The respondent brought a motion seeking to enforce a consent arbitration award arising from minutes of settlement resolving family law disputes, including property and support.
The applicant sought enforcement with an added indemnity clause relating to potential tax liability arising from a pending tax appeal, or alternatively to vary or set aside the award under the Family Law Rules on the basis of mistake.
The court found the parties had failed to address a significant potential tax liability of approximately $485,000 in the settlement despite both being aware of the issue.
Applying principles of mutual and unilateral mistake, the court concluded the parties were at cross‑purposes and would not have agreed to the settlement had they understood the risk.
The arbitration award and settlement were therefore set aside and the litigation permitted to continue.
