The defendants brought a motion seeking relief from forfeiture under s. 98 of the Courts of Justice Act after breaching a settlement agreement that required installment payments totaling $250,000.
The defendants had already paid $155,000 but failed to pay the final $95,000 by the deadline, triggering a contractual clause entitling the plaintiff to judgment for the full $250,000 without credit for prior payments.
The court considered the distinction between penalties and forfeiture and held that enforcing the clause would produce an unconscionable forfeiture because it would permit the plaintiff to recover $405,000 for a settlement valued at $250,000.
The court granted equitable relief from forfeiture and rescinded the earlier judgment.
A new judgment was issued only for the unpaid balance of $95,000 plus interest.