ONCA Clarifies Existing Jurisprudence Regarding the Disclosure of Settlement Agreements

  • November 25, 2022
  • Landan Peleikis


The Ontario Court of Appeal’s decision in Poirier v. Logan[1] serves as a stark reminder of the detrimental consequences that result from failing to immediately disclose settlement agreements to non-settling parties.


The respondents, Jeremy Logan and Morey Chaplick owned the respondent M.C. Capital Corp. (“M.C. Capital”). M.C. Capital ran a wholesale and retail clothing business through Standard Apparel Inc. In 2015, Mr. Logan asked the appellant, Roger Poirier, to buy out Mr.  Chaplick’s shares. Mr. Poirier bought out Mr. Chaplick’s shares and personally guaranteed the debts of the business. The clothing business failed shortly thereafter.

Mr. Poirier alleged that he purchased the shares based on fraudulent or negligently misleading corporate financial statements prepared by M.C. Capital’s business accountant, Jerry Friedberg. Mr. Poirier also alleged that his lawyer, Hillary Goldstein, who is also Mr. Logan’s wife, breached her retainer agreement and acted in a conflict of interest by failing to disclose relevant information regarding the risks involved in acquiring the shares. Accordingly, Mr. Poirier commenced an action against the respondents, M.C. Capital, Mr. Chaplick, Mr. Logan and Mr. Friedberg, for $3.7 million in damages for fraud, deceit, fraudulent misrepresentation, negligent misrepresentation, unjust enrichment, breach of contract and breach of the duty of good faith. Mr. Poirier also initiated an action against Hillary Goldstein and Buchli Goldstein LLP for $3.7 million in damages for breach of contract, negligence, negligent misrepresentation and breach of the duty of good faith.

Each of the respondents issued crossclaims for contribution and indemnity. However, despite the crossclaims, the respondents cooperated in crafting their defence strategies and deferred discovering one another on their crossclaims.

During discoveries, Mr. Poirier settled his claim against Mr. Friedberg on the basis that Mr. Friedberg would assist in establishing the claims against Mr. Chaplick and Mr. Logan. However, the settlement was not disclosed to the respondents until six months later. After learning about the settlement and when it was entered, the respondents brought motions to dismiss Mr. Poirier’s action as an abuse of process.