The Ontario Court of Appeal in the recently released decision of Martin v. 11037315 Canada Inc. 2025 ONCA 648 rejected a joint request by the parties to set aside a lower court judgment on the basis of their mutual agreement.
Background
The case arose after a trial judgment by Justice Chozik, who ruled that one of the parties was “not a bona fide purchaser without actual notice” which was a clear declaration of misconduct.
The parties were dissatisfied with this outcome and sought to resolve their dispute privately, with one party agreeing to pay a substantial settlement sum. As part of the deal, they asked the Court of Appeal to set aside the trial judgment by consent, but the court said no.
The Rule: Consent Cannot Override Judicial Duty
In paragraph [15], the Court of Appeal ruled that:
“This court cannot allow an appeal or set aside a judgment or order made below based on the parties’ consent alone.”
Courts need to ensure that their powers are not used to serve improper purposes. Even when parties reach an agreement, the court has an independent duty to ensure that any relief granted is legally appropriate and does not compromise the integrity of the justice system. In the absence of any legal or evidentiary error, there is no authority for this court to set aside her judgment, even on consent.
Why This Matters
This case, as the court noted in paragraph [18], illustrates the “mischief“ that can arise when courts are asked to approve settlements that include vacating trial judgments. Here, the trial judge had made detailed factual findings, including credibility assessments and a declaration of misconduct. Allowing the parties to erase that judgment by mutual agreement would have whitewashed those findings and undermined the role of the courts in declaring and enforcing rights and responsibilities based on evidence.
The case stands as a reminder that courts are not rubber stamps for private settlements when those settlements risk undermining the public administration of justice as the appellate process must be guided by law, not just agreement.
If your corporation needs assistance with any litigation matters or are just wondering what the outcome of this case could mean for you, feel free to reach out to the undersigned to discuss.
Ariel Dorfman, Associate Lawyer