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

By // 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 


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.



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

By // 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.


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.


The Guiding Principles of Management Fees: Contemporary Trends in British Columbia Litigation.

By // In Articles // 2020.02.05 // Read More

The Guiding Principles of Management Fees: Contemporary Trends in British Columbia Litigation.  

By: Tiffany Tsang and David M. Giroday 


An award for management fees, when justified, can be granted by the court to compensate a plaintiff for the cost of hiring an investment manager to handle the investment of their damages award in a personal injury matter. These are more often awarded where the plaintiff has limited investment experience and in instances where a plaintiff receives a sizeable award. In such circumstances, a consideration of management fees by the court and counsel may be necessary.

Medical Marijuana in Personal Injury Actions

By // In Articles // 2018.07.05 // Read More

Tiffany P.K. Tsang and Callan W. MacKinlay

Originally presented at CLEBC’s Personal Injury Conference, 2018, held at Vancouver, BC on June 15, 2018.

  1. Introduction

The purpose of this paper is to provide an overview of the current state of the law and jurisprudence on the current and potential future guidelines for authorization of medical marijuana by medical practitioners; judicial considerations for awarding versus denying medical marijuana claims; and the factual considerations that counsel should pay attention to when seeking or defending an award for medical marijuana.

The Breach of a Statutory Provision Does Not Determine Negligence

By // In Articles // 2018.07.04 // Read More

Tiffany P.K. Tsang and Callan W. MacKinlay

In cases such as motor vehicle accident claims, it is tempting for parties (and even courts) to infer negligence from a breach of a statutory regulation; however, we are reminded in the recent case of Haynes v. Haynes, 2017 BCCA 131 that the factual matrix and evidence of surrounding circumstances ultimately determines liability. A regulatory breach is just one element of that factual matrix. Fundamentally, the plaintiff still bears the burden of proving a breach of the common law standard of care, notwithstanding the presence of a regulatory breach by the defendant. That breach alone will not suffice to prove negligence.

Allocation of Defence Costs and Conduct of Defence

By // In Articles // 2018.06.27 // Read More

Scott W.K. Urquhart and Nikta Shirazian

I. Introduction

In most instances where a duty to defend has been triggered the insurer has the obligation to pay the defence costs and will have conduct of the defence. However, this arrangement is not true in all cases. Indeed, certain circumstances arise where the costs of defending an action can be allocated amongst various parties. For example, such a scenario may arise when an insured has more than one liability insurer and both are obligated to defend an action. It may also arise in instances where there are covered and uncovered aspects to a particular claim. The purpose of this paper is to provide an overview of the legal principles governing the allocation of defence costs in the aforementioned scenarios. This paper will also address the legal principles governing the determination of which party obtains conduct of the defence in such circumstances.

Good Intentions, Unintended Consequences: Potential Pitfalls for the Insurance Industry and the CTR.

By // In Articles // 2016.04.27 // Read More

Authors:Scott W.K. Urquhart and Margot Liechti

British Columbia is in the process of rolling out a new dispute resolution mechanism for strata disputes and matters falling within the Provincial Court Small Claims jurisdiction ($25,000.00). The object of the Civil Resolution Tribunal (the “CRT”) is admirable. The aim is to provide convenient and cheaper access to justice through an online portal that is user friendly and purged of byzantine legal processes.

Course of Construction Policies and Consequential Economic Losses

By // In Articles // 2016.04.20 // Read More

Author: Scott W.K. Urquhart 

Acciona v. Allianz and Claims for Increased Expense.

Much ink has been spilled on the BC courts’ decisions in Acciona Infrastructure Canada Inc. v. Allianz Global Risks US Insurance Company[1].  But the lion’s share of the commentary has focussed on the defect exclusion at issue in that case, known as the LEG 2/96 exclusion, and the finding that it did not exclude damage to defectively constructed property.  Garnering less attention are the courts’ rulings with respect to the economic claims presented by the insured.

The History and Treatment of Damages in Canada

By // In Articles // 2014.09.18 // Read More

Author: Lawrence Bau


The law of damages in Canada has undergone unique changes over the past 50 years which have helped shape the actions of Canadian society. The development of three areas of damages in Canada is of particular interest: non-pecuniary, punitive, and aggravated damages.

With respect to non-pecuniary damages, the Supreme Court of Canada, Canada’s highest court, implemented a series of rulings in the late 1970s which affected the way non-pecuniary damages were awarded. The rulings have had longstanding social implications. We will discover how the rule has been treated in subsequent cases and predict how it will likely fare in the future.

Determining Coverage in Cases Involving Multiple Concurrent Causes

By // In Articles // 2014.09.18 // Read More


Insurance policies commonly contain clauses which stipulate which losses are covered and which are excluded under the policy. However, determining whether coverage applies can be complicated when a loss can be attributed to two concurrent causes, one of which is excluded from coverage. An example if where an explosion causes a fire on the insured’s property. Damage or loss from the explosion is covered but the fire is excluded from coverage.