Boss Power Corp. v. British Columbia, 2013 BCSC 638
This decision illustrates the importance of ensuring that all essential terms of a settlement offer are agreed upon by all parties to an action.
The plaintiff s (Boss) sued the province of British Columbia alleging that the province had expropriated mineral claims by enacting certain regulations. Boss sought compensation for the loss of the claims, and the parties agreed to a settlement of $30 million. Before the province paid out the settlement, it was determined that an individual, Mr. Beruschi, was the beneficial owner of some of the claims. The province then circulated a draft application for "interpleader relief," in which the province sought to pay the $30 million into court in exchange for acquiring legal and beneficial title to the claims, leaving Mr. Beruschi and other interested parties to prove their entitlement to the settlement funds according to their interests. Ultimately, aft er some back and forth and proposed revisions to the form of order, the province and all interested parties except Mr. Beruschi agreed to the terms of the order sought.
Boss applied for an order directing that a consent order be entered, arguing that the order sought contained all the essential terms sought by Mr. Beruschi. In response, Mr. Beruschi took the position that an agreement on all essential terms had not been reached. The Court was left to determine whether the alleged settlement agreement was in fact valid and enforceable.
In determining whether or not a settlement is binding, a court first asks whether the parties have agreed on all essential terms. If so, the next question is whether the agreement was "completed." Completion could involve an exchange of documents, such as releases or proposed forms of court order. A party is not discharged from its initial agreement on essential terms unless it has "demonstrated an unwillingness to be bound by the agreement by insisting upon terms or conditions which have not been agreed upon or are not reasonably implied in [the] circumstances."
In this case, which the Court characterized as "complex" and not "routine," the Court concluded that the parties had not reached agreement on all essential terms and the application was dismissed.
On a similar point, see "Deal or No Deal? The Importance of Knowing When You Have an Agreement" on page 23.
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