By Elisa Prezzano
In Book v. Cociardi, 2024 ONCA 589, the Ontario Court of Appeal set a high bar for those seeking to set aside settlements based on alleged incapacity. This decision provides valuable insights into the finality and reliability of settlements, and it underscores the importance of robust evidence, timely action, and the pivotal role of legal counsel in personal injury settlements.
In 2015, Brandon Book and his parents settled a personal injury claim against Augustin Cociardi, receiving a total of $231,000, with Brandon receiving $150,000 net of fees and costs. The action was dismissed on consent. However, in 2019, the Books sought to overturn the settlement, arguing that it was improvident and alleging that Brandon was under disability at the time of the settlement agreement, thereby rendering it unconscionable.
After a six-day hearing, the trial judge dismissed the Books’ motion, finding that they had not proven Brandon’s incapacity at the time of the settlement. The trial judge held that even if he had found otherwise, he would not have set aside the dismissal and settlement based on the principles in Mohammed v. York Fire and Casualty Insurance Co. (2006), 79 O.R. (2d) 354 (C.A.). The Books were represented by counsel during the settlement, showed no intent to return the settlement funds, and waited four years before contesting the settlement agreement.
The Court of Appeal agreed with the trial judge’s decision. Considering the Books were represented by counsel at the time, it is presumed that they made an informed decision regarding the settlement agreement. The trial judge accepted the evidence of Rebecca Wissenz, the Books’ lawyer in the action, that she had no reason to doubt Brandon’s capacity when she received instructions from him on the settlement. In addition, challenges to settlements must be timely. In this case, the Books waited four years before contesting the agreement. The Court viewed this delay negatively, especially since the Books continued to retain the settlement funds. The Court further clarified that Plaintiffs alleging cognitive injuries do not automatically require capacity assessments before settlements. Imposing such a requirement would complicate and deter settlements, making the process more burdensome and costly.
Proving incapacity at the time of settlement requires robust evidence. The Books moved to adduce fresh evidence on the appeal. This evidence consisted of undated notes allegedly made by Phillip Book, found amongst his belongings after he passed away in April 2023. The notes constituted inadmissible hearsay. The Court of Appeal held that the notes would only have had any arguable evidentiary value if they had been created contemporaneously with the settlement agreement, in which case they should have been produced at the trial.
In this case, the Books failed to meet the high standard required to set aside the settlement agreement. The trial judge accepted the respondent’s expert evidence and found no reason to doubt Brandon’s capacity at the time of the settlement. This decision demonstrates the high threshold that parties must meet in order to set aside a settlement agreement. It reinforces the principle that settlements should provide closure and finality in that the contracting parties should be able to rely on the certainty that settlements are binding and conclusive.
Elisa Prezzano is a summer student at the firm and the author of this blog. If you have any questions about this decision, please contact Elisa at [email protected].
