Settlement Agreements in Law & Signing the Release

*as per your written instructions.

Sometimes, not often, lawyers will have clients who instruct them to settle a claim for certain amount of damages (aka money). Always, the Client will instruct the lawyer expressly through writing or on a telephone call. Lawyers will save or take notes of these instructions due to a client potentially backing out of an agreed upon settlement. Although this does not occur too often, it has, sadly, happened in the past.

A recent example of same is the case of Nobert v Origin At Longwood Retirement Community Inc., 2021 BCSC 1485. This is a sad case involving the passing of an elder. As Justice Mayer summarized:

[1] On January 14, 2018, the plaintiff Natalie Nobert’s father, Ho Keun Cho suffered a cardiac arrest and died while swimming in a pool at an independent living facility operated by the Defendants, located in Nanaimo, British Columbia. Mr. Cho’s body was found floating in the pool by Ms. Nobert that day after she came to visit her father and initially couldn’t find him. The Coroner classified Mr. Cho’s death to be “natural”.

[2] On December 19, 2018, Ms. Nobert commenced an action against the defendants claiming that their negligence resulted in Mr. Cho’s death. Ms. Nobert sought special and general damages arising from psychological trauma and nervous shock sustained by her, which she alleged was caused by the defendants’ breach of the Occupiers Liability Act, R.S.B.C. 1979, c. 303…

[3] Between September and November 2020 then counsel for Ms. Nobert and counsel for the defendants exchanged correspondence concerning settlement of Ms. Nobert’s claims. On September 28, 2020, counsel for the defendants sent an offer to settle Ms. Nobert’s claims for $3,000, all-inclusive, in exchange for Ms. Nobert’s agreement to execute and deliver a full and final release On November 2, 2020, Ms. Nobert’s counsel wrote to defendants’ counsel purporting to accept the terms of settlement proposed by the defendants. On November 24, 2020, defendants’ counsel wrote to counsel for Ms. Nobert enclosing a full and final release (the “Release”) and settlement funds of $3,000. Ms. Nobert denied that she had agreed to settle her claims and refused to sign the Release. On December 11, 2020, her counsel advised counsel for the defendants of his intention to withdraw as counsel.

[4] The defendants now apply for a declaration that the accepted settlement proposal, including the Release, constitute a binding settlement agreement (the “Settlement Agreement”). In addition, the defendants seek a declaration that Ms. Nobert is deemed to have executed the Release, an order that the $3,000 in settlement funds be paid into court and an order that Ms. Nobert’s proceeding be dismissed.

…[6] In [response to the defendants’ application], Ms. Nobert denies that a settlement agreement was reached on November 2, 2020. She contends that, although she instructed her counsel to accept the defendants’ settlement proposal, she was pressured into doing so at a time when she was experiencing mental distress and that she never actually intended to settle – although she has not provided medical evidence indicating that she lacked the capacity to agree to settlement. Further Ms. Nobert contends that she received poor legal advice from her counsel with respect to the merits of her underlying claims against the defendants before agreeing to settle – although she has not set evidence establishing how the advice she received was deficient.

The Trial Judge ordered that the Settlement Agreement made November 2, 2020, was binding upon the parties and declared that Ms. Nobert was deemed to have signed the Release attached as Schedule A to the defendant’s notice of application filed March 31, 2021. The Plaintiff was granted settlement funds in the amount of $3,000, however ordered costs against her. In reviewing the law, the Court stated as follows:

[7]  Section 8(3) of the Law and Equity Act, R.S.B.C. 1996, c. 253, provides this Court with the jurisdiction to hear an application to enforce the terms of a settlement agreement by staying the underlying proceeding. Section 8(3) reads as follows:

8(3)  Any person, whether or not a party to a cause or matter pending before the court, who would have been entitled, but for this Act, to apply to the court to restrain the prosecution of it, or who may be entitled to enforce, by attachment or otherwise, any judgment, decree, rule or order, contrary to which all or any part of the proceedings in the cause or matter may have been taken, may apply to the court, by motion in a summary way, for a stay of proceedings in the cause or matter, either generally or so far as may be necessary for the purposes of justice and the court must make any order that is just.

[8] This Court is able to determine the enforceability of a settlement agreement summarily, unless the Court is satisfied that there is a genuine issue as to whether a settlement agreement has been reached under the law of contract: Carlton v. Carlton, 2017 BCSC 603 at paras. 20-23 and 44.

[9] The test to determine if parties have reached a settlement agreement is whether parties have agreed on all essential terms. Determining whether the parties have agreed on all essential terms is separate from determining whether the parties have agreed on a form of release incorporating the essential terms agreed upon. A term requiring furnishing of a release and a consent dismissal is implied when a settlement agreement is reached: see Fieguth v. Acklands Ltd., 1989 CanLII 2744 (B.C.C.A.) at para. 35.

[10] This Court has the discretion to refuse to enforce a settlement agreement only in the following circumstances: there was a limitation on the instructions of counsel for the settling party known to the offering party; there was a misapprehension by counsel for the settling party of their instructions or there are facts which would make it unjust to enforce a settlement agreement; there is evidence of fraud or collusion; or, where there is an issue to be tried as to whether there is such a limitation, misapprehension, fraud or collusion in relation to the settlement agreement: Hawitt v. Campbell, [1983] CanLII 307 (B.C.C.A.) at para. 19.

[11] Where this Court finds that a settlement agreement is enforceable the Court may deem that a form of release has been executed by a plaintiff where no objection is made as to its form: see Dosanjh v. Nadon, 2009 BCSC 106 at para. 21