Settlement Agreements Are Not A Done Deal!

• Published date: 05 October 2022
• Subject Matter: Litigation, Mediation & Arbitration, Family and Matrimonial, Family Law, Trials & Appeals & Compensation
• Law Firm: Devry Smith Frank LLP
• Author: Kenna Bromley and Kathleen Judd

Is the Court bound by the agreement between the parties?

The court explores - Whether the court is bound by an agreement made between the parties in order to reach a settlement? In the recent Court of Appeal decision, Richardson¹, the court looked at a trial decision that was contrary to a settlement that the parties had negotiated. The Court of Appeal was faced with the question of whether the trial judge's refusal to accept the negotiated settlement between the parties was contrary to the best interests of the children, the principles of fundamental justice, and indicative of bias. The Court of Appeal said no and concluded that they would not interfere with the trial judge's decision to not accept the settlement between the parties.

In the court process, parties often negotiate a settlement in order to avoid trial. A settlement can be reached at any time during the process. One of the goals of the family court process is to encourage resolution between the parties when possible. An offer to settle should set out all the ways in which the disputed issues can be settled. Parties are strongly encouraged to consider ALL offers because rule 18(14) provides costs consequences for failing to accept an offer if the party who made the offer obtains an order that is favourable as or more favourable than the offer. If the other party makes you an Offer to Settle, you do not accept that Offer, and the order ultimately made by the court is as favourable or more favourable to the offering party than their Offer was, the offeror is entitled to their legal costs, unless the court orders otherwise, to the date the Offer was served, and full recovery of costs from that date.

In other words, if the offer that is presented to you ends up being better than what you received when you went to trial, you may have to pay substantial costs to the other side.

In the Richardson² case, the parties advised the trial judge, during the trial, that they were negotiating a settlement. The trial judge granted an adjournment but advised the trial would continue the following day whether or not a settlement had been reached.

The proposed settlement was presented to the judge the following day. The settlement contained language that the children would move from one party's primary custody (father) to the other party's primary custody (mother); however, the final decision-making would remain with the father. This move involved significant travel (Niagara Falls to Ottawa).

The trial judge...