Does a Settlement Agreement Need to Strictly Comply With the Law?


“It is sometimes said married couples should never wallpaper together; working together on home projects can test even the strongest relationships.” So begins the recent decision of Justice Raikes of the Ontario Superior Court in Johanson v Hinde, 2015 ONSC 5878 which considered whether an email agreement between the parties constituted a binding settlement of the litigation.

Ms. Johanson and Ms. Hinde lived together for approximately 32 month and were married for approximately 20 of those months. During that time, they purchased and renovated two houses in addition to the home that Ms. Hinde already occupied. Two of the properties were adjacent to one another on the same street, 1992 and 1988 Strathuron Street in Sarnia, Ontario.

The parties eventually separated and Ms. Johnson commenced an action on June 11, 2012 seeking, among other things, an order that the three properties be listed for sale. One of the three properties finally sold. Since the parties were spending significant resources on legal fees, they agreed to put the litigation on hold and try to work out a resolution. In May, 2013, Ms. Hinde proposed that they resolve all outstanding issues on the following basis:

1. Hinde would apply to the City of Sarnia to sever 20 feet from the 1988 Strathuron Street property which would be added to the 1992 Strathuron Street property;

2. If the severance was granted, Ms. Hinde would get the 1992 property plus $15,000 from the sale of the 1988 property; and,

3. Johanson would receive the proceeds of sale of the 1988 property minus the $15,000 payable to Ms. Hinde.

Ms. Johanson agreed to these terms, “provided it was legal” in an email dated May 15, 2013. After Ms. Hinde made an unsuccessful application for severance to the City of Sarnia, some squabbling occurred between the parties, and Ms. Johanson was no longer willing to follow through with the settlement. Ms. Johanson recommenced the litigation arguing that there was no settlement agreement for several reasons, including the fact that the agreement was not in compliance with section 55 of the Family Law Act.

The court found that there was a binding settlement agreement between the parties in May 2013 by which they agreed to resolve all outstanding issues between them. Ms. Johanson’s emails to Ms. Hinde are evidence of that agreement. The court found that there was ample case law that a settlement of a litigation made during the course of the litigation need not strictly comply with s. 55 of the Family Law Act.

The above summary does not cover all aspects of this lengthy decision and is not intended to be construed as comprehensive legal advice. To speak to an experienced family lawyer, please contact Jason P. Howie, online or at 519.973.1500.

To read the full decision click here.

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