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AGB lawyers successfully defend motion for permanent stay following alleged failure to disclose litigation landscape-changing settlement

Simon Bieber and Jocelyn Howell successfully defended a motion for a permanent stay of proceedings sought based on an alleged failure to immediately disclose a partial settlement alleged to have changed the litigation landscape for the other, non-settling parties. 

The moving party relied on a recent line of cases from the Court of Appeal for Ontario for the principle that, although a permanent stay of proceedings is a harsh remedy, any failure to immediately disclose a litigation landscape-changing partial settlement agreement to non-settling parties in multi-party litigation amounts to an abuse of process and must therefore result in consequences of the most serious nature.

AGB lawyers argued (successfully) that this line of cases was distinguishable and that a stay was not warranted, at least in part because:

  1. The non-settling party was, in any event, made immediately aware of the settlement, if not its details;
  2. The non-disclosure was wholly inadvertent, in the sense that the disclosure obligation was known (as opposed to the lawyer being ignorant of the obligation), and the lawyer had intended to make the disclosure, thought they had, and had already disclosed similar partial settlements in the same litigation; and
  3. No party had taken any steps to advance the litigation during the time of non-disclosure, and so, there was no prejudice and process that could have been abused.

The motion judge ultimately agreed, holding that "the facts of the case before me put it into that appropriately rare category of cases in which a stay is not warranted".