Case: DeLuca v. Grillone, 2021 ONCA 798 (CanLII)

Keywords: e-mail communications; terms of settlement

Synopsis:

In the context of a share purchase dispute, counsel for the Respondents sends an e-mail to the Motion Judge indicating the parties have agreed to an Order directing the payment of certain share purchase monies into Court at a specific price.

The Motion Judge grants the Order, finding the e-mail permits him to direct purchase monies to be paid into Court for the benefit of the Appellant’s creditors.

The Appellant then appeals the Motion Judge’s decision on the basis that the agreement was “[s]ubject to any contrary direction by His Honour”. (See para. 5). In other words, the Appellant submits it was open to the Motion Judge to determine whether or not the money should be paid in the manner set out in the Respondents’ e-mail, and at that price.

The Court of Appeal finds the Motion Judge’s interpretation of the e-mail was “open to him based on the record before him”. The appeal is dismissed.

Importance:

This decision provides an interesting opportunity to consider an important strategic question in civil litigation – namely, the significant effect a single e-mail communication can have when directed at an adjudicator. In this case, the Court of Appeal helpfully reproduced parts of the e-mail in question, providing a unique window into civil practice:

Your Honour in connection with tomorrow’s attendance before you … the purchasing and selling parties have agreed to the price to be paid for the shares of 239 in 189. The parties will agree to an order that:

      1. Subject to any contrary direction by His Honour the agreed price … shall be paid by Rhonderoo to 239 within 10 business days of Friday, July 17. (See para. 3).

In this case, the Court of Appeal determined that the Appellant had authorized counsel for the Respondents to forward this e-mail content to the Motion Judge. (See para. 5). From a strategic perspective, the Court of Appeal herein is signalling to counsel that, in future cases, the inclusion of the words “[s]ubject to any contrary direction by His Honour” can be reasonably interpreted as providing courts discretion to simply grant an order as set out in e-mail communications. (See para. 6). This means that, from the perspective of the Court of Appeal, the inclusion of that language did not necessitate reconsideration of the purchase price (or any other aspect of the agreement set out in the e-mail) by the Motion Judge.

The Court of Appeal rejected the Appellant’s motion to adduce fresh evidence on appeal on the basis that the evidence “related to something that occurred after the settlement was made and was irrelevant to the question whether there was a settlement” and, otherwise, did not meet the test. (See para. 7).

A key takeaway from this decision is that, whenever one communicates with an adjudicator, it is incumbent upon them to do so clearly. Furthermore, where opposing counsel is authorized to communicate on behalf of both parties to an agreement, special care should be taken to ensure that, where there is really lingering disagreement about the fundamentals of an agreement or settlement (i.e. the purchase price), the court is put on notice that aspects of the agreement remain unresolved.

Counsel for the Appellant 2390215 Ontario Inc.: Sergio Grillone (Grillone Law Firm, Mississauga)

Counsel for the Respondents Marco DeLuca and Rhondaroo Holdings Ltd.: R. Leigh Youd and Adam Wygodny (Berkow Youd Lev-Farrell Das LLP, Toronto)

Counsel for The Bank of Nova Scotia: Randy Schliemann (Lipman Zener Waxman LLP, Toronto)

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