both parties in characterizing
    the amount agreed upon in the settlement in the manner suggested by counsel for
    the appellants.

[16]

There was nothing vague or uncertain about the terms
    of the settlement agreement. The appellants agreed to pay the respondent
    $75,000. The tax or other regulatory consequences of that payment, if any, to
    either party, were not any part of the negotiations leading up to the agreement.
    The absence of terms designating the settlement amount under various heads of
    damage had no impact on the existence or enforceability of the settlement
    agreement.

Should the motion judge have refused to
    enforce the settlement on public policy grounds?

[17]

A court has a discretion to decline to enforce a
    settlement agreement on public policy grounds. That discretion is exercised
    sparingly. The moving party must demonstrate sufficiently compelling
    circumstances to justify the inevitable negative impact non-enforcement of an
    agreement will have on both the finality principle and the reasonable
    expectations of litigants who enter into settlement agreements.

[18]

As with the exercise of any discretionary power,
    this court will defer to the motion judges exercise of his discretion, absent
    demonstration of:

·

a clearly unreasonable result;

·

a material misapprehension of the evidence, or a
    failure to consider material evidence; and

·

a failure to correctly apply the controlling
    legal principles.

[19]

The motion judge addressed the arguments put
    forward by the appellants for non-enforcement, some of which are renewed in
    this court (reasons, paras. 10-15). He concisely and clearly rejected each. In
    doing so, he made his reasons for rejecting the arguments clear. For example,
    in addressing the argument the respondent had threatened prosecution of the
    appellants and Mr. Curnew, the motion judge observed the so-called threat
    consisted of one word in a lawyers letter sent long before the respondent made
    any settlement offer, and more than two years before the appellants accepted
    the settlement offer.

[20]

The motion judge also noted the absence of any
    evidence from Mr. Curnew on the motion. Mr. Curnew did not provide evidence
    that he was intimidated or coerced by the respondents litigation tactics, or
    that those tactics motivated him to encourage or advise the appellants to
    accept the settlement offer.

[21]

The appellants have not convinced us we should
    override the motion judges exercise of his discretion. In seeking to avoid the
    consequences of their settlement agreement, the appellants focused on the
    respondents litigation tactics. The respondent pointed the finger right back
    at the appellants and their litigation tactics. This litigation was personal
    and quickly became nasty. There is plenty of blame to go around on both sides
    for this unfortunate development. However, the tone of the litigation, the product
    of conduct on both sides, offers no reason to permit the appellants to walk
    away from their agreement to settle the claim and thereby deny the respondent
    the benefit of that agreement negotiated by the parties and their lawyers.

The motion for leave to appeal costs

[22]

The respondent seeks leave to appeal the costs
    order made in respect of the settled action. There is no appeal from the costs
    order on the r. 49 motion.

[23]

This court grants leave to appeal costs
    sparingly. The respondent advances two submissions in support of the leave
    application. The respondent submits the motion judge erred in law by
    effectively refusing to consider whether the respondent was entitled to costs
    on a substantial indemnity basis. The respondent further submits, even if the motion
    judge properly held costs should be on a partial indemnity basis, he erred in
    awarding an amount substantially less than the amount claimed by the respondent
    without providing adequate reasons for doing so.

[24]

The motion judge did not refuse to consider the
    respondents claim for costs on a substantial indemnity basis. He acknowledged
    the respondent sought costs on that scale (reasons, para. 20). In refusing
    costs on a substantial indemnity basis, the motion judge noted the action was
    settled, obviously an important consideration in fixing costs of the action. The
    motion judge also determined he could not, on the record before him, make the
    kind of detailed credibility-based factual findings necessary to warrant costs
    on a substantial indemnity basis. In short, the record produced by the
    respondent and the forum chosen by the respondent to litigate costs did not lend
    themselves to the kind of analysis and fact-finding required to justify costs on
    a substantial indemnity basis.

[25]

Contrary to the respondents submission, the
    motion judge did consider whether he should order costs on a substantial
    indemnity basis. The reasons he gave for declining to do so were relevant to that
    determination, and supported by the evidence. It was for the motion judge to
    decide how much weight to give to those factors. We see no reason to grant
    leave on this issue.

[26]

The other argument advanced by the respondent addresses
    the quantum of the partial indemnity costs order made by the motion judge. The respondent
    contends the motion judge substantially reduced the quantum without providing
    any reasons.

[27]

The motion judge offered the following reasons
    for the quantum fixed in his costs order:

·

the action was settled (para. 22);

·

the action was brought under the simplified
    rules. The factual and legal issues were not complex (para. 27);

·

the manner in which the litigation was conducted
    contributed to the amount of time expended by counsel for the plaintiff (para.
    27); and

·

the time claimed by counsel for the plaintiff
    was far higher than is reasonable and proportionate having regard to the
    factors in r. 57.01 (para. 27).

[28]

The respondent suggests the motion judges
    reference to the manner in which the litigation was conducted referred only to the
    manner in which the appellants conducted the litigation. That is incorrect. The
    motion judges reference to the time claimed by plaintiffs counsel as being far
    higher than is reasonable and proportionate follows directly after his
    reference to the manner in which the litigation was conducted. Clearly, the
    motion judge was referring to both sides when he alluded to the conduct of the
    litigation.

[29]

In fixing costs, the motion judge correctly identified
    the objective as an amount that is fair and reasonable for the unsuccessful
    party to pay in the particular proceedings (reasons, para. 26). The factors
    identified by the motion judge in fixing that reasonable amount provided a firm
    basis upon which to move significantly downward from the amount claimed by the
    respondent on a partial indemnity basis. We see no reason to interfere with his
    assessment. We will not grant leave to appeal costs on this issue.

[30]

Leave to appeal costs is refused.

Costs of the appeals

[31]

The respondent was successful on the main
    appeal. The appellants were successful on the cross-appeal on costs. Both
    successful parties are entitled to their costs on a partial indemnity basis.

[32]

A review of the material indicates that the
    materials and issues relevant to the main appeal were somewhat more involved
    than those relating to the cross-appeal on costs. We will make an order as to
    costs on the main appeal that takes into account the appellants entitlement to
    costs on the cross-appeal.

[33]

The respondent shall have her costs on the main
    appeal in the amount of $7,000, inclusive of taxes and disbursements. There
    shall be no order as to costs on the cross-appeal.

Doherty J.A.

C.W. Hourigan J.A.

Fairburn J.A.


