David Temple Plaintiff And: Mary Bailey Defendant And: City of Corner Brook First Third Party And: Mary Bailey Second Third Party And: Gerald Bailey Third Third Party Corrected Judgment : The text of the original judgment was corrected on August 30, 2018 v. a description of the correction is, 2018 NLSC 177

court crest IN THE SUPREME COURT OF NEWFOUNDLAND AND LABRADOR GENERAL DIVISION Citation : Temple v. Bailey , 2018 NLSC 177 Date : August 28, 2018 Docket : 201104G0049 Between: David Temple Plaintiff And: Mary Bailey Defendant And: City of Corner Brook First Third Party And: Mary Bailey Second Third Party And: Gerald Bailey Third Third Party Corrected Judgment : The text of the original judgment was corrected on August 30, 2018 and a description of the correction is appended. Before: Justice George L. Murphy Place of Hearing: Corner Brook, Newfoundland and Labrador

Date of Hearing: April 5, 2018

Summary: A

Summary Trial Application of the First Third Party was granted. The Court determined that the Release signed by theDefendant/Second Third Party and the Third Third Party prevented the Defendant/Second Third Party from bringing a third party claimagainst the First Third Party. Appearances: Alex Templeton Appearing on behalf of Mary Bailey and Gerald Bailey Erin Best Appearing on behalf of City of Corner Brook Authorities Cited: CASES CONSIDERED: London and South Western Railway v. Blackmore, (1870), L.R. 4 H.L. 610, 39 L.J. Ch. 713 (U.K. H.L.);Creston Moly Corp. v. Sattva Capital Corp., 2014 SCC 53; Bhasin v.

Hrynew, 2014 SCC 71; White v. Central Trust Co. (1984), (NB CA), 7 D.L.R. (4th) 236, 25 A.C.W.S. (2d) 258 (N.B.C.A.) RULES CONSIDERED: Rules of the Supreme Court, 1986, S.N.L. 1986, c. 42, Sch. D. TEXTS CONSIDERED: Geoff R. Hall, Canadian Contractual

Interpretation Law, 3rd ed (LexisNexis, 2016) REASONS FOR JUDGMENT Murphy, J.: INTRODUCTION [1] The First Third Party (hereinafter the “City of Corner Brook” or the “City”) made application to this Court for an order firstlypursuant to Rule 17A of the Rules of the Supreme Court, 1986, S.N.L. 1986, c. 42, Sch. D (hereinafter the “Rules”) and alternativelypursuant to Rule 38 of the Rules. [2] The order requested is that the third party claim brought against the City by the Defendant/Second Third Party (hereinafter“Mrs. Bailey”) be dismissed.

The basis on which the City claims entitlement to the requested order is a Full and Final Release (the“Release”) signed by the Third Third Party (hereinafter “Mr. Bailey”) and Mrs. Bailey (hereinafter collectively referred to as the“Baileys”). The City claims the Release is enforceable and bars the Baileys from bringing the third party claim against the City. TheBaileys disagree and argue the Release is not applicable to their third party claim against the City. [3] By Order made on December 13, 2017, I determined that this was a matter which could properly proceed by

summary trialunder Rule 17A of the Rules and a hearing on the merits of the Application was subsequently held.

background [ 4 ] The Plaintiff (hereinafter “Mr. Temple”) commenced an action against Mrs. Bailey on February 10, 2011, arising from injuries he sustained as a result of Mrs. Bailey colliding with him on O’Connell Drive in the City of Corner Brook on March 3, 2009 (the “Accident”). The Accident occurred while Mrs. Bailey was operating a motor vehicle owned by Mr. Bailey and while Mr. Temple was a pedestrian working with the City of Corner Brook on a job site on O’Connell Drive. [ 5 ] The Baileys commenced an action against the City on March 2, 2011 as a result of the Accident.

The Baileys settled their claim with the City of Corner Brook and signed the Release in favour of the City in the presence of their lawyer who witnessed their signatures on the Release. [ 6 ] On March 16, 2016, Mrs. Bailey commenced a third party claim against the City in relation to the Accident. By this third party claim, Mrs. Bailey claimed a contribution or indemnity from the City in the event she was found liable to Mr.

Temple in his claim against her. [ 7 ] On November 18, 2016, the City commenced a third party claim against the Baileys in which, among other things, it stated that the Baileys were bound by the Release signed by them in relation to the Accident and therefore that Mrs.

Bailey was barred from bringing the third party claim against the City. [ 8 ] On December 12, 2016, the Baileys filed a Defence to the third party action of the City in which, among other things, they stated that any release (which would include the Release) which may have been entered into by either or both of them had no application to the claim by Mr. Temple against Mrs. Bailey and thereby no application to the third party claim which Mrs. Bailey had brought against the City. issue [ 9 ] The issue I must decide in this case is whether the Release signed by the Baileys bars Mrs.

Bailey from bringing the third party claim against the City of Corner Brook. position of the parties [ 10 ] The position of Mrs. Bailey is that the Release does not bar her from bringing the third party claim against the City. Her argument is that a proper

interpretation of the Release in accordance with the established and applicable legal principles is that the subject matter of the third party claim was not specifically contemplated by the City and the Baileys at the time it was signed and was not intended to be barred by the Release. [ 11 ] The position of the City of Corner Brook is that the Release does bar the third party claim commenced against it by Mrs. Bailey. Its position is that the facts on which the third party claim of Mrs.

Bailey is based was or should have been known to her at the time she signed the Release and the third party claim itself were within her contemplation. In such circumstances, the City argues that the established and applicable legal principles mean that the third party claim is barred. applicable law [ 12 ] Whether Mrs. Bailey’s third party claim against the City of Corner Brook is barred depends on the interpretive approach to be applied to the Release. A release is in law a contract albeit a contract with a special interpretative principle applicable thereto. In his text Canadian Contractual

Interpretation Law , 3rd ed (LexisNexis, 2016), Geoff R. Hall discussed the nature of a release and the special interpretive principle at page 260: 8.10.1 The principle A release is a contract, and the general principles governing the

interpretation of contracts apply equally to releases. However, there is also a special rule which is superadded onto the regular ones. This rule comes from London and South Western Railway v. Blackmore , 174 an 1870 decision of the House of Lords. The rule in London and South Western Railway holds that a release is to be interpreted so that it covers only those matters which were specifically in the contemplation of the parties at the time the release was given.

The rule allows the court to consider a fairly broad range of evidence of surrounding circumstances in order to ascertain what was in fact in the specific contemplation of the parties at the relevant time, and it is not uncommon for a significant amount of extrinsic evidence to be examined when the rule is applied. However, like the law of contractual

interpretation generally, the scope of permissible extrinsic evidence does not extend to evidence of the parties’ subjective intentions; such evidence is strictly inadmissible. [ 13 ] Professor Hall went on to discuss the rule in London and South Western Railway v. Blackmore , (1870), L.R. 4 H.L. 610, 39 L.J. Ch. 713 (U.K. H.L.) and its application in Canada as follows at pages 260 and 261: 8.10.2 The rule in London and South Western Railway and its application in Canada In London and South Western Railway, Lord Westbury enunciated the following rule for the

interpretation of releases: The general words in a release are limited always to that thing or those things which were specially in the contemplation of the parties at the time when the release was given. But a dispute that had not emerged or a question which had not at all arisen, cannot be considered as

bound and concluded by the anticipatory words of a general release. 175 Although first set out in England nearly a century and a half ago, the rule in London and South Western Railway remains firmly engrained in Canadian law today. 176 Except as modified by the rule in London and South Western Railway , the

interpretation of a release is an exercise in contractual

interpretation like any other, grounded in the words chosen by the parties and governed by the principles which apply to the

interpretation of contracts generally. “It is established precedent that Releases are contracts and are to be interpreted upon the same principles of

interpretation as for any other contract.” 177 With the rule in London and South Western Railway superadded the structure of the analysis was nicely outlined by Bank of British Columbia Pension Plan v. Kaiser. 178 Chitty on Contracts sums up the relevant case law with respect to the

interpretation of a discharge of a contract or release as follows (pp. 1074-5): 1. No particular form of words is necessary to constitute a valid release. Any words which show an evident intention to renounce a claim or discharge the obligation are sufficient. 2. The normal rules relating to the construction of a written contract also apply to a release, and so, a release in general terms is to be construed according to the particular purpose for which it was made. 3.

The court will construe a release which is general in its terms in the light of the circumstances existing at the time of its execution and with reference to its context and recitals in order to give effect to the intention of the party by whom it was executed. 4. In particular, it will not be construed as applying to facts of which the party making the release had no knowledge at the time of its execution or to objects which must then have been outside his contemplation. 5. The construction of any individual release will necessarily depend upon its particular wording and phraseology.

This formulation well illustrates the structure of the exercise. The regular rules of

interpretation apply, but the rule in London and South Western Railway is superadded to those rules. [ 14 ] In terms of the general principles governing the

interpretation of contracts, there is a plethora of case law and academic writing dealing with this issue. The Supreme Court of Canada examined these principles and their evolution in its decision in Creston Moly Corp. v. Sattva Capital Corp. , 2014 SCC 53 and said at paragraph 47: 47 . . . the

interpretation of contracts has evolved towards a practical, common-sense approach not dominated by technical rules of construction. The overriding concern is to determine "the intent of the parties and the scope of their understanding" ( Jesuit Fathers of Upper Canada v. Guardian Insurance Co. of Canada , 2006 SCC 21 , [2006] 1 S.C.R. 744 , at para. 27 , per LeBel J.; see also Tercon Contractors Ltd. v. British Columbia (Transportation and Highways) , 2010 SCC 4 , [2010] 1 S.C.R. 69 , at paras. 64-65 , per Cromwell J.).

To do so, a decision-maker must 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. Consideration of the surrounding circumstances recognizes that ascertaining contractual intention can be difficult when looking at words on their own, because words alone do not have an immutable or absolute meaning: No contracts are made in a vacuum: there is always a setting in which they have to be placed... .

In a commercial contract it is certainly right that the court should know the commercial purpose of the contract and this in turn presupposes knowledge of the genesis of the transaction, the background, the context, the market in which the parties are operating. ( Reardon Smith Line , at p. 574, per Lord Wilberforce)

[15] Later in 2014 the Supreme Court of Canada issued another decision dealing with the

interpretation of contracts in Bhasin v.Hrynew, 2014 SCC 71. In the decision, the Supreme Court confirmed that the primary objective of contract

interpretation is to giveeffect to the intention of the parties. At paragraph 45, Cromwell, J. for the entire court stated: 45 Considerations of good faith are also apparent in contract

interpretation: Chitty on Contracts, at para. 1-050; Hall, at p. 347. Theprimary object of contractual

interpretation is of course to give effect to the intentions of the parties at the time of contract formation.However, considerations of good faith inform this process. Parties may generally be assumed to intend certain minimum standards ofconduct. Further, as Lord Reid observed in Schuler A.G. v. Wickman Machine Tool Sales Ltd., [1974] A.C. 235 (H.L.), at p. 251, "[t]hemore unreasonable the result the more unlikely it is that the parties can have intended it". As A. Swan and J.

Adamski put it, the duty ofgood faith "is not an externally imposed requirement but inheres in the parties' relation": Canadian Contract Law (3rd ed. 2012), at ss.8.134-8.146. [16] In terms of the circumstances existing at the time of execution of a release, Professor Hall noted that the rule in London andSouth Western Railway v. Blackmore requires a court to consider a broad range of evidence in trying to ascertain the relevantcircumstances at the time of execution of a release.

Beginning at paragraph 262 he stated: London and South Western Railway was extensively considered by La Forest J.A. (as he then was) in White v. Central Trust Co. [ (NB CA), [1984] N.B.J. No. 147, 7 D.L.R. (4th) 236 (N.B.C.A.)], which is generally considered the leading Canadian caseon the proper

interpretation of releases. La Forest J.A. made it clear that the rule in London and South Western Railway permits, andindeed requires the court to consider a broad range of evidence to ascertain the relevant circumstances at the time of execution of arelease: What the statement quoted [referring to Lord Westbury’s formulation, cited above] means is that in determining what was contemplatedby the parties, the words used in a document need not be looked at in a vacuum. The specific context in which a document was executedmay well assist in understanding the words used.

It is perfectly proper, and indeed may be necessary, to look at the surroundingcircumstances in order to ascertain what the parties were really contracting about. This expression of the rule was cited with approval by the Supreme Court of Canada in Hill v. Nova Scotia (Attorney General) [ (SCC), [1997 S.C.J. No. 7, [1997] 1 S.C.R. 69 at paras 18-21]. Hannan v. Methanex Corp. [ (BC CA), [1998] B.C.J. No. 318, [1998] 7 W.W.R. 619 (B.C.C.A.)] shows the potentialbreadth of the evidence that may be considered.

The court held that a release executed in November 1994 did not bar a claim by theplaintiff against the defendant for failing to pay a bonus in December 1994, reasoning that the release should not be interpreted to applyto events which were beyond the comprehension or contemplation of the parties at the time of execution.

In doing so, the BritishColumbia Court of Appeal relied on an opinion from a solicitor with respect to the proposed release to determine what was within thecontemplation of the parties at the time: I refer particularly to the solicitor’s opinion letter in which he discusses the problem areas in calculating the termination payment, andthe performance bonus is not mentioned. The letter recommends the execution of a release to bring to an end any differences ofinterpretation which later arise.

If, for example, the plaintiff made a further claim in 1994 for a larger annualized payment based on thebonus given to other executives (1.85 x Target) he would have been barred by the release because he compromised the issue in thesettlement process. [Emphasis added in original.] [17] One of the leading cases on the proper

interpretation of releases is the decision of the New Brunswick Court of Appeal in Whitev. Central Trust Co. (1984), (NB CA), 7 D.L.R. (4th) 236, 25 A.C.W.S. (2d) 258 (N.B.C.A.) which was referenced byProfessor Hall in the quote from his text set forth in the previous paragraph.

LaForest, J. writing in that decision discussed the applicableinterpretative principles at paragraphs 32 and 33 where he stated: 32 Before entering into an examination of the particular releases involved in this case and the circumstances under which they wereexecuted, it may be useful to make some general remarks regarding the manner in which releases are to be construed. Like other writtendocuments, one must seek the meaning of a release from the words used by the parties. Though the context in which it was executed maybe useful in interpreting the words, it must be remembered that the words used govern.

As in other cases, too, the document must be readas a whole. This is particularly important to bear in mind in construing releases, the operative parts of which are often written in thebroadest of terms. Thus reference is frequently made to recitals to determine the specific matters upon which the parties have obviouslyfocused to confine the operation of general words. As Lord Westbury stated in the House of Lord's case of London and South WesternRailway Co. v.

Blackmore (1870), L.R. 4 H.L. 610, at p. 623: "The general words in a release are limited always to that thing or thosethings which were specially in the contemplation of the parties at the time when the release was given". 33 By referring to what was in the contemplation of the parties, Lord Westbury was, of course, not opening the door to adducingevidence of what was actually going on in their minds, still less to making inferences about it. Such considerations are relevant solely to

issues such as undue influence, mistake, fraud and the like which have no application here. What the statement quoted means is that in determining what was contemplated by the parties, the words used in a document need not be looked at in a vacuum. The specific context in which a document was executed may well assist in understanding the words used. It is perfectly proper, and indeed may be necessary, to look at the surrounding circumstances in order to ascertain what the parties were really contracting about.

For authority for the foregoing propositions, see in addition to the cases to which I expressly refer, those cited in Halsbury's Laws of England (4th Ed.), Vol. 9, pp. 412-3, and Vol. 12, p. 642. [ 18 ] Thus, LaForest, J. concluded that the proper analysis in interpreting releases is like that applicable to the

interpretation of other written documents. One must seek the meaning of a release from the words used in the release because these words were chosen by the parties. LaForest, J. also commented that the test for determining what was in the contemplation of the parties is an objective one and that evidence of the parties’ subjective intentions is not permitted. LaForest, J.’s words on this point at paragraph 39 were: 39 . . .

Though one may look at the context to assist in interpreting the words used in an instrument, absent fraud, mistake or other such matter, what the parties may have thought was the effect of an instrument cannot be considered; . . . [ 19 ] What I can discern from the foregoing authorities is that in interpreting a release the goal is to ascertain the intention of the parties. In doing so, I must first look to the words of the release. This means the entirety of the release – all of its words. I may look at the context in which the release was signed in trying to interpret those words.

However, the review is to be carried out from an objective perspective and evidence of the subjective intention of the parties should not be considered. analysis [ 20 ] In my view, if you examine the words of the Release alone, it does indeed cover the third party claim which Mrs. Bailey has brought against the City. If you break down the Release vis a vis Mrs. Bailey and the City, she did a number of things, including: a. She released the City from all claims and demands of any kind or nature whatsoever arising out of or related to the Accident. b.

She agreed to indemnify and save harmless the City from any further claim or demands of any kind or nature whatsoever which she might bring or which might be brought by or on behalf of her or in her name against the City for or in respect of the claims and demands of any kind or nature whatsoever in respect of which she had released the City. c.

She agreed not to make any claims or take any proceeding against any other person who might claim contribution or indemnity from the City in respect of the claims and demands of any kind or nature whatsoever in respect of which she had released the City. [ 21 ] There is nothing in the words of the Release which limits it to covering only personal injury and property damage claims of Mrs. Bailey arising out of or related to the Accident. To the contrary, the wording is such that it covers all claims and demands of any kind or nature whatsoever arising out of or related to the said Accident.

It goes on to then specifically reference the personal injury and property damage claims of Mrs. Bailey using the words “. . . and without limiting the generality of the foregoing from all claims raised or which could have been raised in the action entitled 2011 04G 0062 between Mary Bailey as First Plaintiff, Gerald Bailey as Second Plaintiff and the City of Corner Brook City Council as Defendant . . . ”. [ 22 ] In my view, the fact the Release uses a broad, all encompassing description of the claims being released by Mrs. Bailey and then specifically references in addition the court action covering Mrs.

Bailey’s personal injury and property damage claim in the manner in which it does using the words “. . . and without limiting the generality of the foregoing” indicates that the Release was intended to cover more than just Mrs. Bailey’s claim for personal injury and property damage. It was intended to cover all claims which Mrs. Bailey might have against the City. This includes a claim such as the third party claim Mrs. Bailey has brought against the City. [ 23 ] My determination that the words of the Release alone does cover the third party claim does not end my analysis of the issue.

That is because of the fact we are dealing with a release and therefore I must go on to consider the special rule applicable to the

interpretation of releases. That requires me to look at what was in the contemplation of the parties at the time the Release was given and the specific context in which it was signed. [ 24 ] In terms of the context in which the Release was signed, it is noteworthy that at that time it was signed the Baileys were aware or ought to have been aware of the claim against them by Mr. Temple. That is because they were served with the Statement of Claim in respect of Mr.

Temple’s action against them on March 24, 2011 and did not sign the Release until August 26, 2011. [ 25 ] The fact that upon being served with the Statement of Claim they brought it to a representative of South Coast Insurance does not in my view detract from the fact they knew or ought to have been aware of the claim against them by Mr. Temple at the time they signed the Release. In fact, Mrs. Bailey acknowledged having read the Statement of Claim which was served on her. [ 26 ] It is further noteworthy in my view that Mrs.

Bailey was represented by a lawyer from the time she brought her court action against the City which was commenced on March 2, 2011 and the time she signed the Release. Further, the Release was signed in the presence of her lawyer. [ 27 ] From a factual perspective, she also knew of the facts underlying her third party claim. She clearly knew Mr. Temple had been injured and she knew the City was potentially liable for the accident that lead to his injury. This last fact is made clear from a review of her Statement of Claim against the City in court proceeding 2011 04G 0062.

By that Statement of Claim she alleged that the City was liable for the Accident. [ 28 ] Thus when she signed the Release she knew she was being sued by Mr. Temple as a result of the Accident and she knew the City was potentially liable for the Accident in which Mr. Temple had been injured. Thus she had knowledge of all of the facts which underpin her third party claim against the City. [ 29 ] Moving on from the context in which the Release was signed, I will next examine what was in the contemplation of the parties.

To do this it is helpful to examine the exchange of correspondence between counsel for the Baileys and counsel for the City leading up to the settlement between the Baileys and the City. [ 30 ] On August 10, 2011, counsel for the Baileys wrote to counsel for the City by email and stated: I have given this matter some thought. My client advises that the symptoms related to the injuries to her chest, legs and finger have largely resolved, but that she still experiences numerous disturbing memories of the accident, along with sleep interruptions and occasional headaches related to same.

She remains emotionally labile in any discussion of the accident, which has left her somewhat traumatized to this day. I would be prepared to advise her to accept $10,000.00 in full settlement of her claims. [ 31 ] On August 12, 2011, counsel for the City replied to the email from counsel for the Baileys and stated: Further to your email below and our telephone call yesterday, I have corresponded with my client in respect of this matter. As discussed in our call, my client feels strongly on liability and as you have noted, your client’s physical injuries have largely resolved.

Also, if the matter were to proceed, there would be some issue relating to whether a claim for mental distress can be borne out in light of the SCC decision in Mustapha v. Culligan . We therefore cannot agree to settle at $10,000.00 as proposed. Notwithstanding the foregoing, my client is aware that all litigation carries risks and costs and that even a

summary trial to dispose of the matter would only likely net party-and-party costs. Therefore and in all the circumstances, they would be prepared to make an offer of $7,500.00 (all-inclusive) to resolve this matter, contingent on the usual discontinuance and execution of a Full and Final Release to our satisfaction. This is higher than we were initially thinking but is extended to try and reach a fair compromise with your client.

Please note that this offer is only open for acceptance for ten (10) days, and we would appreciate your client’s earliest response to same. [Emphasis in original] [ 32 ] On August 16, 2011, counsel for the Baileys responded to counsel for the City and stated: My client accepts. Please forward funds and documents to our office as soon as possible. I’d like to close the file this month. [ 33 ] On August 18, 2011, the following email exchange occurred between counsel for the City and counsel for the Baileys: a. From counsel for the City to counsel for the Baileys: Thanks Kier.

I believe my client is out of office on vacation at present, but I will nonetheless send a request for funds and, in he (sic) meantime, will prepare the relevant Full and Final Release. Can I trust that you will prepare the Notice of Discontinuance? b. From counsel for the Baileys to counsel for the City: Yes Steve, I will take care of that. c. From counsel for the City to counsel for the Baileys: Thanks Kier. Please now find attached the Full and Final Release for your review. I also have an email out to my client to request funds, but as noted below, she is presently out of office on vacation. d.

From counsel for the Baileys to counsel for the City: Steve, I understand. I assume she is going to be able to take care of the funds before the end of the month? [ 34 ] On August 26, 2011, the following email exchange occurred between counsel for the City and counsel for the Baileys: a. From counsel for the City to counsel for the Baileys: I was able to get through the manager at my client’s office last Friday after my below email to you (the ½ hour time difference worked in our favour), and have just now received the settlement funds.

They have to be deposited in trust here and then issued to your firm in trust, however, so we will not be able to get these out to you today. Hopefully they will be received early next week. In the meantime, can you confirm that everything is in line for the Release to be executed by your clients and the Discontinuance without costs to be filed?

. . . b. From counsel for the Baileys to counsel for the City: Signed Release is on the way to your office. Discontinuance on the way to Court. [ 35 ] On August 29, 2011, counsel for the City wrote to counsel for the Baileys and stated: We write further to our email exchange of August 19, 2011 and enclose herewith our firm cheque in the amount of $7,500.00 (all inclusive) as full and final settlement of Ms. Mary Bailey’s claim.

We trust the enclosed is in order and look forward to receiving the executed original Full and Final release as well a copy of the Notice of Discontinuance and confirmation that same has been filed with the Supreme Court of Newfoundland and Labrador. [ 36 ] The exchange of correspondence between counsel for the City and counsel for the Baileys informs what was in the contemplation of the parties. I do not doubt that on August 10, 2011 when counsel for the Baileys emailed counsel for the City and advised that he was prepared to advise Mrs.

Bailey to accept $10,000 in full and final settlement of her claims he may have only been contemplating her claim for personal injury and property damage. [ 37 ] However, when counsel for the City responded with what was essentially a counter-offer on quantum at $7,500, it was indicated that this was contingent on inter alia “. . . a Full and Final Release to our satisfaction”. At this point of course there was no agreement between the parties on quantum and no agreement on the type of release which would have to be signed by the Baileys in exchange for the payment of a sum of money.

The exchange of correspondence to this point was simply standard negotiating on settlement of a court action. [ 38 ] Further, even on August 16, 2011, there was no settlement between the parties. While there had been a meeting of the minds on quantum, any settlement in my view remained contingent on agreement being reached on the terms of a release. That is because the offer to pay $7,500 was contingent on getting a “Full and Final Release” to the satisfaction of the City.

It is for this reason that in this case it is the Release which was prepared by counsel for the City and sent to counsel for the Baileys which in my view is of critical importance in determining what was in the contemplation of the City. [ 39 ] The Release was prepared by counsel for the City and the broad and all-encompassing wording of same satisfies me that its purpose was to settle any and all claims which Mrs. Bailey might have against the City arising out of the Accident.

In my view, that makes sense from the perspective of a party, such as the City in this case, which is dealing with a claim being brought against it by a person such as Mrs. Bailey. The facts reveal that the City was denying liability in respect of Mrs. Bailey’s claim and it appears was offering a sum of money merely to avoid the expense of litigation. In such circumstances, I doubt that a party such as the City would pay a sum of money to partially get a release from a person such as Mrs. Bailey.

That is because they might still be forced into a situation where they have to defend litigation by such a person and spend money in doing so when the very reason they paid a sum to settle in the first place was to avoid having to incur the expense of defending the litigation. [ 40 ] This convinces me that what was in the contemplation of the City when it presented the Release to counsel for the Baileys was that they would be released from any and all claims and demands which Mrs.

Bailey might be able to bring against it as a result of the Accident and thereby close their file and not have to spend any further money dealing with a claim from Mrs. Bailey. [ 41 ] Counsel for the City sent the Release which was acceptable to the City to counsel for the Baileys. In my view, there was no binding settlement at this point. There remained one thing to resolve, that was finalization of the agreed terms of a release. Upon counsel for the Baileys receiving same, there could have been negotiations on the wording of the Release. It appears, however, that there were no such negotiations.

Instead, it was accepted as presented by counsel for the City. [ 42 ] I know from the Answers to Interrogatories that the Baileys read the Release before signing same and they signed it in the presence of their lawyer. I can only conclude that upon review of the Release, which was acceptable to the City, and with the benefit of legal advice they accepted the terms and conditions of the Release. Further, at the time the Baileys accepted the Release, they were aware of the facts underpinning the claim against them by Mr. Temple and that a court action had been commenced against them by Mr.

Temple. [ 43 ] In light of the foregoing knowledge on the part of the Baileys and that the City’s objective in my view was to rid itself of any possible claim by Mrs. Bailey, it is my determination that what was in the contemplation of the parties was that Mrs. Bailey could no longer bring any claim or demand whatsoever against the City relating to the Accident and the City did not need to have any concern for a claim from the Baileys relating to the Accident. [ 44 ] I do not believe that either of the parties was thinking of any particular type of claim by the Baileys or Mrs.

Bailey, including a third party claim. However, I do not believe that it is necessary that the parties be specifically contemplating a particular type of claim. Instead, I believe it is sufficient if the parties were contemplating any and all types of claims relating to a particular event such as the Accident. That, in my determination, was the situation here. What the parties were contemplating by payment of the $7,500 and signing the Release was that Mrs. Bailey could bring no more claims or demands against the City relating to the Accident. This includes the third party claim she has attempted to bring.

Summary and conclusion

[ 45 ] The Release covers the third party claim which Mrs. Bailey has brought against the City. By the Release she contractually agreed to release the City from any and all claims which includes the third party claim. As a result, the

Summary Trial Application of the City is granted. The appropriate remedy in these circumstances is an order staying the third party claim. The City shall be entitled to its costs against the Baileys on the basis of Column 3 of the Scale of Costs. _____________________________ George L. Murphy Justice APPENDIX 1. The date in paragraph 3 was changed from December 13, 2107 to December 13, 2017.