A very recent decision of the Alberta Court of Appeal matters to you: Custom Metal Installations v. Winspia Windows 2020 ABCA 333 (Sep 21). First, it deals with an old mystery: when can a judge’s procedural order later be varied or rescinded by another judge?
Second, it also deals with consent orders. Many lawyers supposed that a consent order was a contract, and that a consent order could be upset or varied only on grounds to upset a contract, such as misrepresentation or duress.
If the consent order sets the lawsuit's final result, it probably cannot be changed. Such consent orders are presumed to implement a settlement contract. (One supposes a court would also say the same of a consent order to end part of the suit.)
This new decision creates a large exception for merely procedural orders. For them, the court does not presume any contract. So the court can later undo or amend the earlier entered consent order, despite objection of one party. In the Custom Metal case, a party which bargained for more time and one last chance got it via a consent order. Later it wanted still more time and a further chance. A second chambers judge gave that, which the Court of Appeal upheld.
A pessimist might fear that now any binding deal about procedure is impossible. That is probably not so. The Court of Appeal said that serious prejudice would be a ground to refuse to upset or vary a consent procedural order. And it seemed to say that in procedural matters a contract is merely not presumed. Presumably proving an express contract might change or fill both gaps.
Opposing counsel in lawsuits making a procedural agreement are often very reticent or sloppy in expressing or recording it. What if opposing counsel make an actual deal about a procedural matter? It is in their interest to set out in writing what the contract is. If one of the parties has a history of poor performance, such documenting may be vital.
In the present appeal, likely it would have helped if counsel had written expressly
a. that there was a contract,
b. what the performance on both sides was,
c. agreement what harm would flow to party A from party B’s non-performance,
d. whether paying money would fully remedy prejudice from non-performance,
e. what remedy would flow from non-performance, and whether it must be irrevocable, and
f. a non-draconian remedy (no jail or default judgment), e.g. a stated sum of security for costs.
A draconian remedy for any future default, set by a present consent order, can be dangerous for both sides.
– Hon. J.E. Côté
The Commentaries are intended to call the attention of lawyers to promising or threatening developments in the law, in civil procedure, in developing their skills, or simply to describe something curious, funny or intriguing.
Justice Côté recently retired from the Court of Appeal of Alberta and currently acts as an arbitrator, mediator, or referee under Rules 6.44 and 6.45 of the Alberta Rules of Court.
He may be contacted through Juriliber at email: email@example.com or phone 780-424-5345.