McMillan Estate v. Booth, 2021 NSSC 284

SUPREME COURT OF Nova Scotia Citation: McMillan Estate v. Booth , 2021 NSSC 284 Date: 20210929 Docket: Hfx No. 489435 Registry: Halifax Between: Douglas McMillan, as Executor of the Estate of Veronica McMillan Plaintiff v. Steven Booth Defendant DECISION ON MOTION FOR ORDER TO APPROVE SETTLEMENT Judge: The Honourable Justice Scott C.

Norton Heard: Written Decision: September 24, in Halifax, Nova Scotia September 29, 2021 Counsel: Tara Miller, Q.C., for the Plaintiff Lisa Richards for the Defendant By the Court: Background Facts [ 1 ] The parties attended a Judicial Settlement Conference (“JSC”) before me on May 10, 2021. They reached agreement on resolution of the Plaintiff’s Fatal Injuries Act, RSNS, 1989, c. 163 , claim upon payment of a sum of money to Mr.

McMillan and his three daughters on behalf of the Defendant by his automobile liability insurer, in exchange for a release and dismissal order. [ 2 ] On May 20, 2021 counsel for the Defendant forwarded a form of Final Release (“Release”) to counsel for the Plaintiff to be signed by Mr.

McMillan (as “Releasor”) that included, inter alia , a confidentiality clause restricting his ability to disclose the existence and terms of the settlement: …the Releasor agrees that this settlement and the facts surrounding it shall be kept private and confidential between the Releasor and the Releasees and shall not in any fashion, either private or publically (sic), be published, disclosed or communicated in any way by the Releasor or by any person on his behalf, except as may be required by law. [ 3 ] Counsel for the Plaintiff responded that there had been no negotiated agreement to provide for confidentiality or non-disclosure

of the settlement or its terms. Counsel for the parties exchanged correspondence outlining their respective positions and instructions butwere unable to come to any resolution of the issue of whether a confidentiality clause would be included in the Release. [4] By Notice filed September 9, 2021, the Plaintiff moved for an order confirming the terms of settlement reached at the May 10,2021 JSC. The matter was heard by me as the presiding judge at the JSC pursuant to Civil Procedure Rule 10.04(3). Both parties filedaffidavit evidence and briefs.

The motion was heard on September 24, 2021. [5] The Plaintiff’s evidence is contained in the Affidavit of Douglas McMillan, sworn September 9, 2021 and a reply affidavit ofKelly Dion, a paralegal at the Plaintiff’s counsel’s law office, sworn September 20, 2021. The Defendant’s evidence is contained in theAffidavit of Vicki Little, Senior Claims Examiner at Wawanesa Insurance (the Defendant’s automobile liability insurer), sworn July 15,2021 and Arlene Armsworthy, litigation paralegal at the Defendant’s counsel’s law office, sworn September 16, 2021. Ms. Dion and Ms.Little were cross-examined on their affidavits.

Issue [6] The sole issue is whether the settlement reached between the parties at the May 10, 2021 JSC was subject to a condition that theRelease would contain a confidentiality clause. The parties agree there was no express agreement on the inclusion of the confidentialityclause. The question is whether it was a condition applied either as a standard clause or by the past conduct of counsel for the parties. The Parties’ Positions [7] The Plaintiff asserts: 1. A confidentiality or non-disclosure clause is not a standard or implied term of a final release; 2.

Any compelling need for confidentiality is negated, as the terms of Settlement are in the public domain. [8] The Defendant’s position is: 1. A confidentiality clause is part of a standard full and final release in injury actions in Nova Scotia in 2021. 2. Further, or in the alternative, a confidentiality clause was an implied term of the settlement agreement reached between theparties at the May 10, 2021 JSC. Analysis [9] It is common ground between the parties that: 1.

Both parties understood that the settlement was conditional on the provision of standard closing documents which included aconsent dismissal order and a release. 2.

There was no express condition or term of the settlement that the Final Release would include a confidentiality clause. [10] The parties agree that a settlement reached by parties to litigation is in essence a contract which requires a meeting of the minds ofthe parties and that the terms of settlement must reflect the agreement reached by the parties to be enforceable. [11] In Certified Design Consulting Inc. v Alex Lane Properties Inc. 2015 NSSC 367, Justice Wright observed that there are caseswhere it is appropriate for the Court to imply a term to a contract to give effect to it: [41] It was recognized by the Nova Scotia Court of Appeal in Sinanan (at para. 47) that there are appropriate cases where the courtmust imply a term to a contract in order to give effect to it.

On the subject of releases, the Court of Appeal cited with approval (at para. 38)the following passage from Cellular Rental Systems Inc. v. Bell Mobility Cellular Inc. [1995] O.J. No. 721: It is well established that settlement implies a promise to furnish a release unless there is agreement to the contrary. On the other hand, noparty is bound to execute a complex or unusual form of release: although implicit in the settlement, the terms of the release must reflect theagreement reached by the parties.

This principle accords with common sense and normal business practice. [12] The Plaintiff refers to Ontario jurisprudence that stand for the proposition that a confidentiality clause is not an implied term of afinal release: Abouchar v. Conseil scolaire de langue francaise d’Ottawa-Carleton, (ON CS), [2002] O.J. No. 1249,and Gilles Dube Investments Inc. v. Shooman (c.o.b. Fast Lube), 2013 ONSC 4348. The Court in Gilles followed the reasoning inAbouchar and at paras 10-12 Justice Metivier said: 10 I agree with the reasoning in Abouchar c. Ottawa-Carleton (Conseil scolaire de langue française

section publique) (2002), (ON SC), 58 O.R. (3d) 675 (Eng.) (Ont. S.C.J.). As in that case, the parties here never discussed a non-disclosure clausebefore the offer to settle was accepted. There was no breach or repudiation of either the spirit of the terms of the concluded settlement. Seealso Cellular Rental Systems Inc. v. Bell Mobility Cellular Inc., [1995] O.J. No. 721 (Ont. Gen. Div.). 11 In the text The Law of Releases in Canada, Fred D.

Cass, Canada Law Book, page 65, the author notes: ...the prudent course for a party seeking confidentiality is to bargain for it as part of the process of reaching an agreement. 12 No confidentiality clause is implied and the release shall omit same. [13] Abouchar was followed again in Terranata Winston Churchill Inc. v. Teti Transport Ltd., 2020 ONSC 7577. Justice Vella foundthat a confidentiality clause did not form part of a standard general release. His reasoning is set out at paras 31-32 and 44-46: General Principles for Implied Release Terms

31 When the parties have agreed that a release will be executed, but the settlement agreement is silent as to the content of the release, thecourt will imply that the parties agreed to sign a standard form general release consistent with the settlement - nothing more and nothingless. The court will imply only those terms that are "standard" or "usual" as those terms have been interpreted in the jurisprudence. 32 As noted at para. 24 in Cellular Rental Systems Inc. v. Bell Mobility Cellular Inc. (1995), (ON SC), 23 O.R. (3d)766 (Ont. Div. Ct.); aff'd [1995] O.J. No. 3773 (Ont.

C.A.): It is well established that settlement implies a promise to furnish a release unless there is agreement to the contrary. On the other hand, noparty is bound to execute a complex or unusual form of release: although implicit in the settlement, the terms of the release must reflect theagreement reached by the parties. This principle accords with common sense and normal business practice. 33 In determining what terms falls within the scope of a standard release, the jurisprudence has established that the test to be applied isobjective, rather than the subjective intentions of the parties to the settlement.

Two guiding principles driving this analysis are the generalpurpose of releases and the business efficacy of settlement agreements. … 44 In Abouchar, the court had to determine whether a non-disclosure clause was an implied term of the standard general release that wasrequired by the settlement and silent with respect to the required terms. There was no discussion leading to the settlement concerninginclusion of a non-disclosure clause as a term of the release.

When the defendant inserted a non-disclosure clause into the draft release in itsfavour, the plaintiff refused to sign it. 45 The court rejected the proposed non-disclosure clause finding this type of clause was not standard or usual in releases. The partiesbargained for a standard general release with only the usual terms. Therefore, this type of clause was not specifically agreed upon by bothparties it was not an implied part of the bargained for release.

At para. 11, the court ordered the plaintiff to sign the release in the formproposed by the defendant excluding the non-disclosure clause: "The gist of a "complete and final" release is for the plaintiff to dischargethe defendants (and other persons referred to therein) from any action, complaint, claim, indebtedness, etc. In my opinion, the non-disclosure clause is not part and parcel of a release. If one wishes to insert one, it must be "negotiated." 46 Abouchar is instructive but I disagree with Terranata's application of the ratio to this case.

The key finding in Abouchar was that anon-disclosure clause is not a usual term of a general release. Accordingly, the court would not imply a non-disclosure clause into thisstandard general release because it was not specifically agreed upon in advance of the settlement. [Emphasis added] [14] The Defendant submits that these cases are dated and that the standard of practice can change over time. To establish thatconfidentiality clauses are part of a standard release in Nova Scotia in 2021, the Defendant relies on the evidence of Vickie Little andArlene Armsworthy. Ms. Little attests that: 4.

I have been a Senior Claims Examiner with Wawanesa for six years. 5. In that role, I have had an average of roughly 100 open files in litigation with defence counsel from as many as none firms handling atany given time. 6. Based on my experience, and supported by my review of my files, the form of release used by all defence counsel I have worked withstarted to include confidentiality clauses, similar to the one at issue in this matter, in or about 2015. 7.

To my recollection, and again as supported by my review of my files, there has only been one other occasion when plaintiff counselchallenged the confidentiality clause as not being a standard part of a release. [15] Ms. Little further attests that Wawanesa’s policy is that releases should and do contain confidentiality clauses “largely out ofconcern that settlement details might otherwise be posted on social media or other widespread forums.” In addition, according to Ms.

Little,Wawanesa is concerned with “protecting the privacy interests of their insured defendants” and that disclosure of settlement details “wouldhave adverse consequences for its negotiating position in other matters.” [16] In cross-examination, Ms. Little acknowledged that in addition to the 100 files being handled by defence counsel that sheoversaw, she had another 25-30 files that she negotiated directly with plaintiff counsel. When settlements were reached on those files,Wawanesa used the Insurance Bureau of Canada (“IBC”) Release form that did not contain a confidentiality clause.

She furtheracknowledged that if Mr. McMillan had settled his claim directly with Wawanesa before they retained counsel he would have been asked tosign the IBC Release. [17] This evidence substantially contradicts the concerns stated in Ms. Little’s affidavit. [18] Ms.

Armsworthy attested that she has been a legal assistant at the Defendant’s counsel’s law firm (Ritch, Williams & Richards)(“RWR”) since April 2019 and that: • She has drafted 15 releases for three different partners and all 15 contained a confidentiality clause. • In 3 other matters, the release provided to Tara Miller, Q.C. as plaintiff counsel contained a confidentiality clause. [19] In reply, the Plaintiff filed an affidavit from Kelly Dion, a paralegal who in 2016 became employed by Plaintiff counsel’s lawoffice (MDW Law) (“MDW”), sworn on September 20, 2021. Ms.

Dion attests that she has worked in civil litigation for 31 years. For the8 years before joining MDW she worked as a paralegal for Intact Insurance. Ms. Dion searched the MDW records going back to May 2015.Her review yielded the following observations: • Since 2015 MDW settled 12 claims with Wawanesa as automobile insurer

• One was settled with Defendant’s counsel Ms. Richards • Four were settled with other insurance defence law firms • Seven were negotiated and settled with Wawanesa directly, including three with Ms. Little • Of the 12 claims, only one included a confidentiality clause and it involved Ms. Richards’ firm. • Since January 2020 MDW Law has settled a total of 50 personal injury claims involving automobile liability or commercial general liability insurers either directly or through defence counsel.

Of the 50 claims settled, only seven had releases that included confidentiality clauses and only three involved automobile liability insurers [ 20 ] Ms. Dion attached to her affidavit a copy of the template Final Release found on the IBC website, a resource that is available to and accessible by the insurance industry. As noted above, the IBC form of Final Release does not contain a confidentiality clause. [ 21 ] In cross-examination, Ms.

Dion acknowledged that she had only looked at the final signed release forms on each file and could not say if there was a confidentiality clause in the initial form of release provided by the defence lawyer. She stated that all of the release forms she looked at were dated in 2018 and 2019.

In re-examination, she stated that none of the four release forms received from other law firms included confidentiality clauses. [ 22 ] The Defendant acknowledges that, generally speaking, a confidentiality clause had not previously been considered a standard clause in a release in litigation; but submits that in recent years, and certainly in 2021 in Nova Scotia, a confidentiality clause has become standard in injury matters. [ 23 ] The Defendant says that its argument that a confidentiality clause is part of the standard form of release in use in Nova Scotia in 2021 is supported by Nova Scotia case law; or, alternatively, that the evidence supports that there was a reasonable expectation of the parties that a confidentiality clause would be implied, first on evidence that establishes a standard within the personal injury defence industry; or, second, on evidence of the historic dealings between counsel in this case. [ 24 ] Applying an objective test, the evidence before me falls far short of establishing a practice standard among the members of the personal injury bar of this Province or that there is a standard policy or practice among the automobile liability insurers doing business in Nova Scotia. [ 25 ] The evidence from the Defendant speaks only to the practice of Wawanesa and Ms.

Richard’s firm. Ms. Dion’s evidence raises a question about whether the Wawanesa practice of requiring the confidentiality clause is as far-reaching as Ms. Little was led to believe. [ 26 ] The Defendant’s evidence does not state what the nature of the claim was in any of the previous 15 releases drafted by Ms. Armsworthy. The fact that in three other cases Ms.

Miller had instructions to agree to a confidentiality clause does not establish any standard or reasonable expectation. [ 27 ] The evidence of the standard form of release published by the Insurance Bureau of Canada and its use by Wawanesa in negotiating settlements directly with plaintiff counsel is highly persuasive that there is no insurance industry standard of including a confidentiality clause. I also note the absence of any evidence from any other automobile liability insurer, industry association or insurance defence law firm. [ 28 ] I note that attached to Ms.

Armsworthy’s affidavit was an email between counsel in the Webber decision discussed below. It was advanced in argument as proof of the standard practice of another law firm. This is clearly hearsay and not even put forward on the basis of advice and belief. It is not admissible evidence. [ 29 ] The Defendant submits that the previous dealings between counsel in this matter should be accepted by the Court as proof of a reasonable expectation that the Release would include a confidentiality clause. I respectfully disagree. First, the evidence is clear that more often than not, Ms.

Miller rejected any form of release with a confidentiality clause if it had not been expressly agreed in advance or she was instructed to accede to the request. In this way it can be argued that the reasonable expectation of Ms. Richards should have been that a confidentiality clause would have to be expressly agreed to. [ 30 ] Second, I was provided with no authority that supports the Defendant’s assertion that a party, such as Mr. McMillan, should be bound by their lawyer’s knowledge of her counterpart’s previous preferences. The contract of settlement is between the parties.

Absent some evidence of knowledge by Mr. McMillan of a standard request for a confidentiality clause by Wawanesa (indeed he attested that in his insurance industry experience, it was never a requirement), I am not prepared to find that it was a reasonable expectation. [ 31 ] This is a statutory claim brought pursuant to the Fatal Injuries Act . By virtue of

section 5 of the Act, the claim is a representative action. In the present case, the action was brought (and the settlement made) on behalf of Douglas McMillan and his three daughters who were not named as plaintiffs. Had confidentiality been a serious condition of settlement, a reasonable expectation would be that the Defendant’s insurer request that each of the daughters, unnamed as parties, be required to sign a Release with a confidentiality clause.

There is nothing in the wording of the Release (that the Defendant says should be implied as standard) that would prevent any one of the daughters from publishing the settlement. [ 32 ] The Defendant refers to the decision of Justice Robertson in Webber v. Boutilier, 2016 NSSC 5 . There, Justice Robertson, in obiter , described a release as a “standard full and final release”. The Court did not say in what context the release was “standard”. The issue of whether a confidentiality clause is or is not standard was not before the Court in evidence or argument.

The Webber decision is not legal authority on the issue before me. [ 33 ] The Defendant argues that the JSC itself was confidential and without prejudice. That is true and Mr. McMillan is required by his undertaking to the Court to respect that and not publish or disclose the communications that took place within the JSC. However, once the parties concluded a binding contract of settlement, it was up to the parties to negotiate and agree upon the terms and conditions of that contract. The parties did agree that the settlement was conditional upon a dismissal order and a signed release. There was no express

agreement that the Release would contain a confidentiality clause, and for the reasons, stated there was no such implied term. Conclusion [ 34 ] The motion for an order to confirm the settlement is allowed. There was no express or implied condition that the Release would contain a confidentiality clause. The Plaintiff will satisfy the conditions of the settlement by signing the form of Release presented by Ms.

Richards’ letter of May 20, 2021 with the confidentiality clause removed; instructing his counsel to consent to the form of dismissal order presented; and, Plaintiff counsel returning the executed documents to Ms. Richards’ office. [ 35 ] It is unfortunate that this matter had to come before the Court for determination. This matter evidences that even senior counsel can fall into the trap of presumption.

Parties negotiating settlements, represented by counsel or not, whether at a JSC, a mediation or directly, should be careful to clearly state any terms and conditions of settlement, including: who is responsible for the payment of subrogated claims; and, specific terms to be included in any consent orders or releases that are required to conclude the settlement.

In the more formal settlement processes, defence counsel should consider attaching the form of Release and Order they will expect to be signed as an appendix to the settlement brief sent to the judge or mediator. [ 36 ] The parties agreed on the quantum of costs on the motion. The Defendant shall pay costs of this motion to the Plaintiff in the amount of $1,000 inclusive of disbursements. [ 37 ] Order accordingly. Norton J.