Case law on issues relating to the jurisdiction of courts to enforce settlement agreements can be found in Chapter 9 of The Law of Releases in Canada. As to the jurisdiction of arbitrators and administrative decision-makers in cases involving releases, see sections 10.12.1 and 10.13.1, below, respectively.
Case law on court orders compelling execution or delivery of a release is collected above in Chapter 4: Releases and Settlement, section 4.6.4 Compelling Execution/Delivery of a Release. Case law on court ordered or deemed releases is presented in Chapter 2: Release Formation and Wording, section 2.6, Court Determined or Deemed Releases, and Chapter 4: Releases and Settlement, section 4.6.5, Deemed Release and Release by Court Order.
10.1 Procedural Issues in Release Cases
It can be seen from the decisions summarized in sections 10.2 to 10.9 below that issues about procedure in litigation involving releases tend to arise most frequently in certain areas of practice; for example, issues often arise in release cases about pleadings and about cost awards. This section gathers decisions on a variety of other procedural issues that have arisen in Canadian litigation involving releases.
10.1.1 Motion to Require Release Provided for in Settlement Agreement
The Ontario Court of Appeal decision summarized below indicates that, when a party to a settlement of litigation has not fulfilled the obligation to provide a release, delivery of the release may be enforced by way of a motion in the existing litigation.
Haider v. Rizvi, 2023 ONCA 354 (CanLII)
This appeal arose out of minutes of settlement that were signed by the appellant and the respondent and his wife after certain actions were settled at a pretrial conference. The minutes of settlement provided for the parties and the respondent’s wife to enter into a mutual release, although the form and content of the release was not prescribed. The respondent brought a motion to enforce the obligation for the parties to exchange mutual releases. On appeal from the order of a motion judge requiring the appellant to execute a release, the appellant argued, among other things, that the motion judge erred in refusing to dismiss the motion on the basis that the respondent’s claim for a release was statute-barred. The appellant’s argument was that the claim for performance of the minutes of settlement was a new cause of action, that required the commencement of a new proceeding, or at least the amendment of pleadings in the existing action, which could not occur more than two years after the date of the settlement agreement. The Court of Appeal saw no basis for the appellant to rely on the expiry of a limitation period in this case. The delivery of a release was properly sought in the context of a motion in an ongoing action. The respondent was not required to start a new action or to amend his pleadings to seek an order for an exchange of releases as part of the completion of the settlement.
10.1.2 Parties
In the litigation summarized below, the court allowed an application by a non-party to be added as an intervenor in view of issues to be determined regarding a release executed by the proposed intervenor.
Walsh v. Canada (Attorney General), 2022 NLSC 108 (CanLII)
In the course of gathering documents for the purposes of their defence of this action, the defendants discovered a release executed by Intact Insurance Company. Intact had received a sum of money from the defendants to reimburse it for moneys paid to the plaintiff for the property damage that he suffered. In consideration of the receipt of this money, Intact executed a release in respect of any and all claims that the plaintiff had against the defendants. The defendants applied to amend their pleadings and Intact applied to be added as an intervenor. It appeared that Intact may have executed the release without the plaintiff’s knowledge or consent. Or Intact may have executed the release by mistake – thinking it was a partial release in respect of property damage, oblivious to the fact that it was a release in respect of all of the plaintiff’s claims, including personal injuries. The court said that the legal effect of executing the release was a matter that was best determined at trial. This was sufficient interest to allow the proposed intervention. If the court did not allow it, there would undoubtedly be another action to deal with the question of Intact’s liability to the plaintiff. No court time would be saved by creating a multiplicity of actions. The court decided that Intact should be allowed to intervene as a full party. Further, the plaintiff’s position was that the court ought to rectify the release so that it did not foreclose the plaintiff from seeking damages for his personal injury. The court said rectification was an available remedy. However, in order for the court to grant rectification the issue must properly be before the court. Allowing the defendants to make the requested amendment would enjoin the issue concerning the release. Having done so the parties would then be at liberty to discover the appropriate persons in order to determine “the nature, extent and intention that existed at the time of the signing of the release”. It would be best to do this when all of the necessary parties, including Intact, were before the court.
10.1.3 Other Procedural Issues in Litigation Involving Releases
As explained above, the decisions summarized in this section address a variety of procedural issues that have arisen in Canadian litigation involving releases.
Sheard Estate, 2013 ONSC 7729 (CanLII)
This case involved an executors’ application (an originating process) to pass accounts, in which a motion was made to set aside releases signed by beneficiaries. The court said that a cross-application would have been appropriate, instead of a motion, since the moving parties were seeking independent relief of their own. Applications, by their nature, do not lend themselves easily to the use of “cross” applications. If the passing of accounts arose by way of statement of claim, the moving parties would have asserted their claim to set aside the releases in a counterclaim (an originating process). In the context of estates litigation, the rules mandate applications. The moving parties’ claim was really a new claim asserted in an estates application and it should be treated in the same way as an originating process starting a proceeding. Thus, the claim was subject to the provisions of the Limitations Act, pursuant to which the moving parties would not have been permitted to commence their claim to set the releases aside. The court found they should not be permitted to do so under the guise of a motion. The claim to set the releases aside was clearly time barred.
Modified Thermoset Resins Inc. v. Westland Construction Ltd. et al., 2018 MBQB 69 (CanLII)
The plaintiff made a “simple claim in debt” against the corporate defendant Westland, as well as a claim on a personal guarantee against Westland’s principal. Westland sought leave to file a third party claim. The proposed third party claim brought into issue an amendment agreement and release between Westland and one of the proposed third parties. Westland argued that it was induced to enter into the amendment agreement and release by negligent misrepresentations. The court found that the proposed third party claim was not the just, most expeditious or least expensive manner to achieve a determination of this dispute, for a number of reasons. Among other things, the court said that, if it were to allow Westland to make the third party claim, a simple debt claim would become bogged down in protracted litigation.
Derenzis v. Gore Mutual Insurance Company, 2021 ONSC 6575 (CanLII)
The court considered whether this action should be dismissed under Rule 2.1.01 of the Ontario Rules of Civil Procedure, which provides that a proceeding may be stayed or dismissed if it appears on its face to be frivolous or vexatious or otherwise an abuse of the process of the court. As stated by the court, one of the issues before it was whether a release should be received and considered, as Rule 2.1.01 required a review of the pleadings and a determination based “on its face”. The court said there are limited circumstances where other documents, such as court proceedings, may be put before the court on a Rule 2.1.01 application. The court was not persuaded that it could receive the release because the wording of the rule was clear that the attack on the claim must be based on its face. The court said that the release was a “private document”.
10.2 Pleadings
Case law on issues relating to pleadings in litigation involving releases is collected and categorized in the sections that follow below.
10.2.1 Pleading Reliance on a Release
The effect of a release is to extinguish the cause of action or rights that are within its scope: see Chapter 1: Introduction to Releases, section 1.2.1, Extinguishment of Claim and Bar to Action. Thus, when a cause of action that has been extinguished by a release is asserted in an action against the releasee, the obvious conclusion seems to be that the claim is not founded on an existing cause of action. But it is unlikely, to say the least, that it will be apparent on the face of the statement of claim that the plaintiff’s cause of action has been extinguished by a release; extinguishment of the cause of action will be established only on proof of a valid and enforceable release that applies in respect of the matters set out in the statement of claim. Given the need for proof of a valid, enforceable and applicable release, the effect of a release is a matter of pleading and evidence, as opposed to a ground for arguing that the statement of claim does not disclose a cause of action. In Benson v. Canadian National Railway, 2003 MBCA 110 (CanLII), at paragraph 14, for example, the Manitoba Court of Appeal said: “…an alleged release from liability is a matter of defence. … A defendant who says it has been released from liability should plead this as a defence, giving the plaintiff the opportunity to reply. In his reply the plaintiff may deny that he gave the release, assert that the release given does not encompass the cause of action advanced, or otherwise assert facts which, if proved, avoid the release defence.”
The decision of the Alberta Court of Appeal below indicates that the existence of a release does not determine whether a pleading discloses a cause of action. Rather, the existence of the release is a defence. Accordingly, one would expect reliance on a release to be pleaded just like any other defence. Indeed, the Alberta rules of court specifically address the pleading of a release. They indicate that a pleading must include a statement of any matter on which a party intends to rely that may take another party by surprise, including, without limitation, any of a number of specific matters, one of which is “release”: Alberta Rules of Court, Alta. Reg. 124/2010, rule 13.6.
See section 10.2.6.1 below for decisions indicating that an action for a claim which has been released is an abuse of process.
Waterloo (City) v. Wolfraim, 2007 ONCA 732 (CanLII) , reversing Waterloo v. Wolfraim, 2006 CanLII 26166 (ON SC)
The motion judge held that a release given in settlement of a previous action against the employer of certain of the defendants in this action barred the claim against the employees and he ordered that the statement of claim be struck out as an abuse of process. The Court of Appeal said it was not at all plain and obvious that the release was meant to include the employees. Absent the clearest of cases, which this was not, the position of the employees was properly the subject of a defence that should be pleaded and established as evidence.
Hickman v. Newfoundland Government Fund Limited, 2008 NLCA 57 (CanLII)
The defendants sought leave to appeal from the dismissal of their application to strike out the plaintiff’s statement of claim. The appellate court concluded that no basis had been demonstrated for it to exercise its discretion to grant leave to appeal the applications judge’s decision refusing to strike out the statement of claim on the basis either that the claim disclosed no reasonable cause of action or was an abuse of process. An issue in this case was the effect of a release from claims by a bankrupt estate given by the trustee in bankruptcy. The court said that the question of the effect of the release given by the trustee was in the nature of a defence. The court quoted a passage from Walsh v. TRA Co., 2007 NLCA 50 (CanLII) indicating that, if there is any possible basis whatsoever on which a plaintiff might successfully argue entitlement at law, it is inappropriate to anticipate any defence a defendant may plead, even though it may be a very strong one, and, on the basis of evaluating that defence, strike the statement of claim as having no chance of success; that issue can only be determined at trial after hearing all of the evidence relevant to the matters pleaded by all parties, and the legal arguments of the parties.
Bruno v Samson Cree Nation, 2021 ABCA 381 (CanLII)
The expiration of a limitation period or the existence of a release is a defence. The tolling of a limitation period or the existence of a release are not factors that determine whether a pleading discloses a cause of action.
10.2.2 Striking Out Pleas Regarding a Release, Settlement or Offer
The case law in this section is concerned with issues that arise when one party to litigation argues that a reference to a release, settlement or offer of payment should be struck from the pleading of another party. This jurisprudence reveals that the courts strive to balance competing considerations. One important consideration, of course, is settlement privilege. As stated by the Supreme Court of Canada in Sable Offshore Energy Inc. v. Ameron International Corp., 2013 SCC 37 (CanLII) , [2013] 2 SCR 623, at paragraph 2, the purpose of settlement privilege is to promote settlement; the privilege “wraps a protective veil around the efforts parties make to settle their disputes by ensuring that communications made in the course of these negotiations are inadmissible”. But, in wrongful dismissal cases, an offer to the dismissed employee, with a proposed release, may be included in the very letter or documentation which evidences the termination of employment. And, as discussed in the Williamson decision below, when an employer takes the position that an employee was dismissed for cause, there is authority indicating that the employer’s offer of payment in lieu of notice to the employee may be relevant to arguments of waiver, estoppel or condonation.
Williamson v. Grant Brown National Leasing Inc., 1986 CanLII 2695 (ON SC)
In this action arising from the termination of the plaintiff’s employment, the defendant pleaded that the plaintiff was dismissed for cause. The plaintiff pleaded in reply that, if the court should determine that there was just cause for the termination, the defendant condoned the plaintiff’s misconduct or failure to perform and the defendant was estopped from relying on just cause. In this regard, the plaintiff pleaded, among other things, that the defendant offered an additional payment in lieu of notice, contingent upon the execution of a release. The motion judge struck out this plea on the ground that it offended rule 49.06 of the Ontario Rules of Civil Procedure, according to which no statement of the fact that an offer to settle has been made shall be contained in any pleading. The court on appeal said that the offer of an additional payment in lieu of notice, contingent upon execution of a release, was not the kind of offer contemplated by the rule. The offer to settle was an oral offer made at a time when litigation was not yet contemplated and the parties did not suggest that it was made without prejudice. The appeal court said the offer was relevant to the plaintiff’s position and the pleading by way of reply should be allowed to stand. The court referred to authorities indicating that an offer of settlement made by an employer in lieu of notice may constitute a waiver of the employer’s right to dismiss the employee for cause. The defendant argued that these authorities should be distinguished because the pleading alleged that the offer was made “contingent upon the execution of a release”. In this context, the appeal court said it did not regard the requirement of a release as significant.
Piccioni v. Carriere, 2015 BCSC 1299 (CanLII)
After the plaintiff was injured while traveling on a bus, her mother reached a settlement agreement pursuant to which a payment of money was made in exchange for a full release. The defendants relied on the settlement agreement in their pleadings, but the plaintiff asserted that the settlement had never been approved by The Public Guardian and Trustee in compliance with the British Columbia Infants Act. The plaintiff argued that the settlement agreement could not be of any force and effect and that the “relevant pleadings” should be struck out. However, the court said that, on an application to strike, the issue is the pleadings, not the evidence, and that it was not able to deprive the defendants of the opportunity to provide evidence supporting their reliance on the settlement, “notwithstanding the apparent strength of the plaintiff’s position”. The plaintiff’s application was dismissed, although the court said that the plaintiff “obviously” might renew that application at some stage of the proceedings in advance of trial.
Ramos v Hewlett-Packard (Canada) Co., 2017 ONSC 4413 (CanLII)
After her employment with the defendant was terminated, the plaintiff claimed damages for, among other things, wrongful dismissal. In its statement of defence, the defendant referred refers to a separation package it offered to the plaintiff and the plaintiff’s rejection of the offer. The plaintiff moved to strike out these references. While noting exceptions to the general rule, such as that recognized in the Williamson case, above, the court said that in wrongful dismissal cases, where an offer of settlement is made without prejudice, to “buy peace,” the fact of the offer should not generally be pleaded. The court concluded that the defendant’s offer to settle was intended to be a without prejudice offer, to buy peace between the parties, upon considering factors that included the following: (1) there was an element of compromise in the separation package offer: an increased amount of severance in exchange for a release & indemnity agreement; (2) the release & indemnity agreement was integral to the offer: while the court in Williamson did not regard the requirement of a release as significant, the wording of the release & indemnity agreement in this case supported the conclusion that the offer was made without prejudice and in an effort to avoid litigation; and (3) the release & indemnity agreement and accompanying letter both provided that they were to be kept confidential: the court found that the offer was made with the implied intention that it would not be disclosed to a court.
Renzone v. Onyx Homes Inc., 2020 ONSC 7722 (CanLII)
After the defendant purported to change the terms of her employment, the plaintiff left work on sick leave. In response to a demand letter from the plaintiff’s lawyer alleging constructive dismissal, the defendant’s lawyer responded by a letter headed “without prejudice”, which rejected the plaintiff’s settlement proposal, denied that the plaintiff was terminated “constructively or otherwise”, and set out terms for the plaintiff’s return to work. A form of release was attached to the letter. After the plaintiff commenced this action, the defendant delivered a statement of defence in which it essentially reproduced the letter. The plaintiff brought a motion to strike paragraphs of the statement of defence because they related to “without prejudice” settlement discussions. The defendant disagreed that the communications upon which it relied were without prejudice. The court said that a release typically implies an intention to settle a dispute. In this case, the release, if signed, would indeed have settled the entirety of the dispute between the parties. The release provided for confidentiality and, indeed, made clear that it was not intended to be disclosed. For all these reasons, the Master found it likely that the communications were intended or at least implied not to be disclosed if settlement negotiations failed. The offer proposed a release to allow the parties to entirely end their dispute, if the offer was accepted. Clearly, at least one purpose, and a key one, of this offer was to try to settle the dispute, to “buy peace”. Accordingly, the Master found that settlement privilege arose in the context of these letters, and in context of the impugned portions of the defence which referenced them.
10.2.3 Reliance on Release Inconsistent with Pleading
In the case below, the court found that the only reference to a release in the defence filed by the defendant implicitly contradicted the defendant’s argument on appeal about the effect of the release.
McCracken v. Jacan Investments, 2018 ONSC 4212 (CanLII)
The court upheld the decision of a Small Claims Court judge to sustain the plaintiff’s objection that the defendant’s attempt to rely on a release at trial was unfair and should not be allowed. The only reference to the release in the defence filed by the defendant implicitly contradicted the defendant’s argument on appeal about the effect of the release. The court said that raising the release defence at trial was not simply a matter of fitting a different legal basis to facts already pleaded. It represented a new case altogether – both new facts and an entirely new argument. This was highly unfair and prejudicial to the plaintiff: he and his counsel had no notice that this defence was coming.
10.2.4 Pleading Facts which are the Basis of a Claim that has been Released
The decisions below provide guidance as to what may or may not be pleaded when the subject-matter of litigation is connected with matters or claims in respect of which a release has been given.
Filion v. Barnard, 2007 CanLII 1906 (ON SC)
A party may be restricted from pleading those facts which are the basis of a claim that has been settled between the parties and for which a release has been given. In this case, the plaintiff negotiated a settlement agreement, including a release, with the defendant College setting out the terms of the termination of his employment. The plaintiff claimed that, subsequently, the President of the College gave false information or gave information negligently to a prospective employer of the plaintiff. The court said that a claim for defamation can be made so long as it did not offend the release. To the extent necessary, the plaintiff may assert in the statement of claim certain events that pre-date the settlement agreement, but the plaintiff must use discipline and care when asserting facts that predate the settlement agreement and may be said to arise from the employment relationship or the termination of employment. In pleading, the plaintiff may not go beyond what is absolutely necessary for his claim for defamation or punitive damages; otherwise, he will over-step the limits bargained for in the settlement agreement.
Conway v. The Law Society of Upper Canada, 2016 ONCA 72 (CanLII)
The Ontario Court of Appeal found that the trial judge had correctly struck claims from the appellant’s statement of claim as an abuse of process because the claims were covered by a release signed by the appellant. The Court of Appeal, however, granted leave to the appellant to amend the statement of claim to plead a cause of action based on the tort of misfeasance in public office arising out of alleged bad faith conduct and, in this regard, said that, while the appellant cannot claim damages arising out of conduct that he has released, he may refer to this conduct, if appropriate, as part of the narrative of the alleged pattern of bad faith conduct.
Urban Mechanical Contracting LTD v. Broccolini Construction (Toronto) Inc. et al., 2019 ONSC 7385 (CanLII)
The court said that in Conway, above, the Ontario Court of Appeal found that the trial judge had correctly struck claims as an abuse of process which were covered by a release signed by the appellant. In this case, the court found no reason to depart from that approach. A release included in minutes of settlement remained in force and limited the scope of the claims open to Urban Mechanical to make against the Broccolini defendants to what was understood as a “delay claim” at the time the minutes of settlement were agreed upon. Urban Mechanical was entitled to bring its delay claim, as carved out of the minutes of settlement with Broccolini (with the addition of individual directors to the delay claim), but claims beyond that were released in the minutes of settlement and it would be an abuse of process for those claims to proceed in this action.
Urban Mechanical Contracting Ltd. v. Broccolini Construction (Toronto) Inc. et al., 2021 ONSC 1807 (CanLII)
This decision arose from a motion for an order striking various paragraphs of the Fresh as Amended Statement of Claim filed by Urban Mechanical Contracting Ltd. following the order resulting from the Urban Mechanical decision summarized above. The court noted that, in the previous decision, the motion judge had considered whether certain paragraphs of Urban’s original statement of claim ought to be struck as an abuse of process as being beyond the scope of the delay claim which was carved out from the release contained in minutes of settlement. The court was satisfied that the motion judge in the earlier case had already ruled that the scope of the delay claim carve-out from the release did not extend to any claims based in tort, which includes negligence, or to claims based in unjust enrichment and quantum meruit. The court ordered that the words “and was negligent” be struck from a paragraph of the Amended Statement of Claim as an abuse of process. The court also ordered that a plea of unjust enrichment and a claim for damages on a quantum meruit basis be struck: the motion judge in the previous case had already expressly struck substantially the same unjust enrichment and quantum meruit-based damages claim on the basis that it ran contrary to the restriction contained in the delay claim carve-out.
10.2.5 Releases and Amendments to Pleadings
In Simsa v. Anti-Aging International Inc. [2001] O.J. No. 5154, the defendants proposed to amend their statement of defence to plead that, due to a consent order of dismissal following minutes of settlement and a release, the claims of the plaintiff were barred by res judicata and issue estoppel. The court found that the minutes of settlement clearly envisaged the continuance of the relief sought in the action notwithstanding resolution of another issue. The court said that there was no ambiguity in the minutes of settlement as they exempted claims in the action from the settlement and that, without ambiguity, there was no possibility of success at trial of the defence based on res judicata and issue estoppel. The court recognized that the threshold for granting an amendment to a pleading in the circumstances of this case was a low one, but it was satisfied that even the low threshold had not been met.
Tesfamikael v. Porco, 2006 CanLII 34274 (ON SC)
The defendant brought a motion for summary judgment in the plaintiff’s action for damages allegedly suffered during her employment with the defendant. The defendant asserted that the action was barred by a release executed by the plaintiff after the termination of her employment in consideration of receipt of a separation payment. The court found no grounds for the exercise of its discretion to refuse to enforce the release. At the end of the hearing of the motion, the plaintiff sought leave to amend her pleadings to allege that the separation payment was unconscionable and to request that the release should be set aside, based on the facts alleged in the pleadings. Leave was refused on the grounds that this issue must be addressed in a separate action. The court said it did not believe that the issue in any such action, if instituted by the plaintiff, would be res judicata as a result of the determination of the motion.
Walsh v. Canada (Attorney General), 2022 NLSC 108 (CanLII)
In the course of gathering documents for the purposes of their defence of this action, the defendants discovered a release executed by Intact Insurance Company. Intact had received a sum of money from the defendants to reimburse it for moneys paid to the plaintiff for the property damage that he suffered. In consideration of the receipt of this money, Intact executed a release in respect of any and all claims that the plaintiff had against the defendants. The defendants applied to amend their pleadings and Intact applied to be added as an intervenor. It appeared that Intact may have executed the release without the plaintiff’s knowledge or consent. Or Intact may have executed the release by mistake – thinking it was a partial release in respect of property damage, oblivious to the fact that it was a release in respect of all of the plaintiff’s claims, including personal injuries. The plaintiff argued that the court ought to rectify the release so that it did not foreclose the plaintiff from seeking damages for his personal injury. The court said rectification was an available remedy. However, in order for the court to grant rectification the issue must properly be before the court. This would include the factual substrate necessary in order to make the determination as to whether or not rectification should be ordered. That substrate was deficient. The court should be placed in a position where it could make findings of fact based upon evidence. Allowing the defendants to make the requested amendment would enjoin the issue concerning the release. Having done so the parties would then be at liberty to discover the appropriate persons in order to determine “the nature, extent and intention that existed at the time of the signing of the release”.
10.2.5.1 Release as a Basis for Opposing Amendment to a Pleading
The case law summarized in this section addresses issues that arise when a party to litigation relies on the terms of a release in support of its opposition to a proposed amendment to the pleading of another party.
Calbar Securities Ltd. v. Toole Peet Co. Ltd., 1983 ABCA 301 (CanLII)
The Alberta Court of Appeal said that, while pleadings are often amended by a court, even to permit a new cause of action when there is no prejudice to the other side, an amendment in this case to raise a new cause of action against the defendant Toole Peet would be ineffective because of a release given by the plaintiff.
Daniele v. Johnson, 1999 CanLII 19921 (ON SCDC)
The defendants in an action for damages arising out of a motor vehicle accident made a counterclaim. At a time when they were not represented by counsel, they accepted a payment in return for a full and final release of any claims against the plaintiffs in respect of the accident. The defendants subsequently brought a motion for, among other things, leave to deliver a fresh counterclaim. The Divisional Court said that where a proposed amendment to a pleading is of such a nature that the granting of leave will be immediately followed by a motion to strike the amendment, then the court should examine the merits of the proposed amendment. The amendment proposed by the defendants to assert a fresh counterclaim simply did not meet the threshold of “legal soundness”. The terms of the release were clear and unambiguous. The release was a final settlement of the counterclaim and of any further claims or counterclaims.
Segal v. Plazavest, 2004 CanLII 35087 (ON SC)
In response to the plaintiffs’ motion to amend the statement of claim to add additional claims, the defendants relied on a settlement reached by the parties and a broad mutual release. The plaintiffs argued that the defendants, contrary to their assurances, did not provide all relevant documents in their possession to the plaintiffs and that the default of the defendants caused the plaintiffs to be unaware of the claims that the plaintiffs sought to advance. The Master said that, if the plaintiffs wanted an opportunity to revisit the settlement in the event that documents obtained thereafter raised new issues, they should have made full documentary disclosure a condition in the minutes of settlement and release. The Master dismissed the motion to amend the statement of claim.
Morgan v. Spanogreco, 2008 CanLII 70244 (ON SC)
The factual situation in Daniele et al v. Johnson, above, was similar to the circumstances before the court in this case. The plaintiffs sought to amend their statement of claim to add a party in whose favour a release had been executed in respect of the subject matter of the claim. The plaintiffs’ proposed amendments were untenable at law and the plaintiffs’ motion to amend the statement of claim to add the defendant was dismissed.
Whalley v. Royal Canadian Mounted Police Public Complaints Commission, 2009 NSCA 122 (CanLII)
On this appeal, the appellant submitted that the chambers judge erred in refusing to consider his request to add the Crown as a defendant. However, a settlement had been reached whereby, upon a payment being made to the appellant, the appellant released the Crown. The Court of Appeal agreed with the respondent’s submission that even if it were to allow the appellant to name the Crown as a defendant, the matter would undoubtedly be summarily dismissed, citing Orlandello (section 10.2.6.1 below). The Court of Appeal said it made no sense to permit an amendment to add a party that had been released.
Cheng v. Worldwide Pork Company Limited, 2009 SKQB 186 (CanLII)
In this case, the plaintiffs proposed to amend a statement of claim to add defendants, but claims against the proposed defendants had been released in an amended plan approved in proceedings under the Companies’ Creditors Arrangement Act, except for those claims that could not be compromised as set out in subsection 5.1(2) of the CCAA. The court dismissed the application to amend the statement of claim, although the plaintiffs were allowed an opportunity to come back with more particularized allegations in specific areas where the pleadings were insufficient for the court to determine whether they disclosed material facts which would give rise to a cause of action within the exceptions set out in subsection 5(1)(2(b) of the CCAA.
Roussy v. Red Seal Vacations Inc., 2011 SKCA 116 (CanLII)
In this case, the chambers judge decided that, because a proposed plaintiff in a class proceeding had signed a full and complete settlement of her claim, such claim was one that could be struck out and, accordingly, an amendment to the statement of claim adding her as a plaintiff should not be allowed. An appeal from this decision was dismissed and the Court of Appeal said that the chambers judge made no error in declining to add the proposed plaintiff.
Williams v. Halifax Regional Municipality, 2015 NSSC 228 (CanLII)
The court refused permission for an amendment to a statement of claim so as to create a sub-class of plaintiffs that included people who had signed releases and whose claims had been dismissed by consent order of the court.
Freeman v. Canadian Natural Resources Limited, 2018 ABQB 310 (CanLII)
After the defendant terminated his employment without cause, the plaintiff reached a settlement of his claims with the defendant and signed a broadly worded release. The defendant brought an application for summary dismissal of the plaintiff’s claim and, prior to the hearing date, the plaintiff filed an application to amend his statement of claim. The Master heard the amendment application first, but reserved his decision because one of the relevant considerations was whether the amendments were “hopeless”, which brought into issue the submissions on the summary judgment application. The Master concluded that the release covered all claims pertaining to the relationship between the parties that could have been made up to and including its effective date, but certain of the plaintiff’s new allegations related to post-release conduct which on its face was not covered by the release. The Master allowed amendments to the statement of claim in respect of the post-release conduct.
W.O.M. Mastercraft Construction Ltd. v TFN Meadows Development Limited Partnership, 2020 BCSC 1345 (CanLII)
On the defendants’ application to amend their pleading (defence to civil claim and counterclaim), the plaintiff raised a limitation defence that was based on terms of a contract between the parties which provided that, as of particular time milestones, the defendant released certain claims against the plaintiff. The court said that the applicability and ambit of the release depended on a number of factual questions. Permitting the amendment would not deprive the plaintiff of its ability to rely on the release. The availability of the limitation defence turned on factual issues that could not be resolved on a pleadings application, the plaintiff would not be deprived of the benefit of the defence at trial and the defence was not a reason to refuse the defendants leave to amend.
10.2.6 Release as a Basis for Striking Out or Dismissing Claims
As alluded to in section 10.2.1 above, a court cannot determine that a release stands as a bar to a claim in the absence of proof of the existence of a valid and enforceable release that applies to the claim. Thus, reliance on a release is a defence to be pleaded and established in evidence. It would be wrong to think, though, that a party relying on a valid, enforceable and applicable release in its defence of an action can never avail itself of remedies such as the striking out of the statement of claim or the dismissal of the action. (And the same holds true for a party relying on a release in defence of a counterclaim, cross-claim or third party claim.) The decisions in this section cast light on issues that arise when a party relying on a release in defence of a claim seeks to strike out or dismiss the claim.
First Capital Realty Inc. v. Centrecorp Management Services Ltd., 2006 CanLII 31298 (ON SC)
A settlement of earlier litigation was concluded with a settlement agreement, a release and a consent court order that approved the settlement agreement. The defendants moved to dismiss this subsequent action or strike the statement of claim, arguing, among other things, that the action was barred by the terms of the settlement agreement and the release. The plaintiff argued that, even though certain conduct pleaded in the statement of claim did not qualify as gross negligence or fraud, it did amount to willful misconduct and such conduct was not encompassed by the terms of the release. The court said that, while it was to read the statement of claim generously with allowances for inadequacies due to drafting deficiencies, a pleading alleging malice or intent is to contain full particulars. To the extent that the plaintiff wished to avail itself of this aspect of its claim, the allegations of willful misconduct needed to be further particularized.
Hickman v. Newfoundland Government Fund Limited, 2008 NLCA 57 (CanLII)
The defendants sought leave to appeal from the dismissal of their application to strike out the plaintiff’s statement of claim. The appellate court concluded that no basis had been demonstrated for it to exercise its discretion to grant leave to appeal the applications judge’s decision refusing to strike out the statement of claim on the basis either that the claim disclosed no reasonable cause of action or was an abuse of process. An issue in this case was the effect of a release from claims by a bankrupt estate given by the trustee in bankruptcy. The court said that the question of the effect of the release given by the trustee was in the nature of a defence. The court quoted a passage from Walsh v. TRA Co., 2007 NLCA 50 (CanLII) indicating that, if there is any possible basis whatsoever on which a plaintiff might successfully argue entitlement at law, it is inappropriate to anticipate any defence a defendant may plead, even though it may be a very strong one, and, on the basis of evaluating that defence, strike the statement of claim as having no chance of success; that issue can only be determined at trial after hearing all of the evidence relevant to the matters pleaded by all parties, and the legal arguments of the parties.
Tribar Industries Inc. et al v. KPMG LLP et al, 2009 CanLII 9747 (ON SC)
Issues arose where a settlement set out in minutes of settlement and embodied in an arbitrator’s award could lead one to believe that the entire action was to disappear, but the release was limited to only one of the plaintiffs as releasor. The court was unable to decide these issues on a motion to strike out the amended statement of claim. How the differences were to be reconciled likely required an interpretation of the minutes and the award which in turn probably required some evidence about the context surrounding the execution of the minutes.
Re: SemCanada Crude Company (Orleans Energy Ltd.), 2012 ABQB 495 (CanLII), application for leave to appeal dismissed, RMP Energy Inc. v. SemCAMS ULC, 2012 ABCA 312 (CanLII)
The applicant sought a declaration that claims (referred to as the “price adjustment claim”) with respect to contractual equalization adjustments to volumes of natural gas delivered pursuant to an inlet gas purchase agreement were compromised and released by a plan of arrangement and the plan sanction order. The applicant also sought a declaration that a statement of claim relating to the price adjustment claim was in breach of the plan and the plan sanction order and should be struck. The court concluded that the price adjustment claim was released and discharged by the plan and had become barred and extinguished by the plan sanction order. The court said that the statement of claim was filed in breach of the plan sanction order, which stayed all proceedings with respect to such a claim. The court struck the statement of claim.
Rochette v Bradburn, 2021 BCSC 1752 (CanLII)
A petition sought orders against the members of a strata council (who subsequently resigned). These personal respondents argued that a release between the strata corporation and them was a complete answer to the petition as against them. In reliance on the release, they argued that the entire petition as against them should be dismissed, or alternatively that paragraphs of the petition claiming relief from them should be struck out. The court said that the existence of a binding release is a threshold issue, the resolution of which may make the remaining issues moot, citing Isaacs v. Nortel Networks Corp., 2001 CanLII 28314 (ON SC) . The court agreed that the release, on its face, released the personal respondents from any damages owing to the strata corporation. But because the strata corporation made no claims against the personal respondents, there was an argument that the document was merely a covenant by the strata corporation not to seek damages from the personal respondents in the future. Moreover, monetary compensation was not at the core of the dispute. The petitioners sought orders that the personal respondents acted as members of the strata council while in a conflict of interest and acted contrary to their fiduciary duties owed to the strata corporation. The release did not purport to address these issues. The court also said that, even if the petitioners should have denied the validity of the release in their pleadings, as argued by the personal respondents, before the court could strike a pleading it must consider not only the pleading as set out, but also as it might be amended. Further, the release did not appear to be a full answer to the petition. It only affected the personal respondents’ liability to contribute to and indemnify the strata corporation. While damages were possibly moot, the declaratory relief was alive and the petitioners had a genuine interest in its resolution.
Smith v SaNOtize Research and Development Corp., 2024 BCSC 386 (CanLII)
The defendants applied for an order striking out or summarily dismissing the plaintiff’s claims. Among other things, the court considered whether the plaintiff’s claims should be struck or dismissed because they were barred by the release provisions of a settlement agreement previously entered into by the plaintiff and parties including the personal defendants in this litigation. The court was satisfied that the claims set out in the plaintiff’s further amended notice of civil claim fell within the terms of the release, both because the release was a general one, and the general words of the release applied to the plaintiff’s claims, and because the claims were within more specific wording of the release referring to “the matters that were raised or could have been raised” in earlier litigation. The court said that claims which have been advanced contrary to a previous settlement agreement or release may be struck or dismissed under two of the British Columbia Supreme Court Civil Rules: either as not raising a genuine issue for trial or as an abuse of process. The court concluded that the plaintiff’s claims should be dismissed and struck on both of these bases.
10.2.6.1 Striking Out or Dismissing as an Abuse of Process
The authorities indicate that an action for a claim within the scope of a valid and enforceable release is an abuse of process. The doctrine of abuse of process is discussed above in Chapter 3: Effectiveness and Enforcement of Releases, section 3.3.4.3, Abuse of Process. The cases summarized below address whether it is appropriate to strike out all or part of a statement of claim as an abuse of process on the ground that the pleading asserts claims covered by a release.
Manko v. Ivonchuk, 1991 CanLII 11983 (MB QB)
As stated by the court, the issue on this appeal was whether the plaintiff was entitled to issue a statement of claim in relation to a cause of action following the execution of a release in favour of the defendants along with filing of a notice of discontinuance of an earlier statement of claim for the identical cause of action. The court proceeded to consider whether the filing of a fresh statement of claim in identical terms to the earlier discontinued action was an abuse of the court process. The plaintiff asserted that he executed the release under duress. The court referred to the lack of particulars of the general allegation of duress and the heavy onus on the plaintiff (a practicing lawyer represented by counsel) of satisfying the court that the release ought to be set aside. The court concluded that the reissuance of the statement of claim in these circumstances was clearly an abuse of the court process.
Elfenbaum v. Saskatchewan Crop Insurance Corp., 1995 CanLII 5729 (SK QB)
When an application to strike out a statement of claim is based on the assertion that the claim is scandalous, frivolous or vexatious, or is an abuse of the process of the court, evidence other than the pleadings made be admitted. On the facts of this case, the court concluded that for the plaintiffs to attempt to reassert claims encompassed by a release was clearly an abuse of process. The court granted an order striking out the statement of claim.
Orlandello v. Nova Scotia (Attorney General), 2005 NSCA 98 (CanLII)
An action for a claim which has been released and discharged is an abuse of process. The appropriate remedy in this case would permanently terminate the lawsuit. The court is authorized to strike a statement of claim which constitutes an abuse of process. This was the remedy ordered by the court in Sinanan v. Woodyer, 1999 NSCA 74 . Had the parties’ submissions addressed striking the statement of claim, the Court of Appeal would have preferred that remedy to summary dismissal. But no submissions were made concerning the striking of the statement of claim and there was no discussion of authorities such as Sinanan which considered that sanction. Because striking the pleadings was not canvassed in argument, it was not appropriate to order that remedy and the court resorted to dismissal by summary judgment.
Waterloo (City) v. Wolfraim, 2007 ONCA 732 (CanLII) , reversing Waterloo v. Wolfraim, 2006 CanLII 26166 (ON SC)
The motion judge held that a release given in settlement of a previous action against the employer of certain of the defendants in this action barred the claim against the employees and he ordered that the statement of claim be struck out as an abuse of process. The Court of Appeal said it was not at all plain and obvious that the release was meant to include the employees and that, in coming to the opposite conclusion, the motion judge engaged in an impermissible weighing of evidence and drawing of inferences on contentious matters. Absent the clearest of cases, which this was not, the position of the employees was properly the subject of a defence that should be pleaded and established as evidence.
Waterloo (City) v. Ford, 2008 CanLII 436 (ON SC)
The City of Waterloo entered into a financing arrangement with MFP Financial Services Ltd. in connection with the funding of a new sport and recreation project. The representative of MFP primarily responsible for negotiations on behalf of MFP was David Robson. The representative of the City in the negotiations with MFP was John Ford, the City’s Treasurer and Chief Financial Officer. By agreement, MFP assigned its rights under the financing agreement to Clarica Life Insurance Company. The City learned that the ultimate cost of the financing would be more than twice what the City had understood the cost to be. The City brought this action against Ford. Earlier, the City had commenced an action (the MFP action) against MFP, Clarica and Robson. The MFP action was settled and minutes of settlement were executed. The minutes of settlement included a release which, as stated by the court in its decision in this (Ford) litigation, referred only to the corporate parties as releasing each other: it did not refer to directors, officers, employees or agents of the corporate parties. The City also brought an action (the Wolfraim action; see Waterloo v. Wolfraim, above) against a number of Clarica employees and MFP employees. In respect of a motion to strike the statement of claim in the Wolfraim action, the Ontario Court of Appeal said it was not at all plain and obvious that the release entered into by the corporate parties in the MFP action was meant to include the employees of MFP. In its decision on a motion to strike the statement of claim in this (Ford) action, the court referred to the conclusion of the Court of Appeal in the Wolfraim action that it was not plain and obvious that the minutes of settlement in favour of MFP were meant to release the MFP employees and said, if so, it was even less obvious that those minutes of settlement in favour of MFP were meant to release Ford. Given that the Court of Appeal found that the release did not necessarily cover the MFP employees, it could not be found on a motion under rule 21 of the Ontario Rules of Civil Procedure that the words in the release necessarily covered others such as Ford. As well, the claims and causes of action asserted against Ford were not the same claims as were asserted against MFP in the MFP action.
Forbes v. Manufacturers Life Insurance Company et al, 2010 ONSC 4931 (CanLII)
The court found that the plaintiff in this case sought to re-litigate matters that had been settled and from which the defendants had been released. The court said the action was, therefore, an abuse of process, citing Sinclair-Cockburn Insurance Brokers Limited v. Richards . The action was dismissed.
Conway v. The Law Society of Upper Canada, 2016 ONCA 72 (CanLII)
The Ontario Court of Appeal found that the trial judge had correctly struck claims from the appellant’s statement of claim as an abuse of process because the claims were covered by a release signed by the appellant.
Urban Mechanical Contracting LTD v. Broccolini Construction (Toronto) Inc. et al., 2019 ONSC 7385 (CanLII)
The court referred to Conway v. Law Society of Upper Canada, above – where the Ontario Court of Appeal found that the trial judge had correctly struck claims covered by a release as an abuse of process – and said it found no reason to depart from this approach. The motion to strike portions of the statement of claim in this case was made in the context of minutes of settlement that contained releases of the defendant Broccolini Construction and its officers and directors from all causes of actions other than a specified claim for delay and certain payments for work then underway. The court found that the portions of the plaintiff’s claim extending beyond the delay claim should be struck and that the individual Broccolini defendants could be added to the delay claim, as the release dealing with the Broccolini directors expressly carved out the delay claim.
10.2.6.2 Striking Out as Disclosing No Cause of Action
While we have seen from the cases above that all or part of a claim may be struck out or dismissed to the extent that it is covered by a valid and enforceable release, founding such relief on a conclusion that the statement of claim fails to disclose a cause of action is a dubious approach. As touched on in section 10.2.1, it would be highly unusual for a statement of claim to be worded so as to make clear, on its face, that the plaintiff’s cause of action has been extinguished by a release.
Elfenbaum v. Saskatchewan Crop Insurance Corp., 1995 CanLII 5729 (SK QB)
When an application is made to strike out a statement of claim on the basis that it discloses no reasonable cause of action, the court should exercise its jurisdiction only in the most plain and obvious cases. The consideration of such an application should entail only an examination of the statement of claim and an assumption that all of the allegations therein can be proved. However, when the application to strike is based on the assertion that the claim is scandalous, frivolous or vexatious, or is an abuse of the process of the court, evidence other than the pleadings made be admitted. On the facts of this case, the court concluded that for the plaintiffs to attempt to reassert claims encompassed by a release was clearly an abuse of process. The court granted an order striking out the statement of claim.
D.L.G. & Associates Ltd. v. Minto Properties Inc., 2015 ONCA 705 (CanLII)
On an appeal from an order striking most of the plaintiff’s claims as disclosing no reasonable cause of action, the Court of Appeal said that the effect of a purported release on any of the plaintiff’s claims could not be determined on a pleadings motion.
Bruno v Samson Cree Nation, 2021 ABCA 381 (CanLII)
The expiration of a limitation period or the existence of a release is a defence. The tolling of a limitation period or the existence of a release are not factors that determine whether a pleading discloses a cause of action.
10.2.7 Pleading Challenge to the Effectiveness of a Release
A very common pattern is evident in litigation involving releases: an action is commenced, a release is relied on in defence of the action and a challenge to the applicability, validity or enforceability of the release is made by the plaintiff. In cases where the plaintiff disputes the validity or enforceability of the release, the party relying on it may hold the view that, if the plaintiff has not even asked the court to set aside the release or otherwise determine its invalidity, the release must stand as valid and effective. But the plaintiff’s perspective no doubt is quite a different one. The plaintiff may well disagree with the proposition that, in order to plead its claim, the plaintiff must put into issue – and ask the court to invalidate – a release that the plaintiff believes to be ineffective, especially if the plaintiff’s position is that, in any event, the release is not even applicable to the claim.
The Kang decision below involved the particular circumstances of a proposed class proceeding, where allegations about releases were made in the plaintiffs’ pleading, but no specific relief was sought in respect of the releases. The Ontario Court of Appeal held that the allegations about the releases did not assert a cause of action. In the PricewaterhouseCoopers case below, the Alberta Court of Appeal said that the pleadings adequately indicated that the effectiveness of a release was being challenged and that the party challenging the release was entitled to do so without seeking to have the release set aside or declared void.
Kang v. Sun Life Assurance Company of Canada, 2013 ONCA 118 (CanLII)
This proposed class proceeding concerned the sale and administration of universal life insurance policies. It had not yet been certified at the time of this decision by the Ontario Court of Appeal. The plaintiffs appealed from the striking out of numerous paragraphs of their fresh as amended statement of claim on a pleadings motion. Among other things, the plaintiffs had alleged that the defendant obtained releases from some class members without disclosing to them that their policies had been sold on the basis of misrepresentations. The motion judge struck out these allegations on the ground that they improperly pleaded evidence. He said that none of the representative plaintiffs claimed to have signed a release, or claimed rescission, or alleged that the releases were void. He declined to grant leave to amend, but he did provide the plaintiffs with an option to advance their claim on the releases with an appropriate representative plaintiff. The Court of Appeal said that the motion judge was correct to strike the plaintiffs’ allegation concerning the releases because they did not assert a cause of action. Although the plaintiffs incorporated the releases and settlements into duty of good faith claims and deceit and fraud claims, they had failed to request any specific relief for the policyholders who entered into those agreements. They did not seek rescission, nor did they seek a declaration that the releases were null and void. The motion judge therefore did not err in striking these paragraphs and he fairly left open the availability of a motion to add a claim for rescission or declaratory relief on the releases.
PricewaterhouseCoopers Inc v Perpetual Energy Inc, 2021 ABCA 16 (CanLII) , application for leave to appeal dismissed, Susan Riddell Rose, et al. v. PricewaterhouseCoopers Inc., et al., 2021 CanLII 58908 (SCC)
One of the respondents argued that the appellant trustee in bankruptcy did not adequately plead his position with respect to a resignation and mutual release, because, for example, the trustee did not plead that the resignation and mutual release should be “set aside”. The Court of Appeal said that the pleadings with respect to this issue adequately advised the respondent that the effectiveness of the resignation and mutual release was being challenged. The trustee in bankruptcy was entitled to argue that the resignation and mutual release was legally ineffective against it without seeking to have it “set aside” or declared “void”.
10.3 Directions or Determination of Rights
There are a variety of provisions to be found in rules of civil practice and procedure in Canadian jurisdictions under which, in specified circumstances, a court may give directions, or make a determination of rights. For example, the motion in the Dewitt case below was made pursuant to a Nova Scotia rule which says that a plaintiff or a defendant may, at any time before an action is set down for trial, apply to the court for the determination prior to trial, of any question of law raised by a pleading in the action, where the determination of that question may dispose of the action, shorten the trial, or result in a substantial saving of costs. Rule 14.05(3) of the Ontario Rules of Civil Procedure says that a proceeding may be brought by application where the relief claimed is, among other things, the direction of the court on a question affecting the rights of a person in respect of the administration of the estate of a deceased person or the execution of a trust, or an order directing executors, administrators or trustees to do or abstain from doing any particular act in respect of an estate or trust for which they are responsible. An application may also be made under rule 14.05(3) for the determination of rights that depend on the interpretation of a deed, will, contract or other instrument – and, of course, a release is a contract, as is a settlement agreement.
As and when provided for in the rules of practice of the particular jurisdiction, a court may, in appropriate circumstances, give directions, or make a determination of rights, in respect of issues relating to a release.
Makarchuk v. Makarchuk, 2011 ONSC 4633 (CanLII) , appeal dismissed, 2012 ONCA 42 (CanLII) , application for leave to appeal dismissed, 2012 CanLII 32662 (SCC)
Five months after the testator made a will in which he named his wife as executor and sole beneficiary of his estate, the testator and his wife separated, although they never divorced. The testator and his wife signed a separation agreement in which, subject to any additional gifts from one of the parties to the other in any will validly made after the date of the agreement, the parties each released all rights which he or she had or “may acquire under the laws of any jurisdiction” in the estate of the other. After the testator passed away, his son brought an application for directions under Ontario rule 14.05(3) and submitted that the reference to subsequent wills in the release was evidence that the wife intended to release the testator from the bequest made to her in the will and this reference was sufficient “to trump the will”. The application judge concluded that the release in the separation agreement did not trump the will. On appeal, the Court of Appeal said it was not persuaded that the application judge erred in her interpretation of the separation agreement.
Dewitt v. Strang et al., 2016 NBCA 63 (CanLII)
A minor, Thomas Dewitt, was left a paraplegic as a result of an accident which occurred while he was participating in a motocross competition. Prior to participating in the event, both he and his father had signed a “Minor Participant Waiver” in favour of some of the defendants. These defendants argued that the waiver released them and all organizers of the event from any liability in the event of personal injury or death. Dewitt brought a motion under a rule which provided for a party to apply to court for the determination of a question of law raised by a pleading. He asked the court to determine the following question of law: “Is the Waiver executed by the Infant Plaintiff and his father a bar to the Infant Plaintiff’s right of action?” The motion judge dismissed the motion, finding that it was an unsuitable procedure for the resolution of unsettled, complex and difficult questions. The Court of Appeal said it was possible that there was an extricable question of law. A court might conclude – as submitted by DeWitt – that a waiver signed by a minor and by a parent is never, as a matter of law, binding on the minor. If this conclusion were reached, it would end the analysis of whether the waiver signed by DeWitt barred his right of action. But in the event of a conclusion that sometimes a waiver signed by minor and parent can be binding, depending on the wording of the waiver and the circumstances in which the waiver was obtained, then the analysis would continue. Although the motion judge did not articulate his approach in terms of this analytical framework, it was clear he was of the view both questions were more appropriately addressed as part of the entire proceeding. This was an option available to him.
10.3.1 Directions Regarding the Appropriate Terms of a Release
On occasion, parties to a settlement who are unable to agree on the terms of a release will seek directions from the court regarding the appropriate terms of the release. As appears from certain of the decisions below, their effort to obtain a court ruling may take shape as a request for directions or an application for a determination of their rights under the settlement agreement.
In Fieguth v. Acklands Ltd., 1989 CanLII 2744 (BC CA) , at paragraph 44, the British Columbia Court of Appeal said it should not be thought that every disagreement over documentation consequent upon a settlement amounts to a repudiation of a settlement. The court provided guidance regarding the appropriate course of action for resolving “subsequent disputes”, one of which it said is “application to the court”.
Neinstein v. Marrero, 2007 CanLII 13939 (ON SC)
The parties entered into minutes of settlement resolving litigation arising from a home renovation project. The applicants sought a determination of their rights under the minutes, including a declaration regarding the proper language for a release. The court dismissed the applicants’ request for a declaration that they need not execute a release discharging the respondents’ “contractors, sub-contractors, consultants and sub-consultants”. The court found that a release consistent with the minutes required such persons to be included. The applicants also sought a declaration that they could commence an action against the respondents’ contractors, sub-contractors, consultants and sub-consultants. The court said it had interpreted the rights of the parties under the minutes and indicated what language would be appropriate to include in the release. Whether any party honours its obligations under an executed release is a matter for that party to decide. Any court, of course, hopes that a party would honour such obligations. Courts are not in the business of giving any person a green light to commence litigation, except in circumstances specified by statute.
Excell Stamping Inc. v. Consolidated Recycling Incorporated (Metro Recycling), 2008 CanLII 12492 (ON SC)
The parties entered into binding minutes of settlement which provided that they would execute mutual and full releases in standard form agreeable to counsel. The plaintiff refused to sign a release containing a confidentiality clause proposed by the defendant. The court said that where, as here, the form of release cannot be agreed to, the parties can always seek a clarification from the court within the framework of the settlement.
Henheffer et al. v. Barry et al, 2017 NBQB 131 (CanLII)
In this decision, the court addressed a number of issues arising from the dissolution of a law firm. At the conclusion of the decision, the court said that it would maintain jurisdiction to finalize any wording disputes as to a settlement document, mutual releases and other documents necessary to finalize the dissolution of the law firm and a related management services company. The court went on to say that corporate documentation as well as general releases were to be agreed to, executed and exchanged. Should disagreements occur, either party could return to the court for resolution. The court would then consider the disagreement, make the necessary rulings and consider costs.
Sarazen v. McTaggart et al, 2017 ONSC 5281 (CanLII)
The parties signed minutes of settlement which stated, among other things, that the parties would sign a release, including a LawPRO Standard Release, but certain of the defendants, who were also plaintiffs by counterclaim, argued that a contract was not in place between the parties. The court relied on the proposition in the Excell Stamping decision, above, that where the form of release cannot be agreed to the parties can always seek a clarification from the court, but neither party is released from the settlement. The court made an order that the defendants/plaintiffs by counterclaim must sign and deliver a release.
Pomeroy v. Couprie et al, 2017 ONSC 6906 (CanLII)
The parties agreed that they had reached a binding settlement which required a release to be signed, but they disagreed on the form of the release. The plaintiff brought an application for the determination of rights under the settlement agreement. The court said that the parties required the court’s assistance to determine rights that depended on the interpretation of a contract and, accordingly, that it had jurisdiction to deal with the issues raised in the application on their merits.
Alfaiate v. 1014784 Alberta Inc, 2018 ABQB 666 (CanLII)
The parties settled this action using the formal offer process under the rules of court. A case management judge had provided directions concerning interest on damages under the settlement. The parties sought directions from the same judge to resolve the form of release required to complete the settlement; the judge gave directions regarding the provisions of the contractually required release that the plaintiff was obliged to deliver.
10.4 Summary Determination of Issues Regarding a Release
The availability of summary judgment is a matter governed by rules of civil practice and procedure. These rules may differ from province to province and, thus, in the Fillingham case summarized below, decisions from Ontario and Alberta were of little assistance to a British Columbia court in its consideration of an application for dismissal of an action on a summary trial. Also, the rules of practice and procedure governing summary judgment may change from time to time. The Ontario rule, for example, was amended in 2010 to give judges new and expanded powers when hearing motions for summary judgment.
In Hryniak v. Mauldin 2014 SCC 7 (CanLII) , the Supreme Court of Canada commented on the changes to the Ontario rule (Hryniak, paragraphs 36 to 45), and more generally on the adjudication of disputes by way of summary determination. On the latter subject, the court said (at paragraph 34): “The summary judgment motion is an important tool for enhancing access to justice because it can provide a cheaper, faster alternative to a full trial. With the exception of Quebec, all provinces feature a summary judgment mechanism in their respective rules of civil procedure. Generally, summary judgment is available where there is no genuine issue for trial.”
The Supreme Court also set forth its views regarding the need for a “shift in culture”. In this regard, the court said (paragraphs 27, 28 and 32):
There is growing support for alternative adjudication of disputes and a developing consensus that the traditional balance struck by extensive pre-trial processes and the conventional trial no longer reflects the modern reality and needs to be re-adjusted. A proper balance requires simplified and proportionate procedures for adjudication, and impacts the role of counsel and judges. This balance must recognize that a process can be fair and just, without the expense and delay of a trial, and that alternative models of adjudication are no less legitimate than the conventional trial.
This requires a shift in culture. The principal goal remains the same: a fair process that results in a just adjudication of disputes. A fair and just process must permit a judge to find the facts necessary to resolve the dispute and to apply the relevant legal principles to the facts as found. However, that process is illusory unless it is also accessible — proportionate, timely and affordable.
…
This culture shift requires judges to actively manage the legal process in line with the principle of proportionality. While summary judgment motions can save time and resources, like most pre-trial procedures, they can also slow down the proceedings if used inappropriately.
As for the changes to the Ontario summary judgment rule, the Supreme Court noted (at paragraph 40) that a recommendation to adopt a summary trial procedure similar to that in British Columbia was not picked up in the amendments. But the new rule changed the test for summary judgment from asking whether the case presents “a genuine issue for trial” to asking whether there is a “genuine issue requiring a trial” and, with its enhanced factfinding powers, the new rule “demonstrate[d] that a trial is not the default procedure” (Hryniak, paragraph 43). The Supreme Court concluded that, in interpreting these provisions, the Ontario Court of Appeal “had placed too high a premium on the ‘full appreciation’ of evidence that can be gained at a conventional trial, given that such a trial is not a realistic alternative for most litigants” (Hryniak, paragraphs 4, 16, 53 and 56).
Connor v. Scotia Capital Inc., 2018 ONCA 73 (CanLII)
The appellant’s employment with the respondent was terminated, following which the appellant entered into a settlement agreement with the respondent and also signed a release. Later, the appellant commenced an action against the respondent for, among other things, wrongful dismissal. The respondent brought a motion under rule 21.01(3)(d) of the Ontario Rules of Civil Procedure to stay or dismiss the appellant’s action as frivolous or vexatious or an abuse a process. The appellant made a number of arguments relating to the validity or enforceability of the settlement agreement and release, but the motion judge found there was no reason to conclude that the settlement agreement and release were unenforceable and, accordingly, the appellant was precluded from bringing the action. This decision was reversed on appeal. The Court of Appeal said that the motion judge proceeded as if she was hearing a summary judgment motion and made findings of fact based on the evidence presented. However, unlike a summary judgment motion, on a rule 21.01 (3)(d) motion, it cannot be presumed that all relevant evidence has been presented. Given the dispute over the validity of the release, this was not an appropriate case to be determined on a rule 21.01 (3)(d) motion.
10.4.1 Merits of Making a Preliminary Determination
For a number of reasons, when litigation is defended on the basis of a release and on other grounds, the parties may seek clarity, and indeed certainty, regarding the applicability, validity or enforceability of the release as a preliminary matter before proceeding to litigate the other issues. If the release was given in circumstances where the releasee agreed to settle a dispute in order to avoid potential or continued litigation, the releasee will have reason for concern that leaving issues about the applicability, validity or enforceability of the release to be decided through the full process of litigation will undermine the purpose of the release. And it is not always the releasee who will have reason to seek a preliminary determination: the releasor may also look to remove uncertainty about the effectiveness of the release before tackling the steps necessary to meet the onus of proving its claim. Dewitt v. Strang (summarized below – section 10.4.3) is an example of a case in which it was the plaintiff who, after the close of pleadings, filed a motion requesting a determination of whether a waiver was a bar to his cause of action.
In the event of a preliminary determination that the claims made by the releasor are barred by the release, then the parties will be spared time and resources they would have invested in litigating the other issues – and another positive outcome may come in the form of a reduced burden on the judicial system. Even if the court determines that the claims in the litigation are not barred by the release, this may bring a greater clarity of focus to the other issues in the case and it may remove a point of contention that had increased the difficulty of settlement.
A key question of course is whether a preliminary determination will contribute to the efficient and effective disposition or resolution of the litigation (or, in the words of the Supreme Court of Canada from Hryniak, above, a process that is “proportionate, timely and affordable”). The benefit of saving time and resources may be apparent when the outcome of the preliminary determination is to bring the litigation to an end, but this benefit will not necessarily be so apparent should it be determined that the release is not effective to bar the releasor’s claim. Perhaps, as already stated, certainty regarding the applicability, validity and enforceability of the release will help to move the parties towards settlement of the litigation. But if no such impetus to settlement ensues, it is surely to be expected that, in most cases, litigation of release issues on a preliminary basis followed by litigation of other issues will take longer than litigating all issues together. Rather than a saving of time and resources, a preliminary determination that the releasor’s claims are not barred by the release may have the opposite outcome, especially if there is significant duplication between the evidence relevant to the release issues and the evidence relevant to the other issues.
These points are well illustrated by the course of events leading to the decision in Fleury v. Homocrest Dairy Corporation, (1958), 15 D.L.R. (2d) 161 (Ont. H.C.). When that case came on for hearing, the court decided to direct the trial of a preliminary issue regarding the validity of a release. If valid and binding, the release would have provided an “absolute defence” to the plaintiff’s claim. But, after the trial of the preliminary issue, the court concluded that the release did not bar the plaintiff’s claim. The court said that, when it directed the trial of an issue, it did not realize how much evidence would be called to challenge the validity of the release. The court expressed misgivings about whether much time had been saved by the process of deciding the validity of the release in advance of considering other issues.
In the circumstances of the cases below, the courts saw merit in a preliminary determination of issues regarding the effectiveness of a release as a defence to a claim.
Beadle v. Pictou Landing First Nation, 2013 NSSC 25 (CanLII)
A claim was made for compensation to be paid from accounts established under an agreement and, in the context of the claimant’s application for appointment of an arbitrator, the court addressed a number of issues. As for the question of whether a release was valid and released the claims under consideration (as well as a limitation period question), the court said it would appear to be manifestly unfair to the respondent to be required to prepare to respond to the claims as a whole prior to those issues being determined. However, the court would not direct the arbitrator on the procedure to be followed when no arbitrator had yet determined whether or not a preliminary determination of the two issues would be required.
Peters v. Soares, 2019 BCSC 189 (CanLII)
One of the defendants in this case applied to have the issues of liability and damages severed and to have a summary trial on liability. The court decided that liability and damages should not be severed, but that issues with respect to a waiver and release relied on by the defendant could be severed from the other issues because the facts relating to it were discrete and suitable for summary determination. They presented an opportunity to decide an issue which might negate the need for a trial or remove some issues for determination and therefore simplify the trial.
10.4.2 Decision Can be Made in a Summary Manner
Under this heading and the one that follows, case law has been divided into two categories. Cases in the first category, gathered under the heading immediately above, are those in which courts found that decisions about the applicability, validity or enforceability of releases could be made in a summary manner. Cases in the second category, collected in section 10.1.4.3 below, are those in which courts found that such decisions could not be made in a summary manner.
As noted previously, rules of practice and procedure regarding motions for summary judgment differ from province to province and the outcome of a request for summary determination will depend on the rules of the jurisdiction in which it is made. But each case also turns on its own particular circumstances. For example, in Rossman v. Canadian Solar (section 10.1.4.3 below), the court decided that a trial was needed for the hearing of evidence of the factual matrix relevant to the interpretation of a release, but in MHR Board Game v. CBC (summarized in this section), the Ontario Court of Appeal said that a trial would not enlarge the full factual context that was before the motion judge and that constituted the background for interpretation of a release. Both of these cases were decided under the Ontario Rules of Civil Procedure, yet the differing circumstances of the cases yielded different results.
Manko v. Ivonchuk, 1991 CanLII 11983 (MB QB)
The plaintiff asserted that he executed a release under duress and pressure due to, among other things, the defendants’ harassing and threatening telephone calls. On a motion to strike out the statement of claim, the master said that there was no way to make a finding on the presence or absence of duress prior to a trial. On appeal, the court referred to the lack of particulars of the general allegation of duress and the heavy onus on the plaintiff (a practicing lawyer represented by counsel) of satisfying the court that the release ought to be set aside. The court said that putting the defendants to the expense of defending the action in order to have the validity of the release determined was manifestly unfair. The statement of claim was struck out.
Norm Masters v. First Ontario Credit Union Ltd., 2004 CanLII 9074 (ON SC)
The plaintiff accepted an offer of settlement made by the defendant with regard to the termination of the plaintiff’s employment and his employment entitlements. The defendant drafted minutes of settlement and a full and final release which the plaintiff executed and delivered to the defendant. After the plaintiff commenced this action, the defendant moved for summary judgment. The court found no conflict as to any material fact or any issue of credibility on the motion. There was no genuine issue for trial as to the validity and effectiveness of the release. The defendant was entitled to assert the release as a full answer to the present proceedings. The motion for summary judgment was granted and the action was dismissed.
Predie v. Ontario, 2004 CanLII 45451 (ON SC)
The defendants brought motions for summary judgment dismissing the claims of the plaintiffs in this case and, among other things, relied on releases executed by the plaintiffs. The plaintiffs brought a cross-motion for relief including orders setting aside the releases. The documents filed on the motion and the plaintiffs’ allegations, without backup evidence, were not sufficient to make out grounds for setting aside the releases. The action was dismissed because, inter alia, the releases protected certain of the defendants from future claims or proceedings.
Sibley v. British Columbia Custom Car Association et al, 2005 BCSC 509 (CanLII)
The court referred to Dixon v. B.C. Snowmobile Federation , Clarke v. Action Driving School , Karroll v. Silver Star Mountain Resorts and Schuster v. Blackcomb Skiing Enterprises as authorities for the proposition that issues relating to the enforceability of release agreements in the context of sports and recreation activities have been found suitable for determination under the British Columbia summary trial rule. The single issue on the defendants’ application in this case to dismiss the plaintiff’s claim was whether the release executed by the plaintiff precluded his claim against the defendants. In the result, the application was allowed and the plaintiff’s action was dismissed.
Goodspeed et al v. Tyax Mountain Lake Resort Ltd. et al, 2005 BCSC 1577 (CanLII)
The court allowed the defendants’ application for dismissal of the plaintiff’s claim upon concluding that a pre-emptive release signed by the plaintiff was enforceable and provided a complete defence to the plaintiff’s claim for damages arising out of the defendants’ alleged negligence. There were minor conflicts in the evidence which counsel agreed would not render this an inappropriate case for summary trial.
Orlandello v. Nova Scotia (Attorne General), 2005 NSCA 98 (CanLII)
There is ample authority that a court may summarily dismiss, before trial, a claim which has been discharged by an unambiguous written release. In this case, the Court of Apeal would have preferred the remedy of striking the statement of claim, but, because no submissions were addressed to that remedy, it resorted to dismissal by summary judgment.
Radvar v. Canada (Attorney General), 2005 CanLII 45412 (ON SC) , appeal dismissed, Radvar v. Canada (Attorney General), 2007 ONCA 137 (CanLII)
The motion judge did not accept the plaintiff’s argument that a trial was necessary in order to determine whether a release executed by the plaintiff precluded this action from proceeding. The motion judge said that the wording of the release as to what was to be released was unambiguous. The plaintiff pointed to a conflict in the evidence regarding the context or ‘factual matrix’ within which the release was signed and argued that as a result of the credibility issues created by this conflict, a trial was necessary. The motion judge found, however, that the conflict in the evidence was with respect to the subjective intentions of the parties, which were not relevant to the determination of contractual intentions. In its reasons for dismissing an appeal from this decision, the Court of Appeal said that it was not necessary for the motion judge to make any credibility assessments or findings. The motion judge correctly noted that any conflict in the evidence was with respect to the subjective intentions of the parties. Those intentions were not relevant to the determination of contractual intent.
Bittman v. Royal Bank of Canada, 2007 ABCA 102 (CanLII) , application for leave to appeal dismissed, George Bittman v. Royal Bank of Canada, Verne Stahl, Donna Price (Née Larson), William W. Miller, Leanne C. Mussak (Née Kiez), Burnett Duckworth & Palmer LLP: Patricia Quinton-Campbell, Kelly Bourassa, Richter Allan & Taylor Inc., J. Stephens Allan and Robert Taylor, 2007 CanLII 37202 (SCC)
On an application for summary judgment, the chambers judge held that the action against certain of the defendants had no reasonable prospect of success because the plaintiff had already released them from liability for what was essentially the same cause of action. This decision was affirmed on appeal: the Court of Appeal said that the release must stand and that the plaintiff had demonstrated no reasonable prospect of success nor any genuine issues to be tried.
Fountain v. Katona, 2007 BCSC 441 (CanLII)
The plaintiff argued that a release given by him of his claims arising from a motor vehicle accident was void because it was an unconscionable bargain or because it was obtained through undue influence by an insurance adjuster. The plaintiff contended that the enforceability of the release could only be resolved by an evidentiary hearing during which the witnesses could be cross-examined and their credibility tested. The court concluded that the matter could be decided on a Rule 18A (summary trial) application without the benefit of oral evidence because the material facts were not seriously in contention. The court said that, where there was a divergence in the evidence, it accepted the plaintiff’s version of the events for the purpose of its judgment.
1103785 Alberta Ltd. v. Exxonmobil Canada Ltd., 2008 ABQB 581 (CanLII), appeal dismissed, 1103785 Alberta Ltd. v. ExxonMobil Canada Ltd., 2009 ABCA 283 (CanLII)
The defendant asked the court to summarily dismiss this action. The defendant argued that the plaintiff was bound by previous releases granted to the defendant or its predecessors. The plaintiff did not contest that the documents were signed as represented, but it reserved the right to challenge the documents on the basis, for example, of non est factum. The court said that a 1956 surface lease of land, with wording referred to by the court as a release, was the key document in this case. The plaintiff acknowledged that the release was executed as described. While the plaintiff did not admit the validity of the release, given the age of the document, the amount of consideration paid, and the fact that subsequent documents relating to the lands were executed by successors in title without ever raising any infirmity of the original lease, the court concluded that the execution of the 1956 lease was a “conclusively-established fact” which allowed the court to draw the inference that the lease was not only executed in this form, but was valid. The court held that the defendant had met the burden of establishing that the plaintiff’s claim should be dismissed: It had established that the 1956 release was a full answer to the plaintiff’s claims and it had established that there was no genuine issue to be tried. In its brief reasons for dismissing an appeal from this decision, the Court of Appeal said that a trial would not assist in interpreting the various releases that were the key to the action.
Bjelakovic v. Accenture Global Services GmbH, 2008 CanLII 32802 (ON SC)
On a motion for summary judgment, the court considered whether there was a genuine issue for trial as to the enforceability of a release. The court addressed arguments with respect to duress, incapacity and unconscionability and found that there was no genuine issue of material fact requiring trial with respect to the enforceability of the release.
Murray v. Marcoux, 2009 CanLII 60092 (ON SC)
When a release has been signed by a party with the benefit of independent legal advice, without any imbalance of power and without any party taking advantage of any vulnerability, the question of whether a settlement agreed to by the releasor was improvident does not raise an issue of material fact requiring a trial. On this basis, the court reasoned that a motion for summary judgment dismissing the claim by one of the plaintiffs in this case, the releasor, should be granted. However, the court found that a trial was required to decide whether the other plaintiff, the wife of the releasor, had released her Family Law Act claim. She did not sign a release and the defendants were aware that she was not mentioned in settlement discussions (between the plaintiffs’ lawyer and an insurance adjuster) and was not included in the release. There was an issue of material fact as to whether the defendants did obtain or ever intended to obtain a release of her claim.
1483677 Ontario Limited v. Crain, 2009 CanLII 69791 (ON SC)
Certain of the defendants in this litigation brought a motion for summary judgment dismissing all claims against them. They argued that the evidence did not substantiate the claims made by the plaintiffs, that the plaintiffs had executed releases barring their claims and that the plaintiffs were attempting to set aside transactions they had affirmed. The plaintiffs argued that there were genuine issues for trial. In addition to the releases, the court considered the plaintiffs’ claims based on misrepresentation, conspiracy, economic duress, breach of contract and intentional interference with contractual relations. The court found that there were no genuine issues of material fact requiring a trial. The court said that the purpose of the summary judgment rule is to isolate and terminate claims and defences that are not factually supported. While a motion for summary judgment is not a substitute for a trial, where the allegations made by the plaintiffs are not present in the evidence before the motion judge and the materials do not raise genuine issues of credibility that would require a trial for their determination, summary judgment should be granted.
Turmel v. CBC (Dragon’s Den), 2010 ONSC 5318 (CanLII) , affirmed on appeal, 2011 ONCA 519 (CanLII) , leave to appeal refused, 2011 CanLII 79241 (SCC)
The plaintiff signed a consent and release before appearing on a television show to present a business proposal. He argued that the document was unconscionable because the edited version of his business proposal misrepresented his intent. His action was dismissed on a motion for summary judgment. The Court of Appeal upheld this decision and agreed that it was not unconscionable to give effect to the consent and release.
Forbes v. Manufacturers Life Insurance Company et al, 2010 ONSC 4931 (CanLII)
The defendants moved for an order dismissing this action on the basis that the action had been settled and that it was therefore an abuse of process. The court said that the plaintiff sought to re-litigate matters that had been settled and from which the defendants had been released. The action was dismissed.
Mull v. National Bank of Canada, 2011 ONCA 488 (CanLII), application for leave to appeal dismissed, John Mull v. National Bank of Canada and National Bank Financial Inc., 2012 CanLII 11265 (SCC)
The Court of Appeal upheld the exercise of discretion by a motion judge to stay the appellant’s claim as an abuse of process on the basis of a release. The court did not accept submissions regarding a limited scope of the release, or that a determination regarding the interpretation and scope of the release could only be made at trial, with a full factual matrix.
Sheriff v. Apps et al, 2012 ONSC 565 (CanLII)
On this motion for summary judgment, the court found that there was no genuine issue regarding the validity and scope of a release which required a trial. The matters relating to the release determined by the court on the motion included an issue about the meaning of the word “agents” in the description of the releasees covered by the release and an issue about whether the release was signed under economic duress.
Hanna v. Polanski et al, 2012 ONSC 3229 (CanLII)
The plaintiff suffered injuries as a result of a motor vehicle collision involving a vehicle in which he was a passenger. After he settled his claim with an adjuster for the defendants’ insurer and signed a release, he commenced this action. The defendants brought a motion for summary judgment, arguing that, as a result of the release, there was no triable issue and the action should be dismissed. The plaintiff argued that the release should be set aside as unconscionable, signed under duress or signed as a result of negligent misstatements by the adjuster. The plaintiff also argued that a trial was required to evaluate the credibility of witnesses. The court said that that it had a full appreciation of the evidence and issues required to make dispositive findings on the summary judgment motion. The plaintiff’s case had no chance of success and the parties should not be put to the further expense of a trial. The defendant’s motion was granted and the plaintiff’s action was dismissed.
Butera et al. v. Mitsubishi Motors et al., 2012 ONSC 4980 (CanLII) , appeal dismissed on other grounds, Butera v. Mitsubishi Motors Corporation, 2013 ONCA 99 (CanLII)
In this action, one of the corporate plaintiffs alleged that it entered into an agreement with one of the corporate defendants as a result of misrepresentations made to it by agents of the defendants. On a motion by the defendants, the court granted summary judgment and dismissed the action. The court decided that there was no genuine issue for trial due to the passage of the two-year limitation period applicable to the plaintiffs’ claims. The court also found, among other things, that the entire agreement and release provisions in the agreement were complete defences to the plaintiffs’ claims. On appeal, the Court of Appeal addressed only the issue of the limitation period and did not otherwise deal with the merits of the plaintiffs’ claims except to say it was not going to consider them.
MHR Board Game Design Inc. v. Canadian Broadcasting Corporation, 2013 ONSC 4457, appeal dismissed, 2013 ONCA 728 (Can LII), leave to appeal refused, 2014 CanLII 25874 (SCC)
The appellant signed a comprehensive release before his business proposal was presented on a television show. On a motion for summary judgment, the motion judge found that there was no reason not to give effect to the release and he dismissed the action. The Court of Appeal agreed that a trial would not enlarge the full factual context that was before the motion judge and that constituted the background for interpretation of this contract.
1539304 Ontario Inc. v. ICICI Bank Canada, 2013 ONSC 2737 (CanLII)
The court concluded that the defendant had demonstrated that no genuine issue requiring a trial existed in respect of the applicability and effect of releases contained in standstill agreements entered into by the parties; the releases were valid and binding and they applied to bar the claims advanced by the plaintiff in this action.
Chamberlin v. Canadian Physiotherapy Association, 2015 BCSC 1260 (CanLII)
The defendant applied to have the plaintiff’s claims dismissed by summary trial, on the grounds that a release and waiver signed by the plaintiff legally prohibited the plaintiff from pursuing those claims and that the plaintiff willingly assumed the risk of personal injury. The plaintiff was content to proceed with a summary trial and, having reviewed the material in the application record, the court was satisfied that the issues could be resolved by summary trial.
Trimmeliti v. Blue Mountain Resorts Limited, 2015 ONSC 2301 (CanLII)
A motion for summary judgment was successful where, in addition to other grounds, there was no genuine issue for trial regarding a pre-emptive release signed by the plaintiff which provided a full answer to the claim and warranted a dismissal of the action. The facts relevant to liability were comparatively few and permitted a summary resolution. Further, the recollections of the witnesses were “quite thin”: the motion was heard more than nine years after the incident giving rise to the plaintiff’s claim and recollections could not be expected to improve with the passage of still more time before a trial.
Urbanson v. Western Canadian Place Ltd., 2016 ABQB 32 (CanLII)
The plaintiff made a claim to recover damages for injuries she suffered when using a treadmill at a fitness facility. The operator of the fitness facility applied for summary dismissal on the basis that any claim the plaintiff might have was waived by a written release and waiver agreement signed by the plaintiff. The Master said that neither the plaintiff nor the representative of the fitness facility had any recollection of what happened on the day when the waiver was signed and thus there was no suggestion that a trial judge would have any better evidence regarding the effectiveness of the release than the evidence that was before the Master. Accordingly, the Master proceeded to determine the matter summarily. The application for summary dismissal was allowed.
Braun v. Whistler Mountain Resort Limited Partnership, 2016 BCSC 2259 (CanLII)
Before participating in a skiing lesson, the plaintiff signed a release that the court said was drafted in such a way as to include nearly every conceivable form of neglect or want of duty that might be attributed to the defendant. The court found that, in the circumstances in which the plaintiff was injured, there was a clear assumption of risk. Recognizing the seriousness and the strictness of the test that it must apply in order to dismiss a claim without a trial, the court concluded that there was no possible way the case had a prospect of success and it dismissed the case.
Arif v. Li, 2016 ONSC 4579 (CanLII)
A motion for summary judgment to dismiss this action on the grounds that the plaintiff released the defendants from liability and voluntarily assumed the risks associated with rock climbing was successful on both grounds. As for the releases signed by the plaintiff, the motion judge considered a number of issues, including whether there was a “Lack of Consensus Ad Idem”, whether the releases were unconscionable or contrary to public policy and the scope and interpretation of the releases.
Lay v Lay, 2017 ABQB 279 (CanLII), appeal dismissed on other grounds, 2019 ABCA 21 (CanLII), application for leave to appeal dismissed, Melanie Anne Lay, et al. v. Bradley Lay, et al., 2019 CanLII 55713 (SCC)
A case management judge found that the plaintiffs’ claim was barred by the operation of the Limitations Act and, if this conclusion was wrong, then the claim was extinguished by a mutual release. The case management judge found that “misleading disclosures” alleged by the plaintiffs did not amount to fraudulent misrepresentations. Even assuming the accuracy of the plaintiffs’ evidence, the defendants’ mutual release defence was so compelling that the likelihood it would succeed at trial was very high. As a result, the defendants had discharged their legal onus of showing that there was “no merit” to the claim; the claim was extinguished by the mutual release and it was fair and just to grant summary dismissal on this basis.
Fillingham v. Big White Ski Resort Limited, 2017 BCSC 1702 (CanLII)
The defendant sought dismissal of this action on a summary trial on the basis that an exclusion, release and waiver of liability printed on a day ticket for a ski area constituted a complete defence to allegations of negligence. The court concluded that it was able to find the facts necessary to decide liability issues based on the exclusion. The plaintiff relied on decisions from Alberta and Ontario in support of the argument that a determination of whether the defendant’s conduct and the resulting hazard fell within the scope of the waiver should be made following a trial. The court said that the cases relied on by the plaintiff were of little assistance because they applied a summary judgment rule that was quite different from, and more limited than, the B.C. rule.
Jamieson v. Whistler Mountain Resort Limited Partnership, 2017 BCSC 1001 (CanLII)
In reliance on a pre-emptive release signed by the plaintiff, the defendant brought an application for summary dismissal of this action. The court drew from the B.C. Court of Appeal decision in Dixon v. B.C. Snowmobile Federation the proposition that a case involving the validity of a release is “ideal” for summary trial, remembering that a party is obliged to bring her or his entire case to the summary application even when the party argues the case should not proceed in that way. The court found that the release was valid and enforceable and effective to bar the plaintiff’s claim and it dismissed the action.
Sojka v Sojka, 2018 BCSC 562 (CanLII)
In this case, all parties signed minutes of settlement and a mutual release was signed by all parties except two defendants who refused to sign the release. The court said the issue was whether the two defendants were under a mistaken belief of fact, which justified their request that the settlement agreement and release be deemed unenforceable. The court adopted the analysis in Roumanis v. Hill, 2013 BCSC 1047 (CanLII) with respect to when the enforceability of a settlement agreement ought to be decided on a summary procedure and found that there was no genuine issue for trial as to whether the settlement agreement was binding on the parties.
Urban Mechanical v. University of Western Ontario, 2018 ONSC 1888 (CanLII)
The plaintiff was a subcontractor on a construction project and one of the defendants, the general contractor, brought a motion seeking partial summary judgment dismissing the portion of the action that related to a particular claim by the subcontractor. In support of the motion, the general contractor relied on a provision of its contract with the subcontractor which stated that the subcontractor would be conclusively deemed to have accepted a decision of the general contractor under a specified provision of the contract and to have expressly waived and released the contractor from any claims in respect of the matter dealt with in that decision unless, within seven working days after receipt of the decision, the subcontractor sent a notice in writing of dispute. The court found that the language of the notice provision was clear, the subcontractor was bound by the provision and the subcontractor did not serve the required notice within the applicable period. The court granted the motion for partial summary judgment.
Kimball v Nikiforuk, 2019 BCSC 964 (CanLII)
The plaintiff’s claim arising from a motor vehicle accident was settled and he signed a release. The question before the court for determination was whether the settlement agreement should be set aside as unconscionable or the product of undue influence. The court found that the case presented by the plaintiff was not complex and was suitable for disposition by summary trial. The application materials were voluminous, but the facts were straightforward. While there were minor conflicts in the evidence, none of them bore on the issues to be decided or, if they did, they were such that they could be determined on the merits on the evidence as a whole.
1774142 Nova Scotia Limited v Deutsche Bank AG, 2019 NSSC 60 (CanLII)
On a motion for summary judgment, the court said that the question of law was whether the material facts before the court established a legally recognized vitiating element that would allow the plaintiff’s claims against the defendant to proceed notwithstanding a release executed by the plaintiff. There were no material facts upon which the court could find a legally recognized vitiating element. The release clearly applied to the claims made against the defendant, it was given for consideration, and the plaintiff represented that it had obtained independent legal advice on the meaning and effect of the release before executing it. The plaintiff’s claims were barred by the release and summary judgment was granted on this basis.
Quantech Electrical Contractors Limited v. Asco Construction Ltd., 2019 ONSC 1906 (CanLII)
The defendant was the general contractor for a construction project at a facility owned by the third party and the plaintiff was the electrical subcontractor. The third party and the defendant reached a global settlement agreement of claims by the defendant arising from the project. When the plaintiff made a claim against the defendant in respect of the project, the defendant sought contribution and indemnity from the third party. The third party brought a motion for summary judgment. The defendant argued that its claim against the third party could not properly be dealt with on the motion. The court was satisfied that it had all of the evidence before it which was required to determine the issues on the motion and that there were no issues of credibility that needed to be resolved through oral evidence. The court found that the claim made by the defendant was subsumed in the general settlement agreement, the defendant had forever released the third party in respect of the claim and the defendant was estopped from asserting a further claim against the third party in respect of this item.
Paksa v. Ontario Gymnastics, 2019 ONSC 7019 (CanLII)
The issue in this case was whether a waiver or pre-emptive release that was focused on potential injury to a child participating in a gymnastics program would extend to the plaintiff, who was the mother of the child, and to an injury suffered by the plaintiff during the child’s gymnastics class. On a motion for summary judgment, the court held that any ambiguity must be resolved against the defendant and that the signing of the waiver on behalf of the child was ineffective to “prevent the claims of third parties”. The court found that all of the relevant material on this issue was before it and that there was no genuine issue requiring a trial with respect to the waiver.
Ntakos Estate v. Ntakos, 2021 ONSC 2492 (CanLII)
The court said that the issues in this case involved facts which were largely not in dispute. They depended on a review of prior court proceedings, judgments and documentary evidence including settlements and releases signed by the plaintiffs. These issues did not depend on findings of credibility. They were threshold or “gating” issues that did not require a dive into the merits of allegations of fraud, conspiracy and misappropriation. Summary judgment could thereby “save the parties the cost and delay associated with going to trial on a number of other issues” (citing 2287913 Ontario Inc. v. Blue Falls Manufacturing Ltd., 2015 ONSC 7982).
Arksey v Sky Zone Toronto, 2021 ONSC 4594 (CanLII)
On a motion for summary judgment based entirely on the terms of a waiver and release of liability signed by the plaintiff, the court agreed with counsel that, given the thorough record, the lack of any real contest on the facts, and the relatively narrow range of the issues required to decide the outcome, this was a case that should be resolved summarily. The court could find the facts fairly using the summary judgment process as it could accept the plaintiffs’ evidence as being true and correct, with no effect on the outcome. The court could apply the law to the facts in an efficient, affordable, and proportionate process to yield a fair resolution.
Sharif v. Shaikh et al., 2021 ONSC 6834 (CanLII)
On this summary judgment motion, the moving party defendants, Homelife and Patel, asked the court to dismiss a crossclaim against them by the responding party defendants, on the basis that the responding party defendants signed a release in favour of Homelife and Patel. The responding party defendants argued that the release did not extend to Homelife. The court noted that a scenario in which Homelife remained a party to the crossclaim while Patel did not would not move the case more quickly or more cheaply to resolution. The court concluded that summary judgment might be a proportionate, more expeditious and less expensive means to achieve a just result in this case, but, if the release did not extend to Homelife, summary judgment would be inappropriate because it would not shorten the process or make it more efficient or less expensive. The court went on to find that the release did extend to Homelife, and that the release was of full force and effect, and it dismissed the crossclaim.
Savanna Well Servicing v Cleo Energy, 2022 ABKB 769 (CanLII)
this action, the plaintiffs claimed that they had provided well services to the defendant for which they had not been paid. On an application for summary judgment by the plaintiffs, the court concluded that the plaintiffs had shown there was no defence to their claim and there were no triable issues and that the plaintiffs were entitled to summary judgment. The contract between the parties provided that the defendant could dispute any invoice by written notice within 30 days of receiving the invoice. It also provided that the defendant expressly released the plaintiffs in respect of any claim not communicated to the plaintiffs by dispute notice timely delivered and waived any claim it might have against the plaintiffs in respect thereof. The court said that the result of the defendant not bringing forth its complaints on a timely basis was that the defendant waived any claim it might have against the plaintiffs in respect thereof. This was an entirely separate ground (in addition to another ground discussed in the decision) for concluding that there was no defence to the plaintiffs’ claim.
Fehr v. Gribilas, 2022 ONSC 275 (CanLII)
The court said that the aspect of this case that was appropriate for a summary judgment was about the enforcement of, and about who was able to enforce, the no-claims-over provision contained in a general release (as to no-claim-over clauses of a release, see section 7.5 above). The court could determine the “complete factual story and truth about the release” about which there were no substantial credibility or reliability questions. On the matter of the release, the outcome of a trial was inevitable and a foregone conclusion. The main action and a third party proceeding in this case were governed by the authority of the Sinclair-Cockburn line of cases and there was no genuine issue requiring a trial. The main action and the third party proceedings were permanently stayed. In Van Patter v. Tillsonburg District Memorial Hospital , a no-claims-over provision was not enforced on technical procedural grounds and nothing more was decided than that there were genuine issues requiring a trial in that case.
Badawy v. TD Bank Group, 2022 ONSC 5445 (CanLII)
The defendant brought a motion for an order granting summary dismissal of this action in which the plaintiff made allegations about his former employment with the defendant. The primary basis for the motion was that the plaintiff commenced the action after signing a settlement and release of all claims arising from his former employment with the defendant. The evidence showed that the plaintiff negotiated and signed the release after voluntarily participating in a mediation. He received the benefits of the bargain. The defendant fulfilled all its obligations under the release. The statement of claim did not allege that the release was unenforceable, nor seek to set it aside. The release was binding on the plaintiff. Its unambiguous terms disallowed him from pursuing claims against the defendant that arose from or were connected with his employment or its termination. The release operated as a complete bar to the claim, and accordingly, the claim had no chance of succeeding. A trial was not necessary to reach this legal conclusion.
Manson v Mitchell, 2023 BCSC 723 (CanLII)
This action arose out of injuries suffered by the plaintiff as a result of a mountaineering incident in July of 2021. The defendants sought a declaration that a waiver and release signed by the plaintiff applied to the mountaineering trip during which the incident occurred and was a full defence to the claim. The plaintiff argued that the waiver and release did not apply to the mountaineering trip during which the incident occurred because it was expressly date-specific and therefore applied only to an earlier climb. The defendants argued that the waiver applied to all rock climbing and mountaineering trips in the summer of 2021 during which the plaintiff was guided by the defendant Mitchell. The court said that proceeding by way of summary trial is not precluded by the fact that there is a conflict in the evidence; the determinative issue is whether the court is able to find the facts necessary to decide the issues of fact or law raised on the summary trial application and deliver a just and fair result. The court also said that, where there is little dispute as to the factual matrix, cases involving the interpretation and application of waivers can be ideal candidates for determination by way of summary trial, citing Dixon v. B.C. Snowmobile and Jamieson v. Whistler, above. While, in this case, all parties argued that the issues were suitable for determination by summary trial, the court noted that consent of the parties is an important but not determinative consideration. The court was cognizant of the conflicts in the evidence, yet “rare is the case where there is complete agreement on all of the evidence”. The court decided that the conflicts in the evidence could be resolved on the evidence before it and it proceeded with a summary trial for determination of the release issues.
Caron v. Bluteau, 2023 ONSC 429 (CanLII)
A settlement was reached with respect to a claim made by the plaintiff against the defendant, her former lawyer, and the plaintiff signed a release. The defendant brought a motion for summary judgment seeking a dismissal of this action on the basis of the release. The plaintiff’s evidence was that she signed the release with the understanding that it would not preclude her from commencing an action in negligence against the defendant. The court said that the plaintiff’s allegation about this understanding contradicted the plain meaning of the words of the release and that the plaintiff’s evidence was hearsay because it was presumably based on what she was told by her lawyer and her lawyer had not filed an affidavit to provide direct evidence. The court said it agreed with the conclusion in Sharif v. Shaikh (above) and in Rebel v. Stone Mills (see section 9.14) that the issue of whether a party is barred from pursuing a claim on the basis of a release is appropriate for summary judgment. On a motion for summary judgment, the parties must put their best foot forward as if the case was proceeding to trial. And the court must conduct a careful screening to eliminate inadmissible evidence (citing Kawartha-Haliburton Children’s Aid Society v. M.W., 2019 ONCA 316). The court concluded that the plaintiff’s hearsay evidence of surrounding circumstances that she was assured she could sue the defendant for negligence after signing the release was not sufficient to overwhelm the plain meaning of the words used. The court found that the plaintiff had not raised a genuine issue for trial and it granted the motion for summary judgment.
ALC v. Bergmark Guimond et al., 2023 PESC 48 (CanLII)
The plaintiff claimed damages allegedly sustained as a result of a construction project involving the removal and reconstruction of a grandstand. Pursuant to the terms of the construction management contract, the plaintiff expressly waived and released claims as of the date of total performance of the contract. The contract specifically stated that the waiver of claims included without limitation those that might arise from negligence or breach of contract. This statement expressly contemplated claims that might arise in the future and specifically identified the two types of claims – breach of contract and negligence – advanced by the plaintiff in this case. Pursuant to the terms of a cost plus contract, the plaintiff expressly waived and released claims as of the date of the final certificate for payment. This contract also expressly contemplated claims that might arise in the future and specifically identified the two types of claims made by the plaintiff in this case. The court said that the intention of the parties, as expressed in these contractual provisions, was to waive all claims, including future claims that might arise from negligence or breach of contract, as of the date of a specific event – the date of total performance of the project under the construction management contract and the date of the final certificate for payment under the cost plus contract. This certainty and predictability in the allocation of risk between the parties was also supported by the context known to both parties when these contracts were formed. The contracts were standard form agreements prepared by the Canadian Construction Association and the Canadian Construction Documents Committee for use in the commercial construction industry. On a motion for summary judgment by the defendants, the court found that there was no genuine issue requiring a trial in relation to the applicability and scope of the waivers agreed upon by the parties in the two contracts; the record on the motion allowed the court to conclude fairly and justly that the plaintiff had released its claims.
10.4.3 Decision Cannot be Made in a Summary Manner
As explained above (section 10.4.2), the following are cases in which courts found that issues about the applicability, validity or enforceability of releases could not be decided in a summary manner.
Jam’s International Ventures Ltd. v. Westbank Holdings Ltd., 2001 BCCA 121 (CanLII)
At first instance, an application for dismissal of this action in a summary trial proceeding was successful, but the Court of Appeal allowed the appeal and dismissed the application. With respect to a release relied on in support of the application, the Court of Appeal said that evidence of the factual matrix surrounding the release could throw light on the patent ambiguity in the document itself.
Brown v. Blue Mountain Resort Ltd., 2002 CanLII 7591 (ON SC)
The plaintiff claimed damages for injuries suffered while skiing and alleged that she fell on a patch of “slush” created by a defectively-adjusted snow-making machine. The defendant brought a motion for summary judgment and relied on a waiver and release printed on the daily ski ticket issued to the plaintiff. The motion judge concluded there was a real and genuine issue for trial arising from the plaintiff’s allegation that her injuries resulted from hazards that were unexpected, that would not normally occur at a ski facility and that were not contemplated by the wording printed on the ticket. The motion for summary judgment was dismissed.
Operation 1 Inc. v. Phillips, 2004 CanLII 48689 (ON SC)
The court hearing motions for summary judgment requesting dismissal of an action on the basis of a release said that whether the release was obtained by fraudulent representations could be determined only at a trial. There were “competing inferences” on the question of whether the releasors relied on information provided by the releasees and the task of choosing between competing factual inferences is for the court at trial and not for a judge on a summary judgment motion.
Pelechytik v. Snow Valley Ski Club, 2005 ABQB 532 (CanLII)
On an application for summary judgment, the evidence provided with regard to signage at the defendant’s ski resort was not satisfactory and it was a triable issue whether the defendant took reasonable steps to bring a pre-emptive release to the plaintiff’s attention. Also, the plaintiff argued that, even if the pre-emptive release did encompass categories of negligence, it would be contrary to public policy to allow such an exclusion to stand. The Master held that, since this was a novel argument in Canada, the argument should be allowed to proceed to trial: while the chance of success might be small, failure was not inevitable.
Champion v. Ski Marmot Basin, 2005 ABQB 535 (CanLII)
The plaintiff claimed damages for injuries suffered while skiing and alleged that he fell because the track for a T-bar lift was dangerously icy, as it had not been groomed or roughened. The plaintiff argued that the ski area operator was negligent and that this negligence “was not one normally encountered”. On this issue, the Master followed the reasoning of the Brown case, above, and held that there was a genuine issue for trial.
Pascoe v. Ball Hockey Ontario Inc., 2005 CanLII 3375 (ON SC)
Contractual waiver clauses have barred plaintiffs from recovering damages after sustaining injuries while engaging in a number of sporting activities. Courts have granted summary judgment based on the plaintiff signing a contractual waiver. However, many of the cases cited in support of the defendant’s motion for summary judgment were B.C. cases. The wording of the applicable rule and the test for summary judgment in B.C. are different from the rule in Ontario. The test for summary judgment in the B.C. rule is not based on the court being satisfied there is no genuine issue for trial as in the Ontario rule. The defendant failed to demonstrate that there was no genuine issue for trial and the motion for summary judgment was dismissed.
Peace Hills Trust Company v. Saulteaux First Nation, 2005 SKQB 465 (CanLII)
The defendant by counterclaim relied upon a release in support of an application to strike the counterclaim on the basis that it was an abuse of process. The defendant by counterclaim was not a party to the agreement and whether the release could be relied upon to found an application for abuse of process was dependent upon the interpretation of the agreement in light of the doctrine of privity of contract. The application judge held that a determination at trial must be made as to the intention of the parties to the contract before an exception to the doctrine of privity would be permitted.
Hobbs v. Robertson, 2006 BCCA 65 (CanLII)
This action arose from the death in hospital of a patient who was a Jehovah’s Witness and who had signed a document entitled “Refusal to Permit Blood Transfusion”. The document included a release from responsibility for consequences of the refusal to permit the use of blood or its derivatives. The parties proceeded by way of a special case pursuant to the B.C. Rules of Court, supported by affidavits and admissions made pursuant to the rules. They concurred in stating a question for the opinion of the court as to whether the action was barred by the release. The judge at first instance held that the action was barred by the release. The Court of Appeal concluded that the action should not have been decided on the basis of the record that was before the court. There were critical gaps in the special case and there was a potential for real prejudice if the action was resolved on the record as it stood. Among other things, the Court of Appeal noted that the Refusal was the hospital’s document, but the hospital was no longer a party to the action.
Bartlett v. Bartlett, 2006 CanLII 32592 (ON CA)
The motion judge dismissed a counterclaim by the appellants because he found that the appellants were bound by a release they had executed in favour of the respondents. An appeal from this decision was allowed. The Court of Appeal said there was a conflict in the evidence regarding the factual matrix in which the release was negotiated and executed. In light of that conflict in the evidence, there was a genuine issue for trial in relation to the scope and operation of the release. In addition, the conflict in the evidence raised questions as to whether, even if the release governed the matters covered by the counterclaim, the release was executed in circumstances of unconscionability such that it should be set aside. This also was a genuine issue for trial.
McGarry v. McGarry, 2006 CanLII 16370 (ON SC)
The plaintiffs alleged that a partnership existed between them and the defendants and they claimed, among other things, an accounting from the defendants with respect to the business and assets of the alleged partnership. The defendants moved for summary judgment relying on general releases signed by the plaintiffs (as well as the Limitations Act). The court said that the release was not the obvious product of a typically prudent commercial legal expert. While the court found nothing contradictory in the words of the release, and was not “offended” by the lack of specific reference to claims for an accounting, the release was ambiguous and arguably might not be effective in respect of the plaintiffs’ partnership interest claims, even though the words “all claims” might seem to be crystal clear. The court said that, on a motion for summary dismissal, it should not be asking what the release was for or what it was meant to release. The plaintiffs had raised a genuine issue for trial in respect of whether the release barred the plaintiffs’ claims.
Stein v. Exec-U-Fit Personal Fitness, 2007 CanLII 16447 (ON SC)
The plaintiff claimed damages for injuries suffered while rock climbing; one of the defendants moved for summary judgment, relying on a release and waiver signed by the plaintiff (as well as voluntary assumption of risk). The motion was dismissed because the question of whether the particular defendant was protected by the release depended on the resolution of a number of genuine issues of material fact, including whether the mutual intention of the parties was that the defendant be covered by the release, whether a misrepresentation by the defendant induced the plaintiff to enter into the contract and whether the defendant breached a term of the contract.
Downs v. Georgian College, 2008 CanLII 63205 (ON SC)
The plaintiff sought damages arising from injuries he suffered while proceeding through an obstacle course as part of fitness testing for a paramedic program. The defendant relied on two waivers signed by the plaintiff in support of a motion for summary judgment dismissing the plaintiff’s claim. The motion judge concluded that there was a genuine issue for trial as to whether the release and waiver captured the negligence complained of by the plaintiff in the setting up and maintenance of the obstacle course. Because the obstacle course had been set up for students of a police program rather than for paramedics, the motion judge also concluded that there was a genuine issue for trial as to the applicability of the release and waiver in view of the differences, if any, between the two courses.
Dawson v. Tolko Industries Ltd., 2010 BCSC 346 (CanLII)
On this summary trial application, certain defendants, referred to as the Towers defendants, argued that they and the defendant Tolko were joint tortfeasors in respect of the wrongs pleaded in the claim and that, on this basis, a release of the defendant Tolko resulted in the release of the Towers defendants. The court referred to five tests for determining whether defendants are joint tortfeasors and, for a number of reasons, concluded that it could not determine the issue raised by the argument of the Towers defendants on a summary trial application.
Wallace v. J. Rivington Associates Inc., 2011 ONSC 4481 (CanLII)
The moving parties sought an order staying two actions on the basis of a release signed by the plaintiff in both actions. The plaintiff argued that there were two genuine issues for trial; namely: (1) whether the moving parties made a fraudulent misrepresentation that was relied on by the plaintiff when she agreed to the release; and (2) whether the plaintiff was in a situation of economic duress such that she had no option but to sign the release. The court concluded that the appropriate forum for a determination of the validity of the release was at trial. Credibility would play a role in the determination of the factors that led the plaintiff to sign the release – whether she was under duress when she did so and whether she relied on any fraudulent representations of the moving parties, or their agents, when she did so.
Borre v. St. Clair College, 2011 ONSC 1971 (CanLII)
On a motion for summary judgment, the court said that, although a waiver was very broadly worded, there was a genuine issue for trial regarding the waiver as it applied to the plaintiff. The applicability of the waiver was intimately connected to the factual context to be determined at trial.
Dodd v. Prime Restaurants of Canada Inc., 2012 ONSC 1578
A restaurant operated by the plaintiff franchisees was not successful and the defendant franchisor took over operation of the restaurant. Concurrently, the parties entered into a mutual release under which they released each other from any debts, claims or actions. When the plaintiffs commenced an action against the defendant claiming, among other things, damages for breach of contract, negligence, misrepresentation and rescission of the franchise agreement, the defendant moved for summary judgment and argued that the action was barred by the mutual release. The plaintiffs argued that a trial was necessary to determine the validity of the mutual release, which they claimed was not enforceable since it was unconscionable as well as being void pursuant to section 11 of the Arthur Wishart Act. The court said it was not in a position to find that the mutual release would bar an action to enforce rights arising under the Arthur Wishart Act notwithstanding section 11 of that statute. It was not clear to what extent the plaintiffs may have been aware of potential claims they may have had against the defendant at the time the release was executed and the extent to which one of the plaintiffs had received legal advice in connection with the mutual release was the subject of conflicting evidence. The court concluded that the extent to which section 11 of the Arthur Wishart Act might render ineffective the mutual release as a bar to the action was a matter for determination at trial, rather than on a motion for summary judgment. The court also concluded that, in the circumstances of this case, a trial was necessary in order to reach determinations on the elements of the test for unconscionability.
Toscana Ventures Inc. v. Sundance Plumbing, Gas & Heating Ltd., 2013 ABQB 289 (CanLII)
An application was made for summary dismissal of this action on the basis that the action was captured under the terms of a settlement and release. The Master concluded that it was not plain and obvious that the settlement agreement and release barred the action and the application for summary judgment was accordingly dismissed. The recitals to the settlement agreement were general in scope and the release contained very general language, but the settlement agreement and release also included specific wording. Based on a review of the words used, in the context of the agreements as a whole, evidence of the surrounding circumstances and the facts known to the parties at the time of execution, it was at least arguable that the settlement agreement and release did not extend to the matters at issue in the action.
Seaward v. Blue Cross Life Insurance Company of Canada, 2013 CanLII 9506 (NL SC)
The court could not determine the legal effect of a release because it did not have a full evidentiary record to address an issue of non est factum and an argument that the release had been obtained in an unconscionable manner; also, the interpretation of the release could require extrinsic evidence and there was a potential need to resort to extrinsic evidence for the purpose of dealing with the issue of contra proferentem.
Miyafuji v. Greyhound Transportation et al., 2013 ONSC 1289 (CanLII)
The court found that the evidence filed in this case raised triable issues as to whether or not a release relied on by one of the defendants was a valid enforceable release. It was impossible to adjudicate upon the release without having the benefit of evidence from a particular witness as to what was told to the plaintiff and the representations that were made to the plaintiff with respect to the release. The record indicated a triable issue with respect to the release which could not be resolved on the affidavits filed and which required the full scope of examination that only a trial can provide.
York University v. Michael Markicevic, 2013 ONSC 378 (CanLII)
In this case, there were two reasons why it was not possible to determine disputes about the scope or validity of a release without a trial. First, the plaintiff argued that the defendant stood in a fiduciary position and that a release will not bar an action against a fiduciary when there has been non-disclosure of material information or misrepresentation by the fiduciary. It could not be said that the plaintiff had no chance of success of establishing that the defendant owed fiduciary duties. Second, the structure of the issues in this case made it impossible to determine whether the release was void for fraud without first dealing with the allegations of fraud made by the plaintiff against the defendant and no party suggested that those allegations could be adjudicated by way of summary judgment.
Wood Buffalo Housing & Development Corporation v. Flett, 2014 ABQB 537 (CanLII)
The plaintiff in this case claimed damages in relation to the design and construction of a building and the defendants moved for summary judgment on the basis of a provision of the design-build contract in which the owner agreed to a waiver and release of claims, other than those falling within certain specified exceptions. On the motion for summary judgment, the court made findings regarding the interpretation and scope of the release. The court also said there was no evidence or unfairness or unconscionability, and there was nothing to raise a genuine issue of trial in respect of “any power imbalance”, and, accordingly, it would not have dismissed the summary judgment application on this basis. However, while the waiver and release purported to cover “negligence or breach of contract”, the court found that the question of whether “negligence” extended to negligent misrepresentation in the certificate of substantial completion was a genuine issue for trial.
Legend Seeds v. Quarry Seed, 2014 MBQB 67 (Can LII)
On motions for summary judgment by the plaintiff and by the defendants, the Master concluded that there were genuine issues for trial, including an issue regarding the matters that were within the contemplation of the parties at the time when a release was executed.
Baywood Homes Partnership v. Haditaghi, 2014 ONCA 450 (CanLII)
A motions judge granted summary judgment dismissing this action on the basis that it was precluded by the terms of a release accepted as valid by the motions judge. In respect of the respondents’ counterclaim, however, the motions judge was unable to conclude that two promissory notes relied on by the respondents were valid, and he referred the issue of their validity to trial. The motions judge said that “the most telling and most persuasive indicator” of the validity of the release was the releasor’s testimony during cross-examination on his affidavit, that “there was a clean slate.” The Court of Appeal said that, although the motions judge was prepared to summarily adjudicate the issue of the release, unlike the promissory notes, on the basis of these “clean slate” admissions, the “clean slate” admissions were not made in relation to the release. The Court of Appeal held that it was inappropriate for the motions judge to distinguish between the promissory notes and the release on the basis of “de-contextualized transcript evidence”.
Also, the process of referring the counterclaim to trial while making a summary determination as to the validity of the release risked inconsistent findings and substantive injustice. It was an error in principle for the motions judge to refer the enforceability of the promissory notes to trial while summarily determining the enforceability of the release.
Grenier v. Algonquin College of Applied Arts and Technology (Algonquin College), 2014 ONSC 1984 (CanLII)
The defendant’s motion for summary judgment, brought on the ground that the matter had been settled by the parties, was dismissed. The court said that additional evidence was required on certain issues, including whether the return of an executed full and final release was an essential element of the alleged settlement. Further the court said that additional evidence was required to determine if the settlement was unconscionable. The court also said that this was not an appropriate situation for a mini-trial: the hearing of oral evidence would not avoid the need for a trial.
Royal Bank of Canada v. Kaveh, 2014 ONSC 2582 (CanLII)
The defendants were married to one another, but had separated. The plaintiff sued them on various debts and one defendant settled the claim against her. After the settling defendant and the plaintiff had signed a full and final release, the plaintiff discovered that the other defendant had conveyed his one-half interest in the matrimonial home to the settling defendant. The plaintiff commenced an action for an order declaring the transfer to be a fraudulent conveyance. The settling defendant brought a motion for an order dismissing the action on the ground that it was barred by the release. The motion judge was not prepared to dismiss the action on the basis of the release. While the terms of the release might be broad enough to require the dismissal of the action, that was not necessarily clear. The judge said that a full appreciation of the surrounding circumstances would be of assistance in interpreting the release.
O’Reilly v. Purolator Courier Ltd., 2014 ONSC 3266 (CanLII)
In this case, the court found there were genuine issues requiring a trial as regards a release, its scope and the circumstances of its signing, which might give rise to unconscionability or duress. A just and fair determination could not be made on a summary judgment motion.
Clarke v. Alaska Canopy Adventures, 2014 ONSC 6816 (CanLII)
A motion for summary judgment was dismissed where a full and complete context of the signing of an agreement containing a pre-emptive release and waiver of liability was necessary in order to interpret the agreement fairly and justly, so that its validity, applicability and enforceability could be properly determined. A mini-trial would not be appropriate in the circumstances: it was not in the interests of justice to have some witnesses provide evidence on a mini-trial only to have some of the same witnesses subsequently provide similar evidence at a trial with respect to liability.
LeRoy v. TimberWest Forest Corp., 2015 BCSC 2005, affirmed on appeal, 2016 BCCA 448 (CanLII)
The defendants in this case brought an application for summary disposition of the plaintiffs’ claims. The defendants relied on a release provided in an earlier compromise agreement and they argued that a valid release can and should be enforced summarily because otherwise the releasees are deprived of a significant part of the benefit that they bargained for. Nevertheless, the court found that there were genuine issues for trial with respect to both the validity and interpretation of the release.
D.L.G. & Associates Ltd. v. Minto Properties Inc., 2015 ONCA 705 (CanLII)
On an appeal from an order striking most of the plaintiff’s claims as disclosing no reasonable cause of action, the Court of Appeal said that the effect of a purported release on any of the plaintiff’s claims could not be determined on a pleadings motion.
Grand River Enterprises v. Attorney General of Canada, 2015 ONSC 5256 (CanLII)
On its face, the release in this case appeared to be binding and a bar to the action. However, the releasors had pleaded that the release was null and void because the releasee had breached its agreement and it would be premature and inappropriate to make a determination regarding the release on a motion.
100193 P.E.I. Inc. v. Canada, 2015 FC 932 (CanLII) , appeal allowed in part on other grounds, Canada v. 100193 P.E.I. Inc., 2016 FCA 280 (CanLII) , application for leave to appeal dismissed, 100193 P.E.I. Inc., et al. v. Her Majesty the Queen, 2017 CanLII 32942 (SCC)
The words of a release take their meaning from the context in which they are used and the intent of the parties. In considering what was in the contemplation of the parties, a court should consider the context, including the circumstances surrounding the execution of the document and evidence of the intention of parties (citing Arcand v Abiwin Co-Operative Inc, 2010 FC 529, above). The court said that this was something which could not be ascertained on the basis of the record before it and that should be addressed by way of a trial.
3746292 Manitoba Ltd. et al v. Intact Insurance Company et al, 2016 MBQB 210 (CanLII) , appeal on other grounds dismissed, 2018 MBCA 59 (CanLII)
Insofar as a claim alleging breach of an insurer’s duty of good faith was concerned, the language of a release in a proof of claim document was potentially capable of at least two interpretations and evidence of the circumstances under which it was signed would be of value to anyone making a proper interpretation of it. The interpretation of the release clause ought better to be left for trial, when the court would have more information about the circumstances surrounding its execution. However, there was no ambiguity in the release as regards a claim for monies payable under the insurance policy, so, to the extent that the summary judgment motion before the court was intended to dismiss this latter claim, it must be successful.
Dewitt v. Strang et al., 2016 NBCA 63 (CanLII)
A minor, Thomas Dewitt, was left a paraplegic as a result of an accident which occurred while he was participating in a motocross competition. Prior to participating in the event, both he and his father had signed a “Minor Participant Waiver” in favour of some of the respondents. These respondents argued that the waiver released them and all organizers of the event from any liability in the event of personal injury or death. Dewitt sought a determination of whether the waiver was a bar to his right of action. The motion judge dismissed the motion, finding that it was an unsuitable procedure for the resolution of unsettled, complex and difficult questions. The Court of Appeal said it was possible that there was an extricable question of law. A court might conclude – as submitted by DeWitt – that a waiver signed by a minor and by a parent is never, as a matter of law, binding on the minor. If this conclusion were reached, it would end the analysis of whether the waiver signed by DeWitt barred his right of action. But in the event of a conclusion that sometimes a waiver signed by minor and parent can be binding, depending on the wording of the waiver and the circumstances in which the waiver was obtained, then the analysis would continue. Although the motion judge did not articulate his approach in terms of this analytical framework, it was clear he was of the view both questions were more appropriately addressed as part of the entire proceeding. This was an option available to him.
IWK Health Center v. Northfield Glass Group Ltd., 2016 NSSC 281 (Can LII)
One of the issues in this case was whether an arbitrator appointed under the terms of a contract could determine a defence involving interpretation of a release which was a “separate agreement” from the contract. In this context, the court said that the release defence was not such as to warrant removing the issue from the arbitrator on the basis that it should be dealt with by summary judgment. There was a genuine issue for determination in relation to whether the release barred the claim before the court and that issue could be determined by an arbitrator.
Fleming v. Massey, 2016 ONCA 70 (CanLII)
The appellant appealed from the dismissal, on a summary judgment motion, of his action in which he sought damages from the respondents for injuries suffered at a go-kart race at which he was the race director. The appellant had signed a waiver releasing the respondents from liability for damages associated with participation in the event but, before the Court of Appeal, his main argument, based on the Ontario Workplace Safety and Insurance Act, was that the waiver violated public policy. The Court of Appeal concluded that it would be contrary to public policy to allow individuals to contract out of Part X of the statute. The Court of Appeal set aside the order granting summary judgment and allowed the action to proceed to trial.
Birss v. Tien Lung Taekwon-Do Club, 2017 ABQB 518 (CanLII)
The plaintiff signed a membership agreement for a taekwon-do club that included a waiver of liability. In his reasons for dismissing an application for summary dismissal of the plaintiff’s claim, the Master said that, “in light of evidentiary absences and conflicts”, it was not manifestly clear that the waiver would constitute a full defence to an alleged battery.
Ricova international inc. c. Chopra, 2017 QCCS 360 (CanLII)
The plaintiff alleged that the defendant misappropriated funds owed to it from clients. The plaintiff’s evidence was that, in other litigation, the plaintiff had been sued by its former Vice-President of Sales for commissions owing and the plaintiff learned that the defendant had benefitted when the former Vice President Sales instructed clients to wire payments owing to the plaintiff to bank accounts belonging to or controlled by third parties. The other litigation was settled and the settlement provided for a mutual release of all claims relating to the facts alleged in that lawsuit. In this action, the defendant argued that the object of the plaintiff’s claim had been released and that the specific terms of the release were broad enough to include him. Further, the defendant argued, on the assumption that the facts were deemed to be true, he was liable in solidum with the former Vice-President Sales and was released by virtue of the release granted to an in solidum debtor. The court said that the legal characterization of the facts concerning the defendant’s relationship to the former Vice-President of Sales as well as the interpretation of the transaction and mutual release were not admitted and could not be determined on a preliminary exception to dismiss. Rather, these were questions of fact and law to be determined by the trial judge hearing the merits of the case. Although the amounts claimed in the other lawsuit and this case appeared to arise from the same facts, the plaintiff’s evidence was vague and did not establish with certainty that the plaintiff’s monetary claim was identical to that described in the other lawsuit. In addition, even if the claim released was identical to that being claimed in this case, the legal characterization of the defendant’s liability as one of solidary or in solidum liability was one that was to be determined by the trial judge based upon the facts to be adduced at trial HYPERLINK “https://www.canlii.org/en/qc/qccs/doc/2017/2017qccs360/2017qccs360.html?autocompleteStr=2017%20qccs%20360&autocompletePos=1&searchUrlHash=AAAAAQAHcmVsZWFzZQAAAAAB&offset=0” l “_ftn13” o “” . Finally, even if the court were to conclude that the defendant and the Vice-President Sales were in solidum debtors, it could not be said that the release of one in solidum debtor necessarily discharges the other. The trial judge must first apportion the liability as amongst the in solidum debtors, based on the facts adduced at trial, in order to then determine the consequences of the release.
Sumas Remediation Services Ltd. v. Crowe MacKay LLP, 2018 BCSC 782 (CanLII)
In this case, the defendant relied on a release signed by the plaintiff and sought a determination by way of summary trial dismissing the plaintiff’s claim in its entirety. The release was given in connection with claims made in a dispute between the shareholders of the plaintiff: the defendant had been retained by one of the shareholders to prepare a response to allegations made by the other shareholder in oppression proceedings. Although the defendant was not a party to the release, it argued that it was entitled to the protection of the release as a third party beneficiary according to the principles articulated in Marble v. Saskatchewan . The court said that, given the lack of specificity of the release and in light of the contradictory and complex evidentiary record currently before the court, it was clear the court must carefully examine the intention of the parties in order to determine whom the release might cover. It was also clear that extrinsic evidence not before the court would likely be of assistance in determining to whom the benefits of the release were intended to apply. Further (citing Bank of British Columbia Pension ) the court said a release will not be construed as applying to facts of which the party making the release had no knowledge at the time of execution; in this case, there was significant debate and conflict in the evidence as to whether the relevant facts were in the knowledge of the parties. The court concluded that the interpretation of the release could not be properly completed in the absence of extrinsic evidence and the need for interpretation of the release and the complexity of the background facts made this matter unsuitable for summary disposition.
Clearway Construction Inc. v. The City of Toronto, 2018 ONSC 1736 (CanLII)
The defendant brought a motion for summary judgment on three grounds, one of which was that the claims advanced in the action were discharged by a release given by the plaintiff to the defendant. The court said that Biancaniello v. DMCT, above, summarizes the interpretive principles to be applied when assessing “what was in the contemplation of the parties” in entering into a release. The court concluded that there was insufficient evidence to conduct the analysis specified in Biancaniello and that there were genuine issues not capable of being determined on a summary motion.
Viveiros v. Mokhtarian, 2018 ONSC 2676 (CanLII)
On a motion for judgment by the plaintiffs in this action, the court found there were no genuine issues for trial about the existence of a settlement agreement reached by the parties, but there were several substantial issues for trial, including whether there was a “side deal” between one of the plaintiffs and one of the defendants and the terms of the release that was provided for in the minutes of settlement. The issue with respect to the scope of the release concerned the alleged side deal. The plaintiff’s position was that the release was not intended to bar his claim, but the court read the release to preclude that claim. The defendant’s position was that there was no side deal. The court concluded that these issues required a trial.
Rossman v. Canadian Solar Inc., 2018 ONSC 7172 (CanLII) , appeal on other grounds dismissed, 2019 ONCA 992 (CanLII)
The motions judge found there was a genuine issue requiring a trial in this case surrounding the release portion of an entire agreement clause in an employment contract and if it was meant to apply to the plaintiff’s outstanding claim for commissions from a particular transaction. The meaning of the release provision was wide; it used the general wording that “all previous agreements…are terminated and cancelled and each of the parties releases and forever discharges the other of and from all…claims…in respect of any agreement.” However, the court said those words were not to be looked at in a vacuum and the surrounding circumstances could be considered to understand the meaning of the release. There was no evidence that the goal was to wipe the slate clean between the plaintiff and the defendants and indeed the evidence was to the contrary. There was therefore a genuine issue requiring a trial as to what was in the contemplation of the parties at the time of the execution of the employment agreement.
Swampillai v. Royal & Sun Alliance Insurance Company of Canada, 2019 ONCA 201, allowing appeal from 2018 ONSC 4023 (CanLII),
On a motion for summary judgment, a release was determined to be unconscionable and unenforceable. An appeal from this decision was allowed: the Court of Appeal held that whether the release was unconscionable and therefore unenforceable was a genuine issue requiring a trial. More specifically, the Court of Appeal said, first, that the record before the motion judge was insufficient to permit him to determine whether the high threshold for unconscionability of “grossly fair and improvident” had been reached and, second, that the motion judge should have adverted to the respondent’s failure to read the release when determining whether the transaction was grossly unfair and improvident.
Hosseinkhani v. QK Fitness Inc., 2019 ONSC 70 (CanLII) , appeal dismissed, 2019 ONCA 718 (CanLII)
Under the Ontario Occupiers’ Liability Act, to rely on an exclusion of liability, an occupier must take reasonable steps to bring the exclusion to the attention of the party to whom a duty of care is owed. In this case, a membership agreement signed by the plaintiff did nothing to draw an exclusion of liability to the attention of the person to whom a duty of care was owed and the defendant did not present any evidence from the employee who was present at the time of signing. The court held that the defendant’s motion for summary judgment could not be sustained on the basis of the exclusion of liability in the membership agreement (but it granted the motion on other grounds).
Castleform Development Inc. v. Chiem, 2019 ONSC 238 (CanLII)
On a motion for summary judgment, it was submitted that the dispute between the parties was settled and that the settlement was evidenced by a release. The court said that the issue at hand was whether there was a settlement: if there was no settlement agreement, there was no exchange of consideration. The court concluded that, on its own, the supposed release raised issues that required a trial. More specifically, the court referred to issues including not only whether there was a settlement, but also whether the document in question was a release, who was being released and from what. The court was not prepared to find it was plain and obvious that the document was a release, having the effect of releasing the defendants from any claim the plaintiff might have against them. To be clear, the court said it was not prepared to find that the document was not a release; rather, determining whether the document was a release raised genuine issues requiring a trial.
Bernard v. Re/Max Realtron Realty Inc. et al., 2019 ONSC 1000 (CanLII)
A motion for summary judgment was dismissed because the court concluded that issues raised by the parties required a trial. Among other things, the court said that key issues of credibility related to whether the plaintiff received legal advice in advance of signing a mutual release, or whether he was in fact misled by the defendants as to his legal obligations and pressured to sign the release under duress.
Cuming v. Toronto, 2019 ONSC 1720 (CanLII)
The plaintiff had agreed to release one defendant, Toronto Terminal Railway, from her claim, but another defendant had not agreed to release Toronto Terminal Railway from a cross-claim for contribution and indemnity. Toronto Terminal Railway moved for summary judgment dismissing the cross-claim. The court said that the motion for summary judgment on the crossclaim was much like a motion for partial summary judgment. It might seem to be a cogent request when looked at in isolation, but it was problematic in context of the overall action. The court noted that the Court of Appeal had been especially concerned to warn against granting partial summary judgment in pre-trial motions where it is possible for a trial judge to come to a diametrically opposed conclusion on a finding that impacts on liability. The reason for this caution is self-evident and logical; it is foreseeable that the trial judge “will develop a fuller appreciation of the relationships and the transactional context than the motions judge” which could risk “inconsistent findings and substantive injustice” (citing Baywood Homes, above).
Inglis v. Medway Pines Stables, 2020 NSSC 97 (CanLII)
On a motion for summary judgment, there was a dispute as to the nature and extent of a pre-emptive release relied on by the defendants in connection with injuries allegedly suffered by the plaintiff while riding a horse at the defendants’ stable. The court said that the release was ambiguous concerning the temporal reach of its provisions: did it apply going forward to all contractual relations between the plaintiff and the defendants, in perpetuity or was it only applicable on the day it was signed in relation to the provision of services provided that day? The contractual interpretation of the release required a consideration of the context, that is, the surrounding circumstances of its execution. Such an endeavor – contractual interpretation in light of a factual dispute and potential ambiguity – could not be described as summary. That was not to say that contractual interpretation could never be dealt with on a summary judgment motion, but it could not be dealt with in this particular case.
Zaky v. 2285771 Ontario Inc., 2020 ONSC 4380 (CanLII)
The plaintiff claimed damages for injuries suffered at an “indoor trampoline and fun park”. The defendant relied on an electronic waiver document signed by the plaintiff at a computer kiosk on the defendant’s premises, in which the plaintiff released all claims for damage or injury suffered as a result of participating in trampoline games or activities. A motion for judgment by the defendant was dismissed because the motion judge concluded that there was a genuine issue requiring a trial as to whether the defendant took reasonable steps to bring the terms of the waiver to the plaintiff’s attention.
Weaver v. Bryson, 2021 NSCA 14 (CanLII)
After the breakdown of a business relationship, the parties to this litigation entered into an agreement and executed a mutual release for any future claims. The appellant relied on the release in defence of an action against him and he brought a motion for summary judgment. The respondents claimed that they executed the agreement and release under duress. The motion judge found there were genuine issues of material fact in dispute and he dismissed the motion. In its reasons for dismissing an appeal from the order of the motion judge, the Court of Appeal said that the motion judge was mindful that the alleged duress is a fact-based determination, requiring the consideration of these factors: (1) was there any protest; (2) was there an alternate course of action; (3) was there independent legal advice; and (4) after conclusion of the contract, were there steps taken to avoid it? Each factor requires weight to be attributed to the evidence and a comprehensive assessment to be done.
Curtis v. Medcan Health Management Inc., 2021 ONSC 4584 (CanLII) , appeal allowed (from decision dismissing motion to certify), 2022 ONSC 5176 (CanLII)
In this proposed class action, the plaintiffs made claims relating to unpaid public holiday and vacation pay. In response to the plaintiff’s motion for certification of the class action, the defendants brought a cross-motion for summary judgment to have individual actions of certain plaintiffs dismissed on grounds including releases signed by the individual plaintiffs when they ended their employment. The court found that there were genuine issues for trial as whether to the claims of these individual plaintiffs were barred by releases. The court did not have an adequate record to decide this issue summarily
Nemr v. 9100288 Canada Inc. et al, 2021 ONSC 4733 (CanLII)
The plaintiff Roger Nemr operated a pizzeria from leased premises in a plaza. He fell from the roof above the plaza and claimed damages from a number of defendants, including the owner of the plaza. The owner of the plaza brought a motion for summary judgment. It relied on provisions of the lease which said that the lessor was not responsible for any personal injury sustained by the lessee or other person who may be upon the demised premises. As stated by the court, the facts were disputed and so too was the proper interpretation of the lease. The court said it tended to agree with Mr. Nemr’s position that the “demised premises” were limited to his pizzeria and did not include the roof. The court also said that the Occupiers’ Liability Act permits an occupier to restrict, modify or exclude its duty of care or liability for breach of the statute but this is a fact driven exercise that focuses on the “reasonable steps” taken to bring the exclusion clause to the attention of the plaintiff (citing Hosseinkhani, above). Based on the evidentiary record, the court said it seemed unlikely that the lessor could successfully rely on the lease to exempt it from liability. At the very least, this was a genuine issue for trial.
Lucarelli v. Morrison, 2021 ONSC 5579 (CanLII)
On a motion for summary judgment, the court concluded that a trial was required to determine whether the plaintiffs’ claim against the defendant insurance company was barred by the terms of a release. The insurance company relied on the plain meaning of the release and argued that the action clearly fell within its scope. The court said that the plaintiffs were not arguing that the terms of the release were not broad enough to cover their claim. Their action was for damages, for an amount they said they were entitled to recover beyond a settlement amount paid to them. That damages claim was grounded in tort, based on the insurer’s alleged negligent misrepresentation, which the plaintiffs said they were entitled to pursue against the insurer despite the release (citing BG Checo International Ltd. v. British Columbia Hydro and Power Authority, 1993 CanLII 145). The evidence before the court gave rise to triable issues that it would not be appropriate to resolve in the context of a summary judgment motion.
Provincial Health Services Authority v Briggs, 2023 BCSC 1729 (CanLII)
The respondent reached a settlement of claims arising from the termination of his employment with the Provincial Health Services Authority and he signed a release in respect of claims arising out of his employment or the termination of his employment. Later, the respondent initiated a complaint against the PHSA under the B.C. Human Rights Code. In this litigation, the court considered a petition by the PHSA for a declaration that the release was binding on the respondent and constituted a complete bar to the complaint initiated by him. The court said that deciding whether the release should be enforced would require factual findings that might be challenging to make on a summary application. The court also noted that the respondent had adduced evidence casting doubt on the extent of his awareness of the elements of his claim and of his capacity to appreciate the nature and effect of the document that he was signing. The court found that one of the issues was whether the disability that was the subject of the respondent’s human rights complaint, or its consequences, undermined the fairness of the release, or otherwise rendered it unfair for the PHSA to rely on the release. This was an issue that the Tribunal was better placed than the court to resolve. The petition was dismissed.
10.5 Production and Disclosure of Releases
Production and disclosure of releases when some but not all parties to multi-party litigation have reached a settlement is discussed above in Chapter 7: Release and Potential Multi-Party Liability, section 7.6.1, Disclosure of Litigation Agreements – Releases. As explained in section 7.6.1, Canadian case law deals with the extent to which privilege must give way in favour of disclosure of litigation agreements in multi-party litigation. A number of decisions, particularly from British Columbia, indicate that the existence of a release is relevant to the disclosure obligation.
Other case law on issues relating to production and disclosure of releases is set out below in sections 10.5.1 and 10.5.2.
Lundy v. VIA Rail Canada Inc., 2012 ONSC 4152 (CanLII)
The defendants in a proposed class action communicated with several potential class members and made settlement offers. Three potential class members accepted the defendants’ offer to settle and signed releases. When the plaintiffs in the proposed class action learned about the settlements, they brought a motion for relief including the disclosure of releases signed by the potential class members and an order rescinding the settlements. The court decided that the defendants could complete the settlements for which releases had been signed, but should disclose the releases to the plaintiffs.
10.5.1 Releases and Settlement Privilege
As indicated by the Supreme Court of Canada, settlement privilege is a common law rule of evidence that protects communications exchanged by parties as they try to settle a dispute: Union Carbide Canada Inc. v. Bombardier Inc., 2014 SCC 35 (CanLII), [2014] 1 SCR 800, at paragraph 31. Sometimes called the “without prejudice” rule, it enables parties to participate in settlement negotiations without fear that information they disclose will be used against them in litigation (Union Carbide, paragraph 31). This promotes honest and frank discussions between the parties, which can make it easier to reach a settlement. Encouraging settlements has been recognized as a priority in our overcrowded justice system, and settlement privilege has been adopted for that purpose (Union Carbide, paragraph 32).
In the case below, the court addressed squarely whether settlement privilege applies to releases.
Rekowski v. Renfrew (County), 2019 ONSC 2852 (CanLII)
The court said that the defendants were entitled to know if releases signed in connection with the resolution of earlier litigation arising out of the same motor vehicle accident as this action restricted the rights of any of the litigants in this case. The court went on to say that settlement documents are presumptively privileged including the ultimate minutes of settlement. But releases are another matter. Releases signed to implement a settlement are intended to be a bar to subsequent litigation. Releases are not subject to settlement privilege and they are relevant particularly if they affect the right of parties to advance claims. Releases were to be produced, although it was not necessary to disclose the amount of the settlements if that was set out in the release documents.
10.5.2 Disclosure of Release on Request for Interlocutory Relief
In the cases below, a party seeking interlocutory relief failed to disclose a release that was relevant to the court’s consideration of the request.
Operation 1 Inc. v. Phillips, 2004 CanLII 48689 (ON SC)
In this decision, the motions judge hearing motions for summary judgment referred to an earlier order made in the same case which set aside Anton Piller and receivership orders granted ex parte. The ex parte orders were set aside on the ground that they had been obtained without adequate disclosure of relevant facts – including the existence of a release.
Royal Bank of Canada v. Kaveh, 2014 ONSC 2582 (CanLII)
The plaintiff and one of the defendants settled an action on various debts and they both signed a release. Subsequently, the plaintiff discovered that the other defendant had conveyed his one-half interest in the matrimonial home to the settling defendant. The plaintiff commenced an action for an order declaring the transfer to be a fraudulent conveyance and it obtained and registered a certificate of pending litigation. A motion for an order discharging the certificate was granted. The release was not put before the judge who granted leave to register the certificate and it should have been. While it is possible that the judge might have decided to grant the certificate even with knowledge of the release, she was entitled to be made aware of it.
10.6 Stay of Proceedings
The decisions below provide guidance on issues about the granting of a stay of proceedings in situations involving releases.
Orlandello v. Nova Scotia (Attorney General), 2005 NSCA 98 (CanLII)
An action for a claim which has been released and discharged is an abuse of process. In SinclairCockburn v. Richards , the remedy was a stay. Nova Scotia courts have jurisdiction to grant a stay. A stay, however, was not the most appropriate remedy in this case. A stay is an indefinite, but not necessarily permanent, remedy which may be lifted. The appropriate remedy would permanently terminate the lawsuit. The court is authorized to strike a statement of claim which constitutes an abuse of process. This was the remedy ordered by the court in Sinanan v. Woodyer .
Drapeau v. Heald, 2006 CanLII 9147 (ON SC)
The plaintiff was involved in four motor vehicle accidents. An action arising out of one of the actions was settled and the plaintiff and her spouse gave a release which included a no-claim-over clause: they agreed not to take any proceedings against any other person or corporation who might claim contribution or indemnity from the releasees. When a defendant in an action arising out of one of the other accidents initiated third party proceedings against one of the releasees, the releasee moved for a stay of proceedings. The court said that a stay of the third party claim by the defendant against the third party would be inappropriate because the defendant had nothing to do with the settlement agreement in the other action. The action by the plaintiffs against the defendant fell squarely within the language of the no-claim-over clause, but the defendant had no obligation to abide by the plaintiffs’ undertaking in the release. The defendant was not a party to the agreement which included the release provisions and neither party to the release was entitled to require a stay of the third party claim.
Hollander v. Mooney, 2017 BCCA 238 (CanLII) , application for leave to appeal dismissed, Gail Anita Nelson, et al. v. Gina Marie Hollander, et al., 2018 CanLII 28109 (SCC)
A settlement agreement reached by parties to litigation was found to be enforceable and approved by the court. It provided for releases and that no further steps would be taken. By the terms of the settlement agreement, a stay of proceedings was unnecessary in this case.
10.7 Severance or Bifurcation of Issues
In appropriate circumstances, courts may see fit to sever issues relating to a party’s reliance on a release from other issues in the particular case.
Note that, in cases where consideration of liability and damage issues has been bifurcated, the court will determine whether a release relied on by the defendant stands as a defence to the claim before proceeding to determine issues relating to the quantum of damages: see, for example, Parker v. Ingalls, 2006 BCSC 942 (CanLII) and Copeland v. Hamilton (City), 2009 CanLII 42450 (ON SC), in Chapter 8: Anticipatory of Pre-Emptive Releases, sections 8.5.3 and 8.3.2.2, respectively.
Maiklem v. Springbank Oil & Gas Ltd., 1994 CanLII 9089 (AB QB)
This action was divided into two segments. The first segment of the trial determined the issue of whether a release barred the plaintiff by counterclaim from advancing certain claims made in the counterclaim. The court concluded that the release was obtained as a result of deliberate non-disclosure and misrepresentation and that the counterclaim should be permitted to proceed to trial.
Adroit Resources Inc. v. Tres-Or Resources Ltd., 2008 BCSC 1211 (CanLII)
The defendant applied to sever the trial of this action in order to have the court determine, as a preliminary issue, whether the plaintiff was barred from proceeding with a significant portion of its claim – referred to as the first stage issues – by reason of a provision of an agreement which said that no party to the agreement would have any liability or obligation to the other pursuant to certain pre-existing agreements. The plaintiff relied on authority for the proposition that the general language in a release will only release matters that were in the contemplation of the parties at the time the release was given. The plaintiff also relied on Hannan v. Methanex , in which it was found that the language of a release cannot be considered in a vacuum and that the specific context in which a release was executed must be looked at in order to determine what the parties were really contracting about. The court accepted that the frst stage issues could not be determined in an evidentiary vacuum and that it would be necessary to address the context of agreements between the parties. However, it was likely that this would entail a more limited review of evidence than for the plaintiff to prove alleged breaches of fiduciary duty and of a duty of care by the defendant. Further, the plaintiff’s concern about unnecessary duplication of evidence if the trial was severed could be addressed by having the same judge hear both parts of the trial and by ordering that the evidence in the first part applied to the second part. The court decided that the trial would be severed so that particular issues would be addressed in the first stage.
Peters v. Soares, 2019 BCSC 189 (CanLII)
One of the defendants in this case applied to have the issues of liability and damages severed and to have a summary trial on liability. The court decided that liability and damages should not be severed, but that issues with respect to a waiver and release relied on by the defendant could be severed from the other issues because the facts relating to it were discrete and suitable for summary determination. The court decided that going beyond the waiver issue to determine the defence of volenti non fit injuria was not appropriate because volenti could not be separated from negligence and deciding negligence was not appropriate as it might be necessary to make findings of fact.
10.8 Jury Trials
The respective roles of judge and jury in the trial of proceedings involving releases were at play in the cases below.
Zaworski & Other v. Carrier Lumber Ltd., 2004 BCSC 194 (CanLII)
The defendant sought an order that this action be heard by a judge without a jury. One of the reasons cited by the defendant for its argument that the action should be heard without a jury was that the principal question at issue was the construction of an oral contract. The court said that the principal issue in the case was the meaning and intent of the oral contract and whether it included a particular contractual obligation or promise. The court went on to say that another very significant interpretation and construction issue arose in respect of a written release obtained from the plaintiffs which the defendants relied on in answer to the whole of the statement of claim. The court said this was entirely a construction issue. The court concluded it was mandatory that the action be heard by a court without a jury pursuant to B.C. rules providing that a trial shall be heard by the court without a jury where it relates to a matter in which the sole or principal question at issue is alleged to be one of construction of, among other things, an oral or written contract, or other document.
Gallant v. Fanshawe College of Applied Arts and Technology, 2009 CanLII 50755 (ON SC)
By agreement of the parties, the trial of this action proceeded on the basis that the validity of a waiver/release signed by the plaintiff would be determined by the trial judge after the jury had made its findings of negligence.
Kempf v. Nguyen, 2015 ONCA 114 (CanLII)
As a result of an accident that occurred during his participation in a bicycle race, the plaintiff claimed damages from another rider in the race; the defendant relied on the doctrine of volenti non fit injuria and a waiver signed by the plaintiff which did not release other ride participants but which the defendant said was relevant to the assumption of risk and contributory negligence. The trial judge struck out the jury notice due to a concern that the jury, in answering liability questions, would be confused by the contents of the waiver or perhaps use it inappropriately in their deliberations. This decision was overruled on appeal. The majority of the Court of Appeal said that the trial judge erred in her decision that the jury members would be incapable of understanding the legal effect of the waiver even after careful instruction.
Henni v. Food Network Canada Inc., 2022 BCSC 1711 (CanLII)
The primary claim in this action was for copyright infringement, arising out of the plaintiffs’ submission of a television show concept to the defendant Food Network. The plaintiffs alleged that Food Network rejected their submission but then commissioned a program that was virtually identical to their show concept. The defendants relied on a release given in favour of Food Network’s parent company, Shaw Media. The issue on the application before the court was whether a jury notice filed by the plaintiffs should be struck out. Under rule 12-6(2) of the B.C. Supreme Court Civil Rules, a trial must be heard by the court without a jury if it relates to a proceeding referred to in Rule 2-1(2); Rule 2-1(2)(c) refers to proceedings where the sole or principal question at issue is alleged to be one of construction of, among other things, an oral or written contract or other document. The court agreed with the defendants that, while proof of the copyright infringement claim was the central issue in the case from the plaintiffs’ perspective, the interpretation of the release and its resulting effect on the plaintiffs’ ability to succeed on some or all of their causes of action (copyright infringement, breach of confidence and unjust enrichment) would be the central issue in the action. Even if the plaintiffs were successful in establishing copyright infringement, that would not dispose of the litigation in their favour. The proper construction and application of the release, including whether it released proprietary rights and which of the defendants—if any—it applied to, would then come into play. The plaintiffs could not succeed unless and until the release was interpreted in their favour so as not to bar some or all of their claims, or not to apply to some or all of the defendants who might be found liable to the plaintiffs. It was the interpretation of the release and its application to the facts as found that would determine the litigation. The court concluded that the principal issue in this case was the construction and application of the release and that the jury notice must be struck out.
Caragannis v White, 2023 ABKB 428 (CanLII)
The plaintiffs commenced an action for damages resulting from one of the plaintiffs falling from a horse. One of the defendants sought an order that the trial of the action be held with a jury. In response to the application for a jury trial, an affidavit was filed, to which was attached a document entitled acknowledgment of risk and release of liability. The applicant argued that the existence of a waiver did not make the action too complicated for a jury, citing Kempf v. Nguyen, above. The court said that the Kempf case was far simpler than this case. The court listed a number of issues, one or two of which it said might be manageable by a jury, but that together created a nest of interconnected issues which were likely to make a trial by a jury inconvenient. The application for a jury trial was dismissed.
10.9 Costs
Generally, Canadian courts exercise a discretion to order that a litigant – usually the successful party – be compensated for its costs of litigation by one or more other parties. There are many factors that may be taken into account by a court when it determines an appropriate cost award: see, for example, the list of factors set out in Rule 57.01(1) of the Ontario Rules of Civil Procedure that a court may consider in exercising its discretion under section 131 of the Courts of Justice Act to award costs of a proceeding, or a step in a proceeding.
The courts have considered the relevance of release issues to cost awards in many different fact situations. The case law is categorized on the basis of different fact situations in the sections that follow below.
Guarantee Company of North America v. Resource Funding Ltd, 2009 CanLII 41209 (ON SC)
In this decision regarding costs of a third party claim, the court referred to the normal rule that an unsuccessful plaintiff will not be charged with the costs of the third party except for situations in which fairness requires the unsuccessful plaintiff to bear a successful third party’s costs. The court found that this case fell outside the normal rule and that the plaintiffs should bear the costs of the third parties, Simon Barten and his company. The main issue in the action was whether the defendant Resource Funding Limited had been released from an indemnity given by it to the plaintiffs. Barten had been instructed to negotiate a release of the RFL indemnity. The issue about whether the indemnity had been released turned on a question about whether Barten, who was negotiating on behalf of RFL, was told that a letter had to come from RFL requesting a release of the indemnity. Thus, the main issue litigated was a contest between the plaintiffs and Barten and that issue also was central to the third party claim of RFL against Barten and his company. The principal issue in the main action was also the principal issue in the third party claim, and it would not have been appropriate to try the main action and the third party action separately. Nor would it have been appropriate for RFL to fight the main action and then, if it lost, start an action against the third parties. In order to protect its interests, RFL had no real alternative but to make the third party claim.
10.9.1 Cost Award Based on Conduct in Demanding Release
The issue here is whether the conduct of one party in demanding a release from another party is relevant to the court’s determination of an appropriate cost award.
Isaacs v. MHG International Ltd., 1984 CanLII 1862 (ON CA)
The trial judge awarded the respondent his costs of a wrongful dismissal action on a solicitor-and-client basis, rather than on the ordinary scale, because of the appellant’s refusal to pay the respondent relocation expenses to which he was entitled under company policy unless he signed a release of all claims against the appellant. The Court of Appeal said that an award of costs on a solicitor-and-client basis is ordered only in rare and exceptional cases to mark the court’s disapproval of the parties’ conduct in the litigation. While recognizing that it would not lightly interfere with the discretion of a trial judge in the disposition of costs, the Court of Appeal concluded that, in the circumstances of this case, the discretion was improperly exercised and contained an error in principle.
10.9.2 Cost Award Considering Dispute About Giving or Requiring a Release
The issue here is whether the conduct of parties when they have disagreed about giving or requiring a release, or the terms of a release, is relevant to the court’s determination of an appropriate cost award.
Romany v. Perry, 2006 CanLII 29283 (ON SC)
In connection with the settlement of a “minor motor vehicle claim”, counsel for the parties proposed “competing forms” of release that crossed in the mail and, rather than meeting to negotiate a reasonable form of release, the lawyers engaged in a “flurry of correspondence” and sought to have the court enforce their respective forms of release. The motion judge said that, in view of what he regarded as the inappropriate manner of dealing with the matter by both counsel, there would be no order as to costs.
Chemainus First Nation v. Bullock Baur Associates Ltd., 2012 BCSC 479 (CanLII)
The court found that there had been a valid settlement of causes of action arising out of the construction of a sewer system (as set out in an agreement providing for a mutual release of all claims) and held that the refusal of a party to consent to a release of claims amounted to reprehensible conduct deserving of a rebuke by means of an order for special costs. Only part of the application dealt with the enforcement of the release provided for in the settlement, and solicitor and client costs were awarded for the part of the application related to enforcement of the settlement agreement.
Estate of Françoise Poitras v. Canadian Cancer Society, 2021 ONSC 406 (CanLII)
In this decision, the court addressed an estate trustee’s compensation and costs. On the subject of costs, the court said that by far the single greatest obstacle to the resolution of the estate was a dispute about the wording of a release for an interim distribution of assets of the estate. The court also said that the failure to resolve this issue, which should have been easily and quickly settled, was largely attributable to conduct of the lawyers for certain charitable beneficiaries. The court ordered the charitable beneficiaries to reimburse the estate, on a partial indemnity basis, for the estate trustee’s reasonable legal costs over a period determined by the court.
Rosewall v Sechelt (District of), 2022 BCSC 448 (CanLII)
Shortly before the trial of this litigation, the plaintiffs offered to discontinue their actions in exchange for a waiver of costs by the defendant British Columbia. In its reply to the plaintiffs, BC provided a draft release. The plaintiffs rejected BC’s form of release, proposed an alternate form and noted that BC could not hope to achieve more than the plaintiffs’ form of release, even if successful at trial. BC rejected the plaintiffs’ form of release and insisted on its own form, which brought the negotiations to an end. The plaintiffs’ final offer left open the possibility of further litigation by the plaintiffs against BC and BC was “holding out for a more comprehensive release”. In the result, the plaintiffs obtained what the court described as a “dramatically better outcome”: they recovered damages, BC would have to pay them costs in an amount to be determined, and the plaintiffs were not barred by a release from advancing a further claim against BC if the nuisance that was the subject of the action continued posttrial. The plaintiffs sought double costs on the basis that they offered to settle on terms more favourable to BC than the result eventually obtained by them. In addressing the claim for double costs, the court said that BC’s refusal of the offer to discontinue with a waiver of costs was clearly unreasonable. There was substance to the plaintiffs’ case. While there was room for legal argument on both sides, BC should have recognized the risk that it was running. It was unreasonable for BC to hold out for more in the form of a comprehensive release than it could obtain by success at trial.
10.9.3 Cost Award When Litigation is Barred by Release
The issue here is whether the conduct of a party in commencing litigation found by the court to be barred by a release is relevant to the court’s determination of an appropriate cost award.
Ysselstein v. Tallon, (1992), 18 C.P.C. (3d) 110 (Ont Ct., Gen. Div.)
The plaintiff settled her claim against the driver of a motor vehicle arising from injuries she suffered in a collision and she signed a release with a no-claim-over clause in which she agreed not to take proceedings against any other person who might claim contribution or indemnity from the releasee. In this action, the plaintiff sued the doctors responsible for the diagnosis and treatment of her injuries and the doctors made a third party claim against the releasee. The court dismissed the action on the ground that whatever rights the plaintiff may have had against the defendants had been bargained away, as expressed in the release. On the issue of costs, the court said that, given the well-established policy of upholding and enforcing settlements, and given the broad and inclusive wording of the release, this was a case in which, to the extent practicable, the third party and the defendants should be protected against the costs of the action. The court determined that the costs of the defendants and those of the third party were to be paid by the plaintiff on a solicitor and client basis.
Panasonic Canada Inc. v. Morrison, 2003 ONSC 10744
The plaintiff alleged that it was the victim of a fraud involving the inflation of invoices by suppliers of certain services. The plaintiff commenced an action against parties that included the defendant Samson and his related companies. Later, the plaintiff agreed to discontinue the action against Samson and related companies and the plaintiff gave a release to Samson. After discovering the involvement of the defendants Quebecor and King in the invoicing scheme, the plaintiff added these parties as defendants and amended the statement of claim. Quebecor made a third party claim against Samson and his related companies. The Samson defendants argued that they were obliged to defend the third party claim until the plaintiff clarified its claim to indicate that there was no claim for damages against Quebecor and King in respect of the conduct of the Samson defendants. On the issue of costs, the court agreed with Quebecor’s contention that it was reasonable for it to pursue the third party claim against Samson until the plaintiff clarified its position. The court awarded costs to the Samson defendants against the plaintiff up to the time of the clarification of the claim. The court said that, since the release was intended to shield Samson from costs, the costs should be on the substantial indemnity scale.
Taske v. PrairieFyre, 2004 CanLII 30881 (ON SC)
The Master had previously granted summary judgment in this case dismissing all claims as against the defendant Malcolm Teasdale. The Master found that the claims against Teasdale were released and this decision was upheld on appeal (see section 2.2.2.3 above). Teasdale argued that, since the purpose of a release is to shield the parties from further litigation, he was entitled to his costs, on a substantial indemnity scale, of the motion to dismiss the claims, relying on Panasonic Canada Inc. V. Morrison, above, and Ysselstein v. Tallon, above. Also, an offer to settle had been made offering to consent to a dismissal of the claims against Teasdale on a without costs basis. The Master agreed with the reasoning in Panasonic and Ysselstein and said this was a case where substantial indemnity costs should be awarded throughout. The decision in Ysselstein noted the well-established policy of our courts in favour of upholding settlements as the basis for granting solicitor and client costs. The Master agreed with the plaintiffs that substantial indemnity costs should only be awarded where the court wishes to express its disapproval of the conduct of party in litigation. The Master said that, in effect, this was the result when he granted summary judgment in favour of the defendant Teasdale.
1483677 Ontario Limited v. Crain, 2010 ONSC 1353 (CanLII)
After a successful motion for summary judgment dismissing the plaintiffs’ claims against them, the defendants argued that an award of costs on a solicitor and client basis is appropriate where a plaintiff has signed a release, but brings litigation notwithstanding the terms of the release. The defendants relied on 1302675 Ontario Ltd. (c.o.b. Ancon Construction) v. Daniels Corp., [2000] O.J. No. 1321, 2 C.L.R. (3d) 143 (Sup. Ct.). The court said that the Ancon case does not stand for the proposition asserted by the defendants. Further, the court said that the existence of a release was relevant to the decision on the motion for summary judgment but was not relevant to the question of costs. The court added that, if a party has prolonged litigation or used the litigation process unnecessarily, that could be a factor for consideration in the quantum of costs awarded.
Marjadsingh v. Walia, 2012 ONSC 6659 (CanLII) , appeal dismissed (except on costs), 2013 ONCA 336 (CanLII)
A motor vehicle driven by one of the plaintiffs was damaged when struck by the defendant’s vehicle and the plaintiff was injured when he jumped out of the way. The parties agreed to a settlement and the plaintiff signed a release. The plaintiff argued, on a number of grounds, that he should not be held to the terms of the release. The motion judge addressed the plaintiff’s arguments and concluded that the plaintiff had not adduced evidence of material facts that satisfied the court that the release was unenforceable. On the issue of costs, the motion judge reminded the plaintiffs that courts strongly frown on a party who resiles from a valid agreement which the other party relies on in good faith. The motion judge said that courts have awarded the higher scale of costs in such circumstances. While the motion judge was not prepared to award full or substantial indemnity costs in this case, she took the plaintiff’s conduct into account in setting the cost award to the successful parties. The Court of Appeal allowed an appeal from the costs order. It said that no request for more than partial indemnity costs was made and it saw no basis for doing so in this case.
Southlake Regional Health Centre v. Beswick Group Properties Inc., 2014 ONSC 2326
In this costs decision, the court said that the genesis of these proceedings was Southlake’s erroneous position taken with respect to a mediated settlement, and its attempt to re-litigate claims that had been settled. Other than on one narrow issue, the position taken by Southlake was not upheld by the court. However, Southlake’s application sought to re-litigate claims going back to 2007, notwithstanding that it had released its right to make such claims. The court said that solicitor-client costs have been granted as a mechanism for ensuring that re-litigation of previously settled claims is discouraged, citing Taske v. Prairiefyre, above, Ysselstein v. Tallon, above, and Panasonic Canada v. Morrison, above. For the same reasoning set out in those cases, the court found that an award on the substantial indemnity scale should be made in this case. (In addition, the court referred to law supporting an award of costs on a substantial indemnity scale where unfounded fraud-like allegations are made, as was the case here.)
Millerson Group Inc. v Huntington Properties Ottawa Inc., 2017 ONSC 3794 (CanLII)
The defendants sought full indemnity costs of litigation on grounds including an argument that the plaintiffs acted in “an egregious manner” by unsuccessfully alleging fraud and asserting a claim that was barred by a full and final release. The court referred to an earlier decision in the litigation (see section 6.12.4 above) in which a motion by the defendants for summary judgment had been stayed. In the earlier decision, the court had said that the release would appear “to bar a cause of action in innocent misrepresentation, but not necessarily one in fraudulent misrepresentation”. In this ruling on costs, the court said that the statement in the earlier decision had identified the onus on the plaintiffs to overcome the release. It should have been clear to the plaintiffs that unless they proved “fraud, mistake of fact or unconscionability” the release would act as a bar to their claim. The release did not state what cost consequences would occur if an action was brought in respect of the subject matter of the release. The defendants relied on Southlake Regional Health Centre v. Beswick Group Properties Inc., 2014 ONSC 2326 in which case the court awarded solicitor and client costs against a plaintiff who sought to re-litigate claims it had released. In that case, the court followed the Ontario jurisprudence that solicitor and client costs should be awarded “as a mechanism for ensuring that re-litigation of previously settled claims is discouraged.” Given the trial findings in this litigation, the same reasoning applied here.
10.9.4 Cost Award Taking Into Account Defendant’s Reliance on Release
The issue here is whether the conduct of a party in defending a claim on the basis of a release is relevant to the court’s determination of an appropriate cost award.
Forbes v. Manufacturers Life Insurance Company et al, 2010 ONSC 4931 (CanLII) and 2010 ONSC 5530 (CanLII)
Following the defendants’ successful motion for an order dismissing this action, the plaintiff’s argument on costs was that the defendant was not “entirely blameless” because it relied on a release that was ambiguous and contradictory. The court did not accept the plaintiff’s argument. The release was not ambiguous; it was exactly the sort of release that defendants “rely on every day”. It released the defendant from all liability with respect to the accident in question.
10.9.5 Cost Award When Cost Consequences are Provided for in Release
Some releases expressly provide for particular cost consequences in the event that litigation is commenced in respect of a claim barred by the release. The issue here is the weight to be given to such release provisions when considered by the court in the context of determining an appropriate cost award.
Elfenbaum v. Saskatchewan Crop Insurance Corp., 1995 CanLII 5729 (SK QB)
A release signed by the plaintiffs provided that, if the plaintiffs were to commence any suit relating to any of the claims released, the plaintiffs would pay all attorneys’ fees, on a solicitor and client basis, incurred by the released parties in defending the said suit. The court struck out a statement of claim in which the plaintiffs sought to reassert the same claims and, in accordance with the covenant by the plaintiffs in the release, it directed that the defendants were entitled to costs on a solicitor and client basis.
White v. Colliers Macaulay Nicholls Inc., 2009 ONCA 444 (CanLII)
In this appeal, the appellant challenged the trial judge’s decision to award costs against him on a substantial indemnity basis. The trial judge based his decision primarily on the language of a full and final release executed by the appellant. The trial judge found that the action commenced by the appellant was within a provision of the release which stated that, if the appellant brought an action to which the release applied “and the Releasees (or any of them) [were] added to such proceeding in any manner whatsoever, whether justified in law or not”, the appellant would be “liable to the Releasees for the legal costs incurred in any such proceeding, on a solicitor and his own client scale”. The Court of Appeal said that the trial judge viewed this as a solemn agreement; it was open to the trial judge to arrive at the disposition of costs disputed by the appellant; and no basis could be seen for interfering with his decision in that regard.
1369521 Ontario Inc. v. Pension Fund Realty Limited, 2014 ONSC 6490 (CanLII)
The releases relied on by the moving parties in this case provided that the releasees were entitled to their costs, on a substantial indemnity basis, in respect of proceedings taken by the plaintiff that triggered the releases. The court said that this was consistent with the fact that the releases were intended to provide a full and final termination of all liability and costs in respect of the matters dealt with in the releases. The court said it necessarily followed that the plaintiffs were liable for all costs of the releasees in enforcing the plaintiffs’ obligation to discontinue the action. In any event, given the significance of the motions to these releasees, the seniority of counsel and the nature of these motions, the court considered the costs sought by the releasees to be reasonable.
Ntakos Estate v. Ntakos, 2021 ONSC 3695 (CanLII)
A contract may provide for an elevated award of costs if legal costs must be incurred to enforce it. Such terms are often seen in mortgage agreements and other financing contracts. In effect, the agreement creates the expectation that a breach, if established, will mean that the borrower must indemnify the lender for their legal fees. Of relevance in this case, they are also often seen in releases to ensure that a releasor does not seek to relitigate the matters being released. However, even when there is such a contractual term, the actual award of costs remains in the discretion of the court.
Fehr v. Gribilas, 2022 ONSC 1296 (CanLII)
A third party in this litigation, J+W Foods Inc., brought a motion to stay the main action on the ground that the plaintiffs had signed a release with a no-claim-over clause which barred the main action. The court granted this and other motions and it permanently stayed the plaintiffs’ action and the third party proceedings (see section 7.5 above). J+W Foods Inc. sought full indemnity costs of “$11,379.88, all inclusive”. The basis for the claim of full indemnity costs was that the release signed by the plaintiffs provided that if J+W Foods Inc. were ever required to rely on the no-claim-over clause “the offending Releasors will be jointly and severally liable to the affected Releasee(s) for the legal costs incurred in any such proceedings on a full indemnity basis”. The plaintiffs did not dispute the quantum of the costs claims made by J+W Foods as well as the defendants. Rather, the plaintiffs argued that there should be no order as to costs. The court found no merit to the plaintiffs’ argument. The third parties brought a motion to stay the main action, which, practically speaking, put an end to the third party claim. The plaintiffs unsuccessfully resisted J+W Foods Inc.’s motion, and the outcome was dispositive of the main action and the third party claim. The court awarded J+W Foods Inc. costs of “$11,379.88, all inclusive”.
10.9.6 Cost Award When Indemnity Provisions of Release Are Applicable
In the introduction to one of the sections above, it is said that many releases contain a no-claim-over clause, in which the releasor agrees not to commence or maintain an action against any person who might claim over against the releasee. As well, releases – whether with or without a no-claim-over clause – may include an indemnity provision in which the releasor agrees to indemnify and save harmless the releasee from any further claims which may be made against the releasee in respect of the matters set forth in the release. See Chapter 7: Releases and Potential Multi-Party Liability, section 7.5, No-Claim-Over and Indemnity Provisions of a Release.
The issue here is the weight to be given to indemnity provisions of a release when considered by the court in the context of determining an appropriate cost award.
Woodcliffe Corp. v. Rotenberg, 2005 CanLII 31292 (ON CA)
Several actions between the plaintiffs and the third parties to this proceeding resulted from difficulties that arose in the course of the purchase, development and financing of a real estate project. These other actions were settled and comprehensive mutual releases were exchanged between the third parties and the plaintiffs. All the releases included, at a minimum, a no-claim-over clause with a provision that the releasors would fully indemnify the releasees against the costs of any proceeding encompassed by the clause. In an earlier decision, the Court of Appeal held that the motions judge did not err in concluding that, as this action encompassed matters previously litigated and settled between the plaintiffs and the third parties, it should be stayed. In this decision with respect to the costs of the appeal, the Court of Appeal noted that the basis for the third parties’ success on appeal was that the issues raised in the action had previously been litigated to settlement, consent judgment and the exchange of full and mutual releases which included indemnity and save harmless agreements for legal costs. It would have been clear to the appellants/plaintiffs that a claim over would be made against the third parties. In light of the releases and indemnity agreements, the appellants must reasonably have anticipated to indemnify the third parties fully for the costs of the proceedings if the third parties were successful in having the proceedings stayed. The third parties were fully successful and the Court of Appeal saw no good reason why the third parties should not be fully indemnified for the costs of the proceedings.
Ntakos Estate v. Ntakos, 2021 ONSC 3695 (CanLII)
In an earlier decision, the court concluded, among other things, that proceedings were an abuse of process as they amounted to an attempt to re-litigate issues that were barred by releases signed by the plaintiffs. In this decision on costs, the court referred to indemnification provisions of releases that arguably were limited to claims the releasors might make against others who would then claim over against the releasees: the intention was to hold the releasees harmless from any further action the releasors might attempt to take for the released matters. But the court said it would make no sense if the releasors could avoid these terms by attempting to do directly what they promised not to do indirectly. The court found it was appropriate for costs to be awarded to the defendants on an elevated basis. It also noted that courts must be cautious in enforcing clauses requiring indemnification that they not be applied in a manner that compensates a party which has “overspent on the litigation”.
10.9.7 Cost Award When Release Was a Term of an Offer to Settle
The issue here is the weight to be given to an offer to settle calling for the offeree to provide a release when the offer to settle is considered by the court in the context of determining an appropriate cost award.
Ballen v. Ballen, 2000 BCSC 261 (CanLII)
On an application for the determination of costs, the plaintiff argued that the inclusion of terms in the defendants’ offer to settle requiring the plaintiff to execute a full and final release of all claims and requiring the plaintiff to authorize the endorsement of consent dismissal orders made the offer to settle invalid in that those terms rendered the offer vague, uncertain, and incapable of being incorporated into an order for enforcement. The plaintiff also argued that, given that the releases were not attached to the offer to settle, she was unable to assess their appropriateness and therefore she was not in a position to accept an offer to settle in those terms. The court concluded that there was no merit to the plaintiff’s submissions.
Jamieson v. Denman, 2004 ABQB 693 (CanLII)
In this costs decision, the court considered an offer to settle made on behalf of certain defendants who had successfully applied for summary judgment. Attached to the offer was a form of release “which specified the terms under which the offer would be executed”. The court noted that the offer was not limited to being an offer to discontinue the action without costs but included language with respect to a release from any and all claims whatsoever. The defendants argued that they could not have confidence that if there was a discharge of the action, “there might not be something else surface in the future of a similar nature to come back and force them into another legal formal litigation”. The court said that it had some sympathy for that perspective, but there seemed to be an “amplitude” of the release which covered material that would not have been within the jurisdiction of the court to do at trial in any event. As a consequence, the release was not such as could be reasonably expected to be accepted in its terms by the plaintiffs. The court also said that this seemed to be a situation “where if one asks for a release which includes jurisdictions or matters of exercise of jurisdiction the Court could not do, then you can hardly say that when the Court did not do them you have beaten the offer”.
Gichuru v. Pallai, 2012 BCSC 1316 (CanLII) , appeal dismissed, 2013 BCCA 60 (CanLII)
Following the success of their application for summary judgment in a defamation matter, the defendants sought double costs for steps taken after the date of an offer to settle made by them. Among other things, the plaintiff argued that an offer to settle cannot require a release unless the form of release is provided, citing Alves v. Caston (section 4.6.3, above). The court said that Alves does not stand for the proposition advanced by the plaintiff; rather, it is a case concerning the enforcement of a settlement agreement. The court did not give effect to the plaintiff’s objection about a form of release not being provided with the offer to settle.
Wong-Lai v. Ong, 2012 BCSC 1569 (CanLII)
In connection with the plaintiff’s application for costs of this proceeding, the court found that the plaintiff did not act unreasonably in declining to accept an offer to settle. The court said there were certain ambiguities in the offer. The first was that the offer required the plaintiff to deliver a full and final release “in respect of the defendants”. However, no form of release was included with the settlement offer. It was common ground that, in addition to the claims being advanced in the action, the plaintiff was entitled to bring a claim against the defendants pursuant to the B.C. Family Compensation Act in respect of the death of her husband. The offer however did not clearly state that the plaintiff’s claim under the Family Compensation Act was unaffected by the release.
Bideci v. Neuhold, 2014 BCSC 1212 (CanLII)
The plaintiff applied to recover costs of this action and argued that he did not act unreasonably in not accepting a formal offer to settle, because the offer was ambiguous in that no form of release was included. The plaintiff relied on Wong-Lai v. Ong, above, but the court said that Wong-Lai was entirely distinguishable. In that case, the plaintiff was entitled to bring a claim against the defendants pursuant to the Family Compensation Act with respect to the death of her husband and this was not addressed in the offer, particularly in the reference to the requirement of a release. Accordingly, there was ambiguity in the words “in respect of the defendants”, as set out in the reference to a release in the offer. There was no such ambiguity in this case. The formal offer was clear and unambiguous. It identified the parties to be released.
McEwan v. McEwan, 2014 BCSC 1325 (CanLII)
In its supplemental reasons for judgment on costs of an action under the Wills Variation Act, the court addressed an offer to settle relied on by the defendants. The offer said that the defendants would pay settlement funds to the plaintiff at the time of distribution of the estate of the testator and the plaintiff would execute a release acknowledging that the settlement funds were received in full satisfaction of claims and irrevocably instruct counsel to sign and enter a consent dismissal order. The court found that, at the time the offer to settle was open for acceptance, it was not one that the plaintiff ought reasonably to have accepted. There was no certainty concerning when the settlement funds would be paid. The plaintiff was being asked to sign a full release of the defendants and to “irrevocably instruct” his lawyer regarding the consent dismissal order. However, neither was tied in any way to the payment of the settlement funds. Based on the terms offered in the offer to settle, the plaintiff could find himself powerless to force the defendants to wind up the estate and pay the settlement funds in a timely way.
VAS v Grace, 2015 ABQB 7 (CanLII)
Formal offers of settlement made on behalf of certain defendants included a term to the effect that the plaintiff would provide a filed discontinuance of claim and an executed release in a form agreeable to the parties as against these defendants. The court found that the offers could not form the basis for an expectation of double costs under the Alberta Rules of Court because the offers did not meet the requirements of the rule regarding the validity of a formal offer to settle. The court said that Alberta case law has long held that, in order to be valid, an offer of settlement must be certain and the offers in this case were not certain: a further agreement would have to be concluded between the parties before a settlement would be finalized.
Grieve v. Bennett, 2015 BCSC 899 (CanLII)
The plaintiff suffered injuries in two motor vehicle accidents and, following an award of damages to the plaintiff, the court considered the issue of costs in light of an offer to settle made by the defendants. The plaintiff argued that the offer to settle was defective, for reasons including the fact that it did not include a copy of a full and final release for the plaintiff to consider. The court noted that in Wong-Lai, above, the lack of a release in an offer was one factor (among others) leading to a conclusion that the plaintiff in that case did not act unreasonably in not accepting the offer. However, in that case the plaintiff was entitled to bring a claim under the Family Compensation Act and the offer did not clearly state that the plaintiff’s claim under that statute was unaffected by the release. There was no such parallel claim in this case. The indication in the offer that the plaintiff was to sign a full and final release was a self-evident statement of what was required. The absence of the actual release was not a defect in the offer that justified rejection of the offer.
Yazdi Integrated Health Group Ltd. v. Unihealth Management Ltd, 2015 BCSC 1208 (CanLII)
This action was dismissed on consent as against one of the defendants and the defendant sought special costs or, in the alternative, double costs from the date of an offer to settle. The plaintiff said that the consequences of accepting the offer to settle were not clear: the defendant was asking for a discontinuance, which would have preserved the plaintiff’s right to make a new claim if later facts warranted it, but the form of release that was enclosed would have barred any such claim. The court found that the defendant’s offer ought reasonably to have been accepted. The court said that the offer of discontinuance with a release would have had the same effect as a consent dismissal order and “would have made the somewhat less onerous impact of discontinuance alone illusory”. But the plaintiff would only be deprived of the ability to bring a future claim for which there was no factual basis and the plaintiff was given an opportunity to abandon an ill-conceived and unprovable claim without incurring any cost consequences.
Terracap Investments Inc. v Credit Capital Immobilliari, S.A., 2016 ONSC 5028 (CanLII)
The defendants brought a motion for a stay of this action. Before the release of its decision on the motion, the court provided the parties with a two-week “window” to try to resolve the motion and the action. During the two-week negotiation window, the defendants proposed terms of settlement that included execution of a release by the plaintiff. After the court issued its decision dismissing the defendants’ motion, the parties made submissions regarding the costs of the motion. The defendants argued that no costs of the motion should be payable, in light of the offer they made during the negotiation window. The court said that the defendants’ offer contained a significant additional term, namely, a release of all other claims between the parties; this provision of the defendants’ offer went far beyond the purview of the motion and the court was not surprised that the plaintiff did not accept it. The court could not see that the defendants’ offer, taken as a whole, should affect entitlement to costs, particularly since it was not made prior to argument of the motion.
Gill v McChesney, 2018 BCSC 1378 (CanLII)
On the issue of costs of a personal injury action that had proceeded to trial, the plaintiff submitted that offers to settle by the defendants were unclear for reasons including alleged ambiguity regarding a release to be executed by the plaintiff and the fact that the offers did not include the proposed release. The court did not accept the plaintiff’s arguments about ambiguity, nor did it accept the argument that the offers were unclear or invalid since they did not append a copy of the proposed release itself (referring, in this regard to Bideci v. Neuhold, above).
D’Anscenzo v. Nichols, 2018 ONSC 7760 (CanLII)
In this decision on costs, the court considered whether an offer to settle made by the plaintiffs entitled the plaintiffs to an elevated scale of costs. One of the terms of the offer to settle was that the parties would enter into a mutual release with respect to all matters raised or which could have been raised in the litigation. The court said that the release requirement in the offer constituted an uncertain future event which the offeree could not control in its analysis as to the acceptability of the other terms in the offer. Specifically, the offer contemplated future negotiation of the release terms and the acceptance thereof as a condition of the other substantive terms in the offer. The insertion of the requirement for a release to be negotiated and agreed upon in the future as a term of a written settlement offer introduced a future unknown beyond the control of the offeree. The plaintiffs could have avoided that uncertainty by inserting the release wording in the offer.
Degen v British Columbia, 2019 BCSC 1216 (CanLII)
Following a successful application by certain of the defendants to have the plaintiff’s claim as against them dismissed, these defendants sought costs, including double costs after the dates of their respective offers to settle. Generally, the thrust of each offer was a waiver of costs in return for a release or a dismissal or discontinuance. The court said that the offers, as framed, both contained uncertainties. Neither sought simply a discontinuance or a consent dismissal order in exchange for a waiver of costs. Both sought an executed release. Neither included the form of release and the plaintiff had no opportunity to consider the terms of the required release and possible impact on the action as a whole. Absent delivery of the form of release from each defendant, the plaintiff had no certainty as what he would have to do to be in compliance with that offer. Hence, it was not unreasonable for the plaintiff to decline the offers as at the time they were made.
Zou v. Sanyal, 2019 ONSC 1661 (CanLII)
The plaintiffs were successful on a motion for summary judgment and, in respect of the costs of the action, they submitted that the judgment that was more favourable than the terms of an offer to settle made by them. It was a term of the offer to settle that the parties execute a mutual release in the form attached as a schedule thereto. The defendants argued that the form of release included a non-disparagement provision which “constituted [a] vague uncertain future event which by its very broad nature and unconnected to the proceeding herein was difficult to control and which simply amounted to ‘an agreement to agree’”. The defendants relied on D’Anscenzo, above. The court did not regard the non-disparagement provision to be a standard term of a release to be given as part of a settlement of an action for breach of contract, but it said that the wording of the provision was not unclear or uncertain, as was the case in D’Anscenzo. The court went on to say that the inclusion of the non-disparagement provision in the form of release to be given upon acceptance of the offer to settle was not unreasonable, and it did not lead the court to conclude that the judgment was not more favourable to the plaintiffs than the terms of their offer to settle.
Gale v. Rothbart Centre for Pain Care, 2021 ONSC 5806 (CanLII)
When his action for wrongful dismissal was thwarted by the bankruptcy of the employer, a dismissed employee brought a second action adding more defendants and alleging more causes of action. The defendants added in the second action brought motions to strike, stay or dismiss the second action. The court ruled in favour of the moving defendants and permanently stayed the second action for abuse of process. Certain of the defendants sought costs on a substantial indemnity basis and, among other things, relied on an offer to settle they had made to the plaintiff. The offer to settle required the plaintiff to sign a release which would have prohibited him from continuing the first action, but the decision of the court allowed the plaintiff to continue the first action. The court agreed with the plaintiff that these defendants did not “beat or match” their offer to settle and it decided that the appropriate scale of costs was partial indemnity.
Amelin Engineering v. Steam-Eng Inc., 2022 ONSC 5064 (CanLII)
After the plaintiffs’ action against them was dismissed, the defendants sought a higher scale of costs on the basis (among other things) that they had made a very favourable offer to settle which they exceeded at trial. The offer to settle required a release by the plaintiffs of all claims the plaintiffs ever had or might have had against the defendants “by or by reason of, or in any way arising out of or relating to any cause, matter or thing existing up to the present time”. The court said it was impossible to determine whether in fact the defendants obtained a judgment that was more favourable than their offer to settle. The release went beyond the subject matter of the action. The parties had a business relationship spanning many years and many agreements. The court was not satisfied that a higher scale of costs was warranted because, among other things, the non-monetary term requiring a release by the plaintiffs of “all claims”, past and future, was overly broad and more expansive than the judgment granted in the case, and the court “could not ascertain and compare the immeasurable potential future claims”.
Canfield v. Continental Appraisals Ltd., 2023 BCCA 61 (CanLII)
The plaintiff sought leave to appeal an order requiring her to pay the defendant Continental Appraisals Ltd. double its costs of this proceeding. The plaintiff argued that the trial judge erred in concluding that she reasonably ought to have accepted an offer to settle, given that the offer required her to release all claims against Continental, and given that she had an “extant claim” against Continental. The plaintiff acknowledged that she did not raise the release term as an issue at the costs hearing; she said that the extant claim was overlooked by her, Continental, and the trial judge when costs were argued. The Court of Appeal concluded that the proposed appeal did not raise questions of principle extending beyond the “parameters” of this case. It was already a settled principle that all of the terms of an offer must be taken into account in deciding whether it ought reasonably to have been accepted when made, including a release that could affect other proceedings or even future issues arising between the parties. This case did not raise a general principle about whether a release may or should be taken into account in assessing an offer. It was simply a case in which the judge, in assessing the reasonableness of the offer presented by Continental, did not consider the release because none of the parties raised it as an issue.
10.9.8 Cost Award Where Novel, Public Interest Release Issues Are Raised
The issue here is whether an unsuccessful party in litigation should not be required to pay costs, on the ground that release issues argued by the unsuccessful party were novel and raised in the public interest.
Macaronies Hair Club and Laser Center Inc v. BofA Canada Bank, 2022 ABQB 143 (CanLII)
Objections by Wal-Mart and Home Depot to proposed releases of future claims in a class action settlement were not successful and the settlement was approved (see section 11.4.1.1, below). In this decision, the court found that the question of release of future claims, which was the basis for Wal-Mart and Home Depot’s objections, was not of such import and novelty as to take this matter outside the general proposition that the successful party was entitled to costs. The objections to the settlement were based on the argument that, because it contained releases of claims based on continuing or future conduct, the settlement agreement was too broad. That issue was not of such import or novelty that it served the public interest to advance it in the context of these proceedings. Wal-Mart and Home Depot were not acting in the public interest, they were acting – as they were entitled to do – in their own interests. As a result, the court saw no reason to depart from the general principle that the unsuccessful parties bear the costs.
10.9.9 Costs Carve-Out from Release
In the case below, the issue of costs was carved-out from the scope of a mutual release, because certain of the parties sought to hold another party accountable for his conduct through the mechanism of a costs award.
Patel v. Chief Medical Supplies Ltd., 2021 ABQB 355 (CanLII)
The parties signed a mutual release settling all matters except costs. Clearly, the court said, the applicants sought to preserve the right to hold one of the respondents, Paul Tulan, accountable for his alleged misdeeds through the mechanism of a costs award, despite otherwise releasing him from liability. Though the applicants were not prepared to proceed to trial to establish injury at the hands of Tulan and seek consequential damages, they sought to do so indirectly by making essentially the same arguments in the context of this costs application. The applicants sought costs on “a solicitor and his own client full indemnity basis or, alternatively, on an enhanced basis”. In Secure 2013 Group Inc. v. Tiger Calcium Services Inc, 2019 ABCA 110 (CanLII), the Court of Appeal summarized circumstances in which solicitor-client costs may be appropriate. The applicants argued that Tulan’s conduct met these criteria. They asserted that Tulan’s conduct, pre-litigation and throughout the litigation, had been marked by deceptive behaviour, breach of trust, self-dealing and preference. The court found that neither solicitor-client nor full indemnity costs were warranted (although, as accepted by the respondents, enhanced costs were appropriate for one aspect of the litigation to reflect its complexity). Among other things, the court found that the applicants were willing to accept the absence of any ultimate determination of their assertions of misconduct in order to effect a settlement. The court believed that it would be an abuse of process to allow the applicants to walk back from that position in support of a request for something as exceptional as full indemnity costs.
10.10 Remedies
10.10.1 Rectification
Rectification is an equitable remedy whose purpose is to prevent a written document from being used as an engine of fraud or misconduct “equivalent to fraud”: Performance Industries Ltd. v. Sylvan Lake Golf & Tennis Club Ltd., 2002 SCC 19 (CanLII), at paragraph 31. The traditional rule was to permit rectification only for mutual mistake, but rectification is now available for unilateral mistake provided certain demanding preconditions are met (Performance Industries, paragraph 31).
The basis upon which a court will order rectification of a contract is elaborated on in the following passage from the Performance industries decision (paragraph 31):
Rectification is predicated on the existence of a prior oral contract whose terms are definite and ascertainable. The plaintiff must establish that the terms agreed to orally were not written down properly. The error may be fraudulent, or it may be innocent. What is essential is that at the time of execution of the written document the defendant knew or ought to have known of the error and the plaintiff did not. Moreover, the attempt of the defendant to rely on the erroneous written document must amount to “fraud or the equivalent of fraud”. The court’s task in a rectification case is corrective, not speculative. It is to restore the parties to their original bargain, not to rectify a belatedly recognized error of judgment by one party or the other … . … Apart from everything else, a relaxed approach to rectification as a substitute for due diligence at the time a document is signed would undermine the confidence of the commercial world in written contracts.
Thus, in Canada (Attorney General) v. Fairmont Hotels Inc., 2016 SCC 56 (CanLII) [2016] 2 S.C.R. 720, at paragraph 12, the majority of the Supreme Court of Canada said that, if by mistake a legal instrument does not accord with the true agreement it was intended to record — because a term has been omitted, an unwanted term included, or a term incorrectly expresses the parties’ agreement — a court may exercise its equitable jurisdiction to rectify the instrument so as to make it accord with the parties’ true agreement. Rectification is unavailable where the basis for seeking it is that one or both of the parties wish to amend not the instrument recording their agreement, but the agreement itself (Fairmont Hotels, paragraph 13, emphasis in original). See also 2484234 Ontario Inc. v. Hanley Park Developments Inc., 2020 ONCA 273 (CanLII), at paragraphs 34-40, 5551928 Manitoba Ltd. v. Canada (Attorney General), 2019 BCCA 376 (CanLII), at paragraphs 16-19 and Harvest Operations Corp. v. Attorney General of Canada, 2017 ABCA 393 (CanLII), at paragraphs 45-50.
Fairmont Hotels concerned the conditions under which a taxpayer could ask a court to exercise its equitable jurisdiction to rectify a written legal instrument, where the effect of that instrument was to produce an unexpected tax consequence: see Collins Family Trust v. Canada (Attorney General), 2020 BCCA 196 (CanLII), at paragraph 46, appeal allowed (on grounds relating to equitable relief other than rectification), Canada (Attorney General) v. Collins Family Trust, 2022 SCC 26. Fairmont Hotels clarified that the test for rectification is limited to cases where a written instrument incorrectly recorded the parties’ antecedent agreement, reversing a broader application of the remedy in Canada (Attorney General) v. Juliar, 2000 CanLII 16883 (ON CA): Collins Family Trust (BCCA), paragraph 46. While emphasizing that the test is to be applied in the tax context just as it is in the non-tax context, the majority judgment made it clear that rectification is not available where an agreement that is correctly recorded in an instrument has led to an undesirable or otherwise unexpected outcome, such as an unanticipated tax liability: Collins Family Trust (BCCA), paragraph 47.
In a case of common mistake, rectification of an agreement is available if the parties had reached a prior agreement whose terms are definite and ascertainable; the agreement was still effective when the instrument was executed; the instrument fails to record accurately that prior agreement; and, if rectified, the instrument would carry out the agreement (Fairmont Hotels, paragraph 14). In Performance Industries and again in Shafron v. KRG Insurance Brokers (Western) Inc., 2002 SCC 6 (CanLII), at paragraph 53, the Supreme Court affirmed that rectification is also available where the claimed mistake is unilateral (Fairmont Hotels, paragraph 15). “[C]ertain demanding preconditions” were added in Performance Industries to justify rectification in a case of unilateral mistake: specifically, that the party resisting rectification knew or ought to have known about the mistake; and that permitting that party to take advantage of the mistake would amount to “fraud or the equivalent of fraud” (Fairmont Hotels, paragraph 15).
Drapeau v. Heald, 2006 CanLII 9147 (ON SC)
The plaintiff was involved in four motor vehicle accidents. An action arising out of one of the actions was settled and the plaintiff and her spouse gave a release which included a no-claim-over clause: they agreed not to take any proceedings against any other person or corporation who might claim contribution or indemnity from the releasees. When a defendant in an action arising out of one of the other accidents sought to add one of the releasees as a third party, the releasee relied on the no-claim-over clause. The defendant Thurston was the plaintiff’s lawyer at the time when the release was signed and, although he was not a party to the release, he sought to “rectify” it to comply with what he said was his intention at the time it was executed by his clients, namely, that the release would not prevent the plaintiff and her spouse from claiming damages arising out of other motor vehicle accidents. The court said that because Thurston was not a party to the release or the settlement he had no standing to make a claim for rectification. Further, even if Thurston did have standing to make a claim for rectification, there was no evidence to support his contention that the release was contrary to the common intention of the parties thereto. The clear and uncontradicted evidence of the releasee’s adjuster was that he intended the release to protect the releasee from being sued by anyone. This was the precise purpose of the no-claim-over clause. Thurston’s claim for rectification was struck out.
G. Wilson Construction Co. Ltd. v. Westeinde, 2012 BCSC 1356 (CanLII)
The releasee sought rectification of a release to cover a category of claims not referred to in it. The court said it was not a matter of dispute that issues respecting such claims were not raised during negotiations, “which is fatal to a claim of rectification”.
Marjadsingh v. Walia, 2012 ONSC 6659 (CanLII) , appeal dismissed (except on costs), 2013 ONCA 336 (CanLII)
A motor vehicle driven by one of the plaintiffs was damaged when struck by the defendant’s vehicle and the plaintiff was injured when he jumped out of the way. The parties agreed to a settlement and the plaintiff signed a release of all claims for damage, loss or injury in consequence of the accident. The plaintiff alleged that he thought he and the defendant had only arrived at a settlement regarding damage to the vehicle driven by the plaintiff and he sought rectification of the release. The motion judge said that a court will rectify an inaccurately drawn written agreement so that it conforms to the agreement the parties intended to make, but that the party wishing to rely on this equitable remedy must satisfy a standard higher than the regular civil standard of “more probable than not”. A bare assertion is not sufficient. The plaintiff must show “convincing proof” that there was a prior inconsistent oral agreement, that the written document does not conform with the prior oral agreement and that the defendant knew or ought to have known of the mistake in reducing the oral terms to writing, that permitting the defendant to take advantage of the error would amount to fraud or an equivalent to fraud, and that “the precise form in which the written instrument was done can be made to express the prior intention” (citing Performance Industries Ltd. v. Sylvan Lake Golf & Tennis Club). The motion judge said that in this case the plaintiff fell far short of meeting the onerous test that would allow the court to intervene. The plaintiff relied on a bare assertion and not much more, so rectification was not a remedy available to him.
Layes v. Layes, 2019 NSSC 241 (CanLII)
Where minutes of settlement contained mutual release wording that incorrectly recorded the agreement of the parties, the court determined on a motion that the minutes should be rectified to remove the offending paragraphs.
Walsh v. Canada (Attorney General), 2022 NLSC 108 (CanLII)
In the course of gathering documents for the purposes of their defence of this action, the defendants discovered a release executed by Intact Insurance Company. Intact had received a sum of money from the defendants to reimburse it for moneys paid to the plaintiff for the property damage that he suffered. In consideration of the receipt of this money, Intact executed a release in respect of any and all claims that the plaintiff had against the defendants. The defendants applied to amend their pleadings and Intact applied to be added as an intervenor. It appeared that Intact may have executed the release without the plaintiff’s knowledge or consent. Or Intact may have executed the release by mistake – thinking it was a partial release in respect of property damage, oblivious to the fact that it was a release in respect of all of the plaintiff’s claims, including personal injuries. The plaintiff argued that the court ought to rectify the release so that it did not foreclose the plaintiff from seeking damages for his personal injury. The plaintiff relied on Burns v. Ferri, 1992 CanLII 7450 (ON SC) – see also Burns v. Wellington Insurance Co., 1994 CanlII 760 (ON CA) . The court said rectification was an available remedy. However, in order for the court to grant rectification the issue must properly be before the court. This would include the factual substrate necessary in order to make the determination as to whether or not rectification should be ordered. That substrate was deficient. The court should be placed in a position where it could make findings of fact based upon evidence. Allowing the defendants to make the requested amendment would enjoin the issue concerning the release. Having done so the parties would then be at liberty to discover the appropriate persons in order to determine “the nature, extent and intention that existed at the time of the signing of the release”.
Manson v Mitchell, 2023 BCSC 723 (CanLII)
This action arose out of injuries suffered by the plaintiff as a result of a mountaineering incident in July of 2021. The plaintiff argued that a waiver and release signed by him did not apply to the mountaineering trip during which the incident occurred because it was expressly date-specific and therefore applied only to an earlier climb on June 18, 2021. Among other things, the defendants argued that the plaintiff and the defendant Mitchell had entered into an oral agreement that the plaintiff would retain Mitchell to guide him over the course of a “summer climbing program”. They argued that the waiver failed to accurately record this antecedent agreement and should be rectified to substitute “Summer of 2021” for “June 18, 2021” in the “Trip Date” field. The court said that rectification is a potent remedy that must be used with great caution to avoid undermining commercial confidence in written contracts (citing Fairmont and Performance Industries, above). Two types of error may support a grant of rectification: common mistake and unilateral mistake. Only common mistake was in issue in this case. The court referred to the four requirements for rectification set out in Fairmont (specifically, paragraph 14 of Fairmont, referred to above) and focused on the first of the requirements, namely whether the parties had reached a prior agreement whose terms were definite and ascertainable. A definite and ascertainable agreement must be proven by “clear, convincing and cogent” evidence. It is insufficient to show mere intent that differs from the recorded agreement. The key question is whether there was a “manifest meeting of the minds” (citing Le Soleil Hotel & Suites Ltd. v. Le Soleil Management Inc., 2009 BCSC 1303). The parties must “have indicated to the outside world, in the form of the objective reasonable bystander, their intention to contract and the terms of such contract” (citing Voitchovsky v. Gibson, 2022 BCCA 428). In this way, the inquiry is objective and does not consider the parties’ subjective understandings (citing Berthin v. Berthin, 2016 BCCA 104). The court found that the evidence fell short of establishing that a definite and ascertainable oral agreement was reached on the terms alleged by the defendants. The claim for rectification based on common mistake failed at the first branch of the Fairmont test and the court did not need to consider the remaining factors.
10.10.2 Rescission
The equitable remedy of rescission “annuls or avoids” a contract. It is granted in cases of fraud or innocent misrepresentation, “or some other action on the defendant’s part that amounts to undue influence or unconscionability” – or that makes the bargain unsound on other equitable grounds. It “rolls the contract back to the position the parties were in prior to contracting”: see Jeffrey Berryman, The Law of Equitable Remedies, 2nd Edition (Toronto: Irwin Law Inc., 2013), at page 319. See also The Law of Releases in Canada, at page 298.
Brock and Petty v. Gronbach, 1953 CanLII 60 (SCC) , [1953] 1 SCR 207
In order to secure a release from an agreement to sell a business and certain lands, the plaintiffs/respondents paid a large amount demanded by the purchaser. The Supreme Court said that the release could not be held to be an unconscionable bargain but, if it had been able to arrive at the opposite conclusion, it would then have agreed with the trial judge that the plaintiffs could not secure any relief when they persisted in their attitude that they were entitled to set aside the agreement for the sale of the business. The decision of the trial judge was that, the plaintiffs having asked for the rescission of the release agreement on equitable grounds, the law does this on equitable terms. The trial judge said that the plaintiffs must be in a position to restore the status quo and must formally tender restitution of what they received, namely, the release, and offer to go through with the deal in return for repayment of the amount paid for the release.
York University v. Markicevic, 2018 ONCA 893 (CanLII) , application for leave to appeal dismissed, Michael Markicevic v. York University, 2019 CanLII 64819 (SCC)
As stated by the Court of Appeal, the appellant misappropriated nearly a million dollars from his employer, York University. Before York was aware of the extent of the appellant’s dishonesty, it terminated the appellant’s employment without cause and finalized a severance agreement with him that contained mutual releases. The trial judge rescinded the severance agreement including the releases. She held that, as a fiduciary, the appellant had a positive obligation to disclose his fraudulent activity before he entered into the severance agreement. She also found that the releases and the severance agreement were obtained by fraudulent misrepresentation. This decision was upheld on appeal. Among other things, the Court of Appeal said that a contracting party who is induced to enter into a contract as a result of a fraudulent misrepresentation is entitled to rescission, and restoration of the benefits conferred on the other party to the contract.
Deschenes v. Lalonde, 2020 ONCA 304 (CanLII) , application for leave to appeal dismissed, Roman Catholic Episcopal Corporation of the Diocese of London in Ontario, et al. v. Irene Deschenes, 2021 CanLII 8830 (SCC)
The respondent settled an action and signed a release. The Court of Appeal said that, based on the evidence, the settlement agreement was induced by an innocent misrepresentation. The equitable remedy of rescission is available for a false or misleading representation that induces a contract. Rescission requires proof that the misrepresentation was material and was relied on by the party seeking to rescind the contract. The remedy of rescission is available even if the misrepresentation was made innocently, that is, by a party who believed it was true. A settlement agreement may also be rescinded on the basis of unilateral mistake. The law on rescission for unilateral mistake is that a party may seek rescission of a contract for its own unilateral mistake only where the mistake goes to a material term of the contract, where the other party knows or ought to know of the mistake, and where it would be unconscionable for the second contracting party to rely on the contract.
10.10.3 Declaratory or Other Relief
The following are cases in which courts considered whether to award declaratory or other relief in respect of issues relating to releases.
British Columbia v. Clearwater (Canada) Hatcheries Ltd., 1994 CanLII 894 (BC SC)
The defendant Heimenberg brought an application for a declaration that a mutual release between himself and third parties to this litigation did not excuse the third parties from their obligations under an earlier written indemnity given by them to him. The court concluded that Heimenberg was entitled to a declaration that the indemnity agreement survived the release and that the third parties were still bound by its terms.
Ermineskin Cree Nation v. Foureyes, 2005 ABQB 522 (CanLII)
Following the termination of her employment, the respondent accepted a payment from her employer and signed a release. The respondent lodged a complaint about her dismissal with the Canadian Human Rights Commission and the applicant sought a declaration from the court that the release was valid and enforceable. The court found that the release was valid and binding on the respondent relative to the applicant (but the court said that it could not bind the CHRC which was not a party to the action).
Dosanjh v. Nadon, 2009 BCSC 106 (CanLII)
The defendants sought a declaration that the plaintiff had released all of his claims pertaining to the sale of a parcel of real estate. The court found that a complete settlement had been reached and said there would be a declaration that the settlement formed by the consent dismissal order and the release was final and binding on the parties thereto.
Manitoba (Securities Commission) v. Crocus Investment Fund, 2009 MBQB 13 (CanLII)
The court-appointed receiver for Crocus Investment Fund and those who had served as officers and directors of Crocus reached an impasse in settlement discussions because “all [were] requiring full releases from the other in order to settle”, which none were prepared to give. Although the risk of any unknown claims was said to be minimal, the question was whether Crocus or the former officers and directors should take the risk of the existence of additional claims. In the words of the court, the answer the parties came up with was to eliminate any risk by seeking court approval of a form of bar order in respect of any claims not filed by a claims bar date. The court said that the effect of the order sought would be to impose by court order a new statute of limitations on potential but yet unknown claimants and it would be an improper exercise of the court’s discretion to eliminate a risk that neither Crocus nor the shareholders were prepared to assume in order to pave the way for a settlement.
1250264 Ontario Inc. v. Pet Valu Canada Inc., 2011 ONSC 3871 (CanLII)
In this class proceeding, the court certified a set of common issues based on the allegation that the defendant franchisor had a duty to share rebates from suppliers with its franchisees. The defendant brought a motion for a declaration affirming the validity and enforceability of releases given by franchisees in the context of transactions involving the defendant’s buyback of franchise businesses from franchisees. Assuming that it had jurisdiction to grant the relief sought by the defendant, the court was not prepared to do so on the record before it, for a number of reasons. The court refused the declaratory relief requested by the defendant because, among other things, none of the franchisees affected by buyback transactions were before the court, the court would not make a binding declaration with respect to future transactions in the absence of a specific evidentiary record or with respect to an issue that might become moot and the request for the court to grant discretionary relief raised issues about disclosure of material facts by the defendant.
King v. Chapman, 2012 MBQB 189 (CanLII), appeal dismissed, 2012 MBCA 112 (CanLII), extension of time for leave to appeal refused, Alexander Lenard Quaccoo Chapman v. Jack Anthony King, 2013 CanLII 40337 (SCC)
The plaintiff in this case was granted default judgment in respect of his claim that the defendant breached a settlement agreement. The settlement agreement was comprised of several parts, including payment of $25,000 by the plaintiff to the defendant and a release agreement in which the defendant agreed that his giving of the release was confidential, acknowledged that a breach of confidentiality would or might cause the plaintiff to suffer loss and agreed to compensate the plaintiff, in the event of such loss, by returning the $25,000 paid by the plaintiff. The undisputed evidence was that the defendant breached his obligations arising from the settlement agreement; among other things, the defendant publicly disclosed the terms of the settlement and release and sued the plaintiff over the very matters from which he had released the plaintiff. The court ordered that the defendant return the sum of $25,000 to the plaintiff in accordance with the release agreement. (The settlement between the parties also included a certification from the defendant regarding the return or deletion of materials he had received from the plaintiff and the court granted a permanent injunction in respect of the defendant’s use of documents, emails and photographs sent to him by the plaintiff.)
Ontario v. Imperial Tobacco Canada Limited, 2011 ONCA 525 (CanLII)
An application was commenced by Ontario for a declaration that a claim which had been asserted in a class action was not a “Released Claim” within the meaning of an agreement. Later, another party delivered a notice of arbitration seeking a declaration that the claim was a Released Claim. The same party brought a motion to stay Ontario’s court application on the basis that the matters raised in the application were subject to arbitration. One aspect of Ontario’s application, relating to section 7 of the agreement, required a determination of the factual matrix in which the agreement was negotiated and an issue about whether Ontario was a party to the arbitration provisions of the agreement had to be dealt with first by the arbitrator. The majority of the Court of Appeal concluded that it was proper to stay this aspect of Ontario’s application. However, one of the representative plaintiffs in the class action, the Tobacco Board, was not a party to the agreement and its arbitration provisions. The Tobacco Board had a vital interest in another aspect of Ontario’s application, relating to section 15 of the agreement. The majority said that the arbitrator could not resolve this aspect of the application. The Court of Appeal ordered that Ontario’s application for a declaration that the class action claim was not a Released Claim for the purposes of section 15 of the agreement could proceed.
R. v. Imperial Tobacco Canada, 2012 ONSC 6027 (CanLII) , appeal dismissed, Ontario v. Imperial Tobacco Canada Ltd., 2013 ONCA 481 (CanLII)
The Court of Appeal gave effect to the Imperial Tobacco decision summarized above (2011 ONCA 525), by ordering that Ontario’s application for a declaration that a claim was not a Released Claim for the purposes of certain provisions of an agreement could proceed. Here, the application judge decided to grant Ontario’s application and the Court of Appeal dismissed an appeal from this decision.
Mader v. South Easthope Mutual Insurance Company, 2014 ONCA 714 (CanLII)
The appellant was involved in a single-vehicle motor vehicle accident. She applied for and received accident benefits pursuant to Ontario Regulation 403/96. After the respondent notified the appellant that it would be terminating her benefits, as she was able to resume her pre-accident employment, the appellant requested an assessment by a Designated Assessment Centre. Before a DAC assessment could take place, the appellant signed a release which released the respondent from any obligation to pay accident benefits in exchange for a lump sum payment. The appellant subsequently sued the respondent for a declaration that the release was a nullity. The Ontario Insurance Act provided that no person could commence a court or arbitration proceeding unless he or she had first sought mediation and mediation had failed. It was not disputed that the appellant had not sought mediation of her claim. She argued that her dispute would not be accepted for mediation because, among other things, the Dispute Resolution Practice Code did not permit mediation where a settlement agreement was in place. The court said that the Code permitted mediation where a settlement agreement was in place in limited circumstances, including where the “claimant disputes the validity of the settlement, such as whether the insurer has complied with the requirements of the Settlement Regulation”. The appellant argued that this exception was inapplicable because it was not her position that the release did not comply with the Settlement Regulation, but that it was obtained through fraud and misrepresentation. The court said there was no merit to this submission. Clearly, the exception applied in all circumstances where the claimant disputed the validity of the settlement: the reference to a challenge based on non-compliance with the Settlement Regulation was merely illustrative.
Webber v. Boutilier, 2016 NSSC 5 (CanLII)
After a settlement was reached at a settlement conference, the plaintiff objected to the form of release provided by the defendants. On the defendants’ motion to enforce the settlement, the plaintiff’s counsel argued that the settlement should be exclusive of any potential subrogated claim that could be identified by operation of the provisions of the Nova Scotia Health Services and Insurance Act. The court found that the settlement was full and final and included a clear understanding that all matters were settled as against the defendants including any subrogated claims and that the all-inclusive basis of settlement was an essential term of the settlement agreement. The court made an order: (a) declaring that a settlement was reached on terms including, among other things, a release of the defendants by the plaintiff from all claims relating to the subject matter of the proceeding and (b) “[e]nforcing the settlement according to the above-noted terms”.
Nithiananthan v Thirunavukarasu, 2016 ONSC 2465 (CanLII)
The plaintiff’s motion in this case for an order declaring that releases were invalid and of no force and effect was dismissed by the court. The plaintiff argued that, immediately after signing the releases, she and her husband decided not to proceed with a settlement with the lawyer defendants, but her former lawyer, contrary to her instructions, delivered the releases to counsel for the lawyer defendants. The court found that the plaintiff’s former lawyer had ostensible authority to provide the signed releases to counsel for the lawyer defendants that counsel could rely upon to complete the settlement agreement.
Levac v. Pychel, 2017 ONSC 4509 (CanLII)
In this case, the court declared a settlement agreement to be binding. The settlement agreement included a term that each of the parties was to sign a release and the court ordered one of the defendants to sign the release.
Riar v. Dali Homes Inc., 2019 ONSC 616 (CanLII) , appeal dismissed, 2019 ONCA 933 (CanLII)
Having found that the defendants had complied with minutes of settlement agreed to by the parties and that the minutes should be enforced, the court granted relief requested by the defendants, including a declaration that a mutual release executed by the parties was is in full force and effect and a declaration that all claims made by the plaintiffs in the action, and all counterclaims made by the defendant Dali Homes Inc., were released.
10.11 Appeals
In Corner Brook (City) v. Bailey, 2021 SCC 29 (CanLII) , the Supreme Court of Canada heard an appeal involving the interpretation of a release. With respect to the standard of review for the appeal, the court said (at paragraph 44) that contractual interpretation is a fact specific exercise, and should be treated as a mixed question of fact and law for the purpose of appellate review, unless there is an “extricable question of law”, citing Sattva Capital Corp. v. Creston Moly Corp., 2014 SCC 53 (CanLII) . The exception is standard form contracts: see Ledcor Construction Ltd. v. Northbridge Indemnity Insurance Co., 2016 SCC 37 (CanLII). The court went on to say (paragraph 44) that extricable questions of law in the context of contractual interpretation include “the application of an incorrect principle, the failure to consider a required element of a legal test, or the failure to consider a relevant factor”, citing Sattva, at paragraph. 53, quoting King v. Operating Engineers Training Institute of Manitoba Inc., 2011 MBCA 80, at paragraph 21. The circumstances in which a question of law can be extracted will be uncommon (Corner Brook, paragraph 44). Whether something was or should have been within the common knowledge of the parties at the time the contract was entered into is a question of fact (citing Sattva, at paragraphs 49-55 and 58).
The Supreme Court disagreed with the conclusions that had been reached by the Newfoundland and Labrador Court of Appeal in Corner Brook regarding errors on extricable questions of law made by the application judge. The errors on extricable questions of law identified by the Court of Appeal were as follows (Corner Brook, paragraph 45):
Firstly, what was in the contemplation of the City [Corner Brook] in drafting the Release is not determinative of mutual intent.
Secondly, it was in fact necessary to determine what was “specifically” contemplated by both parties.
Thirdly, it was not sufficient that the broad general wording of the Release potentially covered a subsequent third party action for contribution if the surrounding circumstances suggested otherwise.
The Supreme Court said (at paragraph 46) that, while the first of these three points might describe an error as to an extricable question of law, it was not an error that the application judge made. The second point was not an extricable question of law: the Supreme Court held in Sattva that whether something was or reasonably should have been within the common knowledge of both parties at the time a contract was entered into is a question of fact. But the Supreme Court said in Corner Brook that the Newfoundland and Labrador Court of Appeal had disagreed with the application judge’s interpretation of the surrounding circumstances, characterized it as a question of law, and then substituted its own factual conclusions. This did not accord with Sattva (Corner Brook, paragraph 47). The third point also was not an extricable question of law. Given the application judge’s determination that the parties were contemplating any and all types of claims relating to a motor vehicle accident, even though they may not have explicitly turned their minds to the possibility of a third party claim in particular, it was their objective, mutual intent to cover such a claim within the scope of the release. This finding was a fact-specific application of the principles of contractual interpretation, and it was owed deference (Corner Brook, paragraph 48).
In addition to the decisions summarized immediately below, see also section 10.12.2, Appeals from Arbitration Decisions.
Trillium Motor World Ltd. v. General Motors of Canada Limited, 2017 ONCA 545 (CanLII)
The validity of the releases in this case involved issues of mixed fact and law, where “principles of contractual interpretation are applied to the words of the written contract, considered in light of the factual matrix” (citing Sattva). There may be rare instances where a question of law can be extricated from the interpretive exercise. These are reviewed on a standard of correctness. Otherwise, an appellate court owes deference to the trial judge’s interpretation of the contract. The trial judge’s findings of fact or conclusions of mixed fact and law are also owed deference. Intervention on appeal is not justified absent palpable and overriding error.
Bailey v. Temple, 2020 NLCA 3 (CanLII) , appeal allowed, Corner Brook (City) v. Bailey, 2021 SCC 29 (CanLII)
The court would not characterize the release at issue on this appeal as a standard form contract. Therefore, the case did not “fall within the Ledcor exception” (referred to above). It followed that the standard of review applicable to the trial judge’s decision was palpable and overriding error, unless an extricable principle of law was identified in the process of review by the appellate court. (But the Supreme Court of Canada disagreed with the Court of Appeal’s conclusions about extricable errors of law: see above.)
3113736 Canada Ltd. v. Cozy Corner Bedding Inc., 2020 ONCA 235 (CanLII)
The Court of Appeal said that the motion judge’s interpretation of a release was subject to a deferential standard of review, absent extricable error, citing Sattva. However, the motion judge failed to interpret the release as a whole and give meaning to all of its terms, which is a fundamental principle of contractual interpretation. His reasons did not advert to or analyze an important exception in the release. This was an extricable legal error within the meaning of Sattva. Accordingly, the motion judge’s interpretation of the release was not subject to deference.
Macaronies Hair Club and Laser Center Inc v Bank of Montreal, 2021 ABCA 40 (CanLII)
The interpretation of a release is, as with any contract, generally a question of mixed fact and law warranting appellate deference.
Rai v. Sechelt (District), 2021 BCCA 349 (CanLII) , application for leave to appeal dismissed, Elliot Held, et al. v. District of Sechelt, et al., 2022 CanLII 26230 (SCC)
As the interpretation of a release is a matter of contractual interpretation, the standard of review to be applied on appeal is one of mixed fact and law, unless an extricable legal error is present.
Secure Energy Services Inc. v Canadian Energy Services Inc., 2022 ABCA 200 (CanLII) , appeal dismissed, Secure Energy Services Inc. v Canadian Energy Services Inc., 2022 ABCA 200 (CanLII)
The defendants appealed a ruling by a chambers judge that granted an application summarily dismissing their statement of defence and counterclaim. The decision of the chambers judge was based, in part, on a mutual release relied upon by the plaintiffs. The majority of the Court of Appeal said that a mutual release is a contract and, absent fraud, the parties are bound by the terms to which they have agreed. Interpreting a contract is a question of mixed fact and law and is therefore reviewed for palpable and overriding error. The majority found that there was ample evidence on the record for the chambers judge to reject a narrow interpretation of the release contended for by the appellants and to find that the release applied broadly. In particular, evidence that the release was broader was consistent with the communication surrounding the terms of the release and the broad language in the release itself, all of which was in the record. Absent palpable and overriding error, those facts findings and the chambers judge’s interpretation of the release were entitled to deference.
10.12 Arbitration
10.12.1 Jurisdiction
The decisions that follow in this section deal with the jurisdiction of arbitrators to determine release issues in matters that are subject to arbitration. As can be seen below, decisions regarding the jurisdiction of arbitrators may take shape around an issue about whether an arbitration can proceed in respect of a matter that is the subject of a release; they may also take shape around issues about the extent to which, if at all, an arbitrator has jurisdiction to determine the interpretation, applicability, validity or enforceability of a release.
Ontario v. Imperial Tobacco Canada Limited, 2011 ONCA 525
An application was commenced by Ontario for a declaration that a claim which had been asserted in a class action was not a “Released Claim” within the meaning of an agreement. Later, another party delivered a notice of arbitration seeking a declaration that the claim was a Released Claim. The same party brought a motion to stay Ontario’s court application on the basis that the matters raised in the application were subject to arbitration. The majority of the Court of Appeal said that, where it is clear that a party to the legal proceedings is not a party to the arbitration agreement, the court can reach a final determination rather than require that the arbitrator first determine a jurisdictional challenge brought on that basis, citing Dancap Productions Inc. v. Key Brand Entertainment Inc., 2009 ONCA 135 (CanLII). In the language of Dell Computer Corp. v. Union des consommateurs, 2007 SCC 34 (CanLII), when no more than a superficial examination of the documentary evidence is required to determine this challenge, the court can do so rather than require the arbitrator to do so first. One aspect of Ontario’s application required a determination of the factual matrix in which the agreement was negotiated and an issue about whether Ontario was a party to the arbitration provisions of the agreement had to be dealt with first by the arbitrator. The majority concluded that it was proper to stay this aspect of Ontario’s application. However, one of the representative plaintiffs in the class action, the Tobacco Board, was a party to the court application and it had a vital interest in a second aspect of Ontario’s application. The majority said that a superficial review of the record was enough to reach the conclusion that the Tobacco Board was not a party to the agreement and its arbitration provisions. The arbitrator could not resolve the second aspect of the application because the Tobacco Board was not a party to the agreement or its arbitration provisions. The arbitrator had no jurisdiction to determine the Tobacco Board’s rights. The second aspect of Ontario’s application had to be determined in a forum in which the Tobacco Board had the right to participate. Hence the majority concluded that Ontario’s application should not be stayed in preference to arbitration for this purpose.
Beadle v. Pictou Landing First Nation, 2013 NSSC 25 (CanLII)
The applicants filed a claim for compensation with the Chief and Council of Pictou Landing Indian Band, pursuant to the Boat Harbour Trust Settlement Agreement. The agreement provided that the Chief and Council were to appoint a Tribunal to “hear and determine the claim” within 30 days of receiving it. This did not occur. The Applicants filed this application for an order appointing an arbitrator. The court said that releases “[had} been provided in relation to the Applicants”, but the applicants argued that the releases might not be valid, particularly since some of the applicants were minors. The court said that determining whether the releases were valid and whether the claim was barred involved determining questions of fact, and the interpretation of the agreement and the rights of claimants thereunder, which the arbitrator had the power to do.
Syrianos et al v. Botelho, 2014 ONSC 3852 (CanLII)
The applicants sought an order appointing an arbitrator and the respondent objected to a referral of the matter to arbitration on the ground that a mutual release barred the applicants’ claims. The court said that the respondent’s objections related to defences the respondent could raise, as explicitly recognized in the mutual release, but did not constitute a valid basis for objecting to the appointment of an arbitrator.
IWK Health Center v. Northfield Glass Group Ltd., 2016 NSSC 281 (Can LII)
One of the issues in this case was whether an arbitrator appointed under the terms of a contract could determine a defence involving interpretation of a release which was a “separate agreement” from the contract. The court said that the arbitrator can rule on whether it has jurisdiction, if the court has not already made the ruling, but the court decided that it could and should determine whether the release defence removed the claim from arbitration. The release was given in relation to a claim made under the contract; the claim before the court also was made under the contract; and determining whether the latter claim had merit and whether it had been released involved an interpretation and application of the contract. The court concluded that the arbitrator did have jurisdiction to determine the release issue.
Lithium One Homes Ltd. v. Abakhan & Associates Inc., 2017 BCSC 2189 (CanLII)
The purchasers under a contract for the construction of a home were unable to complete the purchase. The builder’s claim for damages was resolved and a mutual release was signed. After the purchasers made an assignment in bankruptcy, the trustee in bankruptcy filed an arbitration notice under the contract alleging that the builder wrongfully retained money paid by the purchasers. A live issue in the arbitration was whether or not the arbitrator had jurisdiction to proceed due to the release. The court said that this issue was not dealt with by the arbitrator and the reasons for decision of the arbitrator were deficient in this regard. Given that the validity of the release was not challenged and there was no evidence on the record that it was not binding and enforceable, the court concluded that the arbitrator did not have jurisdiction to deal with the issues raised by the trustee in the arbitration.
VHGCC-14 et al. v. 2308451 Ontario Inc. et al., 2022 ONSC 707 (CanLII)
Issues arose in this matter after the applicants delivered a notice of arbitration, but the respondents refused to arbitrate unless certain terms were agreed upon. One of the issues before the court was whether the signatory to a release on behalf of a limited partnership had authority to bind the limited partnership. The court did not agree that the issue of corporate authority must be dealt with by the court before any arbitration could proceed. The court said that the scope of the arbitration must be dealt with by the arbitrator including a determination of, among other things, the issue regarding authority to sign the release.
10.12.2 Appeals from Arbitration Decisions
The appeal rights of a party to an arbitration involving interpretation of a release will depend on the terms of the arbitration agreement and the legislation with respect to arbitrations that applies in the jurisdiction of the arbitration. As can be seen from the decisions summarized below, when a court is asked to hear an appeal from an arbitration decision on grounds that relate to the interpretation of a release, the focus of the court’s consideration of appeal rights may be whether the arbitrator’s interpretation of the release gives rise to a question of law (as opposed to questions of fact or of mixed law and fact). Obviously, the reasoning of the courts in these decisions is consistent with the jurisprudence set out in section 10.11, Appeals, above.
Schreiner v Vistas at Callaghan Ltd, 2022 ABQB 472 (CanLII)
A homeowner made an application to arbitrate claims arising from the construction of a home. An agreement was reached to resolve certain claims and a release was signed. The homeowner sought to pursue, as general contractual claims, claims that had not been accepted as warranty claims. The arbitrator found that the contractual claims were out of time and, moreover that the release was broad enough to relieve the builder from liability for the contractual claims. The homeowner argued that the arbitrator made an error of interpretation, there having been an exchange between counsel prior to the settlement giving rise to the release to the effect that the contractual claims identified would survive the release. On the homeowner’s application for leave to appeal the decision of the arbitrator, the court said it was not clear what the evidence was before the arbitrator. Presumably, the parties led evidence and made argument on the issue of contractual intent, or ought to have. However, the interpretation of the release was dependent on the facts – and was a question of mixed law and fact. The appeal was foreclosed in respect of the issue of whether the release was intended to include the contractual claims. Such would not be an appeal on a question of law (which was permissible with leave) but rather one of mixed law and fact. The Arbitration Act did not contemplate an appeal on a question of mixed law and fact where the arbitration agreement did not expressly provide for such an appeal and an appeal on a question of mixed law and fact was not expressly provided for in the arbitration agreement.
Christie Building Holding Company, Limited v. Shelter Canadian Properties Limited, 2022 MBKB 239 (CanLII)
The applicant in this case sought, among other things, leave to appeal arbitration awards made by an arbitrator. While the arbitration agreement contained no right of appeal, an appeal to the court on a question of law was available, with leave, under the Arbitrations Act, should the court be satisfied that certain pre-conditions were met. The applicant argued that the arbitrator erred in law in applying the wrong legal test to the interpretation of certain document, including a release. The court concluded that much of the arbitrator’s interpretation of the release and other documents involved an analysis and interpretation that was highly fact specific. Given that the arbitrator’s interpretation of these documents was so highly fact specific and firmly grounded in the text, it was not obvious how any of the applicant’s submissions persuasively identified a question of law. The applicant’s submissions in relation to the release and other documents were, in reality, complaints respecting the weight attributed to the broader factual matrix. As such, the questions that arose were more obviously questions of fact. They were not questions that would assist the applicant in gaining jurisdiction for the purposes of leave.
10.13 Administrative Proceedings
Administrative tribunals or decision-makers in Canada are often called upon to consider release issues and the cases in which they have done so are legion. To pick two of many examples, Canadian human rights and labour relations tribunals have considered releases in a host of cases. (Indeed, many of the court decisions summarized in this section and sections 10.13.1 to 10.13.3 deal with issues arising in the context of applications for judicial review from complaints or matters before human rights tribunals or decision-makers.)
But the point here is not to expound on the law of releases as it is reflected in decisions of administrative tribunals or decision-makers. Rather, the intent is to gather decisions of Canadian courts bearing on release issues that come into play in administrative proceedings.
Korsch v. Human Rights Commission (Man.) et al., 2012 MBCA 108 (CanLII)
The Manitoba Human Rights Commission terminated a complaint by the appellant pursuant to a section of The Human Rights Code which provided that the Commission shall terminate its proceedings in respect of a complaint if the complainant rejects an offer of settlement considered by the Commission to be reasonable. Offers to settle had been exchanged during a mediation process and the mediator asked the Commission to determine whether an offer requiring the appellant to give “a release … of any and all claims” was reasonable pursuant to the statutory provision. The offer to settle was deemed reasonable on condition that the release to be executed by the appellant was limited to his complaint to the Commission and the allegations set out therein. The appellant sought judicial review of the termination of his complaint and then he appealed the dismissal of his application for judicial review. At issue (among other things) was whether the Commission was entitled to deem the offer to settle reasonable on condition that the release was limited to the complaint. The Court of Appeal expressed concern that a reference to modifying an offer to settle in the decision of the lower court may have overstated what the Commission was entitled to do. But it was not necessary to address that concern to resolve the appeal. The appellate court said that whether the Commission may unilaterally amend or modify an offer to settle pursuant to the statutory provision was best left for another day. The Commission’s reference to a restricted form of release did not unilaterally amend the substance of the offer to settle, or modify the offer. The appellant acknowledged that the Commission could identify a gap in an offer that needs to be addressed and that was what the Commission did when it identified the need to ensure that the release provided by the appellant pertained only to the complaint under the Code.
Provincial Health Services Authority v Briggs, 2023 BCSC 1729 (CanLII)
The respondent reached a settlement of claims arising from the termination of his employment with the Provincial Health Services Authority and he signed a release in respect of claims arising out of his employment or the termination of his employment. Later, the respondent initiated a complaint against the PHSA under the B.C. Human Rights Code. In this litigation, the court considered a petition by the PHSA for a declaration that the release was binding on the respondent and constituted a complete bar to the complaint initiated by him. The court said that deciding whether the release should be enforced would require factual findings that might be challenging to make on a summary application. The court also noted that the respondent had adduced evidence casting doubt on the extent of his awareness of the elements of his claim and of his capacity to appreciate the nature and effect of the document that he was signing. The court found that one of the issues was whether the disability that was the subject of the respondent’s human rights complaint, or its consequences, undermined the fairness of the release, or otherwise rendered it unfair for the PHSA to rely on the release. This was an issue that the Tribunal was better placed than the court to resolve. The petition was dismissed.
10.13.1 Jurisdiction
The following are cases in which courts have made rulings on the jurisdiction of administrative tribunals or decision-makers in the context of issues relating to releases.
Midland Courier v. Gomes et al, (1994) 73 F.T.R. 286 (TD)
The applicant was the employer of the respondent Gomes and it came to a decision to terminate the employment of Gomes. The applicant gave Gomes a choice of either signing a release or being fired for cause. Gomes chose to sign the release and she was paid a severance package which she would not have been entitled to had she been dismissed for cause. Gomes subsequently filed a complaint under the Canada Labour Code in which she alleged that her dismissal was unjust and without cause or prior notification. The adjudicator found that the release was valid and binding, but proceeded on the basis that Gomes was terminated for cause. The applicant sought to quash the adjudicator’s decision that he had jurisdiction under the Canada Labour Code to adjudicate the complaint by Gomes of unjust dismissal. The court said it appeared that the adjudicator had based his conclusion on a finding that the employment relationship had been terminated prior to the signing of the release. This finding was not supported by the evidence and indeed conflicted with the adjudicator’s observation that the release was signed in “circumstances which are very similar to those in which employees tender their resignations at the request of their employer”. Gomes elected to sign the document and it was at this point that the employment relationship was terminated. The employer’s application was allowed.
Economic Development Edmonton v. Baah, 2003 ABQB 721 (CanLII)
Following the termination of his employment with the applicant, the respondent Baah accepted a lump sum payment offered by the applicant and signed a release of claims relating to his employment and the termination of that employment. Baah filed a complaint with the Alberta Human Rights and Citizenship Commission that his employment had been terminated because of his race, colour and ancestry. Baah’s complaint initially was dismissed, but, on a request for review, the Chief Commissioner decided that the complaint should not have been dismissed, that there were good and sufficient reasons to advance it to a panel hearing and that the panel should first consider whether the release was binding and precluded further consideration of the matter. On an application for judicial review, the applicant argued that the Chief Commissioner exceeded his jurisdiction by referring the matter to a hearing panel in the face of a valid and enforceable release. The court said that there was a triable issue as to the validity of the release, that this validity issue must be determined before the Commission could reject the complaint on the basis of the release and that the Chief Commissioner was correct in referring the validity of the release as the first determinative step by a hearing panel.
Sands Motor Hotel Ltd. v. Edmonton (City), 2005 ABCA 402 (CanLII)
The appellant in this case appealed from a decision of the Alberta Land Compensation Board. The appellant argued that the Board erred by concluding that it had jurisdiction to award compensation and in determining that it could review documents including a release and waiver. The appellant’s argument was that an agreement which resolves the very question of compensation the Board is called upon to determine, on its face, effectively ousts the Board’s jurisdiction to determine that compensation. The Court of Appeal said that the appellant had overlooked the necessity of the Board reviewing the documents in order to determine whether they could support such an argument. Clearly, the Board had jurisdiction to review the documents, and in fact it was required to do so, given the position of the appellant.
Wieler v Saskatoon Convalescent Home, 2017 SKCA 90 (CanLII)
The appellant was hired by the respondent for a six-month probationary term. Before the period expired, the respondent terminated the appellant’s employment on the basis that she was not suitable for the position. The appellant was asked to sign a release in exchange for one month’s severance pay. She signed the release but then filed a complaint with the Occupational Health and Safety Division of the Saskatchewan Ministry of Labour, alleging that she had been the subject of discriminatory actions, contrary to section 27 of the The Occupational Health and Safety Act (OHSA). An occupational health and safety officer took the view that the release placed the appellant’s situation “outside of the jurisdiction” of the OHSA. The Court of Appeal said it was quite clear the officer should not have said the execution of a release placed the appellant “outside of the jurisdiction” of the OHSA. This was not a matter of “jurisdiction”. The issue was whether the appellant could, as a matter of law, waive her rights under the OHSA. The officer had all the jurisdiction he needed to make that assessment. A release could not take away an officer’s “jurisdiction” nor could it, on its own, preclude or prevent an investigation. An occupational health and safety officer has the authority to review a release to determine, as a matter of first instance, whether it is valid and enforceable.
Provincial Health Services Authority v Sayyari, 2022 BCSC 2092 (CanLII)
This litigation arose from a human rights complaint filed by the respondent alleging employment discrimination on the basis of age. The petitioners sought various orders to enforce an alleged settlement agreement with the respondent. On the issue of its jurisdiction to determine whether the parties entered into a settlement agreement, the court referred to section 30 of the B.C. Human Rights Code, according to which, if there has been a breach of a settlement agreement, a party to the agreement may apply to the court to enforce the agreement to the extent that the terms of the agreement could have been enforced by the B.C. Human Rights Tribunal. The court said that the legislature had provided the court with a role by providing a remedy in the event of a breach of the terms of a settlement agreement. Implicit in this role was the authority to decide, in cases where the parties disagree whether they entered into a settlement, whether the parties made an agreement, interpret the agreement, determine whether it was breached, and decide whether it should be enforced. These are issues that are decided on the ordinary principles of contract law and settlement of legal disputes, which are not matters within the specialized expertise of the tribunal. The fact that the tribunal has a statutory jurisdiction under section 27(1)(d)(ii) of the Code to determine whether a settlement agreement exists, and to refuse to hear a complaint if it does, cannot deprive the court of its own jurisdiction under section 30 of the Code. The petitioners argued that the respondent had breached the alleged settlement agreement because, among other things, she proceeded with amendments to her human rights complaint in the face of her acceptance of the terms of a release and she filed a notice of civil claim in the face of the release. The court said that an order of the tribunal dismissing the complaint would not provide the petitioners with a complete remedy for the asserted breaches of the alleged settlement agreement. In particular, the tribunal could not enforce the general release that the petitioners said the respondent breached when she commenced the action in court. Although the respondent had allowed the notice of civil claim in the civil action to lapse without serving it, she had not discontinued the action. Therefore, she was in breach of the release provision of the alleged settlement agreement. The court said that the respondent’s refusal to perform her reciprocal obligations under the alleged settlement agreement was a sufficient breach to justify the court’s intervention under section 30 if the court were to find a binding and enforceable agreement.
10.13.2 Considering the Effect of a Release
The decisions in section 10.13.1 generally address issues relating to the jurisdiction of administrative tribunals or decision-makers in cases involving releases. One can see from the decisions below that an administrative tribunal or decision-maker may be faced with difficult questions when it considers how its jurisdiction is to be exercised in a matter that seemingly falls within the scope of a release. The decision in Pritchard v. Ontario (Human Rights Comm.), 1999 CanLII 15058 (ONSC DC), sheds light on these questions, although it must be recognized that the provisions of the Ontario Human Rights Code that were central to the Pritchard decision are no longer included in the Code.
In Pritchard, the Ontario Human Rights Commission decided, in the exercise of its discretion under section 34(1)(b) of the Code as it was at the time, not to deal with most of a complaint. Section 34(1)(b) provided that, where it appeared to the Commission that the subject-matter of a complaint was trivial, frivolous, vexatious or made in bad faith, the Commission could decide not to deal with it. The Commission decided that the complaint in Pritchard was made in bad faith because the complainant had signed a release which expressly released claims under the Code. An application for reconsideration of this decision was dismissed by the Commission. (See Pritchard v. Ontario (Human Rights Commission), 2003 CanLII 8701 (ON CA), appeal dismissed, 2004 SCC 31 (CanLII), [2004] 1 SCR 809.)
On an application for judicial review of the two decisions of the Commission, the Divisional Court noted that the release was an important factor in the Commission’s original decision. The Divisional Court also said that the Commission’s decision was consistent with the policy set out in the Commission’s Policy and Procedures Manual, from which the Divisional Court quoted the following passage:
The presence of a full and final release executed by the complainant will virtually always be evidence of bad faith in bringing a human rights complaint. The only exception will be if there is evidence of duress in the signing of the release… . It should be noted, however, that duress is a very high standard to be met as laid down by the Courts. Duress does not include so-called “economic duress” … .
The Divisional Court found that the Commission had improperly fettered its discretion, in “deciding that the filing of a human rights complaint shows bad faith after the complainant has signed a release, absent evidence of duress that is defined to exclude economic duress”. The court referred to the context “within which a particular claimant has signed the release” and identified facts that may take on importance, namely: “that the employee misunderstood the significance of the release, or received little or no consideration for it beyond statutory entitlements under employment standards legislation, or was in such serious financial need that she or he felt there was no choice but to accept the package offered”.
The Divisional Court pointed out that the Commission had an important statutory mandate to protect human rights. The court said that the Commission should have given consideration to all the relevant facts of the case to determine whether the complainant acted in bad faith in pursuing her complaint.
The provisions of section 34(1)(b) of the Human Rights Code that were in effect at the time of the Pritchard case have since been removed from the Code. Section 23(1) of the Ontario Statutory Powers Procedure Act provides that a tribunal may make such orders or give such directions in proceedings before it as it considers proper to prevent abuse of its processes. The abuse of process doctrine is discussed above at some length in Chapter 3: Effectiveness and Enforcement of Releases, section 3.3.4.3, Abuse of Process. Notably, as made clear by the Supreme Court of Canada, abuse of process is a flexible doctrine and it exists to ensure that the administration of justice is not brought into disrepute. The focus of the doctrine is less on the interests of parties and more on the integrity of decision-making.
While the provisions of the Ontario Human Rights Code that were central to the Pritchard case have changed, Pritchard continues to be instructive on the question of how an administrative tribunal or decision-maker should exercise its jurisdiction when a matter before it seemingly falls within the scope of a release. Pritchard guides the decision-maker to consider facts relevant to the legal basis for determining the effect of the release (such as abuse of process or a “bad faith” standard), rather than adopting a blanket policy or approach to issues arising from the existence of the release.
Brine v. Canada (Attorney General), 1999 CanLII 8725 (FC)
The applicant filed a complaint with the Canadian Human Rights Commission. He alleged that Ports Canada discriminated against him by refusing to continue to employ him because of a disability. The CHRC resolved not to deal with the complaint because the applicant had reached a settlement with Ports Canada and had signed a release which stated he was satisfied that Ports Canada had met all of its obligations under the Canada Labour Code and the Canadian Human Rights Act. On an application for judicial review, the court said that the CHRC “did not have a proper factual footing not to deal with” the complaint. In addition, the CHRC’s legal premise in deciding the case was also faulty. The CHRC appeared to be of the view that the simple existence of a release which stated the complainant was satisfied the employer had met all of its CHRA obligations was, in and of itself, sufficient to refuse to deal with a complaint. The court said this view was not correct in law. The CHRC was obligated to assess and consider the circumstances of the settlement and release from the perspective of the CHRA to determine whether, under the circumstances, sufficient evidence warranted requesting a Human Rights Tribunal to “inquire into the complaint”. The record was clear that the CHRC failed to conduct this required analysis.
Lusina v. Bell Canada, 2005 FC 134 (CanLII)
The applicant’s employment with the respondent was terminated and negotiations ensued about an acceptable severance package. Before these negotiations concluded, the applicant wrote to the Canadian Human Rights Commission alleging discriminatory conduct by the respondent. Eventually, the parties reached a settlement, the terms of which were incorporated into an Acknowledgement, Release and Discharge, which the applicant signed. After signing this agreement, she told the CHRC that she wished to proceed with her complaint. The CHRC dismissed the complaint. It issued a letter stating, among other things, that the complainant had signed a settlement release covering the events alleged in the complaint. On an application for judicial review of the CHRC’s decision, the court referred to authorities including Gee v. Canada (Minister of National Revenue) and Pritchard, above. The court said there was a striking and material distinction between Gee and this matter. In Gee, there was no indication that there was an allegation of, or an argument relating to, a breach of procedural fairness, but that was not the situation here. A review of the material before the CHRC revealed that the circumstances surrounding the agreement and the human rights complaint led an investigator designated under the Canadian Human Rights Act to conclude that the complaint was vexatious or made in bad faith. The question of bad faith is one of mixed law and fact. The decision as to whether it exists, in the circumstances of the case, is one for the CHRC to make. Only in the rarest of cases would such a determination by the CHRC warrant the intervention of the court. But this was such a case. In the circumstances of this case, the applicant’s opportunity to respond to the respondent’s position with regard to the complaint was compromised at both levels – the investigation level and the CHRC level. This constituted a breach of procedural fairness that vitiated the decision
O’Grady v. Bell Canada, 2012 FC 1448 (CanLII)
After signing documentation, including a release, in relation to the termination of her employment, the applicant filed a complaint with the Canadian Human Rights Commission alleging that she had been discriminated against on the basis of a mental health disability. The CHRC decided not to refer the complaint to the Canadian Human Rights Tribunal and the applicant sought judicial review of the CHRC’s decision. The court discussed the CRHC’s policy regarding the effect of releases on human rights complaints and a guide to releases issued by the Ontario Human Rights Commission that was referred to in the CRHC’s policy. In particular, the court noted “helpful advice” in the OHRC guide about what constitutes bad faith in pursuing a complaint in the face of a release and it referred to the discussion in the OHRC guide about the factors set out in Pritchard, above, to determine if a release actually reflects a settlement of a human rights complaint. In the result, the court concluded that the CHRC had not considered the applicant’s particular circumstances, including consideration of the issue of mental duress as that concept is understood in the human rights context, and it remitted the matter to the CHRC to be re-determined.
Canadian Museum of Civilization v. Public Service Alliance of Canada, 2014 FC 247 (CanLII)
In this case, the Canadian Human Rights Commission considered whether a release given in respect of a first complaint applied so as to cover a second complaint. The court said the threshold test was high, in that the CHRC should decline to hear a case at the screening stage only in plain and obvious cases, citing Canada Post Corp v Canada (Canadian Human Rights Commission) (re Canadian Postmasters and Assistants Assn), 1997 CanLII 16378 (FC), affirmed 1999 CanLII 7865 (FCA). The matter was fraught with issues and it was not plain and obvious that the release covered the second complaint or even if it could because there were different parties to the two complaints. It was open to either party to negotiate for an explicit reference to the second complaint in the release but there was no such explicit reference.
Ayangma v. La Commission Scolaire et al., 2014 PESC 18 (CanLII) , motion to dismiss appeal granted, subject to condition subsequent, Ayangma v. PEI H.Rts.Comm. & La Commission Scolaire, 2015 PECA 4 (CanLII) , application for leave to appeal dismissed, Noel Ayangma v. Prince Edward Island Human Rights Commission, et al., 2015 CanLII 81618 (SCC)
The applicant complained to the P.E.I. Human Rights Commission that the respondent School Board had discriminated against him contrary to the P.E.I. Human Rights Act. The complaint was dismissed by the Executive Director of the Commission on grounds including a finding that the applicant had executed a release preventing him from making a complaint against the School Board and “the position over which the complaint was made” was “not a new matter”. On an application for judicial review, the court said that the Executive Director ventured into a discussion of the validity of the release as it related to future claims or actions and it was this interpretation to which the applicant took the greatest objection. However, it was not the purview of the reviewing court to determine whether the Executive Director was correct in his interpretation of the release as it related to future claims of discrimination. The function of the court was to determine whether or not the Executive Director’s decision was reasonable. The court would not and should not determine the validity of the release as it related to future claims of discrimination. The court agreed that the claim made by the applicant was not a new matter and was covered by the terms of the release.
Sohmer v. Syndicat Unifor, 2016 FC 2 (CanLII)
On December 3, 2013, the respondents Bell and Unifor signed a memorandum of agreement regarding closure of telephone operator service. The memorandum of agreement provided for retirement of certain employees with a termination allowance in the form of a lump sum payment. In order to secure the lump sum, the employees were required to sign a release. On December 19, 2013, the applicant filed complaints against Bell and Unifor with the Canadian Human Rights Commission alleging discrimination on the basis of age. On December 20, 2013, the applicant accepted the termination allowance offer and signed a release in favour of Bell for any complaint or right of complaint he may have in relation to his employment or the end of his employment and the Canadian Human Rights Act. After receiving submissions from the parties, the Commission concluded that the applicant’s complaints were vexatious and it refused to deal with them. On an application for judicial review, the court held that the Commission’s decision was reasonable. The Commission found that the applicant, in exchange for a termination allowance, signed a release regarding any potential human rights issues that could arise, including in relation to age. The Commission further found that there was no evidence to support the applicant’s claims that he was confused or misunderstood the terms of the release, or that he was subject to intimidation, anxiety or pressure, which negated his consent. The Commission noted that the terms of the release were clearly stated and the applicant received independent legal advice prior to signing the release. As for other submissions made by the applicant, the court said that the facts of this case were similar to those in O’Grady v Bell Canada, above.
10.13.3 Remedies
In the case below, an Ontario court determined that, having set aside a decision of an administrative tribunal regarding a release, it would not remit the matter to the tribunal.
Briggs v. Durham Regional Police Services, 2021 ONSC 414 (CanLII) , appeal dismissed, Briggs v. Durham (Police Services Board), 2022 ONCA 823 (CanLII)
The Divisional Court set aside a decision of the Human Rights Tribunal of Ontario that was based on a finding of no ambiguity in a release. The court then considered the appropriate remedy. While the court allowed the application for judicial review, it disagreed with the applicant’s submission that the matter should be remitted to the tribunal with directions. The court said that, generally, where a decision being reviewed on the reasonableness standard cannot be upheld, it should be remitted to the decision-maker to reconsider the matter, citing Canada (Minister of Citizenship and Immigration) v. Vavilov, 2019 SCC 65 (CanLII). Vavilov notes, however, that there are “limited scenarios” where it would not be appropriate to do that, including where timely and effective resolution of the matter would be stymied or where it is evident that remitting the matter would serve no useful purpose. The issue in this case was one of interpretation of the release, which involved the application of legal principles of interpretation. As such, it did not engage the HRTO’s expertise in human rights matters. It was an issue that could be resolved by the court on the record before it. Nor was it a matter that required the HRTO to fashion a remedy under the Ontario Human Rights Code. In upholding this decision, the Ontario Court of Appeal said that, on its own, the tribunal’s lack of expertise in interpreting releases did not justify the decision not to remit the matter back to the HRTO. Otherwise, courts could step into an administrative decision-maker’s shoes in all cases where a court and a decision-maker have equal expertise. However, in combination, the other factors, especially the inordinate delay in this case, justified the Divisional Court deciding the matter rather than remitting it back to the HRTO. For a number of reasons, the Court of appeal did not accept the argument by the appellant Police Services Board that the Divisional Court’s decision not to remit the matter back to the HRTO deprived it of an opportunity to call relevant evidence.