Date: 20020828
Docket: T-1848-99
Neutral citation: 2002 FCT 900
BETWEEN:
VAS-CATH INCORPORATED
Plaintiff
- and -
SAKHARAM D. MAHURKAR
Defendant
REASONS FOR JUDGMENT
(Delivered from the Bench at Toronto, Ontario, on Wednesday, August 21, 2002)
HUGESSEN J.
[1] This is a motion for summary judgment. The action in which it is brought is a conflict proceeding under the old Patent Act, R.S.C. 1985, c. P-4. The Commissioner decided the conflict proceeding generally in favour of the defendant and the action brought by the plaintiff seeks to alter that decision.
[2] Starting in April of 2001, the solicitors representing the two parties entered into an exchange of correspondence regarding the settlement of the litigation. The exchange continued sporadically until September of 2001 and appears to cover all the terms of the settlement. On both sides, the correspondence clearly indicates in express language that the execution of a formal settlement agreement was contemplated. This was never done, the parties are now no longer ad idem and the defendant moves for summary judgment based on the alleged settlement as documented in the exchange of correspondence.
[3] The motion relies exclusively on that exchange of correspondence and the defendant has produced no other evidence of any substance. In my view, this is not enough. The law is clear that a mere agreement to agree is not enforceable. That, on the face of the documents, is all we have in front of us.
[4] Now it is also quite clear that as a matter of construction, looking at the whole course of dealings between the parties, both prior to and often subsequent to the conclusion of an alleged agreement, the Court may find that what on its face appears to be only an agreement to agree is in fact a binding contract. The Court may find that the parties reference in their documentation to a formal agreement was only intended as a means of monumenting or of executing the contract which they have concluded between themselves. But that is an exception to the general rule that a mere agreement to agree is not an enforceable contract, and to make such a finding the Court must have evidence that the parties intended by their exchange of documents to bind themselves finally. Much will depend on the circumstances. I do not propose to make an exhaustive list, but certainly the course of dealings in the past, certainly the parties' actions subsequent to their exchange of documents, certainly also the particular circumstances in which the agreement was reached will be of importance. The Court will look closely at the timing. It is common place that an agreement reached between counsel at the courtroom door (or even in the courtroom with the sword of justice hanging threateningly over both parties' heads) is likely to be much more sympathetically interpreted by the Court, which will be far more likely to find that what the parties have concluded was in fact a contract and not merely an agreement to agree.
[5] At the risk of a personal anecdote, I am sure that I am not alone in recalling my own time at the bar where settlement agreements were scribbled hastily (in those days on the back of a cigarette package, nowadays counsel are much healthier than we were) ; but the most informal sorts of agreements, which were later monumented by long and formal written documents, were unquestionably binding agreements between the parties and were treated as such.
[6] To return to this case, there is nothing in the evidence here that would allow me to conclude that there was anything more than an agreement to agree. I do not say that there was not something more, there may have been, I do not know; but the defendant who, as the moving party, has the burden of persuading me that there is no genuine issue for trial has failed in that burden and I can only conclude to the dismissal of the motion for summary judgment.
(Later)
[7] I shall order the defendant to pay the plaintiff's costs, which I fix in the amount of $9,000, including disbursements. Such payment is to be made forthwith and in any event of the cause.
Judge
Ottawa, Ontario
August 28, 2002
FEDERAL COURT OF CANADA
TRIAL DIVISION
NAMES OF COUNSEL AND SOLICITORS OF RECORD
DOCKET: T-1848-99
STYLE OF CAUSE: VAS-CATH INCORPORATED Plaintiff
- and-
SAKHARAM D. MAHURKAR Defendant
PLACE OF HEARING: TORONTO
DATE OF HEARING: WEDNESDAY, AUGUST 21, 2002
REASONS FOR JUDGMENT : HON. JUSTICE HUGESSEN
DATED: AUGUST 28, 2002
APPEARANCES:
Mr. D. Aylen
Mr. K. Sartorio FOR PLAINTIFF
Mr. Stephen M. Lane FOR DEFENDANT
SOLICITORS OF RECORD:
GOWLINGS
Barristers and Solicitors
Suite 4900, Commerce Court West
Toronto, Ontario, M5L 1J3 PLAINTIFF
SIM , HUGHES, ASHTON
& McKAY, LLP
330 University Avenue
6th floor
Toronto, Ontario, M5G 1R7 DEFENDANT
Email this Content