3.1 Finality and Certainty
The effectiveness of a release is of course tied directly to its enforceability because a release will have no effect if a court concludes that it is not enforceable. Assuming that a release is enforceable, one measure of its effectiveness is the extent to which it brings finality and certainty. This is so because, particularly from the point of view of the releasee, a release is seen to be an instrument that will deliver finality and certainty through the extinguishment of claims or liability.
The importance of finality and certainty in the general law of contract has been recognized by the Supreme Court of Canada. In United Brotherhood of Carpenters and Joiners of America, Local 579 v. Bradco Construction Ltd., 1993 CanLII 88 (SCC), [1993] 2 SCR 316, at pages 341-2, Sopinka J. said that the parol evidence rule (as to which, see section 5.6.6 below) in contract law developed from the desire to have finality and certainty in contractual obligations. This case was later cited in Sattva Capital Corp. v. Creston Moly Corp., 2014 SCC 53 (CanLII) , [2014] 2 SCR 633, at paragraph 59, where Rothstein J. said that the purpose of the parol evidence rule is primarily to achieve finality and certainty in contractual obligations (and secondarily to hamper a party’s ability to use fabricated or unreliable evidence to attack a written contract). Further, Rothstein J. said that the parol evidence rule does not apply to preclude evidence of surrounding circumstances. Considering evidence of surrounding circumstances is consistent with the objectives of finality and certainty because such evidence is used as an interpretive aid for determining the meaning of the written words chosen by the parties, not to change or overrule the meaning of those words.
Canadian courts have also noted the importance of finality and certainty in the particular context of settlement agreements. In Goodswimmer v Canada (Attorney General), 2017 ABCA 365 (CanLII), application for leave to appeal dismissed, Chief Melvin Goodswimmer, et al. v. Attorney General of Canada, et al., 2018 CanLII 61050 (SCC), the Alberta Court of Appeal said, at paragraph 48, that: “Important objectives of any settlement, and particularly any settlement aimed at reconciliation with respect to outstanding aboriginal claims, are certainty and finality.”
The case law in the context of settlements reveals, not surprisingly, that certainty and finality can be closely related concepts. In Adelaide Capital Corporation v. Toronto-Dominion Bank, 2006 CanLII 39459 (ON SC) , appeal allowed on other grounds, South Holly Holdings Limited v. The Toronto-Dominion Bank, 2007 ONCA 456 (CanLII) , at paragraphs 19-20, the court said: “It is a principle of our law that parties should be encouraged to settle disputes. Having done so, such agreements should not be set aside absent compelling reasons, such as fraud. Finality limits the burdens on the courts of re-litigation. We recognize the desirability socially and commercially of having disputes resolved, such that there is certainty in business and personal life. Our law also values finality of disposition. Without finality, there would be no incentive to compromise claims and make settlements. There would be no certainty.“ See also R. v. Horner, 2013 SKQB 340 (CanLII).
In the case law on releases, the objectives of certainty and, especially, finality are referred to separately, as can be seen under the headings that follow below (section 3.2, Certainty and section 3.3, Finality). These two objectives also are treated as companion goals in release cases. In Umholtz v. Umholtz, 2004 CanLII 14183 (ON SC), Corbett J. discussed releases in the context of family law cases and quoted from Miglin v. Miglin, 2003 SCC 24, where, at paragraph 4, the Supreme Court of Canada referred to objectives of the Divorce Act, including certainty, finality and autonomy. Corbett J. said, at paragraph 17 of the Umholtz decision that: “’Certainty’ and ‘finality’ depend, at least in part, on competent crafting of settlement agreements and releases.”
Insofar as releases are concerned, there are obviously good reasons for treating finality and certainty as companion goals. The efforts of parties to achieve finality will be undermined if they bring a matter to a conclusion in a way that lacks certainty and their efforts to bring certainty to their affairs will be undermined if they have failed to conclude a matter with finality. In the decisions immediately below, certainty and finality are referred to together as dual objectives of parties to releases. And later in this chapter (section 3.4), we will see that objectives such as certainty and finality generally are given special emphasis in cases involving commercial transactions.
Companies’ Creditors Arrangement Act (ON), Re, 2006 CanLII 32429 (ON SC)
One of the parties to a settlement argued that a release given in furtherance of the settlement precluded the motion before the court: it said that any release is intended to give finality and certainty. However, the court referred to the Blackmore decision and said that the release must be interpreted within the context of the deal that constituted the settlement and the general words in a release are limited always to that thing or those things which were specially in the contemplation of the parties at the time when the release was given. (As to the Blackmore decision, see section 5.2, below.)
Ferguson (Ferguson Barristers LLP) v. North, 2009 CanLII 55724 (ON SC)
A release is not to be interpreted so as to rob it of certainty or finality.
R. v. Horner, 2013 SKQB 340 (CanLII)
If a citizen were unable to release a government agency from a claim based on an alleged Charter violation, disputes could not be settled and all disputes would of necessity proceed to trial. Such a result would be contrary to the values of finality and certainty that litigation settlement is intended to promote.
Goodswimmer v Canada (Attorney General), 2017 ABCA 365 (CanLII), application for leave to appeal dismissed, Chief Melvin Goodswimmer, et al. v. Attorney General of Canada, et al., 2018 CanLII 61050 (SCC)
The appellant Band entered into a Treaty Land Entitlement Settlement Agreement with Canada, resolving certain claims arising out of a treaty. The Treaty Land Entitlement Settlement Agreement incorporated very general release wording. As noted above, the Court of Appeal said that important objectives of any settlement, and particularly any settlement aimed at reconciliation with respect to outstanding aboriginal claims, are certainty and finality. Immediately following this statement about certainty and finality, the court went on to refer to Canada’s position during negotiations that any settlement would have to include a release in favour of Canada. Later in the decision, the court said it would be an unacceptable stratagem to set aside the certainty and finality brought by the settlement by not only stepping behind the words of the release, but by also holding that claims at issue in this proceeding were not barred by the passage of time.
Nicholl v. Nicholl, 2020 BCCA 173 (CanLII)
The British Columbia Court of Appeal allowed an appeal from a decision to uphold the spousal support provisions of a separation agreement containing a release, but it noted that, in cases such as this, a court must consider finality, certainty and the benefit of allowing spouses to settle their own affairs under terms that are agreeable to them.
Buck v. Canada (Attorney General), 2020 FC 769 (CanLII)
Since 1973, First Nations have been able to avail of the Specific Claims Policy, which provides an alternate dispute resolution process for resolving historic grievances that are related to Canada’s obligations pursuant to historic treaties or the way Canada managed First Nations’ lands, funds or other assets. In 2008, Canada enacted the Specific Claims Tribunal Act, pursuant to which First Nations could file specific claims with the Tribunal as specified therein. The Specific Claims Policy and the SCTA both contemplate releases and indemnities from First Nations whose specific claim is being settled. The Specific Claims Policy states the Canada requires certainty and finality when it settles a claim and that a claim settlement must achieve complete and final redress of the claim. First Nations must, therefore, provide Canada with a release and indemnity with respect to the claim.
In the Matter of a Plan of Arrangement of UrtheCast Corp., 2021 BCSC 1819 (CanLII)
In its decision to grant an order under the Companies’ Creditors Arrangement Act that included a release of directors and officers (where there was no objection to an order for the requested release), the court said it was appropriate to grant the order to provide certainty and finality to the proceedings.
Arrangement relatif à BlackRock Metals Inc., 2022 QCCS 2828 (CanLII) , application for leave to appeal dismissed, 2022 QCCA 1073 (CanLII)
In this proceeding under the Companies’ Creditors Arrangement Act, the debtors (“BlackRock”) sought approval of a reverse vesting order in connection with a proposed sale of assets essentially in line with the terms of a stalking horse agreement with secured creditors, OMF Fund II HH Ltd. (“Orion”) and Investissement Québec (“IQ”). The proposed transaction contemplated releases for parties, including Orion and IQ, from all claims relating to, in particular, BlackRock, its restructuring or the proposed transaction. Objection was taken to the release that was to be given to Orion and IQ. The court said the participation of Orion and IQ was instrumental to the restructuring of Blackrock’s business, it was reasonable for Orion and IQ to start out with a “clean slate” and not be under the threat of potential claims, and the release would provide more certainty and finality. For these and many other reasons, the court granted the release to Orion and IQ. An application for leave to appeal from this decision was dismissed. The appellate judge quoted a passage from the decision of the judge at first instance which included the statement about the release providing more certainty and finality.
Caponero v Alberta Human Rights Commission (Office of the Chief of the Commission and Tribunals) and Kaizen Auto Group Ltd., 2024 ABKB 2 (CanLII)
A Human Rights Tribunal decided that a release signed by the applicant was valid, that the applicant had settled his human rights claim and therefore that there were no grounds upon which the human rights claim could proceed. An application for judicial review of the decision of the Tribunal was dismissed. Among other things, the court said that the Tribunal had properly identified the competing interests of certainty and finality in contracting versus fairness to a vulnerable contracting party. The Tribunal had weighed the evidence before it in light of these competing interests and concluded that there was nothing so unfair in the treatment of the applicant that would displace the certainty and finality provided by the contract which he entered into.
3.1.1 Release Confirming Intent to Achieve Finality and Certainty
The case below indicates that the inclusion of a complete release in a contract may tend to support a finding that the intention of the parties to the contract was to achieve certainty and finality.
Bowes v. Goss Power Products Ltd., 2012 ONCA 425 (Can LII)
The clear goals of the parties, in entering into an employment agreement which designated a stipulated sum owed upon termination without cause, were certainty and closure. Indeed, the inclusion of a complete release in the employment agreement dispelled any doubt that certainty and finality were the goals of the respondent.
3.2 Certainty
Given that, like a release, a limitation period can be raised as a bar to a lawsuit, it is worthy of note that the Supreme Court of Canada has recognized certainty as one of the underlying rationales of legislation with respect to limitation periods. In M.(K.) v. M.(H.), 1992 CanLII 31 (SCC), [1992] 3 SCR 6, LaForest J. said that the three rationales underlying the Ontario Limitations Act may be described as the certainty, evidentiary, and diligence rationales. See also Peixeiro v. Haberman, 1997 CanLII 325 (SCC), [1997] 3 SCR 549, at paragraph 34. The three rationales were referred to in Pioneer Corp. v. Godfrey, 2019 SCC 42 (CanLII), at paragraph 47, where Brown J. said that limitation periods foster certainty. The certainty rationale recognizes that, with the passage of time, an individual should be secure in the reasonable expectation of not being held to account for ancient obligations: Markevich v. Canada, 2003 SCC 9 (CanLII), [2003] 1 SCR 94, citing M. (K.), above, at page 29.
The certainty and stability of contracts emerged as a point of consideration in a decision of the Supreme Court dealing with a contractual limitation of liability clause. The dissenting judgment of Binnie J. in this case, Tercon Contractors Ltd. v. British Columbia (Transportation and Highways), 2010 SCC 4 (CanLII), was discussed at some length by the British Columbia Court of Appeal in Niedermeyer v. Charlton, 2014 BCCA 165 (CanLII) , application for leave to appeal dismissed, William Charlton, et al. v. Karen Niedermeyer, 2014 CanLII 68709 (SCC) .
The decision of the majority of the B.C. Court of Appeal in Niedermeyer was given by Garson J.A. She referred, at paragraphs 74 to 80 of the Niedermeyer decision, to comments by Binnie J. in Tercon regarding the public policy branch of the test for determining the enforceability of a limitation of liability clause – in the words of Garson J.A., “also known as a release of liability”. Garson J.A. noted that, although Binnie J. dissented in the result, the Supreme Court was unanimous in Tercon on the correct approach to the limitation of liability clause, including on the question of public policy. Garson J.A. went on to say that: “Binnie J. continued to endorse significant judicial restraint when invoking public policy as justification for interfering with a contract freely entered into by competent adults. … Binnie J. recognized that given the importance of the ‘certainty and stability of contractual relations’ only where harm to the public is ‘substantially incontestable’ will the court use its residual power to decline to enforce a contract … .”
3.2.1 Certainty – Releases
As stated by the Alberta Court of Appeal in Cain v. Clarica Life Insurance Company, 2005 ABCA 437 (CanLII) , at paragraph 52: “The whole point of a settlement is to replace an unpredictable dispute or suit with a certain contract.” The same court said in an earlier decision that settlement is, after all, “nothing more than a compromise, in which parties gamble by trading prospective rights for certainty”: see Amoco Canada Petroleum Co. Ltd. v. Propak Systems Ltd., 2001 ABCA 110 (CanLII), at paragraph 25. In Zwygers v. Appiah-Kubi, 2019 ONSC 4259 (CanLII), at paragraph 45, Coroza J. said: “…courts must be seen to encourage parties to settle disputes and should, when required, enforce those settlements if there is a basis to do so. Parties need certainty and predictability in the settlement process.”
When parties have brought certainty to an unpredictable dispute by reaching a settlement, a release is used to give effect to that certainty by establishing that the releasee is free from claims or liability within the scope of the release. In addition to the cases above that treat certainty and finality as companion concepts insofar as releases are concerned, the following are cases that specifically address certainty in relation to releases.
Neinstein v. Marrero, 2007 CanLII 13939 (ON SC)
The court held that the interpretation of minutes of settlement most consistent with the reasonable expectations of the parties as expressed in the document was one which required the parties to enter into a release providing the respondents with certainty that they would not be exposed at some future date to any risk associated with claims initiated by the applicants in respect of work on a property.
Williams-Sonoma Inc. v. EllisDon Corporation, 2012 ONSC 5448 (CanLII) , appeal dismissed, Williams-Sonoma Inc. v. Oxford Properties Group Inc., 2013 ONCA 441 (CanLII)
A lease required tenants at a mall to acquire insurance to cover water damage claims on the premises and it obligated the landlord to maintain similar insurance for its property. The lease provided for a mutual release and waiver between the landlord and tenant for any occurrences which were the subject of insurance coverage. The lease also provided a release and waiver for those for whom the releasee was in law responsible with respect to occurrences insured against or required to be insured against by the releasing party. The motion judge said that the reason behind the inclusion of the release and waiver was to require the landlord and tenant to insure their respective portions of the risk. One of the intentions of having this release and waiver in the contract was the allocation of risk and certainty that cost would not be affected by one party asserting subrogation rights.
High-Tech Realty Inc. v. Pichugin, 2014 ONSC 1783 (CanLII)
The difficulty and the risk to the party asserting an oral agreement is that verbal agreements and handshakes are more ambiguous than written releases and may be exceedingly difficult to prove – hence the preoccupation with reducing agreements to writing for purposes of certainty and clarity.
Lithium One Homes Ltd. v. Abakhan & Associates Inc., 2017 BCSC 2189 (CanLII)
The issue in this case was whether an arbitrator had jurisdiction to proceed with arbitration under a contract for the construction of a home, in view of a mutual release which, on its face, appeared to resolve all issues arising out of the contract between the builder and the purchasers. The court said that the issue was of importance to the parties because they needed to have certainty that a contract, the release, was determinative of issues that arose during the performance of the contract. The determination as to whether the release resolved all issues was essential to prevent a miscarriage of justice.
McDonald v. Home Capital Group, 2017 ONSC 5004 (CanLII)
The quid pro quo for a substantial amount to be paid in settlement of a class action was dismissal of the action and a release of the defendants by class members of the claims asserted in the statement of claim. These terms were standard terms found in any settlement. No sane defendant would pay out money without the certainty and closure that a dismissal and release provides.
Pisani v. Smith et al., 2022 ONSC 2677 (CanLII)
The plaintiff was the owner, President, Chief Executive Officer and apparently the sole shareholder of a company, Contac Services Inc., that contracted to provide services to the defendant Air Canada. Issues arising from the contract were resolved by way of an agreement that contained a release in favour of Air Canada. Air Canada relied on the release in support of a motion to strike out the plaintiff’s amended claim in this action. In the amended claim, the plaintiff alleged that Air Canada “inflicted unlawful conduct on Contac” by breaching its contract with Contac, with the intention of harming the plaintiff, and that Air Canada conspired with its co-defendant, an Air Canada executive, to commit the tort of intentional interference with economic relations. Among other things, the court said that, for a sole shareholder to cause his corporation to release claims against defendants but then turn around and sue those defendants in his personal capacity based on a theory of “stretched” liability (referring to the tort of unlawful interference with economic relations) seemed incompatible with the concept of commercial certainty (and the limited scope of the tort of wrongful interference in economic relations).
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 also 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. The court was not convinced that there was any principled legal basis for disrupting the certain and predictable allocation of risk found in the standard form contracts.
3.3 Finality
The importance of finality in litigation has been repeatedly recognized by the Supreme Court of Canada and other Canadian courts. In British Columbia (Workers’ Compensation Board) v. Figliola, 2011 SCC 52 (CanLII), [2011] 3 SCR 422, for example, Abella J. noted that the importance of finality in litigation had previously been emphasized by Binnie J. in Danyluk v. Ainsworth Technologies Inc., 2001 SCC 44, [2001] 2 S.C.R. 460. In Danyluk, at paragraph 19, Binnie J. said: “Finality is … a compelling consideration and judicial decisions should generally be conclusive of the issues decided unless and until reversed on appeal.”
Canadian courts have also emphasized that finality is an important outcome of settlements. In Sub-Prime Mortgage Corporation v. Kaweesa, 2021 ONSC 739 (CanLII), at paragraph 21, Stinson J. said it is a well-established principle that there is a strong presumption in favour of the finality of settlements, referring to Tsaoussis (Litigation Guardian of) v. Baetz (1998), 1998 CanLII 5454 (ON CA), at paragraphs 15-16 and Deschenes v. Lalonde, 2020 ONCA 301, at paragraph 27.
An attempt to catalogue all Canadian jurisprudence which refers to the importance of finality would result in a lengthy list of decisions indeed. Below are summaries of some decisions which illustrate the views of Canadian courts on finality of litigation and settlements.
Donaghy v. Scotia Capital Inc., 2004 CanLII 7702 (ON SC) , appeal dismissed, as noted at paragraph 8, 2009 ONCA 40, application for leave to appeal dismissed, 2009 CanLII 27234 (SCC)
The principle of finality is an important principle. Settlements entered into with the assistance of counsel should be upheld except in the clearest of cases and in exceptional cases.
Kiff v. Lundquist, 2006 BCPC 446 (CanLII)
There is a public interest in finality.
Mohammed v. York Fire and Casualty Insurance Co., 2006 CanLII 3954 (ON CA) , leave to appeal refused, [2006] S.C.C.A. No. 269
Minutes of settlement are a contract. A consent judgment is binding. Both are final, subject to reasons to set them aside. Finality is important in litigation. This is so for the sake of the parties who reached their bargain on the premise of an allocation of risk, and with an implicit understanding that they will accept the consequences of their settlement. Finality is also important for society at large, which recognizes the need to limit the burdens placed on justice resources by relitigation, a limitation reflected in the doctrine of res judicata.
Isailovic v. Gertner, 2008 CanLII 1537 (ON SC) , appeal dismissed, 2008 ONCA 895 (CanLII)
Finality is an important feature of our justice system. There is a general policy in favour of upholding and enforcing settlements, absent misrepresentation, evidence of fraud, duress, undue influence, mistake of fact or unconscionability.
Valic v. Workers’ Compensation Board, 2010 NWTSC 97 (CanLII)
Courts place an emphasis on the benefits of finality in litigation. The settlement agreement in this case was meant to bring finality to an acrimonious relationship between the plaintiff and the defendants. The net effect of the settlement agreement was that the plaintiff released every cause of action.
Hanna v. Polanski et al, 2012 ONSC 3229 (CanLII)
An overarching consideration in the enforcement of settlements is the principle of finality and any attempt to reopen matters which are the subject of a final disposition must be carefully scrutinized (citing Tsaoussis v. Baetz ).
Sentry Metrics Inc. v. Robert Ernewein et al., 2013 ONSC 959 (CanLII)
The principle of finality requires that settlements entered into with the assistance of counsel should be upheld except in the clearest of cases.
1704604 Ontario Ltd. v. Pointes Protection Association et al, 2016 ONSC 2884 (CanLII)
The court does not have to look further than the comments of Justice Lang in the Mohammed case, above, to appreciate the sanctity given in litigation to agreements made between parties and the importance that they attract.
3.3.1 Finality – Releases
Parties who have achieved finality through a settlement will seek to give effect to that finality by using a release to extinguish claims or liability. Summarized below are decisions in which the courts have confirmed the finality associated with a release.
In Sutherland v. Collett (Estate), 2017 YKSC 36 (CanLII) , a Settlement Conference Order which resolved issues relating to the division of communal assets between parties who were former common law spouses stated: “There shall be no further claims by either party arising from this relationship.” The court referred to this as a “release clause” and it took the view that the intention of the release clause was to make the SCO a final order, bringing the litigation and all claims arising from the relationship to an end.
Read v. Read, 1995 CanLII 17870 (PE SCTD)
In the context of an application to vary a divorce judgment, the court said that a release is permanent, final and conclusive.
Gregory v. KPMG LLP, 2012 BCSC 1387 (CanLII)
The goal of a release such as that prepared by the defendants in this case is to put the parties’ dispute to rest with finality, specifically to liberate a party once and for all from any liability or obligation to another party arising out of specific circumstances (citing The Law of Releases in Canada). The purpose of a release is to ensure that the terms of the release achieve the goal expressed in the parties’ settlement which is that the release effectively terminates the parties’ action and provides a finality to their dispute and the potential for matters arising out of their dispute.
Thompson v. Rogers Communications Inc., 2013 ONSC 6975 (CanLII)
A full and final release was held to be binding on the releasor. The court said there is an importance to finality when it comes to litigation.
Cushnaghan v Kwan, 2015 ONSC 4837 (CanLII)
The motion judge in this case said that the defendant’s obligations under minutes of settlement entered into with the plaintiff should be enforced, which included requiring the defendant to execute the agreed-upon form of release contained therein. The principle of finality and public policy dictates that settlements entered into between parties should be upheld except in the clearest of cases. (The defendant acknowledged the minutes to be binding and enforceable.)
Ahmed v Shang, 2016 ONSC 4794 (CanLII)
A full and final release is a normal term of a settlement agreement. The interests of justice in bringing finality to a proceeding would be undermined if a party were permitted to refuse to provide a release where it decided to take the position, after an action had been dismissed pursuant to a settlement, that the delivery of a release was unnecessary.
Betser-Zilevitch v. Nexen Inc., 2018 FC 735 (CanLII) , appeal dismissed, 2019 FCA 230 (CanLII)
No objectively reasonable, sensible, or businesslike release drafted in the context of the settlement of litigation would continue to expose parties to the risk of continued litigation; to be a release in this context, the release must put an end to litigation against those exposed to it.
PricewaterhouseCoopers Inc. v. Perpetual Energy Inc., 2020 ABQB 6 (CanLII) , appeal allowed, 2021 ABCA 16 (CanLII) , application for leave to appeal dismissed, Susan Riddell Rose, et al. v. PricewaterhouseCoopers Inc., et al., 2021 CanLII 58908 (SCC)
When a release is signed, the releasee is typically seeking to achieve finality; indeed, authoritative courts have recognized finality is an objective of both parties. The finality associated with judgments of a court is recognized as an important feature of the justice system in Canada, both for the parties involved in any specific litigation and for the community at large. It is important that there be a point in time when parties can proceed on the basis that matters have been decided and rights and obligations finally determined; parties need to be secure in their knowledge that issues have been concluded on a final basis. The common law recognizes this contractual entitlement in the form of a release.
3.3.2 Intent of Release to “Wipe the Slate Clean” or “Buy Peace”
Finality may take on importance as a consideration in cases when there is an issue about the scope or comprehensiveness of a release. In these cases, not only does finality emerge as an explicit point of discussion, but the courts often use more descriptive phrases, such as “wipe the slate clean” or “buying peace for all time” as they address the extent to which parties intend that a release will bring complete closure to matters between them. In Bank of Credit and Commerce International SA v. Munawar Ali, Sultana Runi Khan and Others [2001] UKHL 8, at paragraph 23, Lord Nicholls said: “General releases are often entered into when parties are settling a dispute which has arisen between them, or when a relationship between them, such as employment or partnership, has come to an end. They want to wipe the slate clean.” These words were echoed in a decision of the Supreme Court of Canada, where Rowe J. said: “In entering into a release, the parties bargain for finality, or as Lord Nicholls put it, ‘to wipe the slate clean’…”: Corner Brook (City) v. Bailey, 2021 SCC 29 (CanLII) , at paragraph 27.
The point of this descriptive phraseology is to bring home the intent of a release to put to an end, completely and comprehensively, claims or liability captured within the scope of the release. But of course the finality achieved by a release will depend on the view taken of its scope – and claims not known to the parties at the time a generally-worded release was given cannot be assumed to be within the scope of the release. In the Bank of Credit decision, for example, Lord Nicholls went on to say that the problem before the court concerned a claim “which subsequently came to light but whose existence was not known or suspected by either party at the time the release was given”. The conclusion of the majority of the House of Lords in Bank of Credit was that a general release was not intended to capture such a claim. As to whether the scope of a release extends to unknown claims, see Chapter 6: Scope and Application of Releases, section 6.4, Unknown and Future Events or Claims.
In the decisions summarized below, Canadian courts referred to descriptive phraseology such as “wipe the slate clean” or “buying peace for all time” when discussing the intent of particular releases.
Woodcliffe Corp. v. Rotenberg, 2005 CanLII 23675 (ON CA) , application for leave to appeal dismissed, Woodcliffe Corporation v. Rotenberg, 2006 CanLII 4766 (SCC)
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, typical wording of a no-claim-over clause. 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. There was no injustice in holding the plaintiffs to the bargain they made with the third parties when they gave releases in the previous litigation, particularly where the plaintiffs had the benefit of the “peace” they obtained because of those settlements. The object and purpose of the release was not only to prevent the plaintiffs from suing the third parties, but also to ensure that the third parties would not be further disturbed by the plaintiffs.
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 said that, from the language of the minutes, the respondents could reasonably expect that they were obtaining the benefit of a release from existing and contemplated litigation initiated by the applicants “in respect of all claims & matters” relating to the project. Not only could the respondents reasonably expect a cessation of any claims by the applicants against them regarding the project, but they could also reasonably expect that they would not have to trouble themselves in the future with any further “matter”, or contemplated litigation regarding the project initiated by the applicants. As put by the respondents, in the minutes they were “buying peace for all time” in respect of the project. The applicants intended to sue the respondents’ “contractors, sub-contractors, consultants and sub-consultants”, but such litigation invariably would raise the prospect of third party claims and the litigation machine would be cranked up yet again, shattering the peace the respondents thought they had purchased. The court held that the interpretation of the minutes most consistent with the reasonable expectations of the parties was one which required the parties to enter into a release providing the respondents with certainty that they would not be exposed to any risk associated with claims initiated by the applicants in respect of the work.
Baywood Homes Partnership v. Haditaghi, 2014 ONCA 450 (CanLII)
The 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”.
Cosentino v. Sherwood Dash Inc., 2014 ONCA 843 (CanLII)
The appellant sold his shares of a company of which he had been a shareholder, officer and director. The share sale agreement required the appellant to sign a release in a prescribed form and, accordingly, he released the respondent from claims as a former shareholder, director, officer, creditor or employee. The appellant resigned as an officer and director of the respondent, but claimed that he had not resigned as an employee. He brought an action for payment of termination pay and severance pay pursuant to the Employment Standards Act. The court held that the appellant’s only employment with the respondent was as Vice-President Operations and that, when he resigned as an officer and director, no other relationship remained. The court said that the intention and effect of the transaction was a “clean break”. (This decision is summarized in Kerzner v American Iron & Metal Company Inc., 2017 ONSC 4352.) On appeal, the Court of Appeal noted that the appellant had released the respondent from any and all claims as a shareholder, officer, director, officer, creditor and/or employee. The Court of Appeal agreed with the lower court that the appellant’s assertion that he had not resigned as an employee was untenable.
Disera v. Bernardi, 2014 ONSC 4500 (CanLII)
Releases are executed when litigation claims are settled in order to give the parties peace from potential liability from the claims and to avoid any further proceedings that might flow from the claims released.
AIG Insurance Co. of Canada v. Canjam Trading Ltd, 2015 ONSC (CanLII)
While a release may provide parties with a “clean slate” by ending the parties’ contractual relationship, this is not always the case.
Rossman v. Canadian Solar Inc., 2018 ONSC 7172 (CanLII) , appeal on other grounds dismissed, 2019 ONCA 992 (CanLII)
On a motion for summary judgment, the motion judge said that the meaning of the release provision of an agreement 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 motion judge said these 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 agreement.
Quantech Electrical Contractors Limited v. Asco Construction Ltd., 2019 ONSC 1906 (CanLII)
As stated by the court, the central issue on a motion for summary judgment in this case was whether the wording of a global settlement agreement as well as the release contained therein prevented the defendant from asserting a third party claim. The court said that an objective reading of the language chosen by the parties revealed that they intended to resolve all known claims and to provide a clean slate for the completion of the project that gave rise to this litigation.
PricewaterhouseCoopers Inc. v. Perpetual Energy Inc., 2020 ABQB 6 (CanLII) , appeal allowed, 2021 ABCA 16 (CanLII) , application for leave to appeal dismissed, Susan Riddell Rose, et al. v. PricewaterhouseCoopers Inc., et al., 2021 CanLII 58908 (SCC)
The wording of a release typically suggests an intent to wipe the slate clean. The parties may look to make that fresh start when, for example, they wish to end a particular relationship or one party may be seeking to sever a connection with a prior relationship. The intent of a release is to unchain a party from any liability or obligation to another party arising out of particular circumstances, and to do so once and for all.
Chopak v. Patrick, 2020 ONSC 5431 (CanLII) , application for leave to appeal dismissed without prejudice to potential proceedings in the Court of Appeal, 2020 ONSC 6873 (CanLII)
The appellant’s submission that a release “wipe[d] the slate clean” even for future causes of action was not supported by the language of the release.
Terranata Winston Churchill Inc. v. Teti Transport Ltd., et al., 2020 ONSC 7577 (CanLII)
It is a fundamental premise of full settlements that a release is intended to buy the releasee peace of mind in relation to all claims arising from, and in connection with, the matters raised in the statement of claim both in the settled proceeding, and any other proceeding in which the releasee could be brought back into the dispute (even if by another party or non-party). If that objective is not to be reflected in the intended release, then the limitations to, and restrictions in, the scope of a release must be express, such as would be the case in a Pierringer Agreement or a Mary Carter Agreement. (For more on Pierringer Agreements and Mary Carter Agreements, see Chapter 7 below.)
Fehr v. Gribilas, 2022 ONSC 275 (CanLII)
The fundamental premise of a full settlement is that the general release is intended to buy the releasee peace of mind in relation to all claims arising from, and in connection with, the matters raised in the statement of claim both in the settled proceeding, and any other proceeding in which the releasee could be brought back into the dispute.
Arrangement relatif à BlackRock Metals Inc., 2022 QCCS 2828 (CanLII) , application for leave to appeal dismissed, 2022 QCCA 1073 (CanLII)
In this proceeding under the Companies’ Creditors Arrangement Act, the debtors (“BlackRock”) sought approval of a reverse vesting order in connection with a proposed sale of assets essentially in line with the terms of a stalking horse agreement with secured creditors, OMF Fund II HH Ltd. (“Orion”) and Investissement Québec (“IQ”). The proposed transaction contemplated releases for parties, including Orion and IQ, from all claims relating to, in particular, BlackRock, its restructuring or the proposed transaction. Objection was taken to the release that was to be given to Orion and IQ. The court said the participation of Orion and IQ was instrumental to the restructuring of Blackrock’s business and it was reasonable for Orion and IQ to start out with a “clean slate” and not be under the threat of potential claims. For these and many other reasons, the court granted the release to Orion and IQ. An application for leave to appeal from this decision was dismissed. The appellate judge quoted a passage from the decision of the judge at first instance which included the statement about Orion and IQ starting out with a “clean slate”.
Briggs v. Durham (Police Services Board), 2022 ONCA 823 (CanLII)
In Biancaniello v. DMCT LLP, 2017 ONCA 386, this court set out the interpretive principles that specifically apply to a release, which include that “[w]hen a release is given as part of the settlement of a claim, the parties want to wipe the slate clean between them”.
Shannon v Shannon, 2023 ABCA 79 (CanLII)
In a brief comment about what the Alberta Court of Appeal called the “aim of releases”, the court quoted the statement from Corner Brook v. Bailey set out above: the parties bargain for finality, or as Lord Nicholls put it, “to wipe the slate clean”.
3.3.2.1 Releases Achieving Finality or a “Clean Slate”
In the cases below, the courts found that the intent of particular releases or settlements was to achieve finality and they gave effect to this intent.
Filion v. Barnard, 2007 CanLII 1906 (ON SC)
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 the College and its officers “bought peace” through the settlement agreement. Not only did they buy peace from potential liability on claims arising from the termination of employment but also peace from claims arising from those events. The plaintiff could not raise those events under the guise of a defamation action or in support of a claim for punitive damages.
Better Beef Ltd. v. MacLean, 2006 CanLII 17930 (ON SCDC)
An employee accepted a severance package and signed a release which specifically indicated that she would have “no further claim of any description” against the employer. She subsequently initiated a complaint before the Pay Equity Hearings Tribunal that the employer had contravened the Pay Equity Act by not preparing or posting a pay equity plan in the workplace. The Tribunal concluded that the settlement and release did not bar the employee’s complaint under the statute, but the Divisional Court granted an application for judicial review of the Tribunal’s decision. Referring to Gissing v. T. Eaton Co. , the court said it is well settled law that parties must be held to their agreements except where there is impropriety. The court said that the literal and ordinary meaning of the release was that the parties’ intention was to make a full and final release of all claims against the employer.
Neinstein v. Marrero, 2007 CanLII 13939 (ON SC)
The parties to an action with respect to work performed on a residential property entered into minutes of settlement and the applicants sought a declaration regarding the proper language for a release. The court said that, from the language of the minutes, the respondents could reasonably expect not only a cessation of any claims by the applicants regarding the work on the property, they could reasonably expect that they would not have to trouble themselves in the future with any further matters regarding the project initiated by the applicants. In the minutes, the respondents were “buying peace for all time” in respect of the project.
Beck v. Johnston, Meier Insurance Agencies Ltd., 2010 BCSC 719 (CanLII), affirmed on other grounds, 2011 BCCA 250 (CanLII)
An insurance company had paid consideration to the plaintiff and bought peace with a release. The present proceeding against the broker that arranged the insurance coverage had not disturbed that peace.
Valic v. Workers’ Compensation Board, 2010 NWTSC 97 (CanLII)
The settlement agreement in this case was meant to bring finality to an acrimonious relationship between the plaintiff and the defendants. The net effect of the settlement agreement was that the plaintiff released every cause of action.
Forbes v. Manufacturers Life Insurance Company et al, 2010 ONSC 4931 (CanLII)
The court said that the release in question in this case was not a commercial contract or an insurance policy; it was a contract for peace of mind. It was the defendant insurance company that was buying peace of mind. The insurer drafted the document and any ambiguity must be resolved in favour of the insured. The release, however, was not ambiguous and the plain words were determinative.
P.C. Devlin Law Corporation v. 403827 B.C. Ltd., 2011 BCSC 1255 (CanLII)
The court found that the plaintiff’s claim was barred by a release provision in a settlement agreement. In its consideration of the interpretation and scope of the release, the court referred to the clear intention of the parties to bring a complete and final end to their association.
Fracassi v. Cascioli, 2011 ONSC 178 (CanLII)
Absent an express and deliberate provision, claims for fraudulent misrepresentation may not be avoided due to a contractual release. Absent fraud, there should be some finality associated with commercial agreements of purchase and sale.
Gregory v. KPMG LLP, 2012 BCSC 1387 (CanLII)
The goal of a release such as that prepared by the defendants in this case is to put the parties’ dispute to rest with finality, specifically to liberate a party once and for all from any liability or obligation to another party arising out of specific circumstances. To ensure that the release achieved the goal expressed in the parties’ settlement, that is, to terminate effectively the parties’ action and provide a finality to their dispute, it was necessary that the releasees listed in the release include those in the version of the document drafted by the defendants.
Fraser Papers Inc. (Re), 2012 ONSC 4882 (CanLII)
The purpose of a full and final release is to provide finality to a party, once and for all, from any liability or obligation to another party arising out of particular circumstances. The court said that in this case it was clear that certain defendants had been fully and irrevocably released in respect of the claims asserted against them in a class action.
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 would “trigger” 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.
Certified Design Consulting Inc. v. Alex Lane Properties Inc., 2015 NSSC 367 (CanLII)
On a motion for an order enforcing a purported settlement of claims arising from work under a construction contract, the parties disagreed about the terms of a release. The court found that the parties had agreed that the settlement was to extend to all claims arising under the construction contract, both past and future. Both parties agreed to end their contractual relationship and “go their separate ways”, foregoing the right to pursue any further claims against each other (past or future) on the condition that a lien and the lawsuit be removed.
Celadon Canada, Inc. v. Hoss Cartage & Distribution Systems Inc. et al, 2015 ONSC 4089 (CanLII)
The context of the release in this case was that the parties were, by means of the release, seeking to entirely disengage from one another.
Montor Business Corporation v. Goldfinger, 2016 ONCA 407 (CanLII) , application for leave to appeal dismissed, 1830994 Ontario Ltd. v. A. Farber & Partners Inc., the Trustee of the Bankruptcy Estate of Montor Business Corporation, Annopol Holdings Limited and Summit Glen Brantford Holdings Inc., 2016 CanLII 89830 (SCC)
The Court of Appeal said that the surrounding circumstances in this case gave support to a conclusion that a settlement including a mutual release was designed to result in finality.
Gregory v. Gill, 2016 ONSC 4227 (CanLII)
The parties settled an application and the evidence was that the applicant and his wife wished to make a “clean break” and to bring finality to their relationship with the respondents. Although the applicant’s wife was not a party to the application and it appeared from the evidence that there was not an initial intention or expressed intention to include her in the mutual release, the court held that it was reasonable to include her in the release.
Kaptor Financial Inc. et al v. SF Partnership, LLP et al, 2016 ONSC 5459 (CanLII)
The court said that the entire purpose of the settlement agreement and release in this case was to end litigation and prevent the releasors from bringing claims, whether personally or through their related companies. The settlement agreement was to be a complete and final stop to any additional claims by the releasors. It was extremely important to all participants (in bankruptcy proceedings) that the releasors release all claims that could have been raised by them to the date of the release. It would be entirely contrary to the purpose of the release to permit an end-run around the clear terms negotiated to protect the participants.
Mee Hoi Bros. Company Ltd. v Borving Investments (Canada) Ltd., 2017 BCSC 1910 (CanLII)
It was clear that parties intended a full and complete resolution of all their competing claims, for themselves and their respective companies, by including them as parties to a settlement agreement and by incorporating the broadest form of mutual release language in the document.
Biancaniello v. DMCT LLP, 2017 ONCA 386 (CanLII)
One of the principles that can be distilled from the decision of the House of Lords in the Bank of Credit and Commerce v. Ali case is that, when a release is given as part of the settlement of a claim, the parties want to wipe the slate clean between them.
Accredit Mortgage Ltd. v. Whiskey Landing Developments Ltd., 2018 BCSC 1243 (CanLII)
A settlement agreement said that the respondents had no further interest in a real estate development and that each of the parties released the other from all issues or matters relating to the development, so that the parties shall be “strangers” to one another and, in particular, the parties shall have no further liability as against one another respecting the development. The court said it was difficult to see how much clearer the parties could be that the respondents had no further interest or liability in the development.
3.3.2.2 Releases Not Achieving Finality or a “Clean Slate”
It can be seen from the cases below that a release, or a settlement, may not always achieve the finality or “clean slate” contended for by the releasee or a party to the settlement.
Xu v. Foo, 2006 BCCA 525 (CanLII)
In this case, an action was settled, a release was signed and consent dismissal orders were issued. Applications to stay or strike a second action were dismissed because, among other things, it was not plain and obvious that the release was determinative of issues raised in the second action. On appeal, the Court of Appeal noted that the court below was alive not only to the need for finality, but also the potential for injustice.
AIG Insurance Co. of Canada v. Canjam Trading Ltd, 2015 ONSC (CanLII)
While a release may provide parties with a “clean slate” by ending the parties’ contractual relationship, this is not always the case. The fact that a release had modified the terms of certain trade credit insurance policies did not mean that the policies had been extinguished.
Miloucheva v. Milouchev, 2016 ONSC 3755 (CanLII)
Parties to litigation signed minutes of settlement that provided for the defendant’s counsel to prepare a form of mutual release mutually acceptable to counsel releasing any claims made in the litigation “and otherwise”. The defendant’s position was that the words “and otherwise” were for the purpose of ensuring there would be a “clean break” between the parties and any and all claims between them would be released. There was evidence that the lawyers for the parties recalled discussing a clean break, but the court held that, if the parties intended to release each other from claims over and above those raised in the pleadings, there was an obligation to use more precise language than “and otherwise”.
Barrs v. Trapeze Capital Corp., 2017 ONSC 5466 (CanLII)
The court in this case said it could not interpret a release in the way that the defendants wanted. There was no existing dispute between the plaintiff and the defendants at the time the release was executed. While, in settling her action, the plaintiff’s partner may have been “wiping the slate clean”, the plaintiff was not doing so.
Canada Bread v. Mallot Creek, 2019 ONSC 2578 (CanLII)
On appeal from a decision of an arbitrator, the court said it was reasonable for the arbitrator to conclude that a release was intentionally drafted narrowly to include only “known” claims and not “known or unknown” claims. As noted by the court, the arbitrator had concluded in his reasons that the release was not intended to “wipe the slate clean between the parties”.
3.3.3 Effect of Release on Existing Contractual Obligations
In the circumstances of the Bank of Credit and Commerce International case referred to above, there was no doubt that the effective scope of a release, although framed very broadly, did not extend to all pre-existing matters between the parties to the release that might have been the basis for claims. The release at issue in that case was, in the words of Lord Nicholls, a general release containing widely drawn general words releasing all claims one party might have against the other. But Lord Nicholls said the release clearly was confined to claims arising out of an employment relationship between the bank and its employee. In fact, Lord Nicholls was inclined to think that the release was to be construed even more narrowly as restricted to claims arising out of the ending of the employment relationship. The release could not, for example, reasonably be regarded as embracing any claim the employee might have as a depositor or borrower with the bank.
The decisions summarized below illustrate the difference between a release which eliminates rights and obligations under pre-existing agreements and a release which modifies contractual terms without ending the contractual relationship of the parties. In the first case, the court found that, as a result of a mutual release among parties to earlier agreements, there was “nothing left to sue upon, and certainly nothing left for non-contracting parties to sue upon”. In the second case, the court found that a release was intended to modify the terms of certain insurance policies and did not extinguish the policies nor end the parties’ contractual relationship.
M5 Marketing Communications Inc. v. GJR Developments Ltd., 2015 NSSC 343 (CanLII)
The plaintiff claimed an amount alleged to be the outstanding balance owing for marketing and branding services provided by the plaintiff in respect of a condominium project which ran into difficulties and was twice re-conceived. The plaintiff’s claim against certain of the defendants, referred to by the court as the Harbour Island Group, was based on the alleged assumption of liability by those defendants pursuant to agreements made in 2008 between the Harbour Island Group as purchaser and GJR Developments Ltd. as vendor of the land and other property relating to the project. In 2010, a settlement agreement and mutual release was executed by, among others, the Harbour Island Group and GJR, pursuant to which any and all claims that might have arisen in respect of the 2008 agreements were extinguished. The court considered whether the plaintiff could claim as a third party beneficiary to a contract (the 2008 agreements) that had been “released by the contracting parties”. The court said that, when the release was signed in 2010, there were no continuing rights or obligations and the plaintiff was not claiming against GJR. The Harbour Island Group and GJR released one another and there was nothing left to sue upon, and certainly nothing left for non-contracting parties to sue upon. GJR released the Harbour Island Group from any and all liabilities associated with the project prior to the plaintiff ever asserting any claim against GJR. Therefore, any third party beneficiary claim which the plaintiff might otherwise have had against the Harbour Island Group through GJR was extinguished.
AIG Insurance Co. of Canada v. Canjam Trading Ltd, 2015 ONSC 149 (CanLII)
After the applicant insurer had paid compensation to the respondent in respect of claims made under trade credit insurance policies, the parties entered into a release and assignment agreement. The respondent argued that the release replaced the policies and extinguished any entitlements the insurer may have had under the policies. The court held that, while a release may provide parties with a “clean slate” by ending the parties’ contractual relationship, this is not always the case. A release does not necessarily amount to mutual rescission. The intention of the parties in signing the release must be considered. The fact that the release had modified the terms of the policies did not mean that the policies had been extinguished: parties to a contract are free to vary the terms of that contract through written agreement.
3.3.4 Giving Effect to Finality
Depending on the circumstances of a particular case, there are a number of doctrines that may be drawn on to assure the finality of decisions and orders. In British Columbia (Workers’ Compensation Board) v. Figliola, 2011 SCC 52 (CanLII), [2011] 3 SCR 422, at paragraph 25, Abella J. said that issue estoppel, collateral attack and abuse of process are doctrines used by the common law “as vehicles to transport and deliver to the litigation process principles of finality, the avoidance of multiplicity of proceedings, and protection for the integrity of the administration of justice, all in the name of fairness”. And, she said, “they are vibrant principles in the civil law as well”.
Issue estoppel is one branch of res judicata; another branch of res judicata not referred to by Abella J. in the quotation above is cause of action estoppel: see Boucher v. Stelco Inc., 2005 SCC 64 (CanLII), [2005] 3 SCR 279, at paragraph 33 and Toronto (City) v. C.U.P.E., Local 79, 2003 SCC 63 (CanLII), [2003] 3 SCR 77, at paragraph 23, per Arbour J.
In the C.U.P.E., Local 79 decision, Arbour J. said, at paragraph 55, that the common law doctrines of issue estoppel, collateral attack and abuse of process adequately capture the concerns that arise when finality in litigation must be balanced against fairness to a particular litigant. She therefore saw no need to endorse, as the Ontario Court of Appeal had done in the case before her, a self-standing and independent “finality principle” either as a separate doctrine or as an independent test to preclude relitigation.
Yet one more doctrine that may be applied so as to achieve finality in litigation is the doctrine of merger, which, according to the Alberta Court of Appeal, prevents a claimant from relitigating a cause of action that has already been litigated: see Sherwood Steel Ltd. v. Odyssey Construction Inc., 2014 ABCA 320 (CanLII), paragraph 16. The Alberta appellate court has adopted the following statement of the doctrine of merger: “…any person in whose favour [a] … judicial tribunal of competent jurisdiction has pronounced a final judgment, civil or criminal, is precluded from afterwards recovering … a second judgment against the same party on the same cause of action.” See the Sherwood Steel decision, at paragraph 14, and Zukowski v Royal Insurance Company of Canada, 2000 ABCA 165, at paragraph 13. The doctrine of merger is referred to in decisions summarized below that address liability of joint or concurrent tortfeasors. See Chapter 7: Releases and Potential Multi-Party liability, section 7.4, Joint Tortfeasors and the Doctrine of Merger, below.
Needless to say, courts attach great importance to the finality of decisions and orders. The doctrines of issue estoppel, cause of action estoppel, collateral attack and merger are engaged, depending on the circumstances, in respect of matters that have been the subject of a previous adjudication. Because finality is also an important consideration insofar as releases are concerned, the doctrines that apply in respect of court decisions sometimes are touched on in the context of releases. Indeed, in Battista v. Emergis Inc., 2008 CanLII 23960 (ON SC) , the court said, at paragraph 16, that a settlement finally disposes of a claim to the same effect as does a judicial determination. But it is clear that issue estoppel, cause of action estoppel, collateral attack and merger all are based on a prior adjudication. Abuse of process, however, has a wider application and can come into play when an effort is made to relitigate claims discharged by a release.
Taske Technology Inc., v. Prairiefyre Software Inc., 2004 Can LII 66295 (ON SC), appeal dismissed, [2005] O.J. No. 2683 (Div. Ct.)
The policy reasons for enforcing a valid release mirror the policy principles underlying the doctrines of res judicata and issue estoppel.
Taske v. PrairieFyre, 2004 CanLII 30881 (ON SC)
The analysis that is engaged in a claim involving a release is similar to that which must be applied in cases where issue estoppel and res judicata are argued.
1518628 Ontario Inc. v. Tutor Time Learning Centres, LLC, 2006 CanLII 25276 (ON SC)
Parties who reach a settlement are to be held to their bargain (citing Cellular Rental Systems Inc. v. Bell Mobility ). The policy reasons for enforcing a valid release mirror the policy principles underlying the doctrines of res judicata and issue estoppel (citing Taske, above).
Faulds v. O’Connor, 2010 NSSC 55 (CanLII)
Merger and estoppel arising from a court decision are quite different from a private release.
3.3.4.1 Res Judicata
Res judicata means “a thing adjudicated” and it describes a doctrine that prevents the relitigation of a claim or issue that has been the subject of a final determination. The principle of res judicata applies not only to the decisions of courts, but also to the decisions of administrative tribunals and bodies: Boucher v. Stelco Inc., 2005 SCC 64 (CanLII), [2005] 3 SCR 279, at paragraph 32.
As noted above, the res judicata doctrine has two branches, cause of action estoppel and issue estoppel. (In this regard, see Dosen v. Meloche Monnex Financial Services Inc. (Security National Insurance Company), 2021 ONCA 141 (CanLII), at paragraphs 13-21 and Goldfluss v. Bortnick, 2014 ONSC 858 (CanLII) , at paragraphs 12-14.)
For issue estoppel to be invoked, three preconditions must be met, as follows: (1) the issue must be the same as one decided in a prior judicial decision; (2) the prior judicial decision must have been final; and (3) the parties to both proceedings must be the same, or their privies: see, for example, Toronto (City) v. C.U.P.E., above, at paragraph 23, Danyluk, above, at paragraph 25, Dosen, above, at paragraph 18 and Angle v. Minister of National Revenue, 1974 CanLII 168 (SCC), [1975] 2 S.C.R. 248, at page 254. When these preconditions have been satisfied, the court must still determine whether, as a matter of discretion, issue estoppel ought to be applied: Danyluk, at paragraph 33. See also, for example, The Catalyst Capital Group Inc. v. VimpelCom Ltd., 2019 ONCA 354 (CanLII), at paragraph 25, application for leave to appeal dismissed, Catalyst Capital Group Inc. v. VimpelCom Ltd., et al., 2019 CanLII 106999 (SCC).
The requirements of cause of action estoppel are: (1) there must be a final decision of a court of competent jurisdiction in the prior action; (2) the parties to the subsequent action must have been the parties to the prior action or in a privy relationship with the parties to the prior action; (3) the cause of action in the prior action must not be separate and distinct; and (4) the basis of the cause of action in the subsequent action was argued or could have been argued in the prior action if the parties had exercised reasonable diligence. (See Dosen, above, at paragraph 13, Bjarnarson v. Manitoba, 1987 CanLII 993 (MB QB), appeal dismissed, 1987 CanLII 5396 (MB CA) and Grandview v. Doering, 1975 CanLII 16 (SCC), [1976] 2 SCR 621.)
Cause of action estoppel requires parties to “bring forward their whole case”: Catalyst Capital, above, at paragraph 49. But it is not enough that the cause of action could have been argued in the prior proceeding. It is also necessary that the cause of action properly belonged to the subject of the prior action and should have been brought forward in that action: Catalyst Capital, paragraph 50, citing Hoque v. Montreal Trust Co. of Canada, 1997 NSCA 153 (CanLII), leave to appeal refused, [1997] S.C.C.A. No. 656 and Pennyfeather v. Timminco Ltd., 2017 ONCA 369 (CanLII), leave to appeal refused, [2017] S.C.C.A. No. 279.
The Alberta Court of Appeal has indicated that merger is closely related to cause of action estoppel, citing Glenko Enterprises Ltd v Keller, 2008 MBCA 24. Indeed, by reference to Grandview, above, the Alberta court said that cause of action estoppel has been stated in precisely the same terms as merger. The court went on to say that: “While their elements are identical, however, cause of action estoppel and merger each have different underlying rationales. The objective of cause of action estoppel is to prevent contradictory findings of fact or law, while the purpose of applying merger is to prevent a litigant reasserting a claim for relief … In brief, while cause of action estoppel prevents contradiction, merger prevents reassertion.” See Sherwood Steel Ltd v Odyssey Construction Inc, 2014 ABCA 320 (CanLII), at paragraph 17.
In Goldman v Kudelya & Kharkhurina, 2015 ONSC 4674 (CanLII), at paragraph 19, the court said that minutes of settlement are simply a private agreement and cannot be used as a basis for res judicata. In support of this proposition, the court relied on Goldfluss v. Bortnick, above, where, at paragraph 24, Wilton-Siegel J. said that a settlement agreement does not constitute a determination of a court for the purposes of the doctrine of res judicata. Wilton-Siegel went on to say that: “In order to ground either cause of action estoppel or issue estoppel, an agreement must not only address specific issues but must also be addressed by a court of competent jurisdiction in a manner which has the legal consequence of rendering the determination of such issues in the agreement a final judicial determination for all purposes of the litigation.”
Following the statement that a settlement agreement does not constitute a court determination for the purposes of res judicata, Wilton-Siegel J. referred to M. Tucci Construction Ltd. v. Lockwood, 2002 CanLII 18708 (ON CA), at paragraph 1. In the Tucci case, the Ontario Court of Appeal said that cause of action estoppel did not apply because the same cause of action was not determined in earlier proceedings by a court of competent jurisdiction. The Court of Appeal indicated that an earlier small claims court action had been resolved in a settlement, there was no determination by a court and, interestingly, “there were no releases”. This, the Court of Appeal said, was sufficient to dispose of cause of action estoppel as a ground of appeal.
Other decisions in which the courts have discussed, or referred to, releases when addressing res judicata are summarized below.
American Buildings Company v. Surrey Iron Works Ltd., 1980 CanLII 473 (BC CA)
The appellant and respondent had agreed to a settlement of an action, the terms of which were, among other things, that moneys held in court would be paid out to the appellant and the parties would provide releases to each other. An order was made for payment out of court of the moneys in accordance with the agreed settlement and a release was executed. The chambers judge concluded that the point at issue in this other action properly belonged to the first action and that the claim in this action was res judicata. The Court of Appeal said it would not have put the case on the basis of res judicata. The claim made in the action out of which this appeal arose had no merit whatsoever by reason of the existence of the agreed settlement, the payment out of court and the release, rather than on the basis of res judicata.
Spender (Guardian of) v. Spender, 1999 CanLII 6548 (BC SC)
This decision indicates that a release may be a source document to assist the court in determining the extent to which a consent judgment supports a plea of res judicata on the basis of issue estoppel. The court said that, when faced with a plea of res judicata on the grounds of a consent order in an earlier proceeding, if no cause of action estoppel is established, the court must nevertheless examine the pleadings, the consent order and any agreement or release leading to its entry in order to determine what issues, if any, were intended by the parties to be determined by the consent order. On the facts of this case, the court found that a release signed in conjunction with a consent dismissal order in an earlier proceeding was of significance to the interpretation of the consent order in two ways and the court ultimately held that the party relying on res judicata had failed to show that the parties expressly or implicitly intended that the consent dismissal order would finally dispose of issues raised in this proceeding.
Simsa v. Anti-Aging International Inc. [2001] O.J. No. 5154
The defendants sought 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 in this action were barred by res judicata and issue estoppel. The court accepted for the purpose of the motion the potentially broad scope of issue estoppel and res judicata as set out in Reddy v. Oshawa Flying Club, (1992), 11 C.P.C. (3d) 154, particularly as it might relate to a consent order. The court said that the principle extends to avoid relitigation of determined legal rights, even where the consent results in a dismissal of an action. However, the court found that the minutes of settlement clearly envisaged the continuance of the relief sought in this action notwithstanding resolution of another issue. The court said that there was no ambiguity in the minutes of settlement as they exempted claims in this 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.
Milstein v. Old Willoughby Realty Ltd., 2004 CanLII 17680 (ON SC)
The court in this case quoted propositions from Spender, above, about res judicata arising from a consent order. Specifically, the court quoted a statement that res judicata applies only to those questions or issues that are expressly or implicitly the subject of a consent order and a statement that, as a consent dismissal order will rarely state any detail, the court can and must look to the pleadings, to any written agreements or releases and to any correspondence in order to ascertain the shared intention of the parties that has been given judicial effect by the consent order. The court concluded, on the facts of this case, that the statement of defence sought to relitigate issues which had been the subject of an earlier judicial determination and that the matter should be disposed of on the basis of res judicata.
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 and that it was res judicata, an abuse of process and a collateral attack on the court order. In the settlement agreement, the parties had acknowledged the validity and enforceability of a particular agreement and, in respect of this motion by the defendants, the court said that, as this agreement continued to be valid and enforceable, the release would not apply to claims which arose and which were based on events that took place after the settlement was entered into. Res judicata was inapplicable as the basis of the claim was fresh conduct in an ongoing relationship. Similarly, the claim should not be described as an abuse of process.
Taske Technology Inc., v. Prairiefyre Software Inc., 2004 Can LII 66295 (ON SC), appeal dismissed, [2005] O.J. No. 2683 (Div. Ct.)
The court agreed with the defendants that the policy reasons for enforcing a valid release mirror the policy principles underlying the doctrines of res judicata and issue estoppel. The court said these were set out in Apotex Inc. v. Merck & Co., 2002 FCA 210 (CanLII), leave to appeal dismissed (2003) [2002] S.C.C.A. No. 323, as follows: “Issue estoppel applies to preclude relitigation of an issue which has been conclusively and finally decided in previous litigation between the same parties and their privies, … It applies not only to issues decided finally and conclusively but also to arguments that could have been raised by a party in exercise of reasonable diligence. … Issue estoppel applies where an issue has been decided in one action between the parties, and renders that decision conclusive in a later action between the same parties, notwithstanding that the cause of action may be different.” (Emphasis added to quote from Apotex in Taske decision.)
Kiff v. Lundquist, 2006 BCPC 446 (CanLII)
A mutual release signed by all the parties and the judge at a settlement conference, once filed in court, in effect became a consent judgment.
McNichol v. Co-operators General Insurance Company, 2006 NBCA 54 (CanLII)
In this case, the motion judge took the view that, for the purposes of res judicata (on grounds of cause of action estoppel), a release and notice of discontinuance duly filed with the court constituted a final disposition of claims. The Court of Appeal held that the release was nothing more than a contract by which the releasor relinquished certain rights and claims and the release did not itself constitute a “final judicial decision” let alone one capable of giving rise to res judicata.
1518628 Ontario Inc. v. Tutor Time Learning Centres, LLC, 2006 CanLII 25276 (ON SC)
Parties who reach a settlement are to be held to their bargain. The policy reasons for enforcing a valid release mirror the policy principles underlying the doctrines of res judicata and issue estoppel (citing Taske, above).
White v. Colliers Macaulay Nicholls Inc., 2008 CanLII 4269 (ON SC) , appeal on other grounds dismissed, 2009 ONCA 444 (CanLII)
“Absent some indulgence in casuistry”, there was no difference between this action and another action which was “consummated” in a full and final release. As such, the principles of estoppel should be invoked in favour of the defendant. Those principles were well enunciated in Danyluk v. Ainsworth, above, where the following comments, among others, were made about the rationale which animates the principle: “A person should only be vexed once in the same cause. Duplicative litigation, potential inconsistent results, undue costs, and inconclusive proceedings are to be avoided.”
Goldfluss v. Bortnick, 2014 ONSC 858 (CanLII)
The moving parties sought an order dismissing this application on the grounds of res judicata. Among other things, the moving parties relied on minutes of settlement in another proceeding. The responding party/applicant was named a respondent in the other proceeding, but no relief was sought against her, she did not respond and she was not a party to the minutes of settlement. The court said that the doctrine of res judicata provides that a dispute adjudicated with finality is not subject to relitigation. Two specific aspects of the res judicata doctrine are cause of action estoppel and issue estoppel. The court concluded that the minutes of settlement did not give rise to any cause of action estoppel or issue estoppel in respect of the responding party. A settlement agreement could foreclose any future action based on the cause of action and/or facts asserted in litigation if it provided for the exchange of full and final releases between the parties to the litigation. However, such consequences are entirely contractual in nature. It would apply only to parties exchanging releases. Absent a court order, a third party’s claims, even a party to litigation, cannot be released.
Southlake Regional Health Centre v. Beswick Group Properties Inc., 2014 ONSC 1319 (CanLII)
The parties reached a settlement of litigation relating to a commercial lease. Minutes of settlement and a release were executed and consent dismissal orders were issued. The court said that the principle of res judicata, in addition to the terms of the release, applied to bar any claims made in this action arising out of the lease prior to the effective date of the release of claims. The court referred to Ontario authority on whether a consent judgment is a final judgment for the purposes of the doctrine of res judicata, and on “the binding nature of a consent judgment”, and it referred to a passage from Segal v. Plazavest, 2004 CanLII 35087 (ON SC), where the Master said that a settlement, followed by dismissal with prejudice based on the settlement, is analogous to a court finding and triggers the principle of res judicata.
Ahmed v Shang, 2016 ONSC 4794 (CanLII)
Following a settlement of actions arising from a motor vehicle collision, orders dismissing the actions without costs were taken out, but the responding parties took the position that they should not be required to sign releases. They submitted that the moving parties were protected from any future claims being brought by the responding parties by the doctrine of res judicata. The court said that the responding parties had provided no authority for this proposition and, in any event, the argument did not address the risk of a claim over by a person sued by the responding parties. Further, the court said that the interests of justice in bringing finality to a proceeding would be undermined if a party were permitted to refuse to provide a release where it decided to take the position, after an action had been dismissed pursuant to a settlement, that the delivery of a release was unnecessary.
Arslan v Şekerbank T.A.Ş., 2016 SKCA 77 (CanLII) , application for leave to appeal dismissed, Hüseyin Arslan, et al. v. Sekerbank T.A.S., 2017 CanLII 5372 (SCC)
The Court of Appeal rejected the notion that issue estoppel cannot arise from a consent order. It said there is nothing in the consent nature of an order that itself ought to render the order immune to issue estoppel. The doctrine of estoppel is founded on considerations of justice and good sense. If an issue has been distinctly raised and decided in an action, in which both parties are represented, it is unjust and unreasonable to permit the same issue to be litigated afresh between the same parties or persons claiming under them (citing New Brunswick Rail Co. v British & French Trust Corporation Ltd., [1939] AC 1). On this basis, regardless of whether an order was “by consent” or otherwise, the question is whether the order has dealt with an issue between the parties to it in a final way. Further, the scope of the issues settled by a consent order is necessarily limited to those that can be fairly regarded as having been disposed of by the order on their merits, on admission, or by compromise. As the case law suggests, to ascertain its scope, a court may have resort beyond the terms of a consent order to the pleadings, applicable statute law, written agreements between the parties, their correspondence, and so on.
McCarthy v. McCarthy, 2018 BCSC 458 (CanLII)
The court cited the requirements for cause of action estoppel set out in Erschbamer v. Wallster, 2013 BCCA 76 (CanLII), one of which is that there must be a final decision of a court of competent jurisdiction in a prior action. The court said that, for the purposes of its analysis, it had assumed that a settlement agreement and release in respect of previously completed litigation constituted a final judicial decision within the meaning of Erschbamer and, indeed, that neither party had suggested the contrary. However, the court agreed with the plaintiff that the earlier action was a separate and distinct action and it dismissed the defendant’s application for judgment on the grounds of cause of action estoppel.
Beach Estate v. Beach, 2019 BCCA 277 (CanLII) , appeal allowed, 2019 BCCA 277 (CanLII)
Based on releases signed and consent dismissals filed in accordance with a settlement agreement, the defendants argued that a claim made by the plaintiffs in this action was res judicata. The chambers judge said that, when faced with a plea of res judicata on grounds of a consent dismissal order from an earlier proceeding, the court must first compare the cause of action in the later proceeding with the first proceeding. If the causes of action are identical, the court must examine the consent order and any agreement, correspondence, or releases leading to its entry in order to ascertain objectively whether the consent order was intended to dispose finally of all issues in the cause of action. The chambers judge was satisfied that the causes of action were identical and, upon examining the consent order, and secondary documents such as the releases, she was objectively satisfied that the consent order was intended to finally dispose of all issues in the cause of action. The Court of Appeal held, though, that the validity of the settlement agreement was in issue and thus the res judicata argument could not succeed at the time of its decision.
3.3.4.2 Collateral Attack
According to the Supreme Court of Canada: “It has long been a fundamental rule that a court order, made by a court having jurisdiction to make it, stands and is binding and conclusive unless it is set aside on appeal or lawfully quashed. It is also well settled in the authorities that such an order may not be attacked collaterally – and a collateral attack may be described as an attack made in proceedings other than those whose specific object is the reversal, variation, or nullification of the order or judgment.” (See Wilson v. The Queen, 1983 CanLII 35 (SCC), at page 599 and Toronto (City) v. C.U.P.E., Local 79, 2003 SCC 63 (CanLII), [2003] 3 SCR 77, at paragraph 33, per Arbour J.)
The rule against collateral attack attempts to protect the fairness and integrity of the justice system by preventing duplicative proceedings. It prevents a party from “using an institutional detour to attack the validity of an order by seeking a different result from a different forum, rather than through the designated appellate or judicial review route”: see British Columbia (Workers’ Compensation Board) v. Figliola, 2011 SCC 52 (CanLII), [2011] 3 SCR 422, at paragraph 28, per Abella J.
As can be seen from the cases below, when a settlement or compromise is implemented by means of a release as well as a court order or the termination of a court proceeding, an attempt to re-open aspects of the settlement may give rise to concerns about a collateral attack.
Manko v. Ivonchuk, 1991 CanLII 11983 (MB QB)
The plaintiff issued a statement of claim in relation to a particular cause of action following the execution of a final release in favour of the defendants and the filing of a notice of discontinuance in respect of an earlier statement of claim for the identical cause of action. The court said that the settlement agreement must be afforded the “presumption of validity” unless set aside.
Paletta v. Paletta, 2003 CanLII 19580 (ON SC)
Litigation relating to an alleged partnership between brothers was settled. The settlement included a mutual release of all claims between the parties and releases between those parties and additional parties. Subsequently, one of the brothers (“Larry”) commenced an action against lawyers who, he alleged, had failed in their duty to properly document the partnership. The court in that case determined the settlement of the earlier litigation to be valid and binding and dismissed the action against the lawyers on the ground that it was precluded by a no-claim-over clause in the release signed by Larry as part of the settlement. In this action involving the brothers and related parties, Larry alleged that the written settlement should be rescinded because of a fraudulent course of action by his brother. The court said the action was an attempt by Larry to relitigate an issue that had already been decided against him in the action against the lawyers, where Larry had a full opportunity to call all evidence bearing on the validity of the settlement and the related releases. If this action were permitted to proceed to trial, it would amount to a collateral attack upon a previous decision of a competent court.
LeRoy v. TimberWest Forest Corp., 2015 BCSC 2005, affirmed on appeal, 2016 BCCA 448 (CanLII)
A compromise agreement containing a release was approved in an order made in Companies’ Creditors Arrangement Act proceedings. On an application for summary disposition of a subsequent action, the defendants argued that the action was an impermissible collateral attack on the court order. The court was unable to conclude that the plaintiff was bound to lose on the basis of this collateral attack argument. Her claims were based on alleged wrongs that arose pre-arrangement and a reasonable argument was open to her that her claims were not an attack on the binding effect of the CCAA arrangement. Further, if the release would otherwise be vitiated by an alleged conspiracy or fraud, the fact that there was a court order in place might not avail the defendants in circumstances where the conspiracy or fraud was not disclosed to the court.
3.3.4.3 Abuse of Process
The doctrine of abuse of process is a flexible doctrine that may be considered in circumstances where issue estoppel would not apply so as to prevent the relitigation of an issue which has already been adjudicated: Toronto (City) v. Canadian Union of Public Employees (C.U.P.E.) Local 79, 2003 SCC 63 (CanLII), [2003] 3 S.C.R. 77, at paragraph 37, per Arbour J.
The flexibility of the doctrine of abuse of process was emphasized by the Supreme Court of Canada in Behn v. Moulton Contracting Ltd., 2013 SCC 26 (CanLII), [2013] 2 SCR 227, at paragraphs 40-41, where the court said: “The doctrine of abuse of process is characterized by its flexibility. Unlike the concepts of res judicata and issue estoppel, abuse of process is unencumbered by specific requirements. As can be seen from the case law, the administration of justice and fairness are at the heart of the doctrine of abuse of process. The doctrine of abuse of process is flexible, and it exists to ensure that the administration of justice is not brought into disrepute.” In short, the doctrine of abuse of process applies even when more specific doctrines, such as collateral attack or res judicata, do not: see, for example, Williamsburg Water Utility Co. Ltd. v Comptroller of Water Rights-Water Management Branch, 2019 BCSC 2069 (CanLII), at paragraph 29.
The Supreme Court of Canada said in the C.U.P.E., Local 79 case, at paragraph 37, that Canadian courts have applied the doctrine of abuse of process to preclude relitigation in circumstances where the strict requirements of issue estoppel (typically the mutuality/privity requirements) are not met, but where allowing litigation to proceed would violate principles such as finality. The doctrine of abuse of process has been extended beyond the strict parameters of res judicata while borrowing much of its rationales and some of its constraints. All the same, the attraction of the doctrine of abuse of process is that it is unencumbered by the specific requirements of res judicata while offering the discretion to prevent relitigation: see C.U.P.E., Local 79, at paragraph 42.
It is well-recognized that the relitigation of issues that have been before the courts in a previous proceeding will create an abuse of process: The Catalyst Capital Group Inc. v. VimpelCom Ltd., 2019 ONCA 354 (CanLII), at paragraph 61, application for leave to appeal dismissed, Catalyst Capital Group Inc. v. VimpelCom Ltd., et al., 2019 CanLII 106999 (SCC). The need to protect the integrity of the adjudicative functions of courts compels a bar against relitigation. If relitigation leads to the same result, there will be a waste of judicial resources, and if it leads to a different result, the inconsistency will undermine the credibility of the judicial process. The law thus seeks to avoid relitigation primarily for two reasons, first, to prevent overlap and wasting judicial resources; and second, to avoid the risk of inconsistent findings: Catalyst Capital, at paragraph 63, citing authorities including C.U.P.E., Local 79.
The Supreme Court has described abuse of process as proceedings “unfair to the point that they are contrary to the interest of justice” and as “oppressive treatment”: see C.U.P.E., Local 79, at paragraph 35, referring to R. v. Power, 1994 CanLII 126 (SCC), [1994] 1 S.C.R. 601, at page 616, and R. v. Conway, 1989 CanLII 66 (SCC), [1989] 1 S.C.R. 1659, at page 1667. The focus is less on the interest of parties and more on the integrity of judicial decision-making as a branch of the administration of justice. When that is understood, “the parameters of the doctrine become easier to define and the exercise of discretion is better anchored in principle”: C.U.P.E., Local 79, at paragraph 43.
Abuse of process applies where issues “could have been determined” but were not. Moreover, it also applies to prevent relitigation of previously decided facts: Catalyst Capital, at paragraph 67, citing Winter v. Sherman Estate, 2018 ONCA 703 (CanLII), at paragraphs 7 and 8.
While other doctrines relied on by courts when they address finality of litigation are primarily concerned with the finality of decisions and orders, application of the abuse of process doctrine does not require the existence of a court order or judgment and abuse of process is frequently referred to by Canadian courts as they consider issues relating to the finality achieved by a release.
For case law on the appropriate remedy when an action is determined to be an abuse of process because it asserts claims covered by a release, see Chapter 10: Jurisdiction, Procedure and Remedies in Release Cases, section 10.2.6.1, Striking Out or Dismissing as an Abuse of Process.
Manko v. Ivonchuk, 1991 CanLII 11983 (MB QB)
The plaintiff issued a statement of claim in relation to a particular cause of action following the execution of a final release in favour of the defendants and the filing of a notice of discontinuance in respect of an earlier statement of claim for the identical cause of action. The court said that the reissuance of the statement of claim was clearly an abuse of the court process.
Elfenbaum v. Saskatchewan Crop Insurance Corp., 1995 CanLII 5729 (SK QB)
An attempt by the plaintiffs to reassert the same claims as were made in earlier actions that were settled and expressly referred to in a release signed by the plaintiffs was clearly an abuse of process and the court struck out the statement of claim.
Paletta v. Paletta, 2003 CanLII 19580 (ON SC)
Litigation relating to an alleged partnership between brothers was settled and releases were signed. One brother alleged that the written settlement should be rescinded because of a fraudulent course of action by the other. The court said this proceeding was an attempt to relitigate an issue that had already been decided in a previous action, where there had been a full opportunity to call all evidence bearing on the validity of the settlement and the related releases. If this action were permitted to proceed to trial, it would amount to a collateral attack upon a previous decision of a competent court. The court stayed this action as an abuse of process.
Orlandello v. Nova Scotia (Attorney General), 2005 NSCA 98 (CanLII)
An action for a claim that has been released and discharged is an abuse of process. The claimant in this case signed a release that “forever discharged” her claim. The appropriate remedy would permanently terminate the lawsuit.
Woodcliffe Corp. v. Rotenberg, 2005 CanLII 23675 (ON CA) , application for leave to appeal dismissed, Woodcliffe Corporation v. Rotenberg, 2006 CanLII 4766 (SCC)
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, typical wording of a no-claim-over clause. 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. Further, to the extent that the releases protected the third parties from claims over on the ground that the third parties were no longer liable to the plaintiffs, the Court of Appeal agreed with the submission that the third parties were entitled to invoke the abuse of process doctrine, citing Toronto (City) v. C.U.P.E., Local 79, above.
Peace Hills Trust Company v. Saulteaux First Nation, 2005 SKQB 465 (CanLII)
Proceeding with an action that is the very subject of a release is considered an abuse of the court process.
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 and that it was res judicata, an abuse of process and a collateral attack on the court order. In the settlement agreement, the parties had acknowledged the validity and enforceability of a particular agreement and, in respect of this motion by the defendants, the court said that, as this agreement continued to be valid and enforceable, the release would not apply to claims which arose and which were based on events that took place after the settlement was entered into. Res judicata was inapplicable as the basis of the claim was fresh conduct in an ongoing relationship. Similarly, the claim should not be described as an abuse of process.
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)
In this case, the Court of Appeal held that a release signed by the plaintiff must stand and it agreed with the chambers judge that the plaintiff had not demonstrated a reasonable prospect of success. Further, the appellate court said that the chambers judge was correct in finding that the claim was liable to be dismissed as an abuse of process because the plaintiff was attempting to relitigate issues raised in an earlier action that was settled.
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 the question of abuse by relitigation was inextricably intertwined with the release issue. A court should invoke its authority to stay an action for abuse of process only in the clearest of cases. This case fell well short of that. The doctrine of abuse of process engages the inherent power of the court to prevent the misuse of its procedures in a way that would be manifestly unfair to a party in the litigation or would in some way bring the administration of justice into disrepute. This case lacked those attributes.
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. It would be an abuse of process to allow a party to make a claim which falls squarely within the terms of the release.
Battista v. Emergis Inc., 2008 CanLII 23960 (ON SC)
On a motion for summary judgment, the court found this action was an abuse of process. The action was an attempt to relitigate a claim that had previously been settled, but a settlement finally disposes of a claim to the same effect as does a judicial determination. In coming to this conclusion, the court referred to the release and consent dismissal order from the earlier settlement and a comparison of the grounds in the previous litigation with the allegations in the statement of claim. The court also said that, insofar as the current action made allegations regarding pre-settlement conduct, the action amounted to an abuse of process: it was open to the plaintiff Battista to advance any such claim in the previous action.
Morgan v. Spanogreco, 2008 CanLII 70244 (ON SC)
The court held that the plaintiffs’ attempt to add a defendant to this action despite the existence of duly executed releases was an abuse of process and an attempt to relitigate. The court referred to the decision of the Supreme Court of Canada in Toronto v. Canadian Union of Public Employees, above, with emphasis on the statement that “Canadian courts have applied the doctrine of abuse of process to preclude relitigation in circumstances where the strict requirements of issue estoppel (typically the privity/mutuality requirements) are not met, but where allowing the litigation to proceed would nonetheless violate such principles as judicial economy, consistency, finality and the integrity of the administration of justice”.
Chapman v. King, 2010 MBQB 249 (CanLII)
The plaintiff admitted that he had entered into a settlement but disputed the validity of the release that he executed. The court found the release to be valid and concluded that the plaintiff’s claim was an attempt to litigate matters that had been settled. The claim was therefore an abuse of process and the defendant was entitled to an order of summary judgment dismissing the action.
Forbes v. Manufacturers Life Insurance Company et al, 2010 ONSC 4931 (CanLII)
The court said that, in this action, the plaintiff sought to relitigate matters which had been settled and from which the defendants had been released. The action was therefore an abuse of process and it 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.
Kaufmann v. Saskatchewan Government and General Employees’ Union, 2012 SKQB 284 (CanLII)
As a result of a settlement agreement previously signed by the plaintiff, the court found that no reasonable cause of action could exist in respect of the claim made by the plaintiff and, further, that continued prosecution of the action would be an abuse of process.
Albu v. The University of British Columbia, 2014 BCSC 239 (CanLII) , appeal dismissed, 2015 BCCA 41 (CanLII)
The petition for relief in this proceeding constituted an abuse of process at law in that the petitioner sought the assistance of the court through judicial review over a number of matters, all of which she had compromised and settled through a letter agreement and accompanying release.
1369521 Ontario Inc. v. Pension Fund Realty Limited, 2014 ONSC 6490 (CanLII)
In this case, certain of the defendants, referred to by the court as the Liao defendants, sought an order striking the plaintiffs’ action as an abuse of process. They argued that the plaintiffs were, in effect, relitigating claims that had been released as part of settlements between the plaintiffs and other parties. The court said it was not persuaded that the circumstances of this case constituted an abuse of process in the form of relitigation. There had been no litigation of the merits of claims or defences asserted by the parties. Instead, there had been a contractual agreement among the parties, other than the Liao defendants, to avoid such litigation as between the releasees and the plaintiffs. Further, even if the releases could be treated as a determination on the merits of the plaintiffs’ claims, such determination did not extend to the merits of the plaintiffs’ claims against the Liao defendants. The releases settled only claims against other parties.
Shannex v. Dora Construction Ltd., 2016 NSCA 89 (CanLII)
A valid release, given for consideration and signed by someone who is represented by independent legal counsel, and without a legally recognized vitiating element like misrepresentation, undue influence or duress, discharges the civil claims that are clearly cited in the release. A later lawsuit for the released claim will be summarily dismissed or struck as an abuse of process. This well-established principle is essential for the orderly settlement of disputes.
Conway v. The Law Society of Upper Canada, 2016 ONCA 72 (CanLII)
The Court of Appeal said that, on a fair reading of the statement of claim in this case, there was no question that by virtue of releases he signed and consent judgments he agreed to, the appellant settled his complaints against the Law Society in relation to civil and trustee proceedings that he was seeking to relitigate. The Court of Appeal held that the motion judge correctly struck out these claims as an abuse of process.
Goodswimmer v Canada (Attorney General), 2017 ABCA 365 (CanLII), application for leave to appeal dismissed, Chief Melvin Goodswimmer, et al. v. Attorney General of Canada, et al., 2018 CanLII 61050 (SCC)
In 1987 the appellant Band issued a statement of claim against Alberta in which it made allegations about lands that were subject to Band claims. Canada and Alberta negotiated with the Band and the Band entered into a settlement agreement with Canada. Canada and Alberta entered into a companion agreement. The Canada-Band agreement contained release and indemnity provisions in favour of Canada. A consent order dismissing the 1987 action provided that the provisions of the Canada-Alberta Agreement and the provisions of the Canada-Band agreement were confirmed as a settlement conclusively resolving all of the issues set out in the agreements. The 1987 litigation was only between the Band and Alberta and, in this case, the court said that, in a strict sense, the doctrines of res judicata and issue estoppel did not bar a claim made against Canada, although they did protect Alberta. While that was so, it was clear that the various claims were negotiated and settled together. A copy of the Canada-Band agreement was attached to the consent order. While Canada was not a party to the 1987 litigation, it endorsed its consent on the consent order as an “interested party”. The court said it was clear that the Band, Alberta and Canada regarded this as one dispute, resulting in a global settlement, under which each party was to perform certain obligations. Even if res judicata and issue estoppel did not strictly apply, relitigating any previously settled claims engaged the abuse of process doctrine set out in the CUPE case, above, and Behn v Moulton, above.
Jacques v. Muir, 2017 BCSC 2400 (CanLII) , appeal dismissed 2018 BCCA 174 (CanLII)
Where the releasor was attempting to relitigate issues about the release that had been heard and decided in several previous court proceedings, the current proceedings were an abuse of process and the action was dismissed.
Urban Mechanical Contracting LTD v. Broccolini Construction (Toronto) Inc. et al., 2019 ONSC 7385 (CanLII)
In this case, the court considered arguments arising from 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 under way. The court said that the release within the minutes of settlement remained in force and limited the scope of the claims open to the plaintiff to make against the Broccolini defendants to what was understood as the delay claim at the time the minutes of settlement were agreed upon. The court held that the plaintiff was entitled to bring its delay claim, as carved out of the minutes of settlement, 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 such other claims to proceed in this action.
Dalton v. Woszczyna et al, 2022 ONSC 826 (CanLII)
As stated by the court, the plaintiff commenced these proceedings against two of the defendants in the face of releases that she executed pursuant to two settlements. The two defendants argued that this constituted an abuse of process. The court indicated that Battista, above, involved a similar situation and it quoted the following passage from Battista: “I am persuaded that the present action is an abuse of process. It is an attempt to re-litigate a claim which has already been settled, evidenced by a review of the Release and Consent Order and a comparison of the complainants. A settlement finally disposes of a claim to the same effect as does a judicial determination.” Further, the releases in this case provided that the plaintiff agreed not to make any claim or take any proceedings against any other person or corporation who might claim contribution or indemnity from the releasees. The Court of Appeal, in Sinclair-Cockburn Insurance Brokers Ltd. v. Richards, 2002 , upheld the enforceability of a similar clause in a release, in favour of a party who was facing a claim for contribution and indemnity. It found that it was an abuse of process to allow the claim to continue in the face of the terms of the release. The court concluded that it would constitute an abuse of process to allow the claims of the plaintiff to proceed, subject to the sole exception of a claim for defamation against one of the defendants. Whether or not either of the releases covered the defamation claim was an issue for trial.
3.3.4.4 Other Decisions Addressing Relitigation by Releasor
As can be seen from the cases below, findings or comments about attempts to relitigate by a releasor may emerge from decisions in a variety of different court proceedings (e.g., proceedings involving issues about the costs of litigation, or whether litigation is vexatious or whether a party is a vexatious litigant).
Goodswimmer v. Canada (Attorney General), 2022 ABKB 841 (CanLII)
In this costs decision arising from an application to strike and/or summarily dismiss claims relating to a Treaty Land Entitlement Agreement (see section 3.3.4.3 above), the court commented that “the Plaintiff’s abusive conduct in pursuing a cause of action it had previously settled and for which it entered into a release of those claims is relevant to the question of abusive, vexatious, and frivolous conduct”.
The Corporation of the Municipality of Mississippi Mills v. Bryant Cougle et al., 2023 ONSC 459 (CanLII)
The court found the respondents, Bryant Cougle and Brylin Construction Ltd., a company of which Mr. Cougle was the only director and officer, to be vexatious litigants within the meaning of section 140 of the Ontario Courts of Justice Act. In its reasons for reaching this decision, the court noted that Mr. Cougle, through Brylin, started two actions against the applicant Municipality even though he and his spouse had consented to an order dismissing earlier litigation which dealt with the same subject matter and had signed a release in favour of the Municipality, its employees, agents and others. The court said that, by starting the two actions in Brylin’s name, Mr. Cougle breached the spirit, if not the letter, of the release that he and his spouse had signed. The court found that, by doing this, Mr. Cougle conducted litigation in a vexatious manner.
Goble v. Onyx Community Service, 2023 ONSC 393 (CanLII)
The court granted the defendant’s motion for the dismissal of this action on the ground that the action was frivolous, vexatious, or otherwise an abuse of the court’s processes. The court said that the action bore “the hallmarks of a vexatious proceeding”. The plaintiff Trevor Goble made the same allegations about false arrest and defamation as in previous litigation, even though, among other things, he had executed a release in which he released the defendant from any actions based on tort as well as any action in relation to anything that occurred to the date of the release. The court said that suing a defendant repeatedly for the same claims is vexatious, particularly if those claims have already been disposed of. The claims obviously could not succeed if they were previously dismissed or if the plaintiff had released the defendant.
3.4 Commercial Transactions
Objectives such as consistency, predictability, certainty and finality often are given particular emphasis in cases involving commercial transactions. On the subject of certainty, Lord Browne-Wilkinson said, in Westdeutsche Landesbank Girozentralev v. Islington London Borough Council, [1996] 2 All E.R. 961 at page 987, [1996] A.C. 669 (H.L.), that: “… wise judges have often warned against the wholesale importation into commercial law of equitable principles inconsistent with the certainty and speed which are essential requirements for the orderly conduct of business affairs …”.
In the decisions summarized below, particular importance was placed on the enforcement of releases given in respect of commercial transactions or in circumstances involving one or more commercial parties. It can be seen from some of the decisions that, in the context of commercial transactions, objectives such as predictability, certainty and finality tend to surface when courts explain their reasons for enforcing releases. One can also see that the concept of a commercial transaction in these cases may be somewhat loose, in that, for example, a settlement between a plaintiff injured in a motor vehicle accident and an insurance adjuster has been treated as a commercial transaction.
Fountain v. Katona, 2007 BCSC 441 (CanLII)
The plaintiff reached a settlement of his claims arising from a motor vehicle accident with an insurance adjuster and he signed a release. There was evidence that the plaintiff’s injuries turned out to be more serious than was understood at the time of the settlement and the court said it had the greatest sympathy for the plaintiff in these circumstances. Nevertheless, absent proof that the bargain was unconscionable, the court said it must enforce the contract. The court referred to an obvious need to maintain consistency and predictability in commercial transactions.
McIsaac v. McIsaac, 2010 BCSC 691 (CanLII)
The defendant sought to dismiss the plaintiff’s claim arising from injuries suffered in a motor vehicle accident on the basis of a prior settlement and release. The plaintiff sought to rescind the settlement on the ground that the bargain struck was unconscionable, but the court found against the plaintiff’s position. The court went on to say that, in order to maintain consistency and predictability in commercial transactions, public policy requires court enforcement of contracts not found to be unconscionable.
Fracassi v. Cascioli, 2011 ONSC 178 (CanLII)
Absent fraud, there should be some finality associated with commercial agreements of purchase and sale. This was particularly so in this case, given that the plaintiff was an extremely sophisticated businessman. Additionally, he had legal counsel. In the circumstances of this case, the language of a contract containing a release should be respected.
1250264 Ontario Inc. v. Pet Valu Canada Inc., 2011 ONSC 3871 (CanLII)
In this class proceeding, the court considered circumstances where a franchisor had offered to buy back a business from a franchisee, on condition that the franchisee sign a release of all claims (including claims made in the class action). The court said that the franchisor’s insistence on a release from the franchisee was a reasonable and acceptable commercial requirement. No prudent business person would require anything less
Cushnaghan v Kwan, 2015 ONSC 4837 (CanLII)
The motion judge in this case said that the defendant’s obligations under minutes of settlement entered into with the plaintiff should be enforced, which included requiring the defendant to execute the agreed-upon form of release contained therein. In the context of a commercial transaction between two reasonably informed individuals, both represented by counsel, the court will hold the parties to their agreement. (The defendant acknowledged the minutes to be binding and enforceable.)
Kalash v Carrier One Express, 2015 ONSC 5131 (CanLII)
The plaintiff Arie Kalash suffered injuries in an accident while working as an independent owner-operator of a tractor-trailer under contract with two of the defendants. The contract documents signed by the plaintiff included provisions whereby, among other things, the plaintiff released the two defendants from responsibility for injuries sustained by the plaintiff. In its decision granting a motion for summary judgment by the two defendants, the court said that there is a strong public interest supporting the enforcement of contracts, and in particular commercial contracts.
Virden Mainline Motor Products Limited v Murray et al, 2018 MBCA 82 (CanLII)
A share purchase agreement provided that, subject to exceptions including intentional misrepresentation or fraud, representations and warranties of the vendor would survive closing, but no warranty claim could be made after the expiration of a specified period of time. The agreement also provided that, after the specified period of time, the vendor would be released from all obligations and liabilities in respect of representations and warranties made by the vendor, subject to certain qualifications. The Court of Appeal addressed these provisions in the context of a claim based on breach of contract, negligent misrepresentation and fraudulent misrepresentation. It concluded that claims against the vendor for breach of contract and negligence were barred by the wording of the agreement. The Court of Appeal said that, in cases of negligent misrepresentation, the courts distinguish between commercial parties and non-commercial parties. Where the parties are experienced commercial parties, often negotiating with legal advisers and relying on independent financial advisors, the presumption in the case law is that the written agreement reflects the entire agreement of the parties – and an entire agreement clause in the share purchase agreement in this case served as confirmation of that presumption.
PricewaterhouseCoopers Inc. v. Perpetual Energy Inc., 2020 ABQB 6 (CanLII) , appeal allowed, 2021 ABCA 16 (CanLII) , application for leave to appeal dismissed, Susan Riddell Rose, et al. v. PricewaterhouseCoopers Inc., et al., 2021 CanLII 58908 (SCC)
The case management judge in this case said it is standard industry practice to release outgoing directors when there is a change of control. It would be highly unusual for a director not to seek protection in the form of a release. But for releases, a director may never achieve finality. The use of a mutual release by business people in transactions is common practice. The Court of Appeal said there are a number of different scenarios under which a director might be released from liability and that a common scenario arises where there is a change of control of the corporation and as a condition of closing the existing directors and officers are released from liability for any past breaches and transgressions. This kind of release is very common and is not within the contemplation of a section of the Business Corporations Act which states that no provision of a contract relieves a director or officer from the duty to act in accordance with the Act. Releasing a director from liability for past breaches of duty is not the same as relieving the director of the obligation to perform those duties.
Pisani v. Smith et al., 2022 ONSC 2677 (CanLII)
The plaintiff was the owner, President, Chief Executive Officer and apparently the sole shareholder of a company, Contac Services Inc., that contracted to provide services to the defendant Air Canada. Issues arising from the contract were resolved by way of an agreement that contained a release in favour of Air Canada. Air Canada relied on the release in support of a motion to strike out the plaintiff’s amended claim in this action. In the amended claim, the plaintiff alleged that Air Canada “inflicted unlawful conduct on Contac” by breaching its contract with Contac, with the intention of harming the plaintiff, and that Air Canada conspired with its co-defendant, an Air Canada executive, to commit the tort of intentional interference with economic relations. Among other things, the court said that, for a sole shareholder to cause his corporation to release claims against defendants but then turn around and sue those defendants in his personal capacity based on a theory of “stretched” liability (referring to the tort of unlawful interference with economic relations) seemed incompatible with the concept of commercial certainty (and the limited scope of the tort of wrongful interference in economic relations).
3.5 When Release Takes Effect/Conditional Release
Depending on its terms, a release does not necessarily take effect immediately when it is signed and indeed a release may explicitly state that it will take effect upon fulfillment of a specified pre-condition. In the cases below, the courts considered issues about when releases would become effective or operative.
Huggard v. Ontario and Saskatchewan Land Company, 1908 CanLII 146 (SK CA)
The plaintiffs were part of a group referred to by the court as a “syndicate”. They argued that a release executed by them was conditional on its face and only binding when executed by all the members of the syndicate. The court did not agree that the release was conditional on its face, but was of the opinion, looking at the purpose for which the release was prepared and executed, that the intention was that all the members of the syndicate should execute it. The court went on to indicate that it did not accede to the proposition that the release was only delivered as an escrow. The release was not delivered with the understanding that it should only take effect when all the members of the syndicate had executed it. There was no statement or agreement to that effect; the release was executed by the plaintiffs with the intention that, insofar as they were able to bring it about, their rights under an agreement were released, although it might be that, if all the members of the syndicate did not execute the release, the execution of it by the plaintiffs would be inoperative.
Belliveau (Francis) Ltd. v. Nelson-Miramichi (Village), 1989 CanLII 7549 (NB CA)
The trial judge decided that amounts were owing to the plaintiff/respondent under a contract for the construction of a sewage collection system. On appeal, the appellant relied on a statutory declaration provided by the respondent when it submitted a claim for interim payment. The statutory declaration released the appellant from claims relating to work completed under the contract “subject to payment of the Holdback Release Certificate”. The Court of Appeal said that the release was predicated upon the respondent being provided with reasonably accurate information as to quantities, which the appellant was required to provide, but required measurements were not made and therefore the certificate was not binding. A second release contained in a statutory declaration released the appellant from claims relating to the contract “subject to payment of final certificate”. Final payment was never made and the release could hardly be held to be binding when payment had not been forthcoming. Again, the same argument relating to measurements applied to this release.
Lalli v. Lalli, 1999 CanLII 5648 (BC SC)
The plaintiff in this case sought a declaration as to the effective date of a mutual release of obligations to be given by the parties under a settlement agreement. After the parties had signified their intention to release claims against each other, delay had occurred due to proceedings that resulted in an order for rectification of the agreement and specific performance of the agreement as rectified. The court held that the effective date for the mutual release would be the date upon which the parties had signified their intention to release claims. The release was of past events and it did not contemplate or address the future. The delay that had occurred did not expand what had been agreed to by the parties. Any matters that had arisen since the signing of the settlement agreement would not be the subject of the mutual release.
Companies’ Creditors Arrangement Act (ON), Re, 2006 CanLII 32429 (ON SC)
The release at issue in this case was explicitly stated to be executed and delivered pursuant to the terms of a settlement. The court said that, in its view, releases were exchanged on the premise that the reasonable expectations created by the settlement agreement would be fulfilled. That is to say, the contemplated “full and final release” was dependent upon the settlement being implemented in accordance with the parties’ mutual reasonable expectations. The court interpreted the settlement as obligating one of the parties to make certain payments and the release was not fully operative unless and until this was done.
Dunkin’ Brands Canada Ltd. c. Bertico inc., 2015 QCCA 624 (CanLII), application for leave to appeal dismissed, Dunkin’ Brands Canada Ltd. (formerly Allied Domecq Retailing International (Canada) Ltd.) v. Bertico Inc., et al., 2016 CanLII 13728 (SCC)
The trial judge found that releases given by franchisees to a franchisor were signed in reliance on a representation that a critical mass of 75 stores would be or had been secured for a proposed renovation program. The trial judge found that this representation was not true. He decided that the signatures of the franchisees were obtained by misrepresentation which vitiated consent and that the releases given on this basis were null. The Court of Appeal said that the franchisor had shown no palpable and overriding error that would allow the appellate court to intervene on this point. The Court of Appeal also referred to the franchisor’s argument that it had a unilateral power to withdraw from the renovation program if 75 stores were not signed on. The Court of Appeal said that the trial judge plainly disagreed, interpreting the condition as a requirement for the program to proceed and the releases to be binding. There was evidence given by the franchisees that signed to support the judge’s interpretation of the designated “condition” in the renovation plan agreement and the franchisor did not show this to be a manifestly wrong interpretation of the parties’ intent. The Court of Appeal said that this gave further credence to the view that the judge did not err in refusing to enforce the releases but, strictly speaking, it was enough to decide that the franchisor’s misrepresentations served to vitiate consent.
Cousin v Cousin, 2020 ABQB 636 (CanLII)
The parties entered into a separation agreement which provided for the release of the respondent from any spousal support obligation upon completion of the property settlement set out in the agreement. Considering the agreement as a whole, the court found that the applicant’s release of her right to spousal support was conditional on completion of the property settlement. The release of spousal support was not effective because the property settlement was not completed in accordance with the agreement. The court agreed with the applicant’s reliance on the proposition that “a person cannot rely on a bargain unless he has honoured it”.
Hierath v Shock, 2021 ABQB 185 (CanLII)
An agreement including a mutual release stated that the release by one of the parties, the plaintiff in this litigation, was conditional on the performance of the contract by the other party, who was one of the defendants in this case. The court said that the release was conditional on the defendant’s performance of the contract, such that an event of default by the defendant cancelled the plaintiff’s release.
3.6 Enforcement of Releases – Public Policy Considerations
Public policy as a factor in a court’s determination of whether to give effect to a contractual exclusion clause was discussed in the Supreme Court of Canada decision inTercon Contractors Ltd. v. British Columbia (Transportation and Highways), 2010 SCC 4 (CanLII). Tercon has been cited by Canadian courts in a number of release cases and, in particular, one of the approaches that Canadian courts have applied in considering the enforcement of pre-emptive releases is based on an analytical framework from the minority judgment in Tercon delivered by Binnie J. (See Chapter 8: Anticipatory or Pre-Emptive Releases, section 8.3.2, Analytical Approach). The majority of the Supreme Court, at 2010 SCC 4, paragraph 62, expressed its agreement with the analytical approach to contractual exclusion clauses enunciated in the minority judgment.
Binnie J. said in Tercon that: “…a court has no discretion to refuse to enforce a valid and applicable contractual exclusion clause unless the plaintiff … can point to some paramount consideration of public policy sufficient to override the public interest in freedom of contact and defeat what would otherwise be the contractual rights of the parties.” Binnie J. went on to say that the law “requires a series of enquiries to be addressed when a plaintiff seeks to escape the effect of an exclusion clause or other contractual terms to which it had previously agreed”. In summary, these enquiries are as follows: (1) as a matter of interpretation, does the exclusion clause apply to the circumstances established in the evidence?; (2) if the exclusion clause applies, was the clause unconscionable at the time when the contract was made?; and (3) if the clause is valid and applicable, the court may undertake a third enquiry, namely, should the court nevertheless refuse to enforce it because of an overriding public policy? (See 2010 SCC 4, at paragraphs 121-123.)
In the decisions summarized below, the courts discussed public policy considerations when addressing the enforceability or effectiveness of releases.
Leonard v. Dunn, 2006 CanLII 33419 (ON SC)
The plaintiff signed a “game sheet” containing a waiver/release as a condition of playing recreational, non-contact hockey in the sports facility where the game occurred. The court said that the waiver, properly construed, did not and “ought not, on public policy grounds, extend to unprovoked attacks by one player on another”.
MHR Board Game Design Inc. v. Canadian Broadcasting Corporation, 2013 ONSC 4457 (CanLII), appeal dismissed, 2013 ONCA 728 (Can LII), leave to appeal refused, 2014 CanLII 25874 (SCC)
The appellant signed a comprehensive release before appearing on a television show to present a business proposal. He alleged that his proposal was edited in such a fashion as to misrepresent completely the merits of the business plan. His action was dismissed on a motion for summary judgment. The motion judge said that the consent and release was a complete bar to the claims and the action should only proceed if it would be unconscionable or contrary to public policy or the defendant itself breached the contract. The motion judge went on to say that the plaintiff had not demonstrated how the enforcement of the contract would be contrary to public policy.
1539304 Ontario Inc. v. ICICI Bank Canada, 2013 ONSC 2737 (CanLII)
In this case, the court granted the defendant’s motion for summary judgment on grounds including the effect of releases contained in certain standstill agreements entered into by the parties. The court referred to Tercon for the appropriate test to be applied when considering the legal effect of an exclusion clause. On the facts of this case, the court found that the release clauses in the standstill agreements applied to the circumstances established in evidence as the grounds for the plaintiff’s claim, there was no genuine issue requiring a trial as to whether the exclusion clauses were unconscionable at the time when the standstill agreements were made and there was no over-riding public policy which outweighed the very strong public interest in the enforcement of contracts.
Bajenaru v. Marchie, 2017 ONSC 2864 (CanLII)
The plaintiffs in this case relied on Stevens v. Howitt in support of the submission that the term of a release proposed by the defendants was contrary to public policy in that it required a parent to indemnify a potential defendant for subsequent claims made by his or her child. The court noted that the obiter in Stevens on this point had not been followed by another court in Ontario and it distinguished Stevens because the release in Stevens was provided before the commencement of an action on behalf of the minor plaintiffs, whereas in this case the release was provided after the commencement of the action and the plaintiffs had the benefit of counsel in arriving at a figure for compensation.
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. He signed a release that specifically covered a complaint he had made to the Association of Professional Engineers and Geoscientists of Alberta and he signed a form of letter requesting withdrawal of the APEGA complaint. Later, he made a second complaint to the APEGA regarding the condition of the settlement that he submit a request for withdrawal of the first complaint. The APEGA published a decision indicating that such a practice was improper. On an application to the Master in the context of his employment-related action, the plaintiff argued that the release was against public policy and unenforceable. The Master said that he would make no findings on the complaints, other than to observe that the APEGA eventually heard both of them; the Master also said it is not surprising that a regulatory body acting in the public interest would find itself not bound to give effect to an agreement regarding the withdrawal of a complaint, particularly when it was not a party to the agreement. On the issue of whether the clause pertaining to withdrawal of the initial complaint was contrary to public policy, the Master found that it was not contrary to public policy in the fact situation before him and that, even if it was, he would find it to be severable.
Rush v. De Ruiter, 2018 ONSC 1210 (CanLII)
The plaintiff’s position regarding a release included in a consent to medical treatment signed by her raised a serious public policy concern. If such a waiver of liability on consent were to be enforceable as a common practice in the medical profession, the waiver would take on a coercive quality that would negate the voluntariness that is at the heart of a consent. A risk to the patient’s health or even death might be the consequence of not signing, leaving a vulnerable patient with a choice between two precarious options which in effect is no choice at all. The consent cannot bar the plaintiff’s claim in negligence “no matter the careful drafting quality of the release”.
Leonard v The Manufacturers Life Insurance Company, 2020 BCSC 1840 (CanLII) , application for leave to appeal dismissed, 2022 BCCA 28 (CanLII)
It is against public policy for a releasor to forgo a public right, which includes the right to complain to a regulator administering a legislative scheme established in the public interest. Such provisions are unenforceable.
3.7 Affirmation of Release or Related Agreement
As can be seen from the cases below, affirmation may arise as an issue in circumstances where a party asserting a challenge to the enforceability of a release has received the benefit of a related contract, such as a settlement agreement, with the party in whose favour the release was given.
Berube v. LeTourneau, 1984 CanLII 3966 (NB QB)
An action commenced by the applicant against her former husband for a declaration that she held a 50% interest in the former matrimonial home was discontinued, the applicant received a cheque for funds paid in settlement of the action and the applicant signed a release. When the applicant subsequently sought a division of marital property, her claim was dismissed because the matter had already been determined in a prior proceeding. The court said that, in view of the fact that the applicant only cashed the cheque some three years later, it could not consider any question of undue influence or unconscionability. In addition to its findings regarding delay, the court said that, when the applicant cashed the cheque, she accepted the settlement by so doing.
White v. Colliers Macaulay Nicholls Inc., 2009 ONCA 444 (CanLII)
In this appeal, the appellant argued that a release given in connection with a settlement agreement should be set aside on the basis of misrepresentations, although he did not claim rescission of the settlement agreement or the release in his action and an attack on the release did not form a ground of appeal. The Court of Appeal said it would not give effect to this argument (and it concluded in any event that the alleged misrepresentations — even if made — were not actionable). The appellant’s actions had affirmed, and had continued to affirm, the settlement agreement. No suggestion had been made that the appellant was willing to return funds paid to him or that he was willing to take back shares he transferred as part of the settlement. The appellant could not have it both ways: he could not take the benefit of all of the provisions in the settlement agreement favouring him and at the same time seek to set aside the release which clearly formed an integral part of the settlement.
1483677 Ontario Limited v. Crain, 2009 CanLII 69791 (ON SC)
The plaintiffs in this case alleged that they executed releases under “extreme economic duress” and, as well, challenged the releases on other grounds. The court referred to White v. Colliers Macaulay, above, where the Court of Appeal said that the appellant had affirmed, and continued to affirm, a settlement agreement and that the appellant could not take the benefit of all of the provisions in the settlement agreement favouring him, while at the same time seek to set aside a release which formed an integral part of the settlement. In this case, there was no factual dispute that the plaintiffs received and continued to receive the benefit of the contracts that gave rise to the litigation. The court found that, by their actions, the plaintiffs had affirmed the releases.
3.8 Other Decisions on the Effectiveness and Enforcement of Releases
In the decisions summarized below, the courts considered a variety of different issues and arguments with respect to the enforcement or effectiveness of releases.
McMurachy v. Red River Valley Mutual Insurance Co., 1994 CanLII 10984 (MB CA) , appeal from 1993 CanLII 14960 (MB QB)
Upon the settlement of an action, the defendant McMurachy agreed to pay $45,000 to the plaintiff Pritchard and she assigned her cause of action against an insurer to Pritchard. The insurer had denied coverage, alleging a lack of co-operation on the part of McMurachy. The assignment and release that was executed in order to give effect to the settlement provided that Pritchard released McMurachy in accordance with the terms of an attached release. In this subsequent action against the insurer, the trial judge found that McMurachy was no longer obligated to pay Pritchard anything – she was fully released from all liabilities to him – and, since she had no obligation, legal or otherwise, to pay Pritchard the agreed-upon amount of $45,000, she had not suffered any damages. Accordingly, there was no liability on the defendant insurer to indemnify either her or Pritchard. An appeal from this decision was allowed by the Manitoba Court of Appeal. The appellate court referred to a body of American case law which looked not at the precise form of the documentation, but at the assignment as a whole, to ascertain whether there was an intention to release the insurer. The court said that, if it were necessary to decide the point, it would opt for this line of American authorities. In circumstances where an insured is obliged to protect herself as a result of an insurer’s wrongful denial of coverage, it is plainly wrong to determine whether rights in the policy continue to be effective based on the technical form of the documentation used as opposed to the intended consequences of the settlement and assignment. But the appellate court found it unnecessary to decide this issue, because the liability of the defendant insurer crystallized, at the latest, when the settlement was consummated. The court concluded that the trial judge was in error when he dismissed the action on the overly simplistic basis that the insured “had suffered no loss”. The insurer wrongfully repudiated its contractual liability to defend and indemnify its insured McMurachy. In order to protect herself from the exposure of significant personal liability, the insured entered into a settlement with the claimant which she was clearly entitled to do. At that moment, at the latest, the insurer’s responsibility was fixed and the arrangement made thereafter for the assignment of the claim and protection of the insured, all arising from the breach of contract of the insurer, did not negate the insurer’s obligation to indemnify under the terms of the policy.
National Bank of Canada v. Colucci, 2006 CanLII 30746 (ON SC)
The parties reached a settlement of issues between them and the defendant signed a release and settlement agreement. The defendant relied on “breaches” by the plaintiff as the basis to set aside the settlement. The alleged breaches took place before the signing of the agreement and release; they were not new and were settled by the settlement agreement. Further, the court was concerned about the defendant’s admission that, despite his lawyer’s advice, he entered into the settlement agreement with the intention of ultimately setting it aside. By entering into the settlement, the defendant received discharges of mortgages, he received a discount of what the plaintiff said was owing to it and his request regarding his credit bureau file was met. The court said that to set aside the settlement agreement would be assisting the defendant in completing his scheme which would be tantamount to fraud.
Hinke v. Thermal Energy International Inc., 2011 ONSC 5345 (CanLII) , appeal dismissed, 2012 ONCA 635 (CanLII)
The parties settled their differences arising out of a breakdown in an employment relationship by entering into an agreement containing four sub-agreements, each resolving a particular aspect of their dispute. In furtherance of one of the sub-agreements, the appellant Hinke received a payment from his employer and gave a release. Hinke argued that the sub-agreements were interdependent and that, because his employer breached one of the sub-agreements, the entire framework agreement should be set aside. The motion judge found that the four sub-agreements were severable and that Hinke was bound by the release. The Court of Appeal found no error in the motion judge’s conclusion that, through the framework agreement, the parties intended to settle their differences concerning four separate issues in four separate agreements. It followed that the four sub-agreements were severable and the rights and obligations arising out of other provisions remained in force notwithstanding the employer’s breach of one sub-agreement.
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. He alleged that the version of his proposal that was broadcast had been edited in such a fashion as to misrepresent completely the merits of his business plan. 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 said that the misconduct complained of was in no way extraneous to the contract or outside the scope of the release: it fell squarely within the terms of the release. Giving effect to the consent and release did not defeat the objectives of the agreement between the parties.
R. v. Horner, 2013 SKQB 340 (CanLII)
Releases provided in favour of public bodies and governments have been held to be enforceable and to bar subsequent legal proceedings contemplated by the terms of the release agreement. Subsequent legal proceedings commenced in the face of a binding release have been found to be an abuse of process (citing Roussy v Red Seal Vacations, below, and Marble v. Saskatchewan ).
Ross v. British Columbia Lottery Corporation, 2014 BCSC 320 (CanLII)
The plaintiff sued the defendants for losses allegedly suffered in casinos. She had signed a voluntary self-exclusion form in which she gave a release from any liability for claims related to her self-exclusion, including her failure to comply with the self-exclusion. The court found that the voluntary self-exclusion form was not a contract at law and the defendants were not entitled to use the release provision in the form to avoid any liability as if it was a contractual provision. However, in considering the plaintiff’s negligence claim, the court said that the release might not have contractual force but it did emphasize that the defendants did not agree to bear any responsibility if the plaintiff breached the self-exclusion. This was a clear message to her that she remained personally responsible when she excluded herself.
Mazza v Ornge Corporate Services Inc., 2015 ONSC 7785 (CanLII) , appeal dismissed, 2016 ONCA 753 (CanLII)
The defendants moved for summary judgment dismissing claims by the plaintiff, their former CEO, relating to the termination of his employment. As stated by the motion judge, the plaintiff sought to enforce the termination provisions in an employment agreement as against alleged common employers, when he had deliberately released the “main” employer with whom he negotiated that very agreement. The motion judge said that, at the core of the motion, the moving parties did no more than rely upon the principle that a creditor who releases one joint debtor will normally be held to release all. The motion judge went on to say that the question was not whether the plaintiff intended to release the defendants: “…he would not be the first person in history to have desired to have his cake and eat it too”. His intention vis-à-vis the other alleged parties to the employment contract did not govern; his unquestionable intention to release the very obligation he claimed them to be bound by did.
Meadowridge School Society v Allen, 2018 BCSC 1707 (CanLII)
The defendants filed a counterclaim seeking the same or substantially the same relief that was the subject of a release in a settlement agreement entered into by the parties. The court said that the counterclaim was a direct contradiction of the settlement agreement and the court dismissed the counterclaim on that basis without a consideration of the issues.
3.8.1 Curtailing Right of Legal Recourse
Certain of the decisions summarized in section 3.6, above (Enforcement of Releases – Public Policy Considerations), discuss public policy implications of releases that would operate so as require the releasor to forgo a public right or a right of legal recourse. The comments of the court in the decision below allude to a concern about a release that attempted to curtail the releasors’ right of appeal or other recourse, but these comments do not explicitly refer to public policy considerations.
Stagg v. Canada (Attorney General), 2019 FC 630 (CanLII)
The Dauphin River First Nation was evacuated from its lands due to flooding and, while the community was being rebuilt, Indigenous Services Canada, through intermediaries, provided DRFN members with benefits. After ISC declared that the evacuation was over and terminated the evacuee benefits, DRFN objected to the termination of the benefits and sought judicial review of ISC’s decision. The court found that the process leading to the decision complied with the requirements of procedural fairness and that the decision was reasonable. The application for judicial review was denied. The court said that one troubling aspect of the case was the assertion that some evacuees were required to sign a release to the effect that they accepted that their benefits would end on a specified date. The court said that the requirement to sign a release, “while most likely objectionable”, did not invalidate ISC’s decision. The releases were not before the court and the court was unable to say whether they amounted to an invalid attempt to curtail the evacuees’ right of appeal or other recourse. Moreover, the releases were obtained after ISC’s decision was made.
3.8.2 Whether Release was Legally Authorized
The decisions in this section address the legal authority for a release in the context of determining the effectiveness or enforceability of the release. Similar issues regarding the authority for a release arise in other circumstances. As to case law on the authority for a demand or requirement that a release be given, see section 1.11.5, above, No Lawful Authority for Release. As to case law in which courts take account of the scope of the releasor’s authority when considering whether particular claims or matters are covered by a release, see section 6.9, below, Authority of the Releasor.
Nithiananthan v Thirunavukarasu, 2016 ONSC 2465 (CanLII)
The plaintiff in this case argued that, immediately after signing 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.
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)
The issue on this appeal was whether a covenant on title to each of the individual respondents’ properties was effective to release certain claims. The judge at first instance concluded that the covenants registered pursuant to section 219 of the B.C. Land Title Act did not release the claims because that section did not authorize the inclusion of release language in a covenant. The appeal was allowed. The Court of Appeal held that a release of the kind included in the covenant was authorized by the statute. The Court of Appeal said that the critical wording in section 219 was that a covenant could include “provisions in respect of the use of land”: the legislature chose words of the widest scope in using the language of “in respect of”. By choosing such broad language, the legislature contemplated the inclusion of a release in a covenant as a provision “in respect of the use of land”. The language of the section, when read in light of the statutory purposes and objectives, did not admit of any other possibility. The possibility that a covenant might include an indemnity was expressly contemplated by section 219. Authorizing an indemnity but not a release would result in an absurdity, effectively requiring a plaintiff to indemnify the covenantee for the financial consequences of its negligence.
833137 Ontario Ltd. v. TD Bank, 2021 ONSC 8381 (CanLII)
The court said that the sole issue on this motion by the defendant was whether a settlement between the parties, including a release, should be enforced by the court, whether by dismissing the action or taking another step that would have the same effect. The plaintiff argued, among other things, that its lawyer acted contrary to the plaintiff’s instructions and violated his professional obligations to the plaintiff. The court did not accept the plaintiff’s arguments. It found that the settlement between the parties was valid and it found no reason to exercise its discretion to refuse to enforce the settlement between the parties
3.8.3 Delay in Challenging Settlement/Release
In the case below, because of the delay which had occurred after the applicant agreed to a settlement and signed a release, the court found that she was estopped from claiming relief.
Berube v. LeTourneau, 1984 CanLII 3966 (NB QB)
An action commenced by the applicant against her former husband for a declaration that she held a 50% interest in the former matrimonial home was discontinued, the applicant received a cheque for funds paid in settlement of the action and the applicant signed a release (described by the court as a standard form used by insurance companies for settlement of damage claims). When the applicant subsequently sought a division of marital property, this claim was dismissed because the matter had already been determined in a prior proceeding. The court said that, in view of the fact that the applicant only cashed the cheque some three years later, it could not consider any question of undue influence or unconscionability. Such delay in seeking redress, should, except in cases of fraud, estop the party claiming relief. The court referred to the apparent improvidence of the settlement in light of the amount paid to the applicant, but it was impossible to say, based on the evidence before the court, that the settlement was unconscionable. And the court said that a delay of over six years in “doing anything about this matter” should clearly disentitle the claim for division of marital property from any further consideration.
3.8.4 Relitigating Challenge to a Release
In the cases below, attempts to challenge settlements and releases were not allowed because the courts would not allow relitigation of decisions in earlier proceedings where the validity of the settlements and releases was, or could have been, determined.
Paletta v. Paletta, 2003 CanLII 19580 (ON SC)
Litigation relating to an alleged partnership between brothers was settled and releases were signed. One brother alleged that the written settlement should be rescinded because of a fraudulent course of action by the other. The court said this proceeding was an attempt to relitigate an issue that had already been decided in a previous action, where there had been a full opportunity to call all evidence bearing on the validity of the settlement and the related releases. If this action were permitted to proceed to trial, it would amount to a collateral attack upon a previous decision of a competent court. The court stayed this action as an abuse of process.
Albu v. The University of British Columbia 2018 BCSC 1954 (CanLII), appeal on other grounds dismissed, 2019 BCCA 222 (CanLII)
The plaintiff argued that she was deceived into signing a settlement agreement. The settlement agreement and an accompanying release signed by the plaintiff were found to be valid in an earlier decision of the court: see Albu v. The University of British Columbia, above (2014 BCSC 239, appeal dismissed, 2015 BCCA 41). The plaintiff was thus estopped from relitigating the validity of either the settlement agreement or the release.
3.8.5 Waiver of Release
The reasoning of the court in the decision below draws on the concept of waiver of an aspect of an executed and effective release. As to the notion that, when a party to an alleged settlement refuses to sign a release, the other party may waive the execution of a release, see Charles v. Blacquiere, 1999 ABQB 965 (CanLII) , at paragraphs 18 and 19, appeal on other grounds allowed, 2005 ABCA 19 (CanLII).
Patrick et al v. Telus Communications Inc., 2006 BCSC 854 (CanLII) , appeal dismissed, Patrick v. Telus Communications Inc., 2007 BCCA 200 (CanLII)
In this case, the court found that that a release was effective but that an aspect of it was waived. Upon the termination of his employment in September of 1999, one of the plaintiffs, Mr. Bjorge, entered into a comprehensive settlement of his employment and pension claims. His pension claims were made under a plan which provided that members with twenty-five years of service could retire on full pension at age fifty-five and those with thirty years of service and “with consent of the company”, could retire before age fifty-five on full pension (referred to by the court as a “consent pension”). Applications for consent pensions were reviewed by a Management Benefits Committee. The settlement of Mr. Bjorge’s employment and pension claims specifically provided that he would receive a reduced pension, not a full consent pension, and Mr. Bjorge executed a release on that basis. The court found that that release was effective, but that it was waived when the former employer agreed to submit Mr. Bjorge’s pension request “anew” to the Management Benefits Committee in 2003. The waiver of this aspect of the release did not mean that Mr. Bjorge was entitled to a consent pension. It only meant that the Committee was required to consider whether it would grant consent. The release was effective to compromise whatever entitlement Mr. Bjorge may have had to a consent pension in 1999. The Committee was obliged to do no more than review his application as if it had been made originally in 2003.
3.8.6 Non-Disparagement Clause
In the case below, the defendant brought a counterclaim for breach of a non-disparagement provision of a release and thus put into issue the enforcement and effectiveness of the non-disparagement clause. The court dismissed the defendant’s motion for summary judgment in respect of the counterclaim.
Radvar v. Canada (Attorney General), 2005 CanLII 45412 (ON SC) , appeal on other grounds dismissed, Radvar v. Canada (Attorney General), 2007 ONCA 137 (CanLII)
The plaintiff made a claim under a policy of insurance issued to him by the defendant Chubb and Chubb retained an investigation firm to carry out background enquiries about the plaintiff. The action against Chubb was settled and the plaintiff signed a full and final release. In the release, the plaintiff agreed that he would in no way disparage, defame or criticize Chubb, or otherwise comment on the settlement agreement, and the plaintiff acknowledged that, if he was proven to have disparaged Chubb, the insurer would have the right to recover the settlement amount paid to the plaintiff. Subsequently the plaintiff commenced this action for breach of privacy rights, fiduciary obligations and regulatory negligence. Chubb counterclaimed on the basis that the plaintiff’s claim constituted a breach of the non-disparagement term of the release. On a motion for summary judgment, the court said there was no evidence of any disparagement other than in the pleading and there was a triable issue as to whether the allegations in the pleading amounted to disparagement as was intended by the wording of the release.