The bar to set aside a settlement agreement is a high one.
There is a great public interest in holding people to their bargains.
BC courts have repeatedly cited the principles set out by the British Columbia Court of Appeal in Robertson v. Walwyn Stodgell Cochran Murray Ltd. 24 BCLR (2d) 385 (BCCA), 1988 CarswellBC 120 at para 9, cited in Lessing Brandon & Company LLP v. Dyck and others, 2019 BCSC 2331 at para 43:
“The fact that the settlement agreement may not have been a desirable one from [one parties point of view], or the fact that they may have received poor advice from their lawyer, or the fact that they later changed their minds, cannot provide grounds for setting aside the settlement agreement, or for a refusal to enforce it […]
Sojka v Sojka 2018 BCSC 562 reviews the law with respect to enforcement of a settlement reached at a mediation where both parties were represented by counsel, and one party attempted to renege on the agreement by utilizing what the court regarded as “settler’s remorse.”
The plaintiff brought on a court application to enforce the minutes of settlement that were signed by the parties and their counsel, and relied upon S 8(3) of the Law and Equity act and the inherent jurisdiction of the court to enforce the terms of settlement, which the court in fact did.
The defendants in their attempt to renege on the settlement argued that they were mistaken as to certain evaluations of property at the mediation, which the court found was not in fact the case, finding that the minutes of settlement and release constituted a clear agreement between the parties.
The court followed the decision of Roumanis v Hill 2013 BCSC 1047 as to when the enforceability of a settlement agreement ought to be decided on a summary procedure.
The court stated:
The question of the proper procedure to adjudicate the enforceability of the settlement was addressed in Mackenzie v Mackenzie (1975) BCJ 1114 were the court reviewed the authorities and concluded that the court ought to enforce settlement upon application in the action of justice could be done by proceeding summarily.
The court found that there is a sound policy for the courts to enforce the terms of a valid settlement agreement as stated by the BC Court of Appeal in Robertson v Walwyn et al (1988) 24 BCLR )2d) 385 (BCCA):
“Justice affects both parties and requires a balancing of their interests. The fact that the settlement agreement may not have been a desirable one from the point of view of the Robertsons, or the fact that they may have received for advice from their lawyer, or the fact that the later change their minds, cannot provide grounds for setting aside the settlement agreement, or refusal to enforce it. And it would do scant justice to the interests of the defendants in this case to recognize the validity of the settlement agreement, and that it will ultimately prevail, but to refuse to enforce it at this time and in these proceedings.”
Hawitt v Campbell 1983 Carswell BC 199 (BCCA) set out that a court could refuse to exercise its discretion to perfect a settlement where:
1. There was a limitation on the instructions of the solicitor known to the opposite party;
2. There was a misapprehension by the solicitor making the settlement of the instructions of the client or the facts of the type that would result in an justice or make it unreasonable or unfair to enforce the settlement;
3. There was fraud or collusion;
4. There was an issue to be tried as to whether there was such a limitation, misapprehension, fraud or collusion in relation to the settlement.