The decision in Schilperoort v. Huang, 2024 BCSC 222 (“Schilperoort”) exemplifies the problems that arise when there is disagreement over whether a binding settlement has been achieved between parties.

Facts

The Plaintiffs, Mr. Schilperoort and Ms. Gonzalez, filed an action against Ms. Huang (the “Defendant”) alleging that they were defamed through a number of emails and posts sent and published by the Defendant. The Defendant brought an application to dismiss the claim on the basis that the dispute had settled shortly before the Notice of Civil Claim had been filed.

The proposed settlement in question consisted of a release with schedules. One schedule to be agreed upon was an apology letter under the Defendant’s name. That letter was to be sent to recipients who would be listed under a separate schedule (Schedule “B”).

Settlement discussions took place over several months. The Defendant was represented by a lawyer. Mr. Schilperoort was also represented by a lawyer, Mr. Watson (“Watson”). Ms. Gonzalez was not represented at the time.

The Court summarized the timeline concerning settlement discussions between the parties, of note:

• On October 13, 2021, the Defendant’s counsel sent an email to Watson, in which she indicated:
  • as a term of her client’s (the Defendant’s) acceptance, Watson would need to confirm in writing that Ms. Gonzalez had sent him a copy of her I.D., and her signature on the release matched her I.D.; and
  • the contents of Schedule “B” would have to be reviewed by the Defendant, and she did not expect that the Defendant would have any objections to the names listed in the release.
• On October 18, 2021, Watson sent an email to Defendant’s counsel, which, in part, stated:

“My client is willing to sign the Release that your client proposed, including listing recipients of the apology letter, but the date needs to be changed to November 2019 to reflect the fact that your client’s actions started then.”

• On October 19, 2021, Defendant’s counsel responded in an email which, in part, stated:

“Yes, my client is agreeable to that change. Please put together the full release, including the list of names for my client’s approval.

My client has indicated she would like to receive the irrevocable instruction that Jesse and Diana provide, and your written confirmation of the verification of Diana’s ID prior to signing the release. I trust this can be done on standard undertakings.

Glad we can finally put this to rest.”

• On October 26, 2021, Watson sent an email to Defendant’s counsel indicating:
  • his client was unwilling to settle at this time;
  • his client was “uncomfortable” providing names under Schedule “B”;
  • his client had concerns regarding some of the wording of the release; and
  • he (Watson) had been unable to obtain any sort of consent from Ms. Gonzalez to agree to the release.

The Defendant’s counsel then emailed Watson back indicating that the Defendant remained ready, willing and able to complete the agreed settlement and refused the repudiation of the agreement. In early November 2021, the Plaintiffs filed the Notice of Civil Claim.

Court’s Findings

The Court found that while Watson (as counsel for Mr. Schilperoort) was Mr. Schilperoort’s agent and could bind him to settlement, Watson did not have actual or implied authority for Ms. Gonzalez. The Court pointed to Watson advising the Defendant’s counsel that he (Watson) was not acting for Ms. Gonzalez during the settlement negotiations and the Defendant’s counsel advising that there be a condition that Watson confirm Gonzalez’s identification, as evidence of this lack of authority.

The Court noted that while it is common for a lawyer for one plaintiff to try to coordinate with another unrepresented plaintiff to achieve settlement, this does not result in the lawyer having authority to bind that other (unrepresented) plaintiff. In the present case, as there was no suggestion that Ms. Gonzalez had agreed to the settlement directly, the Court found there was no express agreement.

The Court further concluded that Mr. Schilperoort and the Defendant did not reach an agreement on the essential terms of the settlement. The Court rejected the Defendant’s suggestion that the October 19, 2021 email was an agreement on the essential terms, rather finding it was counteroffer made by the Defendant with conditions that were never accepted.

The Court found that the agreed upon list of recipients to whom the apology letter would be sent to was an essential term of settlement that was never agreed upon. Written confirmation of Ms. Gonzalez’s identification also had not been completed. The Defendant could also not rely on the wording of “standard undertakings”, as the framework of the settlement terms were not straightforward or common, and it was open to opposing counsel to state they could not give an undertaking sought. As a result, the Court found there was no agreement on settlement between the parties. Thus, the Defendant’s application to dismiss the Plaintiffs’ claim was dismissed.

Takeaway

The decision in Schilperoort reiterates the principle that parties must take great care in navigating settlement negotiations and confirming the terms of a settlement. Particularly when dealing with a multi-party settlement, attention must be directed to the actual or implied authority of each party and ensuring that the essential terms of settlement are expressly accepted.