Date: 19991125
Docket: CA 157868
NOVA SCOTIA COURT OF APPEAL
[Cite as: South Shore Home & Garden Ltd. v. Thibeau, 1999 NSCA 146]
Chipman, Pugsley and Bateman, JJ.A.
BETWEEN: )
)
SOUTH SHORE HOME & GARDEN ) Sean Foreman
LIMITED and JUERGEN ZIEGLER ) for the Appellants
)
Appellants )
)
- and - )
)
CLARENCE THIBEAU ) Derrick G. Wickstrom
) for the Respondent
Respondent )
)
)
) Appeal Heard:
) November 23, 1999
)
)
) Judgment Delivered:
) November 25, 1999
THE COURT: The appeal is allowed without costs as per reasons for judgment of Chipman, J.A.; Pugsley and Bateman, JJ.A., concurring.
CHIPMAN, J.A.:
[1] This is an appeal from a judgment of Carver, J. in Chambers in proceedings before him to confirm a settlement pursuant to Civil Procedure Rule 41A.08. The appellant South Shore is a contractor which builds cottages and other structures for its customers. The appellant Ziegler is South Shore’s president. The appellants engaged the respondent, another contractor, to act as a subcontractor for the purpose of carrying out a number of these projects. Disagreements arose between the parties with respect to six projects, and the respondent commenced an action in the Supreme Court against the appellants for damages for breach of contract and/or negligent misrepresentations respecting the projects. The appellants filed a defence contending that the work done was deficient, and claiming set off of the costs of remedying unfinished and deficient work.
[2] During discovery examinations, settlement discussions between the parties took place and on August 6, 1998, a handwritten agreement between the parties was reached in the following terms:
The parties hereby propose a settlement along the following lines:
1. The action between the parties will be held in abeyance for a period of 120 days from the date of this memorandum;
2. SSHG shall offer for bidding two projects to the Plaintiff within the 120 day period;
3. SSHG shall provide detailed plans and specifications to Thibeau upon which Thibeau shall bid, including start and completion date and location;
4. Thibeau shall bid on each of the bids and his bid will be evaluated against all other bids with all necessary adjustments for WCB payments required to be paid by Thibeau if applicable;
5. If bid of Thibeau is closer (in the event that bid of Thibeau is equal or near equal to the next closet and lowest bid of equal or near quality, Thibeau’s bid shall be chosen) the parties shall enter into a contract to be provided by Ziegler and reviewed by Thibeau for the price bid by Thibeau plus $6250, - for the construction;
6. SSHG shall suggest a consultant to inspect the work in accordance with the contract to be approved by Thibeau;
7. At the time of execution the solicitors of the parties shall exchange consent orders for dismissal without cost to either party, together with releases executed by the parties and releasing each of the parties from any and all claims and obligations arising from this action and the contract with litigation to be held in escrow until final completion of this settlement;
8. Upon final inspection of the project on which Thibeau has successfully bid, SSHG shall pay into trust of the solicitor of the defendant the final contract payment and shall execute an irrevocable direction to pay the funds to the solicitor of the plaintiff in trust on the next day following the expiry date of the lien period;
9. In the event that no bid of Thibeau is closer [chosen ?] within a period of 120 days following the date of this memorandum, the settlement shall be null and void;
10. Time is of the essence;
11. Neither party shall discuss or communicate this settlement to any person other than their respective solicitors and the court (in so far as the order for dismissal must be filed) in the event that either party discloses any of the information contained in this memorandum, that party shall be liable for liquidated damages in the amount of $6250, - payable forthwith to the other party.
Dated at Chester this 6th August 1998.
[3] No contract was entered into between the parties as contemplated in this agreement, and on May 13, 1999, the respondent applied to Carver, J. in Chambers for an order for judgment “... on the settlement agreed to by the parties pursuant to Civil Procedure Rule 41A.08(1)”. The respondent offered an affidavit in support of his application which simply stated that within the period of 120 days following the agreement, he received no offer to tender as provided in the agreement; nor did he receive payment of the sum of $6,250.00. The appellant Ziegler filed an affidavit. He deposed that in the 120 day period following the agreement, the appellants were involved in the tendering process on two construction projects only. As to one, the appellants were awarded a contract with one Schmutz for $120,000. The respondent had also bid on this contract and, in the words of Ziegler, “... it was impossible for South Shore Home & Garden Limited to tender this project to Mr. Thibeau after Kanesius Schmutz had selected South Shore Home & Garden Limited to complete the work for them.”. As to the other project, the owner specified the supply and erection of a frame for the building by a named business, Legacy Timber Frames, and it was therefore not possible to subcontract the work to the respondent.
[4] An affidavit in response to the respondent stated that as to the first contract, the appellant should have offered, by way of subcontract, the opportunity for the respondent to carry out the work. As to the other project, no submission was made.
[5] In his decision, Carver, J. made reference to Rule 41A.08(1):
41A.08 (1) Where a party to an accepted offer to settle fails to comply with the terms thereof, the other party may, subject to the provisions of paragraph (2), apply to the court
(a) for judgment in the terms of the accepted offer,
(b) where the defaulting party is a plaintiff, to have his proceeding dismissed or, where the defaulting party is a defendant, to have his defence to the proceeding struck out.
(2) Where the accepted offer to settle is the settlement or compromise of a claim made by or on behalf of a person under disability, the provisions of paragraph (1) shall not apply until the settlement or compromise has been approved as provided in rule 6.08.
[6] Carver, J. found that the memorandum of August 6, 1998, was a valid settlement agreement and that the appellants were in breach thereof. They could have offered at least one project to the respondent. There was, in the circumstances, no contract capable of specific performance. He found the respondent to be entitled to liquidated damages of $6,250.00. He ordered payment of this sum by the appellants and ordered the dismissal of the action for damages and the set off claimed by the appellants in their defence.
[7] The issue raised in this appeal is whether the memorandum of agreement of August 6, 1998, is “an accepted offer” the terms of which could give rise to a judgment pursuant to Rule 41A.08(1), and whether the consequent dismissal of the proceedings was appropriate.
[8] By the terms of the memorandum, the original proceedings would be dismissed “at the time of execution” of a contract between the parties (clause 7). That never happened.
[9] No provision is made in the memorandum for payment of $6,250.00 or any sum by the appellants to the respondent except as part of the contract price of any contract entered into pursuant to the agreement and, in particular, clauses (2), (3), (4) and (5) thereof. The sum of $6,250.00 was to be added to the bid price. No such contract was ever entered into.
[10] The “settlement” provided for by the memorandum of August 6, 1998, was to be null and void in the event that no bid of the respondent was, as stated in clause (9), either “chosen” or “closer”. Whichever of these two words was used by the parties is not clear from the wording in the handwritten exhibit. This is of no consequence, however, because whatever the word was, the event did not take place. Thus, by virtue of clause (9), the settlement was “null and void”.
[11] On the application before Carver, J., the parties simply called upon him to interpret the memorandum as if it were an agreement to settle capable of enforcement under Rule 41A.08(1). In our opinion, the memorandum was not such an agreement. At best, it provided a mechanism by which settlement might be reached between the parties. Instead, they disagreed further. In Campbell v. Lienaux et al. (1998), 167 N.S.R. (2d) 196 (C.A.), Cromwell, J.A. said at p. 199:
Summary judgment applications are not the appropriate vehicle for determining disputed facts, difficult questions about the proportionate inferences to be drawn from facts or complex legal questions. This application raised all of these.
[12] The appeal must be allowed and the order of Carver, J. set aside in its entirety, including the order for costs. In the circumstances, there will be no costs to either party either of this appeal or the proceedings before Carver, J.
Chipman, J.A.
Concurred in:
Pugsley, J.A.
Bateman, J.A.