



COURT OF APPEAL FOR ONTARIO

CITATION: Maraschiello-Basnett v. Ku, 2013
    ONCA 185

DATE: 20130327

DOCKET: C56372

Gillese, Blair and Rouleau JJ.A.

BETWEEN

Chloe
    Maraschiello-Basnett, a minor by her Litigation Guardian, Whitney Basnett,
Nicholas
    Maraschiello
, and the said
Whitney Basnett personally

Plaintiffs (Appellants)

and

J. Ku, P. Howard, H.
    Yang, D. Handley, Clinidata Corporation,
The Royal Victoria

Hospital
    of Barrie
,
D. McLaughlin
,
M. Wall
,
S. Hodge,
D. Van
    Scoy, S. Manser,
J.

Farrell
,
J. Waugh-Vieira
, T. Gilder
    and
S. White

Defendants (Respondents)

Gavin MacKenzie and Mark Hines, for the appellants

Frank G. Csathy, for the respondents

Jaan Lilles, for the defendants J. Ku, P. Howard, H.
    Yang and D. Handley

Heard: March 21, 2013

On appeal from the order of Justice Mark L. Edwards of
    the Superior Court of Justice, dated November 23, 2012.

ENDORSEMENT

Overview

[1]

This appeal arises in the context of a medical malpractice action
    concerning the care and treatment provided by the defendants to the plaintiff,
    Chloe Maraschiello-Basnett (Chloe), a minor.

[2]

There are three groups of defendants in the action: (1) the defendant
    hospital and the defendant nurses (together, the hospital defendants); (2)
    the defendant physicians; and (3) the defendants related to Telehealth Ontario
    (the Clinidata defendants).  In these reasons, the second and third groups of
    defendants are referred to collectively as the remaining defendants.

[3]

Each group of defendants is represented by different counsel and has crossclaimed
    against the other defendants.

[4]

By order dated November 23, 2012, the motion judge declared that the
    plaintiffs action against the hospital defendants had been settled and
    dismissed the plaintiffs claim as against those defendants (the Order). 
    (The Order also provided for a motion to determine whether the settlement was
    in the best interests of Chloe.)  Chloes parents, Nicholas Maraschiello and
    Whitney Basnett, appeal.

[5]

In our view, the appeal must be allowed because the motion judge made a
    palpable and overriding error in finding that a concluded settlement had been
    reached.

Background in Brief

[6]

Trial of the action was scheduled to begin on November 19, 2012.

[7]

In a letter dated June 14, 2012, counsel for the plaintiffs offered to
    recommend to his clients that they consent to an order dismissing the action
    against the hospital defendants provided the remaining defendants undertake
    not to make any allegations of negligence in any shape or form as against [the
    hospital defendants] at trial (the Undertaking).

[8]

Later, in a letter dated October 12, 2012, counsel for the plaintiffs
    wrote:

Further to my letter of June 14, 2012, I have instructions to
    consent to an Order dismissing the action as against [the hospital defendants]
    on a without costs basis.

[9]

By letter dated November 5, 2012, counsel for the plaintiffs advised the
    defendants that due to a lack of compliance with the Undertaking, the
    plaintiffs would be proceeding with their claims as against the hospital
    defendants.

[10]

By
    letter dated November 8, 2012, the Clinidata defendants advised the plaintiffs that
    they had instructions to consent to a dismissal of their crossclaim as against
    the hospital defendants and that they did not intend to call any evidence to
    allege negligence on the part of those defendants.

[11]

By
    letter dated November 9, 2012, the physician defendants stated that they had
    already provided their consent to the dismissal of the action as against the
    hospital defendants and advised that they did not intend to call evidence to
    allege negligence as against those defendants at trial.

[12]

A
    dispute arose as to whether a settlement had been reached.  The hospital
    defendants moved for an order for summary judgment and dismissal of the action
    as against them.

[13]

The
    motion judge found that although the plaintiffs October 12, 2012 letter could
    have been more clear, the plaintiffs offer to consent to an order dismissing
    the action as against the hospital defendants was contingent on the remaining
    defendants fulfilling the Undertaking.  He further found that the Undertaking has
    now been fulfilled.  Accordingly, he held that a concluded settlement had been
    reached between the plaintiffs and the hospital defendants, and he dismissed
    the action as against the hospital defendants.

Analysis

[14]

There
    is some ambiguity around what the motion judge relied on in finding that the
    Undertaking had been fulfilled.  As counsel for the plaintiffs on appeal
    candidly acknowledged, the motion judge could have been referring to either the
    letters of November 8 and 9, 2012, described above, or statements made by
    counsel for the remaining defendants at the oral hearing of the motion on
    November 14, 2012.

[15]

Regardless
    of which of the two events was relied on in finding that the Undertaking had
    been fulfilled, the motion judge was in error.

[16]

The
    letter of November 5, 2012, revoked the plaintiffs offer to settle.  That is,
    the plaintiffs offer was withdrawn in writing before the delivery of the
    letters of November 8 and 9, 2012, which purported to fulfill the Undertaking.

[17]

Similarly,
    whatever was said at the oral hearing of the motion on November 14, 2012, could
    not have constituted fulfillment of the Undertaking because the offer had been revoked
    on November 5.

[18]

It
    appears clear from the record that in the period from June 14, 2012, to
    November 5, 2012, all parties conducted themselves on the expectation that a
    settlement agreement would be reached and that the action would be dismissed as
    against the hospital defendants.  However, as the motion judge correctly found,
    the Undertaking was a condition precedent to the settlement agreement and by
    the time the remaining defendants purported to fulfill the Undertaking, the offer
    had been withdrawn.  Accordingly, a settlement was never reached.

[19]

In
    light of our conclusion on this issue, we need not consider the appellants
    alternative arguments, namely, that the letters of November 8 and 9, 2012, did
    not fulfil the Undertaking, and that the motion judge erred in failing to
    consider whether he should exercise his discretion and refuse to enforce the
    alleged settlement.

DISPOSITION

[20]

Accordingly,
    the appeal is allowed and the Order is set aside with costs of the appeal and
    the motion below to the appellants, payable by the hospital defendants.  Costs
    of the appeal and the motion below are set at $18,400 and $6,380,
    respectively.  Both sums are all-inclusive.

E.E. Gillese J.A.

R.A. Blair J.A.

Paul Rouleau J.A.


