Clarification from the Supreme Court of Canada on the Interpretation of Releases

By Administrator // In Articles // 2021.08.30 // Read More

Clarification from the Supreme Court of Canada on the Interpretation of Releases

Author: Corey M. Smith, Articled Student

Case: Corner Brook (City) v. Bailey, 2021 SCC 29 

Background 

On March 3, 2009, while driving her husband’s car, Mrs. Mary Bailey struck a Corner Brook City (the “City”) employee who was performing road work. The employee sued Mrs. Bailey for injuries he sustained in the accident.

In a separate action, Mrs. Bailey and her husband sued the City for property damage to their car and the physical injury Mrs. Bailey suffered. Eventually, the Baileys reached a settlement with the City that released the City from liability relating to the accident and discontinued their action. The release stated that the Bailey’s agreed to release the City from all demands and claims of any kind or nature whatsoever arising out of the 2009 accident.

Nearly five years later, Mrs. Bailey brought a third party claim against the City for contribution or indemnity in the action brought against her by the employee. A third party claim involves a party to an action other than the plaintiff seeking relief from another party. Mrs. Bailey’s third party claim in effect asked that the City be liable for any injury to the employee if Mrs. Bailey were found to be responsible for the employee’s injuries.

In response, the City brought a summary trial application on the basis that the release barred the third party claim. Mrs. Bailey’s position was that the release did not bar the claim because the third party claim was not specifically contemplated by the City and the Baileys when they signed the release.

The application judge concluded that the release barred Mrs. Bailey’s third party claim against the City. The Court of Appeal allowed the appeal and reinstated Mrs. Bailey’s third party notice. The City then appealed to the Supreme Court of Canada.

The Supreme Court agreed with the application judge and the City. They allowed the City’s appeal and held that the release barred Mrs. Bailey’s third party claim against the City.

Releases to be interpreted like any other contract 

The Supreme Court clarified that releases are contracts and that the general principles of contractual interpretation apply to them. The Court referred to its previous decision in Sattva Capital Corp. v. Creston Moly Corp., 2014 SCC 53 that directs courts to “read the contract as a whole, giving the words used their ordinary and grammatical meaning, consistent with the surrounding circumstances known to the parties at the time of formation of the contract”. Based on Sattva, courts should use objective evidence of the facts at the time of the agreement to aid in their interpretation. After considering Sattva, the Court held that there is no special rule of contractual interpretation that applies to releases.

The Court discussed application of the Blackmore Rule which previously set out a special approach to the interpretation of releases. The Blackmore Rule stated that a release would not apply to circumstances of which a party had no knowledge of when the release was executed. The Blackmore Rule also meant that if a release was so general as to include matters never contemplated by the parties, a party

would be entitled to relief. The Court said that the Blackmore Rule is no longer useful in interpreting releases and should no longer be referred to because Sattva has taken over its function.

In the present case, the release included “all actions, suits, causes of action . . . foreseen or unforeseen . . . and claims of any kind or nature whatsoever arising out of or relating to the accident which occurred on or about March 3, 2009”. The Court found that Mrs. Bailey’s third party claim came within the plain meaning of the words of the release. They also found that the surrounding circumstances confirmed that the parties had objective knowledge of all facts underlying Mrs. Bailey’s third party claim when they agreed upon the release. The parties had also limited the scope of the release to claims arising out of the 2009 accident and there was nothing in the surrounding circumstances to suggest departing from the plain meaning of the release.

Further considerations

The Court offered a number of further considerations for the interpretation of releases. Distinctions between claims based on facts known to both parties and claims based on facts known only to one party may be useful in assessing whether parties mutually intended to release a particular kind of claim. However, the ultimate question in interpreting a release is whether a claim is of the type to which a release is directed. Whether a release covers a claim depends on the wording and surrounding circumstances of the release in each case.

Releases may cover unknown future claims. Yet the broader the wording of a release, the more likely the release will conflict with the surrounding circumstances of the agreement. In contrast, releases that include wording as to whether they will cover particular subject matter or time periods are less likely to lead to disputes.

Practice Coordinator

By Administrator // In Uncategorized // 2021.08.10 // Read More

We are currently seeking a full time Practice Coordinator with experience in insurance defence to join our team.

Lindsay LLP is an acknowledged leader in the field of insurance law and related civil litigation.  We were voted as one of the Top 10 Insurance Boutique for 2021-2022 by Canadian Lawyer Magazine.

We offer a friendly workplace environment along with a competitive salary and benefits package which includes extended health and dental, Employee Assistance Program (EAP), and a Health Spending Account.  At Lindsay LLP, we recognize the importance of maintaining a positive work life balance.

Qualifications and Experience:

• Graduate of an accredited Legal Administrative Assistant program
• 10+ years of experience in insurance defence practice
• Solid understanding of civil litigation procedures
• Proficient with Word, Outlook, and comfortable with technology
• Excellent verbal and written communication skills including composing, editing and proofreading
• Excellent organizational and time management skills
• Ability to handle a busy practice and multitask
• Ability to exercise sound judgement, discretion and maintain confidentiality
• Ability to work independently as well as part of a legal team
• Knowledge of Worldox Document Management System is an asset

Duties:

• Overseeing workflow of Legal Administrative Assistants
• Maintaining firm precedents
• Developing and implementing efficiencies
• Training new employees and ensuring compliance with firm protocols and procedures
• Collecting and disseminating updated court procedural information
• Assisting one lawyer with their practice

Please forward your cover letter, résumé, and salary expectations in confidence to careers@lindsayllp.ca.

We thank all applicants for their interest, however only those candidates selected for consideration will be contacted.

What counts as “using” a cell phone under the Motor Vehicle Act?

By Administrator // In Articles // 2021.08.06 // Read More

What counts as “using” a cell phone under the Motor Vehicle Act?

Author: Corey M. Smith, Articled Student

Case: R. v. Rajani, 2021 BCCA 292 (CanLII)

The Decision

Resting your phone or other electronic device on or under your leg may be an offence under the Motor Vehicle Act (the “MVA”). In R. v. Rajani, 2021 BCCA 292, the Court of Appeal held that using a cell phone is not limited to having it in a person’s hands. In other words, if someone is supporting a phone or other electronic device in any way with their body, this may count as using an electronic device.

Mr. Rajani was issued a ticket for using an electronic device while driving. The ticket was issued after an officer approached Mr. Rajani’s car and found a cell phone connected to a cord face-up in his lap. At the Court of Appeal, Mr. Rajani argued he had the phone wedged between his thigh and the seat, while the officer said the phone was on Mr. Rajani’s lap facing up. The Court held that in either scenario Mr. Rajani was holding the phone by physically supporting it with a part of his body in a position in which it could be used.

Under the MVA, a person must not use an electronic device while driving or operating a motor vehicle on a highway. The word “use” in the MVA includes holding the device in a position in which it may be used.

The Court of Appeal determined that “holding” is not limited to holding with one’s hands. The Court looked to common dictionary definitions of “holding” and concluded that physically grasping, carrying, or supporting a device with any part of one’s body in a position which the device may be used, are all considered holding.

Significance

The important question raised by the case is whether the prohibition against using an electronic device while driving applies to a cell phone that is resting on or wedged beneath someone’s leg but not in their hands, and whether this counts as “holding”? More generally, should the words “use” and “holding” be interpreted broadly enough to include electronic devices being supported by a driver in some way but not in their hands? Based on this decision, it appears that the courts will take a broad approach to interpreting “using” an electronic device. Under this approach, “using” includes when someone supports a device in any way with their body, and not simply when they are holding it with their hands.