Court Rejects Lawyer’s Attempt To Walk Back Agreement On A Technicality

Written on behalf of Arbesman Hamilton LLP

Technicalities can sometimes be used as a way to escape obligations owed under a contract, but as a recent decision from the Ontario Superior Court of Justice demonstrates, a technicality isn’t necessarily reason enough to convince a court to reverse an agreement made between two parties.

The couple separates

The couple involved in the decision were married on May 25, 2013 after what the court called a “not insignificant period of cohabitation.” They had two children while married, a daughter born in 2013, and a son, born in 2016. They separated in January 2015, prior to their son being conceived, at which time the mother and daughter moved into her mother’s house, while the father continued to live in the matrimonial home, where he still lived at the time of the trial.

Throughout their separation the father and mother, along with their lawyers, negotiated about the sale of the matrimonial home as well as other issues. On July 20, 2017 the mother made an offer to settle all issues.

The presentation and walk back of an offer

The terms of the offer included the parents sharing joint legal custody of the children, with the father having access for two weeknights each week and every other weekend. It also established obligations for the father to pay child support and to keep the mother and children as beneficiaries of his health and life insurance. Finally, the offer established the division of equity of the matrimonial home, including the mother’s recovery of a $12,000 down payment she had made.

The offer’s terms were to be incorporated with the Minutes of Settlement and would be further incorporated into a Court Order.

The father’s lawyer accepted the offer on the father’s behalf on November 13, 2017. There were some changes made by both parties to the language of the offer. At some point shortly thereafter the mother hired a new lawyer who demanded the Minutes be reverted to the exact language of the offer at the time it was accepted by the father. The new lawyer wrote that the Minutes must be tailored to be precisely consistent with “the offer your client claims to have accepted,” continuing, “If you are not prepared to proceed on the foregoing basis in accordance with the terms of the Offer to Settle….”

The new lawyer’s letter led the court to conclude, “that after the Applicant had accepted her Offer, the Respondent had second thoughts and that those second thoughts were occasioned by the only material change in the parties’ circumstances: her new counsel.”

The mother’s lawyer relied on a 2003 Ontario Superior Court of Justice Family Court decision, which stated that signatures of the parties to a contract as well as lawyers are required in such an agreement, and that the lack of any of those invalidates the offer.

The court doesn’t buy it 

However, the court noted some differences between the two cases. In the case cited there had not been negotiation between the parties. In this case, the mother and father had been deeply involved in negotiations. The court stated “Using the ordinarily understood principles of contract law, it is clear to me that there was offer and acceptance and hence a valid and binding agreement,” and further “it is my view that the parties had agreed on all the essential provisions of the contract when the (father) accepted the (mother’s) Offer…In my view, at the time of the (father’s) acceptance, there was a manifest consensus ad idem between the parties on all the material terms of the Agreement.  This was not conditional upon and subject to the execution of a formal contract.”

The court determined there was a binding agreement in place based on the offer being accepted by the father. The court found no reason to proceed to trial and granted the father’s application for summary judgment.

At Arbesman Hamilton LLP, we help families navigate the emotional and stressful times of separation and divorce. Our team can help you make informed decisions through a pragmatic approach that aims to keep your best interests in mind while avoiding high costs and emotional turmoil. Please contact us online or call us at 416-481-5604 in order to schedule a consultation today.