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Civil Litigation Dicta - Settlement - 'Finality'. Zaidi v. Syed Estate
In Zaidi v. Syed Estate (Ont CA, 2024) the Ontario Court of Appeal considered 'finality' in settlements:(4) Alleged Failure to Respect Finality of Settlements
[30] As his fourth ground of appeal, Mr. Zaidi contends that the application judge failed to respect the principle supporting the finality of settlements. He says that the application judge incorrectly relied on events that took place after the settlement agreement was signed as a basis for its rescission. He relies on Deschenes v. Lalonde, 2020 ONCA 304, 447 D.L.R. (4th) 132, where this court stated that “a settlement agreement will not be rescinded on the basis of information that has come to light following the settlement that indicates that a party has entered into an improvident settlement”: at para. 27.
[31] We do not see the alleged error. The application judge did not rely on subsequent events to rescind the settlement agreement. There was no information that came to light, or any other evidence, to suggest that Ms. Naqvi had a change of heart or otherwise with the benefit of hindsight was not prepared to complete the settlement. Rather, the application judge referred to the subsequent events in order to explain how the litigation came about. Ms. Naqvi first obtained legal advice after Mr. Zaidi sent an email to her nine days before the payment was due, demanding written confirmation that day of how the payment would be made, failing which he would register a caution on the Unit. The following day her lawyer notified Mr. Zaidi that Ms. Naqvi disputed the enforcement of the agreement, including on the basis that it was executed “involuntarily”.
[32] The application judge expressly acknowledged that there is a strong presumption in favour of the finality of settlements. However, relying on para. 28 of Deschenes, he went on to correctly state that a settlement agreement is a contract and can be set aside in the same way that a contract may be rescinded, including for innocent misrepresentation, undue influence or unconscionability.
[33] The application judge’s approach was correct at law. He recognized that settlements are generally final, but he went on to review the evidence and to conclude that there was a legal basis for refusing enforcement of the settlement reached in this case. It was open to him to find on the evidence that Ms. Naqvi had entered into the settlement as a result of cultural and family pressures, and to rescind the settlement agreement on the alternative grounds that the agreement was procured through undue influence, that the terms of the agreement were unconscionable, and that the settlement was premised on a misrepresentation by omission when Ms. Naqvi was led to believe that the oral agreement between Mr. Zaidi and her husband was enforceable.
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