BC Estate Lawyer- Was There a Settlement?

Trevor Todd and Jackson Todd have over sixty combined years of estate litigation which often includes issues such as was there a settlement?


In Hutton v. Hutton, 2020 BCSC 2046, the Honourable Chief Justice Hinkson reviewed various authorities which dealt with summary applications, brought in an action to enforce agreements to compromise that same action. At para. 30, he concluded that he could properly enforce a settlement agreement and grant a stay of proceeding through such motion if he were to find that there was a binding settlement agreement.

Essential Terms
[20] The question then remains—was there a settlement agreement between these parties?

[21] Again, reference to the Hutton case provides recent and persuasive authority on such assessment. At paras. 31–33, Hinkson C.J.S.C. says:

Is there an Enforceable Agreement between the Parties?

[31] The burden of proving the existence of a settlement agreement is on the party seeking to enforce or rely on it: Salminen v. Garvie, 2011 BCSC 339 [Salminen] at para. 26. The standard of proof required is on the balance of probabilities.

[32] To determine if a settlement agreement is enforceable, the court must consider whether the parties reached agreement on all essential terms. In Fieguth v. Acklands Ltd. (1989), 59 D.L.R. (4th) 114 (B.C.C.A), [Fieguth] Chief Justice McEachern stated at 121:

… The first question is whether the parties have reached an agreement on all essential terms. There is not usually any difficulty in connection with the settlement of a claim or action for cash. That is what happened here and as a settlement implies a promise to furnish a release and, if there is an action, a consent dismissal unless there is a contractual agreement to the contrary, there was agreement on all essential terms.

[33] In Apotex Inc. v. Allergan, Inc., 2016 FCA 155, at paras. 32–33, Mr. Justice Stratas phrased the test to determine if an enforceable settlement had been reached as follows:

[32] The court is to view the specific facts of the case objectively in light of the practical circumstances of the case and ask whether the parties intended to be legally bound by what was already agreed or, in other words, whether an “honest, sensible business [person] when objectively considering the parties’ conduct would reasonably conclude that the parties intended to be bound or not” by the agreed-to terms: G Percy Trentham Ltd v Archital Luxfer Ltd. (1992), [1993] 1 Lloyd’s Rep 25, 63 B.L.R. 44 (C.A.) at paras. 50 and 86; Ward at para. 61; Hughes v. City of Moncton, 2006 NBCA 83, 304 N.B.R. (2d) 92 at para 6. Put another way, looking not through the eyes of lawyers, but through the eyes of reasonable businesspeople stepping into the parties’ shoes, was there something essential left to be worked out? See Investors Compensation v. West Bromwich Building Society, [1998] I All E.R. 98; [1998] 1 W.L.R. 896 (H.L,); Chartbrook v. Persimmon Homes, [2009] UKHL 38, [2009] A.C. 1101; Re Sigma Finance, [2009] UKSC 2, [2010] 1 All E.R. 571. Another way of putting it is to ask how “a reasonable [person], versed in the business, would have understood the exchanges between the parties”: Bear Steams Bank pic v. Forum Global Equity Ltd., [2007] EWHC 1576 (Q.B.D. Comm.) at para 171.

[33] When courts find that there has been an agreement on essential terms, they will often imply non-essential terms into the agreement: McCabe, above at para 20; Fieguth, above; Hughes, above at para. 6. The lack of agreement on non-essential terms will not stand in the way of a finding of an agreement. Put another way, “it is not necessary that the original contract include all the ancillary terms that are already implicit in its content”: Ward, above at para. 54. “Even if certain terms of economic or other significance to the parties have not been finalized, an objective appraisal of their words and conduct may lead to the conclusion that they did not intend agreement of such terms to be a pre-condition to a concluded and legally binding agreement”: RTS Flexible Systems, above at para. 45. For example, assuming an agreement on essential terms is otherwise in place, courts can imply terms concerning the granting of a release, the manner of payment and the timing of payment: Fieguth, above at para 21; Hodaie v. RBC Dominion Securities, 2012 ONCA 796 at para. 3; Imperial Oil Ltd. v. 416169 Alberta Inc., 2002 ABQB 386, 310 A.R. 338. Often these will be “mere formalities or routine language” Bawitko, above at p. 106.

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