Decision says settling parties waived right to seek legal advice
In a civil forfeiture action, the British Columbia Supreme Court deemed a post-mediation settlement agreement binding and refused to set it aside upon determining that the settling parties waived their right to obtain independent legal advice despite having the opportunity.
In British Columbia (Director of Civil Forfeiture) v Chen, 2025 BCSC 1569, the action sought the forfeiture of two Vancouver properties and the sums of $63,407.87 and $3,880 as proceeds and instruments of unlawful activities.
In September 2024, BC’s civil forfeiture director received a notice to mediate signed by X. Chen and J. Chen. In December 2024, X. Chen, J. Chen, and their son S. Chen attended the mediation. The director hired a translator to assist X. Chen and J. Chen for the entire mediation. The director and the three Chens executed a settlement agreement addressing the civil forfeiture action’s issues.
Last April, the mediator delivered a completed mediation certificate to confirm that the mediation had resolved all issues. However, X. Chen and J. Chen refused to sign the draft consent order reflecting the settlement agreement’s terms.
The director applied for a declaration that the settlement agreement was binding. X. Chen and J. Chen alleged that they did not sign the notice to mediate. X. Chen added that he did not know the mediation’s objectives, but his son told him to attend.
X. Chen and J. Chen also asserted cognitive asymmetry and unconscionability in the settlement agreement. They explained that they could not protect their interests due to their lack of independent legal advice or knowledge of the English language.
Settlement binding
The Supreme Court of British Columbia declared the settlement a binding agreement with X. Chen and J. Chen.
First, the court said X. Chen and J. Chen unquestionably signed the settlement agreement. The court added that X. Chen and J. Chen did not refute the fact that the notice to mediate contained their signatures.
The court ruled that X. Chen and J. Chen knew that they were participating in a mediation. The court noted that they:
- reviewed the agreement to mediate at the beginning of the mediation, with them signing the agreement upon the translator’s translation of the terms
- did not bring up how they signed the agreement to mediate at the outset of the mediation, or how it might have impacted the mediation that followed
- raised no concerns throughout the whole day of mediation, despite having many opportunities to do so
The court held that X. Chen’s evidence regarding his knowledge of the mediation’s purpose contradicted other evidence.
The court rejected X. Chen’s argument that he had no meaningful opportunity to retain legal counsel. The court noted that the director’s counsel wrote to X. Chen and J. Chen and encouraged them to obtain legal advice regarding the upcoming mediation.
The court further noted that X. Chen and J. Chen chose to attend the mediation without a lawyer and opted to specifically waive independent legal advice regarding the settlement agreement’s contents.
Next, the court saw no inequitable bargaining. Regarding the language barrier, the court noted that the translator – certified by the court and hired at the director’s cost – translated the agreement to mediate, the mediation, and the settlement agreement and allowed X. Chen and J. Chen to clarify the terms or ask questions.
The court further noted that:
- X. Chen and J. Chen requested the mediation
- X. Chen and J. Chen did not allege that they did not receive the material facts before or during the mediation
- X. Chen failed to explain how his son supposedly misled him and J. Chen
Lastly, the court saw no improvident bargain. The court concluded that the settlement agreement did not favour the director or lead to an implausible outcome, relieved X. Chen and J. Chen from the total forfeiture the action sought, and apparently attempted to exclude property that was not part of the proceeds of unlawful activity.
