Court Of Appeal Summaries (August 17 – 21, 2015)

There were only two civil law decisions released this week by the Ontario Court of Appeal. One involved the enforceability of a settlement agreement in the employment law context. The other related to a dispute regarding relief ordered under the Family Law Act pursuant to a divorce order that included an obligation to make equalization payments and to pay section 7 expenses under the Federal Child Support Guidelines.

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Civil Case Decisions

Remedy Drug Store Co. Inc. v. Farnham, 2015 ONCA 576

[Epstein, Pepall and Benotto JJ.A.]

Counsel:

Matthew P. Sammon and Paul-Erik Veel, for the appellant

David Chernos, for the respondent

Keywords: Employment Law, Contracts, Rules of Civil Procedure, Rule 49.09, Offers to Settle, Settlement Agreements, Settlement Terms, Enforcement, Repudiation Simpliciter, Anticipatory Repudiation

Facts:

The appellant, Jane Farnham ("Farnham"), was employed as the General Manager and Executive Vice President by the respondent, Remedy Drug Store Co. Inc. ("Remedy"). In the last days of her employment, Farnham forwarded a large amount of emails to her personal computer and on her last day of work, she took home volumes of printed documents from Remedy's premises.

In response, Remedy began an action against Farnham for an injunction, damages and declaratory relief that she had breached her employment contract, fiduciary duty to the company and her duty of confidentiality. Remedy also brought a motion for interim injunctive relief on the issue of the confidential information Farnham was alleged to have taken from Remedy.

An agreement appeared to be reached through email, at which point Remedy's lawyers prepared a draft minutes of settlement. A disagreement arose between the two sides as to whether they had in fact reached an agreement, and if they had, whether Remedy had repudiated the agreement. Remedy's position was an agreement had been reached that included a term that a broad forensic sweep of Farnham's electronic devices would be conducted. Farnham believed that she had only agreed to a simple wipe of her devices and that Remedy's post-agreement emails had repudiated the settlement.

The parties eventually settled the injunction motion by agreeing that Farnham would place her personal computer in the hands of a third party until an agreement could be reached or a court order was issued. However, Farnham argued the continued existence of a scheduled injunction motion was evidence of repudiation, among other things. In response to the repudiation allegation, Remedy brought a motion to enforce the agreement. Remedy argued that it was not refusing to perform its obligations as set out in the settlement agreement but was only trying to clarify the terms. Farnham submitted that the post-agreement emails were more than a disagreement over the interpretation but rather an ultimatum to either agree to Remedy's terms or risk further legal action.

The motion judge found that the parties had entered into an enforceable settlement agreeing with Farnham that a forensic sweep had not been part of the agreement. He then ruled that Remedy's conduct did not amount to a repudiation of the agreement.

Issues:

(1) Did the motion judge err in failing to find Remedy's conduct amounted to a repudiation of the settlement agreement?

(2) Did the motion judge err in his consideration of rule 49.09 in the circumstances of this case?

Holding:

Appeal dismissed with costs on a partial indemnity basis.

Reasoning:

(1) The court found the Remedy did...