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Case Summary: Tessier v Edmonton (City), 2013 ABCA 308

Oct 17

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10/17/2013 8:48 AM  RssIcon

In Tessier v Edmonton (City), 2013 ABCA 308 (Alberta Court of Appeal, dated September 6th, 2013), the respondent expropriated a parcel of land owned by the appellants. The appellants filed an application for determination of compensation with the Alberta Land Compensation Board.  While the hearing was underway, the appellants’ then counsel telephoned the respondent’s counsel and advised that the appellants were prepared to settle for a payment of $650,000 in addition to an amount previously agreed upon, plus legal and expert fees which would be subject to separate negotiation. A few minutes later, the respondent’s counsel telephoned back, received confirmation that the appellants would sign a release and advised that the respondent was in agreement with the settlement proposal.

Later that day, the respondent’s counsel sent an email to the appellants’ counsel confirming that the respondent had accepted the appellants’ offer to settle for a payment of $650,000 in addition to the previously agreed upon amount. The email acknowledged that the settlement did not include legal and expert fees, which would be dealt with separately, and advised that a discontinuance and release would be required.  The next day, the appellants’ counsel advised the Board that an offer was made and accepted between the parties to settle the compensation claim except for professional costs. Counsel requested an adjournment of the hearing subject only to the execution of final documents and the exchange of funds.

Two days later, the appellants’ counsel advised the respondent’s counsel that the appellants did not want to proceed with the settlement.  Apparently the appellants had effectively changed their minds.

The respondent’s counsel took the position that a settlement had been concluded and sent a letter attaching a Settlement and Release Agreement to the appellants’ counsel. The next day, the respondent’s counsel sent another letter to the appellants’ counsel enclosing two cheques and imposing trust conditions that the release would be executed and returned before the cheques were used and a discontinuance would be filed with the Board in due course

The respondent applied to the Board for a ruling as to whether there was a settlement. The appellants’ counsel was the only witness. He testified there was a settlement.  The appellants’ counsel anticipated that the appellants would be required to sign a release and settlement agreement, and file a discontinuance. He testified that the release sent by the respondent’s counsel was very typical of those he had previously negotiated with the respondent except that it was missing a confidentiality clause.

In the result, the Board held that the appellants’ counsel made an offer in clear and unambiguous terms that, in exchange for $650,000 plus the previously-agreed-upon amount, the appellants would sign a release and settlement agreement and discontinue their compensation claim. The respondent’s counsel accepted the offer by telephone and later confirmed in writing.  The Board found that the requirement that the appellants sign a release was not an additional term amounting to a counteroffer because the execution of a release was expressly contemplated by the appellants’ counsel when he made the offer. The exclusion of legal and expert fees did not affect the validity of the settlement because their exclusion was expressly contemplated in the offer. The other terms of the release were not additional terms because they were typical and contemplated by the appellants’ counsel when he made the offer.

The Appellants appealed to the Alberta Court of Appeal, arguing that the Board erred in finding the release and trust letter did not contain additional terms amounting to a counteroffer and failing to find written acceptance of the counteroffer was required. It was argued that those issues involved the application of general principles of contract law outside the Board’s specialized expertise.  The appellants argued that the Board erred in finding their offer was unequivocally accepted. They said that the respondent’s acceptance was conditional because it contained additional terms arising from the release and trust letter. They further asserted that, as a result of the additional terms, the respondent’s purported acceptance was a counteroffer which had to be accepted in writing.

The Alberta Court of Appeal rejected these arguments and upheld the Board’s ruling.  The Alberta Court of Appeal held that the uncontradicted evidence established that the appellants’ offer contemplated the eventual execution of a release in the form provided by the respondent and the filing of a discontinuance. That offer was unconditionally accepted by the respondent. The settlement contract was formed before the concluding documents were sent. The ABCA said that a settlement contract is formed when the parties agree on the essential terms. Once the settlement contract is formed, a party can tender concluding documents on trust conditions without rescinding the agreement.  The appeal was dismissed and the ABCA held that a valid settlement agreement existed between the parties.

If you have questions or would like to discuss this topic further, please contact Jeremy P. Smith at Patterson Law at 1-888-897-2001.

 

Please note that this article is meant to provide information only and is not intended to confer legal advice or opinion. If you have any further questions please consult a lawyer. Please note as well that many of the statements are general principles which may vary on a case by case basis.