NEWMARKET

COURT FILE NO.: CV-11-107092-00

DATE: 20131112

SUPERIOR COURT OF JUSTICE - ONTARIO

RE: Laura Thompson, Plaintiff

AND:

Rogers Communications Inc., Coseco Insurance Company and Intact Insurance Company and Intek Communications Limited, Defendants

BEFORE: THE HON. MR. JUSTICE G.M. MULLIGAN

COUNSEL:
Laura Thompson, Self-represented

J.D. Murphy, Counsel for the Defendant, Rogers Communications Inc.

K. Kamra, Counsel for the Defendant, Coseco Insurance Company

C.A. Leyland, Counsel for the Defendants, Intact Insurance Company and Intek Communications Limited

HEARD: October 24, 2013

ENDORSEMENT

[1] The plaintiff, Laura Thompson (Thompson), brings a motion to set aside a full and final release which she entered into as part of a settlement agreement with all of the defendants. Thompson agreed to settle her claim for $80,000. The settlement was arrived at during negotiations on a day set aside for discovery, February 25, 2013. The next day, the plaintiff filed a Notice of Motion and accompanying affidavit to rescind the settlement.

[2] The defendants, Rogers Communications Inc. (Rogers), Coseco Insurance Company (Coseco), and Intact Insurance Company and Intek Communications Limited (Intact/Intek) filed Statements of Defence and were represented by counsel throughout the proceedings. The defendants, Intact/Intek, brought a responding motion seeking to uphold the settlement and the final release. That request is supported by the defendant, Rogers.

BACKGROUND

[3] Thompson’s claim arose from an alleged water/sewage leak which occurred at her residence after a cable installation in December of 2009. She retained counsel after the incident, but that retainer came to an end. Thompson prepared and issued her own Statement of Claim in November of 2011. She claimed for general damages, damages for mental and emotional distress, punitive and/or aggravated damages, and special damages. The defendants filed Statements of Defence and in due course, two days of examinations for discovery were set aside, to commence February 25, 2013.

[4] The defendant, Coseco, was the insurance company for Thompson under a residential tenancy package. Pursuant to that policy and separate from these proceedings, Coseco paid to Thompson $12,862 for additional living expenses, and $32,836.11 for her personal property.

THE SETTLEMENT NEGOTIATIONS

[5] The negotiations took place at a special examiner’s office on February 25, 2013. In attendance was Ms. Thompson and lawyers for the defendants. A picture of what happened that day emerges from the affidavit of Thompson, and the affidavits of counsel for the defendants. It should be noted that Ms. Thompson was cross-examined on her affidavit, but no cross-examinations took place with respect to the affidavits filed by the defendants.

[6] Ms. Thompson sets out that she is physically disabled and that appears to have been acknowledged by the defendants. When she arrived at the special examiner’s office, she was allowed to rest on a couch in the reception room while the lawyers met in a separate room. Instead of proceeding with an examination for discovery, settlement discussions began early in the day.

[7] Her brief affidavit filed in support of her motion sets out that she is physically challenged. She further sets out in para. 1:

I’m physically challenged and suffer from chronic acute back pain, immobility and sleep deprivation, and I’ve realized after signing the final release in this case that I have made a mistake, the decision I made was made in a state of heightened pain, stress and exhaustion, and not in my best interest, and does not reflect proper compensation in this case.

[8] Her affidavit sets out that she was unable to reach a lawyer by phone, and that she was not able to reach her ODSP worker for advice, and that she could not reach anyone by phone or Internet for advice. She alleges that she felt pressured to settle and was overwhelmed by physical pain.

[9] However, a review of her cross-examination and the affidavits from the lawyers present during negotiations paints a different picture.

[10] In her cross-examination on the issue of being rushed, the following questions and answers are worth noting:

Q. Well, at no point in time did you say “you’re rushing me – I need more time”.

A. No, I did not.

Q. No, and at no point in time did we come into the room and say, “Would you please hurry up, you’re taking too long”, none of that ever transpired.

A. You didn’t have to. I had my own timeline that I was trying to deal with.

Q. Well, just answer the question, we did not come in to you and say, “Please hurry up. You’re taking too long.”

A. You never said hurry up.

[11] Earlier in the cross-examination, the following question was put to her:

Q. Alright, during the same day, February 25, 2013, I put it to you that not once did you say to myself or any of the lawyers present, “Look, I haven’t had anything to drink, I’m not comprehending, I want to chew my arm off, I want to get out of here, I need to speak to a lawyer, I need to speak to my OSP (sic), I don’t know what I’m doing, I don’t want to settle. None of that was ever mentioned by you, ever, correct?

A. Correct. I internalized everything.

[12] Affidavits filed by counsel for the defendants who were present that day, sets out what took place. Coseco was represented at the examination for discovery by Paul C. Sykes, who filed an affidavit. His associate, Kerri Kamra, was also present. Intact/Intek was represented by Courtney A. Leyland, who also filed an affidavit. Rogers was represented by J. David Murphy. Mr. Murphy’s affidavit sets out the course of negotiations that led to the full and final release. Mr. Murphy was the counsel who dealt directly with Ms. Thompson during the negotiations once settlement discussions began. It is evident from the affidavits that the plaintiff began settlement discussions once the issue was canvassed with her. She made the first offer that she would settle her matter for $319,000. After that, all counsel for the defendants retreated to another room to discuss the issue and obtain instructions. The defendants made an all-inclusive offer of $60,000, which Mr. Murphy presented to her on behalf of the defendant group. She made a counter-offer of $100,000, and requested that it be presented to all of the defendants. Mr. Murphy consulted with other counsel and a counter-offer from all defendants for $70,000 was presented by him to Ms. Thompson. Ms. Thompson held fast at $100,000, and Mr. Murphy consulted with co-counsel and an increased offer of $75,000 was presented to her by Mr. Murphy. Ms. Thompson then indicated she would accept an all-inclusive offer of $80,000. The defendants then agreed to settle for this amount. This period of negotiation took over two hours and the defendants required that she sign a full and final release.

[13] Some time was spent on drafting the full and final release, and the defendants agreed to honour the plaintiff’s request that the settlement funds be earmarked for non-pecuniary general damages only.

[14] The full and final release, which was marked as an exhibit to Mr. Murphy’s affidavit states, in part that:

And the release order declares and acknowledges that this release has been read and the terms of the settlement are fully understood, that the consideration stated herein is the sole consideration for the release, and the said consideration is voluntarily accepted for the purpose of making full and final compromise, adjustment and settlement of all claims that the releasor may have as against the releasees ...

[15] As to independent legal advice, the release provides as follows:

AND IT IS FURTHER UNDERSTOOD, AGREED AND CONFIRMED that the counsel for the Releasees advised the Releasor to seek independent legal advice in respect of the settlement of all matters in respect of this Full and Final Release prior to executing this Full and Final Release, and that the Releasor has decided, of her own volition, to not seek such independent legal advice and that she hereby acknowledges and confirms that she fully understands the significance of this Full and Final Release and that she agrees with its terms and that she is executing this Full and Final Release of her own free will.

[16] It was Mr. Murphy’s assessment that she acknowledged and fully understood the issue before signing a full and final release. As Mr. Murphy said in his affidavit:

We also advised her that the Release contains a paragraph whereby she acknowledges that she had the opportunity to retain counsel and she chooses not to retain counsel, and she understands all of the consequences of this decision.

[17] Mr. Murphy further deposed:

In my meeting with the plaintiff, Laura Thompson, she did not at any time, express a desire to cancel the examinations for discovery/settlement conference, nor did she express any desire to contact her case worker or lawyer for advice.

[18] It is the unchallenged affidavit of Courtney Leyland, counsel for Intact/Intek that this clause was drawn to her attention for the specific purpose that:

The plaintiff would not later change her mind about the settlement and suggested that she did not want to be bound by the settlement because she did not have the opportunity to speak with a lawyer.

[19] The affidavit of Laura Thompson is brief and succinct, but the affidavit is significant for what it does not say. The affidavit does not state that she wished to obtain legal advice before signing the release. It does not state that she tried to obtain independent legal advice or tried to call her ODSP worker. It should be noted that she had a lawyer in connection with this occurrence, at least up until the time she commenced her own Statement of Claim.

ANALYSIS

[20] As the Court of Appeal stated in Zwaig Associates Inc. v. Simon Mok and Grace Mok, 2005 458 (ONCA) at para. 2, “Lack of independent legal advice is not a freestanding defence.”

[21] Ms. Thompson sets out that she suffers a physical disability, but I am not satisfied on the evidence before me that she lacked capacity to enter into this agreement. She had legal advice for a period of time before she commenced this claim on her own as a self-represented person. She attended examinations for discovery on her own, and these discoveries were scheduled for two days. When discussions about settlement were introduced, she made the first offer. Although there were several counsel present, they remained in a separate room and had discussions among themselves, or contacted their principals, while Mr. Murray alone presented or received offers to Ms. Thompson.

IS THE SETTLEMENT UNCONSCIONABLE?

[22] The Alberta Court of Appeal reviewed this issue in Cain v. Clarica Life Insurance Co., [2005] ABCA 437. As the Court stated at para. 32:

Those authorities discussed four elements which appear to be necessary for unconscionability.

The four necessary elements are:

(i) a grossly unfair and improvident transaction; and

(ii) victim’s lack of independent legal advice or other suitable advice; and

(iii) overwhelming imbalance in bargaining power caused by victim’s ignorance of business, illiteracy, ignorance of the language of the bargain, blindness, deafness, illness, senility, or similar disability; and

(iv) other parties knowingly taking advantage of this vulnerability.

[23] Having considered the affidavits of Ms. Thompson and counsel for the defendants as to what happened that day, I am not satisfied that there was any unconscionability. Ms. Thompson seems to have had a change of heart the next day. There is no evidence to indicate that the payment to her of $80,000 for her claim was in any way improvident. Although she did not have independent legal advice, she acknowledged that when she signed the release. She had a lawyer for a period of time prior to the claim and issued claim on her own, signalling that she would be self-represented throughout the proceedings. During the bargaining, she made no request to contact a lawyer or her ODSP worker. She made the opening offer to settle and rejected several offers that were lower than the amount finally arrived at. Although she had a physical disability, I am not satisfied that there was an imbalance of power created. The defendants went to some lengths to make Ms. Thompson comfortable. She sat on a couch. She was not badgered by multiple counsel. The lawyers retreated to a separate room and only Mr. Murphy met with her to carry offers back and forth. In addition, there is nothing indicating that the defendants took advantage of her. They attended at discoveries prepared to conduct discoveries for two days. Although they made lower offers, these offers were rejected by Ms. Thompson until the ultimate figure of $80,000 was arrived at.

[24] There is an importance to finality when it comes to litigation. In all the circumstances here, I am satisfied that the full and final release is binding on Ms. Thompson. In the result, her motion to set aside the full and final release is dismissed. The motion by Intact/Intek for judgment in accordance with the terms of settlement is granted. It is ordered that the defendants pay $80,000 to Laura Thompson, pursuant to the full and final release, within thirty days of the release of this endorsement.

COSTS

[25] If the individual defendants are seeking costs, they may serve and file brief submissions not exceeding two pages, together with a Costs Outline, within fifteen days of the release of this endorsement. Ms. Thompson will then have a further ten days to respond in writing to these costs submissions.

MULLIGAN J.

Date: November 12, 2013