Setting Aside a Settlement on the Basis of Duress
It’s not uncommon for litigants who have settled a matter to question whether they could have done better. Usually, they just live with it. However, in situations where an agreement was entered into under duress and the terms are unconscionable, the court has the discretion to set aside the agreement. In the recent decision of Pytka v. Pytka, Brown J. considered the circumstances under which this should occur.
By way of background, the daughter of a deceased brought an application for dependant support (under Part V of the Succession Law Reform Act) against her late mother’s estate. The mother’s will divided the estate equally amongst her four children but the daughter argued that she was a dependant and her needs were such that she was entitled to support.
The litigation continued until the eve of trial, when the parties settled the dispute. Pursuant to the settlement, the daughter was entitled to continue residing in the estate residence for a period of time and was to receive 47.5% of the residue. The parties proceeded to obtain a judgment incorporating the settlement terms.
The daughter later brought a motion to set aside the settlement on the basis that she entered into it under duress and the terms were unconscionable.
Brown J. held that an agreement could only be set aside for duress if it was imposed by a counter-party to the agreement or, if the duress came from a third party, the counter-party was aware of it. In order for duress to occur the pressure exerted must be to the extent it amounted to a “coercion of will”.
In this case, Brown J. found that there was simply no evidence that the estate exerted duress on the daughter to enter into a settlement. On the contrary, the stress she experienced was that which is naturally associated with litigation. The daughter was the one who initiated settlement discussions, so it could not be said she was forced into settlement and the terms of the settlement itself were fair considering the nature and strength of the daughter’s claim.
The decision itself is an interesting and comprehensive one and certainly worth a read.