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Civil Litigation - Settlement - Enforcement

. Haider v. Rizvi

In Haider v. Rizvi (Ont CA, 2023) the Court of Appeal considered an important issue about a central trigger of the main s.4 Limitations Act, that of a the need for a "proceeding":
Basic limitation period

4 Unless this Act provides otherwise, a proceeding shall not be commenced in respect of a claim after the second anniversary of the day on which the claim was discovered.
In this case, the parties had ostensibly settled litigation but left the final drafting of a release to later (in this case much later), as is commonly the practice. In this case, while there were Minutes of Settlement which dealt with most of the material terms, the balance of the release was assumed to follow 'standard' (presumably, 'standard to the profession') terms.

So when active problems arose in the terms of release but after the two-year limitation period, the court faced the issue of how - procedurally - to treat the settlement, ie. as a motion within the existing (but now in abeyance) case file or as a new litigation file. Here, this perhaps seemingly unimportant procedural issue made a difference because if it were the latter (ie. a new 'proceeding') then the limitation would have something to count itself by in terms of limitations. If not, then the claim was already commenced at the beginning of the 'settled' case:
2. The appellant does not have a limitation period defence to the delivery of a release

[25] The appellant argues that the motion judge erred in refusing to dismiss the motion on the basis that the respondent’s claim for a Full and Final Mutual Release was statute-barred. He contends that the claim for performance of the Minutes of Settlement was a new cause of action, that required the commencement of a new proceeding, or at least the amendment of pleadings in the existing action, which could not occur more than two years after the date of the settlement agreement.

[26] First, I note that the appellant has identified no error in the motion judge’s conclusion that the respondent’s claim arose only at the time that the appellant refused to deliver any release at all, and not at the time the Minutes of Settlement were signed or while the parties were in negotiations about the content of the release. On that factual finding, there was no question of the expiry of a limitation period.

[27] Second, and in any event, I see no basis for the appellant to rely on the expiry of a limitation period in this case. It is unnecessary to address whether and in what circumstances a limitation period might bar subsequent proceedings or claims to enforce aspects of a settlement agreement: in this case we are concerned only with the delivery of a release. As I have already noted, the delivery of a release was properly sought in the context of a motion in an ongoing action. The respondent was not required to start a new action or to amend his pleadings to seek an order for an exchange of releases as part of the completion of the settlement.

[28] Even if no Full and Final Mutual Release had been delivered, the respondent was released by the terms of the Minutes of Settlement, subject only to the Undertaking. The settlement of a claim implies an obligation to furnish a release absent agreement to the contrary: Hodaie v. RBC Dominion Securities, 2012 ONCA 796, at para. 3; Fieguth, at pp. 121-122; Bogue v. Bogue (1999), 1999 CanLII 3284 (ON CA), 46 O.R. (3d) 1 (C.A.), at para. 13; Umholtz v. Umholtz (2004), 2004 CanLII 14183 (ON SC), 238 D.L.R. (4th) 736 (Ont. S.C.), at p. 738. So long as the settlement remains on foot, it will bar subsequent proceedings that fall within its terms. The absence of a signed release makes no practical difference to the finality of a settlement: see e.g., Gedco Excavating Ltd. v. Aqua-Tech Dewatering Co., [2014] O.J. No. 2513 (S.C.), at paras. 26-28.

[29] I would therefore reject this ground of appeal.
. Stefanchuk v. LeLiever

In Stefanchuk v. LeLiever (Ont CA, 2022) the Court of Appeal considered the simple test for a court to enforce a settlement:
[4] The application judge applied the two-step test set out in this court’s decision in Capital Gains Income Streams Corp. v. Merrill Lynch Canada Inc. (2007), 2007 CanLII 39604 (ON SCDC), 87 O.R. (3d) 464, which asks first, whether there was an agreement to settle, and second, whether the agreement should be enforced.


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Last modified: 20-05-23
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