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Does 'Without Prejudice' save your mistake in your Offer to Settle?

Can you accept an outstanding offer to settle three years later?

The plaintiff commenced a claim for constructive dismissal. In a ‘without prejudice’ letter, the defendant offered to settle in 2016 for $25,000.

The parties continued to adjudicate a workplace safety and insurance claim (to determine if the plaintiff could even sue civilly). The human rights tribunal decided not to adjudicate while action was pending.

Finally, in 2020, the plaintiff decided to accept the 2016 offer to settle (which had never been withdrawn and did not have a time limit).

Newton J. determined that:

what is the effect of 'without prejudice'?

The ‘without prejudice’ description of the offer letter did not affect its status as an offer. (para 29).

(note: this case distinguishes the rule in Roma v. Krystal (2009) Carswell on 1379(SCJ) where ‘without prejudice’ meant no offer was made.)

Newton J. adopted rather, the words of Schabas J in Magnotta Estate v. Yu [2020] OJ No.1102:

An offer complies with rule 29 if the offer is:

  • made in writing;

  • by a person with authority;

  • is capable of being accepted;

  • served upon the opposing party;

  • does not require form 49A

  • can be in correspondence;

marking it without prejudice does not take it out of Rule 49, to the contrary, it simply reflects the rule meaning that there is no admission of liability;

what is the effect of 'changed circumstances'?

Defendant’s assertion that ‘changed circumstances’ should implicitly deem the offer to have been withdrawn was specifically rejected as it would have Rule 49 unworkable. (para 38).

The defendant is saved by 'discretion'

Instead, the judge exercised ‘discretion’ to refuse to enforce the settlement. ‘Discretion’ is a rare use tool for things like mistake, duress, unconscionability, and illegality.

My Note: my view is that this ‘discretion’ exercised to save the defendant’s ‘error’, should not have been exercised. The ‘error’ which is not the same thing as ‘mistake’ should not have been saved by the judge operating upon vague discretion not to allow the plaintiff to profit from the defendant’s ‘error’ in not time-limiting its offer.



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