



COURT OF APPEAL FOR ONTARIO

CITATION: Buccilli v. Pillitteri, 2014 ONCA
    337

DATE: 20140429

DOCKET: M43697 (C56408)

Rouleau J.A. (In Chambers)

BETWEEN

Patricia Buccilli and Drapery Interiors Etc. Inc.

Plaintiffs (Respondents)

and

Pasquale Pillitteri also known as Pat Pilliteri,
    Christina Pilliteri, Patron Contracting Limited also known as CDC Contracting,
    Birchland Homes Inc. and Vendrain Inc.

Defendants (Appellants)

Anna Husa, for the appellants

M.R. Kestenberg, for the respondents and moving parties
    on cross-motion to enforce a settlement

Terrence OSullivan, for the proposed intervenors, Retano
    (Ron) Ventura and 1796248 Ontario Inc.

Heard: April 25, 2014

On motion for leave to intervene as parties on the appeal
    from the judgment of Justice Frank J.C. Newbould of the Superior Court of
    Justice, dated November 23, 2012, with reasons reported at 2012 ONSC 6624, and
    cross-motion to enforce a settlement.

Rouleau J.A.:

[1]

These reasons deal with both the motion for leave to intervene and the cross-motion
    to enforce a settlement. The motion for leave to intervene is brought by Renato
    Ventura (Ron), brother and brother-in-law of, respectively, Christina
    Pillitteri (Christina) and Pat Pillitteri (Pat), the individual appellants
    on the underlying appeal. Ron moves for leave to intervene, seeking party
    status in the appeal for himself personally and for 1796248 Ontario Inc.
    (179), a company he owns and controls. That motion is opposed by Patricia
    Buccilli (Patricia) and her company Drapery Interiors Etc. Inc. (Drapery
    Interiors), respondents on the appeal, who bring a cross-motion pursuant to rule
    49.09 of the
Rules of Civil Procedure
, R.R.O. 1990, Reg. 194, to
    enforce an alleged settlement of the proposed motion for leave to intervene.

[2]

For the following reasons, the motion for leave to intervene is granted
    and the cross-motion dismissed.

BACKGROUND IN BRIEF

[3]

The underlying dispute concerns a family business. Patricia was married
    to Lorenzo Ventura (Enzo), Rons brother. Enzo, Ron, and Pat owned and
    operated Patron Contracting Limited, also known as CDC Contracting (CDC), and
    Birchland Homes Inc. (Birchland). Each was a one-third shareholder in CDC and
    Birchland.

[4]

In September 1998, Enzo died in a construction accident. Patricia inherited
    her late husbands estate and thus became a one-third shareholder in CDC and
    Birchland.

[5]

In June 2001, Patricia entered into a transfer agreement with Christina,
    transferring to her, in trust, Enzos one-third interest in CDC and Birchland,
    as well as his interest and ownership rights in various real estate holdings.
    Subsequently, that one-third interest in CDC and Birchland, formerly held by
    Enzo, was transferred half and half to Ron and Pat, respectively. Rons shares
    in CDC are now held by 179; he continues to hold his shares in Birchland
    personally.

[6]

In 2008 Patricia brought an action against Christina, Pat, CDC, and
    Birchland, seeking to have the transfer agreement set aside. Neither Ron nor
    179 were parties to the action.

[7]

In accordance with a bifurcation order dated October 26, 2009, a trial
    on liability was to proceed first, followed if necessary by a trial on damages.
    Following the trial on liability, the trial judge released his reasons on
    November 23, 2012, finding in favour of the respondents (Patricia and Drapery
    Interiors). In the judgment that issued pursuant to these reasons, the trial
    judge orders, in part, that the transfer agreement of June 2001 is set aside,
    that Patricia is entitled to a one-third (1/3) interest in CDC Contracting and
    Birchland Homes Inc. and of all money, benefits and opportunities withdrawn or
    diverted by Christina Pillitteri or Pat Pillitteri, either directly or
    indirectly, from CDC and Birchland, and that an accounting is to be taken to
    determine Patricias entitlement. The appellants filed a Notice of Appeal on
    December 20, 2012.

[8]

By orders dated April 9 and 17, 2013, the trial judge appointed Ernst
    & Young (E & Y) as court expert to help perform the accounting of
    Patricias entitlement pursuant to the judgment, with E & Ys invoices to
    be submitted to CDC. When the invoices submitted by E & Y ran considerably
    over the agreed-upon budget, the appellants filed a motion for a stay pending
    the outcome of the appeal. Ron supported the appellants on that motion and made
    submissions to that effect.

[9]

In September 2013 Ron told the respondents that he intended to intervene
    in the appeal. He would, however, wait to see the terms of the formal judgment
    before deciding. That judgment was not settled until January 2014.

[10]

On
    November 29, 2013, Gillese J.A. granted the motion for a stay pending
    disposition of the appeal. At para. 27, she stated the following with respect
    to Ron: Although Ron is not a party to the proceedings, the liability trial
    decision has had a direct impact on his rights and interests.

[11]

In
    February 2014, Ron prepared materials for the purpose of filing a motion to
    intervene. The motion was not filed at that time, but counsel for Ron had some
    discussions with counsel for Patricia about the possibility that it would be
    filed. On March 20, 2014, counsel for Ron sent a letter to counsel for Patricia
    explaining Rons concerns that the trial judges liability judgment could be
    interpreted as affecting Rons ownership of shares in CDC and Birchland.
    Counsel for Ron made the following proposal to counsel for Patricia:

Will your client agree that, to the extent Justice Newboulds
    judgment is interpreted as transferring Mr. Venturas shares, it should be
    scaled back so that it does not have that effect? If so, then there would no
    longer be a need for Mr. Ventura to intervene, and he is willing to withdraw
    his intervention motion provided that you undertake to advise the panel of the
    basis for doing so.

[12]

The
    following day, March 21, 2014, counsel for Patricia responded, in part:

I wish to confirm that our client has agreed to the terms of
    your letter, in particular the second last paragraph of your letter such that
    our client agrees that to the extent that Justice Newboulds judgment is
    interpreted as transferring Mr. Venturas shares it will be scaled back on
    consent so that it does not have that effect.

[13]

Shortly
    after this exchange, counsel for the appellants advised that although the
    appellants position on appeal is that it was improper for the judgment to
    affect Ron and 179, there would be no agreement as to what scaling back might
    mean and the appellants would oppose any order on appeal that varied the
    judgment only with respect to its effect on Ron and 179.

[14]

On
    April 2, 2014, counsel for Ron wrote to counsel for Patricia stating that, on
    further reflection, he was not persuaded that we can protect the interests of
    our client without being present at the Court of Appeal. On April 7, 2014, counsel
    for Ron served notice of the present motion for leave to intervene.
    Specifically, the motion seeks to have Ron and his company, 179, added as
    parties to the appeal. Patricia filed a cross-motion pursuant to rule 49.09,
    seeking to enforce the purported agreement not to intervene, on the ground that
    it was an accepted offer to settle the motion, within the meaning of Rule 49.

ISSUES

[15]

The
    issue before the court is whether, in light of the criteria set out in rule
    13.01, Ron and 179 ought to be granted leave to intervene as added parties in
    the appeal. In reaching my decision I need to consider whether the respondents
    accepted an offer to settle from, or otherwise reached an enforceable agreement
    with, Ron such that Ron and 179 should be precluded from moving to intervene
    pursuant to rule 13.01.

ANALYSIS

[16]

Rule
    13.01 provides:

13.01
(1) A person who is not a party to a
    proceeding may move to intervene as an added party if the person claims,

(a) an interest in the subject
    matter of the proceeding;

(b) that the person may be
    adversely affected by a judgment in the proceeding; or

(c) that there exists between the
    person and one or more of the parties to the proceeding a question of law or
    fact in common with one or more of the questions in issue in the proceeding.

(2) On the motion, the court shall consider whether the
    intervention will unduly delay or prejudice the determination of the rights of
    the parties to the proceeding and the court may add the person as a party to
    the proceeding and may make such order as is just.

[17]

As
    noted above, Gillese J.A. was of the view that Rons rights and interests were
    directly affected by the trial judges liability judgment. I agree that it is
    at least arguable that, by setting aside the transfer agreement between
    Patricia and the Pillitteris, and by ordering an accounting, the judgment may
    affect Rons interests and, specifically, may void the transfer to Ron of one
    half of Enzos former interests in CDC and Birchland. The issue of the
    liability judgment affecting a non-party has in fact been raised by the
    appellants in the current appeal.

[18]

As
    to the issue of prejudice or delay, this motion has been brought late in the
    proceedings and risks causing delay. Patricia notes, in addition, that Ron was aware
    of the trial and must have been aware of the broad substance of the pleadings
    well before then.

[19]

Ron,
    for his part, notes that he formally notified the parties in September 2013
    that he was considering seeking leave to intervene. Ron and 179 have agreed to
    accept the record as is and ask only to file a factum. Both the appellants and
    Ron and 179 have agreed not to seek an adjournment of the scheduled hearing of
    the appeal.

[20]

The
    respondents advance three principal reasons why the motion for leave to
    intervene should be dismissed. First, on their cross-motion the respondents
    argue that the exchange of letters between counsel, discussed above, shows that
    there was a valid settlement of the proposed motion to intervene and that
    settlement should be enforced pursuant to rule 49.09. Second, the respondents
    submit that Rons rights and interests are not automatically affected by the
    judgment, and that Ron would in any case be able to protect his rights and
    interests at the damages phase of the trial. Finally, the respondents submit
    that given the delay in filing the motion for leave to intervene, the court
    should exercise its discretion to dismiss the motion.

I will deal with each of these grounds in turn.

Whether there exists a valid Rule 49 settlement

[21]

The
    respondents bring their cross-motion pursuant to rule 49.09, which reads, in
    relevant part:

49.09
Where a party to an accepted offer to
    settle fails to comply with the terms of the offer, the other party may,

(a) make a motion to a judge for judgment in the terms of
    the accepted offer, and the judge may grant judgment accordingly;

[22]

The
    respondents argue that rule 49.09 applies to the offer purportedly contained in
    and accepted through the exchange of letters noted above, because Ron is a
    party to [that] accepted offer even if he was not at the time a party to any
    relevant proceeding or motion before the court.

[23]

Rule
    49.02 provides as follows:

49.02
(1) A party to a proceeding may serve on
    any other party an offer to settle any one or more of the claims in the
    proceeding on the terms specified in the offer to settle (Form 94A).

(2) Subrule (1) and rules 49.03 to 49.14 also apply to motions,
    with necessary modifications.

[24]

In
Scanlon v. Standish
(2002), 57 O.R. (3d) 767 (C.A.), this court found,
    at para. 8, that these words contemplate the existence of pending litigation and
    that [a]bsent an application or action, the Rules of Civil Procedure, by their
    own definition, have no application to disputes between citizens. In
Scanlon
the litigation was only contemplated at the time of the alleged settlement. This
    led to the courts conclusion, at para. 22: A pre-litigation offer  is not a
    Rule 49 offer. This holding was later confirmed in
McBride Metal
    Fabricating Corp. v. H & W Sales Co.
(2002), 50 O.R. (3d) 97 (C.A.).

[25]

Until
    Ron is given intervenor status, he is not a party to the litigation. Further,
    when counsel exchanged the letters noted above there was no pending motion. In
    my view, therefore, the exchange of letters cannot constitute a Rule 49 offer
    and acceptance. Assuming it forms a binding agreement, however, it can be taken
    into account in deciding whether to exercise my discretion on the motion for
    leave to intervene.

[26]

Even
    supposing that counsels exchange of letters constitutes a valid Rule 49 offer
    to settle and acceptance, I would not exercise my discretion to enforce it. In
    purporting to accept Rons offer, counsel for the respondents wrote, in part,
    that our client agrees that to the extent that Justice Newboulds judgment is
    interpreted as transferring Mr. Venturas shares it will be scaled back
on
    consent
so that it does not have that effect (emphasis added).

[27]

Rons
    counsel maintains that, to be effective, the settlement agreement must be
    agreed to by the appellants because varying the trial judges liability
    judgment on consent requires the consent of all parties to the litigation. It
    is clear that the appellants are not consenting and will not consent to any
    scaling back. Although the respondents argue that consent is not required, it
    is not clear to me that the respondents can, alone, ensure that the result they
    and Ron agreed upon can be obtained without the consent of the appellants or
    the agreement of the court. Finally, there seems to be confusion as to what
    scaling back a judgment means. Ron argues that his interests can be affected
    both directly through an order requiring the transfer of some of the shares and
    indirectly because of the impact of the judgment on the value and assets of CDC
    and Birchland. In my view, the settlement is not clear on this point.

[28]

In
    these circumstances, even if I were to accept that the agreement could come
    within Rule 49, I would conclude that it is not enforceable and would therefore
    not enforce it.

Whether Rons interests are
    automatically affected

by

judgment

[29]

The
    respondents submit that Rons rights and interests are not automatically
    affected by the trial judges liability judgment. The respondents advance at
    least two reasons in support of this submission. First, because the trial on
    damages has yet to take place, Ron will have the opportunity to defend his
    interests. The respondents do not oppose Ron and 179 appearing as parties at
    that stage of the trial. Second, the respondents have agreed to advise this
    court at the hearing of the appeal and the trial judge at any future trial on
    damages that, insofar as the judgment on liability can be interpreted as
    affecting Ron and 179s interests in CDC and Birchland, the respondents support
    the scaling back of the judgment on liability to obviate any impact on Ron
    and 179s interests.

[30]

Ron
    and 179, supported on this point by the appellants, respond that the liability judgment
    is at least open to an interpretation on which it affects Rons rights and
    interests, and the respondents cannot unilaterally scale back the trial
    judges liability judgment in the sense of varying the judgment. In other
    words, the respondents are not in a position to deliver on a promise that Rons
    rights and interests will not be affected by the liability judgment and will
    not be affected by the outcome of the appeal.

[31]

I
    cannot prejudge the outcome of the appeal or that of the damages portion of the
    trial. Justice Gillese has already ruled that the outcome of the appeal may have
    an impact on Rons interest in CDC and Birchland. All that rule 13.01(1)
    requires is that a person may be adversely affected or that there exists
    between the [proposed intervenor] and one or more of the parties to the
    proceeding a question of law or fact in common with one or more of the
    questions in issue in the proceeding. In the appeal the appellants have
    clearly raised the issue of the impact of the judgment on Ron. It may well be
    that through the mechanisms they propose, the respondents will succeed in
    convincing this court and the judge hearing the damages trial that Rons
    interests are not and should not be affected. However, the appellants have not
    agreed to support that position and the issue is squarely before the court on
    the appeal. It is not for me to speculate on the outcome of the appeal and, in
    the circumstances, it seems to me that the respondents cannot ensure any
    specific outcome at the appeal or in the damages trial. As a result, I conclude
    that Ron has met the requirements of rule 13.01(1).

Whether unnecessary delay in bringing the motion warrants
    dismissal

[32]

Finally,
    the respondents argue that Ron and 179 have waited too long to bring this
    motion for leave to intervene, and that the court should accordingly exercise
    its discretion not to grant leave.

[33]

I
    am troubled by the lateness of this motion. The respondents ought not to have
    had to argue the motion one week before the scheduled hearing of the appeal,
    and be left with only a few days to consider Rons factum and be in a position
    to respond in court. The underlying action was brought in 2008 and counsel for
    the respondents understandably expresses frustration at the possibility of an
    adjournment.

[34]

The
    position to be taken by Ron on the appeal will not, however, take the respondents
    totally by surprise. It overlaps considerably with a position already advanced
    by the appellants. The appeal therefore may well proceed as scheduled.
    Additionally, little prejudice would accrue to the respondents if they decide
    to request a short adjournment of the appeal. Ron and the appellants have
    indicated that they will not seek an adjournment but would consent to an
    adjournment request by the respondents if, after reviewing Rons factum, the
    respondents need additional time to prepare for the appeal. In the
    circumstances, while the delay in bringing the motion is unfortunate, I do not conclude
    that it warrants dismissal of the motion.

CONCLUSION

[35]

The
    motion for leave to intervene is granted. The cross-motion is dismissed. Ron
    and 179 are added as parties on the appeal. They are to file a factum of not
    more than 15 pages by Monday, April 28, 2014, and are not to add to the record.

[36]

Counsel
    for the respondents will notify the court by Tuesday, April 29, 2014, if after
    receipt of Rons factum they desire an adjournment. Although Ron was successful
    on the motions, I am not prepared to award him costs. He delayed in bringing
    the motion and, although I have concluded that there is no binding Rule 49
    settlement, the respondents did not act unreasonably in maintaining that they
    had resolved matters with Ron. The appellants do not seek costs. There will,
    therefore, be no order as to costs.


