Case Study: Hashemi-Sabet Estate V. Oak Ridges Pharmasave Inc. ('Hashemi-Sabet')

In the recent Ontario Court of Appeal decision Hashemi-Sabet Estate v. Oak Ridges Pharmasave Inc. (“Hashemi-Sabet”),1the court addressed the principles of offer and acceptance in the context of multiple Rule 49 offers, and the enforcement of a Rule 49 offer to settle. As Justice Pepall noted, “Rule 49.09 of the Rules of Civil Procedure provides that a party may bring a motion for judgment in the terms of an accepted offer and the judge may grant judgment accordingly or continue the proceeding as if there had been no accepted offer to settle.”2 In this case, the appellants argued that the motion judge erred in giving judgment to a Rule 49 offer which they argued had been revoked before it had been accepted. The respondents argued that the offer had not been properly revoked.

Background

The Hashemi-Sabet Estate (the “Estate') sued Oak Ridges Pharamsave Inc. (“Pharmasave”) for damages for breach of contract, oppression and various other causes relating to the opening and operation of a pharmacy.

On June 8, 2015, Pharmasave made a written Rule 49 offer to settle for $55,555.55, which was to remain open until trial (“the June Offer”). The Estate did not respond to the June Offer before the pretrial.

The matter proceeded to pretrial on September 20, 2016. The matter did not settle and what transpired at the pre-trial is disputed.

The Estate claimed that at the conclusion of the pretrial on September 20, 2016, it served Pharmasave's counsel with written acceptance of the June Offer by way of fax at 1:27 p.m. Approximately an hour later, at 2:34 p.m., a law clerk of Pharmasave made a phone call to the Estate requesting a copy of the June Offer, which the Estate subsequently sent by email.

Pharmasave took the position that the June Offer had already been revoked orally at pretrial, so the Estate's subsequent acceptance was ineffective. And, furthermore, even if the oral revocation was not valid, Pharmasave argued that it had served a second Rule 49 offer on September 19, 2016, for $17,333.00, a day before the pretrial, which expressly revoked the first offer (the “Second Offer”).

The Estate acknowledged that it had been served with the Second Offer, but stated that it had not been served until 5:23 p.m. on September 20, 2016 - several hours after the Estate had accepted the June Offer and a day after when Pharmasave alleges it served the Second Offer. In support of its position, counsel for the Estate provided that on receipt of the Second Offer the...