What Constitutes a Settlement

Halpern v Halpern, 2014 ONSC 4246, 243 ACWS (3d) 672

This case addresses the issue of what constitutes a settlement.

Background

The parties were married in January 1999 and separated in October 2011. There was one child of the marriage, born in December 2001. In May 2014, the parties attended a settlement meeting. The husband claims that, while the wife was out of the room, counsel for the wife presented him with an oral offer to which husband’s counsel sent a letter accepting the oral offer. Thereafter, the husband brought a motion for summary judgment seeking to confirm settlement.

Analysis

Justice Stevenson of the Ontario Superior Court cited Cole v Cole, 2011 CarswellOnt 8459 (Ont. SCJ), which found:

The Ontario Court of Appeal in Bawitko Investments Ltd v Kernels Popcorn Ltd. held that at common law, an agreement is binding if it contains all essential terms. This is so even if the parties also agree that those terms will later be recorded in a more formal document along with the usual terms ancillary to that type of agreement. However, an agreement is not final or binding if it is merely an agreement to later agree on essential provision, or to defer the binding nature of the agreement until the parties execute the proposed subsequent formal contract…

What emerges from the cases is that each will be fact-driven, and turn on an interpretation of what the parties’ objective intentions were. I emphasize the notion of discerning objective intentions, because parties generally govern themselves in a self-serving fashion when the issue of enforceability arises, in order to bolster their respective positions as to whether a binding agreement has been formed or not.

Justice Stevenson further cited Lundrigan v Andrews, where the court found that the course of conduct by both parties indicated that they viewed a formal document as essential for there to be a binding agreement.

The Court found that the correspondences between counsel suggests that “the terms of a final agreement have not been agreed to and that all of the terms must be acceptable to both the parties and counsel, including any custody and parenting issues” (paragraph 23). Justice Stevenson found that the conduct of the parties did not demonstrate a “clear intention to have an agreement and to be bound by the provisions of the agreement” (paragraph 22). As such, Justice Stevenson was “not prepared to… conclude based on the evidence before me, that the parties had agreed on all the essential terms of an agreement and had a clear intention to have a final settlement” (paragraph 22) and, consequently, dismissed the motion for summary judgment.

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