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When an offer to settle is made under Rule 18 of the Family Law Rules, it remains open for acceptance, even if a party has rejected the offer or made a counter-offer.  A Rule 18 offer to settle remains open until it is withdrawn, or until the court begins to give a decision that disposes of a claim dealt with in the offer.  For an offer to be withdrawn, Rule 18 (5) requires service on the other side of a Notice of Withdrawal.

The Ontario Superior Court held in the recent decision of Owen-Lytle v. Lytle that offers to settle contained in a settlement conference brief are not Rule 18 offers under the Family Law Rules. Instead, offers in a settlement conference brief are governed by the law of contract, where the formation of a contract depends on an offer, acceptance and communication of that acceptance.  As a result, when an offer contained in a settlement conference brief is not accepted at the settlement conference, it can be implicitly withdrawn by a subsequent offer in writing that is less favourable to the opposing party.

In this case, the wife rejected the husband’s offer proposed in his settlement conference brief at the settlement conference. Following the settlement conference, the wife and husband exchanged other settlement proposals and over a period of time the husband’s offers were less favourable to the wife than the offer originally made at the conference.  In due course the wife served an acceptance of the offer that was contained in the settlement conference brief held approximately two years prior.  The Court held that the offer from the settlement conference brief was no longer available to the wife, as the subsequent offers to settle constituted implicit withdrawals of the offer contained in the brief.

Although the Court found that the offer to settle had been withdrawn, this case reminds us that Parties must be very careful about how an offer is framed and about whether to explicitly reference an expiry date and time (an offer not accepted within the time set out in the offer is also considered to have been withdrawn).  An Offer to Settle made early on in proceedings on a no costs basis may not be appropriate two years later, on the doorstep of the Court, on the day of a trial, when significant legal fees have been incurred.  Parties must remain alert to what Offers to Settle have been made and which remain open for acceptance.

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