Settlements in BC family law cases are common and are the focus of our MacLean Family Law legal team. Since 97 percent of family law cases settle outside of court, clear offers to settle are important in ending often acrimonious family law disputes. But what is the test when an offer to settle is made and each side of the BC family law dispute has a different view of what the terms of the BC family settlement offer mean? Will a court enforce a settlement when each side to the family law dispute has differing ideas of what the offer really means? When will a family law settlement offer be enforced when there is dispute over whether a settlement was even reached?
Lorne MacLean, QC of MacLean Law was recently retained to appeal an order that enforced a family law settlement which was not what the wife and her counsel had intended. The MacLean law lawyers successfully persuaded the BC Court of Appeal that the parties were never actually “on the same page” when an offer made by the wife’s counsel was purportedly accepted by counsel for the husband. The husband and his lawyer had also tried to graft another term onto the settlement which would have led to an unfair result. This decision sets critical guidelines for when BC family law settlements will or will not be enforced and it also advances the law in BC for all family law practitioners and their clients.
Here is the official snapshot of our win on the BC family settlement for our delighted client as prepared by the BC Court of Appeal website:
Summary:
Appeal from an order staying family law proceedings on the basis that an enforceable settlement agreement had been reached. The appellant argued that the parties had not agreed on the issue of the division of family assets and there was no binding agreement. The chambers judge excluded the first two pages of the letter proposing the settlement as “campaign talk”, and found an “objectively reasonable” settlement in the terms set out on the third page only. Held: appeal allowed. There was no binding agreement. The parties had not agreed on the important issue of the division of assets. The chambers judge failed to consider all of the evidence of all of the material facts and to determine the entire scope of the settlement
MacLean Law’s Arguments Accepted By BC Court of Appeal
The BC Court of Appeal relied upon the cases MacLean and Stein provided to them and adopted the arguments raised by the team in their written fact as follows:
[26] The first question to be considered on the appeal is whether there was a binding settlement agreement between the parties.
[27] The principles to be applied in circumstances such as this case were discussed by this Court in Lacroix v. Loewen, 2010 BCCA 224. The issue in that case was whether a settlement of a claim for damages suffered in a motor vehicle accident included both a tort claim and a claim for benefits under Part 7 of the Insurance (Vehicle) Regulation, B.C. Reg. 447/83, under the Insurance (Vehicle) Act, R.S.B.C. 1996, c. 231. The chambers judge held there was a settlement of the tort claim which ICBC repudiated by insisting the settlement included the Part 7 claims. This Court allowed the appeal, finding there was an enforceable settlement of both tort and Part 7 claims (at para. 38).
[28] Chief Justice Finch, in his reasons for the Court, began his discussion of the principles of contract formation (at para. 35):
The principles of contract formation are set out in Fridman, The Law of Contract (Toronto: Thomson Carswell, 2006) at 15:
… the test of agreement for legal purposes is whether parties have indicated to the outside world, in the form of the objective reasonable bystander, their intention to contract and the terms of such contract.
The law is concerned not with the parties’ intentions but with their manifested intentions. It is not what an individual party believed or understood was the meaning of what the other party said or did that is the criterion of agreement; it is whether a reasonable man in the situation of that party would have believed and understood that the other party was consenting to the identical terms. …:
the parties will be found to have reached a meeting of the minds, in other words be ad idem, where it is clear to the objective reasonable bystander, in light of all the material facts, that the parties intended to contract and the essential terms of that contract can be determined with a reasonable degree of certainty.
[Italics emphasis in original.]
[29] He explained further (at paras. 36-38):
[36] The correct interpretation in such a case 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. In this case, a correct analysis would have led the judge to consider the evidence and determine whether it showed, objectively, that the parties intended a tort settlement, or a tort and Part 7 settlement, or whether the evidence was incapable of supporting either conclusion. To answer the first Fieguth question, the trial judge had to be able to determine the entire scope of the settlement….
….In interpreting a contract, what is relevant is the parties’ outward manifestations as to the scope of the whole settlement. That scope is to be assessed as a whole, on all of the material evidence, and not in individual pieces.
[Underline emphasis added.]
The Trial Judges’s Error In Not Looking At The Entire Proposal Letter
[30] The chambers judge in this case made the same error as the judge in Lacroix. She expressly excluded the first two pages of the Proposal from her determination of the scope of the settlement, thus failing to analyze the evidence in light of all the material facts and to determine the entire scope of the settlement based on the evidence. As Finch C.J.B.C. said (at para. 37): “That scope is to be assessed as a whole, on all of the material evidence, and not in individual pieces.”
[31] The evidence before the chambers judge included all three pages of the Proposal. On the second page, appellant’s counsel said “… the law is clear that the parties’ assets and debts should be divided equally”. She then listed the parties’ assets and noted specific assets that were excluded from the equal division and therefore would be kept by each of parties respectively. The chambers judge dismissed these statements as “campaign talk”, when on a consideration of all of the evidence, the division of the parties’ assets was a material aspect of the Proposal.
[32] The chambers judge also failed to consider respondent’s counsel’s interpretation of the result of the settlement in the Response. Instead of merely accepting the settlement proposal in the terms set out on page three of the Proposal, he found it necessary to confirm that the effect of the settlement resulted “in each party retaining any other assets held or registered in their sole name or possession”. A comparison of this statement with the whole of the Proposal reveals the disjunction between the parties’ intentions. It is clearly stated on page two of the Proposal that “this proposal is based on” the parties keeping specific assets, not on “each party retaining any other assets held or registered in their sole name or possession”, as stated in the Response. Reading both the Proposal and the Response as a whole reveals that the respondent was not consenting to the identical terms proposed by the appellant.
[35] As the Court said in Lacroix however, the question is whether a reasonable person in the respondent’s situation would have believed or understood that the appellant was consenting to the identical terms as the respondent understood them. That his counsel found it necessary in the Response to clarify its effect indicates that a reasonable person would not have concluded that the parties had reached a binding agreement which excluded the division of any of the parties’ assets.
[36] I therefore conclude that the parties had not agreed on the issue of the division of assets, and there was no binding settlement agreement.
Result For Our Client
Importantly, as a result of the MacLean Law team’s efforts the purported BC family settlement was not enforced, legal costs that had been awarded against the wife were reversed and our delighted client received her legal costs from her husband at both the Court of Appeal and in the Supreme Court of BC.
If you have a family law or BC family settlement case you want settled across BC call one of our experienced and compassionate family law lawyers to meet with us across BC at one of our 4 offices found in downtown Vancouver, Surrey, Kelowna and Fort St John. You can call us toll free to set up an initial consultation. Meeting with an experienced lawyer is one of the most important steps a person considering separation should take. Failing to do so can be financially fatal. Call us now toll free 1-877-602-9900.
