Litigation often involves claims by a plaintiff against multiple
parties. Defendants in such actions may or may not crossclaim
against each other but they are presumed to be adverse to the
plaintiff unless their pleadings state otherwise. In multi-party
litigation in Ontario, there is an obligation to disclose a
settlement agreement made between parties that has the effect of
changing their adversarial positions into a cooperative one. The
courts impose harsh sanctions if such disclosure is not immediately
made.
In Tallman Truck Centre Limited v. K.S.P. Holdings
Inc.,
2022 ONCA 66, the Ontario Court of Appeal upheld a motion
judge's decision to permanently stay an ongoing action due to
the plaintiff's failure to immediately disclose a settlement
with one defendant to the other defendant.
