The short decision of Williams v Williams had Justice Mandhane address whether to enforce a settlement agreement between the parties, despite the wife’s claim that the husband had repudiated said agreement following his acceptance.
The primary issue of contention between the parties was the value of the matrimonial home for the purpose of Mr. Williams buying out Ms. Williams’ interest. On Sep. 3, 2021, counsel for Ms. Williams, Mr. Humphrey, made a comprehensive Offer to Settle to Mr. Williams’ then counsel, Ms. Liew, open until Sep. 17, 2021. On Sep. 13, 2021, Mr. Williams accepted the offer himself, with Ms. Liew writing to Ms. Williams shortly thereafter stating she was no longer representing Mr. Williams.
The following day, Ms. Williams’ lawyer stated he had prepared a separation agreement in accordance with the agreement between the parties. By this time, Mr. Williams’ had retained a new lawyer, Mr. Cohen, who then requested some time to get acquainted with the file. Mr. Humphrey acknowledged that Mr. Cohen would need time to get caught up. However, one week later, Mr. Humphrey stated that if Mr. Cohen did not respond back with Mr. Williams’ position on settlement, they would proceed with a court application. Mr. Cohen responded that same day requesting the draft separation agreement so he could review same. At this point, Mr. Humphrey then e-mailed Mr. Cohen stating Ms. Williams was no longer sure about her previous offer, and that further negotiation may be required.
Six days later, Mr. Humphrey notified Mr. Cohen that Ms. Williams was unilaterally rescinding all previous offers and commencing a court application. In contrast, Mr. Williams sought to enforce the original agreement he had personally agreed to prior to the offer being rescinded.
Justice Mandhane first explored the law of anticipatory repudiation, as Ms. Williams was now claiming that Mr. Williams had implicitly repudiated the agreement depriving her of its benefit. The test for anticipatory repudiation requires two distinct steps:
- Where one party, either by express language or conduct, or as a matter of implication from what they have said or done, repudiates their contractual obligations before they fall due;
- The non-repudiating or innocent party, then clearly and unequivocally communicates to the repudiating party that they also wish to be discharged from the contract. This termination of the contract can either be performed directly or inferred through the conduct of the innocent party. (Brown v Bellevill (city) 2013 ONCA 148)
This test is an objective one, meaning the court is to consider whether a reasonable person in the applicable circumstances would conclude that the breaching party no longer intends to be bound by the contract. Justice Mandhane then listed specific circumstances for the court to consider in making such a determination, including:
- Whether the parties were represented by counsel;
- Whether the written material supports a prima facie agreement;
- Whether the evidence supports a shared intention to be bound by the written negotiations;
- Whether there was some final act or determination required prior to the settlement being final and binding;
- Any injustice occasioned by enforcing or not enforcing the agreement.
In applying this analytic framework to the facts of this case, Justice Mandhane held that Mr. Williams had not repudiated the contract under the doctrine of anticipatory repudiation. Mr. Williams retaining new counsel to finalize the Agreement is not evidence of his repudiation. It seemed perfectly rational for him to retain a new lawyer to review the terms of the agreement. He was under no obligation to continuously confirm his agreement to Mr. Humphrey afterwards.
In actuality, the evidence pointed to Ms. Williams being the one to change her mind following the agreement. Despite Mr. Humphrey informing Mr. Cohen he would have adequate time to acquaint himself with the file, a mere six business days later, he would state that Ms. Williams was now having reservations about her offer.
Affidavit evidence seemed to suggest that Ms. Williams felt she did not maximize her proceeds from the home and sought to exploit Mr. Williams’ personal acceptance of that offer to resile from this ‘less than ideal’ agreement.
Though the doctrine of anticipatory repudiation is not a common feature in family law matters, its relevance can be critical. Understanding the test and factors to be considered when determining whether a party has repudiated an agreement could help avoid extensive litigation in favor of an earlier binding agreement.
However, the law does not appear settled if the agreement in question arises after litigation has already been commenced. Should this be the case, courts may not be so willing to enforce an agreement as binding, given the dependency of these agreements on judicial oversight.