Digest: Kennett v Diarco Farms Ltd., 2018 SKQB 179

• Date: June 18, 2018

Reported as: 2018 SKQB 179

Docket Number: QBG 1804/13 JCR , QB17555

Court: Court of Queen's Bench

Date: 2018-06-18

Judges:

• Leurer

Subjects:

• Statutes � Interpretation � Queen�s Bench Act, Section 29
• Contract Law � Formation � Intentions of Parties

Digest: The plaintiff applied to enforce an agreement with the defendants by way of summary application pursuant to s. 29 of The Queen�s Bench Act, 1998. His application was made in the context of an existing action and he had not sought an amendment to his statement of claim. The defendants argued that this was inappropriate and that the plaintiff should amend his claim or issue a new one. The substantive issue between the parties was whether they had reached an enforceable agreement. The counsel for each party had agreed in December 2017 to settle the plaintiff�s lawsuit in exchange for payment of $500,000 to him by the defendants. At issue was the status of the payment under applicable tax law. The plaintiff submitted that he was to receive it on a tax-free basis. The defendants said that their understanding was the payment was to be deductible by them as an expense and subject to taxation in the hands of the plaintiff. The plaintiff pointed that the defendants� lawyer never told his lawyer that they were proposing a taxable payment. There was no evidence that the plaintiff�s lawyer expressly communicated to the defendant�s lawyers that the payment they were discussing must be received by the plaintiff on a tax-free basis. The issues were: 1) was the dispute properly before the court; and 2) if so, had a settlement been achieved.
HELD: The court found with respect to each issue that: 1) the dispute was properly before it because since the decision of the Court of Appeal in Childs, a party may seek summary enforcement of a putative settlement in the context of the settled action without amending the pleadings or commencing a new action under s. 29 of the Act. It was therefore unnecessary to decide whether Queen�s Bench rules 7-1 and 7-2 applied; and 2) the agreement was not enforceable. Looking at all of the surrounding circumstances, an objective reasonable bystander could not find agreement by the parties on the essential term of the contract: the tax status of the payment. The court was unable to refine the contract by implying a term.

Statutes Considered:

• Queen�s Bench Act, 1998, SS 1998, c Q-1.01, s 29
• Saskatchewan Employment Act, SS 2013, c S-15.1

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