Executive Summary: Key Legal and Evidentiary Issues

• Appeal concerned whether a settlement agreement should have been summarily enforced under section 8(3) of the Law and Equity Act.

• Chambers judge erred by failing to first assess if there was a genuine issue to be tried before enforcing the settlement.

• Evidence of stress, compromised solicitor-client relationship, and psychiatric conditions raised a genuine triable issue about enforceability.

• Judge improperly treated the application like a summary trial rather than evaluating whether summary enforcement was appropriate.

• Court emphasized that public policy favoring settlements does not override procedural fairness when enforceability is genuinely contested.

• Appeal allowed, enforcement order set aside, and respondents' application to summarily enforce the settlement dismissed.

Facts of the case

Howard Ursuliak filed a civil claim for personal injury damages following an August 2015 motor vehicle accident involving Phillip Collins and Janine Mendes. After adjournments of two trial dates, and amid complications with his legal counsel, Mr. Ursuliak accepted a settlement offer of $240,000 plus costs and disbursements on May 26, 2023. His acceptance came during a period where he was reportedly under considerable emotional and mental health stress and without proper legal advice.

The respondents applied to enforce the settlement agreement summarily under section 8(3) of the Law and Equity Act. The chambers judge granted the application, finding that the essential terms had been agreed to and there was no substantive unfairness sufficient to set aside the agreement. The judge treated the application as a straightforward question of contract formation and enforceability, finding that any disparity in bargaining power was not sufficiently stark to invalidate the settlement.

Outcome of the case

The Court of Appeal allowed Mr. Ursuliak’s appeal. It concluded that the chambers judge misdirected herself by failing to first assess whether there was a genuine issue for trial concerning the enforceability of the settlement. The evidence raised triable issues regarding Mr. Ursuliak’s capacity to understand the offer, the effect of his mental health condition, and the fairness of the bargaining circumstances. The Court emphasized that a summary procedure under section 8(3) is not appropriate where serious disputes of fact exist. Accordingly, the order enforcing the settlement was set aside, and the respondents' application was dismissed, leaving the enforceability of the agreement to be determined at a full trial if necessary.