Introduction

Over the course of my 30+ years in practice, I derive the most pleasure from resolving cases out of court, without the need to litigate the matter, or leaving it to a judge to decide my client’s fate. I am by no means afraid to go trial – far from it, it is a necessary tool in my took box – but generally speaking, my client is likely to get the best result by being the author of their own good fortune and establishing the terms by which they will be guided.

There are many ways were people try and settle the case “out of court” including (But not limited to) separation agreements, mediation, four-way meetings with parties and counsel, and collaborative law. I have written on separation agreements and collaborative law matters in the recent past, and the topic of mediation requires its own stand-alone blog (likely, my next blog), so I will focus this blog on four-way meetings with parties and counsel. I will discuss the basic mechanisms of these meetings, and what happens when the parties discuss a settlement, think they have a deal, but then someone thinks otherwise. Sometimes, it is mere oversight when this happens, but other times, it is part of the gamesmanship in reaching an even better deal for a party. Everyone needs peace of mind, and that only happens when “a deal is a deal.”

Setting Up The Four-Way Meeting

The traditional four-way meeting usually happens when both parties have tried to negotiate an agreement without any luck, and one party has decided to start the court process. Once both parties have hired their respective lawyers for the court matter, and usually before the matter has gone too far down the litigation path, one or both of the parties may have an interest to try and negotiate a settlement, rather than proceeding to a long motion or a trial.

Truth be told, four-way meetings can happen at any juncture along the litigation path, but generally speaking, there is usually an external event that motivates one or both parties to try this option. Money (or more likely, the lack of money) is a popular consideration, as is time (trial are often far away and decisions are delayed), motivation (the need to fight dwindles over time), and the best interests of the children (especially if they let both sides know their view about the case).

There’s nothing terribly critical about who sets up the meeting, where it is held, or whether it is in person or virtual. Some lawyers and clients can get very particular about these things – in my opinion, that is usually gamesmanship once again – and I put little weight into trying to “psych out” the other side. As I rarely deal with multi-million-dollar complex negotiations, these considerations are not part of my brand, and if it is another lawyer’s brand, I tend not to enter into such negotiations with them.

Is There a Deal?

Let’s assume for a moment that, after several meetings (and likely many more behind the scenes), the parties have reached an agreement. An agreement, like any contract, must have four basic elements:

1. The offer is made;
2. The offer is accepted;
3. There is consideration (in family law cases, it is mutual consideration); and,
4. There is certainty of terms.

In family law cases, usually one side will draft proposed terms of settlement, send it to the other side to review (#1 – offer), likely there are edits to it (sometimes many), and then the parties sign the agreement (#2 – acceptance). In coming to a deal, the parties usually give up something to get something (#3 – mutual consideration), such as increased parenting time for more deference towards incurring section 7 expenses.

If there is any concern as to whether there is (or is not) a deal, the sticking point in the family law setting is usually in regards to item #4. Have the parties actually reached an agreement? Is it a verbal understanding, a handshake deal, or has it been committed to writing? Generally speaking, a court will give more credibility to a purported written agreement, even if there’s some semblance of one through a review of exchanged emails of offers to settle or iterations (versions) of a purported agreement.

Even with the commitment to writing, there are other aspects of a purported deal that may make one pause and wonder if there really is a deal:

1. Are the terms too vague to be enforceable? If the agreement is too loosely worded to be valid, such as lack of specificity for child support, spousal support, property settlement terms, or not clear about decision-making and parenting terms, a court may decide there’s no real meeting of the minds to have formed a deal.
2. Is the deal a partial one, a temporary one, or a final one? If there has been a lot of back and forth, it is common that some terms may be temporary and other terms may be final. You need to be clear which ones are which, and that both parties know what they signed.
3. Is the deal lop-sided (more in favour one party than another)? If the consideration given by one party is disproportionate to the trade-off, then a judge is likely to say there’s no deal. For example, if someone gives up all parenting rights that they’ve enjoyed for a while, so as to wipe out their support arrears, this “deal” may not hold up in court.
4. Has there been full and frank disclosure? This is a foundation pillar of family law in the 2020s wherein the lack of disclosure to an agreement, even if it is mutually agreed upon, can later on be set aside for its failure to be considered. If you have a late Friday afternoon negotiation session and there’s a dela on the table without the proper financial numbers to justify its acceptance, expect it to not be salvaged.
5. Is the lawyer competent? The presumption is that both lawyers are competent, but again, if there is a huge disproportionality in the agreement without any semblance of some recognition of same, there may not really be a fair deal. A lawyer needs to “cover their backside” in cases where their client is giving up “the prized cattle” to the other side for some “magic beans.”
6. Is there a side-deal going on that you’re not aware of? Be aware of undue influence and duress, or domestic violence and coercion. It may be subtle, especially if there are other competing cases going on, such as a real estate deal, a civil case involving a party’s business dealings, a pending criminal charge, or an upcoming immigration/refugee claim. Parties often strike their own “side deals” and the lawyers are none the wise, until it is too late.
7. Did someone make an honest mistake in signing the agreement, e.g. they thought they signed a version of a clause that they agreed to earlier, and they wanted it worded differently? Is there proof of same in email exchanges?
8. What were the circumstances of finalizing the deal? Was it made after hours and hours of deliberation, and approaching the end of long weekend or a holiday? Were the parties fatigued and simply capitulated to “get it over with?”

There are other consideration at play that have not been listed. But it is trite to say that a court will need to have the broad picture painted for them, using some or all of the factors listed here, and others, to help them decide whether a deal was or was not reached.

What Does A Court Want to See in a Binding Deal?

Thankfully, the courts have weighed in cases where there has been some dispute, after the fact, as to whether or not the parties reached a deal. The courts wants to know:

1. Did the parties mutually intend to reach a deal? Is there proof of this mutual intention?
2. Does the deal address the essential terms that were in dispute? It’s okay if there are some residual terms that still need to be worked out, such as going through FRO or opting out of FRO, who will the real estate lawyer be to close the deal, and exchanging the details about benefit and insurance coverage for the children.

Lawyers will need to research the most current necessary case law to support their position – one way or another – that there was a deal in place, or there was not, having regard to the overriding principles above, and the other factors set out earlier in this blog.

Last Resort – Trial of an Issue

If the judge cannot make that decision based on the affidavit evidence of the parties to support their claims, it is quite possible, though not often used, that the judge will order “the trial an issue.” The sole issue will be conduct a “mini trial” to establish whether there was, or was not, a meeting of the minds to formulate a binding agreement between the parties. Usually, such trial of the issue will be focused and limited in time, number of witnesses, and the manner of the evidence to be presented.

If things go this way, there may be some thought given as to whether another lawyer should conduct the trial, as there may be the risk of a lawyer not putting into evidence their possible errors and omissions in the matter. Just some more food for thought.

Conclusion

The notion of “shaking on it” to seal a deal is a somewhat quaint reminder that the world has changed, and that deals are not done the same way they were done 30, 20, or even 10 years. A recent non-family law case in Canada held that by sending a “thumbs up” emoji was sufficient to bind a party to a deal. A decade or so ago, we would have asked “what’s an emoji?” It just goes to show that the court will look at what was the underlying intention of the parties, and careful consideration of all the factors that go into the parties reaching a deal will be under the very specific microscope.

It therefore goes without say (but I will say it anyway), that sometimes the best decision you made is the deal you did not make. Sometimes it is better to sleep on it and think it over one last time. But that is the risk parties often take – the deal you make today may be better than the one you make tomorrow, or it may be worse. A great lawyer will advise you what to do, but at the end of the day, you have to make (and live with) the final decision: deal, or no deal?

Remember, every case is unique, just like you are. If you are facing real legal problems, you need the right legal solutions. Please contact Runco Law at 289-799-3080 or email me at carm@runcolaw.ca.