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Enforcing Settlements and Settler’s Remorse

Wiley v. Kimball, 2020 ONSC 2691 (CanLII), http://canlii.ca/t/j6wb6

Lawyers are usually happy when clients enter into minutes of settlement (“MOS”) hoping that it is an end to their protracted litigation, or even if before proceedings are commenced, avoiding protracted litigation. There may however be issues that arise where one party might refuse to comply and cooperate with the other party, or, to give effect to the terms of the settlement. There may also be remorse, or a desire to resile from the agreement. In this event, the party is entitled to apply to the court for an order enforcing the MOS.

This is just what happened in the case of Wiley v. Kimball.[1]

Background

Fern (the “Deceased”), passed away on May 10, 2014, leaving her estate to her three children, Diane, Richard, and Harold. Diane and Richard were appointed as Estate Trustees and were the Applicants in this proceeding (the “Applicants”). Harold passed away on August 24, 2014, and his wife Judith was appointed as Executrix of his estate. She is the Respondent in this Proceeding (the “Respondent”).

There were several issues that the parties could not agree upon respecting the administration of the Deceased’s estate, such as the ownership of various properties, GICs, distribution of jewelry; and, calculation of Estate trustee compensation.

The parties attended a mediation where an agreement was reached and MOS signed. All the parties were assisted by counsel at the mediation. The MOS dealt with all of the issues.

After the execution of the MOS, some of the provisions in the agreement were already completed. The parties had reached an impasse with regards to a few remaining issues that had already been agreed to and dealt with in the MOS. Therefore, the Applicants commenced an application (the “Application”) seeking orders consistent with the terms of the settlement.

Analysis

Counsel for the Applicants argued that the parties were bound by the MOS, an argument that the judge agreed with. The court looked at the case of Olivieri v. Sherman which stated the following:

“The settlement agreement is a contract. Thus, it is subject to the general law of contract regarding offer and acceptance. For a concluded contract to exist, the court must find that the parties: (1) had a mutual intention to create a legally binding contract; and (2) reached agreement on all of the essential terms of the settlement.”[2]

The Respondent did not dispute that there was no agreement reached between the parties, she argued that the Applicants had not complied with the settlement because they had not yet transferred the required property to her as per the MOS, and therefore, they were not entitled to enforce.

For the court to consider the Respondent’s submission, it considered the events that occurred subsequent to the execution of the minutes of settlement. Upon reviewing the evidence, and the cross-examination of the Respondent, it was evident that it was due to the Respondent’s inaction that the property was never transferred to her.

The Respondent’s counsel also argued that the Estate Trustee’s compensation was unfair. The judge rejected the argument on the basis that the parties had previously agreed to compensation payable to the Estate Trustees and that they were entitled to same in the normal course of administering an estate.

The court considered the case of Donaghy v. Scotia Capital Inc., which stated the following:

“The principle of finality is an important principle. Settlements entered into with the assistance of counsel should be upheld except in the clearest of cases and in exceptional cases.”[3]

In granting the Applicants’ Application, The court stated:

This case is one where a reasonable settlement was reached at mediation by all parties with the assistance of counsel. Subsequent to the settlement, the respondent resiled from the settlement without a reasonable explanation. In my view, the settlement is one that ought to be enforced.[4]

Takeaway

Minutes of Settlement are legally binding contracts that are enforceable by a court.

[1] Wiley v. Kimball, 2020 ONSC 2691, 2020 CarswellOnt 6036 [Wiley]

[2] Olivieri v. Sherman, (2007), 86 O.R. (3d) 778, At para. 41,

[3] Donaghy v. Scotia Capital Inc., [2004] O.J. No. 2157, aff’d 2009 ONCA 40, at para. 6:

[4] Wiley, at para 30.

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