Case information

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Contracts – Settlements – Civil procedure – Counterclaims – Whether the courts below erred in finding that the parties had reached a settlement – Whether the Court of Appeal erred in finding that given the motions judge’s finding that the parties had reached a settlement, he ought to have found an implied obligation on the part of the applicants to provide a release of their counterclaim.

The applicants purchase, process and sell vegetable produce. In 2010, they entered into an agreement to purchase 4.5 million pounds of carrots from the respondent. After the carrots were delivered, the parties agreed to reduce the purchase price to account for the fact that some of the carrots were bad. However, the applicants maintained that the parties had not agreed on a rate of payment, a term which they asserted was fundamental. As a result, they claimed no settlement had been reached. The respondent successfully sought summary judgment against the applicants. The motions judge found that a settlement had been reached. The Court of Appeal dismissed the appeal. However, it did find that the motions judge had erred in leaving it open to the applicants to proceed with their counterclaim against the respondent for having been supplied the wrong type of carrots in the first place. In the Court of Appeal’s view, given the motions judge’s finding that the parties had reached a settlement, he ought to have found an implied obligation on the part of the applicants to provide a release of their counterclaim.