CHAPTER 4: Releases and Settlement

4.1 The Legal Basis for a Settlement

Parties can settle any matter in any manner they choose so long as it is a matter that does not require the intervention of the court: Dickson v. Poon Estate, 1982 ABCA 112 (CanLII), at paragraph 10.

A settlement agreement is a contract. Thus, a settlement agreement is subject to the general law of contract regarding offer and acceptance. For a concluded contract to exist, the court must find that the parties had a mutual intention to create a legally binding contract and reached agreement on all of the essential terms of the settlement: Olivieri v. Sherman, 2007 ONCA 491 (CanLII) , at paragraph 41, quoting from Bawitko Investments Ltd. v. Kernels Popcorn Ltd., 1991 CanLII 2734 (ON CA) . A determination as to whether a concluded agreement exists does not depend on an inquiry into the actual state of mind of one of the parties or on parol evidence of one party’s subjective intention. Where the agreement is in writing, it is to be measured by an objective reading of the language chosen by the parties to reflect their agreement: Olivieri v. Sherman, 2007 ONCA 491, at paragraph 44, referring to Lindsey v. Heron & Co. (1921), 64 D.L.R. 92 (Ont.S.C., App.Div.)

The Alberta Court of Appeal has said that “[t]he whole point of a settlement is to replace an unpredictable dispute or suit with a certain contract”. It is of the essence of such a settlement that each party relies on his or her own evaluation of what a suit or trial will yield in comparison to a settlement. It is an error to look at events in hindsight and then use them to measure a settlement contract made earlier before those facts were known and still less to call the settlement improvident or unfair. Least of all can one attack a settlement on the ground that one party was right all along and should not have compromised. (See Cain v. Clarica Life, 2005 ABCA 437, at paragraphs 52 and 54, referring to Radhakrishnan v. University of Calgary and other authorities.)

The policy of the courts is to encourage the settlement of litigation. The courts “should not be too astute to hold” that there is not the requisite degree of certainty in any of a settlement agreement’s essential terms: Olivieri v. Sherman, 2007 ONCA 491, at paragraph 50, quoting from Canada Square Corp. v. Versafood Services Ltd. (1982), 34 O.R. (2d) 250 (C.A.). Parties cannot be permitted to “play fast and loose with settlements” they have made, and broad releases they have executed, with the assistance of legal advice and in full knowledge of all the relevant facts: Disera v. Bernardi, 2014 ONSC 4500 (CanLII) .

When parties reach a settlement agreement on all essential terms, but include words indicating that the agreement is subject to the approval of the court, this does not mean that there is no agreement at all. There is an agreement, but its operation is suspended until the court approves it. It is the duty of one party or the other to bring the agreement before the court for approval. If the court approves, the contract is binding and, if the court does not approve, it is not binding. Pending the application to the court, it remains a binding agreement which neither party can disavow: Re Wu, 2006 CanLII 16344 (ON CA), quoting from Smallman v. Smallman, [1971] 3 All E.R. 717 at 720 (C.A.).

Dreco Energy Services Ltd. v. Wenzel Downhole Tools Ltd., 2010 ABQB 252 (CanLII)

There is an obvious difference between an action which culminates in a judgment and one which culminates in compromise: save in exceptional cases, a judgment will conclusively determine the full measure of damages while a sum agreed to be paid under a compromise may or may not represent the full measure of one party’s liability to another. In this case, the court could see nothing in a settlement agreement and release, nor in a consent judgment, which could be interpreted as meaning the plaintiffs accepted a specified dollar payment in full satisfaction of their claims.

Sojka v Sojka, 2018 BCSC 562 (CanLII)

When counsel are present during the settlement of a dispute and assist the parties in preparing a settlement agreement and there is no evidence of duress, fraud or fundamental mistake in the preparation of such an agreement, the presumption should be that the parties intended to be bound by it.

4.2 Policy of Encouraging Settlement

The policy of the law to encourage settlements has been emphasized in a host of Canadian authorities, including decisions of the Supreme Court of Canada in cases such as Kelvin Energy Ltd. v. Lee, 1992 CanLII 38 (SCC) and Sable Offshore Energy Inc. v. Ameron International Corp., 2013 SCC 37 (CanLII) , [2013] 2 SCR 623. In Kelvin, the Supreme Court quoted with approval the following comments about settlement made by an Ontario judge:

… the Courts consistently favour the settlement of lawsuits in general. To put it another way, there is an overriding public interest in favour of settlement. This policy promotes the interests of litigants generally by saving them the expense of trial of disputed issues, and it reduces the strain upon an already overburdened provincial Court system. 

(Sparling v. Southam, 1988 CanLII 4694 (ON SC), quoted in Kelvin [1992] 3 S.C.R. 235 at page 259.) According to the Supreme Court, encouraging settlements has been recognized as a priority in our overcrowded justice system: Union Carbide Canada Inc. v. Bombardier Inc., 2014 SCC 35 (CanLII), [2014] 1 SCR 800, at paragraph 32.

In Remedy Drug Store Co. Inc. v. Farnham, 2015 ONCA 576 (CanLII), at paragraph 54, the Ontario Court of Appeal said that Courts are motivated to enforce settlements for good reason; the court then quoted from Angela Swan & Jakub Adamski, Canadian Contract Law, 3rd Edition (Markham: LexisNexis Canada, 2012), where, at page 52, it is said that: “There are strong policy reasons for the court’s attitude to settlements: it is in everyone’s interest that litigation be concluded by the parties’ agreement.”

Below are some representative examples of the many decisions in which Canadian courts have confirmed, emphasized or elaborated on the policy of the law to encourage settlement of litigation and disputes.

Vanderkop v. Manufacturers Life Insurance Company, 2005 CanLII 39686 (ON SC)

There are policy considerations which weigh in favour of declining judgment enforcing a settlement in certain circumstances. Agreements to settle litigation often occur in circumstances, such as on the eve of trial, when the parties are under time constraints and emotional and financial pressure. There is great potential for mistakes, misunderstanding and miscommunication. The countervailing and valid policy is that parties should be encouraged to take settlement discussions seriously and carefully and their motivation to settle should not be eroded by a concern that settlements will be easily avoided by litigants having second thoughts.

Better Beef Ltd. v. MacLean, 2006 CanLII 17930 (ON SCDC)

Courts will be slow to set aside a release and settlement made between the parties for valuable consideration (citing Bartlett v. Canada Life Assurance ).

Barr v. Pennzoil-Quaker State Canada Inc., 2007 CanLII 28526 (ON SC)

The courts will be slow to set aside a release and settlement agreement between parties for valuable consideration. There are policy considerations in favour of upholding releases. The pressures on contracting parties are hugely variable. By way of example, one daily witnesses at court incredibly stressful family law cases and motor vehicle accident cases, full of visceral and emotional issues, reaching settlement at the courtroom door. Once minutes of settlement are executed, it is virtually impossible to resile from them. That is especially so after the settlement has been executed and monies paid and parties have gone ahead with their lives and businesses on the strength of such settlements. It cannot be otherwise.

Olivieri v. Sherman, 2007 ONCA 491 (CanLII)

The policy of the courts is to encourage the settlement of litigation. The courts “should not be too astute to hold” that there is not the requisite degree of certainty in any of a settlement agreement’s essential terms: see Canada Square Corp. v. Versafood Services Ltd. (1982), 34 O.R. (2d) 250 (C.A.).

Whitehall Homes & Construction Ltd. v. Hanson, 2012 ONSC 3307 (CanLII)

Settlement between parties should be encouraged and supported. It is contrary to public policy to set agreements aside because someone changes their mind significantly after the fact.

Chapman v. King, 2010 MBQB 249 (CanLII)

As a matter of public policy, the courts encourage parties to settle their differences amongst themselves if possible. As noted in Malley v. Red Deer Valley Mutual Insurance Company, 2010 MBQB 111 (CanLII), most legal disputes are resolved by way of negotiated agreements between the parties and the enforceability of settlement agreements is essential to the settlement process.

Sentry Metrics Inc. v. Robert Ernewein et al., 2013 ONSC 959 (CanLII)

Good public policy dictates that settlements be encouraged. It would be inconsistent with that policy to refuse to enforce a settlement agreement unless there is good reason for doing so.

Sable Offshore Energy Inc. v. Ameron International Corp., 2013 SCC 37 (CanLII) , [2013] 2 SCR 623

Settlements allow parties to reach mutually acceptable resolution to their dispute without prolonging the personal and public expense and time involved in litigation. In Kelvin, (above), L’Heureux-Dubé acknowledged that promoting settlement was “sound judicial policy” that “contributes to the effective administration of justice”.

Cushnaghan v Kwan, 2015 ONSC 4837 (CanLII)

The motion judge in this case said that the defendant’s obligations under minutes of settlement entered into with the plaintiff should be enforced, which included requiring the defendant to execute the agreed-upon form of release contained therein. The principle of finality and public policy dictates that settlements entered into between parties should be upheld except in the clearest of cases. (The defendant acknowledged the minutes to be binding and enforceable.)

Sahota v. Sahota, 2016 ONSC 314 (CanLII)

The policy of the courts is to encourage litigants to settle their disputes. Therefore, the court should not be too demanding in finding that there is not the necessary degree of certainty in any of the essential terms of a settlement agreement.

Canadian Standards Association v. P.S. Knight Co. Ltd., 2018 FC 1081 (CanLII)

Agreements to settle litigation are frequently subject to interpretive disagreements. Because of the value of promoting and enforcing litigation settlements, the courts have generally been reluctant to treat ex post facto “posturing” as a repudiation of a settlement agreement.

Lumsden et al v. The Toronto Police Services Board et al., 2019 ONSC 5052 (CanLII)

On a motion for judgment under the Rules of Civil Procedure after a party has accepted an offer to settle, the settlement will be enforced if there is a binding settlement agreement and there is no reason for the court to exercise its discretion not to enforce the settlement. The overriding consideration in these types of cases is that settlements are to be encouraged. Where the first part of the test has been met, the party resisting settlement has a heavy onus to demonstrate why the court should not give effect to the agreement. The discretion not to enforce a settlement is to be exercised rarely.

Deschenes v. Lalonde, 2020 ONCA 304 (CanLII) , application for leave to appeal dismissed, Roman Catholic Episcopal Corporation of the Diocese of London in Ontario, et al. v. Irene Deschenes, 2021 CanLII 8830 (SCC)

 There is a strong presumption in favour of the finality of settlements, referring to Tsaoussis and Mohammed v. York Fire (above).

ADT Security Services Canada, Inc. v. Fluent Home Ltd., 2023 ONSC 5052 (CanLII)

There is an overriding public interest in enforcing settlements to promote the interests of the litigants (saving them the time and expense of a trial) and reducing strain on an overburdened court system.

Sumarah v. International Property Group (Toronto) Limited, 2024 ONSC 334 (CanLII)

 

The policy of the court is to encourage settlements and in matters of interpretation, courts are not inclined to find that the settlement agreement does not have the requisite certainty in its essential terms.

4.3 Formation and Completion of a Settlement: Two-Step Analysis

Canadian jurisprudence reveals many disputes about whether parties have reached an agreement to settle when differences arise between them with respect to the terms of a release. In such circumstances, an important distinction must be made between, on the one hand, the formation of a settlement agreement and, on the other hand, the completion of a settlement agreement.

The decision of the British Columbia Court of Appeal in Fieguth v. Acklands Ltd., 1989 CanLII 2744 (BC CA) sets out a two-question framework for cases in which parties differ over the terms of, or the completion of, a settlement: see Lacroix v. Loewen, 2010 BCCA 224 (CanLII) , paragraph 28. The first question to be asked is whether a contract was reached. In answering this question, it is necessary to determine if all essential terms have been agreed upon. The next stage is the completion of the agreement. If there are no specific terms in this connection, either party is entitled to submit whatever releases or other documentation he or she thinks appropriate. More specifically, one can tender whatever documents one thinks appropriate without repudiating the settlement agreement: Fieguth, at paragraph 36. Thus, if there was an agreement, the second question is whether the agreement was repudiated by one party insisting on terms not agreed to: Lacroix, at paragraph 28. See also Salminen v. Garvie, 2011 BCSC 339 (CanLII), paragraph 39.

Where there is no meeting of the minds and the essential provisions have not been settled or agreed to, there is no agreement and the settlement will not be enforced: Bawitko Investments Ltd. v. Kernels Popcorn Ltd., 1991 CanLII 2734 (ON CA) . The court will not make a contract for the parties if they have not agreed on its essential terms: see, for example, Martin v. St. Thomas – Elgin General Hospital, 2018 ONSC 799 (CanLII), at paragraph 42, and Picavet v. Clute, 2012 ONSC 2221 (CanLII), at paragraph 13. Where there is agreement on essential terms, any disagreement with respect to the implementation of the essential terms does not change the fact that a settlement occurred: Martin v. St. Thomas – Elgin, above, at paragraph 44.

Certified Design Consulting Inc. v. Alex Lane Properties Inc., 2015 NSSC 367 (CanLII)

On a motion for an order enforcing a purported settlement agreement, the court said there were four related legal principles to be applied, as follows: (1) to be enforceable, there must be agreement between the parties as to all essential terms – the determination of what terms are essential, however, varies with the nature of the transaction and the context in which the alleged agreement was made; (2) one party’s subjective intent has no independent place in this exercise – rather, the determination of whether agreement has been reached on all essential terms is made from the perspective of an objective, reasonable bystander in light of all the material facts; (3) where the alleged agreement calls for the execution of a further document, the question is whether the further documentation is a condition of there being an agreement, or whether it is simply an indication of the manner in which the agreement already made will be implemented; and (4) in appropriate cases, the essential terms do not all have to be expressed – they may have to be implied in order to give effect to the agreement. 

Jenneson v. Olson, 2019 BCSC 2367 (CanLII)

In determining whether a binding settlement agreement has been formed, the court must separate the question of the formation of a contract from its completion. In Fieguth, the court held that the first question that must be determined is whether the parties have reached an agreement on all essential terms. If they have, then a binding settlement agreement is formed. The next stage, the completion of the agreement, need not be finalized in order for the parties to be bound by their agreement. If there are completion terms unresolved after the formation stage, either party is entitled to submit whatever releases or other documents he or she thinks are appropriate to complete the contract.

4.4 Formation of a Settlement Agreement

A settlement agreement is (obviously) a contract. As noted above, for a concluded contract to exist, the parties must have had a mutual intention to create a legally binding contract and they must have reached agreement on all of the essential terms of the contract: see Martin v. St. Thomas-Elgin General Hospital, 2018 ONSC 799 (CanLII), at paragraphs 40-45, and Olivieri v. Sherman, 2007 ONCA 491 (CanLII) , at paragraph 41.

The determination as to whether a concluded contract exists does not depend on an inquiry into the actual state of mind of any of the parties or on evidence of a party’s subjective intention. Where the agreement is in writing, it is to be measured by an objective reading of the language chosen by the parties to reflect their agreement: Olivieri, above, at paragraph 44.

Thus, the correct approach is to analyze the evidence to determine whether it is clear to the objective reasonable bystander, in light of all the material facts, that the parties intended to contract and whether the essential terms of that contract can be determined with a reasonable degree of certainty. Not only must there be an offer and acceptance, but the evidence must be capable of demonstrating that there is an agreement on all essential terms: Lacroix v. Loewen, 2010 BCCA 224 (CanLII) , at paragraph 36.

As to whether execution of a formal agreement is required in order for a settlement to take effect, the Ontario Court of Appeal said, in Andrews v. Lundrigan, 2009 ONCA 160 (CanLII), at paragraph 8, that the intention of the parties is important in determining whether or not there was a final settlement that was merely to be recorded in a formal document. Here, the term intention is not used in a subjective sense, rather it refers to whether “in the eyes of a hypothetical onlooker” the parties appeared to have reached an agreement. In making this determination, the court will look at the conduct of the parties at the time. If, in examining what transpired, it is apparent that execution of a contemplated formal document was not intended only as a record of an already complete and binding contract, but was essential to the formation of the contract itself, there is no contract and no settlement.

Quite apart from the principles of contract formation, there are many different grounds upon which a party may rely in challenging the enforceability of a settlement agreement. Indeed, these tend to be similar grounds to those that are often put forward to support an argument that a release should not be enforced (see Chapter 9: Challenging a Release). In Whitehall Homes & Construction Ltd. v. Hanson, 2012 ONSC 3307 (CanLII) , for example, the parties signed minutes of settlement, but the defendants argued that there was no enforceable settlement because they were under duress when they signed the agreement. The court rejected this argument, noting that the defendants were not unsophisticated, vulnerable or inexperienced and that they had availed themselves of legal advice. In Lumsden et al v. The Toronto Police Services Board et al., 2019 ONSC 5052 (CanLII) , the plaintiffs argued that the principles of duress and unconscionability applied to vitiate a settlement agreement. As to duress, the court said that there was no evidence of any pressure or coercion, let alone any illegitimate pressure. As to unconscionability, there was no evidence of an unfair or improvident bargain, nor of an overwhelming imbalance in bargaining power. Further, while the plaintiffs were not represented by a lawyer, the court said that lack of independent legal advice is a consideration but not a “freestanding defence”.

Bodnar v. The Cash Store Inc., 2011 BCCA 384 (CanLII)

In this decision concerned with the duties of a settlement administrator in a class proceeding, the Court of Appeal said that the material terms of a settlement are typically provision of consideration in exchange for a release of further claims and dismissal of the action. Effecting that exchange is an administrative matter, and the entity who carries it out is immaterial to the substance of the settlement. In this case, the duties of the settlement administrator were clearly administrative, and the substance of the settlement would remain the same regardless of who performed those duties.

Kuo v. Kuo, 2017 BCCA 245 (CanLII) , 2016 BCSC 767 (CanLII)

When a dispute about the existence of a settlement agreement arises, the first question is whether the parties have agreed on all essential terms of the purported settlement (citing Fieguth). The usual principles of contract formation apply. The court must analyze the evidence to determine whether, in all the circumstances, it is clear to the objective, reasonable bystander that the parties intended to contract, and whether the essential terms of that contract can be determined with a reasonable degree of certainty. After a settlement agreement has been reached, the next stage is its completion. Unless the agreement is terminated, the parties must fulfill their obligations, express and implied. 

4.4.1 Establishing a Binding Settlement

As set out in Viveiros v. Mokhtarian, 2018 ONSC 2676 (CanLII) , at paragraph 9, a settlement agreement is a contract that the court has jurisdiction to enforce at common law and, in Ontario, under the Rules of Civil Procedure. At common law, where an action has been settled by agreement, a party may enforce the settlement agreement by action or by a motion for judgment in the action. Whether a litigant is entitled to enforce a settlement by motion depends upon whether there are no genuine issues for trial about: (a) the existence of the settlement agreement; and (b) the enforceability of that agreement. The court also has a discretion not to enforce a settlement when, among other things, it considers the settlement to be unreasonable or where the settlement would result in an injustice (Viveiros, paragraph 5).

The court went on to say in Viveiros, at paragraph 10, that a motion to enforce a settlement involves two elements. The first element is whether or not there is any genuine issue about the existence of an agreement to settle, and the second is whether there is any reason not to enforce the settlement. The court has a discretion to refuse to enforce the settlement agreement summarily. In exercising its discretion, the court may have regard to such factors as a mistake by a lawyer about his or her instructions to accept the settlement, the prejudice to the parties of enforcing or not enforcing the settlement, and the effect on third parties. The discretion not to enforce a concluded settlement, especially where the settlement has been partially or fully performed, is reserved for those rare cases where compelling circumstances establish that the enforcement of the settlement is not in the interests of justice. Circumstances where the court might exercise its discretion not to enforce a settlement include: (a) where it considers the settlement to be unreasonable; (b) where the settlement would result in an injustice; or (c) where there is another good reason not to enforce the settlement (Viveiros, paragraph 12).

Charles v. Blacquiere, 1999 ABQB 965 (CanLII)

The plaintiff brought a motion to set aside an apparent settlement of her claim arising from a motor vehicle collision. The plaintiff had entered into a subrogation agreement and was aware that a subrogated claim would be pursued. The defendant made a written settlement offer which the plaintiff instructed her lawyer to accept, following which the defendant forwarded a cheque for the settlement amount on condition that no funds be disbursed until an accompanying release was executed and a discontinuance of the action was provided. The discontinuance was executed and provided by the plaintiff’s lawyer, but the plaintiff did not sign the release. While there was no direct material before the court about the manner or nature of the acceptance of the settlement offer, the court concluded that the acceptance was consistent with the plaintiff’s instruction to her lawyer that acceptance was not to be construed as payment in full for all damages. The court decided that there was no meeting of the minds on essential elements of an agreement to settle. The release appeared to be a new offer which, unlike the defendant’s written offer, referred to subrogated claims, and the release made it abundantly clear that it was the contract of settlement, rather than a mere recital, and thus purported to contain the entire agreement. The defendant’s position was that execution of the release had been waived, but waiver of the release was irrelevant because there was no settlement contract.

Sindhar (Guardian of) v. Brar, 2002 BCCA 378 (CanLII)

The issue on this appeal was whether a settlement agreement in a personal injury action was enforceable, where the injured party died after the settlement agreement was made but before the settlement funds were paid. Terms of settlement had been approved by the court, following which a structured settlement was arranged and a draft agreement, including a release, was approved by all parties. The agreement and release were never signed before the plaintiff passed away. The third party insurer, while not disputing the settlement agreement, submitted “that because the settlement had not been finalized by payment and release, the court retain[ed] jurisdiction and should intervene to do justice between the parties to prevent a windfall to the plaintiff’s estate.” The court found that what remained to be accomplished was execution of the final documents and, in this regard, referred to Fieguth, where McEachern C.J.B.C. said that the “formation of the contract” must necessarily be separated from matters of completion of the agreement and that litigation is, generally speaking, settled on the basis of whether a final agreement has been reached which the parties intend to record in formal documentation. The settlement in this case was one from which no party could legally resile.

Norm Masters v. First Ontario Credit Union Ltd., 2004 CanLII 9074 (ON SC)

 The plaintiff accepted an offer of settlement made by the defendant with regard to the termination of the plaintiff’s employment and his employment entitlements. The defendant drafted minutes of settlement and a full and final release which the plaintiff executed and delivered to the defendant. There was no term or condition put on the release that it be held in escrow pending the execution and delivery by the defendant of the minutes of settlement. The court found that, as the offeror was the defendant, the delivery by the plaintiff of the executed documents as offeree completed the formation of the contract.

Umholtz v. Umholtz, 2004 CanLII 36132 (ON SC)

The court should not conclude easily that there is no settlement agreement where there appears to be a clear offer and a clear acceptance. This is so for two practical reasons. First, unless the settlement is embodied and “entire” in a formal settlement agreement, then it will always be possible for a party to contest some detail in the final documentation. The “devil” may well be in “the details”, but once there is sufficient core agreement on settlement, the parties should be required to effect their settlement. There is surely an implied term of settlement that details shall be determined on a reasonable basis, in a manner consistent with the terms of settlement. To hold otherwise would require parties to achieve a level of detailed formality in settlement that will act as an impediment to the difficult task of dispute resolution. Thus, where the parties have achieved full and final settlement, the court should do its utmost to give effect to that agreement.

Grant v. Jovic, 2005 ABQB 323 (CanLII)

The applicant sought summary judgment to enforce an alleged settlement agreement with two other parties. One of the other parties, although claiming that she never agreed to settle, had in fact signed a release. The court found that the evidence established a settlement agreement. The court said that the signed release, among other things, corroborated the agreement.

Saxton v. Credit Union Deposit Guarantee Corporation, 2006 ABCA 175 (CanLII)

The appellant sued Melcor Developments Inc. for amounts owing pursuant to agreements for the sale of land. Around the same time, the respondent, as the successor to two dissolved credit unions, gained control of two default judgments against the appellant, which it assigned to Melcor. Melcor then amended its statement of defence in Saxton’s action to allege a set off. The action between the appellant and Melcor was settled during the course of trial and the settlement was put in the form of a consent order signed by the trial judge. Subsequently, the appellant refused to sign a form of release that purported to include the respondent and the credit unions. On application by Melcor, the trial judge amended the consent order to include a requirement that the appellant provide a release of the respondent. But the Court of Appeal held that the trial judge did not have jurisdiction to make determinations regarding the release of the respondent and the credit unions because they were not parties to the action. The appellant commenced an action alleging that, in making the assignments to Melcor, the respondent acted maliciously, in bad faith and in breach of fiduciary duty and a second action alleging a conspiracy. On a motion for summary judgment, the chambers judge decided, among other things, that the earlier settlement barred the two actions because the parties had agreed to grant a release to the respondent. This decision was reversed on appeal. The Court of Appeal said it was not plain and obvious that the parties agreed to include the respondent in the settlement: it appeared that even Melcor’s solicitor was not sure the respondent was to be included in the release. This confusion, coupled with the fact that the releases had not been signed and no settlement money had changed hands, meant “the legitimacy of the settlement agreement” was “not beyond doubt”. The second reason why it was not plain and obvious that the settlement applied was that even, if the respondent was supposed to be released, there was no evidence concerning the intended scope of the release. 

Hughes v. The City of Moncton, 2006 NBCA 83 (CanLII)

So far as contract formation is concerned, the question to be asked is whether the parties reached an agreement on all the essential terms. The question as to what is or is not an essential term is often fact specific. In some cases, it is not difficult to identify non-essential terms. The fact that a party refuses to sign a release is irrelevant to the question of whether a settlement was reached.

Zhuppa v. Porporino, 2006 CanLII 16532 (ON CA)

In this case, the Court of Appeal allowed an appeal from an order of a motion judge declaring that the action between the appellants and the respondent had been settled on the terms set out in an alleged settlement agreement. The appellants submitted that, although one of them, Mr. Zhuppa, signed a release, an attempt was made to convey to their lawyer that the lawyer should retain the release until Mr. Zhuppa had consulted with Mrs. Zhuppa. The release contained a line for the signature of Mrs. Zhuppa but at no time did she sign it. After Mr. Zhuppa discussed the matter with Mrs. Zhuppa, instructions were promptly sent to their lawyer to refuse the settlement and not forward the release, but the lawyer had already provided the release to the respondent’s lawyer. The Court of Appeal said that the evidence of mistake concerning the instructions as to the granting of the release, the clear instructions rejecting the settlement given within “a very short time prior to any order giving effect to the settlement being taken out”, and the lack of prejudice to the defendant, apart from losing the benefit of the settlement, as well as the absence of any affected third parties, were factors that called for further examination. The motion judge failed to undertake such an examination.

Hemingway v. Desire2Learn Incorporated, 2008 CanLII 47476 (ON SC)

The defendants brought a motion for judgment on an alleged settlement of the plaintiff’s wrongful dismissal claim. The plaintiff had proposed a settlement agreement, which he had signed. The terms of the proposed agreement included the signing of releases upon performance of the obligations of the parties. The defendants indicated that they would not sign the settlement agreement, nor complete the terms of settlement, until the plaintiff signed the release. The court said that there was not an unequivocal acceptance of the plaintiff’s proposal: rather, a condition was established for acceptance, namely, the delivery of the signed release. Months after the time of the principal events, the defendants claimed that the demand for delivery of the release was a mistake. The court said that, quite apart from the question of credibility, this position did not support the defendants’ claim of settlement. The court concluded that the parties had not reached an agreement to settle, or at least that there was a triable issue, and it dismissed the defendants’ motion.

Melco Distributing v. Sparkle Sales, 2008 CanLII 52313 (ON SC)

The court decided not to exercise its discretion in favour of enforcing a settlement pursuant to the terms of a draft mutual release attached to the plaintiff’s notice of motion in this case. The court’s reasons for coming to this conclusion were its doubt that there was ever a meeting of the minds, the absence of prejudice to the plaintiff or third parties, apart from loss of the benefit of the settlement, and the fact that the defendant’s “lapse” in relation to the “overbreadth of drafting” in the original mutual release was communicated to the plaintiff in a very timely manner (a period of less than one and one-half hours).

West v. Oreskovich, 2009 CanLII 16579 (ON SC)

The court granted the applicant’s motion for a final order in accordance with minutes of settlement signed by the parties to this matrimonial litigation. The court said that three discrete matters left outstanding in the minutes – one of which was a spousal support release to be drafted by the respondent’s counsel – were not essential provisions of the agreement. Even if further documents were to be prepared to reflect the applicant’s release of the right to spousal support, to further describe that the child support could not be varied except in the case of catastrophic circumstances, or in accord with the Consumer Price Index, this did not alter the binding validity of the minutes of settlement. 

Chater v. York Central Hospital, 2009 CanLII 33022 (ON SC)

Disagreement as to matters which are not essential to a settlement agreement is not demonstrative of a failure to accept the offer made. Such disagreement does not lead to the conclusion that no contract was formed. This may include the documents to be exchanged in formalizing the settlement. The form of the settlement documents, in particular releases, is incidental to, and not essential to, the agreement made.

Alves v. Azevedo & Nelson, 2010 ONSC 2853 (CanLII) , appeal dismissed, Alves v. Caston, 2010 ONCA 805 (CanLII)

One of the defendants in this case moved to enforce a settlement that he alleged had been entered into with the plaintiff. The plaintiff argued that the defendant’s settlement offer had been accepted by mistake. The settlement offer included a proviso that the plaintiff execute a full and final release in a form satisfactory to the defendant indemnifying the defendant against any claims for contribution and indemnity. The plaintiff argued that a mistake was made when the offer was accepted because his counsel did not understand the implications of the release in relation to the liability of the defendants. The court said that this argument was based on inadmissible hearsay evidence containing vague hints of misunderstanding and, further, that counsel are reasonably entitled to assume that the opposing counsel with whom they are negotiating know the law. No evidence of a mistake by a party existed in this case.

Hodaie v. RBC Dominion Securities et al., 2011 ONSC 6881 (CanLII) , appeal dismissed, Hodaie v. RBC Dominion Securities, 2012 ONCA 796 (CanLII)

An agreement to settle a claim is a contract. To establish the existence of a contract, the parties’ expression of agreement must demonstrate a mutual intention to create a legally binding relationship and must contain agreement on all of its essential terms.

Simpson v. Canada (Attorney General), 2011 ONSC 5637 (CanLII)

In this action, the applicant argued that the Ontario and Canada Student Loan Program was discriminatory; her contention was that, because disabled students take longer to obtain a degree, they graduate with a higher average debt load than students without disabilities. Minutes of settlement were signed, which provided that settlement funds would be released for distribution upon the passing of regulations to implement new student loan/grant programs and instructions from the applicant to provide to the respondents a duly executed release. The court interpreted the minutes to mean that the applicant had the right to be satisfied subjectively that the regulations addressed systemic issues raised in the application and, if not satisfied, she was entitled to refuse to deliver a release. The minutes would operate much like an option agreement and the applicant would have a unilateral discretion to accept or reject the settlement.

Hedayat Amirvar v. Murlee Holdings Limited, 2011 ONSC 5826 (CanLII)

There is a two-part test to determine whether a binding settlement agreement exists. First, there must have been a mutual intention to create a legally binding contract and, second, the parties must have reached agreement on all the essential terms of the settlement. The terms of a release are not the terms of settlement, and any issue the plaintiff may have with the wording of the release is not a valid reason to suggest that the parties had not reached agreement on all the essential terms.

Hartslief v. Terra Nova Royalty Corporation, 2012 BCSC 1705 (CanLII) , appeal dismissed, Hartslief v. Terra Nova Royalty, 2013 BCCA 417 (CanLII)

After the plaintiff’s employment with the defendant was terminated by the defendant, the parties entered into negotiations regarding the settlement of the plaintiff’s claim for compensation. In this decision, the court addressed whether the parties reached a binding settlement agreement. The plaintiff argued that an agreement had been reached on terms that were documented in an unsigned draft agreement. He sought an order for payment of an amount set out in the agreement and an order that the defendant provide executed copies of, among other things, the agreement and a mutual release attached as a schedule to the agreement. The defendant argued that the deal being negotiated was a “sign and close” agreement such that there would be no binding agreement until the parties signed formal documents. The court said that, in the usual course, documents need not be signed in order for a contract to form. Agreement can be communicated by any conduct that explicitly or implicitly signifies to the outside world an intention to be bound. However, in some cases, the parties may stipulate that a contract shall only come into being upon the signing of formal documents. On the evidence before it, the court did not accept the defendant’s argument regarding a “sign and close” agreement and it ordered, among other things, that the parties provide each other with executed copies of the agreement and the mutual release.

Pahljina v. Pahljina, 2015 BCSC 1528 (CanLII)

While the initial appearance from correspondence between the parties in this case was that the parties had reached a settlement, the respondent’s letter accepting the claimant’s proposal added a term that a release of a certificate of pending litigation would not be filed “until such time as the funds have been secured to pay out” the respondent. This term had implications that were more than mere documentation of the agreement; it led to a situation where all essential terms could not be unequivocally said to have been agreed on. The term was unworkable for the claimant in that she could not obtain the required funds until a period of time after the certificate of pending litigation had been discharged. The court concluded that, while the respondent agreed to the claimant’s proposal, he did not do so in a way that exactly corresponded to the offer. A term was added, such that the respondent’s letter could be considered to be a counteroffer. There was ultimately no acceptance of the offer. The respondent’s letter did not meet the requirement that the acceptance be unconditional, clear and absolute.

Apotex Inc. v. Allergan, Inc., 2016 FCA 155 (CanLII)

The elements of a binding settlement are: an objective, mutual intent to create legal relations; consideration flowing in return for a promise; terms of agreement that are objectively, sufficiently certain; and matching offer and acceptance on all terms essential to the agreement. A key question is whether an honest, sensible business person, when objectively considering the parties’ conduct, would reasonably conclude that the parties intended to be bound. If there is agreement on all essential terms, the fact that a further document is required to formalize the agreement is not an impediment to a finding of a binding settlement agreement. Courts may look at subsequent conduct of the parties to shed light on whether there has been an agreement on all essential terms. Non-essential terms may be implied into the agreement.

Sahota v. Sahota, 2016 ONSC 314 (CanLII)

In order to prove that a settlement has been reached, it is necessary to establish that there was a mutual intention of the parties to create a binding contract and that the parties reached an agreement on the essential terms of the contract. It is not necessary for formal settlement documents to be executed before a settlement may exist, as long as there is evidence of the necessary mutual intention to reach a final agreement, and the essential terms of that final agreement can be identified. The policy of the courts is to encourage litigants to settle their disputes and therefore the court should not be too demanding in finding that there is not the necessary degree of certainty in any of the agreement’s essential terms.

Nithiananthan v Thirunavukarasu, 2016 ONSC 2465 (CanLII)

The plaintiff in this case argued that, immediately after signing releases, she and her husband decided not to proceed with a settlement with the lawyer defendants, but her former lawyer, contrary to her instructions, delivered the releases to counsel for the lawyer defendants. The court found that the plaintiff’s former lawyer had ostensible authority to provide the signed releases to counsel for the lawyer defendants that counsel could rely upon to complete the settlement agreement. The plaintiff also submitted that there was no evidence of a settlement agreement because there was no evidence of negotiations between counsel leading to an offer to settle and an acceptance of that offer. The court said that delivery of releases and a notice of discontinuance to counsel for the lawyer defendants was as good as, if not better than, formal acceptance of their offer by a letter from counsel for the plaintiff advising that the plaintiff agreed to the terms of the offer.

Coco Homes Inc. v. Caleron Properties Ltd, 2017 ABQB 15 (CanLII)

A settlement agreement is a form of contract. Its existence depends on showing a mutual intention to create a legally binding relationship and agreement on all essential terms. Whether a contract was made requires consideration of the parties’ words and conduct from an objective perspective. Determining the existence of a contract is different from whether it was completed or documented.

Cook v. Joyce, 2017 ONCA 49 (CanLII)

The Court of Appeal found that the record in this case on whether the parties had entered into an oral settlement contract contained conflicting and disputed material facts. Among other things, the court noted that the parties did not memorialize any oral contract in minutes of settlement or a release and the documentary record concerning a settlement was thin. The court said that it could not see how the issue of whether the parties concluded an oral settlement contract could be fairly adjudicated without a trier of fact hearing viva voce evidence from the parties.

Marcotte v. Marcotte, 2018 BCCA 362 (CanLII)

The test for the existence of a valid contract, with respect to certainty and consensus ad idem, is objective and, for the contract to be enforceable, there must be consensus between the parties on all the essential terms of their agreement. Whether formalization of the contract is a condition that must be met before the contract is enforceable, or, instead, whether the contract is enforceable in the absence of formalization despite the parties’ having intended to take steps later to formalize the agreement, is a question of construction. Thus, the focus with respect to contested contractual terms is on the actual communications between the parties and on an objective interpretation of the terms of the agreement as reflected in their communications.

Cumberland (Village) v. Ferdinandi, 2018 BCSC 726 (CanLII)

In Fieguth, McEachren C.J.B.C. made the important point that it is necessary to separate the issues of contract formation and contract completion. It is necessary to decide whether a final agreement has been reached which the parties intend to document, or whether they have reached a tentative agreement that is not binding until the documentation is complete – litigation is usually settled on the former basis.

Betser-Zilevitch v. Nexen Inc., 2018 FC 735 (CanLII) , appeal dismissed, 2019 FCA 230 (CanLII)

Considerations relating to finding a binding settlement agreement are as set out in Apotex Inc. v. Allergan, Inc. (above). It cannot necessarily be said that a settlement agreement “in principle” is not a settlement agreement. This is a fact-dependent and fact-specific enquiry.

1648290 Ontario Ltd. v. Bhabha, 2018 ONSC 1044 (CanLII)

On the defendant’s motion to enforce a settlement agreement, the parties agreed on the common law test for a binding agreement: they must have a mutual intention to enter into a binding agreement and they must agree to all essential terms.

Muller v. O’Flynn, 2019 BCSC 1674 (CanLII)

The primary issue at the trial of this matter was whether an oral agreement made by the parties after their separation constituted a binding settlement of the division of their property. The plaintiff argued that there was no enforceable agreement because there was no meeting of the minds on matters including the timing of the plaintiff’s release from a mortgage on the matrimonial home. The court concluded that the timing of the release of the plaintiff from the mortgage was not an essential term of the agreement. The court was satisfied that the parties had an agreement whereby the defendant was obligated to obtain a release of the plaintiff from the mortgage within a reasonable time.

Fleming v. Fleming, 2020 ABQB 85 (CanLII)

The defendant in this case argued that the parties had reached a binding settlement, but the court said that a “narrow-gauge” settlement offer by the plaintiff (“shutdown” of the application in exchange for monetary payment) had been met with the defendant’s agreement on the monetary amount but a “wider-gauge” draft release (abandonment of any and all rights that the plaintiff had or may have had). The court did not know whether the plaintiff had other rights or possible rights against the defendant in light of a matrimonial-property judgment that had been previously granted. In the absence of more information about the nature and extent of the plaintiff’s actual or possible rights, the court found that the potential gulf between the parties’ “contemplation” of the settlement was a “material detail”. In other words, with the parties not coming to terms on the scope of the release, the court found that they did not agree on all material terms of the settlement.

North York Excavating & Contracting Limited v. D’Urzo, 2023 ONSC 473 (CanLII)

On a motion for an order enforcing an alleged settlement agreement, the court said that supplementary agreements and mutual releases are merely “the mechanics required to complete the settlement agreement”, citing Olivieri, above.

Sumarah v. International Property Group (Toronto) Limited, 2024 ONSC 334 (CanLII)

 

A settlement agreement is subject to the ordinary rules of contract. For there to be a binding settlement agreement, there must be a mutual intention to create a legally binding agreement and the essential terms of the agreement must have been agreed upon. It is not necessary to have reached agreement on incidental matters, such as the method of payment or the exchange of releases. The policy of the court is to encourage settlements and in matters of interpretation, courts are not inclined to find that the settlement agreement does not have the requisite certainty in its essential terms.

4.4.2 Whether Agreement on a Release is Required for A Binding Settlement

There are many decisions of Canadian courts which bear on the issue of whether agreement on the terms of a release is a required element of a binding and enforceable settlement. Presumably due to considerations such as encouraging settlement and bringing certainty and predictability to settlements, Canadian courts lean decidedly towards the view that finalization of a release is a matter of settlement implementation, rather than settlement formation. However, in some circumstances, courts have concluded that the content of a release was an essential or “fundamental” term of a settlement, or that a settlement was conditional on one party delivering a form of release acceptable to the other party. Thus, the terms of a release generally are not essential terms of settlement, but, in the circumstances of a particular case, a court may conclude otherwise, that is, the court may conclude that the content of a release was an essential term of a settlement agreed to by the parties.

Kaur v. Manufacturers Life Insurance Company, 1999 CanLII 1901 (ON CA)

The appellant appealed from an order granting judgment pursuant to the terms of a settlement reached in her action against the respondent Manufacturers Life. The Court of Appeal said that it saw no merit in the appellant’s position that no settlement could be reached until the execution of the written release or in her objections to the form of the release.

Re Rickards Estate v. Diebold Election Systems Inc., 2004 BCSC 1357 (CanLII) , appeal allowed on other grounds, Rickards (Estate of) v. Diebold Election Systems Inc., 2007 BCCA 246 (CanLII)

The defendant terminated the employment of an employee and negotiations ensued with regard to settlement of the employee’s potential claim for damages for wrongful dismissal. The employee died before a settlement was fully completed. The executor of the employee’s estate sought specific performance of an alleged settlement agreement while the defendant argued that the absence of final agreement on the language of a release and on the language of a reporting/mitigation obligation meant there was no concluded contract between the parties. The court considered whether this was a matter that could be resolved, in the language of the Fieguth decision, “by application to the court or by common sense within the framework of the settlement to which the parties have agreed and in accordance with the common practices which prevail amongst members of the bar”, or whether there was an essential term on which the parties had not reached agreement. The court concluded that the case fell into the former category. The particulars of both the reporting/mitigation agreement and the release (as in Fieguth) fell into the category of matters that could be determined in the context of normal business practice and common sense. 

Perri v. Concordian Chesterfield Company Ltd., 2004 CanLII 2904 (ON CA)

The Court of Appeal saw no basis to interfere with the motion judge’s exercise of discretion to grant judgment enforcing a settlement and it agreed with the conclusions of the motion judge that, among other things, the exchange of releases was merely incidental to the essential terms of the settlement agreement.

Le Soleil Hospitality Inc. et al v. Louie et a., 2006 BCSC 1920 (CanLII) , appeal dismissed 2008 BCCA 206 (CanLII)

Following settlement negotiations between the parties, a letter intent of was signed that dealt with a number of matters, including the exchange of releases and the discontinuance of litigation between the parties. The defendants argued that there was no intention to conclude a binding agreement and they relied on a number of points in support of this argument, including the fact that formal mutual releases were to be settled and exchanged. The court found that the parties intended to conclude an agreement and that steps yet to be taken, such as the mutual exchange of releases, were all formalities as opposed to substantive terms or conditions precedent to an agreement. In this regard, the court referred to the “further assurances clause” of the letter of intent, which indicated that the parties would execute such further documents as reasonably required to carry out the intent and meaning of the letter of intent.

Hughes v. The City of Moncton, 2006 NBCA 83 (CanLII)

The plaintiff was alleged to have accepted a settlement offer made by the defendant, although the defendant acknowledged that a draft release with a mutual confidentiality clause was to be forwarded to the plaintiff for his consideration. The plaintiff objected to a form of release provided by the defendant on the ground that the confidentiality clause was too broad. The Court of Appeal concluded that the plaintiff’s contention about the clause being too broad was without foundation and that all of the essential terms of settlement had been agreed to, including a mutual confidentiality clause “drafted in the narrowest of terms”. Accordingly, the appellate court said it should be declared that a binding settlement had been reached and the underlying action should be dismissed.

Oliveira v. Tarjay Investments Inc., 2006 CanLII 8870 (ON CA)

The appellants argued in this case that there was only an agreement to agree on the terms of a settlement because the minutes of settlement called for the execution of a release that was never signed. The Court of Appeal did not accept this argument: the requirement that a full and final release be signed did not mean that a binding agreement had not been reached.

Ferron v. Avotus Corporation, 2007 ONCA 73 (CanLII)

The Court of Appeal dismissed an appeal from a decision – Ferron v. Avotus Corp., 2005 CanLII 29655 (ON SC) – in which the motions judge concluded that the parties’ agreement as to the essential provisions of a settlement was not conditional upon the execution of minutes of settlement and a release. The motions judge said that the minutes of settlement and release were documentation of the nature referred to in Fieguth (relating to completion, not formation, of an agreement) and the failure of the plaintiff to communicate his acceptance of the documents did not discharge the parties from the settlement agreement reached.

Finelli v. Dubas, 2008 CanLII 5982 (ON SC)

The court concluded that, on the facts of this case, the parties had not reached agreement on an essential term of a settlement – namely, the wording of a release. Counsel for the defendant had stated that he would be prepared to recommend a settlement on terms including execution by the plaintiff of a “comprehensive Release” with a specific reference to “CPIC checks” done in the 1990s. (“CPIC” is an acronym for the Canadian Police Information Centre.) The defendant’s evidence was that it was critical to him to have a commitment from the plaintiff that there would be no further allegations or claims arising out of these CPIC checks. However, the draft release sent by the plaintiff’s lawyer did not make a specific reference to the CPIC checks, but rather referred only to claims made or that could have been made in the action. When the parties disagreed about whether a settlement had been reached, the defendant’s lawyer indicated that he had made it clear that he would obtain instructions from his client upon being provided with the “specified Release”, which had never been provided.

 

Excell Stamping Inc. v. Consolidated Recycling Incorporated (Metro Recycling), 2008 CanLII 12492 (ON SC)

The parties entered into binding minutes of settlement which provided that they would execute mutual and full releases in standard form agreeable to counsel. The plaintiff refused to sign a release containing a confidentiality clause proposed by the defendant and the defendant argued that, because counsel could not agree on the inclusion of a confidentiality term, the minutes of settlement were not enforceable. The court found that the parties had reached a settlement on all essential terms.

Kavuru v. Toronto Transit Commission, 2008 CanLII 60707 (ON SC)

On the defendant’s motion for judgment pursuant to an alleged settlement, the plaintiff argued, among other things, that, since no release was signed, there could be no final settlement. The court found without any doubt that an agreement was reached by the parties on all essential terms.

Great Sandhills Terminal Marketing Centre Ltd. v. J-Sons Inc., 2008 SKCA 16 (CanLII)

The principal issue on this appeal was whether the parties arrived at an agreement to settle leaving only the performance of its terms to be completed, or whether no agreement had been concluded when certain parties withdrew from negotiating an appropriate form of release. The Chamber judge found that the provision of releases was essential to the completion of the settlement agreement, noting that the releases contemplated the inclusion of a non-party to the action and negotiations on the contents of the releases followed the completion of the alleged agreement. An appeal from this decision was granted and the decision of the Chamber judge was set aside. The Court of Appeal rejected the argument that a release acceptable to all parties is an essential requirement of any settlement and that a meeting of the minds on a settlement agreement had not occurred because no agreement as to the terms of a release was reached. The Court of Appeal followed Fieguth and quoted from Fieguth the proposition that a settlement implies a promise to furnish a release.

Dosanjh v. Nadon, 2009 BCSC 106 (CanLII)

A complete settlement was reached and acted upon and the parties altered their respective positions in reliance on the settlement. A release was not necessary to the formation of the settlement, but only to its execution.

Lavoie v. Chambers, 2009 CanLII 18285 (ON SC)

This litigation was commenced by the applicant after she and the respondent had separated and ended their conjugal relationship. Following settlement discussions, applicant’s counsel wrote to respondent’s counsel to confirm a resolution of the matter, enclosing unsigned minutes of settlement and indicating that the applicant had provided instructions to consent to a final order, one term of which was that the applicant would abandon her spousal support claim. Respondent’s counsel requested the inclusion of specific paragraphs to address the release of the right to spousal support and a release relating to property. Later, applicant’s counsel provided significantly changed minutes of settlement signed by his client and stated that, since the respondent had made amendments to the minutes, they were open to review. The court found that a settlement agreement had been reached on the terms of the minutes of settlement with the amendments made by the respondent. The spousal support releases were an amplification of the existing agreement to “abandon spousal support” and the inclusion of the release relating to property was accepted by the applicant’s counsel. The amendments made by the respondent did not render the minutes “open to review”.

Chater v. York Central Hospital, 2009 CanLII 33022 (ON SC)

The form of settlement documents, and in particular the form of releases, is incidental to and not essential to a settlement agreement. A disagreement as to matters which are not essential to a settlement agreement is not demonstrative of a failure to accept a settlement offer. In this case, the defendants provided a unilateral form of releases with their acceptance of a settlement offer, rather than the mutual releases contemplated by the offer, but this was nothing more than a mistake and not suggestive of any effort to change the settlement offered.

Hodaie v. RBC Dominion Securities et al., 2011 ONSC 6881 (CanLII) , appeal dismissed, Hodaie v. RBC Dominion Securities, 2012 ONCA 796 (CanLII)

The parties’ agreement to the essential provisions in a settlement is not conditional upon the execution of minutes of settlement and a release. Settlement implies a promise to furnish a release unless there is a contractual agreement to the contrary.

Hedayat Amirvar v. Murlee Holdings Limited, 2011 ONSC 5826 (CanLII)

There is no merit to the argument that a settlement cannot be reached until the execution of a written release or if a plaintiff has objections to a release.

Chisholm v. Yuille, 2012 NSSC 297 (CanLII)

The plaintiffs sought an order under the Partition Act and this claim was contested by one of the defendants, but not the other. When the defendants disagreed about whether a settlement agreement was reached between them, the court considered whether an exchange of correspondence was an enforceable agreement to settle concluded by the defendants or simply an agreement to agree. The court said that terms such as “subject to contract” were nowhere to be found in the correspondence and that the future documentation contemplated was easy to identify and essentially administrative in nature: “Deeds, releases and consent dismissal orders are not documents on which one would anticipate significant disagreement or negotiation.” One of the defendants argued that there could be no agreement to settle the litigation without participation of the plaintiffs. The court’s interpretation was that neither of the defendants considered the plaintiffs to be essential parties to the settlement, although it was recognized that the plaintiffs would have to agree to dismissal of the proceeding without costs and sign a release. The court found that the defendants understood and agreed that the consent of the plaintiffs would be needed in order to complete the settlement, and that one of the defendants was responsible for obtaining it. Although this would be a condition precedent to completion of the settlement terms, the lack of the plaintiffs’ participation as parties in the first instance did not mean that the agreement otherwise reached was unenforceable.

Bland v. Canadian Farm Insurance, 2012 ONSC 3021 (CanLII)

The court applied the reasonable “objective observer test” and found that the parties had reached a settlement agreement. The plaintiff testified that he had expected to receive a formal settlement offer and a form of release from the defendants. The court found that, in the circumstances, the plaintiff’s expectation was not reasonable and the court rejected the plaintiff’s argument that he had not agreed to settle his claim.

CabCom Network Inc. v. Strategic Media Outdoor Inc., 2012 ONSC 4148 (CanLII)

As long as the parties have agreed on the essential terms of the settlement, the final documentation does not have to be executed in the form of a release or minutes of settlement, citing Bawitko v. Kernels . It is the usual practice for parties to a settlement to sign the “closing documentation” following the agreement to settle and the case law is clear that a binding agreement is not subject to the signing of minutes of settlement.

Blake v. Carachi et al, 2012 ONSC 4934 (CanLII)

A settlement offer including a proposal for mutual releases by the parties “mutually satisfactory to their respective counsel” was accepted. The parties were unable to agree on the form and scope of the release. The court held that there was no settlement agreement to enforce: the form and scope of the release were an essential element of the proposed settlement on which the parties did not agree. On the motion seeking enforcement of the settlement, the parties agreed that “each case turns on its own facts”.

Tessier v. Edmonton (City), 2013 ABCA 308 (CanLII)

The appellants’ settlement offer contemplating the eventual execution of a release by the appellants was accepted. The appellants argued, however, that, as a result of additional terms arising from the respondent’s proposed form of release and “trust conditions” on settlement funds, the respondent’s purported acceptance of the offer was a counteroffer. The Court of Appeal said that the offer was unconditionally accepted and a settlement contract was formed before the concluding documents were sent. A settlement contract is formed when the parties agree on the essential terms and once the settlement contract is formed a party can tender concluding documents on trust conditions without rescinding the agreement. In this case, the provision of the release (and the imposition of trust conditions) could not amount to a counteroffer.

Di Gennaro v. BMO Nesbitt Burns Inc., 2013 ONSC 37 (CanLII)

Upon the execution of minutes of settlement, the parties bound themselves to a settlement subject to the execution of a release. The requirement that a release be signed, as agreed to by the parties, did not mean that a binding agreement had not been reached. Clearly any difficulty with respect to the wording of the release could either be agreed upon by the parties or settled by the court, if necessary. 

Beck v. Chmara, 2014 ONSC 4874 (CanLII)

The defendant in this case argued that the parties had not reached a settlement agreement because she did not sign a release and she did not sign any agreement. The court disagreed with her argument: the defendant had agreed to all the essential terms of the settlement and there need not be a signed agreement or release in order to have a binding settlement.

Trieu v. Diep, 2015 BCSC 950 (CanLII)

The plaintiffs sought an order declaring that the parties had reached a settlement of this litigation concerning the ownership of real estate in British Columbia. The defendant argued that the purported settlement agreement did not satisfy the Law and Equity Act because, pursuant to that statute, an agreement respecting land is not enforceable unless there is writing signed by the party to be charged or by that party’s agent. The defendant also argued that the agreements or documents contemplated by the settlement – including a release – were not signed by the party to be charged or her agent and there could be no agreement without agreement on those documents. The court found that there was a binding settlement agreement and the fact that the settlement contemplated a consent dismissal order, release and mortgage did not make the settlement subject to those documents being signed.

1549858 Ontario Inc. v 1549857 Ontario Inc., 2015 ONSC 1913 (CanLII)

The applicant sought an order directing the respondents to complete an agreement alleged to have been entered into by the parties. The respondents asserted that a number of essential terms had not been agreed to by the parties including the nature of the releases “granted between” the parties. The court said that determining whether the parties have agreed on the essential terms of a contract must be done on a case-by-case basis. The respondents had not explained “what was missing or why it was essential with respect to” the releases. If the respondents could not point to a specific problem, then their arguments must fail. The issues raised by the respondent were not essential terms; instead, they were issues raised after the fact by the respondents in order to resile from a binding agreement.

Fontaine v. Saskatchewan (Attorney General), 2015 SKQB 220 (Can LII)

In this case, the court considered a dispute concerning rights and obligations created by the Indian Residential Schools Settlement Agreement. As stated by the court, certain parties agreed to make a payment to Canada, Canada agreed to accept that amount, the parties agreed that, in exchange for this payment, Canada was required to give a release and the only issue was whether the parties were in agreement as to the general scope of the release. One of the issues addressed by the court was whether the agreement of counsel for Canada was subject to approval by others at Canada. The court noted that the form of general release proffered by the other parties was stamped “Draft”, that both counsel anticipated their clients might have some comments on the wording of the release, and that both counsel communicated to each other that their clients might have comments on the wording of the release. However, the court said it would reasonably have been expected that the comments of the respective clients would amount to “wordsmithing” and would not be about the essential terms of the deal, which were that the payment by the other parties would be made in exchange for releases and indemnities contemplated by particular provisions of the Settlement Agreement.

Webber v. Boutilier, 2016 NSSC 5 (CanLII)

After a settlement was reached at a settlement conference, the plaintiff objected to the form of release provided by the defendants. On the defendants’ motion to enforce the settlement, the plaintiff’s counsel argued that the settlement should be exclusive of any potential subrogated claim that could be identified by operation of the provisions of the Nova Scotia Health Services and Insurance Act because he was unaware of these statutory provisions. He argued that including in the scope of the release the potential subrogation claim by operation of the Act would be tantamount to imposing an essential term of the contract never agreed to at the settlement conference. The court found that the settlement was full and final and included a clear understanding that all matters were settled as against the defendants including any subrogated claims and that the all-inclusive basis of settlement was an essential term of the settlement agreement.

Jefferson v Pillar to Post-Central Home Inspections, 2016 NSSC 309 (CanLII)

Certain of the defendants in this case accepted a counter-offer of settlement made by the plaintiffs, subject to a release from the plaintiffs. The plaintiffs were to send a scanned or faxed copy of the release and the original by mail. One of the plaintiffs signed a release for himself and the other plaintiff (his mother) and sent this by email to the defendants. Subsequently, the plaintiffs took the position that no settlement had been reached, for reasons including the fact that an original, signed release was not provided to the defendants. The court said it was clear that the release was a condition of the agreement, it was not itself the agreement. And, even if the release comprised the agreement, the court was not convinced that the plaintiff’s failure to provide the defendants with the original signed version would be “detrimental”. The email copy of the release could be admitted as documentary evidence of the agreement. The court further concluded that this was not a conditional contract. The providing of an original signed release was not a condition precedent. The defendants’ request that the original release be sent dealt with merely formalizing an agreement already made.

Sahota v. Sahota, 2016 ONSC 314 (CanLII)

An initial email regarding settlement in this case stipulated that a release would have to be in the standard form of LawPRO. Therefore, there was no uncertainty or confusion as to the nature of the release sought. But even if the exact wording of the release had not been stipulated, this would not have meant that no settlement had been arrived at until the release had been drafted. Where a provision in a settlement agreement is that the parties will provide each other with full and final releases, further agreement on the specific wording of those releases is not required before there is a binding settlement agreement, unless there is some indication that the parties’ settlement was conditional on such further agreement.

Mildren v. Mildren, 2016 ONSC 8076 (CanLII)

Following a pre-trial conference, the parties executed minutes of settlement stating that they would exchange a signed mutual release “agreed by counsel”. The parties could not agree on the wording of the mutual release. While the usual intent “at such events” is to finalize all matters between the parties, one party intended to pursue a private criminal complaint and did not disclose this intention. The court said that the parties having a different expectation, compounded by the lack of disclosure, there was no meeting of the minds. Hence, there was no agreement, the minutes of settlement being conditional on a mutual release.

Buterman v. St. Albert Roman Catholic Separate School District No. 734, 2017 ABCA 196 (CanLII)

In this case, the Alberta Human Rights Commission Tribunal found that the appellant had relinquished a human rights claim when he entered into a settlement agreement. At issue was whether the essential terms of the settlement were contained in certain correspondence, or whether the essential terms included the language of settlement documents, in particular a release and confidentiality agreement. The appellant had advised the media that he rejected a settlement offer because of the confidentiality clause in the release. The Tribunal majority concluded that there were four essential terms of the settlement, including execution of a release and confidentiality agreement, all of which were set out in the correspondence. The Court of Appeal’s description of the Tribunal majority’s decision was that the execution of the release and confidentiality agreement was an essential term, but the form of the document was not. The Court of Appeal said it was not unreasonable for the Tribunal majority to characterize the draft settlement documents as “minuting” the settlement, in line with the reasoning in Fieguth. The Court of Appeal was not persuaded that there was any reviewable error in the Tribunal majority’s decision.

Mifflin v. North Atlantic Refining Limited, 2017 CanLII 48250 (NL SC)

In considering whether the parties had concluded an agreement to settle claims arising from the termination of the plaintiff’s employment, the court focused its enquiry on the distinction between “essential” conditions and “completion” issues. The court said that, from the Fieguth case, it is clear that the form of a release is not an essential term but a completion issue. The lack of agreement on a release did not affect the agreement of the parties on the essential elements of the settlement.

Bajenaru v. Marchie, 2017 ONSC 2864 (CanLII)

A settlement was conditional upon the plaintiffs delivering a release in a form acceptable to the defendants and, accordingly, the conditional nature of the settlement contemplated that it would be at an end in the event that the parties could not agree on a form of release. Given the inability of the parties to agree on a form of release, the settlement was at an end.

Lakehead Ironworks Inc. v 183340 Ontario Ltd., 2017 ONSC 3078 (CanLII)

The plaintiffs alleged that a binding settlement of this litigation was reached when the defendant Locke accepted an offer by the plaintiff Quast to purchase his shares in the plaintiff corporation. The defendants argued that there was no agreement on all essential terms because one of the essential terms was a requirement for a written contract to deal with a number of issues including release of Locke from a personal guarantee and general mutual releases. The court said that these submissions about items such as releases that had to be agreed upon before there was a contract related to the completion or implementation of the agreement, not to whether there was an agreement.

1648290 Ontario Ltd. v. Bhabha, 2018 ONSC 1044 (CanLII)

A settlement in which it was agreed that the parties would enter into a mutual release on terms acceptable to each was enforced by the court. The plaintiff argued that agreement on the language in the release was an essential term of the settlement, but the court held that the fact the parties did not agree on the specific language of the release was not a reason to suggest that the parties had not reached agreement on all essential terms of the settlement.

Extreme Venture Partners Fund LLP v. Seven Hills Group LLC, 2018 ONSC 6092 (CanLII) , appeal on other grounds dismissed, Extreme Venture Partners Fund LLP v. Varma, 2019 ONCA 446 (CanLII)

The plaintiffs and one of a number of defendants in this litigation “agreed in principle” to settle the action as against the one defendant. The defendant insisted upon a release that included an indemnity against liability for any claims over, and the court said that a “standard” release includes such a provision, but the plaintiffs said they would never have agreed to settle on that basis. The court found that the terms of the release were, in this case, an essential term of a settlement agreement, and that there was no agreement on an essential term, being the scope and terms of the release.

Iofcea v. Dinoiu, 2018 ONSC 6882 (CanLII)

Case law has made it clear that a formal release is not an essential term necessary to find there to be a settlement agreement. In this case, the parties entered into a “fairly simple handwritten document and the wording “Settlement of $650,000” made it implicit that releases were eventually to be provided. It was implicit that the claims of each of the parties would have been ended by the payment of that sum of money. (However, the court went on to find, on other grounds, that all the parties had not agreed on all of the essential terms of a settlement.)

D’Anscenzo v. Nichols, 2018 ONSC 7760 (CanLII)

In this decision on costs, the court considered whether an offer to settle made by the plaintiffs entitled the plaintiffs to an elevated scale of costs. One of the terms of the offer to settle was that the parties would enter into a mutual, full and final release with respect to all matters raised or which could have been raised in the litigation. The court said that there was contradictory case law as to the enforceability of a settlement “where as a term thereof a release is not agreed upon”, although the court went on to note that the “present issue” was not the enforceability of an “otherwise settlement”.

Arndt v. Scandinavian Cultural Society of Calgary, 2019 ABQB 475 (CanLII)

Depending of on the facts of the case, not finalizing the wording of a release does not render a settlement non-enforceable.

Jenneson v. Olson, 2019 BCSC 2367 (CanLII)

The defendant accepted the plaintiff’s settlement offer in exchange for a release (with confidentiality clause) and consent dismissal order. The court said that this acceptance was capable of only one interpretation: the plaintiff’s offer would only be acceptable if a release with confidentiality clause were part of the settlement. The court did not accept the defendant’s argument that the acceptance separately referred to the formation and the completion stage of a settlement agreement, such that the first idea communicated – “we accept your offer to settle” – formed the contract and the second idea communicated – “in exchange for a release (with confidentiality clause) and consent dismissal order” – related to the completion of that contract. The court held that the two ideas were inextricably linked and the defendant accepted the offer to settle on the condition that the plaintiff agreed to confidentiality terms.

Freed Developments Ltd. v. Target Park (No. 10), 2019 ONSC 1273 (CanLII)

The court considered whether the parties to this case had concluded a settlement and, more specifically, whether it was intended that there would be no binding settlement until, among other things, releases had been executed. In the course of deciding that a settlement had been concluded, the court found that a request for confirmation that a settlement had been reached was not inconsistent with an agreement having been concluded.

Cox v. Baker, 2019 ONSC 2859 (CanLII)

In this case, the wording of a release needed to be finalized, but this did not preclude a settlement on the essential terms that had been negotiated and agreed. The parties’ settlement was not conditional on further agreement on the specific wording of a mutual release.

Atkinson v. Whaley Estate Litigation, 2019 ONSC 3708 (CanLII)

Typically, a release is an incidental term of a settlement agreement, but this case was not typical and the form of the release was a very important matter for the defendant, which had insisted on a release with a non-disclosure provision. What is an essential term of a contract is dependent on the circumstances, the “factual nexus of each negotiation”. In the circumstances of this case, the release was a fundamental term of any settlement and there was no meeting of the minds about the release.

Tige Industries Ltd. v 0763636 B.C. Ltd., 2020 BCSC 50 (CanLII)

The plaintiffs brought an application seeking to enforce an alleged settlement agreement entered into by the parties. The defendants submitted that the failure of the plaintiffs to include in the application the form of release contemplated in the defendants’ settlement offer demonstrated that the parties had not come to a consensus on the essential terms of the agreement. The court said there was no compelling evidence that the plaintiffs did not agree to enter into the required release and intend to abide by the agreement. And the “omission in the pleading” was of no moment: the release was an implied term of the agreement in any event.

Shoolestani v Crease Harman LLP, 2020 BCSC 452 (CanLII)

Applying the principles of Fieguth to this case, the court held that, following the formation of a settlement agreement, the parties’ conduct relating to settlement documentation (release and consent dismissal order) did not affect the existence of the settlement agreement.

Huma et al v. Mississauga Hospital and Queensway Health Centre (Trillium Health Partners) et al., 2019 ONSC 5115 (CanLII) , appeal dismissed, Huma v. Mississauga Hospital, 2020 ONCA 644 (CanLII)

The motion judge found that the parties in this case reached agreement on the essential elements of a settlement. Releases proposed by counsel for certain of the defendants contained some important commitments, but did not constitute essential elements of the settlement. The releases constituted the mechanism for implementing the settlement, but did not form part of the settlement itself. The Court of Appeal said that, although the respondents, in accepting an offer to settle, each introduced a request for a release, that was not, in and of itself, the introduction of a new term inconsistent with the existence of a settlement agreement. 

Tchir v King, 2021 ABQB 393 (CanLII)

The appellant appealed a Master’s decision that the parties had concluded a settlement.

He argued that the terms of a release were not agreed upon and were essential terms of the settlement agreement. The court referred to Buterman and Fieguth on the distinction between contract formation and the completion of settlement document. The court said the evidence was clear that the parties reached agreement on all essential terms.

Reid v. Bracebridge, 2021 ONSC 791 (CanLII)

It is well settled that for there to be a binding settlement the parties must intend to create a legally binding contract and agreement must be reached on all essential terms. Where the settlement provides for a release, the cases establish that the terms of the release are not terms of the settlement unless the parties have agreed that further agreement to the terms is required. On the facts of this case, the Divisional Court concluded, contrary to the finding of the motion judge, that there was no evidence that at the time a settlement agreement was reached the parties agreed that the execution of a release by the plaintiff was “always” contingent on the plaintiff reviewing the terms of the release and agreeing to them. More importantly, the Divisional Court said, there was no evidence that any such requirement was an essential term of the settlement. Further, the fact that subsequent to the settlement agreement. the parties negotiated certain wording in the release did not give rise to a term of the settlement that it was conditional on the plaintiff agreeing to the terms of the release. Disputes over documentation in respect of settlement agreements should be resolved by application to the courts or by common sense within the framework of the settlement.

77 Charles Street Ltd. et al. v. Aspen Ridge Homes Ltd. et al., 2021 ONSC 2732 (CanLII)

There is a distinction between the essential terms of a settlement and terms relating to the completion or implementation of a settlement. For there to be a settlement, typically, it is not necessary to have reached agreement on incidental matters, such as the exchange of releases. Although requests for releases and even mutual releases (referring to Chater v. York Central Hospital, above) and documents terminating an action typically would be considered matters relating only to the completion or implementation of a settlement, the request made in this case for a mutual release and a without-costs discontinuance or dismissal of the action affected strangers to the settlement discussions and were terms which the offering parties had not proposed and could not have offered and to which they could not agree. The response to the offer introduced new terms that were not merely incidental, because they required the agreement of other parties, and it constituted a counter-offer, not an acceptance of the offer.

Zaidi v. Syed, Estate of, et al, 2023 ONSC 1244 (CanLII)

For there to be a binding settlement agreement, there must be a mutual intention to create a legally binding agreement and the essential terms of the agreement must have been agreed upon. However, it is not necessary to have reached agreement on incidental matters, such as the method of payment or the exchange of releases.

ADT Security Services Canada, Inc. v. Fluent Home Ltd., 2023 ONSC 5052 (CanLII)

The plaintiffs moved for judgment on a settlement allegedly agreed upon at a pre-trial conference. The parties were subsequently unable to agree on, among other things, all of the terms of releases to be exchanged among the parties. The defendants argued that no binding settlement was reached and that the “agreement in principle” reached at the pre-trial conference did not include all “essential terms” required to create a legally binding contract. The court found that the parties intended to create a firm and binding settlement agreement and both the parties and the court had relied on this express intention in concluding the pre-trial conference and vacating trial dates. The terms of the release were not contested issues during the pre-trial conference, and the parties did not treat these issues as essential terms prior to entering into the settlement agreement. They did not qualify their agreement as being subject to execution of settlement documents.

Sumarah v. International Property Group (Toronto) Limited, 2024 ONSC 334 (CanLII)

 

A settlement agreement is subject to the ordinary rules of contract. For there to be a binding settlement agreement, there must be a mutual intention to create a legally binding agreement and the essential terms of the agreement must have been agreed upon. It is not necessary to have reached agreement on incidental matters, such as the method of payment or the exchange of releases.

4.4.3 Release as an Implied Term of Settlement

As can be seen from the cases below, Canadian courts have repeatedly indicated that a release is an implied term of settlement, unless there is a contractual term of the settlement to the contrary. In a similar vein, the Alberta Court of Appeal said, with regard to a settlement of common issues in a class proceeding, that, since no defendant is going to pay to settle an action without securing a release as part of that settlement, the granting of a release was necessarily an integral part of the settlement: see Macaronies Hair Club and Laser Center Inc v Bank of Montreal, 2021 ABCA 40 (CanLII) , at paragraph 33.

Brown v. Arbutus Manufacturing Ltd., 2000 BCSC 1475 (CanLII)

The defendant’s position was that it had reached a settlement with the plaintiff which the plaintiff was obliged to complete; the fact that the plaintiff did not sign the form of release proffered to him did not alter the fact that the agreement was complete in all its essential terms and there was nothing extraordinary about the form of the release. The court accepted the position of the defendant that such a release could reasonably be implied to have been required of the plaintiff in the circumstances of this case.

EGL Eagle Global Logistics v. Northlea Corp., 2004 CanLII 19425 (ON SC)

In the course of coming to its decision that a trial was necessary to address a counter-application to enforce an alleged pre-litigation settlement, the court said that, where a settlement agreement is incomplete as to certain terms, reasonable terms such as time for performance, a release and compliance with the Income Tax Act could be implied by the court and their absence will not make the agreement unenforceable (citing Fieguth).

Umholtz v. Umholtz, 2004 CanLII 36132 (ON SC)

Settlement of litigation implies an exchange of mutual releases.

Landry v. Standard Life Assurance Co., 2005 CanLII 30875 (ON SC)

It may very well be that an offer to settle implies a promise to furnish a release if it is accepted. However, the terms of the release must reflect the agreement reached by the parties and in this case the terms did not reflect the agreement reached by the parties.

Romany v. Perry, 2006 CanLII 29283 (ON SC)

It would be an implied term of any settlement that a release would be provided. The authorities are clear that a settlement implies a promise to provide a release, although no party is bound to execute any form of release submitted but only a form that reflects the agreement reached between the parties.

Hughes v. The City of Moncton, 2006 NBCA 83 (CanLII)

A binding settlement agreement implies an obligation to furnish a release on terms commonly adopted (“the so-called standard wording”).

Ferron v. Avotus Corporation, 2007 ONCA 73 (CanLII)

The Court of Appeal dismissed an appeal from a decision – Ferron v. Avotus Corp., 2005 CanLII 29655 (ON SC) – in which the motions judge said it is well established that settlement implies a promise to furnish a release, in a customary form, unless there is agreement to the contrary.

Great Sandhills Terminal Marketing Centre Ltd. v. J-Sons Inc., 2008 SKCA 16 (CanLII)

The Court of Appeal rejected the argument that a release acceptable to all parties is an essential requirement of any settlement and that a meeting of the minds on a settlement agreement had not occurred because no agreement as to the terms of a release was reached. The Court of Appeal followed Fieguth and quoted from Fieguth the proposition that a settlement implies a promise to furnish a release.

Vengroff v. Transamerica Life Insurance Company of Canada, 2008 CanLII 22912 (ON SC)

In this case, a defendant brought a motion to enforce the terms of a settlement agreement against a co-defendant. The settlement was reached in respect of a matter involving insurance policies purchased by the plaintiff from the defendants and the co-defendant refused to sign a release because he was concerned about eliminating any claim he might have for commissions arising out of the insurance policy. The court said that, when the parties signed the settlement agreement, it was within their reasonable contemplation that they would be released from all claims relating to the insurance policy, including any claims for commission. The court quoted the proposition from Romany v. Perry (above) that provision of a release would be an implied term of any settlement agreement and it said that the release of all claims relating to the insurance policy reflected the true agreement of the parties.

Langthorne v. Humphreys, 2011 NSSC 44 (CanLII)

The parties in this case reached a valid and enforceable settlement and the execution of a release was not a condition precedent to the settlement, but rather was an implied, but not essential, term of the settlement agreement.

 

Hodaie v. RBC Dominion Securities, 2012 ONCA 796 (CanLII)

The authorities are clear that, absent a contractual stipulation to the contrary, a settlement agreement implies a promise to furnish a release. If any exception to this rule exists, it could not apply in this case.

OZ Optics Limited v. Timbercon, Inc., 2013 ONSC 6439 (CanLII)

The case law is clear that where a settlement is reached, it is normally implied that an executed final release will be provided (referring to Cellular Rental Systems Inc. v. Bell Mobility ).

Certified Design Consulting Inc. v. Alex Lane Properties Inc., 2015 NSSC 367 (CanLII)

In the circumstances of this case, and there being no agreement to the contrary, the court was satisfied that a settlement agreed to by the parties implied a promise to furnish a release, provided, of course, that it reflected the agreement reached by the parties.

Fontaine v. Saskatchewan (Attorney General), 2015 SKQB 220 (CanLII)

The fact of a settlement implies a release. In the circumstances of this case, it was not logical to say that the quantum of the settlement was agreed to but the fundamental and essential scope of the release was not. That is not how reasonable parties negotiate settlements.

Apotex Inc. v. Allergan, Inc., 2016 FCA 155 (CanLII)

When courts find that there has been an agreement on essential terms, they will often imply non-essential terms into a settlement agreement. The lack of agreement on non-essential terms will not stand in the way of a finding of an agreement. For example, assuming an agreement on essential terms is otherwise in place, courts can imply terms concerning, among other things, the granting of a release. Often these will be “mere formalities or routine language” (citing Bawitko ).

R & G Draper Farms (Keswick) Ltd. v. Nature’s Finest Produce Ltd., 2016 ONCA 481 (CanLII) , leave to appeal dismissed, Nature’s Finest Produce Ltd., et al. v. R & G Draper Farms (Keswick) Ltd., et al., 2017 CanLII 4188 (SCC)

A motion for judgment by the plaintiff/respondent in respect of a debt owed to it was granted on the basis of a settlement reached by the parties. The lower court judge also decided that it would be unfair not to allow the defendants/appellants to proceed with their counterclaim. The Court of Appeal dismissed an appeal by the defendants/appellants from the order for summary judgment and it addressed the decision (2015 ONSC 7035) allowing the counterclaim to proceed. On the latter aspect of the case, the Court of Appeal said that the lower court judge ought to have given effect to its reasoning in Bogue v. Bogue . Given the finding that the parties had reached a settlement of the action, the lower court judge ought to have found an implied obligation on the part of the defendants to provide a release of their counterclaim.

Ahmed v Shang, 2016 ONSC 4794 (CanLII)

It is well established that the delivery of a full and final release, in a customary form, whose terms give effect to common sense and normal business practice, is an implied term of the settlement of an action unless the parties otherwise agree.

Kuo v. Kuo, 2017 BCCA 245 (CanLII) , 2016 BCSC 767

When it is clear to the objective, reasonable bystander that parties negotiating a settlement intended to contract and the essential terms of that contract can be determined with a reasonable degree of certainty, then, unless otherwise agreed, an obligation to furnish a release is implied (Fieguth).

Smith v. Coca-Cola Bottling Company, 2017 ONSC 396 (CanLII)

The decision in this case includes quotations from Abouchar and from Cellular Rental Systems indicating that a settlement implies a promise to furnish a release unless there is agreement to the contrary.

Bajenaru v. Marchie, 2017 ONSC 2864 (CanLII)

It is well established that the delivery of a release, in a customary form whose terms reflect the agreement reached by the parties, is an implied term of the settlement of an action unless the parties otherwise agree. However, in this case, the implied term that a settlement should be supported by a release delivered in a customary form was rebutted by the parties’ agreement that the settlement was conditional on the defendants’ obtaining a release in a form acceptable to them.

Lakehead Ironworks Inc. v 183340 Ontario Ltd., 2017 ONSC 3078 (CanLII)

The plaintiffs alleged that a binding settlement of this litigation was reached when the defendant Locke accepted an offer by the plaintiff Quast to purchase his shares in the plaintiff corporation. The defendants argued that there was no agreement on all essential terms because one of the essential terms was a requirement for a written contract to deal with a number of issues, including release of Mr. Locke from a personal guarantee and general mutual releases. The court said that, when Mr. Locke agreed to accept the amount offered by Mr. Quast for his shares, it was reasonable to imply that the parties would, in the usual course, execute mutual releases.

Marcotte v. Marcotte, 2018 BCCA 362 (CanLII)

The first question to address when a dispute arises about the formation of a settlement agreement is whether the parties have agreed on all essential terms of the purported settlement. The court must determine whether, based on the evidence, it is clear to the objective, reasonable bystander that the parties intended to contract, and whether the essential terms of that contract can be determined with a reasonable degree of certainty. If the parties have formed a contract, then unless otherwise agreed, an obligation to furnish a release is implied.

455 Gordon Baker Holdings Limited et al. v. Toronto Transit Commission, 2018 ONSC 5989 (CanLII)

The court said that the law allows it to infer certain types of uncontentious terms into a settlement, such as releases (and the manner of payment and the timing of payment).

Extreme Venture Partners Fund LLP v. Seven Hills Group LLC, 2018 ONSC 6092 (CanLII) , appeal on other grounds dismissed, Extreme Venture Partners Fund LLP v. Varma, 2019 ONCA 446 (CanLII)

The parties in this case agreed that the obligation to provide a release must be implied in a settlement agreement. The court said that this is, in fact, the law as well, but the question is: what form of release? The court found as a fact that the terms of the release were in this case an essential term of the settlement agreement.

Iofcea v. Dinoiu, 2018 ONSC 6882 (CanLII)

Case law has made it clear that a formal release is not an essential term necessary to find there to be a settlement agreement; it may be implied by the settlement’s terms. In this case, it was implicit from the words “Settlement of $650,000” that releases were eventually to be provided; it was implicit that the claims of each of the parties would have been ended by the payment of that sum of money.

Stewart v. Stewart, 2019 BCSC 985 (CanLII)

The parties in this case entered into a settlement agreement which, among other things, provided that certain funds were to be paid to the plaintiff within 30 days of the execution of the agreement. The agreement required the parties to execute a mutual release to be held and not become effective until all obligations under the agreement had been completed. The issue, as characterized by the court, was whether the settlement agreement required the plaintiff to do anything as an implied term—such as provide a mutual release or acknowledgement—in order to get paid the agreed-upon amount by the end of the 30-day period. The court said that there are three ways terms can be implied into a contract, namely: (1) based on custom or usage; (2) as legal incident of a particular class or kind of contract; or (3) based on the presumed intention of the parties where the implied term must be necessary to give business efficacy to a contract or otherwise meets the “reasonable bystander” test as a term which the parties would agree they assumed. The defendants argued that, arising from the third of these categories, there was an implied term of the agreement that the plaintiff would provide an executed acknowledgement and mutual release to the defendants concurrently with the payment to the plaintiff. The court was unable to find that there was an implied term as contended for by the defendants. There was no need to look beyond the agreement in order to determine what the parties intended. A reasonable observer would conclude that the parties intended that the payment to the plaintiff would be made within the stated time limit, notwithstanding that the comprehensive documentation necessary to implement the settlement agreement had not been agreed to by the plaintiff.

Holness v. Metrolinx, 2019 ONSC 349

It is well-established that settlement implies a promise to furnish a release (citing Cellular Rental Systems ).

Lumsden et al v. The Toronto Police Services Board et al., 2019 ONSC 5052 (CanLII)

A full and final release is an implied term of a settlement that has already been reached. A settlement is not tentative, therefore, because the parties must still agree on the wording of the release. Or, to put it another way, a settlement agreement is not an “agreement to agree”.

Tige Industries Ltd. v 0763636 B.C. Ltd., 2020 BCSC 50 (CanLII)

Unless agreed otherwise, the obligation to furnish a release once the essential term or terms is/are resolved, is an implied term of any settlement agreement.

Hutton v Hutton, 2020 BCSC 2046 (CanLII)

The court in this case quoted statements from Umholtz v. Umholtz, 2004 CanLII 14183 to the effect that an exchange of releases is an integral part of any settlement and even where there is “no express discussion about a release, the settlement of an action implie[s] an obligation to furnish [one].” The court set out in its decision the form and wording of the release to be signed by the plaintiff.

Huma v. Mississauga Hospital, 2020 ONCA 644 (CanLII)

Settlement implies a promise to furnish a release unless there is a contractual agreement to the contrary (citing Hodaie, above and Kuo, above). Where a settlement has been agreed to, the implied obligation to furnish a release is to provide one that does not go beyond the terms to which the parties have agreed.

White v. White Estate, 2020 ONSC 6270 (CanLII)

The Divisional Court upheld an order of a motion judge approving releases proposed by the respondents in respect of a settlement of estate litigation. The court said that the motion judge considered the correct legal principles, which the motion judge had described by reference to the following quotation from Cellular Rental Systems Inc. v. Bell Mobility Cellular Inc. : “It is well established that settlement implies a promise to furnish a release unless there is agreement to the contrary. On the other hand, no party is bound to execute a complex or unusual release: although implicit in the settlement, the terms of the release must reflect the agreement reached by the parties. This principle accords with common sense and normal business practice.”

77 Charles Street Ltd. et al. v. Aspen Ridge Homes Ltd. et al., 2021 ONSC 2732 (CanLII)

An offer to settle is not required to set out the terms of a release; settlement implies a promise to furnish a release unless there is a contractual agreement to the contrary.

Bouzanis v. Greenwood et al., 2022 ONSC 5262 (CanLII)

It is well established that the delivery of a full and final release, in customary form, whose terms give effect to common sense and normal business practice, is an implied term of the settlement of an action unless the parties agree otherwise (citing Cellular Rental Systems , Ferron, Hodaie and Ahmed).

Fenos v. Facca Incorporated, 2022 ONSC 6747 (CanLII)

Absent a contractual agreement to the contrary, a settlement agreement implies a promise to furnish a release (citing Hodaie and Huma, above). The implied obligation to furnish a release is to provide one that does not go beyond the terms to which the parties have agreed.

Haider v. Rizvi, 2023 ONCA 354 (CanLII)

This appeal arose out of minutes of settlement that were signed by the appellant and the respondent and his wife after certain actions were settled at a pretrial conference. The minutes of settlement expressly provided for the parties and the respondent’s wife to enter into a mutual release, although the form and content of the release was not prescribed. The respondent brought a motion to enforce the obligation for the parties to exchange mutual releases. On appeal from the order of a motion judge requiring the appellant to execute a release, the Court of Appeal said that the settlement of a claim implies an obligation to furnish a release absent agreement to the contrary, citing Hodaie, above, Fieguth , Bogue and Umholtz . 

Sumarah v. International Property Group (Toronto) Limited, 2024 ONSC 334 (CanLII)

 

The policy of the court is to encourage settlements and in matters of interpretation, courts are not inclined to find that the settlement agreement does not have the requisite certainty in its essential terms. If the settlement agreement is silent, there is an implied term that the parties will execute a release consistent with the terms of the settlement. Settlement implies a promise to furnish a release unless there is a contractual agreement to the contrary.

4.4.4 Whether Minutes of Settlement Are Required in Addition to Release

In each of the cases below, a release took effect as a binding agreement even though the parties had not signed minutes of settlement setting out the terms of their settlement. Note that, in cases such as Hedayat Amirvar v. Murlee Holdings Limited, 2011 ONSC 5826 (CanLII) , at paragraphs 13-14, Lumsden et al. v. The Toronto Police Services Board et al, 2019 ONSC 5052 (CanLII) , at paragraph 19, and Daehn v. Lalonde, 2021 ONSC 301 (CanLII), at paragraph 15, it has been confirmed that there is no requirement that a settlement be embodied in formal minutes of settlement.

Isailovic v. Gertner, 2008 CanLII 1537 (ON SC) , appeal dismissed, 2008 ONCA 895 (CanLII)

The release signed by the parties in this case provided that it was given in consideration of the execution of attached minutes of settlement and the performance of obligations in the release and other consideration. The minutes of settlement, however, were not signed. Rather, the settlement agreement was reflected in a letter from the plaintiff’s lawyer to the defendant. The plaintiff’s position was that the release should not be a bar to his action for reasons including the fact that the parties did not sign the minutes of settlement. The evidence of the plaintiff’s lawyer was that he had explained to the plaintiff what the plaintiff was getting under the agreement and he had also explained the finality of the release by using the words “this is it”. The court found that, in these circumstances, the lack of signatures on the minutes of settlement did not undermine the release as a binding agreement.

Davis v. Cooper, 2010 ONSC 4230 (CanLII) , appeal dismissed, 2011 ONCA 323 (CanLII) , motion for extension of time to serve and file leave to appeal application dismissed, Andria Davis v. CGU Group Canada Ltd. et al., 2012 CanLII 62858 (SCC)

The plaintiff argued that a release signed by her in respect of her claims arising out of a motor vehicle accident was not valid because there were no minutes of settlement. The motion judge said that, in Isailovic v. Gertner, there was an executed release and minutes of settlement that were not signed and the court found the release contained all the terms agreed upon by the parties. There was no evidence in this case that the release did not contain all of the terms of the agreement and the motion judge therefore would not set aside the settlement agreement on the basis of the plaintiff’s argument.

4.5 Effect of Disagreement on Terms of Release

When parties who have been engaged in negotiations or communications about a settlement disagree on the terms of a release, the implications of their disagreement will turn on the distinction made in Fieguth between contract formation and contract completion. If there has been no meeting of the minds on the essential elements of a settlement agreement, no contract has been formed that will or can be enforced by a court. The parties have simply disagreed about the terms of a release associated with a settlement agreement that has not come into existence. But, if the parties have reached agreement on the essential terms of a settlement agreement, then a contract has been formed and their differences about the terms of a release are a matter of contract completion that do not affect the existence of a legally-enforceable settlement agreement.

When an agreement to settle has been formed, disagreements with respect to the terms of a release may give rise to issues about whether the settlement agreement has been repudiated by one or other of the parties. Interestingly, in the Shoolestani case summarized in section 4.5.2 below, the plaintiff argued that a settlement agreement was repudiated by the defendant (or the defendant’s client), or, alternatively, that he repudiated the settlement agreement and his repudiation was accepted by the defendant.

As indicated in the Fieguth decision, at paragraph 44, it is rare that post-contract-formation exchanges between the parties about settlement documentation will amount to repudiation of a settlement agreement. Neither party is discharged from a settlement agreement unless the other has demonstrated an unwillingness to be bound by the agreement (Fieguth, paragraph 36).

4.5.1 Effect on Settlement Agreement Formation and Completion

Charles v. Blacquiere, 1999 ABQB 965 (CanLII)

The court concluded that there was no meeting of the minds on essential elements of an agreement to settle. The form of release provided by the defendant appeared to be a new offer which, unlike the defendant’s written settlement offer, referred to subrogated claims, and the release made it abundantly clear that it was the contract of settlement, rather than a mere recital, and thus purported to contain the entire agreement. The defendant’s position was that execution of the release had been waived, but waiver of the release was irrelevant because there was no settlement contract. Waiving a release cannot “solidify” a contract when there is no meeting of the minds between the parties.

Excell Stamping Inc. v. Consolidated Recycling Incorporated (Metro Recycling), 2008 CanLII 12492 (ON SC)

The parties entered into binding minutes of settlement which provided that they would execute mutual and full releases in standard form agreeable to counsel. The plaintiff refused to sign a release containing a confidentiality clause proposed by the defendant and the defendant argued that, because counsel could not agree on the inclusion of a confidentiality term, the minutes of settlement were not enforceable. The court found that the parties had reached a settlement on all essential terms. Where, as here, the form of release cannot be agreed to, the parties can always seek a clarification from the court within the framework of the settlement. If the release is not acceptable to either party, there may be further discussion, but neither party is released from the settlement.

Gunvaldsen-Klaasen v. Bulpitt, 2009 NSSC 66 (CanLII)

In this case, the plaintiffs claimed that their property had been contaminated by oil leakage from the defendants’ property and previous owners of the defendants’ property were named as third parties. At a mediation, the parties agreed on the amount to be paid to the plaintiff, the amount of the contribution to that amount to be made by the third parties and the “split” of the third parties’ contribution. Further discussions ensued about additional testing of the plaintiffs’ property, the possibility of contamination escaping to other properties, and releases and a consent dismissal order. However, it emerged after the mediation that there was a disagreement about the part of the verbal settlement dealing with releases and a consent dismissal order: the defendants said that they did not agree to release their claim against the third parties, while the third parties said agreement was reached on a resolution of all matters relating to the proceedings, including specific releases from the defendants in favour of the third parties and a consent order dismissing all claims. The court found that the third parties and the defendants were not ad idem and there was no contract. The defendants were of the understanding that the releases and dismissals were in relation to the plaintiffs’ action, while the third parties were of the view that all claims were being dismissed and the third parties would be released. The parties appeared to have been under mistaken assumptions regarding the nature and extent of the settlement due, in part, to their perspectives entering the mediation, the fact that the parties were separated during negotiations and the failure to prepare and sign a settlement document upon conclusion of the mediation.

                

Baeta (Amorosa Group Masonry) v. Dombrower, 2010 ONSC 844 (CanLII)

The plaintiff commenced this action for amounts owing under a contract with the defendant Galperin for construction services at Galperin’s home. The defendant Dombrower was the spouse of Galperin but was not a party to the contract. The plaintiff alleged that he and Galperin agreed on terms of a settlement of the claim. Following the alleged agreement, Galperin indicated to the plaintiff that Dombrower had agreed to the offer and had requested a release. On the plaintiff’s motion for judgment in the terms of an accepted offer to settle, the court found that the evidence did not establish that the plaintiff and Galperin had a mutual intention to create a legally binding contract and had reached agreement on all the essential terms of the settlement. On the contrary, Galperin sought to continue negotiating an additional term to the offer. She sought to have the release of Dombrower added as a term given the action was against him as well.

Hodaie v. RBC Dominion Securities et al., 2011 ONSC 6881 (CanLII) , appeal dismissed, Hodaie v. RBC Dominion Securities, 2012 ONCA 796 (CanLII)

The plaintiff sought to distinguish certain principles of settlement formation and completion on the basis that, unlike the circumstances in other cases, he was not represented by counsel. The court said the plain fact is that a settlement agreement is a contract and lay people are competent to enter into contracts. It was true that the release sent to the plaintiff went beyond what was necessary and he was not obliged to sign it as drafted. But this did not entitle him to avoid the settlement agreement. He ought to have expressed any dissatisfaction he had with it and demanded a revised release. If one party submits a form of release that is not accepted by the other party, then there must be further discussion, but neither party is released from the settlement unless the other has demonstrated an unwillingness to be bound.

Hedayat Amirvar v. Murlee Holdings Limited, 2011 ONSC 5826 (CanLII)

The terms of a release are not the terms of settlement, and any issue the plaintiff may have with the wording of the release is not a valid reason to suggest that the parties had not reached agreement on all the essential terms.

Whitehall Homes & Construction Ltd. v. Hanson, 2012 ONSC 3307 (CanLII)

The parties reached an agreement to settle an action. They signed minutes of settlement which provided that they would exchange mutual releases and obtain an order discontinuing the action. The plaintiff provided a draft release to the defendants; the defendants’ lawyer said that he had some concerns about the wording and the release was never signed by the defendants. When the plaintiff moved to enforce the settlement, the defendants said that there was no enforceable settlement because, among other things, no release was provided. The court found that the settlement agreement was complete when the minutes of settlement were signed and that the releases and discontinuance order were merely reflections of that settlement. The defendants should not be allowed to set aside the contract when they did not hold up their end of the mutual obligation relating to the provision of releases and the dismissal order.

Dube v. Shooman, 2013 ONSC 4348 (CanLII)

Shortly before the date set for the commencement of the trial of this action, the plaintiff accepted a settlement offer, but the parties were unable to agree on the wording of a release. The third party submitted that, since the parties could not agree on the inclusion of a confidentiality clause in the release, the matter should be placed back on the trial list. The court found that there was no breach or repudiation of either the spirit or the terms of the concluded settlement and held that judgment would be entered in terms of the settlement with the release put forward by the plaintiff.

Tondera et al. v Vukadinovic et al., 2015 ONSC 5843 (CanLII)

On a motion to enforce the terms of an alleged settlement, the court said that correspondence between the lawyers for the parties indicated that what remained outstanding were issues relating to the form and content of the releases which the settling defendants wanted the plaintiffs to execute. The court also said there was no doubt that the draft releases provided to the plaintiffs by the settling defendants were comprehensive in their terms. One of the releases was what is often referred to by Ontario litigators as a “LawPro” release. It was a “belt and suspenders” document which sought to protect the releasees from any conceivable future financial liability arising from or in connection with the dispute that was settled. But the failure to conclude a mutually satisfactory release following an agreement to settle does not undermine the settlement agreement itself, provided (as in the present matter) that the settlement was not expressly made subject to agreement on the form or content of the release. In this case, the essential terms of the settlement were clear and unequivocal and a valid settlement agreement was entered into.

Apotex Inc. v. Allergan, Inc., 2016 FCA 155 (CanLII)

An agreement on all essential terms of settlement is binding even though the parties are still negotiating over other terms and – unless essential – terms such as the provision of releases can be easily implied into an agreement to complete it.

Sarazen v. McTaggart et al, 2017 ONSC 5281 (CanLII)

The parties signed minutes of settlement which stated, among other things, that the parties would sign a release, including a LawPRO Standard Release, but certain of the defendants argued that a contract was not in place between the parties. The court relied on the proposition in the Excell Stamping decision (above) that, where the form of release cannot be agreed to, the parties can always seek a clarification from the court, but neither party is released from the settlement. Even if the defendants were to take the position that the releases provided by counsel for other parties were not acceptable, they would remain bound by the minutes of settlement.

Alfaiate v. 1014784 Alberta Inc, 2018 ABQB 666 (CanLII)

It is not necessary to specify in an agreement to settle existing litigation the terms of the formal release that must be delivered under the agreement. The precise terms of the release are not essential terms of the settlement agreement and the court can fix them if the parties are unable to agree.

Cumberland (Village) v. Ferdinandi, 2018 BCSC 726 (CanLII)

In Fieguth, McEachren C.J.B.C. made the important point that it is necessary to separate the issues of contract formation and contract completion. If there are no specific terms in connection with contract completion, either party is entitled to submit whatever releases or documents they think appropriate without rescinding a settlement agreement. If the documents are not accepted there must be further discussion, but neither party is discharged from the agreement unless the other has demonstrated an unwillingness to be bound by the agreement.

Viveiros v. Mokhtarian, 2018 ONSC 2676 (CanLII)

Minutes of settlement signed by the parties to this action provided for the defendants to pay settlement funds in defined installments and contained a default provision in respect of the failure of the defendants to pay the settlement funds. After the default provision had been triggered several times, the settlement funds were eventually paid, but the plaintiffs moved for judgment for “the full amount of the claim” less the settlement funds that had been paid. The court found there were no genuine issues for trial about the existence of a settlement agreement, but there were several substantial issues for trial, including whether there was a “side deal” between one of the plaintiffs and one of the defendants and the terms of the release that was provided for in the minutes of settlement. The issue with respect to the scope of the release concerned the alleged side deal. The plaintiff’s position was that the release was not intended to bar his claim, but the court read the release to preclude that claim. The defendant’s position was that there was no side deal. The court concluded that these issues required a trial.

Extreme Venture Partners Fund LLP v. Seven Hills Group LLC, 2018 ONSC 6092 (CanLII) , appeal on other grounds dismissed, Extreme Venture Partners Fund LLP v. Varma, 2019 ONCA 446 (CanLII)

The plaintiffs and one of a number of defendants in this litigation “agreed in principle” to settle the action as against the one defendant. The defendant insisted upon a release that included an indemnity against liability for any claims over, and the court said that a “standard” release includes such a provision, but the plaintiffs said they would never have agreed to settle on that basis. The court found that the terms of the release were, in this case, an essential term of a settlement agreement, and that there was no agreement on an essential term, being the scope and terms of the release.

Muller v. O’Flynn, 2019 BCSC 1674 (CanLII)

The primary issue at the trial of this matter was whether an oral agreement made by the parties after their separation constituted a binding settlement of the division of their property. In relation to a communication between the parties about a separation agreement that, among other things, “should specify the usual release”, the court said that the fact that a separation agreement was required did not render the agreement unenforceable. The court referred to Marcotte v. Marcotte (above) where the B.C. Court of Appeal said that the obligation to furnish a release can be implied.

Lumsden et al v. The Toronto Police Services Board et al., 2019 ONSC 5052 (CanLII)

A draft release provided by the defendants reflected the settlement reached by the parties; it was not open to the plaintiffs to object to the release and they could not rely on it to resile from their agreement.

Wannan v Hutchison, 2020 BCSC 1233 (CanLII)

The plaintiff filed a notice of civil claim seeking damages as a result of naturopathic treatments performed on her by the defendant. The defendant made an offer to settle indicating that the defendant would require the plaintiff to sign a release with a confidentiality and non-disparagement clause and providing the defendant’s form of release. The form of release provided by the defendant included a non-disparagement clause that, among other things, referred to the “Treatment”. Because of the COVID-19 pandemic, plaintiff’s counsel was not meeting with clients in person. She forwarded the offer to the plaintiff, but inadvertently did not attach the release. Although the plaintiff did not wish to be prevented from telling others about her experience with the treatment, the plaintiff did not realize that the non-disparagement clause extended beyond the defendant to include the treatment as well. The offer was accepted on behalf of the plaintiff by her counsel. The plaintiff was sent the release to sign and then, about a day after the acceptance of the offer, plaintiff’s counsel made the defendant aware of the problem with the release. The court concluded that there was no question that there was a binding settlement agreement. The court also found that plaintiff’s counsel had entered into the settlement under a misapprehension – “both on her part and the part of her client”. The court decided that this was “one of those rare cases in which it would be unjust to enforce” a settlement agreement. Among other things, the court referred to a new way of doing business in “unusual times” (the pandemic), the unusual breadth of the non-disparagement clause, the fact that defendant’s counsel was advised of the misapprehension within 24 hours, at which time the settlement had not been “perfected”, and the absence of evidence of prejudice to the defendant “other than losing the settlement”.

Huma v. Mississauga Hospital, 2020 ONCA 644 (CanLII)

The respondents accepted an offer to settle and each proffered a release which introduced terms beyond what would be strictly necessary to end the claims in this action on a without costs basis, which was the essence of the settlement. The respondent hospitals’ proposed release included an acknowledgment or waiver of independent legal advice and an undertaking to keep the terms of the settlement confidential. The respondent physicians’ proposed release also included a term of confidentiality and extended not only to the claims in the action, but to all claims up to the time of the release. Nevertheless, the proffering of overly broad releases does not negate the existence of a settlement, where there is no evidence that the settlement agreement was conditional on the respondents obtaining a release with those and only those proposed provisions.

Tchir v King, 2021 ABQB 393 (CanLII)

The appellant advised the respondents that he was willing to discontinue an action on a without costs basis and provide a release. The respondents agreed to this offer. They provided a form of release and discontinuance, which the appellant never executed. The appellant purported to withdraw his offer due to his disagreement with a confidentiality clause in the release. The court said the evidence was clear that the parties reached agreement on all essential terms of a settlement agreement. The next stage was the completion of the agreement. As there was no evidence that the parties discussed what would be an appropriate form of release, either party could tender a release they considered appropriate. Neither party was released or discharged until after the parties negotiated what was appropriate and one party was insisting on terms not agreed to or not reasonable in the circumstances. There was no evidence that the appellant or his lawyer responded to the respondents’ proposed form of release. There was no evidence of any negotiations regarding the terms of the release. Accordingly, the appellant was not discharged or released from the settlement agreement when he purported to withdraw his offer.

Ihenyen v. Lakeridge Health Corporation, 2021 ONSC 3788 (CanLII)

An offer to settle was made by one of the defendants in this case and a term of the offer was that the plaintiff would sign a release in the form attached to the offer. The court found that the plaintiff accepted the settlement offer and did not set out any issue with the wording of the release at that time. On this motion by the defendant to enforce an accepted offer to settle, the plaintiff took the position that he had some concerns about the wording of the release. The court concluded that the plaintiff had accepted all the terms of the offer to settle, including the term that he execute a release in the form enclosed with the offer and it granted an order dismissing the action against the defendant.

Bouzanis v. Greenwood et al., 2022 ONSC 5262 (CanLII)

The plaintiff in this case offered to settle the litigation against the defendant Greenwood on the basis of a dismissal without costs. The defendants’ lawyer replied that he had instructions to consent to a dismissal without costs “provided that” the plaintiff executed a release “in LawPRO’s form”. The plaintiff was not willing to sign this form of release. The court said that, If the defendants, in accepting the offer of a dismissal on a without costs basis, had been silent on the need for a release, or had furnished a release for discussion, this court would have had no difficulty in finding that a settlement had been reached subject to an agreement or court direction on the terms of the release. But that was not what occurred. Counsel for the defendants accepted the offer “provided that” the LawPRO standard form release was executed. On the plain meaning of the words “provided that”, the court found that the defendants made the execution of the LawPRO standard release a condition of the settlement. It became an essential term of this agreement. The plaintiff clearly indicated she was rejecting the LawPRO release. The defendants had made that release an essential term. As a result, there was no meeting of the minds and there was no settlement.

Fenos v. Facca Incorporated, 2022 ONSC 6747 (CanLII)

The proffering of an overly broad release does not negate the existence of a settlement without evidence that the settlement was conditioned on the execution of the release proffered (citing Huma, above).

4.5.2 Whether Dispute about Release Results in Repudiation of Settlement

Termination of an agreement by repudiation occurs when a party evinces an intention not to be bound by the agreement and the innocent party elects to accept the repudiation: Kuo v. Kuo 2017 BCCA 245 (CanLII) , paragraph 39, and Guarantee Co. of North America v. Gordon Capital Corp., 1999 CanLII 664 (SCC), [1999] 3 S.C.R. 423, paragraph 40. An intention not to be bound by an agreement may be evinced by words or conduct: Guarantee Co., paragraph 40, and Kuo, paragraph 40. Unlike rescission, which allows the rescinding party to treat the contract as if it were void ab initio, the effect of a repudiation depends on the election made by the non-repudiating party. If that party treats the contract as still being in full force and effect, the contract remains in being for the future on both sides. If, however, the non-repudiating party accepts the repudiation, the contract is terminated, and the parties are discharged from future obligations. Rights and obligations that have already matured are not extinguished: Guarantee Co., paragraph 40.

A party may repudiate a contract by breaching a sufficiently serious term that triggers the right of the non-breaching party to end the contract. Where the non-breaching party accepts the repudiation, the contract is over: Potter v. New Brunswick (Legal Aid Services), 2015 SCC 10 (CanLII), at paragraph 147, per Cromwell J. An anticipatory breach occurs when one party manifests, through words or conduct, an intention not to perform or not to be bound by provisions of the agreement that require performance in the future: Potter, paragraph 149. The same principles guide both anticipatory repudiation and repudiation: Remedy Drug Store Co. Inc. v. Farnham, 2015 ONCA 576 (CanLII), paragraph 44.

Anticipatory repudiation is essentially the same as repudiation simpliciter – the only difference is timing: Remedy, paragraph 42. The focus in such cases is on what the party’s words or conduct say about future performance of the contract. For example, there will be an anticipatory repudiation if the words and conduct evince an intention to breach a term of the contract which, if actually breached, would constitute repudiation of the contract: Potter, paragraph 149 and Remedy, paragraph 43.

The test for anticipatory repudiation is an objective one: Remedy, paragraph 45. In objectively construing the purported breaching party’s intention, the surrounding circumstances must be considered: Remedy, paragraph 46 and Potter, paragraph 164. Although the subjective intention of the breaching party is not determinative, it may assist in determining objective intention by throwing light on how the alleged repudiatory conduct would be viewed by a reasonable person: Potter, paragraph 171 and Remedy, paragraph 49.

It is rare for subsequent conduct to amount to a repudiation of a settlement agreement: Fieguth, paragraph 44 and Kuo, paragraph 41. In Canadian Standards Association v. P.S. Knight Co. Ltd., 2018 FC 1081 (CanLII) , at paragraph 10, the court said that agreements to settle litigation are frequently “susceptible to interpretive disagreements” and that, because of the value of promoting and enforcing litigation settlements, the courts have generally been reluctant to treat “ex post facto posturing” as a repudiation. A party’s later insistence on a condition of performance that is excessive and contrary to the original contractual intent will only rarely amount to a repudiation: ibid.

In Remedy Drug Store v. Farnham, above, a dispute arose over whether the parties had reached an agreement to settle their differences and, if so, whether one party had repudiated the agreement. On appeal, the argument centred on the repudiation issue. The Ontario Court of Appeal said that a finding of anticipatory repudiation is reserved for cases in which the conduct at issue can be said to be serious. Before an anticipated breach of contract can be characterized as an anticipatory repudiation, the breach must be one that would deprive the innocent party of substantially the whole benefit of the contract: Remedy, paragraph 50. Insistence on a new contractual term can amount to anticipatory repudiation but only if the term is of such importance that the party propounding the term can be said to have exhibited an intention not to be bound by the contract: Remedy, paragraph 52. The Ontario appellate court agreed with the opinion of the B.C. Court of Appeal in Fieguth that anticipatory repudiation should be considered a particularly exceptional remedy in the context of settlement agreements: Remedy, paragraph 53.

Landry v. Standard Life Assurance Co., 2005 CanLII 30875 (ON SC)

The defendant brought a motion for judgment in terms of an accepted offer to settle. The release tendered by the defendant was extremely broad in its scope and it contained a confidentiality clause prohibiting the publication by the plaintiff of the terms of the release and settlement. The court found that the terms of the release did not reflect the agreement reached by the parties. The court went on to say it was not suggesting that, by tendering the release in question, the defendant had repudiated the agreement to settle, but the defendant insisted on a judgment that went beyond the terms of the offer to settle and the defendant’s motion was therefore dismissed.

Moore v. Sundquist, 2009 BCSC 20 (CanLII)

The parties reached an agreement to settle a claim ensuing from a motor vehicle accident, but the plaintiff refused to sign the release sought by the defendant. The defendant’s position was that the settlement was a full and final settlement of all claims arising from the accident, while the plaintiff said that at no time was there any mention of her claim for benefits made in an action against the Insurance Corporation of British Columbia. The court said that the issue was whether one party had demonstrated an unwillingness to be bound by the agreement by insisting upon terms or conditions that had not been agreed upon. The court concluded that this had in fact happened because the plaintiff would not complete the settlement unless she was paid an additional amount or the defendant agreed that she could continue her action against ICBC. The court concluded that to take such a position was to repudiate the settlement agreement.

Lacroix v. Loewen, 2010 BCCA 224 (CanLII)

On this appeal, the parties made opposing contentions about the basis for the decision of the chambers judge to strike a paragraph of the statement of defence alleging a settlement of the plaintiff’s claims. The Court of Appeal agreed with the appellants that the basis of the chambers judgment was that the parties had negotiated a binding settlement, but the defendants repudiated the settlement by tendering a release that did not reflect the terms of the settlement. The Court of Appeal concluded that the defendants had not tendered a release that did not reflect the terms of the settlement. The Court of Appeal added that, on the repudiation issue, the chambers judge cited proper authority in Fieguth, but incorrectly applied that authority. The passage in Feiguth about tendering documents thought to be appropriate without rescinding a settlement agreement continues to be a correct statement of the law and to accord with sound practice.

Kuo v. Kuo, 2017 BCCA 245 (CanLII) , 2016 BCSC 767

It is rare for subsequent conduct to amount to a repudiation of a settlement agreement (citing Fieguth). For example, while insisting upon an excessive release may evidence an unwillingness to be bound, the mere proffer of such a release does not necessarily have this effect. On the facts of this case, the trial judge found that the respondent did not repudiate a settlement agreement when he added to a draft release a term which made other parties responsible for capital gains and other tax liabilities. The Court of Appeal referred to the trial judge’s finding of fact that the respondent did not evince an intention not to be bound by the agreement when he attempted to negotiate a favourable release and remained silent for five months after hearing from the defendants regarding their objections and the Court of Appeal said that this was a supportable finding.

Buterman v. St. Albert Roman Catholic Separate School District No. 734, 2017 ABCA 196 (CanLII)

In this case, the Alberta Human Rights Commission Tribunal found that the appellant had relinquished a human rights claim when he entered into a settlement agreement. The appellant submitted that, if there was a settlement agreement, the agreement was repudiated by the form of release and confidentiality clauses proposed by the other party. The majority of the Tribunal concluded that the appellant had not demonstrated that the draft settlement documents were inflexible or final and that there had been no repudiation of the settlement agreement. It reasoned that, to the contrary, the evidence strongly supported a conclusion that the parties were engaged in an exchange concerning the final wording of the documents. Moreover, the Court of Appeal said, when a party repudiates a contract, the non-repudiating party must accept that repudiation. The requirement of a clear acceptance of a repudiation by the non-repudiating party, as discerned on an objective standard, is particularly appropriate in relation to settlement agreements. The object of a settlement agreement is to bring an existing dispute to a close, not to create a situation where either or both of the parties can treat the agreement as merely another step in a continuing dispute. Where there is an objective basis to conclude that repudiation has occurred, it is open to the court to find that the parties have completely walked away from the settlement. On this record there was no objective basis to conclude that the settlement agreement was repudiated or that the appellant accepted that repudiation. The Court of Appeal held that the Tribunal majority decision on this issue was reasonable.

Marcotte v. Marcotte, 2018 BCCA 362 (CanLII)

It would be rare for post-settlement conduct to amount to repudiation or anticipatory breach. Where a settlement agreement has been reached, but the release has yet to be finalized, the tendering of draft release documents to the other party which are ultimately not accepted will not generally amount to repudiation: see Fieguth. While there are differences between repudiation and anticipatory breach (as Justice Cromwell explained in Potter), it was unnecessary for the Court of Appeal to discuss them here because the appellant had not met the high standard required for either in any event.

Tige Industries Ltd. v 0763636 B.C. Ltd., 2020 BCSC 50 (CanLII)

The plaintiffs brought an application seeking to enforce an alleged settlement agreement entered into by the parties. The defendants submitted that the plaintiffs did not include in the application any specific relief relating to the form of release referred to in the defendants’ settlement offer and that the failure to include relief concerning the release amounted to repudiation of the agreement by the plaintiffs. The court said that this omission did not reasonably give rise to a conclusion the plaintiffs did not intend to be bound by the agreement, including the proposed release contained in the offer; nor could it be said that a fundamental breach of the agreement occurred. The application of the principles of repudiation to these facts appeared to the court to be artificial in the extreme. Finally, on the evidence before the court, it certainly could not be said that there was a clear and unequivocal refusal, by words or conduct, on the part of the plaintiffs, to be bound by the aspect of the agreement that required a release.

Shoolestani v Crease Harman LLP, 2020 BCSC 452 (CanLII)

The court did not accept the argument of the plaintiff in this case that a settlement agreement had been repudiated by the defendant: “back and forth” about release language did not demonstrate an unwillingness to perform the essential elements of a settlement agreement amounting to repudiation. The court said that, as the B.C. Court of Appeal explained in Fieguth, such negotiations are commonplace and unless the settlement documentation is an essential element of the agreement, hard or protracted negotiations about settlement documentation do not demonstrate repudiation. As to whether a repudiation by the plaintiff himself had been accepted by the defendant, the court said that the plaintiff’s actions following the settlement agreement with respect to the terms of the release could not discharge or release him from his obligation under the agreement.

Hutton v Hutton, 2020 BCSC 2046 (CanLII)

The defendant in this case applied to enforce a settlement agreement she said was reached by the parties. The plaintiff argued that there was no binding settlement agreement and, in the alternative, that, if a settlement agreement was reached, the defendant repudiated it. The plaintiff relied on a number of grounds in support of the repudiation argument. One of these grounds, the court said, required consideration of whether, by insisting on a release in the terms she proposed, the defendant should be taken to have repudiated the settlement. The court quoted from Kuo, above, Fieguth and Salminen, above, and found that the settlement agreement “remained intact”. The subsequent negotiations between the parties were an attempt to reach a supplementary agreement, the failure of which was irrelevant to the enforceability of the settlement agreement. In attempting to negotiate for the release, the defendant did not lead the plaintiff to believe that there was no firm agreement at all.

Huma v. Mississauga Hospital, 2020 ONCA 644 (CanLII)

The proffering of overly broad releases does not negate the existence of a settlement, where there is no evidence that the settlement agreement was conditional on the respondents obtaining a release with those and only those proposed provisions. Nor does a party proffering an overly broad release repudiate an existing settlement unless, after discussion, the party refuses to proceed without it being signed, citing Kuo, above.

Mackiw v. Chauhan, 2020 ONSC 2542 (CanLII)

Repudiation is a particularly exceptional remedy in the context of settlement agreements (citing Remedy, above, Bogue v. Bogue , and Whitehall Homes, above). In this case, to ensure the accuracy of a release signed by the plaintiff, the defendant took steps to correct a wrong date reference which reflected an obvious and minor typographical error that was not material to the settlement reached with the plaintiff. The plaintiff refused to make the correction. Instead, she asked the defendant to reconsider deleting terms from the release to which she had previously objected, even though she had signed the release with these terms. The defendant refused to change the release terms because it had concluded a settlement that it wished to preserve. Although the defendant did not release settlement funds because the plaintiff refused to correct the typographical error, the defendant’s intention was to preserve the settlement with a corrected release for accuracy. In these particular circumstances, the court found that this was not one of the rare cases where post-settlement conduct “implicates” the repudiation of a settlement agreement. The defendant did not renounce its obligation to release settlement funds with an outright refusal to pay, or otherwise resile from the settlement. The defendant’s position was consistent with its intention to stand by the settlement agreement that the parties had concluded.

Reid v. Bracebridge, 2021 ONSC 791 (CanLII)

It is well settled that, for there to be a binding settlement, the parties must intend to create a legally binding contract and agreement must have been reached on all essential terms. Where the settlement provides for a release, the cases establish that the terms of the release are not terms of the settlement unless the parties have agreed that further agreement to the terms is required. As a result, disagreement over the wording of a release does not generally result in repudiation of the settlement, citing Fieguth.

77 Charles Street Ltd. et al. v. Aspen Ridge Homes Ltd. et al., 2021 ONSC 2732 (CanLII)

A party which proposes an overly broad release is not repudiating a settlement unless, after discussion, the party refuses to proceed without it being signed, citing Huma, above.

4.6 Completion of a Settlement Agreement

When the efforts of parties to reach a settlement of their dispute satisfy all of the requirements of contract formation, they have arrived at an enforceable agreement. Even then, though, it is very often the case that further steps remain for the parties to complete their settlement agreement. In particular, the documentation required to complete a settlement agreement commonly consists of, or includes, a release. As referred to in one of the decisions summarized below, the documentation required to complete an agreed-upon settlement, such as a release, can be viewed in much the same way as “closing documents” that are required to complete an agreed-upon business or real estate transaction. In Mary Bray v. Willem Fijnheer et al, 2013 ONSC 4097 (CanLII), at paragraph 16, the court said that the lawyer for parties alleging an agreement to settle had fairly pointed out that a court order, release or notice of discontinuance “is merely the mechanism upon which a party may enforce a settlement or an agreement”.

The other decisions below address different issues about releases provided or exchanged in furtherance of an agreed-upon settlement.

Companies’ Creditors Arrangement Act (ON), Re, 2006 CanLII 32429 (ON SC)

The release at issue in this case was explicitly stated to be executed and delivered pursuant to the terms of a settlement. The court said that, in its view, releases were exchanged on the premise that the reasonable expectations created by the settlement agreement would be fulfilled. That is to say, the contemplated “full and final release” was dependent upon the settlement being implemented in accordance with the parties’ mutual reasonable expectations. The court interpreted the settlement as obligating one of the parties to make certain payments and the release was not fully operative unless and until this was done.

C.D.C. Contracting Ltd. v. Humberplex Developments Inc., 2009 CanLII 60664 (ON SC)

A settlement of this litigation was reached which dealt with joint ventures in six real property investments. The parties agreed that a form of transfer agreement was required to implement the settlement but they disagreed about warranties and representations to be included in the transfer agreement and whether such representations and warranties would survive the closing. The court cited Cellular Rental Systems for the proposition that the terms of documents required to effect a settlement must reflect the agreement reached by the parties. The settlement agreement specifically provided that the parties would “exchange full and final Releases releasing all matters as at the date of the Release”. The court said it was implicit that the releases would be delivered at the time that the sale transaction closed. Having regard to the very specific language of the minutes of settlement regarding the releases, the court disagreed with the plaintiff’s position that all representations and warranties would survive closing. The court said the defendant’s position that none of the representations and warranties would survive closing similarly was not contemplated by the minutes of settlement. Representations and warranties in respect of matters that could not be considered “matters as at the date of the Release” would survive closing for a reasonable time period of two years.

Rana v. Canadian Business College, 2012 ONSC 4030 (CanLII) , appeal dismissed, 2013 ONCA 562 (CanLII)

The case law is clear that, when parties dispute whether a settlement has been reached, the first question that must be considered by the court is whether there was an agreement reached between the parties; if there was, then the question may arise as to what “closing documents” must be completed. It is the usual practice that after there has been an agreement as to the terms of a settlement, the parties will execute the necessary “closing documentation”, usually a release and minutes of settlement.

4.6.1 Refusal of a Party to a Settlement to Sign a Release

In the cases below, the courts addressed the legal implications of a refusal to sign a release after parties had agreed on the terms of an enforceable settlement agreement. Another case that is of interest in this context is Scicluna v. Solstice Two Limited, 2018 ONCA 176 (CanLII). Scicluna involved the refusal of a party to sign a release in circumstances where an agreement much like a settlement had been reached, even if it was not specifically referred to as such.

The applicant in Scicluna was unable to complete an agreement for the purchase of a condominium unit and she entered into a resale agreement with the vendor wherein the vendor agreed to return to her all but a specified amount of the money she had advanced, if the unit was resold. After the unit was resold, the applicant refused to sign a release, as contemplated by the resale agreement, because she misread the release and mistakenly believed that she was being asked to let the vendor keep double the amount provided for in the resale agreement. The applicant commenced litigation seeking a declaration regarding the return of monies advanced by her and the vendor invoked a forfeiture provision in the agreement of purchase and sale. In holding that the application judge was entitled to grant relief from forfeiture of monies advanced by the applicant, the Ontario Court of Appeal noted that the applicant’s refusal to sign the release agreement was based on a misunderstanding of its meaning. The Court of Appeal went on to say that this was not a case where the applicant’s conduct was so unreasonable that the court should interfere in the application judge’s exercise of discretion.

Birjasingh v. Coseco Insurance Co., 1999 CanLII 14888 (ON SC)

There are many decisions of this court that have dealt with the enforcement of settlements which have had, as a term, a requirement that a party sign a release. The refusal of a resiling party to sign the release cannot be relied upon as invalidating the settlement.

Langthorne v. Humphreys, 2011 NSSC 44 (CanLII)

The refusal of the plaintiff to sign a release and to acknowledge that a settlement agreement had been reached by the parties was not a repudiation of the agreement. Alternatively, if the plaintiff’s failure constituted a repudiation of the contract, the defendant had decided to treat the contract as continuing, by affirming it through his words and actions.

Levac v. Pychel, 2017 ONSC 4509 (CanLII)

The moving parties in this case sought an order declaring that a settlement agreement among the parties was binding and compelling the defendant 1671233 Ontario Limited to execute a mutual full and final release. The settlement, which included a term that each of the parties was to sign the release, was agreed to by counsel appointed by the numbered company’s insurer to represent the company in the action. The numbered company took the position that it was not properly represented by the insurer or the lawyer appointed by the insurer. However, on the motion, the numbered company did not strenuously oppose arguments that the insurer had the authority to appoint the lawyer to act on behalf of the company, that the insurer had the right to settle the claim against the company and that the lawyer acted within the scope of her ostensible authority when she agreed to the terms of the settlement. The court declared the settlement agreement to be binding and it ordered the numbered company to sign the release.

Sojka v Sojka, 2018 BCSC 562 (CanLII)

In this case, all parties signed minutes of settlement and a mutual release was signed by all parties except two defendants who refused to sign the release. The court said the issue was whether the two defendants were under a mistaken belief of fact, which justified their request that the settlement agreement and release be deemed unenforceable. The court said that the conduct of the defendants constituted “settler’s remorse”, their failure to execute the release constituted a breach of the settlement agreement and there is sound policy for the court to enforce the terms of a valid settlement agreement.

4.6.2 Release Issues Relating to a Statutory Cooling Off Period

The decisions summarized below deal with release issues arising from arguments about the effect of a statutory cooling off period when parties dispute the existence or enforceability of a settlement. A number of these decisions refer to Igbokwe v. HB Group Insurance Management Ltd., 2001 CanLII 3804 (ON CA). Igbokwe does not shed light on issues specifically relating to releases, but, in that case, the Ontario Court of Appeal held that statutory provisions regarding a cooling off period did not apply in respect of an offer to settle made, after the commencement of litigation, under Rule 49 of the Ontario Rules of Civil Procedure.

Phillips v. CGU Insurance Co. of Canada, 2004 CanLII 7056 (ON SC)

The defendant brought a motion to enforce a settlement agreed to by counsel for the parties. Following the agreement by counsel, the defendant sent a form of release for signature by the plaintiff as part of a package containing the disclosure material prescribed by regulations under the Ontario Insurance Act, which included a notice and caution advising the plaintiff, among other things, of the cooling off period that would apply if the plaintiff were to sign the release. The plaintiff refused to sign the release and took the position that he had not authorized the settlement. The court indicated that, had the defendant sent a final release in traditional, absolute form and not the form of release and package comporting to the requirements of the regulations, the settlement would have been enforced, subject to a discretionary power of the court, as mentioned in Scherer v. Paletta, 1966 CanLII 286 (ON CA). But, the court said, once the defendant elected to proceed in accordance with the regime established by the regulations, the defendant was “stuck with it”, including the cooling off period and the plaintiff’s right to reject the proposal.

Melson v. Farmers Mutual Insurance Company, 2010 ONSC 1951 (CanLII)

The defendant in this case brought a motion for summary judgment to enforce a settlement agreement that it asserted had been reached at an examination for discovery. The plaintiff’s position was that no such settlement was arrived at because, after the examination for discovery, the defendant sent the plaintiff’s counsel a full and final release together with a standard disclosure notice pursuant to regulations under the Ontario Insurance Act. The release was never signed by the plaintiff. The court said that, at the examination for discovery, there was an offer by the defendant and acceptance by the plaintiff with the benefit of counsel at his side. The parties could have dealt with a cooling off period if they intended one to apply. The intent of the legislative provision was to assist unrepresented insureds from being pressured into unwise settlement and insureds who have engaged the adversarial process by commencing an action and retaining counsel are not the group that the legislature intended to protect. The defendant was entitled to expect a release and was not required to extend to the plaintiff a cooling off period. Summary judgment dismissing the plaintiff’s claim was granted.

Dorothy Amyotte v. Wawanesa Mutual Insurance Company, 2012 ONSC 2072 (CanLII) , appeal allowed Amyotte v. Wawanesa Mutual Insurance Company, 2013 ONSC 4361 (CanLII)

The parties in this case disagreed about whether they had reached a settlement of the plaintiff’s claim. In support of her position that no settlement was agreed upon, the plaintiff, asserted, among other things, that, because the defendant had sent with its release a settlement disclosure notice in accordance with regulations under the Insurance Act, the plaintiff was afforded all of her rights of rescission under the regulations. The motion judge considered himself bound by the decision in Igbokwe (cited above) to conclude that, once a party chooses to engage in litigation, he or she cannot avoid the provisions of Ontario Rule 49 (dealing with offers to settle) by falling back upon the rights afforded by the regulations. On appeal, the Divisional Court said it has been authoritatively held that the regulations do not apply to settlements made pursuant to a true Rule 49 offer and that the determination of the appeal turned on whether the defendant’s offer qualified as a Rule 49 offer. The Divisional Court concluded that the defendant’s offer did not qualify as a Rule 49 offer, the regulations applied and the plaintiff was entitled to rescind a settlement, as he did, for whatever reason he wished.

Chauvette v. Massey, 2013 ONSC 4146 (CanLII)

As the Court of Appeal stated in Igbokwe (above) the settlement disclosure notice required by regulations under the Insurance Act is designed to protect self-represented parties, not parties who have counsel. A party who has counsel does not require a two day cooling off period in which he or she can rescind acceptance of an offer. Although the defendants in this case sent the notice along with the settlement documents, it was not necessary. While the court in Phillips determined that once the notice was sent, the defendant was “stuck with it,” the Court of Appeal’s reasoning in Igbokwe prevails.

Co-operators General Insurance Company v Doobay, 2017 ONSC 5804 (CanLII)

The plaintiff sought to enforce a settlement arising from an arbitration. Settlement documentation, including a release given by the defendant, was signed, which referred to the two-day cooling off period provided for in regulations under the Insurance Act. The defendant subsequently indicated that he was rescinding the settlement in accordance with the regulations and the terms of the release, but the plaintiff relied on Igbokwe, above, and Chauvette, above, and argued that the regulations did not apply. The court said that the plaintiff, through parol evidence, wished to amend the wording of the written release. This was not a case of sending out the prescribed settlement disclosure notice, which includes a two day cooling off period, after a settlement had been achieved. In this case, the clause containing the two day cooling off period was attached to and formed part of the proposed settlement documentation signed by the defendant. The plaintiff’s motion was dismissed.

Sidhu v. Aviva Canada Inc., 2018 ONSC 3710 (CanLII) , appeal dismissed Sidhu v. Aviva Canada Inc., 2019 ONCA 444 (CanLII)

An arbitrator decided that the applicant’s claim for accident benefits from his automobile insurer was barred, given that a full and final release had been signed. While the applicant’s position was that the settlement disclosure notice provided by the insurer did not comply with the regulations under the Insurance Act, the arbitrator concluded, on the basis of Walker v. Allstate Insurance Company, 2002 CanLII 44970 (ON CA), and Igbokwe, above, that the provision of the regulations relied on by the applicant did not apply to settlements after a court action has been commenced. The arbitrator’s order was upheld on appeal to the Director’s Delegate under the Insurance Act. On this application for judicial review of the decision of the Director’s Delegate, the applicant argued that the decision was both incorrect and unreasonable because the Walker and Igbokwe cases were decided prior to the version of the regulations in force at the time of the settlement and, further, that Walker and Igbokwe should not have been followed because the Court of Appeal failed, in those cases, to consider the primacy of the insurance legislation over conflicting Rules of Civil Procedure. The Divisional Court rejected both of these arguments and concluded that the decisions of the arbitrator and the Director’s Delegate were not only reasonable; they were correct. An appeal to the Court of Appeal was dismissed. The Court of Appeal said that Igbokwe and Walker were dispositive of the issues on the appeal.

4.6.3 Terms of Release to be Provided to Complete a Settlement

After parties have reached an enforceable settlement agreement, differences may arise about the terms of a release to be provided to complete the settlement. Not surprisingly, Canadian case law makes clear that the terms of a release to complete a settlement must reflect the agreement reached by the parties. In Neinstein v. Marrero, 2007 CanLII 13939 (ON SC) , the court said that, for the purpose of determining the language of a release to be provided to complete a settlement agreement, a court must interpret the agreement so as to ascertain the reasonable expectations of the parties, as expressed by the language they have chosen and as understood with reference to the surrounding circumstances of the agreement.

But the settlement agreement reached by the parties may simply not provide answers to all ensuing issues about the terms of a release to be provided to complete the settlement. As can be seen from the decisions below, the courts also speak of terms of a release that are, on the one hand, customary, or, on the other hand, unusual.

On a motion for approval of a settlement of a class action, an Ontario court considered an argument that a proposed release should extend only to certified claims, and not all the claims that were alleged or could have been alleged in the proceeding. In this context, the court said: “Settlements are a compromise. It is unrealistic to expect a settling defendant to be content to walk away without a meaningful release.” See Loewenthal v. Sirius XM Holdings, Inc. et al., 2021 ONSC 4482 (CanLII) , at paragraphs 38-39.

Umholtz v. Umholtz, 2004 CanLII 36132 (ON SC)

The scope of releases is determined by the scope of the litigation, the terms of settlement, and common settlement practices in light of current jurisprudence. The task of the court is not to substitute its own views of proper settlement terms for those of the parties, or to fashion an agreement where there is none. If there is no agreement, then the entire settlement may fail, throwing all of the issues back to the parties to finalize a bargain or proceed with the litigation. If there is agreement, then the documentation should fairly reflect the agreement.

Harris v. Braithwaite, 2006 CanLII 51172 (ON SC)

The terms of an implied release to complete a settlement must reflect the agreement reached by the parties.

Ferron v. Avotus Corporation, 2007 ONCA 73 (CanLII)

The Court of Appeal dismissed an appeal from a decision, Ferron v. Avotus Corp., 2005 CanLII 29655 (ON SC) , in which the motions judge said it is well established that settlement implies a promise to furnish a release, in a customary form, unless there is agreement to the contrary and that the terms of the release must, of course, reflect the agreement reached by the parties.

Neinstein v. Marrero, 2007 CanLII 13939 (ON SC)

The parties to an action with respect to work performed on a residential property entered into minutes of settlement and the applicants sought a declaration regarding the proper language for a release. The applicants took the position that the minutes did not require them to release the respondent’s contractors, subcontractors and consultants. The court held that the interpretation of minutes of settlement most consistent with the reasonable expectations of the parties as expressed in the document was one which required the parties to enter into a release providing the respondents with certainty that they would not be exposed at some future date to any risk associated with claims initiated by the applicants in respect of the work on the property.

Great Sandhills Terminal Marketing Centre Ltd. v. J-Sons Inc., 2008 SKCA 16 (CanLII)

Approval of the wording of a release by the boards of directors of corporate entities was not required because a settlement agreement had been concluded and, contrary to the finding of the Chamber judge that a condition regarding approval of releases was imposed by the lawyer for one of the parties, no party was at liberty to impose additional terms or conditions after the conclusion of the agreement.

Alves v. Caston, 2010 ONCA 805 (CanLII)

The appellant appealed from an order enforcing a settlement agreement. One of the appellant’s arguments was that the release required to be executed by the respondent was not an agreed-upon part of the settlement. The Court of Appeal did not accept this argument. It noted that the original offer to settle stated that a release, which would be forwarded later, would have to be signed. The respondent provided a draft of the form of the release to be executed to the appellant’s counsel as the settlement offer contemplated. The appellant’s counsel, with the draft release in hand, accepted the offer and advised that he had forwarded the release to the appellant for signature. The acceptance of the offer did not reserve acceptance of the form of release.

Hodaie v. RBC Dominion Securities et al., 2011 ONSC 6881 (CanLII) , appeal dismissed, Hodaie v. RBC Dominion Securities, 2012 ONCA 796 (CanLII)

In this case, the motion judge said that no party is bound to execute a complex or unusual form of release. The terms of the release must reflect the agreement reached by the parties. This principle accords with common sense and normal business practice. The Court of Appeal said that the form of release required was a simple release of the appellant’s claim.

Atlas Holdings v. Vratsidas, Canaclean Building Services, Plewa, 2011 ONSC 364 (CanLII)

The Master held that a settlement implies a promise to furnish a release, but that the release must take into account other claims the parties may have. The Master therefore ordered the parties to sign a release which was without prejudice to the plaintiffs’ claims in other actions. An appeal from this decision was dismissed. The appellant submitted that, if parties want extra terms in their release, they must bargain for them before settlement. In support of his conclusion, the Master had cited Cellular Rental Systems Inc. v. Bell Mobility Cellular Inc. , where the defendant did not mention a counterclaim in a settlement proposal and the court concluded that this would clearly indicate an intention to settle only the main action. In this case the court said that, similarly, it was reasonable for the Master to conclude that the plaintiffs would not have given a release that compromised other claims they had. The court saw no error in the Master’s decision.

OZ Optics Limited v. Timbercon, Inc., 2013 ONSC 6439 (CanLII)

In furtherance of their efforts to resolve outstanding matters in this litigation, the parties exchanged draft releases but were unable to agree on final wording. The court said that a comparison of the competing releases demonstrated that the main area of dispute was that the defendant wanted wording to the effect that the release included “any and all disputes and claims between the parties that are presently known or reasonably discoverable and which arose out of, or in any way relate to, the dealings between the parties that gave rise to the action and the appeal.” The court said that these cases must be viewed through the lens of their factual background. This case was somewhat unusual in that settlement occurred after a lengthy trial and an appeal and the only outstanding issue after the appeal was a claim for negligent representation. The release prepared by the plaintiff was clear that the settlement being entered into was a full and final release of all claims made in the action or the appeal and was reflective of the agreement reached by the parties. The court noted that there was never any discussion that the settlement was inclusive of any “discoverability rights” the plaintiff might have, which was the major thrust of the additional wording requested by the defendant.

Fontaine v. Saskatchewan (Attorney General), 2015 SKQB 220 (Can LII)

In this case, the court considered a dispute concerning rights and obligations created by the Indian Residential Schools Settlement Agreement. As stated by the court, certain parties agreed to make a payment to Canada, Canada agreed to accept that amount, the parties agreed that, in exchange for this payment, Canada was required to give a release and the only issue was whether the parties were in agreement as to the general scope of the release. The position of the Attorney General for Canada was that the parties would deal “with quantum first and terms second”. The court said that Canada’s interpretation of the communications between the parties presumed that other parties would agree to pay a significant sum of money in a settlement without knowing precisely what it was they were settling. The court found this was not a reasonable interpretation of what transpired. The fact of a settlement implies a release, and it was not logical to say that the quantum of the settlement was agreed to, but the fundamental and essential scope of the release was not. That is not how reasonable parties negotiate settlements. The court referred to a number of areas of the evidence which indicated that the parties were negotiating with respect to all matters at issue between them in relation to the settlement agreement.

Smith v. Coca-Cola Bottling Company, 2017 ONSC 396 (CanLII)

The decision in this case includes quotations from Abouchar and from Cellular Rental Systems indicating that a settlement implies a promise to furnish a release unless there is agreement to the contrary; no party is bound to execute a complex or unusual form of release; and the terms of the release must reflect the agreement reached by the parties. As a result of his injuries in a car accident, the plaintiff made claims against the tortfeasor, against his accident benefits insurer and against short and long term disability benefit carriers. His employer, Coca-Cola, was responsible to pay short term disability benefits, which were administered by Sun Life. All three claims were settled and Coca-Cola sought a broad release on the basis that a global settlement had been achieved. The court held that there was no global settlement: settlement of each of the three separate actions was negotiated separately. Insofar as Coca-Cola was concerned, the parties were focused solely on the short term disability claim and the release demanded by Coca-Cola was not contemplated or negotiated as part of the settlement.

Alfaiate v. 1014784 Alberta Inc, 2018 ABQB 666 (CanLII)

The precise terms of a release are not essential terms of a settlement agreement and the court can fix them if the parties are unable to agree. In fixing the terms of the release, the court must consider the wording of the agreement, the context of the dispute and its resolution and commercial reasonableness.

Huma v. Mississauga Hospital, 2020 ONCA 644 (CanLII)

Where a settlement has been agreed to, the implied obligation to furnish a release is to provide one that does not go beyond the terms to which the parties have agreed.

Magnotta et al. v. Yu et al., 2020 ONSC 5445 (CanLII)

The court granted a motion by the plaintiffs to enforce acceptance of an offer to settle made by the defendants. The court indicated that judgment would issue in favour of the plaintiffs in accordance with an “Option B” set out in the offer to settle. Issues arose with respect to the terms of the formal judgment of the court. A paragraph of the draft judgment provided that the parties would exchange mutual releases. The court said that this paragraph was not appropriate. While a term of the offer to settle, the need for releases was premised on the parties accepting the offer and settling the action. That had not happened. Instead, the operative terms of the offer had become a judgment and releases were no longer necessary.

Terranata Winston Churchill Inc. v. Teti Transport Ltd., et al., 2020 ONSC 7577 (CanLII)

When the parties to a settlement have agreed that a release will be executed, but the settlement agreement is silent as to the content of the release, the court will imply that the parties agreed to sign a standard form general release consistent with the settlement – nothing more and nothing less. The court will imply only those terms that are “standard” or “usual” as those terms have been interpreted in the jurisprudence. In determining what terms fall within the scope of a standard release, the jurisprudence has established that the test to be applied is objective, rather than the subjective intentions of the parties to the settlement. Two guiding principles driving this analysis are the general purpose of releases and the business efficacy of settlement agreements. Where it was clear from an accepted offer to settle that a party was to execute a “full” release, this title did not mean something less than a “full and final” release or, in other words, a limited or partial release. There was no language in the accepted offer to settle that narrowed the scope of the release to something less than a standard general release.

McMillan Estate v. Booth, 2021 NSSC 284 (CanLII)

Parties negotiating settlements, represented by counsel or not, whether at a judicial settlement conference, a mediation or directly, should be careful to clearly state any terms and conditions of settlement, including: who is responsible for the payment of subrogated claims; and, specific terms to be included in any consent orders or releases that are required to conclude the settlement. In the more formal settlement processes, defence counsel should consider attaching the form of release and order they will expect to be signed as an appendix to the settlement brief sent to the judge or mediator.

Fehr v. Gribilas, 2022 ONSC 275 (CanLII)

The overarching purpose of a general release is to resolve all matters as between the settling parties and to put an end to the settling parties’ exposure to litigation, and thus a release is typically broad in scope to cover not only the specific litigation but all actions or claims that could have been raised against the settling party including claims advanced by non-settling parties or strangers to the release.

Fenos v. Facca Incorporated, 2022 ONSC 6747 (CanLII)

The implied obligation to furnish a release is to provide one that does not go beyond the terms to which the parties have agreed. The form of the release required is a simple release of the claim (citing Hodaie, above). In this case, a disagreement arose regarding the effect of a release to be given by the plaintiff on other litigation, referred to by the court as the Oppression Action. The plaintiff sought a release that included an explicit exclusion of the Oppression Action. The defendant sought a broad general release that “facially” could include the Oppression Action. The court concluded that both positions were incorrect and that the releases proposed by both parties were overly broad. The court said that the release must reflect the agreement reached by the parties and that both proposed releases introduced terms beyond what was necessary to end the claims, and appeal, identified in the settlement agreement. The broad language in the defendant’s proposed release could be construed to include the Oppression Action, a result clearly not included in the settlement agreement. The defendant argued that it was entitled to the proposed broad release, citing principally Terranata, above. The court did not read Terranata as calling for a broad general release in all cases. In Terranata, the guiding principle was repeated, namely, that the court will imply that the parties agreed to sign a standard form general release consistent with the settlement – nothing more and nothing less. Wording that could be construed to include the Oppression Action in the release was contrary to the settlement. On the other hand, the plaintiff’s proposed release included provisions that were not part of the settlement agreement and could not be part of the release.

Haider v. Rizvi, 2023 ONCA 354 (CanLII)

This appeal arose out of minutes of settlement that were signed by the appellant and the respondent and his wife after certain actions were settled at a pretrial conference. The minutes of settlement provided for the parties and the respondent’s wife to enter into a mutual release, although the form and content of the release was not prescribed. The respondent brought a motion to enforce the obligation for the parties to exchange mutual releases. The motion judge ordered that the appellant execute a standard form release which would release all claims arising out of the subject matter of the actions and containing a clause barring claims-over. The Court of Appeal said that where, as in this case, the form of release is not prescribed in the settlement agreement, the content and scope of the release depend on an interpretation of the settlement. The motion judge ought to have considered the appellant’s arguments about the scope of the release in the context of the specific terms of the settlement the parties had reached, including the actions that had been settled and an undertaking which the parties had agreed would survive the settlement.

4.6.3.1 Confidentiality or Non-Disclosure

The decisions below deal with whether the terms of a release to complete a settlement should include a confidentiality or non-disclosure clause.

Excell Stamping Inc. v. Consolidated Recycling Incorporated (Metro Recycling), 2008 CanLII 12492 (ON SC)

Where a party agrees to provide a release, the party is not bound to execute any form of release submitted but only a form that reflects the agreement made between the parties. A complete and full release does not entail the provision of a confidentiality clause. A determination of whether such an agreement exists does not depend on an enquiry into the actual state of mind of a party (e.g., subjective intention) but is to be measured by an objective consideration of the language chosen to reflect the agreement. In this case, such a clause was not a necessary term of the settlement and must be negotiated.

Dube v. Shooman, 2013 ONSC 4348 (CanLII)

The plaintiff accepted a settlement offer which made no mention of non-disclosure as a term of settlement. The parties never discussed a non-disclosure clause before the offer to settle was accepted, but it was submitted that a confidentiality term was standard and fair and reasonable. The court held that no confidentiality clause was to be implied and the release should omit such a clause.

Urban Handyman Inc. v. Should I Stay or Should I Go West Productions Inc., 2015 BCSC 1780 (CanLII)

The parties in this case agreed that a settlement agreement was reached on all of the essential terms, but a dispute remained about a particular provision of a release. The communications between the parties referred to a release including a confidentiality and non-disparagement clause. The applicant’s position was that the reference to a confidentiality and non-disparagement clause referred to a provision of a previous contract regarding protection of trade secrets and other matters and was therefore understood to mean that the formal settlement documents would include the level of specificity of this earlier provision. The court said that the lack of mention of the specifics of the earlier contractual provision, and the terminology used, simply reflected a confidentiality and non-disparagement clause between the parties. This clause, the court found, did not incorporate all of the additional terms contemplated in the release proposed by the applicant.

455 Gordon Baker Holdings Limited et al. v. Toronto Transit Commission, 2018 ONSC 5989 (CanLII)

The court said that the law allows it to “infer” certain types of uncontentious terms into a settlement, such as releases. However, terms like confidentiality requirements go beyond what could be described as uncontentious. In certain settlements, terms of that nature may be uncontentious. In others, they may be hotly contested. In this case, neither party had given the court any context that would permit it to assess whether such terms were contentious or not.

Jenneson v. Olson, 2019 BCSC 2367 (CanLII)

The defendant accepted the plaintiff’s settlement offer in exchange for a release (with confidentiality clause) and consent dismissal order. The court held that no settlement was reached, but, in the course of coming to this conclusion, the court addressed the defendant’s argument that a confidentiality clause is an implied term of any settlement agreement in a medical malpractice action (i.e., like a consent dismissal order or a release, a confidentiality clause must be assumed to be part of any settlement). The court was not provided with case authorities in support of this proposition. The court found that a confidentiality clause was an essential term of settlement and that formation of a settlement was subject to the agreement of the plaintiff on confidentiality terms.

Mackiw v. Chauhan, 2020 ONSC 2542 (CanLII)

The plaintiff argued that her acceptance of an offer to settle did not bind her to the non-disclosure and non-disparagement terms of a settlement agreement because non-disclosure language is not an implied term of a standard release and must be specifically negotiated, relying on Abouchar v. Conseil scolaire . Although non-disclosure and non-disparagement terms are not implied terms of a standard release, these terms were specifically addressed in this case. The plaintiff explicitly raised the non-disclosure and non-disparagement terms by trying to negotiate their removal from the release. After the defendant refused to change the release, the plaintiff signed and returned the release to accept the offer to settle. In these circumstances, it was clear that the plaintiff accepted the terms of the settlement agreement, which included the non-disclosure and non-disparagement provisions that stayed in the release.

Terranata Winston Churchill Inc. v. Teti Transport Ltd., et al., 2020 ONSC 7577 (CanLII)

In Abouchar  v. Conseil scolaire, the court considered whether a non-disclosure clause was an implied term of the standard general release required by a settlement that was silent with respect to the required terms of the release. The key finding in Abouchar was that a non-disclosure clause is not a usual term of a general release. Accordingly, the court in Abouchar would not imply a non-disclosure clause into the standard general release because it was not specifically agreed upon in advance of the settlement.

McMillan Estate v. Booth, 2021 NSSC 284 (CanLII)

The sole issue on this motion was whether a settlement reached between the parties at a judicial settlement conference was subject to a condition that the release would contain a confidentiality clause. The parties agreed there was no express agreement on the inclusion of the confidentiality clause. The question was whether it was a condition applied either as a standard clause or by the past conduct of counsel for the parties. As stated by the court, the plaintiff referred to “Ontario jurisprudence that stand for the proposition that a confidentiality clause is not an implied term of a final release” (Abouchar , Gilles Dube Investments, above, and Terranata, above). The defendant argued that these cases were “dated” and that the standard of practice can change over time. The defendant relied on evidence to establish that confidentiality clauses were part of a standard release in Nova Scotia in 2021, but the court said that, applying an objective test, the evidence fell far short of establishing a practice standard among the members of the personal injury bar of the Province or that there was a standard policy or practice among the automobile liability insurers doing business in Nova Scotia. The court found that there was no express or implied condition that the release would contain a confidentiality clause.

Bouzanis v. Greenwood et al., 2022 ONSC 5262 (CanLII)

It was argued in this case that, in 2022, the inclusion of a confidentiality clause could be a standard term in a release. Second, it was argued that the inclusion of a confidentiality clause in a release was of no real import on the facts of this case because it was not complained about at the time the release was provided. As to the first argument, the court said that the case law did not support the position that a confidentiality clause should now be considered a standard term of settlement (referring to Abouchar , Gilles Dube Investments, above, and Terranata, above). As to the second argument, the court said that a particular form of release had been made an essential term of settlement by the moving parties and had been rejected by the responding party; the court was not provided with any case law to support the proposition that a party must explain why they are rejecting an essential term of a settlement offer. 

4.6.3.2 No-Claim-Over Clause

After parties have reached a settlement of their differences and a release has been given to complete the settlement, a related claim by the releasor against a non-party to the settlement could give rise to a claim over against the releasee. In most if not all circumstances, the perspective of the releasee is likely to be that the release does not serve its purpose if it provides no protection against such a claim over. Protection for the releasee in respect of a claim over may take the form of a no-claim-over clause, which is, in essence, the agreement of the releasor not to make a claim or bring or maintain an action which could give rise to a claim for contribution or indemnity, or any other relief over, as against the releasee.

The subject of no-claim-over clauses is addressed more generally below in Chapter 7: Releases and Multi-Party Liability. The point of interest here is whether a release given to complete a settlement should include a no-claim-over clause when the parties to the settlement did not explicitly indicate their intentions regarding the inclusion of such a provision in the release.

Global Resorts International v. McCarthy, 2003 CanLII 24272 (ON SC)

The court concluded that the release to be provided to complete a settlement reached by the parties would include the “standard protection” demanded by the defendant, namely, a no-claim-over clause. The plaintiff was concerned that legitimate claims it wished to pursue in a foreign state could be defeated by a frivolous claim over against the defendant which would cause the plaintiff’s claim to be stayed under the no-claim-over clause. The court said that the risk of a “mischievous interpretation” of the release could be avoided by a requirement that it be interpreted by an Ontario court according to Ontario law and the court determined that the release proposed by the defendant was to be executed with that additional provision.

Gregory v. KPMG LLP, 2012 BCSC 1387 (CanLII)

The parties reached a settlement of litigation on terms that required the execution of a release by the plaintiff, but were unable to agree on the provisions of the release. Among other things, the plaintiff objected to the no-claim-over provisions of the release proposed by the defendants and argued that an “other persons clause” must be specifically negotiated for inclusion in a release. The court said that the purpose of a release is to ensure that its terms achieve the goal expressed in the parties’ settlement, which is that the release effectively terminates the parties’ action and provides finality to the dispute and the potential for matters arising out of their dispute. The court held that the release proposed by the defendants addressed and finalized all aspects of the parties’ dispute and that the no-claim-over provisions would be included in the release.

Certified Design Consulting Inc. v. Alex Lane Properties Inc., 2015 NSSC 367 (CanLII)

The court was satisfied that a settlement agreed to by the parties in this case implied a promise to furnish a release provided, of course, that it reflected the agreement reached by the parties. The court said that there was never any discussion at any point in the settlement negotiations of a requirement that the defendant undertake not to pursue a claim against any third parties who might claim contribution or indemnity against the plaintiff. The court found that that was not a term that reflected the settlement agreement or which could be said to be necessary in order to give effect to it. The court would therefore not imply such a term in the settlement agreement.

Ahmed v Shang, 2016 ONSC 4794 (CanLII)

In connection with a settlement of actions arising from a motor vehicle collision, the responding parties submitted that draft releases were overly broad in that each release would prevent the responding parties from bringing a claim against a person who might claim contribution or indemnity from the moving parties in relation to the collision. The court said that the responding parties had not provided any evidence or precedent to support the assertion that the draft releases were not in the customary form and, as a result, the court rejected this submission. Further, there was nothing in the record to show that this concern was raised by the responding parties prior to the exchange of materials for the motion before the court.

Pomeroy v. Couprie et al, 2017 ONSC 6906 (CanLII)

The court found that the parties to litigation had agreed on a settlement and that one of the terms of the settlement was that the parties would sign a mutual release “in LawPro’s standard form”. The issue before the court was whether the parties’ agreement contemplated that “LawPro’s standard form” would be modified to restrict the scope of the no-claim-over provision. The court said that a no-claim-over clause is part of the standard LawPro release, would have been in the contemplation of the parties and must be included, but amended to reflect the ongoing litigation which was only being partially settled. The scope of the release should be consistent with matters that were specially in contemplation of the parties at the time the settlement agreement was entered into.

Brager v. Ontario (Natural Resources), 2017 ONSC 1759 (CanLII)

The court found that there was a final settlement between the parties, the terms of which were contained in minutes of settlement. The minutes required the parties to provide each other with a full and final release. The inclusion of a contribution and indemnity clause (referred to in this work as a no-claim-over clause) in a release is standard in virtually every release entered into by parties engaged in litigation. Without such a clause, the release would not be a full and final release.

Holness v. Metrolinx, 2019 ONSC 349

When the terms of a settlement require execution of a release, a form of release with a contribution and indemnity clause (referred to in this work as a no-claim-over clause) is standard. There is nothing prejudicial to the inclusion of a contribution and indemnity clause in a full and final release (citing Brager, above). In this case, by carving out an exception to a full and final release with a handwritten amendment, the plaintiff was circumventing the purpose of the release – it would make no sense for the defendant, or any defendant for that matter, to agree to a release without a contribution and indemnity clause.

Terranata Winston Churchill Inc. v. Teti Transport Ltd., et al., 2020 ONSC 7577 (CanLII)

No-claim-over/contribution and indemnity clauses are usual elements of a standard general release. The court will therefore imply these types of provisions as terms of standard general releases, unless expressly carved out or narrowed by the parties prior to reaching a settlement. If there is to be any narrowing in scope of these types of provisions, it must be specifically negotiated, agreed upon and reflected in the settlement agreement. This conclusion is supported by the case law and informed by a purposive analysis of general releases.

Fehr v. Gribilas, 2022 ONSC 275 (CanLII)

The fundamental premise of a full settlement is that the general release is intended to buy the releasee peace of mind in relation to all claims arising from, and in connection with, the matters raised in the statement of claim both in the settled proceeding, and any other proceeding in which the releasee could be brought back into the dispute. “No-claims-over clauses”, that preclude a settling party from bringing claims that will prompt others to claim contribution and indemnity against the other settling party are implied terms of a standard general release and if there is to be any narrowing in scope of these provisions, it must be specifically negotiated, agreed upon and reflected in the settlement agreement.

Haider v. Rizvi, 2023 ONCA 354 (CanLII)

This appeal arose out of minutes of settlement that were signed by the appellant and the respondent and his wife after certain actions were settled at a pretrial conference. The minutes of settlement provided for the parties and the respondent’s wife to enter into a mutual release, although the form and content of the release was not prescribed. The respondent brought a motion to enforce the obligation for the parties to exchange mutual releases. The motion judge ordered that the appellant execute a standard form release which would release all claims arising out of the subject matter of the actions and containing a clause barring claims-over. The Court of Appeal found that the wording and circumstances of the minutes of settlement made clear that, subject only to matters carved out of the release by an undertaking which the parties had agreed would survive settlement, the parties were agreeing to extinguish each other’s full underlying liability in relation to the subject matter of the settlement. A no claims over clause was a natural extension of their agreement and was consistent with the parties’ goal of providing a full and final release. In the circumstances of this case, however, the Court of Appeal saw no basis for the inclusion of an indemnity for breach of the no claims over clause. While this would no doubt aid in the enforcement of the no claims over clause and an indemnity to support and enforce a no claims over clause is frequently included without objection in releases in completion of settlements, the parties in this case bargained for certain indemnities to survive the settlement (as included specifically in the undertaking). The indemnity wording proposed by the respondent to reinforce the no claims over clause went beyond what the parties reasonably bargained for.

Wiener v Strickland et al, 2023 ONSC 3452 (CanLII)

The plaintiff brought this action alleging negligence by a lawyer who acted for him in litigation relating to an estate. The litigation was settled at a mediation and one of the terms of the settlement was that standard releases were to be signed, releasing the estate and estate trustees. The plaintiff’s position was that he agreed to the terms of the settlement so long as he could sue the lawyer for the estate, Gunn (who was not one of the parties to this litigation). The plaintiff refused to sign minutes of settlement because the minutes did not expressly provide that he could sue Gunn. A motion to enforce the settlement was resolved by way of a consent order which provided that releases were to be signed. The plaintiff signed a release that was referred to by the court in this case as “a standard estate release”. It was common ground that nothing in the release prevented the plaintiff from bringing a claim against Gunn. However, the plaintiff argued that the release that was a term of the settlement reached at the mediation must be interpreted to include a no-claim-over clause, which the plaintiff would not accept, because, should the plaintiff sue Gunn, then Gunn would make a claim over that would be prohibited by the release. The court rejected this argument. The court said that nothing in the settlement document prevented the plaintiff from suing Gunn. A standard estate release “like in a distribution” does not generally include a no-claim-over clause. This was the type of release that was signed following the consent order – the parties signed a standard estate release, without a no-claim-over clause, even though the consent order provided for “full and final” releases. The form of release that was eventually signed supported the conclusion that, at the time of the mediation, the parties expected standard estate releases without a no-claim-over clause.

4.6.3.3 Claims or Matters Not Pleaded or at Issue in Litigation That Has Been Settled

When, after reaching a settlement of litigation, parties exchange views about the terms of a release to be provided in order to complete the settlement, differences may arise about whether the scope of the release should extend to claims that were not pleaded in the litigation. The party in whose favour the release will be given may seek protection from claims that were not made in the litigation but are related to allegations in the litigation, or even from claims that are unrelated to the litigation. The perspective of this party may be that the intent of the settlement was to “wipe the slate clean” between the parties and not merely to bring an end to such claims as were specifically advanced in the litigation. The perspective of the intended releasor may be that a release given to complete a settlement of litigation should do just that – complete the settlement of the litigation – and nothing more. It comes as no surprise that, when the courts are called upon to resolve arguments about whether the scope of a release should be restricted to claims actually pleaded in litigation, their analysis focuses on the terms of the parties’ settlement agreement.

Mildren v Mildren, 2016 ONSC 8076 (CanLII) is a case that did not actually involve completion of a settlement agreement (because the court found that there was no meeting of the minds on the terms of settlement) but the court did address the differing views of the parties about the appropriate scope of a mutual release. The defendant contended for a standard mutual release “so that all matters between the parties would come to an end”, while the plaintiff argued that the scope of the release should “limited to the lawsuit”. The court did not “read the jurisprudence” as saying the mutual release must be limited only to the matters in the lawsuit.

Harris v. Braithwaite, 2006 CanLII 51172 (ON SC)

The parties agreed to settle an action and acknowledged that they had reached agreement on all essential terms. A dispute arose from the terms of a release prepared by the plaintiff’s counsel, which purported to release the parties from all claims against each other, even if such claims were not the subject of the action and were not pleaded. The terms of an implied release to complete the settlement must reflect the agreement reached by the parties. The settlement was restricted to the causes of action set forth in the pleadings and the release to be signed by all of the parties should be limited to the causes of action set forth in the pleadings.

Alavi v. York University, 2013 ONSC 3213 (CanLII)

The plaintiff was a Ph.D. candidate at the defendant university. He alleged that his academic supervisor instigated public harassment, innuendos and ill-treatment of him and he claimed damages from the university and the professor. The plaintiff accepted a settlement offer by the defendants, but refused to complete the settlement. He said that he did not understand that the settlement included a full release of the university in respect of any claims, including his potential claim for readmission into the Ph.D. program. The court concluded that, when the defendants offered to settle the plaintiff’s entire claim on the basis that the plaintiff would execute a release confirming that “all issues” had been resolved, it was clearly understood by both sides that “the offer to settle was more than just the issues in the lawsuit”. It was also an offer to settle, fully and finally, any and all potential claims by the plaintiff, including any claims for readmission to the Ph.D. program.

Miloucheva v. Milouchev, 2016 ONSC 3755 (CanLII)

Parties to litigation signed minutes of settlement that provided for the defendant’s counsel to prepare a form of mutual release mutually acceptable to counsel releasing any claims made in the litigation “and otherwise”. The court held that the causes of action in the pleadings were the matters to be released under the settlement. If the parties intended to release each other from claims over and above those raised in the pleadings, there was an obligation to use more precise language than “and otherwise”.

Betser-Zilevitch v. Nexen Inc., 2018 FC 735 (CanLII) , appeal dismissed, 2019 FCA 230 (CanLII)

An essential term of a settlement agreement reached in respect of patent infringement litigation was that the defendants were to be released from all claims “asserted” in the litigation. There was no merit in the argument that the release should also extend to “assertable” claims, potentially far broader than simply claims “asserted.” No honest, sensible business person, when objectively considering the matter, would reasonably conclude that the parties had agreed to include in the release not only claims asserted but “claims assertable”.

Wheatland Industrial Park Joint Venture v Soo, 2020 BCSC 1400 (CanLII)

The plaintiffs applied for an order enforcing an alleged settlement. The parties disagreed on the wording of the release that was to be part of the settlement documentation. The court found that the parties had reached agreement on all the essential terms of a settlement. As to the wording of the release to be provided to complete the settlement, certain of the defendants relied on a reference to a “comprehensive” release in their offer to settle and they argued that general releases of all claims are the usual practice in litigation in British Columbia. The court did not agree with the submission that the general understanding was that a release usually encompasses matters unconnected with the litigation. Such a practice would frustrate rather than further settlement of disputes by putting parties in the position of having to evaluate all such possible claims in deciding whether to settle litigation. The court also said that it is of course open to a party to seek a release of unrelated claims but, if such a release is required it must be clearly set out. A release of unrelated claims stands in the same position as any other collateral benefit that a party may require as a condition of the settlement. The court agreed with the “default position” stated in Umholtz v. Umholtz, 2004 CanLII 14183 that the parties are taken to have resolved all matters that: (a) were raised in the litigation; (b) were known to the parties at the time of settlement; or (c) ought to have been known to the parties if they had exercised reasonable diligence at the time of settlement.

Hutton v Hutton, 2020 BCSC 2046 (CanLII)

The defendant in this case applied to enforce a settlement agreement she said was reached upon her acceptance of an offer made at a settlement conference. There was no evidence that the parties ever discussed a release in any correspondence or discussion before or at the settlement conference. The court was satisfied that a release in the terms proposed by the defendant after the acceptance of the offer was not a term of the settlement offered by the plaintiff. The court quoted statements from the Umholtz, 2004 CanLII 14183 decision to the effect that an exchange of releases is an integral part of any settlement and even where there is “no express discussion about a release, the settlement of an action implie[s] an obligation to furnish [one].” The court set out in its decision the form and wording of the release to be signed by the plaintiff.

Terranata Winston Churchill Inc. v. Teti Transport Ltd., et al., 2020 ONSC 7577 (CanLII)

Where parties to litigation have reached a settlement, the overarching purpose of a general release is to resolve all matters as between the settling parties arising from the subject matter of the claims released, and not only the specific causes of action set forth in the pleadings. A standard general release is typically broad in its scope. It covers not only the specific litigation being resolved, “but any and all actions, causes of action, demands, rights or claims, etc., howsoever arising from further damages, indemnities, costs, etc. of any other matters that were raised, or could have reasonably been raised, in the resolved litigation”. The standard general release is not designed to prevent the releasor from continuing only with the resolved litigation against the releasee.  Instead, a standard general release presumptively extends to any other proceeding against the releasee that could be commenced or continued, whether within the same settled proceeding by non-settling parties, or by virtue of a new proceeding commenced against the releasee by a non-settling party or a non-party. This general proposition is subject, of course, to public policy or statutory considerations such as the ineffectiveness of civil releases to bar criminal proceedings, and to the absence of any specifically carved out exceptions identified by the settlement agreement.

ADT Security Services Canada, Inc. v. Fluent Home Ltd., 2023 ONSC 5052 (CanLII)

Parties often negotiate release terms that are broader than the effect of a simple judgment – and they are free to do so.  Where the parties do not agree on the terms of a release, the court implies a simple release, consistent with ordinary practice and commercial reasonableness, given the overall context of the claim.

4.6.4 Compelling Execution/Delivery of a Release

In the past, Canadian courts have expressed reservations about ordering a party to sign a release when that party has refused to provide a release to complete a settlement. In Browne v. McNeilly the judge at first instance made an order requiring the plaintiff to sign releases, but the Ontario Court of Appeal did not consider it appropriate to direct that a release be signed. The Court of Appeal expressed concern that, if the plaintiff was ordered to sign the releases, but failed to do so, further proceedings would be initiated. In a similar vein, the court in Pukec v. Durham Regional Police Service said that an order dismissing an action without costs was more appropriate relief than trying to compel a party to execute a release.

It seems, though, that, perhaps with rare exceptions, concerns about ordering a party to sign a release are a thing of the past. In the Birjasingh case referred to below, the court indicated that, when a party to a settlement found to be enforceable has refused to sign a release, “the court merely orders that the release be signed as part of the relief granted”. Many examples of orders requiring the execution of a release can be seen in the cases noted in this section.

Birjasingh v. Coseco Insurance Co., 1999 CanLII 14888 (ON SC)

The refusal of a party to sign a release cannot be relied upon as invalidating a settlement. If the settlement is found to be enforceable, then the court merely orders that the release be signed as part of the relief granted.

Ozon v. Lutex et al, 2005 NLTD 147 (CanLII)

The plaintiff’s change of heart about a settlement reached in this case came too late: the plaintiff could not renege on her acceptance of a settlement offer and there was no suggestion of duress, mistake, nor even of unconscionability. The court ordered that the settlement agreement be enforced and that the plaintiff provide an executed release.

Vanderkop v. Manufacturers Life Insurance Company, 2005 CanLII 39686 (ON SC)

The parties entered into minutes of settlement whereby the defendant agreed to pay a specified amount to the plaintiff in return for a full and final release. The defendant’s motion for summary judgment in accordance with the minutes of settlement was allowed and the court directed the plaintiff to sign the full and final release tendered by the defendant.

1475576 Ontario Ltd. v. Paradiso, 2005 CanLII 2035 (ON SC)

The plaintiff argued that one of the defendants had not complied with the terms of a settlement and was not entitled to a release. The motion judge found that the defendant had complied with the terms of the settlement and was entitled to a release as set out in the draft judgment that was before the court.

Placer Dome Inc. v. Ruzzo, 2006 BCSC 1564 (CanLII)

In this case, the court issued a declaration that the parties had reached a binding settlement agreement and ordered specific performance of the agreement. Ancillary to the order of specific performance, the court ordered that the parties would have 30 days to reach agreement on, among other things the form of a release (and a mutually acceptable letter of reference). Failing agreement, the court said “either party has liberty to apply”.

Hagel v. Giles, 2006 CanLII 3964 (ON SC) , appeal on other grounds dismissed, 2006 CanLII 29653 (ON CA)

An oral agreement to settle this action was reached through counsel at a mediation and it was agreed that the plaintiff would execute a full and final release. When the defendants sought judgment in accordance with the settlement, the plaintiff denied that a legally enforceable settlement had been concluded. The court said that the plaintiff’s position did not result from coercion or mistake, but from the plaintiff’s second thoughts about the deal he made. The court granted the defendants’ motion and said “the plaintiff will execute a full and final release of the defendants”.

Budning v. Vinokurov, 2006 CanLII 16538 (ON SC)

On these competing motions to enforce minutes of settlement, the court ordered that the action and cross-claims as against two of the defendants be dismissed and that the plaintiffs execute a release in favour of the two defendants.

Excell Stamping Inc. v. Consolidated Recycling Incorporated (Metro Recycling), 2008 CanLII 12492 (ON SC)

The parties entered into binding minutes of settlement which provided that they would execute mutual and full releases in standard form agreeable to counsel. The plaintiff refused to sign a release containing a confidentiality clause proposed by the defendant and the defendant argued that, because counsel could not agree on the inclusion of a confidentiality term, the minutes of settlement were not enforceable. The court held that the plaintiff was not required to sign a release with a confidentiality clause. The court ordered the defendant to sign and deliver a release in the form signed by the plaintiff.

Precision Remodelling v. Soskin, 2008 CanLII 31411 (ON SC)

The logical and reasonable interpretation of the agreement reached by the parties in this case was that they intended to be bound by minutes of settlement and they would exchange full and final releases. This interpretation was the only one that was commercially reasonable in the circumstances. In light of the words of the settlement agreement and the factual matrix, this was a case where an exchange of releases was an integral part of settlement. The court ordered that the plaintiffs provide a full and final release.

Great Sandhills Terminal Marketing Centre Ltd. v. J-Sons Inc., 2008 SKCA 16 (CanLII)

The Saskatchewan Court of Appeal concluded that a settlement agreement had been reached which required certain entities to provide a release and a notice of discontinuance, but the court indicated that it would rather not impose a mandatory obligation to provide the documents in the absence of evidence of the ability of those entities to comply with the requirement; the court noted, in addition, that one of them was not a party to the appeal. The court allowed 30 days for the respondents to settle an appropriate notice of discontinuance and form of release with the appellants, failing which judgment would issue dismissing the action and releasing the appellants.

1672370 Ontario Limited v. D. Narducci Holdings Inc., 2009 CanLII 53156 (ON SC) , order varied but appeal otherwise dismissed, 2010 ONCA 264 (CanLII)

The third party in this proceeding, the City of Vaughan, sought an order enforcing a settlement, dismissing the third party claim against it and requiring the parties to deliver executed releases. The court said that, if the minutes of settlement lacked any term at all respecting dismissal of the third party claim or the delivery of releases, or if it contained a term that was ambiguous, an argument could be made that a term should be implied or interpreted to mean that the third party claim would be dismissed and releases would be delivered to the City once the City had complied with its obligations. But neither of these was the case here. The language of the settlement stated clearly that the third party claim would be dismissed and the parties would exchange releases after the closing of a“land deal” referred to in the settlement and there was nothing in the agreement to suggest that the third party claim could be dismissed under any other circumstances. The land deal had not closed and the City was not entitled to the dismissal of the third party claim or the delivery of releases, even though it had complied with all the terms “imposed on it” by the settlement.

Demessey Ltd. v. Cassels Brock & Blackwell LLP, 2011 ONSC 6696 (CanLII) , appeal allowed on other grounds, Demessey Limited v. Cassels Brock & Blackwell LLP, 2012 ONCA 423 (CanLII)

Certain of the defendants moved for an order requiring the plaintiff to comply with a settlement agreement and to deliver a signed release. The motion judge found that these parties had reached a settlement and agreed to the terms of a release. He granted the motion to enforce the settlement and directed the plaintiff to provide an executed release forthwith. The Court of Appeal said that the motion judge correctly ordered the plaintiff to deliver a signed release.

Hartslief v. Terra Nova Royalty Corporation, 2012 BCSC 1705 (CanLII) , appeal dismissed, Hartslief v. Terra Nova Royalty, 2013 BCCA 417 (CanLII)

After the plaintiff’s employment with the defendant was terminated by the defendant, the parties entered into negotiations regarding the settlement of the plaintiff’s claim for compensation. In this decision, the court addressed whether the parties reached a binding settlement agreement. The plaintiff argued that an agreement had been reached on terms that were documented in an unsigned draft agreement. He sought an order for payment of an amount set out in the agreement and an order that the defendant provide executed copies of, among other things, the agreement and a mutual release attached as a schedule to the agreement. The defendant argued that the deal being negotiated was a “sign and close” agreement such that there would be no binding agreement until the parties signed formal documents. On the evidence before it, the court did not accept the defendant’s argument regarding a “sign and close” agreement and it ordered, among other things, that the parties provide each other with executed copies of the agreement and the mutual release.

Rana v. Canadian Business College, 2012 ONSC 4030 (CanLII) , appeal dismissed, 2013 ONCA 562 (CanLII)

The defendant brought a motion to enforce a settlement allegedly reached by the parties, but the plaintiff argued that no settlement was achieved. The court did not accept the plaintiff’s argument and, in addition to granting judgment in accordance with the settlement, it ordered the plaintiff to execute a release in a form satisfactory to the lawyer for the defendant.

CabCom Network Inc. v. Strategic Media Outdoor Inc., 2012 ONSC 4148 (CanLII)

The court granted an application for judgment in accordance with a settlement reached by the parties. The court required the parties to execute the minutes of settlement and a release which had been approved by the respondent’s lawyer.

Beier v. Proper Cat Construction Ltd., 2013 ABQB 351 (CanLII)

The court granted a declaration that a settlement agreement was valid and binding and made an order for specific performance of the agreement. The specific performance order included directions that, among other things, the plaintiffs deliver to the defendants releases signed by each of them and the defendants deliver to the plaintiffs releases signed by each of them. The court directed further that, if the parties could not agree on, inter alia, the contents of the releases, each of the plaintiffs and the defendants must deliver to the court drafts of the documents in a form satisfactory to them. The court said it would then “finalize and return the documents to the parties” and make any orders necessary to effect specific performance.

Sentry Metrics Inc. v. Robert Ernewein et al., 2013 ONSC 959 (CanLII)

The plaintiff accepted a settlement offer made by the defendants and sought a mutual full and final release. The defendants asked the court to exercise its discretion not to enforce the settlement due to lack of good faith, but the court granted judgment to the plaintiff in accordance with the accepted offer. The court said, further, that “the parties shall execute and exchange mutual full and final releases”.

Alavi v. York University, 2013 ONSC 3213 (CanLII)

The plaintiff accepted a settlement offer by the defendants, but refused to complete the settlement. He said he did not understand that the settlement included a full release of the defendant university in respect of any claims, including his potential claim for readmission into a Ph.D. program. The court concluded that the parties had settled any and all potential claims by the plaintiff, including any claims for readmission to the Ph.D. program. The court ordered the plaintiff to sign before an independent witness of the defendants’ choosing the form of release attached to the defendants’ notice of motion. The court also ordered that, If the plaintiff did not do so by a specified date, the release would be deemed to have been signed by the plaintiff on that date and to have full force and effect thereafter in accordance with its terms.

MacEachen v. Minnikin, 2015 NSCA 81 (CanLII)

This case concerned entitlement to survivor benefits under a pension plan. When the pensioner and his second wife, the respondent, separated, they entered into a separation agreement in which the respondent agreed that, if the pensioner remarried, she would execute all necessary documents in order to release her as a beneficiary under the pension plan. The pensioner married his third wife, the appellant, but took no steps to change the beneficiary designation for the pension plan to the appellant and never asked the respondent to execute any release documents as contemplated under the separation agreement. The Court of Appeal rejected the appellant’s assertion that there was an onus on the respondent to act, without a request by the pensioner, to change the beneficiary. The pensioner retained the option to pursue a change in beneficiary and request (even compel) the respondent to release. He was in control, but he took no action.

Cushnaghan v Kwan, 2015 ONSC 4837 (CanLII)

The court declared that minutes of settlement signed by the plaintiff and the defendant, together with a release attached thereto as Schedule “B”, were a binding and enforceable settlement and release and the court ordered that the defendant execute the release forthwith.

Ahmed v Shang, 2016 ONSC 4794 (CanLII)

The court found, contrary to the position of the responding parties, that there was no agreement that the responding parties would not have to provide a release as a term of settlement. The court said that a full and final release is a normal term of a settlement agreement. The court granted the order sought by the moving parties to compel the delivery of a release.

Brager v. Ontario (Natural Resources), 2017 ONSC 1759 (CanLII)

Following the signing of minutes of settlement by the parties, the respondent proposed a draft release with a no-claim-over clause and the applicants sought an exclusion from the clause. The court required the applicants to enter into a full and final release as contemplated by the minutes of settlement. The court found that the form of release proposed by the respondent met the requirement of a full and final release that was contemplated by the parties.

Levac v. Pychel, 2017 ONSC 4509 (CanLII)

The moving parties in this case sought an order declaring that a settlement agreement among the parties was binding and compelling the defendant 1671233 Ontario Limited to execute a mutual full and final release. The court concluded that the parties had entered into a valid settlement agreement and that the settlement agreement included a term that each of the parties was to sign the release. The court declared the settlement agreement to be binding and it ordered the numbered company to sign the release.

Levac v. Pychel, 2017 ONSC 5210 (CanLII)

In the Levac decision referred to above, the defendant 1671233 Ontario Limited was ordered to sign a release. A draft order was approved by all parties except the numbered company. The numbered company refused to approve the draft order because, among other things, the release attached to the draft order stated that the company was voluntarily releasing other parties and because the draft order included a term that the company’s former counsel would be permitted to sign the release if the company failed to do so. The court said that the formal order should not include a term that would permit the company’s former counsel to sign the release. This term was never requested in the motion material, the issue was never argued at the motions hearing, and the term did not form part of the court’s decision. The fact that the numbered company was balking at signing a release, despite a court order to do so, did not permit counsel to add terms to an order without a proper motion. The court accepted that there should be an amendment to the release confirming that the numbered company was signing it pursuant to a court order, not voluntarily.

Sarazen v. McTaggart et al, 2017 ONSC 5281 (CanLII)

The parties signed minutes of settlement which stated, among other things, that the parties would sign a release, including a LawPRO Standard Release, but certain of the defendants, who were also plaintiffs by counterclaim, argued that a contract was not in place between the parties. The court relied on the proposition in the Excell Stamping decision, above, that where the form of release cannot be agreed to the parties can always seek a clarification from the court, but neither party is released from the settlement. The court made an order that the defendants/plaintiffs by counterclaim must sign and deliver a release.

Alfaiate v. 1014784 Alberta Inc, 2018 ABQB 666 (CanLII)

In respect of a request for directions regarding the form of release required to complete a settlement, the court directed that the plaintiff was obliged to deliver the contractually required release properly executed by him and his spouse.

Hutton v Hutton, 2020 BCSC 2046 (CanLII)

The court found that the parties to this action concluded a binding settlement of the issues between them. The court ordered the plaintiff to sign a release and it set out in its decision the form and wording of the release to be signed by the plaintiff.

Terranata Winston Churchill Inc. v. Teti Transport Ltd., et al., 2020 ONSC 7577 (CanLII)

The court required a party to a settlement agreement to execute a release in accordance with the court’s determinations about the terms of the release. For greater certainty, the court attached the release in the form and content to be signed by the settling party as a schedule to its reasons.

Reid v. Bracebridge, 2021 ONSC 791 (CanLII)

On the facts of this case, the Divisional Court concluded, contrary to the finding of the motion judge, that there was no evidence that, at the time a settlement agreement was reached, the parties agreed that the execution of a release by the plaintiff was “always” contingent on the plaintiff reviewing the terms of the release and agreeing to them. The Divisional Court required the plaintiff to sign a release in the form and content of a release appended as a schedule to the notice of appeal.

Kalair v. Kabir, 2021 ONSC 4075 (CanLII)

On a motion for an order enforcing an alleged settlement, the court found there was a binding settlement and it said the settlement would be enforced. The court went on to say that judgment would issue “incorporating the settlement of the parties as follows: … Mr. Kabir will sign a release in LawPRO’s standard form … .”

Ihenyen v. Lakeridge Health Corporation, 2021 ONSC 3788 (CanLII)

An offer to settle was made by one of the defendants in this case and a term of the offer was that the plaintiff would sign a release in the form attached to the offer. The court concluded that the plaintiff accepted all the terms of the offer to settle, including the term that he execute a release in the form enclosed with the offer. The court ordered that the plaintiff was “compelled” to execute the release in the form provided within 30 days of the date of the court’s decision and, should the plaintiff fail to execute the release within 30 days, the plaintiff would be deemed to have released the defendant.

Haider v. Rizvi, 2023 ONCA 354 (CanLII)

This appeal arose out of minutes of settlement that were signed by the appellant and the respondent and his wife after certain actions were settled at a pretrial conference. The minutes of settlement expressly provided for the parties and the respondent’s wife to enter into a mutual release, although the form and content of the release was not prescribed. The respondent brought a motion to enforce the obligation for the parties to exchange mutual releases. The motion judge ordered that the appellant execute a standard form release which would release all claims arising out of the subject matter of the actions and containing a clause barring claims-over. The Court of Appeal allowed the appeal only to the extent of modifying the form of the release that the motion judge had required the appellant to sign. The court directed the appellant to sign and deliver to the respondent a copy of the release with this modification.

4.6.5 Deemed Release and Release by Court Order

When an enforceable settlement has been agreed upon but a party has failed to sign a release in completion of the settlement, the courts may grant relief that essentially gives effect to appropriate terms of a release. As can be seen from the decisions summarized below, the courts have come at this in a variety of different ways, including a declaration incorporating terms of a release, an order deeming that a release in a particular form has been executed or an order deeming the release of a party from claims.

Wasserman v. Kassam, 2006 CanLII 42368 (ON SC)

The court said that this was not a case in which the parties had failed to agree on the form of a release at the time of entering into a settlement. On the contrary, after the settlement offer was accepted, the parties, through their lawyers, specifically agreed upon the form of release. The court held that the defendant was entitled to a declaration that the action against him had been settled in accordance with the terms of the release.

Dosanjh v. Nadon, 2009 BCSC 106 (CanLII)

The court found, on the uncontradicted facts of this case, that a settlement had been reached. With respect to the plaintiff’s refusal to sign a release, the court said that the release was not necessary to the formation of the settlement, but only to its execution. The court determined that a release would be deemed executed by the plaintiff and that the release would be deemed executed in the form provided by the lawyer for the defendants because no objection was taken to the form of the release.

Alves v. Azevedo & Nelson, 2010 ONSC 2853 (CanLII) , appeal dismissed, Alves v. Caston, 2010 ONCA 805 (CanLII)

The court concluded that a binding settlement agreement was reached between the plaintiff and one of the defendants in this case, in which the plaintiff agreed to discontinue his action against the defendant without costs and to sign a release in the form provided by the defendant’s counsel to his counsel. The court allowed the plaintiff 30 days in which to file the notice of discontinuance and to sign such a release. The court said that, if the plaintiff did not do so, then the defendant would be entitled to an order declaring, inter alia, that the plaintiff had released the defendant in the terms of the language of the draft release.

Great Sandhills Terminal Marketing Centre Ltd. v. J-Sons Inc., 2008 SKCA 16 (CanLII)

The Saskatchewan Court of Appeal concluded that a settlement agreement had been reached which required certain entities to provide a release and a notice of discontinuance, but the court indicated that it would rather not impose a mandatory obligation to provide the documents in the absence of evidence of the ability of those entities to comply with the requirement; the court noted, in addition, that one of them was not a party to the appeal. The court allowed 30 days for the respondents to settle an appropriate notice of discontinuance and form of release with the appellants, failing which judgment would issue dismissing the action and releasing the appellants.

Langthorne v. Humphreys, 2011 NSSC 44 (CanLII)

The court found that there was a valid and enforceable settlement agreement between the parties in this case and, among other things, the court ordered that, in spite of the failure of the plaintiff to execute a full and final release and a consent order of dismissal, he was deemed to have done so.

Boulanger v. Great West Life Assurance Company, 2011 ONCA 20 (CanLII)

The Court of Appeal dismissed the plaintiff’s appeal from a decision that the parties had arrived at a binding settlement of the plaintiff’s claims, but allowed the respondent’s cross-appeal from the refusal of the motion judge to enforce a paragraph of the settlement agreement in which the plaintiff agreed to deliver a release of all claims. The Court of Appeal said that, given the conclusions of the motion judge regarding the enforceability of the settlement agreement, there was no basis to deny the respondent relief concerning a release in the terms of the settlement agreement. The court noted that counsel for the parties had agreed on the form of release and it varied the motion judge’s dismissal order to include an order that the dismissal of the action shall be an absolute bar to subsequent proceedings.

Gregory v. KPMG LLP, 2012 BCSC 1387 (CanLII)

The court granted an order enforcing a settlement agreement, but expressed concern that the plaintiff might not sign a release. Citing Bolton v. Surrey (City) , the court ordered that the plaintiff was bound by the terms of the release in the form approved in the court’s decision “as if he had signed it”. The court found jurisdiction to make this order in s. 10 of the B.C.Law and Equity Act and the Supreme Court Civil Rules.

Alavi v. York University, 2013 ONSC 3213 (CanLII)

The plaintiff accepted a settlement offer by the defendants, but refused to complete the settlement. He said he did not understand that the settlement included a full release of the defendant university in respect of any claims, including his potential claim for readmission into a Ph.D. program. The court concluded that the parties had settled any and all potential claims by the plaintiff, including any claims for readmission to the Ph.D. program. The court ordered the plaintiff to sign before an independent witness of the defendants’ choosing the form of release attached to the defendants’ notice of motion. The court also ordered that, If the plaintiff did not do so by a specified date, the release would be deemed to have been signed by the plaintiff on that date and to have full force and effect thereafter in accordance with its terms.

Reds by Arvin Inc. v Modern Basics Distributors Ltd., 2015 ONSC 5318 (CanLII)

On a motion by the defendant/plaintiff by counterclaim for an order enforcing an alleged settlement, the court concluded that an order should issue dismissing both the action and counterclaim “and execution of the mutual release” by the plaintiff and, “[i]f that does not occur”, the order dismissing both the action and counterclaim would be “with prejudice to either party asserting any further claim against each other arising from the facts alleged in the pleadings”. 

Webber v. Boutilier, 2016 NSSC 5 (CanLII)

On a motion for enforcement of a settlement reached at a settlement conference, the court made an order: (a) declaring that a settlement was reached on terms including, among other things, a release of the defendants by the plaintiff from all claims relating to the subject matter of the proceeding and (b) “[e]nforcing the settlement according to the above-noted terms”.

Coco Homes Inc. v. Caleron Properties Ltd, 2017 ABQB 15 (CanLII)

Where the terms of a release are not expressly agreed upon (almost always so in late settlements), the court can determine the terms according to what is commercially reasonable and issue a binding declaration to that effect.

Sarazen Realty v. McTaggart and Bisson, 2017 ONSC 7659 (CanLII)

In the Sarazen Realty decision referred to above, the defendants/plaintiffs by counterclaim were ordered to sign and deliver a release. However, they refused to sign the release because they wanted to maintain a complaint against one of the defendants to their counterclaim. In this decision, the court found them to be in contempt of court and imposed a fine on them. The court also made an order deeming the defendants to the counterclaim to be released from claims.

Riar v. Dali Homes Inc., 2019 ONSC 616 (CanLII) , appeal dismissed, 2019 ONCA 933 (CanLII)

Having found that the defendants had complied with minutes of settlement agreed to by the parties and that the minutes should be enforced, the court granted relief requested by the defendants, including a declaration that all claims made by the plaintiffs in the action, and all counterclaims made by the defendant Dali Homes Inc., were released (as well as a declaration that a mutual full and final release executed by the parties was in full force and effect).

Lumsden et al. v. The Toronto Police Services Board et al., 2019 ONSC 5052 (CanLII)

On the defendants’ motion for judgment in accordance with a settlement, the court found that there was a binding settlement agreement which should be enforced and it dismissed the action in accordance with that agreement. The court said the plaintiffs “shall be deemed to have executed” the release provided to them, a copy of which was provided to the court during the hearing of the motion.

Gustafson v Future Four Agro Inc., 2019 SKCA 68 (CanLII)

Those who choose to pursue a claim in the Court of Queen’s Bench are entitled to do so in the manner permitted by The Queen’s Bench Rules. They are, to the extent and in the manner contemplated by The Queen’s Bench Rules and permitted by the court, entitled to make agreements as to how they will conduct an action. They may commence an action and agree to settle on terms to be incorporated in a consent order, which may include a release of all actions and causes of action.

Aylward v. Ejidike, 2022 ONSC 6866 (CanLII)

The defendant brought a motion to enforce a settlement alleged to have been reached with the plaintiff. In her motion, she asked the court to dismiss the action and require the plaintiff to deliver a release. The court did not see a basis to refuse to enforce the settlement and accordingly it dismissed the action. The defendant expressed concern that requiring the plaintiff to sign a release created yet further opportunities for issues to arise. The court said that the more efficient and affordable course was to declare that the defendant was fully and finally released from any and all claims by or on behalf of the plaintiff related to the claims made or that could have been made by, for, or through her in this action.  

4.6.6 Confidentiality Clause of Release and Court Approval of Settlement

In some situations, court approval of a settlement may be required. When a settlement is subject to court approval, issues may arise about whether a court order will maintain the confidentiality of terms of the settlement. The decisions summarized below deal with confidentiality provisions of releases in the context of court proceedings for approval of settlements.

Schuringa v Trent Lakes (Municipality), 2016 ONSC 7882 (CanLII)

In this case, the court approved the settlement of claims arising from a single-car accident and, in doing so, considered whether the amount of the settlement and related information, including parts of the court file, should remain confidential. The plaintiffs had accepted a settlement offer made through a General Motors Claims Resolution Facility, which required a release with a confidentiality provision. The release executed on behalf of the driver of the car contemplated certain exceptions to the requirement of confidentiality, including compliance with a court order. While the defendant General Motors did not offer any particular rationale for its insistence on confidentiality, the court said that confidentiality clauses in releases executed as part of the settlement of personal injury claims are not unusual. The Public Guardian and Trustee argued that it was not appropriate to redact or seal the quantum of the settlement funds flowing to the driver, who was an incapable person as a result of injuries suffered in the accident, given that the court must supervise guardians of property on the passing of accounts of their management of the driver’s settlement funds. The court decided that the appropriate order was to seal documents that directly or indirectly disclosed the settlement amount and to seal an unredacted version of the judgment granting court approval of the settlement, but that copies of the unredacted order should be provided to General Motors and the Office of the Public Guardian and Trustee. The court also decided that a “comeback” clause in the sealing order, allowing any party to return to court for a reassessment of the need for the sealing order, was warranted in this case. 

Carroll et al. v. Natsis, 2020 ONSC 3263 (CanLII)

In this case, affidavits filed in support of a motion for court approval of a settlement were subject to a temporary sealing order. The plaintiffs sought an order that certain monetary figures and certain exhibits be redacted from the affidavits and that full copies of the affidavits in the court file remain sealed. The court said that the minutes of settlement did not include a confidentiality clause and there was nothing in the minutes to support the conclusion that confidentiality was an integral component of the settlement. The minutes referred to a full and final release to be executed by the plaintiffs which, it was said, was to include a confidentiality clause. The confidentiality clause in the release signed by the adult plaintiffs excepted the plaintiffs from their confidentiality obligations when disclosure was required by law and the court found that the Ontario Rules of Civil Procedure fell within the scope of the exception. The court said that there was nothing unusual about the inclusion of the confidentiality clause in the release, citing Schuringa, above, and that the understanding of the clause set out in the affidavit of one of the plaintiffs did not support a finding that confidentiality was an integral component of the settlement. Further, the court did not interpret Schuringa as holding that where confidentiality is an integral component of a settlement, that factor alone is sufficient for a sealing or redaction order to be granted. The court concluded that the plaintiffs had failed to establish that any of the public interests they relied on (settlement privilege, confidentiality clauses and the privacy of litigants) was at serious risk if a redaction order was not granted. The plaintiffs’ motion for a sealing or redaction order was dismissed.

Ihenyen v. Lakeridge Health Corporation, 2021 ONSC 3788 (CanLII)

An offer to settle was made by one of the defendants in this case and a term of the offer was the the plaintiff would sign a release in the form attached to the offer. The court concluded that the plaintiff accepted all the terms of the offer to settle, including the term that he execute a release in the form enclosed with the offer. The court ordered that the plaintiff was “compelled” to execute the release in the form provided within 30 days of the date of the court’s decision and, should the plaintiff fail to execute the release within 30 days, the plaintiff would be deemed to have released the defendant.

4.6.7 Settlement Completed Without Release

The completion of a settlement does not always include provision of a release. In the cases below, the courts considered the implications of a settlement completed without an explicit release of particular claims.

Cain v. Clarica Life Insurance Company, 2005 ABCA 437 (CanLII)

The respondent was employed by the appellant, which sought to move the respondent to a new position. The respondent considered himself to have been constructively dismissed and months of negotiation ensued about a settlement package. Eventually, the respondent agreed to and received a settlement package, without signing a release, and he resigned. The respondent’s position apparently was that there was no settlement contract. The Alberta Court of Appeal agreed with the finding of the trial judge that there was a settlement contract. The Court of Appeal said that someone who voluntarily resigns ordinarily does not get damages for wrongful dismissal and, in this context, the resignation was tantamount to a release. Later, the Court of Appeal noted that the respondent seemed to have hoped that, since he did not sign a release, he could keep the settlement money and sue for more.

Sommers v. Poirier, 2008 NSSC 342 (CanLII)

The defendant sought summary judgment to enforce a settlement agreement entered into by the defendant and the lawyer for the plaintiff. The evidence of the plaintiff was that she did not have any knowledge of, or agree to, the terms of the settlement and had never received any of the money paid to her lawyer in trust by the defendant. The contingency agreement entered into by the plaintiff and her lawyer stated that no offer of settlement would be binding upon the client without written consent in the form of a release. The court said that the failure of the plaintiff to execute the release form was not fatal to the defendant’s application as a final agreement had been reached and was binding on the plaintiff.

Condoyannis v. Foundos, 2010 ONCA 279 (CanLII)

In this case, the lower court considered whether minutes of settlement executed in connection with divorce proceedings had extinguished the applicant’s right to share in the proceeds of the sale of a family business. The trial judge found found that a release by the applicant of her rights to the business was never discussed. Whereas the minutes of settlement provided for a release of spousal and child support after the completion of the payments called for in the minutes, there was no similar provision in respect of the business. The trial judge said that the minutes could easily and simply have provided for this. An appeal from this decision was dismissed and the Court of Appeal also noted that the minutes did not contain a release of the applicant’s right specific to the business, whereas the minutes did contain a release of spousal and child support.

   

Brunet v. Brunet, 2018 ONSC 2993 (CanLII)

In this case, the court considered whether the parties to divorce proceedings had reached an agreement to divide the respondent’s pension in exchange for the applicant releasing all other claims. On the basis of the Condoyannis decision, above, the court stated a general proposition that there needs to be “specific language” to find a release and the courts are loath to find one where the contract is silent and the agreement “could easily and simply have provided for this”.

Haider v. Rizvi, 2023 ONCA 354 (CanLII)

This appeal arose out of minutes of settlement that were signed by the appellant and the respondent and his wife after certain actions were settled at a pretrial conference. The minutes of settlement provided for the parties and the respondent’s wife to enter into a mutual release, although the form and content of the release was not prescribed. The respondent brought a motion to enforce the obligation for the parties to exchange mutual releases. On appeal from the order of a motion judge requiring the appellant to execute a release, the Court of Appeal said that, even if no release had been delivered, the respondent was released by the terms of the minutes of settlement (subject only to an undertaking, attached to the minutes, which the parties agreed would survive the settlement of the actions). So long as the settlement remained “on foot”, it would bar subsequent proceedings that fell within its terms. The court said that the absence of a signed release makes no practical difference to the finality of a settlement, citing Gedco Excavating Ltd. v. Aqua-Tech Dewatering Co., [2014] O.J. No. 2513 (S.C.).

4.7 Repudiation of Settlement Agreement

The decision of the Ontario Court of Appeal summarized below indicates that, in the circumstances before the court, acceptance of the repudiation of a settlement agreement would not have affected a mutual release delivered prior to the repudiation.

Tucker v. Hobbs, 2005 CanLII 254 (ON CA)

The Court of Appeal dismissed an appeal from an order of a motion judge granting the respondent’s motion for summary judgment. The motion judge held that, even if the respondent had repudiated a settlement agreement reached by the parties, the appellants’ acceptance of that repudiation would not affect a mutual release delivered prior to repudiation. The Court of Appeal said this is because, as the Supreme Court of Canada held in Guarantee Co. of North America v. Gordon Capital Corp. , the effect of a repudiation is to discharge the parties from future obligations, but not from rights and obligations that have already matured.