Whitaker v. Mix, 2011 ABQB 755

Court of Queen ’ s Bench of Alberta Citation: Whitaker v. Mix, 2011 ABQB 755 Date: 20111201 Docket: 1003 12776 Registry: Edmonton Between: Colin Mitchell Whitaker Plaintiff - and - Dallas Bradley Mix Defendant Corrected judgment: A corrigendum was issued on December 14, 2011; the corrections have been made to the text and the corrigendum is appended to this judgment. _______________________________________________________ Memorandum of Decision of the Honourable Mr. Justice Sterling Sanderman _______________________________________________________ [ 1 ] By Court Order a

summary trial was ordered to be held in relation to this matter. The Defendant asks for dismissal of the Plaintiff ’ s action on the basis that the parties have entered into a settlement agreement that has determined the issues. The issue to be decided on the

summary trial is whether the Plaintiff is bound by the settlement agreement made between his solicitors and the Defendant ’ s insurer. On November 29, 2011 evidence was presented to the Court through the Affidavit of the adjuster for the insurer,

Mr. Schmidt, and the viva voce evidence of the lawyer who advanced the claim on behalf of the Plaintiff. [2] The facts that were revealed by the evidence is clear. It is not in dispute. [3] After being involved in a motor vehicle accident in Edmonton, Alberta on November 21, 2008 the Plaintiff retained the lawfirm Braithwaite Boyle to represent his interests. He made this arrangement with the law firm in December of 2008. The lawsuitprogressed in a normal fashion. In March of 2010 counsel for Mr.

Whitaker made a settlement proposal to the insurer of the Defendantfor approximately $27,000.00 and costs. [4] This proposal was rejected. On March 30, 2010 the insurer for Mr. Mix made a counteroffer. Clearly the adjuster felt thatthe injuries suffered by the Plaintiff were little more than those covered by a legislative scheme. The counteroffer was for slightly morethan $4,800.00 plus costs and disbursements. [5] Counsel for the Plaintiff assessed Mr. Whitaker’s injuries somewhat differently. He was of the belief that his client hadsuffered considerable damage and would not be caught by the legislation.

Consequently, he sought instructions from Mr. Whitaker toreject the counterproposal. These instructions were sought through a letter dated April 7, 2010 sent to Mr. Whitaker. He provided writteninstructions to his counsel to reject the settlement offer on April 15, 2010. It is not certain when these written instructions arrived at hiscounsel’s office. In anticipation of receiving these instructions, Mr. Whitaker’s counsel prepared a Memorandum for the file thatindicated what should go in the letter of rejection. This letter was never prepared or sent. [6] Inadvertently, the legal assistant of Mr.

Whitaker’s counsel prepared and sent a letter to the adjuster accepting thecounteroffer of approximately $4,800.00 plus costs and disbursements. A Memorandum of Costs and Disbursements was included withthis letter. Upon its receipt, the adjuster prepared a cheque for the amount claimed and sent the cheque to the law firm representing Mr.Whitaker. [7] The rapidity with which this cheque issued was astounding. The acceptance dated April 20, 2010 was sent to the adjuster bytelecopier at approximately 3:50 p.m. on that day. The cheque covering the settlement was prepared on April 21, 2010.

This is asuspicious circumstance having regard to the experience of the adjuster. His affidavit evidence indicates that he has worked exclusivelyas a bodily injury claims adjuster for approximately 15 years. One wonders whether he has become extremely efficient over the yearsand attends to his files immediately or whether he felt there might be some advantage to accepting this offer immediately.

I cannot saythat the adjuster is guilty of sharp practice, but the suggestion cannot be discounted completely. [8] Nevertheless on this record, the Plaintiff is unable to establish the standard required that a mistake had been made and thathe acted upon it to his advantage to the civil standard of proof. [9] Counsel for Mr. Whitaker was not aware that the letter had been drafted or sent. He did not read it before it left the office. Hedid not sign it. His legal assistant signed on his behalf. It is abundantly clear that counsel bears no direct responsibility for thepreparation and sending of this letter.

It was a mistake made by his legal assistant who sent an acceptance letter rather than a rejectionletter. Although counsel for Mr. Whitaker has rendered him good service and continues to do so, the law firm must bear theresponsibility for the mistake made within the four walls of the law firm. [10] In a very recent decision, released October 3, 2011, Justice Gill reviews the law that is applicable to this

summary trial. InLofthaug v. Canadian Immigration Specialists Ltd. 2011 ABQB 609 , 2011ABQB 609 Justice Gill reviews cases decided byour Court of Appeal that have considered when Courts should enforce settlement agreements reached between lawyers. One cannot dobetter than his analysis that is found at paras. 27 to 34 inclusive and I adopt it. At para. 34, Justice Gill concludes: In my view, the Court of Appeal has clearly set out the situations in which a settlement agreement will be set aside. These are wherethere is:

a. mutual mistake and a fresh action could be commenced to achieve the same effect; b. misapprehension or mistake by the lawyer entering into the agreement, but only if Court intervention is necessary to give effect tothe settlement; c. lawyer settles without authority and the third party is aware of that limited authority (Alken Basin Drilling Ltd v Fraser (1994),30 CPC (3d) 250 (AB QB), Racz v.

District of Mission, (BC CA), [1988] 22 BCLR (2d) 70 (BCCA), or d. evidence that the lawyer entered into the agreement in defiance of express and specific instructions from the client. [11] Settlement agreements will be set aside in very limited circumstances. It is well settled that the normal rules of agencyprovide that lawyers have ostensible authority to settle any lawsuit on behalf of a client. If a lawyer does so without possessing actualauthority to do this, the client is still bound by the settlement as long as the party agreeing to the settlement was not aware of the limits ofthe lawyer’s authority.

Before the Court can intervene to overturn the settlement, there must be an evidentiary basis to find that theopposing side should have been aware of some deficiency in the authority of counsel to make the bargain.

I have earlier indicated mysuspicions in relation to a possibility that the adjuster may have taken advantage of an error that he knew had been made because of hisexperience, but I cannot make that finding to the benefit of the Plaintiff. [12] On the evidence presented to me on this application I am compelled to find that there is no evidence that would lead to theconclusion that the adjuster knew of the error made in the office of Mr. Whitaker’s counsel and took advantage of it. Without such anevidentiary basis, the Court cannot provide Mr.

Whitaker with the relief he requests pursuant to the law of contract or equity. Althoughhis position raises sympathy with the Court, nothing can be done for him. The evidence supports the position that the parties haveentered into a binding settlement agreement and the action advanced by the Plaintiff must be dismissed. He has other remedies that areavailable to him. [13] The Defendant shall have his costs. Heard on the 29th day of November, 2011. Dated at the City of Edmonton, Alberta this 1st day of December, 2011. Sterling Sanderman J.C.Q.B.A. Appearances: Ivan J. Derer, Q.C. For the Plaintiff Kenneth B.

Haluschak for the Defendant

_______________________________________________________ Corrigendum of the Memorandum of Decision of The Honourable Mr. Justice Sterling Sanderman _______________________________________________________ Paragraph 13 should read the Defendant shall have his costs.