Charteris v. Jakobsen et al. Date:, 2017 BCPC 93

Citation: Charteris v. Jakobsen et al. Date: 20170222 2017 BCPC 93 File No: C02263 Registry: Courtenay IN THE PROVINCIAL COURT OF BRITISH COLUMBIA Civil BETWEEN: DEREK CHARTERIS CLAIMANT AND: MARK JAKOBSEN, CHANTAL O'BRENNAN AND ENVISION HOME INSPECTIONS LTD. DEFENDANTS REASONS FOR JUDGMENT OF THE HONOURABLE JUDGE CROCKETT

Counsel for the Claimant: Charles E. Allen Counsel for the Defendants: Mark Burger Place of Hearing: Courtenay , B.C. Date of Hearing: February 22, 2017 Date of Judgment: February 22, 2017 [ 1 ] This is an application by the defendants in this case, Mark Jakobsen, Chantal O’Brennan (now known as Chantal Jakobsen) and Envision Home Inspections Ltd. (“Envision”) for this court to enforce a contract of settlement in this action. The claimant, Derek Charteris, opposes the application. The Facts [ 2 ] The facts are not in dispute. Mr. Charteris filed a Notice of Claim naming the defendants.

The claim was for damages for costs to repair a house, which he purchased from the Jakobsens. Envision conducted an inspection of the house for Mr. Charteris at the time of purchase. [ 3 ] The parties attended a settlement conference on May 16, 2016. An order was made for the parties to exchange documents, case law, and a

summary of evidence to the opposing party by July 16, 2016. No trial date was scheduled. [ 4 ] On July 13, 2016, the defendants sent an offer to settle to Ms. Ridgway, counsel for Mr. Charteris. None of the defendants were represented by counsel when they made the offer to settle. [ 5 ] The offer was made on the Small Claims Offer to Settle Form 18 and read, in part: The defendants offer to settle this claim in the following terms: WITHOUT PREJUDICE: Mark and Chantal Jakobsen offer: $4000 Envision Home Inspections offer: $2000 This offer is conditional on Mr.

Charteris also agreeing to sign a Release/Settlement Agreement. This offer is open for acceptance until 5:00 p.m. July 13, 2016 after which it will be withdrawn. [ 6 ] The offer was sent via email to Mr. Charteris’ counsel, Ms. Ridgway. [ 7 ] On July 13, 2016, Ms. Ridgway sent a letter, via email, addressed to both the Jakobsens and Envision, accepting the offer of settlement. She asked both parties to forward their “respective settlement payments” made payable to her law firm.

She went on in her letter to state: We undertake not to release any portion of the settlement funds, until we can provide you with copies of the following: 1. Filed Notice of Withdrawal of Claim in the captioned matter; 2. Two releases duly executed by Mr. Charteris, releasing both defendants in the captioned matter from any further claim with respect to the property… We trust you will find the foregoing satisfactory, and look forward to receiving your respective settlement payments in due course. [ 8 ] Both parties agree that they had a binding contract on July 13, 2016.

From that date until July 28, 2016, there was no further communication between the parties. [ 9 ] On July 28, 2016, Ms. Ridgway sent a letter to both parties, via email, stating that Mr. Charteris had instructed her to withdraw his letter of acceptance of the offer, and that this was “due in part to the fact that it is now two weeks since your offer and there has been no payment by either defendant”. [ 10 ] On August 3, 2016, the Jakobsens delivered a bank draft for $4000 to Ms. Ridgway. On August 8, 2016, the bank draft was returned to the Jakobsens, with a letter. A copy of the letter was sent to Envision.

The $4000 bank draft stated the words “payment in full” on it. [ 11 ] In her letter accompanying the returned bank draft, Ms. Ridgway stated her instructions remained as in her July 28, 2016 letter. As well, she informed the Jakobsens and Envision that the notation of “payment in full” on the $4000 bank draft did not reflect the terms of settlement of the original offer (for $6000), and she therefore construed the $4000 draft to be a further offer of settlement, which was declined. [ 12 ] On August 10, 2016, the Jakobsens delivered two bank drafts to Ms. Ridgway, for $4000 and $2000.

Those bank drafts remain in the possession of Ms. Ridgway’s firm.

Positions of the Parties [13] Both parties agree this court has jurisdiction to make an order with respect to this matter, to either enforce the settlement, orconfirm that it may be set aside. They agree my jurisdiction comes from section 2(2) of the Small Claims Act, and s. 10 of the provincialLaw and Equity Act. [14] Mr. Charteris, through counsel, submits that he is entitled to withdraw his acceptance of the offer, for the reasons stated by Ms.Ridgway.

No payment was made for two weeks, and, after he withdrew his offer, the $4000 “payment in full” made by the Jakobsensamounted to a further offer of settlement, which was not accepted. He submits that this court should infer that time is of the essence inthis contract, given the very short time limit for the acceptance. [15] The Defendants submit that the contract was complete with offer and acceptance, and that the delay of payment is acceptable. They rely on the term in Ms.

Ridgway’s letter which refers to payment being made in “due course”, which allows for some flexibility. [16] The Defendants further submit that once they were put on notice that delay in payment was a problem, they made every effortto pay the amounts due quickly. The offer to settle indicated the amounts were to be paid by the defendants separately, in the amountsstated, so it is unreasonable to construe the notation “payment in full” on the first $4000 bank draft as a further offer of settlement. Analysis [17] The parties both referred to the case of Fieguth v. Acklands Ltd , [1989] B.C.J. No. 857 (BCCA).

In thatcase, the court had to determine whether there was a binding agreement of settlement. There was no discussion or agreement in that caseon five elements of settlement, listed at paragraph 20 of that decision. Three of the same elements arise in this case: 1. terms of release which the defendants required Mr. Charteris to execute and deliver; 2. the method of payment of the funds; 3. the timing of payment of the funds. [18] In Fieguth, the court held that despite no discussion or agreement on these three issues, there was a binding agreement ofsettlement.

The court held that these terms could be implied in the settlement between the parties (see paragraph 21 in Fieguth). [19] In this case, there was some reference to a release. Both counsels agree that in the normal course of a settlement, where bothparties are represented by counsel, the payor of the funds will draft a release for the payee to sign. [20] In this case, the defendants were not represented. The payee did have counsel. The letter of Ms.

Ridgway is ambiguous as towhether she contemplated drafting a release, or whether she expected to receive one from the defendants. [21] From a lay person’s perspective, it would not be unreasonable for the defendants to assume that Ms. Ridgway would draft thereleases. She states she will not release any portion of the funds “until we can provide you with copies of the following”: First, a Filed Notice of Withdrawal of Claim in the captioned matter (which could only be drafted by Mr. Charteris or his counsel); and Two releases, “duly executed by Mr.

Charteris”. [22] This wording, to a lay person, could easily be interpreted to mean that Ms. Ridgway would be the one drafting all threedocuments. [23] In any event, there was no suggestion in Ms. Ridgway’s letter that the releases were to be provided by any given time. [24] With respect to the method of payment of the funds, there was nothing stated in the settlement documents. However, given itwas for a relatively small amount of money, it is reasonable to infer that a secure form of payment, in full, could be expected. Themethod of payment would have to be of a type that could be held in trust, so Ms.

Ridgway could fulfill her undertaking as expressed inthe acceptance letter. [25] The main issue of dispute between the parties is the timing of the payment. The offer was made with a very short turnaroundtime: 5:00 p.m. on the same day of the offer. Mr. Charteris submits that this court should infer that time is of the essence with respect topayment as well. [26] However, the timing of the offer must be taken in context: that being that the parties had to undergo the time and expense toexchange documents, case law, and a

summary of evidence to the opposing party within three days of the date of the offer. This explainsthe urgency of the timeline for the offer. [27] In contrast, no time for payment is stated by either party, other than the reference in Ms. Ridgway’s letter to the respectivepayments being received in “due course”. [28] I note that payment was contemplated via two separate payments, from two separate defendants (I will address this point furtherbelow). The evidence also discloses that the principal of Envision, Mr. King, was not able to participate in the court process due to hisincompetency.

The settlement conference was attended by his sister, who had power of attorney on behalf of Mr. King. The payment ofthe settlement funds had to be arranged through a committee, Mr. King’s sister and daughter, who had a joint power of attorney. Mr.Charteris would have been aware of this state of affairs as of the date of the settlement conference, if not earlier. [29] In Fieguth, the court held that a 26 day delay between acceptance and payment, of just over $5000, was acceptable.

[ 30 ] In this case, the payment had not been made for 14 days, between the acceptance and the withdrawal. Once put on notice that delay was a problem, the Jakobsens delivered a bank draft for their portion of the settlement to Ms. Ridgway within six days, which dates included a holiday weekend. The final payment of the two bank drafts, for the total sum of $6000 was made within two days of Ms. Ridgway returning the original $4000 draft. [ 31 ] To sum up, in this case, unlike in Fieguth , there is evidence to support that there was some, albeit limited, communication regarding release and timing of payment. [ 32 ] I am also mindful that we are dealing with a settlement in Small Claims court.

Section 2 of the Small Claims Act reads: 2

(1) The purpose of this Act and the rules is to allow people who bring claims to the Provincial Court to have them resolved and to have enforcement proceedings concluded in a just, speedy, inexpensive and simple manner.

(2) Subject to this Act and the rules, in conducting a hearing the Provincial Court may make any order or give any direction it thinks necessary to achieve the purpose of this Act and the rules. [ 33 ] Within the context of the Act , and the facts of this case, in particular dealing with the defendants who were not represented by counsel at the time of the settlement, this court must consider what is just, speedy, inexpensive, and simple. [ 34 ] The agreement to settle, that being the offer, and the letter of acceptance, is not complicated.

The defendants would have no way of knowing that time, or a release, or method of payment, was of importance to Mr. Charteris, based on the letter provided by his counsel. [ 35 ] For the foregoing reasons, the agreement should be interpreted in a straightforward manner, and is enforceable. [ 36 ] Dealing with the second submission by Mr. Charteris, that the first $4000 bank draft with the notation “payment in full” should be interpreted as a further offer of settlement, I will not accede to this argument. The defendants are named separately in the pleadings.

The offer clearly states the amount to be paid by each defendant. Ms. Ridgway’s letter acknowledges that they are separate defendants in her letter in three ways: 1. she addresses them separately in the letter; 2. she refers to them forwarding their “respective settlement payments” in two separate places in her letter (in other words, she anticipates two separate payments); 3. she refers to providing two releases signed by Mr.

Charteris. [ 37 ] In other words, it is clear from the correspondence of both parties, in the offer and in the acceptance, that the two defendants are to be treated separately. [ 38 ] To be clear, I have found that there was a binding contract of settlement between the parties.

For that reason, I have not to this point referred specifically to the law with respect to breaches and repudiation of contracts. [ 39 ] Suffice it to add, that if necessary, I also find that the actions of the defendants in not making payment within 14 days, and thereafter the Jakobsens delivering a bank draft for $4000 marked “payment in full”, do not constitute a breach of their settlement contract. I rely on Fieguth for that authority, at paragraphs 42 to 44: 42.

Wallace J.A. quoted other authorities and then summarized the legal position at p. 358: "The common theme, emphasized by every court, when determining whether a breach of contract justifies the innocent party terminating the contract rather than confining his remedy to the damages caused by the breach, is that the breach must be tantamount to the frustration of the contract either as a result of the unequivocal refusal of one party to perform his contractual obligation or as a result of conduct which has destroyed the commercial purpose of the contract, thereby entitling the innocent party to be relieved from future performance". 43 In the case at bar the defendant gave no indication that it was not ready willing and able to comply with the terms of the settlement agreement. … 44 It should not be thought that every disagreement over documentation consequent upon a settlement, even if insisted upon, amounts to a repudiation of a settlement.

Many such settlements are very complicated such as structured settlements, and the deal is usually struck before the documentation can be completed. In such cases the settlement will be binding if there is agreement on the essential terms. When disputes arise in this connection the question will seldom be one of repudiation as the test cited above is a strict one, but rather whether a final agreement has been reached which the parties intend to record in formal documentation, or whether the parties have only reached a tentative agreement which will not be binding upon them until the documentation is complete.

Generally speaking, litigation is settled on the former rather than on the latter basis and, parties who reach a settlement should usually be held to their bargains. Subsequent disputes should be resolved by application to the court or by common sense within the framework of the settlement to which the parties have agreed and in accordance with the common practices which prevail amongst members of the bar.

It will be rare for conduct subsequent to a settlement agreement to amount to repudiation. [ 40 ] The actions of the defendants, as described, did not amount to a breach that is “tantamount to the frustration of the contract” or the “unequivocal refusal” to perform their obligation pursuant to the settlement. On the contrary, once put on notice of Mr. Charteris’ concern with the timing of payment, the defendants made timely efforts to pay the settlement funds, even without a release having been drafted or executed for their benefit.

This was a simple settlement agreement and the parties should be held to their bargain.

[ 41 ] This court orders that there is a binding agreement of settlement between the parties and that all further proceedings in this action are stayed, except those necessary to carry out the terms of this settlement. [ 42 ] I assume the parties, both of whom are now represented, can agree on who will draft the two releases so the funds can be released. BY THE COURT __________________________ The Honourable Judge Crockett