Is a party who repudiated a settlement agreement?

Manitoba, Canada


The following excerpt is from Norwich Union Life Insurance Company (Canada) v. MGM Insurance Group Inc., 2003 MBQB 282 (CanLII):

The defendants contend that, because at one point in their communications counsel for the plaintiff indicated there would be no settlement unless the wording of the indemnification could be agreed and that if not the plaintiff would not feel bound by the agreement, they repudiated the contract and cannot now take steps to enforce it. However, it was the plaintiff who initiated these proceedings to enforce the agreement and indicated throughout that it wished to be bound by its terms. Again, the words of McEachern C.J.B.C. in Fieguth v. Acklands Ltd. are apt where at p. 122 and following he states: It should not be thought that every disagreement over documentation consequent upon a settlement, even if insisted upon, amounts to a repudiation of a settlement. Many such settlements are very complicated such as structured settlements, and the deal is usually struck before the documentation can be completed. In such cases the settlement will be binding if there is agreement on the essential terms. When disputes arise in this connection the question will seldom be one of repudiation as the test cited above is a strict one, but rather whether a final agreement has been reached which the parties intend to record in formal documentation, or whether the parties have only reached a tentative agreement which will not be binding upon them until the documentation is complete. Generally speaking, litigation is settled on the former rather than on the latter basis and, parties who reach a settlement should usually be held to their bargains. Subsequent disputes should be resolved by application to the court or by common sense within the framework of the settlement to which the parties have agreed and in accordance with the common practices which prevail amongst members of the bar. It will be rare for conduct subsequent to a settlement agreement to amount to repudiation.

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