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Vancouver Family Settlement Agreement Lawyers help get family cases fairly settled. Good family lawyers ensure full disclosure, no unfair pressure, an informed decision by the client and clarity of settlement terms.

Vancouver Family Settlement Agreement Lawyers Tel 604 602 9000

Today our senior family lawyers answer the question:  Can a settlement agreement between parties that was not formalized be enforceable?

In today’s blog, Gurdeep Randhawa explains how Courts decide if parties are on the same page and really did reach a binding settlement. These disputes occur a lot as parties sometimes have different ideas of what the deal is. Sometimes the parties have settlor’s remorse. This is why it is important to properly paper a deal so it is clear and there is no dispute over the terms. Our Vancouver Family Settlement Agreement Lawyers act across BC and Alberta out of 6 conveniently located offices.

In a recent B.C. Court of Appeal decision in Marcotte v. Marcotte, 2018 BCCA 362, the Court held that a separation agreement was in fact, enforceable and that the trial judge’s decision is entitled to deference. Call us toll free across Canada at 1 877 602 9900

Vancouver Family Settlement Agreement Lawyers – The Facts

The parties separated in February 2014 after almost eight years of marriage. After the wife filed a claim for divorce, spousal support and division of property, the parties engaged in settlement negotiations. The parties entered into settlement discussions before the trial of their family law action.

The wife’s counsel agreed to the husband’s propositions with minor clarifications and the husband’s counsel confirmed that the matter had settled. The husband’s counsel drafted a final order reflecting the terms of an alleged agreement, but the wife objected to various aspects and it was never filed.

The wife subsequently said there was no enforceable agreement because it was never formalized, or, in the alternative, the husband had repudiated the agreement through his post-agreement statements or conduct. The husband sought a declaration that the agreement was binding and the chambers judge held that it was. On appeal, the wife argued that the judge erred by concluding the parties had an enforceable agreement, or, if there was an enforceable agreement, in finding the husband had not repudiated it.

Vancouver Family Settlement Agreement Lawyers – The Law

The central issue on appeal is whether the parties reached a binding agreement in their divorce action and if so, whether the Respondent husband repudiated that agreement. The Honorable Chief Justice Bauman, the Honorable Mr. Justice Hunter and the Honorable Madam Justice Mackenzie dismissed the wife’s appeal. The B.C. Court of Appeal found that the  parties did not intend to require formalization of agreement as condition of its enforceability, the trial judge did not err in finding parties agreed on all essential terms of the settlement agreement and the husband neither expressly nor implicitly repudiated contract.

The Court of Appeal went on to discuss the issues. Namely:

  1. Did the judge err by failing to find the parties merely had an “agreement to agree” rather than an enforceable agreement? Put another way, was it an essential term that the agreement be formalized by court order or in writing?
  2. In the alternative, did the judge err by failing to find the respondent anticipatorily breached the agreement or repudiated it?

In discussing whether the trial judge erred by failing to find the parties merely had an agreement to agree, the Court of Appeal stated that:

[32] 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: Berthin at paras. 46–47.

[33]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: BayBridge Seniors Housing Trust v. Retirement Concepts Seniors Services Ltd., 2017 BCSC 1102 at paras. 34-35, 42; Calvan Consolidated Oil & Gas Co. Ltd. v. Manning, [1959] S.C.R. 253 at 260–261. 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.

[35] The judge was alive to the issue of whether it was a condition of the parties’ agreement that it must be formalized to be enforceable. His conclusion that it was not is entitled to deference on appeal absent overriding and palpable error.

Vancouver Family Settlement Agreement Lawyers – Was The Deal Breached?

In discussing the alternative argument, whether the trial judge erred by failing to find the respondent breached or repudiated the agreement, the Court of Appeal stated:

 [42] In Kuo at paras. 37–38, this Court succinctly summarized the law of repudiation in the context of settlement agreements, stating there is a strong public interest in favour of resolving lawsuits by agreement. Settlements allow parties to reach a mutually acceptable resolution to their dispute without prolonging the personal and public expense and time involved in litigation. Therefore, the policy of the courts is to promote settlement and to enforce settlement agreements. This policy contributes to the effective administration of justice.

[45]   I agree with the respondent that the December 2, 2015 letter does not evince an intention to refuse to perform the contractual obligations, let alone meet the “clear and unequivocal” standard required by the jurisprudence: Kuo at para. 40.

[46]  It would be rare for post-settlement conduct to amount to repudiation or anticipatory breach. As the respondent correctly notes, where an 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.

[48] In this case, the judge considered the language in the December 2, 2015 letter and observed that not only was there no express statement that the respondent was repudiating the contract, but such a statement could not be inferred. The judge also considered the circumstances as a whole and a number of specific issues raised by the appellant that he ultimately concluded to be insignificant. I see no palpable and overriding error in this analysis.

Hiring one of our experienced Vancouver Family Settlement Agreement Lawyers makes good sense. Call us today toll free 1 877 602 9900