CHAPTER 6: Scope and Application of Releases

6.1 Introduction

Generally-speaking the scope of a release will depend on the interpretation given to its words. Thus, one might question the extent to which a clear distinction can be drawn between case law on the interpretation of a release and case law on the scope of a release. The intent of this chapter is to present cases in which Canadian courts have made determinations about the scope of a release without engaging in a searching interpretive exercise in order to do so.

In addition to this chapter and the preceding chapter on the Interpretation of Releases, Canadian decisions bearing on the scope of a release are addressed in other parts of rlaw.online. For example, Chapter 8: Anticipatory or Pre-emptive Releases, includes sections on Exclusion of Liability for Negligence and Exclusion of Liability for Intentional Wrongdoing. Also, case law bearing on the scope of a release can be found in Chapter 11: Releases in Particular Situations, section 11.8, Subrogated Claims.

6.1.1 Scope of Release – Commercial Transactions

In the decision below, the court commented on the scope of a release given in a commercial context referred to by the court as a “multi-party, multi-transaction, multi-recourse universe”.

Gearbulk Pool Ltd. v. Scac Transport Canada Inc., 2002 FCT 353 (CanLII)

It is not unusual for parties to commercial transactions to have a variety of contracts between them. Each of those contracts and the underlying transactions can give rise to claims, which may or may not impinge on the other transactions. Even within a single transaction, one event may give rise to various recourses, some of which may implicate strangers to the contract who are nonetheless parties to the transaction. In such a multi-party, multi-transaction, multi-recourse universe, it is not to be assumed that a release given with respect to one event covered all possible claims between the two parties, unless the parties clearly indicated that this was their intention. Before a release can be extended to all possible claims between two parties there must be some evidence that it was the parties’ intention to achieve that result. This is not to encourage artfully drawn releases but to require those who hope to derive a benefit from such documents to clearly define the advantage they seek. The plaintiff Gearbulk and the defendants in this case were parties to a mutual release given in other litigation in which they were co-defendants. The court said that the language of the mutual release was very specific. The only rationale for expanding the scope of the release would have been the argument that, having commenced proceedings against the defendants, Gearbulk was bound to advance all its claims at once. It was argued that Gearbulk had commenced proceedings against the defendants, in that it had made a cross-claim in the other litigation. The court said, though, that, in the absence of evidence about these proceedings, it was not in a position to hold that the mutual release acted as a release of claims which Gearbulk could have but did not advance against the defendants.

6.2 Sufficiency of General Words or Need for Specific Words

The author of a release may be pulled in different directions when trying to come to a decision about the relative merits of general language or specific words to lay out the scope of the release. On one hand, general language might be favoured out of concern that an effort to be specific could result in something important being left out, or could lead to the release being understood as more narrow or focused in scope than intended. On the other hand, the author of the release might be concerned about a view that particular aspects of the scope of the release are to be understood in a limited sense in the absence of explicit wording which makes clear that such is not the intention of the parties.

The decision of the Supreme Court of Canada in Corner Brook (City) v. Bailey, 2021 SCC 29 (CanLII) lends support to the view that it is not necessary to include wording in a release merely for the purpose of particularizing operative aspects of the release that are clearly expressed in general language. In his decision delivered on behalf of the court, Rowe J. noted that the release at issue included “all actions, suits, causes of action . . . foreseen or unforeseen . . . and claims of any kind or nature whatsoever” arising out of a motor vehicle accident. Rowe J. said that, if this wording was insufficient to include a claim arising out of the accident, it would be hard to imagine what wording would be sufficient, “aside from listing every type of claim imaginable one by one (third party claims, cross claims, counter claims, subrogated claims, claims in equity and common law, statutory claims, etc.)”. More pointedly, Rowe J. said that “[t]here is no principled reason to require parties to particularize the scope of the release in this fashion”: Corner Brook, at paragraph 51. (In his discussion about sufficient language to make clear that a release covers unknown claims, Rowe J. also said that a release does not necessarily need to particularize with precision the exact claims that fall within its scope. See section 6.4.1, Unknown Claims or Events, below.)

Decisions in which courts have commented on the sufficiency of general language, or the need for specific words, to describe the scope of a release are summarized below. Note that approaches taken by the courts to the interpretation of the words of a broad, general release are discussed above in Chapter 5: Interpretation of Releases.

6.2.1 Scope of Release – General Words Found to be Sufficient

In the cases below, particular claims were found to be within the scope of general release wording.

Bellman v. HMTQ et al, 2006 BCSC 426

The petitioner, who was an employee of the provincial government, accepted a severance package offered by the government and signed a release. Some time later, he filed a complaint under the Employment Standards Act that he had not been paid vacation pay for the year 2001, nor had he been paid vacation pay for the period covered by his severance package. The petitioner made several arguments before the court about the release, one of which was that, because the release did not specifically mention vacation pay – either in relation to his claim for 2001 or in relation to his claim for vacation pay on the severance payment – it did not bar these claims. The court noted that the release was prepared following a course of negotiations in which both the severance package and the 2001 vacation pay were discussed.  The court said the terms of the release could not have been broader or clearer. The letter that accompanied the release described the settlement as the “full and complete terms of settlement”. The release itself provided that, in signing it and accepting the monies paid in consideration for it, the petitioner was releasing the government from “all claims” that he ever had “arising out of or in any way connected with” his employment. His claim for vacation pay for 2001 and for similar pay on the severance he was awarded fell within that language.

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. One of the Tribunal’s two basic reasons for finding that the release did not bar a complaint under the statute was that the release made no “specific reference” to the “right or rights the Employer wished the Employee to relinquish” under the statute. 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. The general words in the release were unambiguous and sufficient in themselves to conclude that the employee released any claims under the statute by way of her contractual settlement.

Wong v. Lok’s Martial Arts Centre Inc., 2009 BCSC 1385 (CanLII)

In this case, the court considered a parental waiver signed by the parent of an infant who allegedly was injured in the course of a sparring match at a Hapkido school. The pre-emptive release began with the words “[i]t is expressly agreed that all exercises and treatments and use of all facilities shall be undertaken at the student’s sole risk”. The plaintiff argued that these initial words limited the scope of the release and that the sparring match could not be described as “exercise”, “treatment”, or “use of facilities”. The court said that this sentence was in the nature of a recital. It was followed by a statement that the Hapkido school would not be liable for injuries, damages, actions or causes of action whatsoever. The court said a release from “any causes of action whatsoever” has usually been considered to be broad enough to constitute a general release of claims in negligence.  The wording of the release in this case was broad enough that if it was effective to bind the infant plaintiff, the claim should be dismissed.

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, referring to “claims or demands of whatsoever nature or kind”. The appellants argued that because the release did not mention specific components of the claims, it was not intended to cover these components. Canada, it was argued, could easily have listed all these individual components. The Court of Appeal said there was no principle of contractual interpretation that would support this approach. One could just as easily argue that, if the Band had intended to exclude some claims from the release, it should have insisted that they be listed as exceptions. The court also said it was irrelevant that some other land entitlement settlements might opt for a more detailed form of release. The parties are entitled to rely on very general release wording in order to avoid the risk of missing something if the claims are all listed.

6.2.2 Scope of Release – Specific Words Lacking

In the case that follows, the court found that, absent specific wording, a claim was outside the scope of a release.

Watson v. The Governing Council of the Salvation Army of Canada, 2018 ONSC 1066 (CanLII)

The scope of a release in respect of all claims that “arise out of … my employment” was held to be the employment relationship. While many events of sexual harassment alleged in the statement of claim occurred at the place of employment, and perhaps because of the employment, sexual harassment, intimidation and other improper conduct are not connected to employment. They are separate matters. As the alleged conduct fell outside of the employment relationship, specific language would need to be added to the release to bar the claim in this case.

6.2.3 Whether Specific Words are Needed to Express Limits on Scope

Decisions regarding the scope of releases often include consideration of, or reference to, the absence of specifically-stated exceptions from, or limitations on, the scope of a particular release.

As can be seen from a number of the decisions set out below, the absence of a specifically-stated exception from the scope of a release may become a factor in a court’s reasoning when the releasor intended to preserve the right to pursue a claim, but did not explicitly make clear the intention to proceed with this claim notwithstanding the signing of the release. Indeed, rather than preserving the right of the releasor to pursue a claim, it is typical for the general wording of a release to include a provision, referred to in rlaw.online as a no-claim-over clause, in which the releasor explicitly agrees not to commence or maintain a claim against any person who may claim over against the releasee.

No-claim-over clauses are discussed in Chapter 7: Releases and Potential Multi-Party Liability, section 7.5, No-Claim-Over or Indemnity Provisions of a Release. Certain of the decisions summarized in section 7.5, such as Woodcliffe Corp. v. Rotenberg, 2005 CanLII 23675 (ON CA) , application for leave to appeal dismissed, Woodcliffe Corporation v. Rotenberg, 2006 CanLII 4766 (SCC) , refer to the failure of the releasor to bargain for an exception from the claims covered by a no-claim-over clause of a release. In one of these cases, for example, the plaintiff settled a claim and gave a release in which she agreed not to commence or maintain any action in which any claim could arise against the releasee for contribution and indemnity. The plaintiff commenced an action on the basis of what she contended was a “totally separate cause of action” but which did indeed give rise to a claim for contribution and indemnity from the releasee. The court said that, at the time when the release was being negotiated and signed, the plaintiff should have tried to procure a concession regarding her right to pursue the second action. See Lee v. Back Information Services, Ltd., 2005 CanLII 38101 (ON SC) , appeal dismissed on consent, 2006 CanLII 22108 (ON CA) , in section 7.5, below.

Also, see the case law set out above in Chapter 2: Release Formation and Drafting, section 2.5.6, Reservation of Rights by Releasor. As to a costs carve-out from a release, see Chapter 10: Jurisdiction, Procedure and Remedies in Release Cases, section 10.9.9, Costs Carve-Out from Release.

Sheriff v. Apps et al, 2012 ONSC 565 (CanLII)

The plaintiff executed a release that included as releasees a company’s agents. The defendants were lawyers who acted for the company in connection with events that were the subject of this litigation. The court said it was clear that the company reasonably expected that the term “agents” in the release would cover their lawyer and the plaintiff should have reasonably expected the same. The court indicated that if the plaintiff had wanted to preserve his right to sue the lawyer, he should have made that clear by requesting the company to include a term expressly excluding the lawyer from the release. (The reasons for decision actually refer to the defendant lawyer wanting to preserve his right to sue, but presumably the court meant to refer to the plaintiff.)

Fraser Papers Inc. (Re), 2012 ONSC 4882 (CanLII)

It was open to the claimant in this case to limit or restrict the scope of release provisions so as to preserve the claim that it wished to prosecute. It did not do so and in fact language that would limit or restrict the release in the manner suggested was conspicuously absent from the release.

Shoaai v. The Attorney General of Canada et al, 2013 MBQB 110 (CanLII)

After the plaintiff’s vehicle was destroyed in an accident, he settled his action for insurance benefits and for damages in relation to an alleged breach of privacy, and he signed a release. The Master dismissed a motion for an order striking out a statement of claim subsequently issued by the plaintiff alleging that the defendants negligently investigated the accident and maliciously caused the plaintiff’s criminal prosecution. The Master said that, even though both sets of claims had their origin in the same accident, the causes of action were different. The Master went on to express reservations about the plaintiff’s apparent failure to put the defendants on notice that he intended to bring a second action before the release was executed. He said the situation was not quite the same as settling part of a claim or pursuing summary judgment on part of a claim, where the other side knows there is continuing litigation on the remaining issues. In these circumstances, where the causes of action originated in the same incident, the Master said that the plaintiff had some obligation to put the defendants on notice that, while he was agreeable to settling one part of his grievance, that did not end the matter. However, the evidence before the Master did not disclose whether the plaintiff so advised the defendants, nor was any authority provided to the Master on this point.

Disera v. Bernardi, 2014 ONSC 4500 (CanLII)

If the plaintiff had wanted to preserve his legal right to pursue a particular claim, he should have sought to preserve that claim expressly by causing some exception clause to be drafted and inserted within the otherwise broad and expansive terms of the release he executed.

Tandalla Inc. c. Lippman Leebosh April, 2016 QCCA 1145 (CanLII)

The appellant purchased all of the shares of a company, the majority shareholder of which was Mr. Elie Cohen. The appellant alleged that Cohen misrepresented or hid certain important financial information and thus defrauded the appellant in the share purchase. The appellant’s claim against Cohen was submitted to mediation which resulted in a settlement. The transaction agreement signed pursuant to the mediation included a mutual release and a no-claim-over clause. In this proceeding, the appellant sought damages based on allegations of negligence against the respondent accounting firm which issued an audit opinion regarding the company’s financial statements upon which the appellant relied at the time of the purchase. The Court of Appeal said that the appellant could have sought to retain his independent recourse versus the respondent in the transaction. There was no legal position or principle prohibiting this per se. The court referred to Boutilier c. Alexopoulos, 2010 QCCA 387 (CanLII), as an example of a case where recourse against a non-settling party was saved. In this case nothing was written, done or said to save the appellant’s recourse against the respondent. The principal of the plaintiff testified that he had always intended to sue the auditor but there was no proof of the manifestation of this intent prior to or at the signing of the transaction. Moreover, not only was the recourse not saved, but the opposite was expressed in the no-claim-over clause.

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, referring to “claims or demands of whatsoever nature or kind”. The appellants argued that because the release did not mention specific components of the claims, it was not intended to cover these components. Canada, it was argued, could easily have listed all these individual components. The Court of Appeal said there was no principle of contractual interpretation that would support this approach. One could just as easily argue that if the Band had intended to exclude some claims from the release, it should have insisted that they be listed as exceptions.

Crosstown Transit Constructors v. Metrolinx, 2018 ONSC 4650 (CanLII), affirmed on other grounds, 2019 ONCA 240 (CanLII)

In this case, the motion judge said that, if one were to focus solely on the language of the release under consideration, the applicant’s position would certainly be arguable: that is, if the parties had intended to restrict the release to particular items, as contended for by the respondent, they could have, and should have, drafted the release to make that clear. Nevertheless, taking into account the circumstances of the release and the context of a larger settlement between the parties, the motion judge did not accept the applicant’s arguments. The Court of Appeal concluded that the restriction on the scope of the release was not unclear or ambiguous, but said that, even if the language was ambiguous, it did not find any error in the analysis and conclusion of the motion judge.

6.3 Events or Claims Pre-Dating Release

The decisions below include comments about the extent to which a release or settlement agreement applied in respect of claims, events or conduct which pre-dated the release or agreement.

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 a claim for defamation can be made so long as it does not offend the release. To the extent necessary, the plaintiff may assert in the Statement of Claim certain events that pre-date the settlement agreement, but the plaintiff must use discipline and care when asserting facts that predate the settlement agreement and may be said to arise from the employment relationship or the termination of employment. In pleading, the plaintiff may not go beyond what is absolutely necessary for his claim for defamation or punitive damages; otherwise, he will over-step the limits bargained for in the settlement agreement.

Battista v. Emergis Inc., 2008 CanLII 23960 (ON SC)

The plaintiffs entered into a Provider Agreement with the defendant, under which a “Provider Number” was issued. Following the termination of the Provider Agreement, litigation ensued, a settlement was reached and a release was executed by the plaintiffs. In this subsequent litigation, allegations were made regarding “pre-settlement conduct”, but the court said that the release clearly released any claim that could have existed at the time it was executed in connection with the termination of the “Provider Number”.

Humberplex Developments Inc. v. Wycliffe Humberplex Limited, 2011 ONSC 556 (CanLII)

If, at the time of a settlement and mutual release agreed upon by the parties, there was any viable claim such as that asserted by the applicant (and in the court’s view, there was not), such claim was extinguished by the settlement and mutual release and the applicant cannot resurrect a claim extinguished by the release.

Wang v. Grace Canada Inc., 2018 BCCA 255 (CanLII) , application for leave to appeal dismissed, Danian Wang v. GCP Canada Inc. (formerly known as Grace Canada Inc.), 2019 CanLII 37490 (SCC)

The defendant terminated the employment of the plaintiff, a unionized employee, who was later denied employment insurance benefits. The employee’s union brought a grievance related to his termination. The parties settled the grievance and entered into a mutual release whereby the employee released his former employer from all claims arising out of his employment, or severance thereof, or as may otherwise have existed before the execution of the release. The employee later brought a claim alleging that his former employer “sabotaged” his EI claim by forging documents and making fraudulent representations. On an application by the defendant, the court said that the action disclosed no genuine issue for trial as a result of all claims having been released. On appeal, the Court of Appeal said that, regardless of whether the plaintiff’s claim arose from the collective agreement, his employment, or severance, the plaintiff’s pleading indicated that he had been informed in 2015 of the denial of his benefits and the existence of what he alleged were forged records of employment.  The trial judge made no palpable and overriding error in concluding that the release would cover any claims arising from those events as they would have existed or come into being before the release was signed in 2016.

HSBC Bank Canada v. 1481396 Ontario Inc., 2023 ONCA 762 (CanLII)

Certain of the defendants in this action moved to set aside a default judgment granted against them in 2009. They relied on a release executed in their favour by the plaintiff almost 10 years later in the context of other litigation. The defendants argued that the release given in the context of the settlement of two other claims made in 2012 and 2014 was broad enough to encompass the preexisting judgment debt. The motion judge did not accept this argument and the defendants’ motion was dismissed. On appeal, the Court of Appeal said that, as properly noted by the motion judge, the words of the 2019 release plainly did not refer to, or release, the 2009 action or the default judgment. The court agreed with the motion judge that if the release was intended to apply to the 2009 action and default judgment, it would at the very least have made reference to them. The court also held that the motion judge did not err in refusing to find that, by reciting the events leading to the 2009 action (and ultimately the default judgment) in the 2012 claim, the plaintiff had “asserted” those facts as part of the 2012 claim. The court agreed with the motion judge’s conclusion that there was no claim being asserted because default judgment had already been obtained well before 2012. Accordingly, the release was not “tethered to” that claim and its subsequent default judgment.

6.4 Unknown and Future Claims or Events

When the subject-matter of concern is the scope of a release, the words “future” and “unknown” are often used together. Insofar as facts and events are concerned, the words “future” and “unknown” naturally go together because, in a broad sense, future facts or events cannot be “known” with certainty. Taking the words in this broad sense, though, they do not seem to add much to each other because that which lies in the future is essentially treated as if it is unknown.

In relation to the scope of a release, a more useful approach is to distinguish between future facts or events that are anticipated and those that are unanticipated. To the extent that parties anticipate future facts or events (such as the impending closing of a transaction) at the time when a release is given, it seems reasonable to assume that they can freely and fairly bargain for a release that will apply upon the occurrence of that which they have anticipated. But the notion that a release will apply to future facts or events that were unanticipated at the time when the release was given potentially raises problematic issues. For example, depending on the circumstances, one might well question the extent to which parties working towards an agreement with respect to the terms of a release can achieve a real meeting of the minds on the implications of future events that are not anticipated by them.

Shifting the perspective from facts and events to claims and causes of action brings us to other issues about the use of the words “future” and “unknown” when the subject-matter of discussion or consideration is the scope of a release. In the Canadian case law referred to below, we see statements to the effect that specific language is required to release future claims. Assuredly, the reference to “future claims” in these statements must be understood in a particular way, because a release – whether framed in general or specific words, or both – would seem to be of little value or effectiveness if it does not preclude claims that, but for the release, might otherwise be made in the future.

Perhaps when used in the context of these cases, the word “claims” is to be understood to have a meaning in line with the description of a cause of action by the Supreme Court of Canada, namely, a set of facts that provides the basis for an action. (See Chapter 5: Interpretation of Releases, section 5.12.2, “Cause of Action”.) But if a claim, like a cause of action, is understood to mean a set of facts providing the basis for an action, then apparently a reference to “future” claims or causes of action is not all that much different than a reference to “future” facts or events. In any event, when courts say that specific language is required to release future claims, their point of concern is whether the parties intended a release of claims that might arise in the future, as opposed to claims, arising from the circumstances in which the release is given, that might be made in the future.

Future claims may well be anticipated by the parties when a release is given and, generally-speaking, it does not seem problematic that an appropriately-worded release can and will be applied to future claims that were anticipated at the time of the release. But what of future claims that were unanticipated at the time of the release? Canadian courts have often recognized that the intent of parties to a release may be to “wipe the slate clean”. (See Chapter 3: Effectiveness and Enforcement of Releases, section 3.3.2, Intent of Release to “Wipe the Slate Clean” or “Buy Peace”.) It could be said that a release will not serve the purpose of wiping the slate clean if claims are included within its scope only to the extent that they were specifically on the minds of the parties at the time of the release. In other words, the parties might have intended a release of all claims, whether known or unknown, that would or could continue to put them at odds with one another.

Even on the broadest possible view of a “clean slate”, though, the parties to a release surely cannot intend that the release will apply in respect of any and all new events that may occur in the future. For example, it defies credulity to think that parties who have agreed to a release to “wipe the slate clean” in respect of a matter involving a breach of contract could intend or expect that the release would apply to claims arising when, at some time after the release is given, the releasor’s motor vehicle collides with the releasee’s vehicle.

Lord Nicholls expounded at some length on these issues in the following passages from his decision in Bank of Credit and Commerce International SA v. Munawar Ali, Sultana Runi Khan and Others, [2001] UKHL 8, at paragraphs 27-28:

…Courts are accustomed to deciding how an agreement should be interpreted and applied when unforeseen circumstances arise, for which the agreement has made no provision. That is not the problem which typically arises regarding a general release. The wording of a general release and the context in which it was given commonly make plain that the parties intended that the release should not be confined to known claims. On the contrary, part of the object was that the release should extend to any claims which might later come to light. The parties wanted to achieve finality. When, therefore, a claim whose existence was not appreciated does come to light, on the face of the general words of the release and consistently with the purpose for which the release was given the release is applicable. The mere fact that the parties were unaware of the particular claim is not a reason for excluding it from the scope of the release. The risk that further claims might later emerge was a risk the person giving the release took upon himself. It was against this very risk that the release was intended to protect the person in whose favour the release was made. For instance, a mutual general release on a settlement of final partnership accounts might well preclude an erstwhile partner from bringing a claim if it subsequently came to light that inadvertently his share of profits had been understated in the agreed accounts.

This approach, however, should not be pressed too far. It does not mean that once the possibility of further claims has been foreseen, a newly emergent claim will always be regarded as caught by a general release, whatever the circumstances in which it arises and whatever its subject matter may be. However widely drawn the language, the circumstances in which the release was given may suggest, and frequently they do suggest, that the parties intended or, more precisely, the parties are reasonably to be taken to have intended, that the release should apply only to claims, known or unknown, relating to a particular subject matter. The court has to consider, therefore, what was the type of claims at which the release was directed. For instance, depending on the circumstances, a mutual general release on a settlement of final partnership accounts might properly be interpreted as confined to claims arising in connection with the partnership business. It could not reasonably be taken to preclude a claim if it later came to light that encroaching tree roots from one partner’s property had undermined the foundations of his neighbouring partner’s house. Echoing judicial language used in the past, that would be regarded as outside the ‘contemplation’ of the parties at the time the release was entered into, not because it was an unknown claim, but because it related to a subject matter which was not ‘under consideration’.

Of course, each case turns on the interpretation of the words used in the particular release under consideration and releases are to be interpreted in accordance with the principles and approach discussed in Chapter 5, above. The point of the commentary in this section, though, is to bring out areas of uncertainty that arise from discussion or consideration of the applicability of releases – notably, broad general releases – to “future” or “unknown” matters. Perhaps at least to some extent we encounter this uncertainty because the words “future” and “unknown” lack sufficient specificity. Greater precision – and clarity – might be achieved by distinguishing, first, between known and unknown claims arising from facts or events that have occurred as at the time when a release is given and, second, between anticipated and unanticipated claims arising from facts or events occurring after the time when the release is given.

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)

Releases are common in a variety of circumstances, including in purchase and sale agreements and where the parties have no previous relationship. The purpose of a release is typically to deal with events that are, or may be, yet to come.

Ntakos Estate v. Ntakos, 2021 ONSC 2492 (CanLII)

The court found that actions commenced by the plaintiffs in this case simply could not “overcome” the passage of time, previous litigation and broadly worded releases. The releases were broad and were intended to cover all claims regarding matters that were or could have been pleaded in an earlier action. The releases included unknown or unanticipated losses that might be discovered in the future. For example, a release of one of the defendants expressly released him from “unknown claims arising in the future with respect to all matters raised or which could have been raised in the [the earlier action].” A release in favour of another defendant addressed “not only all known injuries, losses and damages, but also injuries, losses and damages not now known or anticipated but which may later develop or be discovered, including all the effects and consequences thereof.” The court referred to the decision of the Ontario Court of Appeal in Biancaniello v. DMCT LLP, 2017 ONCA 386 for the proposition that “a release for future and unknown claims is enforceable to bar claims discovered after execution of the release, even when the release does not clearly say so”.

6.4.1 Unknown Claims or Events

As discussed above, the words “future” and “unknown” are often used together when the point of concern is the scope of a release, although by no means do these words mean the same thing. Because these words are commonly used together, the case law cannot be neatly divided between decisions about unknown claims or events and decisions about future claims or events. Nevertheless, in this section, an attempt is made to gather decisions that speak of claims or facts unknown at the time of signing of a release, while the aim of the following section is to gather decisions that speak of claims arising from future events.

The Supreme Court of Canada has made clear that, while of course difficulty can arise in deciding what wording is sufficient to encompass the unknown claim at issue in a given case, releases can encompass such claims: see Corner Brook (City) v. Bailey, 2021 SCC 29, at paragraph 27. Rowe J., who delivered the decision on behalf of the Supreme Court, noted that in Bank of Credit and Commerce International SA v. Munawar Ali, Sultana Runi Khan and Others, [2001] UKHL 8, the House of Lords unanimously agreed that it is possible for a release to include claims of which the parties were not aware at the time they signed the release. Rowe J. also noted cautionary words of Lords Bingham and Nicholls in the Bank of Credit case which signalled a need for careful attention to whether the parties to a release intended it to apply to claims of which they were unaware at the time of the release: Corner Brook, paragraphs 39-40.

The decision of Rowe J. provides further direction regarding the language needed in order for a release to encompass unknown claims. For more on this subject, see Chapter 2: Release Formation and Wording, section 2.5.2.3, Language Used to Describe the Scope of a Release.

Rowe J. concluded his discussion of releases and unknown claims with the following comments (Corner Brook, at paragraph 43):

Distinctions can be drawn between claims based on facts known to both parties (as in this case) and claims based on facts that were not known to both parties (as in Biancaniello [below]). Such distinctions may be relevant when interpreting a release and assessing whether the claim at issue is the kind of claim the parties mutually intended to release. The ultimate question is whether the claim is of the type of claim to which the release is directed. This will depend on the wording and surrounding circumstances of the release in each case. Lord Bingham’s cautionary principle from Ali should be understood not as a rule of interpretation, but rather an observation as to the issues that releases will tend to give rise to given their subject matter.

Dabbs v. Sun Life Assurance Co. of Canada, 1998 CanLII 14855 (ON SC)

In considering approval of a settlement agreement reached in a class action, the court addressed an objection that the terms of the release to be given under the agreement were broad. The court said that a release in such terms consequent upon a settlement was not unusual or unexpected, and in any event, it was subject to being interpreted in accordance with recognized legal principles. Among other things, the court said it is well established that a release will not be construed as applying to facts not known to the claimant at the time the release was drafted (referring to Blackmore).

484887 Alberta Inc. v. Faraci, 2002 ABQB 406 (CanLII)

Releases were exchanged in connection with the buyout of the defendant’s shares in the plaintiff corporation. It was alleged that, prior to the buyout, the defendant was aware of, but failed to make known, the “criminal past” of an employee. An action was commenced against the defendant for breach of fiduciary duty and the defendant argued that the releases precluded the action against her. The court did not accept this argument: since the other directors of the corporation did not know about the “criminal history”, they could not be said to have had it in contemplation when the releases were exchanged.

Umholtz v. Umholtz, 2004 CanLII 36132 (ON SC)

In this family law proceeding, the court was satisfied that the parties had reached a final settlement. On the issue of spousal support, the court was satisfied that they intended a complete release, even in the event of a future material change of circumstances. The issue considered here was what the parties intended in respect of non-disclosure. The court said that the default position is that parties to a settlement are taken to have resolved all matters that: (a) were raised in the litigation; (b) were known to the parties at the time of settlement; or (c) ought to have been known to the parties if they had exercised reasonable diligence at the time of settlement. This position is often reflected in standard release language such as the following: “all [claims] which were raised in or could have been raised in the [legal proceedings] existing up to the present time”. A broader release of claims not asserted in the proceedings, and both unknown and not reasonably knowable by a party, should surely require express agreement. A standard release in family law proceedings does not release claims based on material non-disclosure not known or reasonably knowable at the time of settlement: it is this standard position that is reflected in the language of the parties’ settlement agreement releasing “all claims whatsoever”. 

Radvar v. Canada (Attorney General), 2005 CanLII 45412 (ON SC) , appeal 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, for a loss of personal property as a result of a break-in at his apartment. 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 of any and all actions and claims howsoever arising as a result of loss of property resulting from the theft and the request for coverage under the insurance policy. Subsequently the plaintiff commenced this action for breach of privacy rights, fiduciary obligations and regulatory negligence. The court found that, when the plaintiff executed the release, he was aware that his private information had been obtained by illegal means and he knew the essential elements of the claims in this action. The plaintiff argued that he did not know the full scope of the illegal acts at the time when he executed the release. The court held that the fact that the plaintiff was lacking some information regarding the privacy breaches did not enable him to avoid the application of the release. It was enough that the nature of the breaches was known for those breaches to fall within the scope of the release. The release embraced “any and all actions” even if “not now known or anticipated but which may arise in the future and all effects and consequences thereof”.  Only a dispute that “had not emerged, or a question which had not at all arisen” would fall outside the scope of these anticipatory words (citing Albert Bloom Ltd. v. Intermetco Ltd. ).

Companies’ Creditors Arrangement Act (ON), Re, 2006 CanLII 32429 (ON SC)

The broad, general language of a release can be limited to those matters that were specifically contemplated by the parties as being the subject of the release. A dispute that has not emerged and is unknown to exist at the time of signing a release is not affected by the anticipatory words of a general release.

Gentra Canada Investments Inc. v. Lipson, 2010 ONSC 1417 (CanLII)

In this case, which did not involve a release, one party argued that the “principle governing releases” applied to preclude the assignment of a cause of action. The court said it is “well established” that a release cannot be effective in waiving a cause of action not known to the releasor.

Fraser Papers Inc. (Re), 2012 ONSC 4882 (CanLII)

A release extended to all claims existing at the date of the release, whether known or unknown, relating to all facts and circumstances in respect of a company that had filed for protection under the Companies’ Creditors Arrangement Act. Even if all of the facts giving rise to an alleged claim were not known at the time when the release was executed, the terms of the release specifically and clearly provided that it would be effective to release such claims.

Toscana Ventures Inc. v. Sundance Plumbing, Gas & Heating Ltd., 2013 ABQB 289 (CanLII)

In the ordinary course, a release cannot be effective, notwithstanding its wording, if it purports to waive a cause of action not known to the releasor (citing Tongue v. Vencap Equities Alberta Ltd. and Athabasca Realty Co. v. Foster ).

Gwininitxw v. British Columbia (Attorney General), 2013 BCSC 1972 (CanLII)

if a releasor subsequently sues on a claim of which it was unaware or which was not in the contemplation of the parties at the time of the release, the central question is whether the parties intended for unknown claims to be released. As with any contract, the parties’ intentions are assessed objectively. In order to release a party from unknown claims the language in a release must be unequivocal. It must be clear that the parties intended the release to cover unknown claims. If the language of the release is considered to extend to or cover unknown claims, the further question becomes:  is the claim part of the subject matter of the release? If so, the releasor cannot sue on that claim, even if it was unknown at the time when the release was made. In this case, the language used in a release was unequivocal with respect to whether it covered unknown claims. The language mirrored the language of the release addressed in Bank of Montreal v. Irwin The release in Bank of Montreal was deemed sufficient to cover unknown claims; indeed, it covered claims which did not exist at the time the release was made.

York University v. Michael Markicevic, 2013 ONSC 378 (CanLII)

If parties to a release intend to provide for the release of rights and the surrender of claims of which they have no knowledge, then they should use specific language which leaves no doubt that such was their intention. Further, where the party receiving the benefit of the release knew that the other party might have a claim and also knew the other party was ignorant of the claim, taking a general release without disclosing the existence of a possible claim would constitute unacceptable sharp practice for which a remedy should be provided.

O’Neill v. General Motors of Canada, 2013 ONSC 4654 (CanLII)

The claims made in this class action gave rise to an issue as to whether the applicable contractual documents allowed the defendant to effect a substantial reduction of retirement benefits for former employees after they had retired. The court found that releases contained in “statements of acceptance” signed by employees who accepted early retirement packages did not preclude their claims. In support of this conclusion, the court said, among other things, that a release can only apply to claims of which a plaintiff is aware at the time he or she signed the release. All but a few of the early retirement agreements in the record pre-dated the reductions to benefits. The early retirees could not have known that “years down the line” the defendant would reduce and eliminate their post-retirement benefits. They could not be said to have released claims in respect of such reductions.

Wood Buffalo Housing & Development Corporation v. Flett, 2014 ABQB 537 (CanLII)

In this case, the court said it is a fundamental principle of law that a party cannot release or waive claims of which it is not aware at the time the release or waiver is signed. But then the court said that such a release, given without any knowledge of the particulars, may only be effective if it also contains “an exclusive acknowledgment of the fact of non-disclosure and an explicit acknowledgement of the duty owed”. The contract before the court included an “acknowledgment of future unknowns”, in that its wording specified an express waiver and release of claims “including those without limitation that might arise”. If there were any doubt about these words extending to claims yet unknown, the words “without limitation” made it clear that they covered all claims, thereby not excluding those yet unknown, discovered or discoverable.

Syrianos et al v. Botelho, 2014 ONSC 3852 (CanLII)

The applicants sought an order appointing an arbitrator and the respondent objected to a referral of the matter to arbitration on the ground that a mutual release barred the applicants’ claims. The court did not find that the release was a bar to the claims that the applicant sought to make in the arbitration, which were not known until after the release was signed (although, as explicitly recognized in the mutual release, the respondent could plead the release as a defence).

Daniells v. McLellan, 2016 ONSC 3854 (CanLII)

The parties to an action may agree to resolve matters, both known and unknown, beyond those that are the subject of a claim.

Mildren v Mildren, 2016 ONSC 8076 (CanLII)

In the context of a disagreement about proposed forms of release, the court said that, unless a release has exceptionally comprehensive language, it applies only to claims that were known to the parties at the time that it was executed. A dispute that had not emerged, or a question which had not arisen, cannot be absorbed by the words of a general release. If the parties want to bar unknown claims, they must use clear and unequivocal language to express that intention

Biancaniello v. DMCT LLP, 2017 ONCA 386 (CanLII)

Parties may use language that releases every claim that arises, including unknown claims, but courts will require clear language to infer that a party intended to release claims of which it was unaware. The real issue in the Bank of Credit and Commerce v. Ali case, above, was not whether the general words of the release should be interpreted to include unknown claims: all the Law Lords agreed that the release covered factually unknown claims. The issue was whether it was fair to conclude that it was in the contemplation of the parties that the release included a claim for stigma damages, where such a claim was unknown at the time of the release.

Barrs v. Trapeze Capital Corp., 2017 ONSC 5466 (CanLII)

The language of a release was broad and general and provided no clear basis for an inference that the plaintiff intended to release claims of which he was unaware.

Sumas Remediation Services Ltd. v. Crowe MacKay LLP, 2018 BCSC 782 (CanLII)

In the context of an application for a determination by way of summary trial dismissing the plaintiff’s claim on the basis of a release, the court said (citing Bank of British Columbia Staff Pension Plan ) that a release will not be construed as applying to facts of which the party making the release had no knowledge at the time of execution.

Canada Bread v. Mallot Creek, 2019 ONSC 2578 (CanLII)

On appeal from a decision of an arbitrator, the court said that 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. The release could have been drafted to specifically preclude “any other claim” or “any claims that have been raised or could have been raised”, but it was not. Accordingly, it was not unreasonable for the arbitrator to interpret the release narrowly, such that it did not bar future claims which were not known to the parties when they signed the release. Further, it was open to the arbitrator to decline to impute to the plaintiff the knowledge of an insurance adjuster when considering whether a claim was “known” to the plaintiff.

LeRoy v TimberWest Forest Corp., 2020 BCSC 978 (CanLII) , appeal on other grounds dismissed, 2021 BCCA 326 (CanLII)

While the principle from Blackmore will often mean releases are construed narrowly, it does not preclude parties from agreeing to a release that bars unknown claims or antecedent claims of fraud, provided the parties contemplate such claims at the time the release is given. Although it is possible for parties to agree to release unknown claims, courts will only give effect to these words where the objective evidence—including the contract as a whole, the impugned words in their ordinary meaning in the context of the agreement, the parties’ relationship, and the relevant facts surrounding the transaction—supports this intention. The release relied on by the defendants in this case referred to “unknown” claims, but it was also limited to “disputes” that had “arisen” among the parties. The objective evidence did not support the parties’ intention to release unknown claims and the court found that the release did not include the claims being pursued in this action.

PricewaterhouseCoopers Inc v Perpetual Energy Inc, 2021 ABCA 16 (CanLII) , application for leave to appeal dismissed, Susan Riddell Rose, et al. v. PricewaterhouseCoopers Inc., et al., 2021 CanLII 58908 (SCC)

The appellant trustee in bankruptcy argued that the wording of a resignation and mutual release was not wide enough to cover unknown claims or future claims. As to unknown claims, however, the Court of Appeal said that the intent was clear: the new owners of a company were to take the company they were purchasing “as is”. The intention obviously was to relieve a former director of any claims that arose before the closing of the transaction, whether they were known or unknown, excepting claims based on fraud, criminal conduct, or deceitful conduct. The commercial efficacy of the resignation and mutual release required that it cover unknown claims.

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)

In Corner Brook, the Supreme Court clarified that a release may cover unknown claims, and does not need to particularize with exact precision the claims that fall within its scope. The question of a release’s scope ultimately depends upon its wording, and what the surrounding circumstances indicate the parties objectively intended (referring to Corner Brook).

Shannon v Shannon, 2023 ABCA 79 (CanLII)

A resolution agreement, however brief, is a contract. A release based on a settlement is also a contract. The Supreme Court of Canada said, in Corner Brook, that as to interpretation of a release, “[t]he ultimate question is whether the claim is of the type of claim to which the release is directed.” The Court of Appeal in this case added: “And not exclusively to whether the claim is known.”

Manson v Mitchell, 2023 BCSC 723 (CanLII)

A release “will not be construed as applying to facts of which the party making the release had no knowledge at the time of its execution” (citing Corner Brook and Bank of British Columbia Pension Plan ). In this way, the proper approach to interpreting releases under the ordinary principles of contractual interpretation prescribed by Sattva is consistent with the approach to releases formerly applied using the Blackmore Rule (citing Corner Brook).

6.4.2 Future Events or Claims

As indicated above, the intent of this section is to set out decisions that address the applicability of releases to claims arising from future events.

A release or waiver of claims arising from future events may have important public policy implications if it prospectively affects rights under the Canadian constitution, the Canadian Charter of Rights and Freedoms or human rights legislation. Generally, it is to be expected that an otherwise valid release will be effective if given in settlement of claims for infringement of constitutional, Charter or human rights that arise from past events. But a prospective release or waiver of such rights amounts to a contracting out of fundamental rights that may be seen to be inalienable. For case law discussing the release, waiver or contracting out of fundamental rights, see section 6.11, Release of Constitutional, Charter and Other Rights.

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.

Hallstrom v. Trans-Isle Freightways Inc., 2004 FC 1243 (CanLII) , appeal dismissed, 2005 FCA 194 (CanLII)

In this patent litigation, one issue before the court was the interpretation of the release provisions set out in two sentences of a settlement agreement. The court did not accept an argument that the two sentences were ambiguous. The purpose of the first sentence was to deal with the release of claims asserted in actions listed in the settlement agreement or under patents listed in the settlement agreement. The purpose of the second sentence was to deal with all other claims which might be asserted under foreign counterparts of U.S. patents which the parties had previously litigated in the course of their many court battles:  consistent with that purpose it released all foreign causes of action, whether or not sued upon, where the underlying issue had been resolved by U.S. litigation prior to the settlement agreement. The court said that, while it is possible to release future claims, that is, claims which could not at the time of their release even be sued upon, this would require very much stronger and more explicit language than what was found here.

York University v. Michael Markicevic, 2013 ONSC 378 (CanLII)

Courts have made clear that specific language is required in order to release future claims.

2038724 Ontario Ltd. v. Quizno’s Canada Restaurant Corporation, 2014 ONSC 5812 (CanLII)

The court found that a proposed settlement of a class proceeding was not in the best interests of the class as a whole “because of an overbroad unfair release”. In this context, the court said that, as settlements of matrimonial and other relationship litigation demonstrate, it is certainly not impossible to release future claims.

Ayangma v. La Commission Scolaire et al., 2014 PESC 18 (CanLII) , motion to dismiss appeal granted, subject to condition subsequent, Ayangma v. PEI H.Rts.Comm. & La Commission Scolaire, 2015 PECA 4 (CanLII) , application for leave to appeal dismissed, Noel Ayangma v. Prince Edward Island Human Rights Commission, et al., 2015 CanLII 81618 (SCC)

The applicant complained to the P.E.I. Human Rights Commission that the respondent School Board had discriminated against him contrary to the P.E.I. Human Rights Act. The complaint was dismissed by the Executive Director of the Commission on grounds including a finding that the applicant had executed a release preventing him from making a complaint against the School Board and “the position over which the complaint was made” was “not a new matter”. On an application for judicial review, the court said that the Executive Director ventured into a discussion of the validity of the release as it related to future claims or actions and it was this interpretation to which the applicant took the greatest objection. However, it was not the purview of the reviewing court to determine whether the Executive Director was correct in his interpretation of the release as it related to future claims of discrimination. The function of the court was to determine whether or not the Executive Director’s decision was reasonable. The court would not and should not determine the validity of the release as it related to future claims of discrimination. The court agreed that the claim made by the applicant was not a new matter and was covered by the terms of the release.

Barwin v. IKO Industries Ltd. et al, 2015 ONSC 5994 (CanLII)

The substantive law relating to the interpretation of a release stipulates that whether subsequent claims fall within the scope of those previously released requires a determination of what was “in the contemplation of the parties” when the release was given. Determining what was in the contemplation of the parties in turn requires consideration of both the words used by the parties and a broad range of surrounding circumstances. The contextual analysis must be an objective one; it matters not what a party to a release personally believed, but rather what a reasonable bystander would say was in the specific contemplation of the parties under the circumstances (citing authorities including White v. Central Trust Co. and Creston Moly Corp. v. Sattva Capital, above).

IAP Claimant H-15019 v. P. James Wallbridge, 2019 ONSC 1617 (CanLII) , affirmed on other grounds, IAP Claimant H-15019 v. Wallbridge, 2020 ONCA 270 (CanLII) , application for leave to appeal dismissed, P. James Wallbridge, et al. v. IAP Claimant H-15019, 2020 CanLII 94499 (SCC)

The respondent was a class member of an Indian Residential Schools Survivors’ Class Action that was settled by the Indian Residential Schools Settlement Agreement. The IRSSA, which established an Independent Assessment Process for claims and compensation, was approved by court order. The Settlement Approval Order contained a release and cause of action bar in favour of class action defendants and other released organizations. The respondent commenced an action against Canada and the lawyers, referred to as the Wallbridge defendants, whom he had retained to bring an IAP claim. He brought the action not because of his mistreatment at a residential school, but because of issues relating to the initial dismissal of his IAP claim. On this motion for dismissal of the action as an abuse of process, the Wallbridge defendants relied on release provisions of the approval order. The motion judge said that, on a plain reading of the approval order, the release of causes of action was restricted to factual situations which had already come to pass when the approval order was signed. The release could not and did not release causes of actions or claims relating to factual situations which had not yet occurred. The judge said that this aspect of the release was to be contrasted with the release provisions pertaining to damages, which provided for the release of “…damages…which they ever had, now have or may hereafter have, directly or indirectly…”. The motion judge said that the effect of the provisions of the approval order was to release the defendants from all damages, past, present or future, arising from causes of action or claims that had been asserted or could have been asserted, whether known or unknown. On appeal, the Court of Appeal noted that, in the motion judge’s view, causes of action and damages were treated differently in that the release specifically included future damages, but it did not include causes of action arising in the future. The decision of the motion judge was upheld on other grounds.

IAP Claimant H-15019 v. P. James Wallbridge, 2019 ONSC 1627 (CanLII)

In the Wallbridge litigation described immediately above, Canada also argued that the action was an abuse of process because, among other things, the plaintiff had released Canada from claims related to his attendance at a residential school. The court did not agree that the cause of action asserted by the plaintiff was released by virtue of the provisions of the approval order relied on by Canada.  One of the grounds for the court’s decision was that, on a plain reading of the approval order, the release of causes of action was restricted to claims that had been asserted or could have been asserted, that is, causes of action arising out of factual situations which had already come to pass when the Approval Order was signed.  It could not and did not release causes of action or claims arising out of factual situations that had not yet occurred, even if in some way related to a residential school.

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. While it may be possible for parties to release one another for wrongful acts that they may commit in the future, very clear language must be used to evidence such an intention. The release in this case was intended to be limited to claims either party could make, whether then known or not, arising from issues raised in an earlier lawsuit brought by the appellant against the respondent. It contained no language addressing separate, new and unanticipated future wrongful acts.

PricewaterhouseCoopers Inc v Perpetual Energy Inc, 2021 ABCA 16 (CanLII) , application for leave to appeal dismissed, Susan Riddell Rose, et al. v. PricewaterhouseCoopers Inc., et al., 2021 CanLII 58908 (SCC)

There was no issue in this case as to whether a release was wide enough to cover future claims as there were no such claims. Claims were asserted after the release was signed, but that did not mean they were “future claims” as that term is applied to releases. There is a distinction between claims that relate to conduct that post-dates the signing of the release, and claims advanced after the signing of the release but relating to conduct before the signing (referring to Biancaniello v DMCT LLP, above). Further, while it is questionable whether a release respecting future performance of director’s duties can be effective, no such issues were engaged here.

Jonathan Agg et al. v. John Watson et al., 2021 ONSC 3068 (CanLII)

Litigation between the shareholders of a landscaping business arose because one shareholder, Agg, believed that the other shareholder, Watson, was misappropriating funds. The litigation was settled and the parties signed a release. In this action, Agg alleged that Watson had overstated the revenue of the business and Watson brought a motion for an order dismissing the action on the basis of the settlement and release in the earlier litigation. The court said that a line of cases holds that general words in a release are limited to the things in contemplation of the parties at the time the release was signed, and do not release disputes that had not emerged, or questions that had not arisen. In the earlier litigation, the enquiry focused on improper expenses and money taken out of the business, while the allegation in this action was that (at a different time) revenue had been fraudulently inflated. The court said that the facts of this case gave rise to an issue about how specific a party’s knowledge of a claim has to be before it falls into the category of a claim that is released as opposed to falling into the category of a claim that has not emerged. The court found it was not appropriate to dismiss the action “at this early stage”.

Smith v Rutledge, 2023 ABKB 571 (CanLII)

A release of future wrongful conduct would have to be very explicit (citing Chopak v Patrick, above).

ALC v. Bergmark Guimond et al., 2023 PESC 48 (CanLII)

The plaintiff claimed damages allegedly sustained as a result of a construction project involving the removal and reconstruction of a grandstand. Pursuant to the terms of the construction management contract, the plaintiff expressly waived and released claims as of the date of total performance of the contract. The contract specifically stated that the waiver of claims included without limitation those that might arise from negligence or breach of contract. This statement expressly contemplated claims that might arise in the future and specifically identified the two types of claims – breach of contract and negligence – advanced by the plaintiff in this case. Pursuant to the terms of a cost plus contract, the plaintiff expressly waived and released claims as of the date of the final certificate for payment. This contract also expressly contemplated claims that might arise in the future and specifically identified the two types of claims made by the plaintiff in this case. The court said that the intention of the parties, as expressed in these contractual provisions, was to waive all claims, including future claims that might arise from negligence or breach of contract, as of the date of a specific event – the date of total performance of the project under the construction management contract and the date of the final certificate for payment under the cost plus contract. This certainty and predictability in the allocation of risk between the parties was also supported by the context known to both parties when these contracts were formed. The contracts were standard form agreements prepared by the Canadian Construction Association and the Canadian Construction Documents Committee for use in the commercial construction industry. On a motion for summary judgment by the defendants, the court found that there was no genuine issue requiring a trial in relation to the applicability and scope of the waivers agreed upon by the parties in the two contracts; the record on the motion allowed the court to conclude fairly and justly that the plaintiff had released its claims.

6.4.2.1 Releases in Class Proceedings and Future Claims or Conduct

Canadian courts have frequently considered arguments in class proceedings about releases that encompass future conduct. The reasoning of the courts in these cases on the issue of whether releases extend to claims arising from future events or conduct is generally aligned with the principles and propositions emerging from decisions that do not involve class proceedings. However, the arguments about releases in class proceedings tend to arise in the context of a request for court approval of a settlement agreement, so, as can be seen from some of the cases below, the release issues are viewed through the lens of the factors that the court considers when deciding whether to approve a class proceeding settlement. As stated in the Hello Baby decision summarized below (at paragraph 41): ”…the issue is not whether the releases are perfect. Further, the issue is not the scope of the releases, considered alone. The issue is whether settlement on the terms provided by the … settlement agreements – including the releases and associated provisions – are fair, reasonable and in the best interests of the class.” Class law on releases of future conduct in class proceedings is also summarized in Chapter 11: Releases in Particular Situations, section 11.1.4.1, Release of Future Conduct.

2038724 Ontario Ltd. v. Quizno’s Canada Restaurant Corporation, 2014 ONSC 5812 (CanLII)

In its reasons for dismissing a motion for approval of a settlement agreement in a class proceeding, the court found that the proposed settlement was not fair and reasonable and was not in the best interests of the class as a whole “because of an overbroad unfair release”. The court said it was fair to have class members release their existing claims against the defendants. And it would have been fair to bar claims that were a continuation of the particular existing claims. However, it was unfair to bar categorically all future claims of the types identified in the statement of claim, which was a possible interpretation of the proposed release.

Coburn and Watson’s Metropolitan Home v BMO Financial Group, 2018 BCSC 1183 (CanLII) , notices of appeal and leave to appeal quashed, Coburn and Watson’s Metropolitan Home, 2019 BCCA 308 (CanLII) , application for leave to appeal dismissed, Home Depot of Canada Inc. v. Coburn and Watson’s Metropolitan Home dba Metropolitan Home, et al., 2020 CanLII 23626 (SCC)

The court said that certain parties in this class proceeding had not provided any authority for their proposition that a release of continuing future conduct is inappropriate. The court went on to say that, indeed, the case law was to the contrary. Numerous courts have found that it is not unfair to bar claims that are based on a continuation of the conduct giving rise to the existing claims that are the subject-matter of a proceeding (citing, as an example, Quizno’s, above). But a court will be very slow to infer that a party intended to surrender rights and claims that may arise in the future by virtue of a change in the law of which the party was unaware and could not have been aware (citing Biancaniello, above, which in turn cited Lord Bingham in Bank of Credit and Commerce International SA v. Munawar Ali ). On appeal, the Court of Appeal referred to revisions that had been made to the releases at issue in order to address a concern about barring unknown future conduct. The Court of Appeal was not persuaded that the release of known existing conduct in the future was demonstrably unreasonable and it noted that there was no release of future unknown conduct not forming the subject matter of the existing Canadian class proceedings.

Bancroft-Snell v. Visa Canada Corporation, 2018 ONSC 5166 (CanLII)

It was argued in this case that proposed settlements of class proceedings should be rejected because the settlements released future conduct alleged to be anticompetitive. The court said it did not see the breadth and operation of the releases as grounds for rejecting the settlement. Releases sometimes forgive or license continuing alleged wrongdoing and the court saw the releases as appropriate for the settlement. There was nothing improper or illegal per se about the releases.

Hello Baby Equipment Inc. v BofA Canada Bank, 2018 SKQB 276 (CanLII) , applications to quash appeals granted and applications for leave to appeal dismissed, Home Depot of Canada Inc. v Hello Baby Equipment Inc., 2020 SKCA 7 (CanLII) , application for leave to appeal dismissed, Home Depot of Canada Inc. v. Hello Baby Equipment Inc., et al., 2020 CanLII 81403 (SCC)

There is no rule that precludes a release of claims based on future conduct (referring to Coburn and Bancroft-Snell as decisions in which the same view was stated). The releases in this case were broadly written. Among other things, they affected potential claims based on future conduct. They also reflected the unique characteristics of the action. However, broad releases are not unusual, and the releases in this case did not contain unprecedented provisions.

Macaronies Hair Club and Laser Center Inc v. BofA Canada Bank, 2019 ABQB 181 (CanLII) , appeals dismissed, Macaronies Hair Club and Laser Center Inc v Bank of Montreal, 2021 ABCA 40 (CanLII)

In his decision approving the settlement of a class proceeding, a case management judge rejected objections to releases of the settling defendants from future claims for continued conduct of the type that was the subject of the settlement. On appeal, the Court of Appeal said that, to the extent the impugned conduct could not be illegal going forward under the existing statutory regime in Canada, a release from future liability was innocuous because there was no prospect of future liability. That was so in respect of allegations of “illegality” made in this case, with the possible exception of a claim of “conspiracy to injure”. Accordingly, the Court of Appeal was unable to accept that the release of future conduct from liability in these settlements represented a grave injustice to the class members. Moreover, the releases had been amended in response to concerns that they included future unknown conduct within their ambit. Such amendments sought to make clear that future unknown conduct would not be released. The same revised language was approved in Alberta. This helped explain why courts below had interpreted the releases as being limited to known existing conduct in the future.

Leonard v The Manufacturers Life Insurance Company, 2020 BCSC 1840 (CanLII) , application for leave to appeal dismissed, 2022 BCCA 28 (CanLII)

An application was made for certification of a class action for the purpose of settlement and for approval of the settlement. The terms of a release set out in the settlement agreement were criticized because, among other things, they sought to forestall future claims. The objecting party relied on Quizno’s, above, where the Ontario court refused to approve a settlement agreement on the ground that it provided for a release that could be interpreted as categorically barring all future claims of the types identified in the statement of claim. The B.C. court in this case said that the language of the settlement agreement did not inappropriately forestall future claims. The release extended to the future consequences of past wrongful conduct, but it did not protect the released parties from being sued in relation to future wrongful conduct. 

6.4.2.2 Releases with Prospective Effect

In the cases below, the courts addressed the applicability of releases to claims arising from future events or damage and, in doing so, confirmed that the releases operated prospectively.

Drader v. Abbotsford (City), 2013 BCCA 376 (CanLII)

A settlement was reached in respect of an action in which it was claimed that the diversion of ditch water had caused damage to a property. A second action was commenced because, the plaintiff alleged, water damage to the property had continued. The defendant in the second action relied on the settlement of the first action, and a release given in fulfillment of the settlement, but the plaintiff argued that the release did not bar future claims arising from new damage to the property. The court said that the clear wording of the release relieved the defendant from any claim for damages arising from the diversion of water and, further, that the settlement agreement, when read together with the statement of claim in the first action, indicated that the release was intended to operate prospectively.

Wood Buffalo Housing & Development Corporation v. Flett, 2014 ABQB 537 (CanLII)

In this case, a contract included an “acknowledgment of future unknowns”, in that its wording specified an express waiver and release of claims “including those without limitation that might arise”. If there were any doubt about these words extending to claims yet unknown, the words “without limitation” made it clear that they covered all claims, thereby not excluding those yet unknown, discovered or discoverable.

  

6.4.2.3 Future Events or Claims Not Within Scope of Release

In the cases below, releases were found not to apply in respect of claims or causes of action arising from future events.

Colette v. AMV Enterprises Ltd., 2014 BCSC 8116 (CanLII)

A release of claims against an employer referred only to claims up to the date of the contract and did not refer to any future liability or contingent claim arising out of the releasor’s employment.

Andrews v. McHale, 2016 FC 624 (CanLII)

The broadly-worded operative paragraph of a release concluded with a phrase that was more specific: “for or by reason of any matter, cause or thing whatsoever, existing up to and inclusive of the date of this Release … by reason of or in any way arising or related to” the termination of an agreement and the removal of the applicant as the director of a company. The respondents argued that the concluding phrase did not modify the broad language of the release. The court considered this to be a strained interpretation of the language of the release. To accept the respondents’ interpretation would mean that the broad language was completely unqualified in time, such that even claims arising from future events would be released. The concluding phrase served to qualify the breadth of the release.

Flintoff v. Crown William Mining Corporation, 2016 ONCA 86 (CanLII)

A release expressly applied to claims “for any matter whatsoever from the beginning of time up through the effective date of this agreement”. Causes of action relating to the exercise of a “Put-Right” option in an asset purchase agreement did not arise until well after the effective date of the release agreement. The release agreement was dated April 19, 2011 and the Put-Right option could not be exercised until January 22, 2013.

Bykerk v. Kapalka Estate, 2017 BCSC 655 (CanLII)

This action involved a claim under the Wills, Estates and Successions Act in respect of the estate of Bernard Kapalka. The plaintiff, who was the child of the deceased, sought an order that the deceased had left a Will that did not make adequate provision for her proper maintenance and support. A release executed by the plaintiff when Mr. Kapalka was alive (in respect of claims arising out of or relating to issues that were the subject of an action and counterclaim) was not a bar to the Wills, Estates and Successions Act claim: such a claim could not arise until Mr. Kapalka died leaving a will.

Freeman v. Canadian Natural Resources Limited, 2018 ABQB 310 (CanLII)

The Master found the scope of a release signed by the plaintiff to be broad. Even though the release was broad, certain new allegations that the plaintiff sought to raise were “post-release” and on their face were not covered by the release. The plain wording of the release covered everything in the plaintiff’s action, except for claims that appeared to relate to post-release conduct (if proven).

Applied Industrial Technologies, LP v. Sirois, 2018 ABQB 818 (CanLII)

The court considered the interpretation of a release of claims arising out of “any cause, matter or thing” whatsoever “existing up to the present time”. A claim based on a series of events that did not exist when the release was delivered did not fall within the “temporal restriction” of the release.

6.5 Claim For Non-Compliance with Agreement Containing Release

The issue of concern in the decisions summarized below is whether a release included in an agreement (or an order approving an agreement) will apply as a bar to claims for failure to comply with the agreement itself. This issue arises, of course, because if a release included in an agreement operates as a bar to claims based on non-compliance with the agreement, then the release stands in the way of the enforcement – and thus the effectiveness – of the very agreement in which it is found.

A related issue is whether a release is open to challenge on the ground that it is, or forms part of, a contract and the party relying on the release has breached that contract or has failed to perform its obligations under the contract. For case law on this issue, see Chapter 9: Challenging a Release, section 9.17, Breach or Non-Performance of Contract by Releasee.

John Doe v. Ontario, 2009 ONCA 132 (CanLII)

The plaintiff entered a Witness Protection Program and signed a Letter of Agreement in which he gave a release of claims arising out of his role as a witness. Following the termination of his participation in the Program, the plaintiff brought an action on a number of grounds, including breach of contract and negligence, and the defendants relied on the release. The action was dismissed on a motion for summary judgment and an appeal from this decision was dismissed. The Court of Appeal said that, in interpreting the release as a blanket bar against any claims by the plaintiff “arising out of the Witness Protection Program”, it was unclear whether the motion judge was including any claims for breach of the very agreement that contained the release. To the extent that the motion judge found that the release negatived the effect of the Letter of Agreement by precluding the plaintiff from enforcing the terms of the agreement itself, he was in error. However, because of the conclusion that there was no genuine issue for trial, the Court of Appeal said that nothing turned on any error that may have been made.

O’Neill v. General Motors of Canada, 2013 ONSC 4654 (CanLII)

The claims made in this class action gave rise to an issue as to whether the applicable contractual documents allowed the defendant to effect a substantial reduction of retirement benefits for former employees after they had retired. The court found that releases contained in “statements of acceptance” signed by employees who accepted early retirement packages did not preclude their claims. In support of this conclusion, the court said, among other things, that the Court of Appeal has made clear that a release cannot bar a claim in respect of a breach of the very agreement that contains the release. The Court cited the decision of the Court of Appeal in John Doe, above, as well as the Superior Court decision in Burgener v. Haldimand (section 2.1.3 above).

First Queensborough Shopping Centres Limited v. Wales McLelland Construction Company (1988) Ltd., 2014 BCSC 764 (CanLII)

In this case, the court considered an appeal from a decision with respect to whether a waiver and release clause in a construction contract extinguished the respondent’s entitlement to interest on unpaid accounts. The appellant was a shopping centre developer and the respondent, identified in the contract as the design builder, operated a construction business. The release clause in the contract provided that, as of the date of the final certificate of payment, the design builder released the owner from all claims against the owner, subject only to two specified exceptions. The appellant argued that the release clause unambiguously extinguished all claims existing at the date of the final certificate for payment, including claims for interest. The respondent argued, among other things, that the appellant’s interpretation of the release clause made no commercial sense: the appellant’s interpretation would mean that all of the appellant’s obligations, including the monies due under the final payment certificate, would be extinguished at the date of that certificate. The court said that the appellant’s literal interpretation of the clause was completely against rational commercial principles and good business sense and, when considered in light of the entire contract, the meaning contended by the appellant did not objectively reflect the parties’ intention. The contract required the appellant to pay the full contract price at the end of the contract; this amount should rationally include the accrued interest and any amounts that became due after the final payment certificate was issued. The parties could not have intended that triggering the appellant’s obligation to pay the contract price would simultaneously extinguish the obligation to pay the full contract price.

IAP Claimant H-15019 v. Wallbridge, 2020 ONCA 270 (CanLII) , application for leave to appeal dismissed, P. James Wallbridge, et al. v. IAP Claimant H-15019, 2020 CanLII 94499 (SCC)

The respondent was a class member of an Indian Residential Schools Survivors’ Class Action that was settled by the Indian Residential Schools Settlement Agreement. The IRSSA, which established an Independent Assessment Process for claims and compensation, was approved by court order. The Settlement Approval Order contained a release and cause of action bar in favour of class action defendants and other released organizations. The respondent’s initial IAP claim was dismissed because his evidence was found not sufficiently reliable to meet the burden of proof. After the respondent retained a new lawyer and a new hearing was held, he was awarded significant compensation. The respondent commenced an action, not because of his mistreatment at a residential school, but because of issues relating to the initial dismissal of his IAP claim. The Court of Appeal agreed with the motions judge that compliance by Canada with its obligations under the IRSSA would not be encompassed by the release. As the motion judge said, it could not have been within the reasonable contemplation of the parties that class members would give up any rights they could have arising from Canada’s failure to fulfill its obligations under the IRSSA or the Settlement Approval Order. The respondent’s claims were not barred by the release.

Rees v. Shannon, 2020 ONSC 3633 (CanLII)

On a motion for summary judgment dismissing claims made by the respondent, the applicant argued that, contrary to the release included in a domestic agreement, the respondent was seeking trust remedies and damages for breach of contract. The motion judge said that, while the applicant argued that the release clause precluded a claim for damages for breach of the agreement, he could not point to the words where such a release could be found, nor could he explain how a contract can pre-emptively release a claim for damages for the breach of that very same contract.

Levesque v. Edmonton Regional Airports Authority, 2022 ABQB 411 (CanLII)

It makes little commercial sense for a party to a contract to agree to waive all claims it might have against the other party as that would effectively preclude any claim for breach of contract. The beneficiary of the release could breach the contract with impunity.

Smith v Rutledge, 2023 ABKB 571 (CanLII)

It would be highly problematic to produce a release that expressly contemplated absolving liability for future acts designed to frustrate the very settlement that the release is part of.

6.5.1 Claim in Respect of Transaction of which Release Forms a Part

Much like the decisions above which cast doubt on whether a contract can pre-emptively release claims for breach of that very contract, the decision below indicates that it is illogical for a release forming part of a transaction to release a party from obligations arising as part of that transaction.

L. & V. Enterprises Ltd. v Dave’s Diesel Ltd., 2022 SKQB 87 (CanLII)

It would be uncommon and illogical for a release that forms part of a transaction to release a party from obligations arising as a part of that very transaction. For example, in share sale transactions it is common for a release of the outgoing directors to be provided, irrespective of whether they also were among the selling shareholders. The principals among the selling shareholders will generally be required by the agreements to provide a non-competition agreement and/or a non-disclosure agreement concerning information confidential to the business. Normally there will be a carve-out from the release to cover related agreements, but even if no carve-out is present, it would be extreme and illogical for a selling shareholder to advance a position that his or her obligations under the non-competition agreement and non-disclosure agreement were released by the release forming part of the same transaction.

6.6 Greater or Different Injuries or Damages

The decisions in this section deal with the applicability of a release to claims based on injuries or damages suffered by the releasor that are greater or different than what was known or expected at the time when the release was given.

Canadian courts have also addressed whether the emergence of injuries or damages that are greater or different than expected can be relied on as a ground for challenging the validity or enforceability of a release. In this regard, see Chapter 9: Challenging a Release, section 9.2, Injuries or Damages Greater or Different Than Expected.

Hampshire Holdings Ltd. v. Surrey (City of), 1996 CanLII 3454 (BC SC)

The plaintiff in this case and the third party South Surrey Hotel Ltd. were parties to earlier litigation that was settled. The plaintiff had given a comprehensively-worded release to South Surrey Hotel that contained a no-claim-over clause in which the plaintiff agreed not to make any further claim or to take any further proceedings in respect of any matter which was the subject of the release against any other person, corporation, or other legal entity who or which might claim contribution or indemnity from South Surrey Hotel. The court found that, inasmuch as the defendant in this action was entitled to join South Surrey Hotel as a third party “arising from the subject matter of the earlier compromised action”, the plaintiff was precluded from litigating this action. The court said it was of no avail to the plaintiff that it sought different damages in this action from those which it sought in the earlier action that was “consensually discontinued” since the factual foundation in both actions was the same.

Taske Technology Inc., v. Prairiefyre Software Inc., 2004 Can LII 66295 (ON SC), appeal dismissed, [2005] O.J. No. 2683 (Div. Ct.)

On a motion for partial summary judgment dismissing the plaintiffs’ claims against the defendant Teasdale, the plaintiffs argued that a release given in connection with the settlement of earlier litigation did not prevent them from pursuing their claims. The Master said that, in effect, the injury caused by Teasdale’s actions was known, it was just that the extent of the harm was not known, and the case law indicates quite clearly that this is not enough to avoid a release. The Master cited authorities for the proposition that mistake as to the extent of an injury is not a ground to set aside a release.

Roussy v. Red Seal Vacations Inc., 2011 SKCA 116 (CanLII)

In this case, it was argued that a settlement agreed to by a proposed plaintiff in a class proceeding was incomplete, in that she received a refund of her purchase price for a vacation but she sought to claim punitive and other damages. The court said that the question is not whether the proceedings advance a claim more substantial than the amount of the settlement, but whether the settlement was broad enough to cover the new and larger claims. The court held that the settlement was broad enough to do so.

Thandi Group Holdings Inc. v. Royal Bank of Canada, 2011 BCSC 147 (CanLII)

The court concluded that all of the claims in this case against the defendants Royal Bank and Horton were within the contemplation of the parties at the time of a settlement and a release executed by the Thandi Group. The plaintiffs argued that the release did not address environmental damages suffered by the Thandi Group after the execution of the release. However, nothing in the affidavit evidence before the court or in the submissions suggested that the costs of environmental remediation were unknown to the Thandi Group at the time of the release.

6.7 Parties Protected/Third Party Beneficiaries

Canadian case law on the scope and application of releases is not limited to decisions about the extent to which particular claims are captured by a release. There are many decisions that deal with the extent to which the protection of a release extends to others beyond each specifically-named releasee. Canadian courts have also dealt with issues about whether, in addition to specifically-named releasors, other parties are bound to the terms of a release as releasors. The issue here is the scope of a release in extending protection to parties as releasees. Decisions regarding the particular parties bound to the terms of a release as releasors are set out in section 6.8 below.

Of course, the scope of protection afforded by a release to parties in addition to each specifically-named releasee will depend on the words of the release under consideration in each case. Releases commonly include an expansive description of the releasee, referring to agents, successors, assigns, and so on, of the named releasee. The interpretation of words used in this context, such as “agents” or “successors and assigns”, is discussed above in Chapter 5: Interpretation of Releases, section 5.12.6, Words Used to Describe Releasor and Releasee.

In addition, the law of privity of contract often plays a role in these cases. Decisions that look to expectations, circumstances and terms of a release when addressing the parties protected by the release are set out in section 6.7.1. Decisions that draw on case law regarding privity of contract principles are set out in section 6.7.2.

In Canada, it is very common for releases to include a provision referred to in rlaw.online as a no-claim-over clause. Generally, a no-claim-over clause says that the releasor will not commence or maintain an action against any person who might claim over against the releasee. Given the agreement of the releasor not to commence or maintain an action against a person who might claim over against the releasee, a no-claim-over clause could be seen to afford the protection of a release to any such person who, if called on to defend a claim by the releasor, would be in a position to make a claim over against the releasee. The notion that a no-claim-over clause extends benefits of a release to others who are not parties to the release is touched on in some decisions dealing with no-claim-over clauses. See Chapter 7: Releases and Multi-Party Liability, section 7.5, Claim Over or Indemnity Provisions of a Release.

When a waiver or release of claims that might arise during participation in a particular activity or event is required to be signed in advance of participation, the intent of the parties who look to rely on the release is to gain anticipatory or pre-emptive protection from claims that might arise during the activity or event. Case law on such releases is gathered in Chapter 8: Anticipatory or Pre-Emptive Releases. More specifically, cases on the parties protected by such a release are to be found in section 8.5.5, Parties Protected by Pre-Emptive Release.

6.7.1 Parties Protected – Expectations, Circumstances and Terms of Release

As stated, the following are decisions in which Canadian courts have looked to expectations, circumstances and terms of releases when addressing the parties protected by the releases.

Buffalo v. Canada (Minister of Indian Affairs and Northern Development), 2002 FCT 1299 (CanLII)

The plaintiffs Andrew Mark Buffalo and the Samson Cree Nation each made claims in respect of sums of money held by Canada in “a suspense account which originally had its origin in funds held by Her Majesty in trust for the benefit of the Band”. The Band Council had directed the Minister of Indian Affairs and Northern Development to make certain per capita distributions to Band members who were members of the Band during a specified period. Buffalo had entered into an agreement in which he released the Band from all claims that he might have in respect of per capita distributions. The court said it was quite clear that the agreement could not be set up against Buffalo to defeat his claim to the funds which the Crown was holding. Among other things, the agreement was a waiver of Buffalo’s rights against the Band, but his claim was not against the Band; his claim was against the Crown for funds which the Crown was holding in trust for the Band and which, upon a proper direction, it was henceforth holding in trust for Buffalo. The agreement, the waiver and the release, while they might have properly released the Band, did not release the Crown from the obligation to pay.

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. The Court of Appeal said it was not at all plain and obvious that the release was meant to include the employees: absent the clearest of cases, which this was not, the position of the employees was properly the subject of a defence that should be pleaded and established as evidence. The Court of Appeal also discussed case law on the relaxation of the privity doctrine – see section 6.7.2, below.

Neinstein v. Marrero, 2007 CanLII 13939 (ON SC)

In this case, the wording of a proposed release included the “assigns, partners, employees, solicitors and agents, officers, directors” of the parties. The court said that the general expectation when one drafts a general release is to include such persons; their close relationship to the parties makes their inclusion natural. It is standard practice to infer from language of a settlement agreement calling for a “Full + Final Mutual Release (General)” that the successors, assigns, etc. of the parties will be included as releasees. This is an accepted implied term of an agreement to enter into a general release. Otherwise, the parties to the release risk losing the finality which they seek.

Waterloo (City) v. Ford, 2008 CanLII 436 (ON SC)

The City of Waterloo entered into a financing arrangement with MFP Financial Services Ltd. in connection with the funding of a new sport and recreation project. The representative of MFP primarily responsible for negotiations on behalf of MFP was David Robson. The representative of the City in the negotiations with MFP was John Ford, the City’s Treasurer and Chief Financial Officer. By agreement, MFP assigned its rights under the financing agreement to Clarica Life Insurance Company. The City learned that the ultimate cost of the financing would be more than twice what the City had understood the cost to be. The City brought this action against Ford. Earlier, the City had commenced an action (the MFP action) against MFP, Clarica and Robson. The MFP action was settled and minutes of settlement were executed. The minutes of settlement included a release which, as stated by the court in its decision in this (Ford) litigation, referred only to the corporate parties as releasing each other: it did not refer to directors, officers, employees or agents of the corporate parties. The City also brought an action (the Wolfraim action; see Waterloo v. Wolfraim, above) against a number of Clarica employees and MFP employees. In respect of a motion to strike the statement of claim in the Wolfraim action, the Ontario Court of Appeal said it was not at all plain and obvious that the release entered into by the corporate parties in the MFP action was meant to include the employees of MFP. In its decision on a motion to strike the statement of claim in this (Ford) action, the court referred to the conclusion of the Court of Appeal in the Wolfraim action that it was not plain and obvious that the minutes of settlement in favour of MFP were meant to release the MFP employees and said, if so, it was even less obvious that those minutes of settlement in favour of MFP were meant to release Ford. Given that the Court of Appeal found that the release did not necessarily cover the MFP employees, it could not be found on a motion under rule 21 of the Ontario Rules of Civil Procedure that the words in the release necessarily covered others such as Ford. As well, the claims and causes of action asserted against Ford were not the same claims as were asserted against MFP in the MFP action.

Webster v. BCR Construction, 2012 ONSC 2217 (CanLII) , appeal on other grounds dismissed, Webster v. B.C.R. Construction Incorporated, 2014 ONSC 5657 (CanLII)

The plaintiff purchased a lot in a property development, moved a house to the lot and completed a rebuild of the house. The defendant, which was the property developer, claimed that the plaintiff had failed to comply with restrictive covenants on the lot purchased by plaintiff. The plaintiff relied on a release given by the defendant to the original purchasers of the lot, the plaintiff’s predecessors in title, in respect of all covenants arising out of the agreement of purchase and sale with the original purchasers, together with many rights and causes of action that each party might have against the other. The release was binding on the “…assigns of all parties executing the same”. The court noted that the restrictive covenants arose by operation of the Land Titles Act. They were registered against all of the lots within the development and not in respect of any particular lot. The defendant did not have the power to modify or discharge the restrictive covenants without first bringing an application to vary or discharge a covenant. The plaintiff’s interpretation of the meaning of the release was over-reaching. Once the original purchaser’s agreement of purchase and sale was completed there was nothing left to assign. Further, there was no evidence before the court as to the intention of the parties to the releases that the release included a subsequent transfer of the property.

Disera v. Bernardi, 2014 ONSC 4500 (CanLII)

No doubt there are circumstances where a non-party may indirectly obtain the benefits of a mutual release executed by the parties to a settlement. But in order for such benefits to be extended to non-parties, one of the legal pre-conditions that must be established is that it was the intention of the parties that the benefits of the contract be unconditionally extended to the non-party who seeks to rely on the contract.

1369521 Ontario Inc. v. Pension Fund Realty Limited, 2014 ONSC 6490 (CanLII)

The plaintiffs reached two separate settlements with certain of the defendants in this case and provided releases to these defendants which included no-claim-over clauses. The other defendants, referred to by the court as the Liao defendants, cross-claimed against the settling defendants claiming contribution or indemnity for any amounts for which the Liao defendants might be found responsible to the plaintiffs and moved for an order striking the action as an abuse of process. The court found that the Liao defendants had no standing to bring such a motion. The standing of the Liao defendants depended on their entitlement to assert the benefit of the releases, but the language of the releases contained no language that assisted the Liao defendants in their argument that the parties to the releases intended that the Liao defendants would also be beneficiaries of the releases. The Liao defendants relied on certain cases in support of their assertion that they were entitled to rely on the releases as third party beneficiaries. The court noted that, insofar as there appeared to be such authority, each case relied heavily on its own facts. The court could not discern a general recent trend either in favour of allowing third parties to rely on releases executed by co-defendants, as the Liao defendants suggested, or in favour of a narrow interpretation of releases to permit plaintiffs to continue to pursue non-settling defendants, as the plaintiffs suggested. The cases relied on by the Liao defendants related to releases in which the third party was either specifically identified as a party being released or fell within a class of persons generically described in the release as “releasees”. In this case, the releases did not specifically name the Liao defendants as “releasees” and there was no category of “releasee” named generically into which the Liao defendants fell.

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 held that a release applied to a company not named in it that was not incorporated when the release was given. When the release as a whole was properly construed, the company was captured by the definition of the parties encompassed by the release. This result made practical and commercial sense, because it would be bizarre if a person could circumvent the ambit of a release simply by establishing a nominee company in his or her stead.

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 it was reasonable to include her in the release.

Tandalla Inc. c. Lippman Leebosh April, 2016 QCCA 1145 (CanLII)

The trial judge found that the defendant accounting firm came within the meaning of the word “representatives” in a release which was given in favour of a specifically-named releasee “his representatives and attorneys”. She said the court could look to different clauses of the contract that contained the release, as well as to the preceding documents and the behaviour of the parties, to determine their intention at the time. On appeal, the releasor argued that as a matter of law the accounting firm could not be a representative of the named releasee because it performed the role of auditor and as such was independent, given the very nature of the auditor’s function. The Court of Appeal said that the interpretation of the release by the trial judge to include the accounting firm as a “representative” was a question of fact and, even if this interpretation was erroneous, it was not determinant of the issues on the appeal.

Sew Cozzi Ventures Inc. v. Apex Outdoor Innovations Corp., 2017 BCSC 481 (CanLII)

This litigation arose from business ventures which Jeffrey Seip and Chun Chich Chen entered into through various corporate entities. In one of two actions which were tried together, Seip and Sew Cozzi Ventures Inc. were plaintiffs and the defendants included Chen and Apex Outdoor Innovations Corp. The claims in the Sew Cozzi action involved allegations of breaches of contract and fiduciary duty in relation to three alleged agreements, one of which was an unwinding agreement among parties including Seip and Chen relating to the corporate re-organization of Apex. The court said that the unwinding agreement was an integral part of a re-organization through which Seip relinquished his shares in Apex, with the result that Chen secured control of the company. The unwinding agreement contained a release and, in clause 16 of the agreement, the parties agreed, personally and through their control of companies including Apex and Sew Cozzi, to do such things and to sign such documents as might be required to give full effect to the agreement. The court said that the operation of clause 16 would prevent Chen from advancing a claim against Seip through the vehicle of Apex. However, the parties were aware that Seip conducted his business through Sew Cozzi, which was not a party to the agreement and was not referred to directly or by necessary implication in the terms of the release. The court concluded that a claim by Apex against Sew Cozzi did not fall within the terms of the release.

Daum v Borsuk, 2020 BCSC 2013 (CanLII)

Defendants named in this proceeding were not parties to a release given in connection with the settlement of a property dispute, but they were entitled to assert its protections as third party beneficiaries under the release. First, certain defendants were entitled to rely on the release as a result of an agency relationship with the releasee. Likewise, because of an indemnity agreement from the releasee, other defendants were entitled to rely on the release. Second, any objective interpretation of the settlement documentation, particularly the consent dismissal order and release, made it clear that both the plaintiff and the releasees mutually intended to end the property dispute once and for all. Third, the impugned activities of the defendants fell squarely within the scope of the settlement. The plaintiff and the releasees objectively intended the release to cover all issues in the property dispute including any involvement by or complaints against these defendants.

Herb Fournier v. J. William Collette, 2020 NBQB 122 (CanLII)

The plaintiff brought an action against a lawyer, Murphy, who had represented him in connection with certain proceedings. The plaintiff also made a complaint against Murphy to the Law Society of New Brunswick. Murphy reported the action to his insurer, the Professional Liability Reserve Fund, which is administered by the Law Society of New Brunswick. The Fund retained the defendant in this action, Collette, to defend Murphy. The plaintiff and Collette reached a settlement of the action against Murphy and the plaintiff signed a release. The release was in favour of Murphy, his professional corporation and the Fund, referred to in the release as “Professional Liability Reserve/Fond de Réserves pour la Responsabilité Professionnelle, Law Society of New Brunswick – Barreau du Nouveau-Brunswick”. In this action against Collette, the plaintiff argued that, when he signed the release, he was duped into releasing the Law Society and its agents in respect of any matter pertaining to his complaint against Murphy. The court said it was clear that there were three persons/entities being released. While, admittedly, the legal name of the Fund “would seem to include” the words “Law Society of New Brunswick”, the Law Society was not included in the release. 

Sharif v. Shaikh et al., 2021 ONSC 6834 (CanLII)

On this summary judgment motion, the moving party defendants were a real estate agent, Patel, and the company he worked for, Homelife. The moving party defendants relied on a release signed by the responding party defendants. The release said that the responding party defendants released Patel and “respective officers, directors … insurers, heirs and assigns” but it did not explicitly name Homelife. The responding party defendants argued that the release did not extend to Homelife. The court noted that the release identified the scope of claims released to include counterclaims, crossclaims and claims over. Moreover, it included a no-claim-over clause. If the release were limited to Patel, and Homelife remained in the crossclaim, Homelife could claim over against Patel, and the court would be faced with a motion seeking a dismissal of the crossclaim against Homelife on the basis that the responding party defendants had a contractual obligation to Patel not to sue Homelife. The no-claim-over clause referred to “the corporations and individuals discharged by this Release.” The first paragraph of the release also referred to “directors,” and “officers.” The language suggested that Homelife – the only corporation involved in the relevant dealings – was contemplated to be covered by the release. The release also provided protection for “insurers” and Patel and Homelife had the same insurer. The court said that a practical, common sense approach to understanding the parties’ intention, reading the release as a whole, and in the context of the surrounding circumstances, led to the conclusion that the release conferred protection on Homelife, as an entity contemplated by the release, by operation of the crossclaim provision, and by the release of the insurer.

Belfor (Canada) Inc. v Drescher, 2021 BCSC 2403 (CanLII)

After experiencing a flood at her home, the defendant authorized the plaintiff to perform repair work. The plaintiff commenced this action for money owing in respect of the work and the defendant argued that the work was deficient. The defendant had signed a release with respect to all of the repair work undertaken by one of the plaintiff’s subcontractors, Craftsman’s Touch. In the release, the defendant agreed that “[t]he repairs to items on [her] claim [had] been repaired to [her] satisfaction” and she released The Craftsman’s Touch, its assignors and assignees, “from further responsibility for repairs to [her] claim”. The defendant argued that the release could not be relied upon by the plaintiff and, among other things, that the plaintiff had not led any evidence to establish that it was an assignor or assignee under the release. The court noted that, whether or not the release was applicable to the plaintiff, the defendant had clearly agreed that it applied to a specific list of work. In addition, the court found that the release “expressly released Craftsman’s Touch and its assignors and assignees (i.e., Belfor)” from further responsibility for repairs to the defendant’s claim. The defendant’s claims related to many of the items that she expressly released. These had been detailed and the defendant was aware that Craftsman’s Touch was one of the plaintiff’s subcontractor’s undertaking the repair work.

6.7.2 Parties Protected – Privity of Contract

At a high level, the import of the doctrine of privity of contract is that a contract cannot confer rights or obligations on a third party. There are principled exceptions to this doctrine, as explained by the Supreme Court of Canada in Fraser River Pile & Dredge Ltd. v. Can-Dive Services Ltd., 1999 CanLII 654 (SCC) . In that case (at paragraph 31), the court referred to the “emphasis” in London Drugs v. Kuehne & Nagel, 1992 CanLII 41 (SCC) “that a new exception first and foremost must be dependent on the intention of the contracting parties”. Thus, the court said, “the determination in general terms is made on the basis of two critical and cumulative factors”.

The two critical factors set out in Fraser River are: (1) whether the parties intended to extend the benefit in question to the third party seeking to rely on a contractual provision; and (2) whether the activities performed by the third party seeking to rely on the contractual provision are the very activities contemplated as coming with the scope of the contract, as determined by reference to the intentions of the parties.

Orlandello v. Nova Scotia (Attorney General), 2005 NSCA 98 (CanLII)

In Fraser River, above, the Supreme Court extended the exception to the privity requirement which had been introduced in London Drugs Ltd. v. Kuehne & Nagel. The Supreme Court referred to two critical and cumulative factors: (a) Did the parties to the contract intend to extend the benefit in question to the third party seeking to rely on the contractual provision? and (b) Are the activities performed by the third party seeking to rely on the contractual provision, the very activities contemplated as coming within the scope of the contract? The release in this case unambiguously satisfied both conditions from Fraser River. First, while the defendant Nova Scotia was not party to the release contract, the release discharged all of the plaintiff’s claims against “all other persons”, which included the Province. Second, the release discharged those claims “resulting, or to result from a certain loss which happened on or about July 21, 1999″ – the incident giving rise to the claim.

Radvar v. Canada (Attorney General), 2005 CanLII 45412 (ON SC) , appeal 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. 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. Subsequently the plaintiff commenced this action against the investigators, among others, for breach of privacy rights, fiduciary obligations and regulatory negligence. The plaintiff’s position was that the investigators could not benefit from the release because they were not parties to it. The court concluded that the facts of this case represented an exception to the rule of privity of contract, stating that the Supreme Court of Canada had modified basic privity of contract doctrine by introducing ‘principled exemptions’ to that doctrine to conform to the intentions of the parties and commercial reality. The investigators met the first part of the test for the principled exception because they were acting as agents of Chubb when they obtained the plaintiff’s personal information and the release specifically provided that it applied to Chubb’s agents. The second part of the test was met because the activities complained of against the investigators fell within the scope of the release.

Waterloo (City) v. Wolfraim, 2007 ONCA 732 (CanLII) , reversing Waterloo v. Wolfraim, 2006 CanLII 26166 (ON SC)

According to the Court of Appeal, it was at least an open question whether the common sense rationale that informs the relaxation of the privity doctrine in cases such as London Drugs and Fraser River should apply in cases like this, where certain of the defendants relied on a release given in a previous action against their employer, but the conduct of the employees was complete when the release was executed and it consisted (allegedly) of quasi-criminal conduct, outside the scope of their employment, for personal gain at the expense of their employer.

Dawson v. Tolko Industries Ltd., 2010 BCSC 346 (CanLII)

In this case, the court considered whether the doctrine of privity of contract prevented certain defendants, referred to as the Towers defendants, from relying on releases signed by the releasing plaintiffs. The court said that, as a rule, the doctrine of privity provides that a contract can neither confirm rights nor impose obligations on third parties. In Karroll v. Silver Star , the court set out the four requirements that must be met by a third party intending to rely upon the benefit of a release: a) it must be clear from the release that the third party is intended to be protected by the provisions which limit liability; b) it must be clear from the release that the contracting party is contracting not only on its own behalf but also on behalf of its agents; c) the contracting party must have authority from the third party to contract for a release of liability on its behalf; and d) the third party must have given consideration for the release. The Towers defendants could not meet the final three of these requirements on the evidence in this case. The Towers defendants also relied on the principled exception to the privity doctrine first considered in London Drugs and explained in Fraser River. However, on a proper interpretation of the releases, the parties did not intend to extend the benefit of the releases to third parties. Further, the activities of the Towers defendants were not those the parties contemplated as coming within the scope of the releases at the time of their formation. The court found that the doctrine of privity applied to prevent the Towers defendants from obtaining the benefit of the releases.

Zelsman v. Meridian Credit Union, 2011 ONSC 1680; Zelsman v. Meridian Credit Union Limited, 2012 ONCA 358 (CanLII) , application for leave to appeal refused, Francine Zelsman also known as Francine Kerdman also known as Francine Zelsman-Kerdman v. Meridian Credit Union Limited et al., 2012 CanLII 76968 (SCC)

After the termination of her employment, the plaintiff signed minutes of settlement with her employer. The minutes of settlement included a release by the plaintiff of claims against her employer, which also provided that the plaintiff released the Great West Life Assurance Company from all claims including claims relating to benefits (including short-term and long-term disability benefits). Great West Life relied on the release in defence of an action by the plaintiff for payment of disability benefits. The motion judge discussed the Fraser River decision and the principled exceptions to the doctrine of privity of contract. She determined, notwithstanding the plaintiff’s assertion of subjective intent, that the parties intended to extend the benefit of the release to Great West Life and that the activity performed by Great West Life (the provision of disability benefits) was the very activity contemplated as coming within the release. This decision was upheld by the Court of Appeal, which said that it agreed with the very thorough and well-reasoned analysis of the motion judge.

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 other was in law responsible” with respect to occurrences insured against or required to be insured against by the releasing party. The Court of Appeal said that the respondent, a contractor engaged by the landlord to perform construction work at the mall, could only claim the benefit of the release and waiver if it fell within the test set out in Fraser River. The lease extended the benefit of the waiver of subrogation to those for whom the landlord was in law responsible and the first task for the court was to determine whether the respondent was a person for whom the landlord was “in law responsible”. Applying ordinary principles of contract interpretation, the Court of Appeal concluded that the landlord was in law responsible for the respondent. It rejected the argument that, if it were the intent of the parties that the release was to extend to the parties’ “officers, agents, servants, employees, contractors, customers or licensees” then they would have used that wording, and not the words “those for whom the other is in law responsible”. As to the “second prong” of the Fraser River test, the activities performed by the respondent were activities contemplated as coming within the scope of the release and waiver.

Ayangma v. P.E.I. Teachers Federation, 2014 PECA 9 (CanLII) , application for leave to appeal dismissed, Noël Ayangma v. Prince Edward Island Teachers’ Federation, 2014 CanLII 60081 (SCC)

The plaintiff, a teacher, alleged that the defendant Teachers’ Federation breached its duty of fair representation by failing to file two grievances on his behalf against his employer, the Eastern School District. The teacher had released the School District from, among other things, all causes of actions or grievances which existed at the time, or were discovered to exist, arising from all past, present or future dealings. The teacher argued that the Teachers’ Federation could not rely on the release as part of its defence because it was not privy to the release. The release barred the Teachers’ Federation from filing a grievance and the issue of privity of contract did not arise: a finding of privity was not required to conclude that the Teachers’ Federation did not breach its duty of fair representation.

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 plaintiff relied upon the doctrine of privity of contract to argue that the moving parties were neither parties to, nor intended beneficiaries of, the minutes of settlement containing the release and could not claim the benefit thereof. The motion judge found that the doctrine of privity of contract could not come to the plaintiff’s rescue since the plaintiff was specifically alleging that each of the defendants had privity of contract in the underlying contract, the employment agreement. The agreement that purported to release that single contractual obligation for one jointly liable debtor did so for all without violating any principle of privity of contract.

Manthadi v. ASCO Manufacturing, 2019 ONSC 5572 (CanLII) , appeal allowed, 2020 ONCA 485 (CanLII)

The plaintiff moved for summary judgment on her wrongful dismissal claim against the defendant and the motion judge granted the motion. The Court of Appeal allowed the defendant’s appeal, concluding that summary judgment was not appropriate in the circumstances of this case. The Court of Appeal addressed the relevance of a settlement and release agreement signed by the plaintiff at an earlier time when her employer, a numbered company, sold its business to the defendant. Based on principles of privity of contract, the motion judge had found that the defendant could not rely on a contract between the plaintiff and the numbered company to maintain that the plaintiff waived any claim it might have against the defendant. The Court of Appeal said that the release clause applied only to the numbered company and that the motion judge was correct in finding that the settlement and release agreement did not disentitle the plaintiff from making a claim against the defendant.

6.8 Parties Bound as Releasors

Just as a release may use expansive words to broaden the description of the releasee beyond specifically-named parties, similar wording may be used to describe the releasor expansively. Again, the interpretation of words used in this context, such as “agents” or “successors and assigns”, is discussed in Chapter 5: Interpretation of Releases, section 5.12.6, Words Used to Describe Releasor and Releasee.

In the decisions below, courts considered the circumstances and wording of releases as they came to decisions about whether parties not specifically named as releasors were bound by the releases. For case law on the parties bound as releasors by anticipatory or pre-emptive releases, see Chapter 8: Anticipatory or Pre-Emptive Releases, section 8.5.6, Parties Bound as Releasors Under Pre-Emptive Release.

Robitaille v. Vancouver Hockey Club Limited, 1981 CanLII 532 (BC CA)

The Court of Appeal held that the release provision in a standard players’ contract between Robitaille Enterprises Ltd. and the defendant professional hockey club did not apply to a claim by the plaintiff Michael Robitaille for damages arising out of the negligence of the club. In the players’ contract, the Robitaille company was described as the “player”. Robitaille himself signed a “guaranty and indemnity agreement” with the defendant in which he “guaranteed” the “performance” by the company of the players’ contract. The Court of Appeal said that, whatever might have been intended, the language of this agreement was not wide enough to include a covenant by Robitaille to be bound by the release provision in the players’ contract. Whatever was required of the company to be done had been done when Robitaille agreed to the guaranty and indemnity agreement. In that respect there was nothing left to be performed. With regard to evidence that players had set up corporations for tax purposes and the tax arrangements were not intended to interfere with the player-club employment relationship, the court said that this very general expression of intention could not be used to rewrite the guaranty and indemnity agreement to make Robitaille bound by the release provision.

Sceptre Resources Ltd. v. Deloitte Haskins & Sells, 1988 CanLII 3576 (AB QB), appeal dismissed and cross-appeal allowed on other grounds, Sceptre Resources Limited v. Deloitte Haskins & Sells, 1991 ABCA 320 (CanLII)

As a result of certain transactions relating to the reorganization of Francana Oil & Gas Ltd., Sceptre Resources Ltd. acquired the shares of Francana. Francana negotiated an agreement with one of the other parties involved in the reorganization transactions and gave a release. In this action commenced by Sceptre and Francana, Sceptre argued that it was not a party to the release and was therefore not bound by it. The court noted that the release referred to losses sustained by Francana or Sceptre and that Sceptre had acquired all the outstanding shares of Francana at the time of reorganization. The court took the view that Francana and Sceptre could be treated as one entity “pursuant to the agency principle or to the group enterprise concept”. It was clear that the two companies were acting together with respect to the matters set out in the agreements. The individual who executed the release was at all times acting as an officer of both Sceptre and Francana. In the execution of this document, Francana was acting for itself and for Sceptre.

Newfoundland Government Fund Limited v. Christopher Hickman, 2008 NLTD 75 (CanLII) , leave to appeal denied, Hickman v. Newfoundland Government Fund Limited, 2008 NLCA 57 (CanLII)

The plaintiff alleged that it entered into a contract with Hospital Leasing Services Inc. in which it granted a loan to HLSI for the construction of a hospital and that, without its consent, HLSI entered into a second contract with the defendant Marco Services Limited, a related company owned and directed by the directing mind of HLSI, whereby Marco would do the actual construction of the Hospital. The plaintiff alleged that the direct impact and effect of the second contract was to provide a means to siphon off money which was intended and expected by the plaintiff to flow to it in repayment of, and in service of, its loan to HLSI. HLSI went into default on its loan from the plaintiff, a receiver was appointed and HLSI was petitioned into bankruptcy. The trustee in bankruptcy filed a notice of motion seeking a declaration that two payments made by HLSI to Marco were deemed to be fraudulent and void as against the trustee under sections 95 and 91 of the Bankruptcy and Insolvency Act. Subsequently, the trustee entered into a release with Marco wherein, in return for a payment made by Marco, certain claims were purported to be released against Marco and its successors, predecessors, subsidiaries, affiliated and associated corporations and all of their respective past and present officers, directors, employees, representatives and agents. The defendants claimed that, by reason of this release, Marco and all of Marco’s officers, directors, employees, representatives and agents were released from any claims with respect to HLSI. The defendants said that, at the time when the trustee executed the release, the plaintiff was a creditor of HLSI and an officer or employee of the plaintiff was the sole inspector of the bankrupt estate of HLSI. The defendants argued that, since the plaintiff was a creditor of HLSI, and had one of its officers or employees acting as an inspector of the bankrupt estate at the time of execution of the release by the trustee, the plaintiff either explicitly or implicitly agreed to and benefited from the terms of compromise and settlement reflected in the release and thus the plaintiff was bound by the release and was estopped from pursuing any claim regarding HLSI against Marco or any of the officers or directors of Marco. The court said that, based on a review of the definition of “Claims” in the release, the single most important characteristic of the definition was that portion which required that “Claims” must be claims that the trustee “ever had, may have or now has”. While the trustee’s notice of motion may have referred to the contractual documents entered into between HLSI and the plaintiff, and to the second contract made between HLSI and Marco, that recital of the factual background did not make the claims in this action claims of the trustee which were discharged by way of the release. The claims in this action were alleged to be vested in the plaintiff, which was not a party to the release. The basis of the plaintiff’s claim was entirely different from the claim of the trustee which had a statutory basis in sections 95 and 91 of the BIA. While a trustee in bankruptcy may release a third party or potential co-defendant from claims by the bankrupt estate, such a release cannot discharge separate and independent claims against the third party which claims are vested in persons or corporations other than the bankrupt. The trustee only had authority to compromise those claims which were vested in the bankrupt estate of HSLI.

Vista Hospitality Co., Canada, Inc. v. SST Group of Construction Companies Limited, 2021 ONSC 5605 (CanLII)

The plaintiff Vista Sudbury Hotel Inc. hired a general contractor, SST, for a parking garage rehabilitation project and SST hired a sub-contractor, T.H.A.T., to provide engineering and consulting services for the project. A flood occurred at the site of the project and it was substantially agreed that the flood occurred due to the actions, errors, and omissions of SST and T.H.A.T. The insurer for the plaintiff Vista Hospitality Co., Canada, Inc. paid the costs of repair and remediation (less the deductible under the insurance policy). Vista Sudbury and SST entered into a settlement and release agreement settling claims under the contract that included the work giving rise to the flood. In this action, a subrogated claim by Vista’s insurer was made, in the name of the plaintiffs, against defendants including SST and T.H.A.T. SST brought a motion for summary dismissal of the claim against it and it argued that the settlement and release agreement operated to bar the plaintiffs’ action. The court considered whether Vista Hospitality and the insurer were bound by the agreement signed by Vista Sudbury. The court found that, throughout the transactions giving rise to these proceedings, Vista Hospitality and Vista Sudbury conducted themselves as one entity. Vista Hospitality was the named insured on the insurance policy that responded to the claim, notwithstanding the fact that the premises were owned by Vista Sudbury. In their pleadings, and throughout their submissions in response to this motion, the plaintiffs referred to themselves as one entity. The court also noted that the plaintiffs had made no submissions that Vista Hospitality (and by extension the insurer) ought to be extricated from the agreement by virtue of the fact that it was not a named party. This led the court to conclude that Vista’s own assessment of its operations was that the corporations were sufficiently intertwined so as to preclude the viability of such an argument. The court therefore found that, if the agreement actually encompassed the insurer’s subrogated claims (which the court found that it did not), then Vista Hospitality and its insurer were bound by the releases set out in the agreement.

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. The release provided that Contac and “its representatives” were releasing Air Canada and its employees. The release defined the plaintiff as Contac’s representative. In other words, the court said, the plaintiff was releasing claims just as Contac was.

6.9 Authority of the Releasor

The issue of concern in the cases below is whether the scope of a release extends to a claim that the releasor had no authority to exercise control over and thus had no authority to relinquish. Note that, in decisions dealing with renunciation of a testamentary gift before the death of the maker of the will, courts have stated the proposition that one cannot disclaim or renounce an interest in something to which he or she has no legal interest: see section 6.13, below, Release by a Beneficiary Named in a Will.

940833 Ontario Ltd. (Re) (In Bankruptcy), 2003 CanLII 9253 (ON SC)

A release could not be said to incorporate a claim that the releasor had no authority to deal with “one way or the other” when the release was given (more specifically a fraudulent preference claim that remained with and “belonged to” the trustee in bankruptcy, rather than the releasor, until assigned by the trustee).

Newfoundland Government Fund Limited v. Christopher Hickman, 2008 NLTD 75 (CanLII) , leave to appeal denied, Hickman v. Newfoundland Government Fund Limited, 2008 NLCA 57 (CanLII)

While a trustee in bankruptcy may release a third party or potential co-defendant from claims by the bankrupt estate, such a release cannot discharge separate and independent claims against the third party which claims are vested in persons or corporations other than the bankrupt. The trustee only has authority to compromise those claims which were vested in the bankrupt estate.

1420041 Ontario v. 1 King West, 2015 ONSC 252 (CanLII)

The plaintiff agreed to purchase condominium units from the defendant but disputed the adequacy of construction both of common elements and of elements of its own units. The plaintiff commenced an action for specific performance of the contract, or an abatement of the purchase price, or damages. The defendant brought a motion for summary judgment and relied on a release given in an action commenced by the condominium corporation on its own behalf and on behalf of unit owners. The court noted that the release did not mention the plaintiff’s action and that the condominium corporation did not have authority to settle the plaintiff’s “distinct action” for specific performance; as a result, the court found that the release should be interpreted narrowly and should not apply to the plaintiff’s action.

Hutton v Hutton, 2020 BCSC 2046 (CanLII)

The defendant in this case applied, in both her personal capacity and in her capacity as attorney, executrix of her parents’ will, and trustee of their estates, to enforce a settlement agreement she said was reached by the parties. The plaintiff argued that the scope of any release should be resolved on the basis of the objectively determined intention of the parties referencing the language of the release against the factual matrix. The court said that the plaintiff correctly pointed out that he had no authority to release the defendant on behalf of his mother’s estate.

6.10 Release Contrary to Public Policy

As can be seen from the cases below, a court may determine that it would be contrary to public policy for the scope of a release to extend to particular claims or matters. See also Chapter 3: Effectiveness and Enforcement of Releases, section 3.6, Enforcement of Releases – Public Policy Considerations. A related issue is the propriety of efforts to secure a release which may have public or societal implications extending beyond the private interests of the parties directly involved in it. In this regard, see Chapter 1: Introduction to Releases, section 1.11.3, Release of Matters with Public Interest Implications.

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”.

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.

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.

PricewaterhouseCoopers Inc v Perpetual Energy Inc, 2021 ABCA 16 (CanLII) , application for leave to appeal dismissed, Susan Riddell Rose, et al. v. PricewaterhouseCoopers Inc., et al., 2021 CanLII 58908 (SCC)

While the issue might not have directly arisen in this litigation, a generalized release of a director may not cover every duty owed. One example is the potential, but presently ill-defined, obligation of a director of a corporation to ensure that the corporation complies with its environmental and regulatory responsibilities: see J. Sarra, Fiduciary Obligations in Business and Investment: Implications of Climate Change, Commonwealth Climate and Law Initiative, Working Paper Series, October 14, 2017. As noted in Redwater (reported as Orphan Well Association v Grant Thornton Ltd, 2019 SCC 5), such obligations would potentially be owed to the public, not necessarily to the corporation exclusively. It may not, therefore, be open to a private party to release a director from those obligations. The extent to which there are such duties, and whether or how they can be enforced against a particular director in this case was a matter that could not, and need not, be resolved on the record of this litigation.

6.11 Release of Constitutional, Charter and Other Rights

An important issue with regard to the scope of releases is whether constitutional rights or rights under the Canadian Charter of Rights and Freedoms, can be released or waived. A related issue is whether courts will allow a waiver or contracting out of the provisions of provincial human rights legislation. Arguments regarding a waiver of rights under Quebec’s Charter of Human Rights and Freedoms, R.S.Q., c.C-12 were dealt with by the Supreme Court of Canada in Syndicat Northcrest v. Amselem, 2004 SCC 47 (CanLII).

It was argued in Amselem that, by signing a declaration of co-ownership in respect of units owned by them in a residential building, the appellants waived rights of religious freedom under the Québec Charter of Human Rights and Freedoms. Based on the facts before it, the Supreme Court concluded that the appellants had not waived their right to freedom of religion. The majority of the court did not decide whether a waiver of constitutional rights was legally permissible, but indicated that the issue was not free of doubt. On behalf of the majority, Iacobucci J. said (at paragraph 92) that:

Whether one can waive a constitutional right like freedom of religion is a question that is not free from doubt: see, e.g., for cases where waiver was disapproved of: Insurance Corp. of British Columbia v. Heerspink, 1982 CanLII 27 (SCC) , [1982] 2 S.C.R. 145, at p. 158; Ontario Human Rights Commission v. Borough of Etobicoke, 1982 CanLII 15 (SCC), [1982] 1 S.C.R. 202; Newfoundland Association of Public Employees v. Newfoundland (Green Bay Health Care Centre), 1996 CanLII 190 (SCC), [1996] 2 S.C.R. 3, at para. 21; Parry Sound (District) Social Services Administration Board v. O.P.S.E.U., Local 324, [2003] 2 S.C.R. 157, 2003 SCC 42, at para. 28. But see where cases recognized waiver: R. v. Mills, 1999 CanLII 637 (SCC), [1999] 3 S.C.R. 668; R. v. Rahey, 1987 CanLII 52 (SCC), [1987] 1 S.C.R. 588; R. v. Richard, 1996 CanLII 185 (SCC), [1996] 3 S.C.R. 525; Frenette v. Metropolitan Life Insurance Co., 1992 CanLII 85 (SCC), [1992] 1 S.C.R. 647.

Justice Iacobucci noted (at paragraph 100) that “[a]t a minimum, waiver of a fundamental right such as freedom of religion, if possible at all, presumably need not only be voluntary; it must also be explicit, stated in express, specific and clear terms”.

In the Borough of Etobicoke decision cited in the passage from Amselem above, the Supreme Court said (at page 214, [1982] I S.C.R.) that The Ontario Human Rights Code was enacted by the Legislature of the Province of Ontario for the benefit of the community at large and of its individual members and clearly fell within that category of enactment which could not be waived or varied by private contract. L’Heureux-Dubé J. expounded on the reasons for a “prohibition against waiver of human rights provisions” in her decision written on behalf of the minority of the Supreme Court in Dickason v. University of Alberta, 1992 CanLII 30 (SCC), [1992] 2 SCR 1103. She said that this prohibition “arises not only from a concern about inequality in bargaining power, but also because the rights guaranteed by human rights codes are seen as inherent to the dignity of every individual within our society”. She added that: “As a matter of public policy, such rights are not the common currency of contracts, but values which, by their very nature, cannot be bartered.”

The decisions of the Supreme Court in Etobicoke, Dickason and another case, Central Okanagan School District No. 23 v. Renaud, 1992 CanLII 81 (SCC), [1992] 2 S.C.R. 970, were referred to in Webber Academy Foundation v Alberta (Human Rights Commission), 2016 ABQB 442 (CanLII) where the court said: “It has been well established that human rights are a matter of public policy, created for the benefit of the community, inherent to the dignity of every individual, and cannot be waived or contracted out of.” An appeal from this decision was allowed by the Alberta Court of Appeal, which remitted the matter to a new panel of the Alberta Human Rights Tribunal: Webber Academy Foundation v Alberta (Human Rights Commission), 2018 ABCA 207 (CanLII), application for leave to appeal dismissed, Alberta Human Rights Commission (Director), et al. v. Webber Academy Foundation, 2019 CanLII 14403 (SCC).

The Amselem case was discussed in one of the decisions summarized below, R. v. Horner, 2013 SKQB 340 (CanLII), at paragraph 32. The court said there that all of the cases cited by Iacobucci J. in Amselem which held against the legitimacy of a waiver involved provincial human rights legislation and all concerned a purported waiver or contracting out of prospective human rights (referring to Heerspink, Borough of Etobicoke, Newfoundland Association of Public Employees and Parry Sound (District) Social Services Administration Board). More to the point, the court said in Horner, “the infringements which formed the basis of the litigation in each instance had not yet occurred when the waivers were signed”.

In a case involving charges under the Income Tax Act, it was said that, because of the need to protect social values of superordinate importance and to protect the certainty and integrity of the judicial process, the courts are loath to accept that a person has consented to the breach of his or her Charter rights or waived a Charter right. The courts may intervene on their own motion even in the face of such a waiver. But a breach already having occurred, the right to waive a claim to a remedy stands upon a somewhat different footing. Denial of Charter rights to one person, even with that person’s express consent, may affect others, diminishing the superordinate social values we cherish and the integrity of the judicial process. The denial of Charter rights may also otherwise impact directly upon others. On the other hand, the failure of an accused to claim a Charter remedy may not have such far reaching effects. It may impact upon the accused only.  A breach having already occurred the defence may make a tactical decision not to claim a Charter remedy and this should be respected. See R. v. Glaister, 2004 CanLII 8662 (ON SC).

Note that there are many decisions in which Canadian courts have considered whether, by way of a release, parties may contract out of, or otherwise affect the application of, statutory provisions enacted in the public interest. These decisions are discussed in Chapter 11: Releases in Particular Situations, section 11.1.2, Release of Statutory Liability, Rights and Benefits.

 

R. v. Horner, 2013 SKQB 340 (CanLII)

Although there appears to be judicial support for the proposition that Charter rights cannot be waived, the release in question in this case did not purport to waive future or prospective rights. Understood in its context, and with regard to the specific wording employed, the plaintiff both settled any claim she may have had for prior Charter violations and covenanted not to commence a Charter-based action in the future. More specifically, the impugned release in this case did not seek to waive the plaintiff’s section 15(1) Charter rights on a go-forward basis. Instead, the plaintiff purportedly released the defendants from past Charter infringements and also waived her ability to sue in the future on the ground of her loss of benefits, as a spouse of a deceased worker, upon her subsequent remarriage in 1980. As the termination of benefits occurred in the past, the document signed was not a waiver of future infringements but part and parcel of an overall settlement of Charter litigation.

Ayangma v. La Commission Scolaire et al., 2014 PESC 18 (CanLII) , motion to dismiss appeal granted, subject to condition subsequent, Ayangma v. PEI H.Rts.Comm. & La Commission Scolaire, 2015 PECA 4 (CanLII) , application for leave to appeal dismissed, Noel Ayangma v. Prince Edward Island Human Rights Commission, et al., 2015 CanLII 81618 (SCC)

The applicant complained to the P.E.I. Human Rights Commission that the respondent School Board had discriminated against him contrary to the P.E.I. Human Rights Act. The complaint was dismissed by the Executive Director of the Commission on grounds including a finding that the applicant had executed a release preventing him from making a complaint against the School Board and “the position over which the complaint was made” was “not a new matter”. On an application for judicial review, the court said that the Executive Director ventured into a discussion of the validity of the release as it related to future claims or actions and it was this interpretation to which the applicant took the greatest objection. The court said that the applicant placed much emphasis on a decision of the Human Rights Tribunal of Ontario which stands for, among other things, the proposition that a claimant cannot contract out of or relinquish the future right to be treated in accordance with the Ontario Human Rights Code. However, in the decisions which the applicant sought to set aside, it was concluded, and reasonably so, that the applicant’s claims were not new matters and his claim was thereby distinguished from that made in the HRTO case. The court said it would not, nor should it, determine the validity of the release as it related to future claims of discrimination by the applicant. The court was limited to determining the reasonableness of the decisions which the applicant sought to set aside. The court agreed the claim made by the applicant was not a new matter and was covered by the terms of the release.

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)

There is no principle of law that constitutionally based claims cannot be settled and released. Legal rules or approaches to the interpretation of settlement agreements should not be set in a way that acts as a disincentive to governments to settle such claims, citing Nunavut Tunngavik Inc. v Canada (Attorney General), 2014 NUCA 2 and Delgamuukw v British Columbia, 1997 CanLII 302 (SCC).

6.11.1 First Nations’ Rights

In the case below involving a release in a Treaty Land Entitlement Settlement Agreement, the Alberta Court of Appeal considered arguments about the constitutional status of aboriginal rights.

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)

There is nothing in the constitution that prevents Canada or the First Nations from recognizing, defining, fulfilling, acknowledging satisfaction of, and releasing aboriginal rights. This case involved a Treaty Land Entitlement Settlement Agreement entered into by the appellant Band with Canada, resolving certain claims arising out of a treaty. The agreement incorporated very general release wording. Among other things, the lower court judge found against the appellants in respect of a number of arguments about the release. The appellants argued on appeal that the lower court judge failed to consider the constitutional status of aboriginal rights. The Court of Appeal said that there was nothing unconstitutional about the Treaty Land Entitlement Settlement Agreement to the extent that it released claims of the kind referred to by the appellants.

6.12 Fraud or Criminal Conduct

Canadian case law addresses a number of issues about releases of fraud or criminal conduct, including public policy considerations, release of antecedent fraud and the need for express words to release fraud. Case law on these issues is gathered under the headings that follow.

The point of concern here is whether fraud or criminal conduct comes within the scope of a release, not whether the release itself is tainted by fraud. For case law on fraud as a ground for challenging the validity of a release, see Chapter 9: Challenging a Release, section 9.16, Misrepresentation and Fraud.

6.12.1 Public Policy Implications of a Release of Fraud or Criminal Conduct

In Tercon Contractors Ltd. v. British Columbia (Transportation and Highways), 2010 SCC 4 (CanLII), [2010] 1 SCR 69, at paragraph 120, Binnie J. (writing for the minority of the court) said that conduct approaching serious criminality or egregious fraud are examples of well-accepted and “substantially incontestable” considerations of public policy that may override the countervailing public policy that favours freedom of contract. He went on to say that such misconduct might prevent reliance on a contractual exclusion clause. But, according to Binnie J., a plaintiff who seeks to avoid the effect of an exclusion clause must identify the overriding public policy that it says outweighs the public interest in the enforcement of the contract.

Dennis v. OLG, 2010 ONSC 1332 (CanLII), appeal dismissed, Dennis v. Ontario Lottery and Gaming Corporation, 2011 ONSC 7024 (CanLII), further appeal dismissed, 2013 ONCA 501 (CanLII), application for leave to appeal dismissed, Peter Aubrey Dennis, et al. v. Ontario Lottery and Gaming Corporation, 2014 CanLII 5980 (SCC)

The plaintiffs moved for certification of a class action on behalf of a class of people who signed “self-exclusion” forms provided by the Ontario Lottery and Gaming Corporation that included a release. In the self-exclusion form, OLGC undertook to use its “best efforts” to deny signatories entry to its facilities, but excluded liability if it failed to do so. The court said that, in Tercon, Binnie J. discussed the role of public policy in determining when a court should exercise its “narrow” public policy jurisdiction to give relief against an exclusion of liability clause. Binnie J. referred to cases where criminal or fraudulent conduct would justify a finding that reliance on an exclusion clause is not to be countenanced and he emphasized that less egregious conduct could require the same conclusion.

Precision Drilling Canada Limited Partnership v Yangarra Resources Ltd, 2017 ABCA 378 (CanLII)

In this case, the Court of Appeal allowed an appeal from a decision granting summary judgment in favour of the respondent. The majority of the court concluded that the appellant’s claims based on fraudulent misrepresentation raised a genuine issue for trial. In its decision, the majority commented on contractual release and allocation of risk provisions that extended to liability resulting from “negligence or other fault” or “any other theory of legal liability”. The majority agreed with the chambers judge that contractual provisions having the effect of excluding liability for the appellant’s claim in fraudulent misrepresentation might be contrary to public policy. The majority said that, even if the contract effectively barred a fraudulent misrepresentation claim (which issue the majority specifically refrained from deciding), the issue would then become one of whether the court could intervene in the name of public policy to nullify that exclusion if a party had a legitimate claim of fraud. On this issue the chambers judge referred to Roy v. Kretschmer, 2014 BCCA 429, which the majority said was a case where fraud occurred “during the currency of the contract” and where the court held that the wrongdoer could not hide behind an exclusion clause. Roy was to be distinguished from many other cases in which fraudulent conduct induced a party to enter into a contract in the first place. The majority said it tended to agree with the chambers judge that Roy was applicable in this case, where serious allegations of fraud were made against a sophisticated business entity that promised to conduct its risky and potentially dangerous work in a good and workmanlike manner. Without deciding the matter, all the majority could say was that, if the appellant’s allegations of fraud were substantiated, it was not clear that public policy would not be triggered to prevent the respondent from relying on the benefit of the contract’s exclusion clauses. The determination as to whether public policy should intervene to render the clauses unenforceable should take place after the factual record had been established, at which time the trial judge would be in a position to examine carefully whether there were public policy reasons to decline to enforce the clauses.

6.12.2 Release of Antecedent Fraud

The decisions below confirm that there is no legal impediment to a release of an antecedent claim in fraud within the contemplation of the parties at the time when the release is given.

Umholtz v. Umholtz, 2004 CanLII 36132 (ON SC)

In this family law proceeding, the court was satisfied that the parties had reached a final settlement. The issue considered here was what the parties intended in respect of non-disclosure. The court said that the law has become increasingly demanding on the issue of financial disclosure in family law proceedings. If parties exchange timely and accurate financial information, legal costs and overall conflict may be reduced. On the other hand, when allegations of fraud or material non-disclosure are raised in the proceedings, the parties are entitled to a final disposition of those issues at trial. In the absence of agreement to the contrary, surely a disposition by full and final settlement should have the same effect. There was no express language in the settlement agreement from which mutual agreement could be inferred apart from this language: “each of the parties release the other from all claims, howsoever arising, including claims for spousal support and any other corollary relief”. A release of “all claims” does not include claims of fraud in respect to the settlement agreement itself, in the absence of express language to the contrary. While it is possible to release unknown, hidden claims, even based on fraud, that is not the usual position.

 

Metcalfe & Mansfield Alternative Investments II Corp. (Re), 2008 ONCA 587 (CanLII), leave to appeal refused, Jean Coutu Group (PJC) Inc. et al. v. Metcalfe & Mansfield Alternative Investments II Corp. and Other Trustees of Asset Backed Commercial Paper Conduits Listed in Schedule “A” to this application et al., 2008 CanLII 46997 (SCC)

While the law does not condone fraud and it is the most serious kind of civil claim, there is no legal impediment to granting the release of an antecedent claim in fraud, provided the claim is in the contemplation of the parties at the time when the release is given (citing Fotini’s Restaurant Corp. v. White Spot Ltd. ). There may be disputes about the scope or extent of what is released, but parties are entitled to settle allegations of fraud in civil proceedings.

York University v. Michael Markicevic, 2013 ONSC 378 (CanLII)

While there is no legal impediment to granting the release of an antecedent claim in fraud, the general language of a release will only cover such a claim provided it was in the contemplation of the parties to the release at the time it was given.

Labourers’ Pension Fund of Central and Eastern Canada v. Sino-Forest Corporation, 2013 ONSC 1078 (CanLII) , leave to appeal denied, a Plan of Compromise or Arrangement of Sino-Forest Corporation, 2013 ONCA 456 (CanLII) , application for leave to appeal dismissed, Invesco Canada Ltd., et al. v. Sino-Forest Corporation, et al., 2014 CanLII 11054 (SCC)

In the Metcalfe & Mansfield case, above, the Ontario Court of Appeal confirmed that parties are entitled to settle allegations of fraud and to include releases of such claims as part of the settlement. It was noted that “there is no legal impediment to granting the release of an antecedent claim in fraud, provided the claim is in the contemplation of the parties to the release at the time it is given”.

LeRoy v TimberWest Forest Corp., 2020 BCSC 978 (CanLII) , appeal on other grounds dismissed, 2021 BCCA 326 (CanLII)

While the principle from Blackmore will often mean releases are construed narrowly, it does not preclude parties from agreeing to a release that bars unknown claims or antecedent claims of fraud, provided the parties contemplate such claims at the time the release is given. The court was not convinced that the claims for fraud, deceit, and conspiracy in this case were in the contemplation of the parties prior to the signing of the release relied on by the defendants. The court found that the release did not include the claims being pursued in this action.

6.12.3 Wording Needed to Release Claim for Fraudulent Misrepresentation

The decision below indicates that “express and deliberate” wording is needed for a release of a claim for fraudulent misrepresentation.

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.

6.12.4 Scope of Particular Releases – Fraud

The decisions below on the scope of particular releases distinguish, in one case, between innocent and fraudulent misrepresentation and, in the other case, between common law fraud and constructive or equitable fraud.

Millerson Group Inc. v. Huntington Properties Ottawa Inc., 2013 ONSC 1048 (CanLII)

In this case, the court said that a settlement agreement included a full and final release of all claims, whether known or unknown, which would appear to bar a cause of action in innocent misrepresentation, but not necessarily one in fraudulent misrepresentation. In making this statement, the court relied on the proposition that there is a policy in favour of upholding settlements, absent evidence of fraud, mistake or unconscionability.

Holley v. Northern Trust Company, Canada, 2014 ONSC 889 (CanLII), appeal dismissed on other grounds, 2014 ONCA 719 (CanLII)

A release approved in proceedings under the Companies’ Creditors Arrangement Act (see Re Nortel, 2010 ONSC 1708, below) contained an exclusion for fraud on the part of any releasee. The court considered whether constructive fraud was within the scope of the release and, in doing so, it addressed the nature and elements of common law fraud and constructive or equitable fraud. The court concluded that the release barred constructive fraud claims but the common law torts of fraud, deceit or fraudulent misrepresentation were not barred.

6.13 Negligent Misrepresentation

Case law bearing on whether the scope of a release extends to fraudulent misrepresentation can be seen above in section 6.12, Fraud or Criminal Conduct. Below are decisions that deal with a releasee’s reliance on a release when a claim against the releasee is made on the ground of negligent misrepresentation. For cases on whether a release may be challenged, and ultimately set aside, on the ground of negligent misrepresentation, see Chapter 9: Challenging a Release, section 9.16.2, Non-Fraudulent Misrepresentation.

Doucet and Dauphinee v. Spielo Manufacturing Incorporated and Manship, 2011 NBCA 44 (CanLII)

The defendant Manship was the president and majority shareholder of the defendant Spielo Manufacturing Incorporated. After Manship incorporated Spielo in June of 1990, Spielo needed an infusion of capital so as to pursue its corporate objectives. In November of 1990, Spielo and Manship entered into an investment agreement with a numbered company, pursuant to which the numbered company acquired 50% of Spielo’s shares while providing a shareholder’s loan. Doucet acquired a one-quarter interest in the numbered company (equal to 12.5% of Spielo’s shares). Through the numbered company, the parties also entered into a shareholder’s agreement which enabled Manship to repurchase the Spielo shares at fair market value. In 1993, Doucet commenced employment with Spielo. In July of 1994, Manship exercised his option to repurchase all of the Spielo shares with the consent of the investors. By way of a “resignation and release”, Doucet waived any claims against Manship and Spielo which he may have had as an investor, creditor or shareholder of Spielo. The release was subsequently amended to provide that the document would not serve as a release for “any entitlement” Doucet would have as an employee of Spielo. At trial, Doucet argued, among other things, that Manship had represented to him that he would receive 12.5% of the Spielo shares in return for persuading the initial investors in the numbered company to sell their shares in Spielo back to Manship. Doucet said that the amendment to the release was agreed to for the purpose of preserving his right to claim 12.5% of the Spielo shares. Doucet argued that the release signed in regard to the loan investment effected through the numbered company was not intended to limit his right to sue for negligent misrepresentation (nor did it expressly limit or exclude liability in tort). The court said that Doucet was suing in tort rather than in contract in order to avoid the clear wording of the release. This was not a case of actionable negligent misrepresentation as there was no element of negligence involved in the allegations. Either Manship promised Doucet 12.5% of the Spielo shares or he did not. The enforcement of promises lies within the bailiwick of contract and not tort law.  The court said it was obvious why Doucet did not want to base his claim in contract law. Doucet would have to directly confront the reality that the alleged promise was effectively negated by contractual provisions found in the release signed by Doucet. He mistakenly believed he could convert the alleged promise into negligent misrepresentations, thereby seizing upon a line of jurisprudence governing the issue of concurrent liability in tort and contract. What he failed to appreciate was that one cannot sue successfully in tort for negligent misrepresentation when the contract effectively precludes the making of the very representations that are alleged to have been made. To argue that neither Spielo nor Manship could rely on the provisions of the release contract was, to say the least, pure folly. The court went on to refer to authorities on concurrent liability in contract and tort, including BG Checo International Ltd. v. British Columbia Hydro and Power Authority, 1993 CanLII 145.

Wood Buffalo Housing & Development Corporation v. Flett, 2014 ABQB 537 (CanLII)

The plaintiff claimed damages in relation to the design and construction of a building and the defendants moved for summary judgment on the basis of a provision of the design-build contract in which the owner had agreed to a waiver and release of claims, other than those falling within certain specified exceptions. On the motion for summary judgment, the court found that the question of whether “negligence” extended to negligent misrepresentation in the certificate of substantial completion was a genuine issue for trial.

Lucarelli v. Morrison, 2021 ONSC 5579 (CanLII)

On a motion for summary judgment, the court concluded that a trial was required to determine whether the plaintiffs’ claim against the defendant insurance company was barred by the terms of a release. The insurance company relied on the plain meaning of the release and argued that the action clearly fell within its scope. The court said that the plaintiffs were not arguing that the terms of the release were not broad enough to cover their claim. Their action was for damages, for an amount they said they were entitled to recover beyond a settlement amount paid to them. That damages claim was grounded in tort, based on the insurer’s alleged negligent misrepresentation, which the plaintiffs said they were entitled to pursue against the insurer despite the release (citing BG Checo, above). The evidence before the court gave rise to triable issues that it would not be appropriate to resolve in the context of a summary judgment motion.

6.14 Release By a Beneficiary Named in a Will

Issues with respect to the effect of a release on a testamentary bequest or gift tend to arise when spouses or common law partners separate and reach a settlement of their financial affairs, concluded with a separation agreement and release, but one spouse or common law partner later dies leaving a will made prior to the separation in which the other is named as a beneficiary. To use the words of one of the decisions below, the issue of concern to the courts is whether the provisions of the separation agreement “trump” the will.

Note that, at common law, a testamentary gift to one’s spouse was construed prima facie to refer to the person to whom the testator was married at the time the will was made and the fact that the marriage was later dissolved made no difference: see Roth Estate v. Roth, 2009 CanLII 57455 (ON SC) , at paragraph 13, where the court quoted from A. H. Oosterhoff, Oosterhoff on Wills and Succession, 6th Edition, 331. Many Canadian provinces have enacted legislation pursuant to which divorce (and nullity of marriage) is presumed to revoke any gift by will to a former spouse, except when a contrary intention appears: see J. MacKenzie, Feeney’s Canadian Law of Wills, 4th Edition (Toronto, ON: LexisNexisCanada, 2000), at section 5.5. In Ontario, for example, subsection 17(2) of the Succession Law Reform Act says that, except when a contrary intention appears, if after a testator makes a will his or her marriage is terminated or declared a nullity, a devise or bequest of a beneficial interest in property to his or her former spouse is revoked and the will shall be construed as if the former spouse had predeceased the testator.

Robinson v. Morrell Estate, 2009 NSCA 127 (CanLII)

The testator made a will in which he left the residue of his estate to his wife. A few years later, the testator and his wife signed a separation agreement which included a provision stating that the parties forever renounced and waived any claim in the estate of the other and any right to share in the estate of the other. Subsequently they divorced, but, at the time of the testator’s death, the law in Nova Scotia was that divorce did not revoke the bequest of a beneficial interest in property to a testator’s former spouse. (Since then, the Nova Scotia Wills Act has been amended.) The Court of Appeal dismissed an appeal from a decision that the separation agreement had not revoked the will, although it said that the reliance of the chambers judge on the Billing and Eccleston decisions was misplaced and his reasoning was flawed. The Court of Appeal said that, until the death of the testator, a person expecting to benefit under a will has nothing more than an expectancy and one cannot disclaim or renounce an interest in something to which he or she has no legal interest (citing Wolfson Estate v. Wolfson (2005), 22 E.T.R. (3d) 255 (Ont. S.C.J.) and Re Smith, [2001] 3 All E.R. 552 (Ch.).) When she signed the separation agreement, the former wife could not and did not immediately renounce any interest in the estate of her former husband pursuant to his will. At that time, there was nothing more than an expectancy: there was nothing on which a renunciation could “bite”.

 

Roth Estate v. Roth, 2009 CanLII 57455 (ON SC)

This case did not address the effect of a release on a testamentary gift. The central issue was whether, pursuant to subsection 17(2) of the Ontario Succession Law Reform Act, a bequest of monthly payments made in a will was revoked by reason of the subsequent divorce of the testator and the named beneficiary. But, in respect of the respondent’s assertion that “the jurisprudence invariably has given priority to a will over a separation agreement”, the court referred to “out-of-province cases” cited by the respondent, namely, Goldfield v. Koslovsky, 1975 CanLII 1583 , Morrell Estate, above, and Eccleston Estate, 1999 CanLII 32897 . The court said that these cases “involved situations where the applicable provincial wills legislation did not contain a provision similar to section 17(2) of the SLRA at the time of the testator’s death”.

Muth Estate v. Bushkowsky, 2009 SKQB 237 (CanLII)

In this case, a husband and wife entered into a separation agreement for the express purpose of “settling all property rights, questions of maintenance and monetary divisions”. It was their intention that the agreement would constitute a “complete final and effective settlement of their respective rights in and to the property of each other” and a “full relinquishment of all the rights, interests and claims which either party may otherwise have upon the property of the other”. In particular, in clause 8 of the agreement, the wife acknowledged she had no claim against the present or future property of the husband, she renounced any right she might have to the administration of the husband’s estate and she waived any and all rights under a number of Saskatchewan statutes. The husband died and his will named the wife as sole beneficiary. The court directed the trial of an issue as to the effect of the separation agreement, and in particular clause 8, on the will. The court referred to cases such as Billing , Eccleston Estate and Morrell Estate, above, and said it is evident that, in other provinces, the courts have been loath to disentitle an estranged or a former spouse from inheriting under the will of a deceased spouse in spite of what some may consider to be a clear waiver in a separation agreement. The court was of the opinion that a trial would be the most effective manner in which to elicit the facts and to provide for clear and full elucidation of the applicable law. (Note that, rather than continue to trial, the parties to this case reached a mediated settlement in 2011: see Muth Estate, 2019 ABQB 922 (CanLII), at paragraphs 11-12.)

Hayward v. Hayward, 2011 NSCA 118 (CanLII)

The central issue in this case concerned the temporal application of amendments to the Nova Scotia Wills Act made in 2008, but the separate reasons delivered by the three judges of the Court of Appeal each addressed the effect on a will of a separation agreement containing a mutual release. The separation agreement provided that the husband and wife each released all rights which he or she might have to any share in the estate of the other. Pursuant to section 8A of the Wills Act, as amended, a court may give effect to a “writing” that embodies testamentary intentions, or an intention to revoke, alter or revive a will, notwithstanding that the writing was not executed in compliance with the formal requirements of the Wills Act. The trial judge held that, because the separation agreement made no reference to the will, section 8A could not operate so as to effect a revocation of the will. Oland, J.A. concluded that the trial judge erred in law in this interpretation of section 8A and by failing to consider whether the separation agreement satisfied section 8A. Beveridge, J.A. saw no reversible error in the trial judge’s decision relating to section 8A. He said that his colleague had pointed to no terms in the separation agreement that demonstrated any intention by the deceased to have the separation agreement viewed as constituting a testamentary intention by the deceased and neither was there any mention of anything in the separation agreement that demonstrated an intention by the deceased to revoke or alter his testamentary dispositions. Fichaud, J.A. disagreed with the trial judge’s conclusion on section 8A. With respect to the trial judge’s statement that the separation agreement made no reference to the will, Fichaud, J.A. noted the provision of the agreement in which each party released all rights to any share in the estate of the other and said that the word “estate” includes a testamentary estate after death, “meaning that the word connotes the Will”: it was a “cognitive challenge” to dissociate a testamentary estate from the encompassing term “estate”. Fichaud J.A. said that the parties signed a document to eliminate any disposition from the husband’s testamentary estate to the wife, despite that such a disposition had been directed by the husband’s will. This “writing” expressed an intent to alter the effect of the will under s. 8A of the Wills Act.

Makarchuk v. Makarchuk, 2011 ONSC 4633 (CanLII) , appeal dismissed, 2012 ONCA 42 (CanLII) , application for leave to appeal dismissed, 2012 CanLII 32662 (SCC)

Five months after the testator made a will in which he named his wife as executor and sole beneficiary of his estate, the testator and his wife separated, although they never divorced. The testator and his wife signed a separation agreement in which, subject to any additional gifts from one of the parties to the other in any will validly made after the date of the agreement, the parties each released all rights which he or she had or “may acquire under the laws of any jurisdiction” in the estate of the other. After the testator passed away, his son brought an application for directions and submitted that the reference to subsequent wills in the release was evidence that the wife intended to release the testator from the bequest made to her in the will and this reference was sufficient “to trump the will”. The court referred to the Eccleston decision and said it was satisfied that the language of the separation agreement in that case was so similar to the language of the agreement in this case that the same principle applied. The testator had a number of means available to him to revoke the gift he had made to his wife prior to their separation. The language of the release did not specifically address the will made only five months prior; it spoke to ‘rights acquired under law’, which is not a reference to rights acquired by the will. The release did not trump the will. On appeal, the Court of Appeal said it was not persuaded that the application judge erred in her interpretation of the separation agreement. Since the testator never revoked his will, the gift in the will to the wife stood.

6.15 Release by Insurance, Pension or Retirement Plan Beneficiary

The sections that follow gather case law regarding the effect of a release on a beneficiary designation in respect of a life insurance policy or a retirement plan (sections 6.15.1 and 6.15.2, respectively) and the effect of a release on entitlement to pension plan benefits (section 6.15.3).

6.15.1 Effect of Release on Life Insurance Beneficiary Designation

Designation of a beneficiary is, of course, an important feature of a life insurance policy. A beneficiary designation may also be made for the purposes of retirement funding or financial planning arrangements, such as a beneficiary under a pension plan or a retirement savings plan. The cases below deal with the effect of a release on a beneficiary designation made in favour of the releasor. Again, as in the section above dealing with testamentary gifts, these issues about the effect of a release tend to surface in circumstances where spouses or common law partners have separated and have reached a settlement of their financial affairs as set out in an agreement and release. A particular point of concern in the cases below is compliance with any statutory requirements which must be met in order for the revocation of a beneficiary designation to be effective.

Hall Estate v. Hall, 1985 ABCA 31 (CanLII)

The issue in this case was whether the terms of a release executed to effect a matrimonial settlement precluded the releasor, who was the designated beneficiary under an insurance policy on the life of the releasee, from receiving the proceeds of the policy. The Court of Appeal said it mattered not that the releasee may not have intended to benefit the releasor. Notwithstanding general waiver provisions, the release would not dispossess the releasor of her designation as a beneficiary unless it could be construed as a declaration conforming to one of the requisites contained in s.240(e) of the Alberta Insurance Act. The release was not an instrument signed by the insured and each requisite of the statute was missing. The release made no disposition of insurance. A revocation can be achieved only by compliance with the statute in clear language and general provisions will not suffice.

Conway v. Conway Estate, 2006 CanLII 1448 (ON SC)

The applicant was named as the beneficiary of a group life insurance policy and of the pension plan survivor benefit of her former husband, before their separation. She sought a declaration, after her former husband passed away, that she was entitled to these benefits. The respondent argued that the applicant released her entitlement to the benefits in the separation agreement entered into with her former husband. As to the group life policy, the court concluded that the separation agreement did not amount to a “declaration” – within the meaning of the Ontario Insurance Act – which revoked the beneficiary designation of the applicant. The respondent also argued, in reliance on Roberts v. Martindale, above, that it would be against good conscience to allow the applicant to receive the benefits of the policy. Unlike the Martindale case, though, the court said it was not prepared to make a finding that the applicant had given up any entitlement to the proceeds of insurance by virtue of the releases contained in the separation agreement.

Perry v. Perry (Estate), 2009 ABQB 687 (CanLII)

 

The applicant and her former spouse had entered into a parenting, support and property agreement prior to the finalization of their divorce, which contained a number of paragraphs relating to mutual releases of property and claims. The applicant was the designated beneficiary under a life insurance policy maintained by her former spouse and, on the issue of whether the agreement precluded the applicant from claiming the proceeds of the policy, the Master said that the law in Alberta, as reflected in Hall Estate v. Hall, above, is that release provisions cannot dispossess a beneficiary of insurance proceeds unless they can be construed as declarations within the meaning of the Alberta Insurance Act. The Alberta courts have emphasized that a declaration revoking or changing a beneficiary needs to be clear and express. The requisite clear and specific language was absent from the agreement in this case.

 

Richardson Estate v. Mew, 2009 ONCA 403 (CanLII)

A former spouse is entitled to proceeds of a life insurance policy if his or her designation as beneficiary has not changed. This result follows even where there is a separation agreement in which the parties exchange mutual releases and renounce all rights and claims in the other’s estate. General expressions of the sort contained in releases do not deprive a beneficiary of rights under an insurance policy because loss of status as a beneficiary is accomplished only by compliance with the legislation. The general language used in waivers and releases does not amount to a declaration within the meaning of the Ontario Insurance Act.

Chanowski v. Bauer, 2010 MBCA 96 (CanLII)

Unless a designation of an insurance beneficiary is revoked, it takes effect upon death. General expressions or clauses in separation agreements (for example) ought not to be construed as depriving a beneficiary under an insurance policy. The general language used in such waivers and releases does not amount to a declaration within the meaning of The Insurance Act.

Love v. Love, 2013 SKCA 31 (CanLII)

The general trend of the law appears to be the one summarized in Richardson Estate, above: “A former spouse is entitled to proceeds of a life insurance policy if his or her designation as beneficiary has not changed. This result follows even where there is a separation agreement in which the parties exchange mutual releases and renounce all rights and claims in the other’s estate. General expressions of the sort contained in releases do not deprive a beneficiary of rights under an insurance policy because loss of status as a beneficiary is accomplished only by compliance with the legislation. The general language used in waivers and releases does not amount to a declaration within the meaning of the Insurance Act.”

Wilson v. Wysoski, 2014 BCSC 675 (CanLII)

In Britton v. Klippenstein Estate , the court noted that the fact that a former spouse signed a release of claims in a settlement agreement was not a waiver of entitlement to pension benefits, stating that “[g]eneral expressions or clauses in settlement agreements ought not to be construed as depriving a beneficiary under a will or insurance policy”. In Richardson, above, the Ontario Court of Appeal expressed the same sentiment, saying that a former spouse is entitled to take benefits on death – despite any agreement or order releasing claims against property – where they remain the designated beneficiary.

Schiller-Arsenault v. Proudman, 2015 BCSC 1924 (CanLII)

The respondent was named as the beneficiary of an insurance policy on the life of his former common law spouse, who passed away in 2013. Upon their separation, the spouses had entered into a separation agreement, which included a broad mutual release. Following the death of his former spouse, the respondent made a claim to the proceeds of the insurance policy, as did the sister of the deceased. The insurer paid the proceeds of the policy into court and the sister’s application for payment of the proceeds to her was opposed by the respondent. The court said, by reference to Roberts v. Martindale, above, that, “as in this case”, the deceased and the plaintiff (petitioner here) believed that steps had been taken to revoke the beneficiary designation. The court also said it did not matter in this case that the separation agreement did not refer specifically to policies of insurance. As noted in Roberts, a policy of life insurance is property. It was clear that the agreement was intended to be a full and final settlement of entitlement to any and all property, including policies of insurance. The respondent was under an equitable obligation to refrain from taking any steps to pursue a claim to the insurance proceeds. The respondent filed a claim to the insurance proceeds in breach of his contractual obligations under the separation agreement. He took active steps to pursue property despite having agreed that he had no further interest in that property.

Knowles v LeBlanc, 2021 BCSC 482 (CanLII)

This case involved a dispute over the proceeds of a life insurance policy between the deceased’s ex-wife, who was named as the sole beneficiary under the policy, and the deceased’s long-time spouse as at the time of his death. The court said that the language of a consent order issued in the divorce proceedings between the deceased and his ex-wife did not go as far as the wording considered in cases such as Schiller (above), Roberts (above), or Hemmerling , where the parties clearly relinquished all interest in the other’s estate. Accordingly, the consent order did not operate to prevent the ex-wife from claiming the proceeds of the life insurance policy.

6.15.2 Effect of Release on Retirement Plan Beneficiary Designation

In each decision below, the court considered the effect of a release or release clause on the designation of a beneficiary of a retirement plan and found that the designated beneficiary was not entitled to claim against the plan upon the death of the holder of the plan.

Campbell Estate v. Campbell, 2011 ONSC 5079 (CanLII)

The testator and the respondent were married but they separated and entered into a comprehensive separation agreement, pursuant to which they released any claims against each other’s estate. After the testator’s death, three registered retirement savings plans were discovered and the respondent was the designated beneficiary in all of them. The respondent took the position that a revocation of the RRSP beneficiary designations had never taken place as required by the Ontario Succession Law Reform Act. She contended that the terms of the separation agreement were inapplicable according to the approach followed in Gaudio . The court said that the separation agreement in Gaudio contained a general release clause and no reference was made to any RRSPs. The court also referred to Hemmerling Estate , where the wife’s covenant not to make a claim against an RRSP owned by the husband was held to be sufficient to revoke the designation. In this case, the specific terms of the separation agreement, including the listing of the RRSPs, made it abundantly clear that the parties had no intention that the respondent would end up with the RRSPs. The court said it would be unconscionable for the designation to stand.

Sutherland v. Collett (Estate), 2017 YKSC 36 (CanLII)

The plaintiff and Collett were common law spouses and, following their separation, the plaintiff commenced an action principally to deal with the division of communal assets. This issue was resolved by way of a Settlement Conference Order, emanating from a judicial settlement conference, which included a provision characterized by the court as a release clause. During the relationship, Collett had designated the plaintiff as the beneficiary of certain registered retirement savings plans and after Collett’s death the plaintiff refused to renounce any claim to the RRSPs on the basis that she was still the validly designated beneficiary of the RRSPs. The court interpreted the SCO in view of the surrounding factual matrix and concluded that, because the SCO did not deal with all of the issues raised by the parties, the release clause was intended as a “catchall provision” to prohibit any further claims by either party: 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. Taking support from authorities such as the decision of the Ontario Court of Appeal in Burgess , the court also concluded that the SCO operated as a revocation, pursuant to the Yukon Retirement Plan Beneficiaries Act of the plaintiff’s status as a beneficiary to Collett’s RRSPs.

Ray-Ellis v. Goodtrack et al., 2021 ONSC 3102 (CanLII)

The applicant and her former husband, Kirk Goodtrack, separated in 1998. In 1997, Goodtrack had signed a beneficiary designation naming the applicant as the beneficiary of a Locked in Retirement Account which originated at Nesbitt Burns but ultimately ended up with CIBC as the holding institution. Although Goodtrack signed another designation in 2001 which revoked the 1997 designation, CIBC was unable to find the 2001 designation in its records. Also, in order to resolve their matrimonial litigation, the applicant and Goodtrack entered into minutes of settlement which included broad mutual release provisions. The court found that the 2001 designation met the applicable statutory requirements and that the inability of CIBC to locate it did not derogate from its validity. The court went on to consider the effect of the release. The applicant argued that the release could not oust the properly executed 1997 designation as the release did not make reference to the LIRA or to any revocation of the 1997 designation. The court did not accept this argument. It said that the release was broad and general and was a mutual release of property. It was not necessary in such releases to provide a specific list of property that was included. The release included all property. The court said that it relied on Burgess v. Burgess Estate for the proposition that the release revoked the 1997 designation.

6.15.3 Effect of Release on Entitlement to Pension Plan Benefits

The decisions below deal with the effect of a release on the releasor’s entitlement to benefits payable under a pension plan. Another case involving issues relating to a release of entitlement to pension benefits is MacEachen v. Minnikin, 2015 NSCA 81 (CanLII) . In that case, the pensioner and his second wife, the respondent, entered into a separation agreement in which the respondent agreed that, if the pensioner remarried, she would execute all necessary documents in order to release her as a beneficiary under the pension plan. The pensioner married his third wife, the appellant, but took no steps to change the beneficiary designation for the pension plan to the appellant and never asked the respondent to execute any release documents as contemplated under the separation agreement. The Court of Appeal rejected the appellant’s assertion that there was an onus on the respondent to act, without a request by the pensioner, to change the beneficiary. The pensioner retained the option to pursue a change in beneficiary and request (even compel) the respondent to give the release. He was in control, but he took no action. See Chapter 4: Releases and Settlement, section 4.6.4, Compelling Execution/Delivery of a Release.

Yates v. Air Canada and Daveluy, 2004 BCSC 3 (CanLII)

The plaintiff and her husband Roy Yates separated (but never divorced) and entered into a separation agreement which was said to be a “full and final settlement” and which included a broad mutual release. For a period of time, Roy Yates cohabited with the defendant Sylviane Daveluy. He was a member of the Air Canada pension plan and, after he passed away, both the plaintiff and the defendant Daveluy applied for the survivor benefits available under the plan. Air Canada referred the survivor benefits issues to its Pension Committee, which decided that the defendant Daveluy was the “surviving spouse” under the plan. In this proceeding, the plaintiff sought relief that, in essence, would reverse the outcome of the Pension Committee’s decision. The court concluded that the Pension Committee acted reasonably and, in doing so, considered an issue about the intention of Roy Yates that had been placed before the Committee by the plaintiff (although the court was satisfied that the Committee did not have to make a finding of fact on this issue about intention). The court said that the separation agreement was determinative of the intention of Roy Yates and the plaintiff. It was a final resolution of the financial relationship between the parties. There was no mention of the pension or the survivor benefits in the agreement, but, because the retirement of Roy Yates was close, it must have been in the contemplation of the parties that the “release” from all “claims” included any claim that the plaintiff might have against the pension of Roy Yates.

Conway v. Conway Estate, 2006 CanLII 1448 (ON SC)

The applicant was named as the beneficiary of a group life insurance policy and of the pension plan survivor benefit of her former husband, before their separation. She sought a declaration, after her former husband passed away, that she was entitled to these benefits. The respondent argued that the applicant released her entitlement to the benefits in the separation agreement entered into with her former husband.  No reference was made in the separation agreement to the pension plan and the court was not persuaded that the release provisions amounted to a revocation of the beneficiary designation for the pension plan benefit (but the court did go on to declare, in order to prevent the applicant from being unjustly enriched, that the pension plan survivor benefit was impressed with a constructive trust in favour of the former husband’s estate).

King v. King, 2010 ONSC 6271 (CanLII)

The applicant sought a declaration that his former wife had waived her entitlement to his survivor’s pension benefits. Pursuant to section 46 of the Ontario Pension Benefits Act, a waiver of entitlement to benefits payable under a joint and survivor pension plan could be made by way of a particular form of waiver. The question was whether the general pension release contained in a separation agreement signed by the applicant and his former wife, coupled with the requirement in the agreement that each party would execute any documents required to give effect to the terms of the agreement, was sufficient to satisfy the requirements for a waiver set out in section 46. The court said that the release provision of the separation agreement did not mirror the prescribed form in any respect and, in view of the failure to comply strictly with the statute, the applicant was unable to make use of section 46.

Holowa Estate, 2011 ABQB 23 (CanLII)

When James Holowa passed away, a lump sum death benefit became payable under his pension plan and, according to the rules of the plan, the entire pension benefit would be paid to the respondent Hanrahan, to whom Holowa was still legally married. But, as found by the court, Hanrahan had waived her right to the pension benefit in an agreement made during the marriage and again in an agreement made on separation, where she expressly released any rights arising on death, or out of any Act of the Province of Alberta. The court concluded that the elements of unjust enrichment were satisfied on the facts of this case and that any pension benefit received by Hanrahan should be impressed with a trust in favour of Holowa’s estate. The court also considered a claim made under constructive trust principles, independent of unjust enrichment, and said that constructive trust cases cited by the parties turned on the sufficiency and specificity of a person’s waiver of rights to a benefit. The court went on to say that, as the divestiture of entitlement in this case was effectively done by contract, but not by order, this was exactly the type of situation that equity is designed to address, and a constructive trust was a concept that could be used to effect that equitable result.

Tower et al v. Estabrooks et al, 2012 NBCA 27 (CanLII) , application for leave to appeal dismissed, 2012 CanLII 49139 (SCC)

When the respondent Grant and her former husband Cedric Tower divorced, they executed a separation agreement and she executed a standard release in favour of him. Grant had been designated by Tower as the beneficiary of certain public service pension benefits and death benefits but, following the death of Tower, the appellants claimed that the benefits belonged to the estate as a result of the provisions of the separation agreement and the release. With respect to arguments based on the Martindale and Richardson decisions, above, the Court of Appeal said neither decision had a great deal of relevance: those cases were decided on the basis of whether or not there were “exceptional” circumstances which went beyond the mere issue, in this case, of whether a separation agreement and a release trumped the particular substitute beneficiary process promulgated by section 26 of the regulations under the Public Service Superannuation Act. The Court of Appeal held that section 26 is part of a complete code and in this case, it resolved the question of who was entitled to the benefits because there was no evidence that Tower ever intended any other result than an allocation of the benefits to Grant. The separation agreement and the release could not remove Tower’s freedom to revoke a designation or to substitute a beneficiary.

Tarr Estate v. Tarr, 2014 BCCA 315 (CanLII)

The appellant and her former husband Michael Tarr separated in 2002. At the time of the separation, Mr. Tarr elected under his pension plan to receive a 100% joint life pension which meant that pension benefits were to be paid out over the course of the lives of both of him and the appellant. The appellant was designated as the beneficiary of survivorship benefits and the election for joint survivor benefits was irrevocable. Later the appellant and Mr. Tarr entered into a separation agreement which purported to be a final resolution of all issues between them. The agreement included a general release of all claims and a provision that each party retained for his or her own use, free of any claim by the other, his or her own pension and benefits. After Mr. Tarr’s death, the monthly survivor benefit under his pension plan was paid to the appellant, pursuant to the election made in 2002, and his estate brought a claim to recover the benefits. Much of the decision of the Court of Appeal turned on the provisions of B.C. legislation, notably the Famiy Relations Act and the Pension Benefits Standards Act. With respect to the former statute, the court said that the Legislature had singled out as particularly important the protection of a spouse’s survivorship interest in a member’s pension, but nevertheless provided an avenue for such interests to be waived; such a “waiver” under s. 80(1)(b) of the statute must take into account the nature of a survivorship interest as a separately protected asset, and one that cannot be disposed of lightly. The court went on to say it was not convinced that a simple “waiver” based on the somewhat ambiguous intention of the parties to the separation agreement would necessarily suffice to waive this benefit under s. 80(1)(b) of the FRA. A clear and unambiguous waiver of the survivorship interest must be incorporated into a separation agreement in order to effect the waiver contemplated in the FRA. This at least requires specific mention of the separate survivorship interest. Mere inadvertence, inattention or a failure of the parties to turn their mind to such an interest, would not amount to a valid waiver. However, the court did need not to resolve this question definitively because of the even more explicit provisions of the PBSA. The effect of the provisions of the PBSA was that, as of the date when the separation agreement was executed, the survivorship interest was effectively the separate property of the appellant. Once it was understood that the survivorship interest was owned by the appellant on the date of the separation agreement, the resolution of the case became more straightforward: far from waiving the survivorship interest, the separation agreement confirmed that the parties would retain their respective pension rights. The court left open the question as to whether the owner of a survivorship interest can effectively ‘waive’ the interest so as to create a trust in favour of the member’s beneficiaries. The court said, though, that, in whatever context the conveyance of a vested survivorship interest is made, it must be explicit, and leave no doubt as to what it is the spouse is relinquishing. It was clear in this case that such language was lacking in the separation agreement.

6.16 Release of Remedy

The uncertainties associated with a release limited in scope to the relinquishment of a remedy are discussed briefly in The Law of Releases in Canada (at page 119). According to the PricewaterhouseCoopers decision below, a release that does not operate as a complete bar to an action or proceeding initiated by the releasor may yet be effective to limit the issues that can be raised in the proceeding or the remedies that may be available to the releasor.

Wieler v Saskatoon Convalescent Home, 2017 SKCA 90 (CanLII)

The appellant was hired by the respondent for a six-month probationary term. Before the period expired, the respondent terminated the appellant’s employment on the basis that she was not suitable for the position. The appellant was asked to sign a release in exchange for one month’s severance pay. She signed the release but then filed a complaint with the Occupational Health and Safety Division of the Saskatchewan Ministry of Labour, alleging that she had been the subject of discriminatory actions, contrary to section 27 of the The Occupational Health and Safety Act (OHSA). An occupational health and safety officer took the view that the release placed the appellant’s situation “outside of the jurisdiction” of the OHSA. The Court of Appeal said it was quite clear the officer should not have said the execution of a release placed the appellant “outside of the jurisdiction” of the OHSA. This was not a matter of “jurisdiction”. The court said the scope of an occupational health and safety officer’s task, for the purposes of applicable provisions of the OHSA, permitted the officer to determine that, even if a potentially discriminatory action took place (or is presumed to have taken place), the remedy for the same can be ousted or barred by a release, depending on its effectiveness in the circumstances in which it is given. It was a question of a loss of remedy, not jurisdiction.

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)

Even when a release is not effective to bar a particular proceeding, it may still be relevant to bar the merits of issues in that proceeding or in relation to the remedies that may otherwise be available.

6.17 Decisions on the Scope of Releases

The decisions in this section are separated into two categories depending only on a very general differentiating factor, namely, whether particular claims were, or were not, found to be within the scope of a release.

6.17.1 Claim Within the Scope of a Release

In each decision below, claims were found to be within the scope of a release given by the party making the claims and accordingly the release was effective to bar such claims.

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. The court said that all of the claims which one of the brothers was attempting to relitigate in this action were released and discharged by him as a component of the settlement of the earlier litigation. The current action was completely inconsistent with, and contrary to, the terms of the written releases signed in furtherance of the settlement.

Sokol v. Photonics Research Ontario (Ontario Centres of Excellence Inc.), 2009 CanLII 3788 (ON SC)

Upon the termination of his employment by the defendant, the plaintiff gave a very broad release of all claims against the defendant, including claims arising from the employment relationship. The court said that the breadth of the language of the release would encompass claims by the plaintiff against the defendant for shares of equities in companies that the plaintiff co-founded.

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 his business proposal was presented on a television show. He alleged that his proposal was edited in such a fashion as to misrepresent completely the merits of the business plan. The release gave the broadcaster the sole discretion to edit as it saw fit and the Court of Appeal held that the “misconduct” complained of was in no way extraneous to the contract or outside the scope of the release and exclusion clause: it fell squarely within the terms of the release and giving effect to the release did not defeat the objectives of the agreement between the parties.

Hancock v. WRHA, 2019 MBQB 52 (CanLII)

After the applicant’s employment with the Winnipeg Regional Health Authority was terminated, she grieved the dismissal through her union. The grievance was settled and the applicant signed minutes of settlement and a release. This proceeding involved the applicant’s request for access to investigation reports that were prepared in connection with allegations that WRHA had an unhealthy work environment for employees. The court said that the release the applicant provided to WRHA in settlement of her grievance applied to this case and prevented the applicant from seeking the redress that she wanted. At the time of the settlement and release, the applicant and the union’s counsel were well aware of the existence of the reports. The court was satisfied that, when she signed the release, the applicant had to know that she was giving up access to the reports. If she had any questions in that regard, she could have sought independent legal advice, but there was no evidence that she did so.

Quantech Electrical Contractors Limited v. Asco Construction Ltd., 2019 ONSC 1906 (CanLII)

The defendant was the general contractor for a construction project at a facility owned by the third party and the plaintiff was the electrical subcontractor. The third party proposed a global settlement that would include all claims by the defendant and the third party and the defendant reached a global settlement agreement. When the plaintiff made a claim against the defendant in respect of the project, the defendant sought contribution and indemnity from the third party. On the third party’s motion for summary judgment, the central issue was whether the wording of the global settlement agreement, as well as the release contained therein, prevented the defendant from asserting a third party claim. The court referred to Biancaniello, above, for the factors to consider when examining the scope of a release and concluded 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. The court found that the claim made by the defendant was subsumed in the general settlement agreement, the defendant had forever released the third party in respect of the claim and the defendant was estopped from asserting a further claim against the third party in respect of this item.

6.17.2 Claim Not Within the Scope of a Release

In each decision below, claims were found not to be within the scope of a release given by the party making the claims and accordingly the release was not effective to bar such claims.

Robitaille v. Vancouver Hockey Club Limited, 1981 CanLII 532 (BC CA)

The defendant professional hockey club unsuccessfully argued that the release provision in a standard players’ contract gave a complete answer to a claim for damages arising out of the negligence of the club. A clause of the contract said, that, if the player’s injuries resulting directly from playing for the club rendered him unfit to play skilled hockey, then during such time the player was so unfit, but in no event beyond the end of the season, the club would pay the compensation provided for in the contract and the player released the club “from any and every additional obligation, liability, claim or demand whatsoever”. The collective bargaining agreement between the players’ association and the league, provided, among other things, that each hockey player should enter into the form of standard players’ contract and, in the event of inconsistency, the collective bargaining agreement would govern. Under article 9.08 of the collective bargaining agreement an injured player was entitled to receive his remaining salary for the full term of his contract and not, as set out in the clause of the playing contract, to the end of the current season. The trial judge held that that the scope of the release was confined to compensation provided in the playing contract, and that the provisions were inconsistent with article 9.08 of the collective agreement. The Court of Appeal agreed with the trial judge that “the scope of the release must be intended to be co-extensive with the scope of the subject matter and thus would not affect the claim in this action”. The Court of Appeal added that the scope of the subject matter was the salary and benefits provided by article 9.08 of the collective bargaining agreement.

940833 Ontario Ltd. (Re) (In Bankruptcy), 2003 CanLII 9253 (ON SC)

A release could not be said to incorporate a claim that the releasor had no authority to deal with “one way or the other” when the release was given (more specifically a fraudulent preference claim that remained with and “belonged to” the trustee in bankruptcy, rather than the releasor, until assigned by the trustee).

Rankin v. Alberta Curling Federation Appeals Committee, 2005 ABQB 938 (CanLII)

The defendant curling federation relied on a release, which the court said generally dealt with injury or damages and was intended to prevent the defendant from being sued for monetary damage. The court did not interpret the release as preventing curlers from insisting that they be treated in a fair, transparent and impartial way when their conduct is being reviewed for disciplinary reasons. The release could not “oust the courts in the area of judicial review”.

McMaster v. Marier, 2009 CanLII 57551 (ON SC)

The plaintiff sued the defendant as the guarantor of a mortgage alleged to be in default. The defendant alleged, among other things, that the plaintiff had released him from his guarantee. The plaintiff had bought out the shares of the defendant and another shareholder in a company and, at the time of the share purchase, the plaintiff signed a share purchase agreement that included a release of all claims relating to the company’s business affairs. The defendant’s position was that he was relying on the release contained in a counter offer to the plaintiff for the sale of the shares which was accepted by the plaintiff. The counter-offer included a clause providing that, in return for the transfer of the shares, the parties would do the following: “We shall provide a release to you and the company for all claims of any kind.  You and the company will release both of us for all claims of any kind.” When the share purchase was eventually agreed to and a formal agreement was drawn up, it included the release relating to the business affairs of the company. The court said that the release that the parties eventually signed clearly related to the affairs of the company. The court was satisfied that the parties did not intend the release to apply to the mortgage.

Whitehorse Condominium Corporation No. 95 v. 37724 Yukon Inc., 2013 YKSC 4 (CanLII)

A condominium corporation applied for a permanent injunction prohibiting the condominium developer from proceeding with the construction of apartment buildings on land owned by the developer, alleging that the apartment buildings were contrary to the declaration and plan of the condominium corporation. The condominium developer claimed that the construction was not contrary to the declaration and the plan, or alternatively that the declaration and plan should be amended to permit the construction of the apartment buildings. The condominium developer also opposed the application on the basis of a release and waiver clause in the condominium corporation’s bylaw. As stated by the court, the release and waiver clause released any person involved in additional construction on the condominium property from acts of negligence, except when wilful or grossly negligent damage was done. The court said that the release and waiver had no application to this court action, as it would only be involved if the condominium developer caused wilful or grossly negligent damage to an owner. The release and waiver could not be conflated or expanded to release the condominium developer from its statutory obligation to obtain written consents of the owners to amendments to the declaration or plan. It also could not release the developer from its obligation to perform other duties imposed by the declaration or bylaw. In any event, even if it did apply to the case at bar, the release and waiver did not apply to the extent that the construction of the apartment building was an intentional or wilful act.

Prelorentzos v Havaris, 2015 ONSC 2844 (CanLII)

When John and Marie Clair Prelorentzos separated, they executed a domestic contract and Marie-Clair transferred a property to John. Marie-Clair agreed “to release all possessory rights” she had to the property in return for a payment made to her. John died intestate and Marie-Clair claimed entitlement to the entire estate under the Succession Law Reform Act. It was argued that the release language in the domestic contract precluded Marie-Clair from making any claim to the property. The court said that direct and cogent words were required before there would be a finding that a claim under the SLRA had been surrendered. The language found in the domestic contract fell well short. The release was expressly limited to “possessory rights”. Rights of occupation and ownership are not the same. The domestic contract did not prevent Marie-Clair from making a claim under the SLRA.

Livent Inc. v. Deloitte & Touche, 2016 ONCA 11 (CanLII)

The appellant Deloitte argued that the respondent Livent’s action was barred by releases and bar orders made by a U.S. court in approving settlements of class actions brought on behalf of Livent’s shareholders and noteholders. The Court of Appeal agreed with the two reasons given by the trial judge for rejecting this argument. First, the U.S. class action litigation was entirely different from this proceeding. The class actions were brought under U.S. securities legislation permitting investors to recover their personal financial losses from Deloitte as a result of misrepresentations in Livent’s financial statements. The claims in this action were brought by Livent, as distinct from its stakeholders, and the cause of action was for negligence in the performance of the auditor’s duties, not negligent misrepresentation. Second, Deloitte’s argument was contrary to Livent’s plan of reorganization, which confirmed that Livent’s assets included its claim against Deloitte. The Court of Appeal noted that the settlements approved by the U.S. court contained no release or bar of Livent’s claims against Deloitte.

Hawkshaw v Bachly Investments Inc., 2017 ONSC 1364 (CanLII)

The plaintiffs purchased and took possession of a newly-built home that was subject to the Tarion New Home Warranty Program. Days after the plaintiffs moved into the home, there was a heavy rainstorm and rainwater ran down the driveway towards the garage causing water to pool between the garage and the driveway and to enter the garage. The plaintiffs hired a contractor to shift the driveway, relocate a culvert, and pave the driveway. In a Tarion form signed by one of the plaintiffs, a list of deficiencies included “grading”, with specific reference to rainwater running up against the house and into the garage and to the work done by the plaintiffs to address this problem. The plaintiffs signed a release in respect of the alleged deficiencies set out in the Tarion form. In this action concerning other grading issues with the property purchased by the plaintiffs, certain of the defendants relied on the release. On a review of the terms of the release, the court found that the plaintiffs did not release the grading claims raised in the action. The reference to “grading” in the Tarion form described the nature of the problem. It was not stated to be a general release of all grading claims – it was included in a column where alleged deficiencies were to be set out according to “room/location”. The limit of the release to the driveway issue was confirmed in the “description” column, which referred only to the driveway pooling problem.

Boulet v. Inventys Thermal Technologies Inc., 2019 BCSC 1416 (CanLII)

The court considered the scope of a settlement agreement and release in respect of a wrongful dismissal claim by the petitioner – who was a founder and a shareholder of the respondent – and held that the petitioner had waived his rights to oppression remedies and had only preserved his rights to contractual remedies.

Tassone v. 407 ETR, 2019 ONSC 6999 (CanLII)

The plaintiff brought an action against the defendant company and its lawyers. The action against the company was settled and a full and final mutual release was signed. The plaintiff attempted to subpoena employees of the company in his action against the lawyers. The company sought to have the subpoenas quashed and, after a motion for this relief was successful, the company sought substantial indemnity costs of the motion. The plaintiff relied on the release as a bar to the claim for costs. The court concluded, for a number of reasons, that the release did not preclude the company from claiming costs. Among other things, the court said that the release was insufficiently broad to cover the cost claim, because the release related to claims in the action between the plaintiff and the company, while the subpoenas related to the action against the lawyers.