By J. Nicholas Fernandes
The basic tenet of Rule 7.08 of the Rules of Civil Procedure is that any settlement of a claim by or against a person under disability, including minors, requires Court approval. On a motion (or application, if settlement occurs prior to a lawsuit being commenced) to obtain such approval, the party under disability must satisfy the Court, with specific evidence, that the proposed settlement is reasonable and in the best interest of the party under disability.
After settlement of a claim involving a plaintiff under disability, if the plaintiff delays in obtaining approval of that settlement, this can create a difficult predicament for the defendant. Rule 7.08 requires the court to consider evidence from the party under disability’s litigation guardian and counsel. This evidentiary requirement creates a substantial barrier to defendants wishing to conclude settlements requiring court approval.
What can a defendant do in these circumstances? In Catanzaro v. Kellogg’s Canada Inc., 2014 ONSC 5691, affirmed 2015 ONCA 779, the defendant facing this situation brought a motion to enforce the settlement.
Catanzaro v. Kellogg’s Canada Inc.
In Catanzaro, a mouldy piece of chicken found its way into a box of breakfast cereal. The plaintiffs, Claudia and Nick Catanzaro and their young daughter Alessia (with her mother acting as litigation guardian), sued the defendant, Kellogg’s Canada Inc., for damages suffered after the ghastly discovery.
After the plaintiffs issued their statement of claim, counsel for Kellogg’s served an offer to settle on them. In the offer, Kellogg’s agreed to consent to an order dismissing the action without costs. The plaintiffs accepted the offer and provided counsel for Kellogg’s with draft motion materials for Court approval of the settlement relating to Alessia, which also included a dismissal of the action.
The plaintiffs’ lawyer notified the court that the matter had settled. However, despite repeated written promises from the plaintiffs’ lawyer to bring a motion before the court to have the settlement in regards to Alessia approved and the action dismissed, this was never done. Several months later, a new lawyer for the plaintiffs notified Kellogg’s that the plaintiffs were resiling from the settlement agreement and intended to proceed with the action.
Kellogg’s brought a motion to enforce settlement pursuant to Rule 49.09 of the Rules of Civil Procedure, seeking approval of the settlement with respect to the plaintiffs, including Alessia, as well as the dismissal of the action. The plaintiffs argued that the court should decline to enforce the settlement against Alessia on the basis that the infant settlement was not in her best interests, and that Ms. Catanzaro was depressed at the time she entered into the settlement and did so in haste.
The motion judge ordered the settlement be enforced as against the adult plaintiffs, and dismissed their actions. She found that the plaintiffs’ previous lawyer had authority to settle the action, that they had agreed to settle the action on the terms set out in the offer, and they failed to establish that the settlement should be set aside.
However, the motion judge dismissed the motion as it related to the infant plaintiff, on the basis that the required evidence for court approval of settlement involving a party under disability was not before the court. Although Kellogg’s placed the draft motion materials for court approval received from the former plaintiffs’ counsel before the court, the court could not accept them as the affidavit evidence was unsworn.
The plaintiffs appealed the enforcement of the settlement as against the adult plaintiffs to the Court of Appeal. The Court of Appeal dismissed the appeal, affirming the motion judge’s decision.
In reaching its decision, the Court of Appeal emphasized that the policy of the courts is to promote settlement. The discretion to refuse to enforce a settlement should only be used sparingly.
In distinguishing the case of Milios v. Zagas[1], which lays out factors which may allow a party to resile from a settlement agreement (namely mistake, significant compromise, and prompt notification of the mistake), the Court noted that these factors were not present in the case at bar. The Court further noted that the evidence before it did not support the plaintiffs’ assertions that the settlement should not be enforced because Ms. Catanzaros accepted the offer in haste and under stress.
Takeaways
The evidentiary and legal requirements applied in determining whether a court should approve a minor litigant’s settlement exist to protect the minor and ensure that the settlement is in his or her best interest. However, these requirements may result in procedural difficulties for defendants who wish to bring finality to these types of actions following settlement.
As Catanzaro v. Kellogg’s Canada Inc. demonstrates, a defendant cannot rectify this issue by simply bringing a motion to enforce settlement, although such a motion can be effective as against any adult co-plaintiffs.
Potential alternative strategies for addressing a plaintiff’s delay in bringing a motion to approve an infant settlement include seeking a litigation timetable with a deadline for plaintiff’s counsel to bring the motion for court approval, or in cases of more extreme delays, a motion to dismiss the action for delay.
[1] (1998), 38 O.R. (3d) 218
By J. Nicholas Fernandes
The basic tenet of Rule 7.08 of the Rules of Civil Procedure is that any settlement of a claim by or against a person under disability, including minors, requires Court approval. On a motion (or application, if settlement occurs prior to a lawsuit being commenced) to obtain such approval, the party under disability must satisfy the Court, with specific evidence, that the proposed settlement is reasonable and in the best interest of the party under disability.
After settlement of a claim involving a plaintiff under disability, if the plaintiff delays in obtaining approval of that settlement, this can create a difficult predicament for the defendant. Rule 7.08 requires the court to consider evidence from the party under disability’s litigation guardian and counsel. This evidentiary requirement creates a substantial barrier to defendants wishing to conclude settlements requiring court approval.
What can a defendant do in these circumstances? In Catanzaro v. Kellogg’s Canada Inc., 2014 ONSC 5691, affirmed 2015 ONCA 779, the defendant facing this situation brought a motion to enforce the settlement.
Catanzaro v. Kellogg’s Canada Inc.
In Catanzaro, a mouldy piece of chicken found its way into a box of breakfast cereal. The plaintiffs, Claudia and Nick Catanzaro and their young daughter Alessia (with her mother acting as litigation guardian), sued the defendant, Kellogg’s Canada Inc., for damages suffered after the ghastly discovery.
After the plaintiffs issued their statement of claim, counsel for Kellogg’s served an offer to settle on them. In the offer, Kellogg’s agreed to consent to an order dismissing the action without costs. The plaintiffs accepted the offer and provided counsel for Kellogg’s with draft motion materials for Court approval of the settlement relating to Alessia, which also included a dismissal of the action.
The plaintiffs’ lawyer notified the court that the matter had settled. However, despite repeated written promises from the plaintiffs’ lawyer to bring a motion before the court to have the settlement in regards to Alessia approved and the action dismissed, this was never done. Several months later, a new lawyer for the plaintiffs notified Kellogg’s that the plaintiffs were resiling from the settlement agreement and intended to proceed with the action.
Kellogg’s brought a motion to enforce settlement pursuant to Rule 49.09 of the Rules of Civil Procedure, seeking approval of the settlement with respect to the plaintiffs, including Alessia, as well as the dismissal of the action. The plaintiffs argued that the court should decline to enforce the settlement against Alessia on the basis that the infant settlement was not in her best interests, and that Ms. Catanzaro was depressed at the time she entered into the settlement and did so in haste.
The motion judge ordered the settlement be enforced as against the adult plaintiffs, and dismissed their actions. She found that the plaintiffs’ previous lawyer had authority to settle the action, that they had agreed to settle the action on the terms set out in the offer, and they failed to establish that the settlement should be set aside.
However, the motion judge dismissed the motion as it related to the infant plaintiff, on the basis that the required evidence for court approval of settlement involving a party under disability was not before the court. Although Kellogg’s placed the draft motion materials for court approval received from the former plaintiffs’ counsel before the court, the court could not accept them as the affidavit evidence was unsworn.
The plaintiffs appealed the enforcement of the settlement as against the adult plaintiffs to the Court of Appeal. The Court of Appeal dismissed the appeal, affirming the motion judge’s decision.
In reaching its decision, the Court of Appeal emphasized that the policy of the courts is to promote settlement. The discretion to refuse to enforce a settlement should only be used sparingly.
In distinguishing the case of Milios v. Zagas[1], which lays out factors which may allow a party to resile from a settlement agreement (namely mistake, significant compromise, and prompt notification of the mistake), the Court noted that these factors were not present in the case at bar. The Court further noted that the evidence before it did not support the plaintiffs’ assertions that the settlement should not be enforced because Ms. Catanzaros accepted the offer in haste and under stress.
Takeaways
The evidentiary and legal requirements applied in determining whether a court should approve a minor litigant’s settlement exist to protect the minor and ensure that the settlement is in his or her best interest. However, these requirements may result in procedural difficulties for defendants who wish to bring finality to these types of actions following settlement.
As Catanzaro v. Kellogg’s Canada Inc. demonstrates, a defendant cannot rectify this issue by simply bringing a motion to enforce settlement, although such a motion can be effective as against any adult co-plaintiffs.
Potential alternative strategies for addressing a plaintiff’s delay in bringing a motion to approve an infant settlement include seeking a litigation timetable with a deadline for plaintiff’s counsel to bring the motion for court approval, or in cases of more extreme delays, a motion to dismiss the action for delay.
[1] (1998), 38 O.R. (3d) 218