Mistaken Settlement Not Set Aside

If a party makes a mistake in entering into a settlement agreement, it is difficult to set the settlement aside.

In Kearns v. Canadian Tire Corporation Limited, 2019 ONSC 4946, a settlement was reached at a mediation in a wrongful dismissal claim. Following the mediation, the defendant realized that a payment had been mistakenly made to the plaintiff before the mediation. Therefore, the defendant took the position that the negotiated settlement was too high.

Justice Cavanagh held that there was an enforceable agreement. For a party to set aside an agreement based on a unilateral mistake, the party must show there was fraud or the equivalent of fraud on the other party’s part.

Justice Cavanagh stated that there was no evidence of fraud or the equivalent of fraud on the plaintiff’s part. As a result, the plaintiff was successful in his motion to enforce the settlement.