Minutes of Settlement forming a Contract

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

[18] In Olivieri v. Sherman, 2007 ONCA 491, the Court of Appeal observed, at para. 41, that a settlement agreement is a contract. This requires a court to find that there was a mutual intention to create a legally binding contract and that the parties reached an agreement on all the essential terms of the contract. However, the Court noted at para. 44, that “whether a concluded agreement exists does not depend on an inquiry into the actual state of mind” of a party. Rather, where “as here, 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.” See also B.O.T. International v. CS Capital et al., 2013 ONSC 5329 at para. 20.

[19] There is no requirement, therefore, of formal minutes of settlement, and an email exchange can suffice. As Justice M.F. Brown stated in Amirvar at paras. 14, 15 and 19:

Although the plaintiff’s offer was made orally, it was accepted in writing through the emails sent between the lawyers for the parties. The emails demonstrate that the parties accepted the terms as a binding settlement, a position that is supported by Mr. Miller providing his consent to the defendant taking out a dismissal order and providing his authority to execute the consent for the same.

The Courts have acknowledged that the terms of a contract are often expressed orally before being drafted into a formal written document but the formal written document, itself, does not alter the binding validity of the original oral contract. There is no merit in the argument that a settlement cannot be reached until the execution of a written release or if a plaintiff has objections to a release. See Kaur v. The Manufacturers Life Insurance Company, [1999] O.J. No. 3564 (Ont. C.A.) at para. 3.

….

As well, the documentation of taking out the dismissal order and executing the full and final release were not terms of the contract, but simply the formal documentation of settlement. The terms of the 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. See Bawitko Ltd. v. Kernels Popcorn Ltd., 1991 CanLII 2734 (ON CA), [1991] O.J. No. 495 (Ont. C.A.). [emphasis added]

[20] Similarly, in Cellular Rental Systems Inc. v. Bell Mobility Cellular Inc., 1995 CarswellOnt 4182, appeal dismissed, 1995 CarswellOnt 4172, Chapnik J. stated:

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 form of 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.

[21] The Court of Appeal explicitly agreed with Justice Chapnik’s conclusions. It is therefore well established that 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 to address an argument made by Brian Lumsden, a settlement agreement is not “an agreement to agree”.

[22] Viewing the correspondence objectively, I conclude that there was a binding agreement reached on all essential terms between the parties. The straightforward terms were that the action would be dismissed without costs, and that other costs ordered to be paid would be forgiven. This was accepted by Brian and David Lumsden. The draft Release reflected the settlement, and included an exception for Brian Lumsden’s benefit, as he had requested. It was not open to the plaintiffs to object to the Release, and they cannot rely on it to resile from their agreement.

Tsaoussis v. Baetz, 1998 CanLII 5454 (ON CA)

A minor plaintiff, like any other plaintiff, is entitled to full but fair compensation if the minor establishes a personal injury claim. The parens patriae jurisdiction does not expand that entitlement. For example, a minor plaintiff who cannot establish that the defendant's negligence caused the injury, cannot succeed on the basis that, despite that failure, compensation is in the minor's best interests. Similarly, a minor, like any other plaintiff, is entitled to have the compensation assessment made on a once and for all basis and to be paid that compensation in a single lump sum. The parens patriae jurisdiction does not enable the court to create a different compensation regime for minor plaintiffs involving periodic reviews of the adequacy of the compensation provided to the minor. The court must protect the minor's best interests, but it must do so within the established structure for the compensation of personal injury claims: Kendall v. Kindl Estate (1992), 10 C.P.C. (3d) 24 (Ont. Gen. Div.).

Finality is as important in cases involving minor plaintiffs as it is in cases involving adult plaintiffs. The need for finality must temper the goal of meeting the minor's best interests just as it must temper the desire to provide every plaintiff with full but fair compensation. Proposed settlements of minors' personal injury claims, especially those involving very young children with head injuries, raise real concerns about the adequacy of compensation provided by those settlements. The risk of under-compensation in those cases is very real. [See Note 10 at end of document.] That risk demands that the court vigorously exercise its parens patriae jurisdiction when asked to approve a settlement. Once the settlement is approved, however, and the judgment is final and not appealed, the parens patriae jurisdiction is spent. It can only be re-asserted if there is a valid basis for setting aside the final judgment.

In arriving at the conclusion that the best interests of the minor justified setting aside the previous final judgment, Leitch J. relied exclusively on the decision of the British Columbia Court of Appeal in Makowka v. Anderson (1990), 1990 CanLII 196 (BC CA), 67 D.L.R. (4th) 751, 45 B.C.L.R. (2d) 136. In Makowka, a motion judge was asked to approve an infant settlement. He did so over the objections of the Public Trustee acting on behalf of the infant. The Public Trustee argued that more time was needed to assess the extent of the minor's head injury and the cause of her various medical problems. The Public Trustee appealed the judgment approving the settlement and sought to introduce evidence on appeal of medical assessments done between the judgment approving the settlement and the hearing of the appeal. Those assessments confirmed the Public Trustee's concerns and indicated that the minor's injuries were serious and that in all likelihood she would suffer significant long- term disabilities.