An indemnity clause involving child support required precise wording to be considered agreed upon
The Ontario Superior Court of Justice dismissed a motion for summary judgment related to the enforceability of a purported settlement in a family law case involving ex-spouses.
The dispute in N.C. v. M.D., 2024 ONSC 2296 centred around whether the parties reached a binding settlement regarding their separation agreement dated November 5, 2018.
The couple, N.C. and M.D., who married in June 1999 and separated in August 2016, are parents to two now-adult children. N.C. initiated the application in 2020, seeking child support and a parenting schedule, among other reliefs.
The parties engaged in intensive settlement negotiations in October 2023. However, they disputed whether they had achieved a consensus on all essential terms of the agreement, prompting M.D. to file a motion for summary judgment, claiming that a settlement had indeed been reached.
At the hearing, the Ontario Superior Court concluded that a genuine issue requiring a trial was present. The court found insufficient consensus on the agreement's essential terms, specifically pointing out issues with an indemnity clause and a $350,000 credit related to child support.
Drawing on the principles of summary judgment in family law, as outlined by Rule 16 of the Family Law Rules and the precedents, the court emphasized the need for expediency in resolving matters yet insisted on a fair and just outcome through a proportionate and affordable process.
Despite extensive discussions and a near agreement in the emails exchanged between the parties' lawyers, the court concluded that the parties had not unambiguously agreed on the essential terms. The indemnity clause, involving potential future child support claims, required precise wording to be considered agreed upon due to its unusual and sensitive nature.
Furthermore, the court noted that the $350,000.00 clause, which involved a significant financial credit against child support, lacked consistent integration and acceptance in the settlement discussions.
Ultimately, the court refused to declare a binding settlement agreement and dismissed the motion for summary judgment, opting to let the disputes proceed to trial. The court also offered to facilitate a settlement conference if the parties believed it could conclusively resolve the issues without further litigation.
