Monday, February 11, 2013

Refusing to enforce a settlement

Srebot v. Srebot Farms Ltd., 2013 ONCA 84 deals with a decision not to enforce a settlement partly completed:

[6]          The discretionary decision not to enforce a concluded settlement, especially where the settlement has been partially or fully performed, should be reserved for those rare cases where compelling circumstances establish that the enforcement of the settlement is not in the interests of justice.  The trial judge's reasons indicate that she was alive to this issue.  On the facts as she found them, the trial judge concluded that this is one of those rare cases.  We see no basis for appellate interference with this conclusion. 

[7]          Importantly, we note that the appellants led no evidence of any particular prejudice arising from their acts of performance under the settlement.  On the contrary, they candidly acknowledged before this court that they suffered no financial prejudice from implementation of the settlement. 


[10]       At the end of the day, the critical issue in this case was whether, on consideration of all the relevant factors disclosed by the evidence, the enforcement of the settlement would lead to clear injustice: see for example,Royal Bank v. Central Canadian Industrial Inc., 2003 CarswellOnt. 5214 (Ont. C.A.); Milios v. Zagas (1998), 38 O.R. (3d) 218 (C.A.).  The trial judge concluded that in the circumstances of this emotionally-charged case, arising from the unfortunate estrangement of two brothers following a dispute concerning their respective interests in the family farming business, the interests of justice demanded that the settlement not be enforced and that the respondent's action continue.  This was her call to make.


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