In the recent case of Johnston v. McLean, 2024 ONCA 791, the Ontario Court of Appeal offered important insights into the interpretation of consent judgments, specifically emphasizing the necessity of clearly expressing parties’ intentions. This case serves highlights how ambiguity or omission in consent judgments can prolong disputes.

Margaret Ila Johnston, the deceased, owned a farm valued at $1.9 million. Her will stipulated that her assets be equally divided among her four daughters: Mary and Karen (the appellants) and Laura and Elizabeth (the respondents.) However, disputes arose between the four daughters regarding the sale of the farm, which culminated in the drafting and execution of a Minutes of Settlement.

According to the minutes, the appellants agreed to pay the respondents $422,750 for the farm, a sum derived from an agreed-upon appraisal value of $890,000 (the farm’s valuation in 2014). The Minutes further provides for a closing date and other terms related to the transfer of the property.

Contemporaneously, the parties also agreed to a consent judgment, which was entered and issued by the Superior Court of Justice. This consent judgment was drafted by the appellants and Elizabeth. This consent judgment did not explicitly reference the sale of the farm – it merely stated that this consent judgment was made in accordance with the Minutes and that the Minutes were approved. Further, the Minutes themselves were not attached to the consent judgment as a schedule.

After the Minutes and consent judgment were executed, the parties began to work together to transfer the property according to the Minutes. However, further tensions arose and the parties were unable to cooperate on the sale of the farm. Subsequently, the Appellants filed an application requesting a declaration that the consent judgment constituted an order for the sale of the farm.

The central issue on appeal was whether the consent judgment included the sale of the farm.

The application judge ruled that the consent judgment did not encompass the sale of the farm, as it was not explicitly mentioned. The appellants contended that the judge misinterpreted the agreement. However, the Court of Appeal upheld the application judge’s ruling, reiterating that consent judgments are a “species” of contract and must be interpreted using contractual principles.

Justice Hourigan, writing for the panel, cites James G. McLeod in the Reports of Family Law to Thomsett v. Thomsett, 2001 BCSC 546:

“…a consent judgment is not a judicial determination on the merits of a case but only an agreement elevated to an order on consent. The basis for the order is the parties’ agreement, not a judge’s determination of what is fair and reasonable in the circumstances.”

Therefore, consent judgments are distinguished from “regular” judgments. A consent judgment, in its fundamental form, is an agreement between parties, and so a contractual analysis must be applied.

The Court of Appeal zeroed in on the contractual intentions of the parties included or omitted in this consent judgment. The absence of explicit language regarding the sale of the farm in the consent judgment was pivotal – it was clear that only selective terms from the Minutes were included in the consent judgment.

The Court of Appeal undertook a surgical analysis of both documents, noting that specific paragraphs in the Minutes were replicated in the consent judgment, while others were not. Further evidence was adduced in the form of email correspondence which demonstrated that the appellants intentionally included some of the paragraphs and not others. The paragraphs dealing with the sale of the farm were left out of the consent judgment deliberately.  

The appeal was dismissed the appellants were ordered to pay costs. The absence of language regarding the sale of the farm in the consent judgment created an insurmountable barrier for the Appellants’ interpretation.

This case underscores the necessity for parties and counsel to ensure that all critical terms and intentions are clearly articulated in consent judgments to avoid future disputes. If an intention is specifically excluded from a consent judgment, courts will treat such exclusion as intentional and binding.