Canada: The Court Of Appeal Rejects Unilateral Addition By A Judge To An Executed Settlement Agreement On Procedural Grounds Only

Can a judge unilaterally "rewrite" an executed settlement agreement that approves class counsel fees by lowering the amount payable and putting conditions on those fees, when neither party agrees to the changes? In Welsh v. Ontario,1 the Court of Appeal held that the answer is "no"; however, the Court based its decision on a procedural error rather than the substance of the motion judge's concerns that led him to put conditions on class counsel's fees in the first place.

This class action, commenced in 2015, was certified on consent in 2016. About 4,500 former students of three provincial schools for the Deaf claimed that the Province was negligent in its management and operation of these schools, and breached its fiduciary duties stemming from "very serious allegations of physical, sexual and emotional abuse".2

The parties arrived at a settlement through mediation in late 2017, and entered into a mutually agreed upon settlement agreement. As part of that settlement agreement, class counsel, Koskie Minsky, would receive $3.75 million – 25% of the $15 million settlement fund. There was also a reversion provision: if any amounts remained after payment of the fees, damages, and costs and the claims period had ended, the remaining funds were to revert to the Province.

In finalizing the matter, there were two separate motions at play: one to approve the settlement agreement and one to approve class counsel fees. At the motion to approve the settlement,3 Perell J. expressed serious concerns about the merits of the settlement, but nonetheless approved it because it fell "within the range of reasonableness".

With respect to class counsel fees, Perell J. found that the fees were unfair and unreasonable because only about 10% of the class would benefit from the settlement and the settlement was "disappointing". As such, he approved class counsel's fees on the condition that class counsel donate $1.5 million of its fees to a charity for the Deaf (the "Donation Condition") approved by the judge, and the balance of those fees, $2.25 million, would be subject to a proportionate reduction depending on the reversion of settlement funds to the Province that have not been taken up by class members (the "Reversion Condition"). Perell J. did not allow parties to make submissions on the matter. Class counsel appealed the fee order.

On appeal, the fee order was set aside, and the matter was remitted for rehearing before a different judge. Class counsel's submissions related both to the substantive and procedural errors of the decision. The Province took no position on the quantum of class counsel fees, but agreed that the motion judge erred in imposing the two conditions and in not allowing the parties to make further submissions. The Crown also submitted that the Reversion Condition, in effect, directed public funds to a third party that might have reverted to the Crown. An intervenor (a class member) argued that Perell J.'s order was fair and reasonable.

Writing for the Court of Appeal, Sharpe, Juriansz, and Roberts JJ.A. held that the motion judge erred by failing to give the parties an opportunity to make submissions to address his concerns related to the class counsel fees. The Court stated that the Donation Condition had the effect of adding material conditions to an executed settlement agreement without the parties' consent, which was a legal error. "[T]he appropriate course of action would have been for him to allow the parties an opportunity to make submissions and, if they desired to do so, agree to change the terms of the settlement in order to address those concerns and obtain approval of class counsel's fees."

Perhaps significantly, the Court of Appeal focused only on the technical error of not allowing submissions from the parties. It did not undertake an analysis of the reasonableness of the class counsel fees or comment on whether the motion judge was right or wrong to criticize the size of class counsel fees relative to the benefits to the class.

The Court of Appeal also did not comment on the Reversion Condition. The decision does not state that the motion judge erred by adding a Reversion Condition, which would have had the effect of reducing the funds payable to the Crown at the conclusion of the claims period. The Court only states that imposing the Donation Condition materially altered the settlement agreement.

This narrow decision was perhaps a missed opportunity for the Court of Appeal to clarify that adding any material condition onto the payment of class counsel fees that has the effect of altering an executed settlement agreement – without submissions or consent from the parties – would be a legal error. Can motion judges unilaterally add proportionate reductions to class counsel fees based on class member take-up in settlements that incorporate a reversion provision, like Perell J. did in this case? Does such a provision constitute a "material condition"? Can a motion judge add a donation condition where it would not impact any reversion to the Crown? These questions are left unanswered.


[1] 2019 ONCA 41 [Welsh ONCA].

[2]Welsh ONCA, ibid at para 2.

[3] 2018 ONSC 3217 [Welsh ONSC].

To view the original article click here

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

To print this article, all you need is to be registered on

Click to Login as an existing user or Register so you can print this article.

Similar Articles
Relevancy Powered by MondaqAI
In association with
Related Topics
Similar Articles
Relevancy Powered by MondaqAI
Related Articles
Related Video
Up-coming Events Search
Font Size:
Mondaq on Twitter
Mondaq Sign Up
Gain free access to lawyers expertise from more than 250 countries.
Email Address
Company Name
Confirm Password
Mondaq Newsalert
Select Topics
Select Regions
Registration (you must scroll down to set your data preferences)

Mondaq Ltd requires you to register and provide information that personally identifies you, including your content preferences, for three primary purposes (full details of Mondaq’s use of your personal data can be found in our Privacy and Cookies Notice):

  • To allow you to personalize the Mondaq websites you are visiting to show content ("Content") relevant to your interests.
  • To enable features such as password reminder, news alerts, email a colleague, and linking from Mondaq (and its affiliate sites) to your website.
  • To produce demographic feedback for our content providers ("Contributors") who contribute Content for free for your use.

Mondaq hopes that our registered users will support us in maintaining our free to view business model by consenting to our use of your personal data as described below.

Mondaq has a "free to view" business model. Our services are paid for by Contributors in exchange for Mondaq providing them with access to information about who accesses their content. Once personal data is transferred to our Contributors they become a data controller of this personal data. They use it to measure the response that their articles are receiving, as a form of market research. They may also use it to provide Mondaq users with information about their products and services.

Details of each Contributor to which your personal data will be transferred is clearly stated within the Content that you access. For full details of how this Contributor will use your personal data, you should review the Contributor’s own Privacy Notice.

Please indicate your preference below:

Yes, I am happy to support Mondaq in maintaining its free to view business model by agreeing to allow Mondaq to share my personal data with Contributors whose Content I access
No, I do not want Mondaq to share my personal data with Contributors

Also please let us know whether you are happy to receive communications promoting products and services offered by Mondaq:

Yes, I am happy to received promotional communications from Mondaq
No, please do not send me promotional communications from Mondaq
Terms & Conditions (the Website) is owned and managed by Mondaq Ltd (Mondaq). Mondaq grants you a non-exclusive, revocable licence to access the Website and associated services, such as the Mondaq News Alerts (Services), subject to and in consideration of your compliance with the following terms and conditions of use (Terms). Your use of the Website and/or Services constitutes your agreement to the Terms. Mondaq may terminate your use of the Website and Services if you are in breach of these Terms or if Mondaq decides to terminate the licence granted hereunder for any reason whatsoever.

Use of

To Use you must be: eighteen (18) years old or over; legally capable of entering into binding contracts; and not in any way prohibited by the applicable law to enter into these Terms in the jurisdiction which you are currently located.

You may use the Website as an unregistered user, however, you are required to register as a user if you wish to read the full text of the Content or to receive the Services.

You may not modify, publish, transmit, transfer or sell, reproduce, create derivative works from, distribute, perform, link, display, or in any way exploit any of the Content, in whole or in part, except as expressly permitted in these Terms or with the prior written consent of Mondaq. You may not use electronic or other means to extract details or information from the Content. Nor shall you extract information about users or Contributors in order to offer them any services or products.

In your use of the Website and/or Services you shall: comply with all applicable laws, regulations, directives and legislations which apply to your Use of the Website and/or Services in whatever country you are physically located including without limitation any and all consumer law, export control laws and regulations; provide to us true, correct and accurate information and promptly inform us in the event that any information that you have provided to us changes or becomes inaccurate; notify Mondaq immediately of any circumstances where you have reason to believe that any Intellectual Property Rights or any other rights of any third party may have been infringed; co-operate with reasonable security or other checks or requests for information made by Mondaq from time to time; and at all times be fully liable for the breach of any of these Terms by a third party using your login details to access the Website and/or Services

however, you shall not: do anything likely to impair, interfere with or damage or cause harm or distress to any persons, or the network; do anything that will infringe any Intellectual Property Rights or other rights of Mondaq or any third party; or use the Website, Services and/or Content otherwise than in accordance with these Terms; use any trade marks or service marks of Mondaq or the Contributors, or do anything which may be seen to take unfair advantage of the reputation and goodwill of Mondaq or the Contributors, or the Website, Services and/or Content.

Mondaq reserves the right, in its sole discretion, to take any action that it deems necessary and appropriate in the event it considers that there is a breach or threatened breach of the Terms.

Mondaq’s Rights and Obligations

Unless otherwise expressly set out to the contrary, nothing in these Terms shall serve to transfer from Mondaq to you, any Intellectual Property Rights owned by and/or licensed to Mondaq and all rights, title and interest in and to such Intellectual Property Rights will remain exclusively with Mondaq and/or its licensors.

Mondaq shall use its reasonable endeavours to make the Website and Services available to you at all times, but we cannot guarantee an uninterrupted and fault free service.

Mondaq reserves the right to make changes to the services and/or the Website or part thereof, from time to time, and we may add, remove, modify and/or vary any elements of features and functionalities of the Website or the services.

Mondaq also reserves the right from time to time to monitor your Use of the Website and/or services.


The Content is general information only. It is not intended to constitute legal advice or seek to be the complete and comprehensive statement of the law, nor is it intended to address your specific requirements or provide advice on which reliance should be placed. Mondaq and/or its Contributors and other suppliers make no representations about the suitability of the information contained in the Content for any purpose. All Content provided "as is" without warranty of any kind. Mondaq and/or its Contributors and other suppliers hereby exclude and disclaim all representations, warranties or guarantees with regard to the Content, including all implied warranties and conditions of merchantability, fitness for a particular purpose, title and non-infringement. To the maximum extent permitted by law, Mondaq expressly excludes all representations, warranties, obligations, and liabilities arising out of or in connection with all Content. In no event shall Mondaq and/or its respective suppliers be liable for any special, indirect or consequential damages or any damages whatsoever resulting from loss of use, data or profits, whether in an action of contract, negligence or other tortious action, arising out of or in connection with the use of the Content or performance of Mondaq’s Services.


Mondaq may alter or amend these Terms by amending them on the Website. By continuing to Use the Services and/or the Website after such amendment, you will be deemed to have accepted any amendment to these Terms.

These Terms shall be governed by and construed in accordance with the laws of England and Wales and you irrevocably submit to the exclusive jurisdiction of the courts of England and Wales to settle any dispute which may arise out of or in connection with these Terms. If you live outside the United Kingdom, English law shall apply only to the extent that English law shall not deprive you of any legal protection accorded in accordance with the law of the place where you are habitually resident ("Local Law"). In the event English law deprives you of any legal protection which is accorded to you under Local Law, then these terms shall be governed by Local Law and any dispute or claim arising out of or in connection with these Terms shall be subject to the non-exclusive jurisdiction of the courts where you are habitually resident.

You may print and keep a copy of these Terms, which form the entire agreement between you and Mondaq and supersede any other communications or advertising in respect of the Service and/or the Website.

No delay in exercising or non-exercise by you and/or Mondaq of any of its rights under or in connection with these Terms shall operate as a waiver or release of each of your or Mondaq’s right. Rather, any such waiver or release must be specifically granted in writing signed by the party granting it.

If any part of these Terms is held unenforceable, that part shall be enforced to the maximum extent permissible so as to give effect to the intent of the parties, and the Terms shall continue in full force and effect.

Mondaq shall not incur any liability to you on account of any loss or damage resulting from any delay or failure to perform all or any part of these Terms if such delay or failure is caused, in whole or in part, by events, occurrences, or causes beyond the control of Mondaq. Such events, occurrences or causes will include, without limitation, acts of God, strikes, lockouts, server and network failure, riots, acts of war, earthquakes, fire and explosions.

By clicking Register you state you have read and agree to our Terms and Conditions