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Settlement Agreement Overturned by Court of Appeal


Making an settlement offer agreeing to agree is unenforceable. Likewise if ICBC makes an offer to settle which is an agreement to agree then this offer is not a true offer to settle.
In a pithy statement on the power of the Court to enforce out of court settlement agreements, the Court of Appeal had this to say,

[16] It is clear that by reason of ss. 8 and 10 of the Law and Equity Act, R.S.B.C. 1996, c. 253, courts have the authority to enforce settlement agreements. It is also clear that an exchange of emails between counsel can create an agreement binding on their respective clients: Fewer v. Fewer, 2011 BCCA 502 at para. 23, 314 B.C.A.C. 41.(Simoran Enterprises Ltd. v. Global Dental Direct Inc. ,2017 BCCA 458)

However in today’s case study the Court of Appeal found that the Judge was wrong to enforce the agreement as a settlement.  Simoran Enterprises filed applications seeking orders to enforce a settlement agreement  or, in the alternative, damages of $350,000 for breach of contract.  The chambers judge held that the parties had reached a binding settlement. She expressed her conclusion in summary form, referring to Trieu v. Diep, 2015 BCSC 950, for the proposition that a settlement can be reached even though the formal documents evincing its terms have not been finalized. As the Court of Appeal went on to state:

[17] However, the fact that the parties had not agreed to, let alone discussed, the terms of the non-competition agreement precludes finding they had reached a binding settlement. The formal orders in the Supreme Court refer to the parties as having agreed to a non-competition agreement “the wording of which will be agreed to by counsel”. This can only mean that the parties had agreed to negotiate the terms of that agreement through their respective counsel. Those negotiations would involve such matters as parties, duration, geographic scope, and activities covered. Unlike, for example, certain forms of release, there is no such thing as a “standard form” non-competition agreement. Accordingly, as matters presently stand, the terms of the non-competition agreement in this case remain unknown.

[18]  I do not accept the argument advanced by Simoran Enterprises and Mr. Simor that the non-competition agreement was merely an ancillary document. To the contrary, it was a central pillar of the overall settlement. However, in that regard, the parties did no more than “agree to agree”. Absent any consensus as to the terms of the non-competition agreement, the parties cannot be said to have entered into an enforceable settlement agreement.

To learn more, read our article on how to make an accurate offer to settle.

Posted by Personal Injury Lawyer Mr. Renn A. Holness, B.A. LL.B.

Tags: Settlement, Settlement Agreement

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