The Ontario Court of Appeal’s April 29, 2014 decision in Buccilli v. Pillitteri allowed a much-delayed intervention motion, placing heavy emphasis on prejudice as the factor to be considered when deciding whether to permit such a delayed intervention on appeal – both the prejudice that would accrue to the prospective intervener if his motion were denied, and the comparative prejudice that would accrue to the parties if the motion were allowed. Rouleau J.A. also gave consideration to the question of what constitutes a binding settlement of a prospective motion to intervene.

The case involved a dispute over a family business. A member of the family (“Ron”), who had a share in the business, was aware of the trial but was not named as a defendant. In a bifurcated proceeding, liability was found in November 2012 but a formal judgment was not finalized until January 2014. A damages trial has yet to commence. In September 2013, Ron announced that he intended to intervene in the appeal of the liability judgment but wished to wait to see the final terms of the judgment before taking steps to do so.  From February through April of 2014, Ron interacted with the respondent-plaintiff (“Patricia”) – both were clearly attempting to avoid an intervention motion. Rouleau J.A. summarized their interactions as follows:

[11]     … On March 20, 2014, counsel for Ron sent a letter to counsel for Patricia explaining Ron’s concerns that the trial judge’s liability judgment could be interpreted as affecting Ron’s ownership of shares in CDC and Birchland. Counsel for Ron made the following proposal to counsel for Patricia:

Will your client agree that, to the extent Justice Newbould’s judgment is interpreted as transferring Mr. Ventura’s shares, it should be scaled back so that it does not have that effect? If so, then there would no longer be a need for Mr. Ventura to intervene, and he is willing to withdraw his intervention motion provided that you undertake to advise the panel of the basis for doing so.

[12]     The following day, March 21, 2014, counsel for Patricia responded, in part:

I wish to confirm that our client has agreed to the terms of your letter, in particular the second last paragraph of your letter such that our client agrees that to the extent that Justice Newbould’s judgment is interpreted as transferring Mr. Ventura’s shares it will be scaled back on consent so that it does not have that effect.

[13]     Shortly after this exchange, counsel for the appellants advised that although the appellants’ position on appeal is that it was improper for the judgment to affect Ron and 179, there would be no agreement as to what “scaling back” might mean and the appellants would oppose any order on appeal that varied the judgment only with respect to its effect on Ron and 179.

[14]     On April 2, 2014, counsel for Ron wrote to counsel for Patricia stating that, on further reflection, he was “not persuaded that we can protect the interests of our client without being present at the Court of Appeal.” On April 7, 2014, counsel for Ron served notice of the present motion for leave to intervene. Specifically, the motion seeks to have Ron and his company, 179, added as parties to the appeal. Patricia filed a cross-motion pursuant to rule 49.09, seeking to enforce the purported agreement not to intervene, on the ground that it was an accepted offer to settle the motion, within the meaning of Rule 49.

The respondents made three principal arguments in opposition to the intervention motion.

First, they argued that there was a valid settlement on the motion to intervene. Rouleau J.A. was unpersuaded:

[25]     Until Ron is given intervenor status, he is not a party to the litigation. Further, when counsel exchanged the letters noted above there was no pending motion. In my view, therefore, the exchange of letters cannot constitute a Rule 49 offer and acceptance. Assuming it forms a binding agreement, however, it can be taken into account in deciding whether to exercise my discretion on the motion for leave to intervene.

[26]     Even supposing that counsel’s exchange of letters constitutes a valid Rule 49 offer to settle and acceptance, I would not exercise my discretion to enforce it. In purporting to accept Ron’s offer, counsel for the respondents wrote, in part, that “our client agrees that to the extent that Justice Newbould’s judgment is interpreted as transferring Mr. Ventura’s shares it will be scaled back on consent so that it does not have that effect” (emphasis added by Rouleau J.A.).

[27]     Ron’s counsel maintains that, to be effective, the settlement agreement must be agreed to by the appellants because varying the trial judge’s liability judgment “on consent” requires the consent of all parties to the litigation. It is clear that the appellants are not consenting and will not consent to any “scaling back”. Although the respondents argue that consent is not required, it is not clear to me that the respondents can, alone, ensure that the result they and Ron agreed upon can be obtained without the consent of the appellants or the agreement of the court. Finally, there seems to be confusion as to what “scaling back” a judgment means. Ron argues that his interests can be affected both directly through an order requiring the transfer of some of the shares and indirectly because of the impact of the judgment on the value and assets of CDC and Birchland. In my view, the settlement is not clear on this point.

[28]       In these circumstances, even if I were to accept that the agreement could come within Rule 49, I would conclude that it is not enforceable and would therefore not enforce it.

Second, the respondents submitted that Ron’s rights and interests were not “automatically” affected by the trial judgment on liability, and that Ron would in any event be able to protect his rights and interests at the damages phase of the trial. Rouleau J.A. did not agree:

[31]     I cannot prejudge the outcome of the appeal or that of the damages portion of the trial. Justice Gillese has already ruled that the outcome of the appeal may have an impact on Ron’s interest in CDC and Birchland. All that rule 13.01(1) requires is that a person “may be adversely affected” or that “there exists between the [proposed intervenor] and one or more of the parties to the proceeding a question of law or fact in common with one or more of the questions in issue in the proceeding.” In the appeal the appellants have clearly raised the issue of the impact of the judgment on Ron. It may well be that through the mechanisms they propose, the respondents will succeed in convincing this court and the judge hearing the damages trial that Ron’s interests are not and should not be affected. However, the appellants have not agreed to support that position and the issue is squarely before the court on the appeal. It is not for me to speculate on the outcome of the appeal and, in the circumstances, it seems to me that the respondents cannot ensure any specific outcome at the appeal or in the damages trial. As a result, I conclude that Ron has met the requirements of rule 13.01(1).

Third, the respondents submitted that given the delay in filing the motion for leave to intervene, the Court of Appeal should have exercised its discretion to dismiss the motion. Despite finding some merit in this submission, Rouleau J.A. ultimately did not accept it:

[33]       I am troubled by the lateness of this motion. The respondents ought not to have had to argue the motion one week before the scheduled hearing of the appeal, and be left with only a few days to consider Ron’s factum and be in a position to respond in court. The underlying action was brought in 2008 and counsel for the respondents understandably expresses frustration at the possibility of an adjournment.

[34]       The position to be taken by Ron on the appeal will not, however, take the respondents totally by surprise. It overlaps considerably with a position already advanced by the appellants. The appeal therefore may well proceed as scheduled. Additionally, little prejudice would accrue to the respondents if they decide to request a short adjournment of the appeal. Ron and the appellants have indicated that they will not seek an adjournment but would consent to an adjournment request by the respondents if, after reviewing Ron’s factum, the respondents need additional time to prepare for the appeal. In the circumstances, while the delay in bringing the motion is unfortunate, I do not conclude that it warrants dismissal of the motion.

Accordingly, Ron was allowed in intervene in the appeal.