DATE: 2020-12-08
SUPERIOR COURT OF JUSTICE - ONTARIO
RE: TERRANATA WINSTON CHURCHILL INC., Plaintiff
AND:
TETI TRANSPORT LTD., METROLINX, a Crown Agency of the Government of Ontario, CROSSLINX TRANSIT SOLUTIONS CONSTRUCTORS, ELLISDON CIVIL LTD., DRAGADOS CANADA, INC., SNC-LAVALIN CONSTRUCTORS (PACIFIC) INC., AECON INFRASTRUCTURE MANAGEMENT INC., CROSSLINX TRANSIT SOLUTIONS GENERAL PARTNERSHIP, ACS CROSSLINX PARTNER INC., AECON CROSSLINX GP INC., ELLISDON CROSSLINX PARTNER INC., and SNC-LAVALIN CTS PARTNER INC., Defendants
BEFORE: Justice S. Vella
COUNSEL: Daniel Schwartz, Scott McGrath, Owen Gaffney, Lawyers for the Moving Parties, Crosslinx Transit Solutions Constructors, Ellisdon Civil Ltd., Dragados Canada, Inc., SNC-Lavalin Constructors (Pacific) Inc., Aecon Infrastructure Management Inc., Crosslinx Transit Solutions General Partnership, ACS Crosslinx Partner Inc., Aecon Crosslinx GP Inc., Ellisdon Crosslinx Partner Inc., and SNC-Lavalin CTS Partner Inc.
Paul Rooney, Lawyer for the Responding Party, Terranata Winston Churchill Inc.
HEARD: August 5, 2020
Reasons for Decision – RULE 49.09
[1] The Moving Parties, Crosslinx Transit Solutions Constructors, Ellisdon Civil Ltd., Dragados Canada, Inc., SNC-Lavalin Constructors (Pacific) Inc., Aecon Infrastructure Management Inc., Crosslinx Transit Solutions General Partnership, ACS Crosslinx Partner Inc., Aecon Crosslinx GP Inc., Ellisdon Crosslinx Partner Inc., and SNC-Lavalin CTS Partner Inc. (collectively the “Crosslinx Defendants”), seek an order under Rule 49.09 enforcing a settlement reached as between them and the Plaintiff, Terranata Winston Churchill Inc. (“Terranata”). At issue is the scope and form of the release agreed to be signed by Terranata in favour of the Crosslinx Defendants. The Defendants who are not party to the settlement or this motion are Teti Transport Ltd. (“Teti Transport”) and Metrolinx (collectively, “non-settling Defendants”).
Preliminary Motion to Strike
[2] At the outset of the motion, Terranata brought a motion to strike paragraphs 16, 17, 18, 19 and the first sentence of 20 of Ms. Brinkman’s affidavit sworn December 23, 2019 (“Brinkman Affidavit”) filed on behalf of the Crosslinx Defendants. Terranata states that those discussions were made without prejudice and in advance of the settlement or are irrelevant and also, in the case of paragraph 19 and the first sentence of paragraph 20, are inadmissible hearsay.
[3] I dismissed the motion with reasons to follow. These are the reasons.
[4] Terranata urged the court to find that the telephone call between the lawyers for Terranata and the Crosslinx Defendants that immediately preceded Terranata’s acceptance of the offer to settle are inadmissible as falling within the scope of settlement privilege. However, I find that this discussion falls within the exception to the settlement privilege rule.
[5] The Supreme Court of Canada, in Union Carbide Canada Inc. v. Bombardier Inc., 2014 SCC 35, confirmed at para. 35, that without prejudice communications leading to a settlement are admissible where the scope or interpretation of the settlement agreement itself is at issue:
The rule is simple, and it is consistent with the goal of promoting settlements. A communication that has led to a settlement will cease to be privileged if disclosing it is necessary in order to prove the existence or the scope of the settlement. Once the parties have agreed on a settlement, the general interest of promoting settlements requires that they be able to prove the terms of their agreement. (Emphasis added.)
[6] The telephone conversation and related emails pertain to the scope of the release and are therefore admissible as falling within the exception to settlement privilege. This evidence is relevant to my determination of the terms of the release agreed upon in the settlement.
[7] With respect to the hearsay objections concerning paragraph 19 and the first sentence of paragraph 20, I admit these paragraphs. They are relevant as forming part of the narrative that led to the acceptance of the offer to settle. It is not disputed that there was some communication surrounding Terranata’s suggestion that the release be made mutual as is made clear by the exhibits filed, and that no list of concerns relating to a potential release was tendered by Terranata prior to its acceptance of the offer to settle.
[8] In any event, the parties agree that the accepted offer to settle dated April 16, 2019 (the “accepted Offer to Settle”) set out the complete terms of the settlement. Terranata’s written acceptance did not purport to add any conditions or make any deletions, additions or modifications to any of the terms of the accepted Offer to Settle, including the requirement for a release.
Background and Circumstances Leading to the Settlement
[9] By Statement of Claim issued on March 13, 2019, under the Construction Act, O. Reg. 302/18, Terranata sued various defendants for matters arising from work done at the Eglinton Crosstown Light Rail Transit project in the City of Toronto.
[10] The Defendant, Metrolinx, owns the lands over which the construction was occurring. This work included excavation of lands resulting in the production of mining spoils.
[11] The Crosslinx Defendants are a consortium of 10 entities that acted as the general contractor for Metrolinx.
[12] Metrolinx entered into a contract with one of the non-settling defendants, Teti Transport, to provide services to the Crosslinx Defendants in the nature of transporting the excavated lands (the “mining spoils”) to lands then owned by Terranata.
[13] Terranata’s role in this construction project was to take possession of the mining spoils that were transported from the construction site by Teti Transport. It is alleged by Terranata in this Action that Teti Transport delivered mining spoils that were not in compliance with the contaminant standards set out in a subcontract between Terranata and Teti Transport.
[14] The claims made against all the defendants in this Action by Terranata (the “Terranata Action”) relate to a construction lien claimed as security for Terranata, together with any unpaid holdbacks pursuant to the provisions of the Construction Lien Act in relation to payments otherwise owing by either Metrolinx or the Crosslinx Defendants to Teti Transport (the “Lien Claim”).
[15] In addition, Terranata claims damages against Teti Transport relating to the transport by the latter of the mining spoils to its formerly owned lands, that Terranata claims are contaminated (“Contaminated Soil Claim”).
[16] As at the date of the Motion, neither Metrolinx nor Teti Transport had served any defence to this Action, and the Crosslinx Defendants posted security with the court resulting in Terranata’s lien registered against the construction site (Metrolinx’s lands) having been vacated.
[17] There were two other actions that had been commenced by Teti Transport (the “Teti Actions”) against certain of the Crosslinx Defendants. The Teti Actions claimed breach of contract or alternatively restitution regarding monies allegedly owing for work done by Teti Transport (essentially for the transport of the mining spoils to Terranata’s former lands) in relation to the same Eglinton Crosstown Light Rail Transit Project referenced in this Action. However, the Teti Actions were joined by court order and then referred to arbitration for resolution.
[18] On April 1, 2019 the Crosslinx Defendants delivered a Request to Inspect and Demand for Particulars to Terranata seeking particulars of the Contaminated Soil Claim. By letter dated April 16, 2019, the lawyers for the Crosslinx Defendants wrote to Terranata’s lawyers advising, in part, that in their view the lien and other claims made by Terranata against the Crosslinx Defendants were “without merit” and their intent to proceed with an examination of Terranata pursuant to s. 40 of the Construction Lien Act.
[19] These communications and litigation steps are important, as they show that the Crosslinx Defendants indicated to Terranata that they considered themselves engaged in both the Lien Claim and the Contaminated Soil Claim.
[20] On April 16, 2019, the Crosslinx Defendants made the accepted Offer to Settle Terranata’s Action against them. The accepted Offer to Settle was in writing and contained the following terms of particular relevance to this motion:
The [Crosslinx Defendants], offer to settle this proceeding on the following terms:
Terranata Winston Churchill Inc. (“Terranata”) will consent to a with prejudice order dismissing the Action as against the Crosslinx Defendants, discharging its lien and releasing the security posted by the Crosslinx Defendants in respect of Terranata’s lien.
Terranata shall sign a full release in favour of the Crosslinx Defendants in a form acceptable to counsel for the Crosslinx Defendants, acting reasonably.
If this offer to settle is accepted in writing on or before April 23, 2019 at 5:00 p.m., there shall be no costs of the Action.
[21] The accepted Offer to Settle was silent as to the terms of the release, and no draft release was attached.
[22] Some without prejudice communications occurred (the subject of my ruling denying the motion to strike) as between the lawyers for the Crosslinx Defendants and the lawyers for Terranata. The communications specifically relating to the requirement of a release revolved around Terranata’s request that the release be mutual. Terranata was also to provide a list of any specific issues it wanted addressed regarding the release. However, Terranata did not provide any list and there was no agreement to make the release mutual.
[23] In the end, those discussions did not result in any alteration to the accepted Offer to Settle. Terranata accepted the offer to settle in writing on April 23, 2019 before the 5:00 p.m. deadline, thereby ensuring that the “no costs” provision was part of the settlement. The acceptance was not made conditional on any matter. It did not include any reference to the requirement that it sign a “full release” nor was it made conditional on the release terms being mutually satisfactory.
[24] The Crosslinx Defendants prepared and sent a proposed draft “full release” to Terranata.
[25] Terranata replied by providing a revised proposed “full release” reflecting 12 revisions to the Crosslinx Defendants’ draft.
[26] The Crosslinx Defendants and Terranata have reached an impasse and look to this Court to resolve the form and content of the release to be signed by Terranata. The parties state that they agree that the matter has been settled, and that the accepted Offer to Settle sets out the complete terms of the settlement. However, they offer substantially different interpretations of clause 2 of the accepted Offer to Settle relating to the scope of the release.
The Competing Forms of Releases
[27] At the crux of the disagreement is the scope of the release that Terranata has agreed to sign in favour of the Crosslinx Defendants pursuant to the accepted Offer to Settle.
[28] The language proposed by the Crosslinx Defendants would require Terranata to indemnify and hold them harmless in the event they are sued by anyone in relation to the matters which are being released by Terranata, including arising from the Contaminated Soil Claim. The proposed language would also prevent Terranata from starting or continuing with any proceeding against any party or non-party that could claim contribution and indemnity from the Crosslinx Defendants arising from the matters released by Terranata.
[29] These concerns are hypothetical because at the time of this motion the non-settling parties had yet to file any pleadings. Furthermore, as stated, the joined Teti Actions have been referred to arbitration, by Order of Archibald J.
[30] As the accepted Offer to Settle requires a “full release” but is silent as to the terms of this Release, the Court’s task is to imply the terms of the release that are consistent with the settlement made by the parties.
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, the court will imply that the parties agreed to sign a standard form general release consistent with the settlement – nothing more and nothing less. 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) O.R. (3d) 766 (Ont. S.C.); 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, no party is bound to execute a complex or unusual form of release: although implicit in the settlement, the terms of the release must reflect the agreement 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 is objective, rather than the subjective intentions of the parties to the settlement. Two guiding principles driving this analysis are the general purpose of releases and the business efficacy of settlement agreements.
The Express Terms of the Settlement Agreement
[34] First, I will deal with the terms reflected in the accepted Offer to Settle that relate to the required release.
[35] It is clear on the face of the accepted Offer to Settle that Terranata must execute a “full” release in favour of the Crosslinx Defendants. Terranata’s position is that this title meant that it was to sign something less than a “full and final” release or in other words a limited or partial release.
[36] I disagree. Based on the provisions of the accepted Offer to Settle, the parties bargained for a full and final general release in favour of the Crosslinx Defendants, not a limited or partial release. There is no language in the accepted Offer to Settle that narrowed the scope of the release to something less than a standard general release.
[37] Second, the parties have agreed to settle “this proceeding”. Terranata’s position is that this phrase restricted the agreement, and therefore the release, to settlement of the claims that were specifically asserted against the Crosslinx Defendants (the Lien Claim) in the Statement of Claim, and that the release was not to extend to any other or future proceeding against the Crosslinx Defendants arising from the subject matter of the release.
[38] Again, one difficulty with this submission is that nothing in the accepted Offer to Settle, on its face, reasonably permits such a restrictive reading. The phrase “this proceeding” means the Action, not a part of the Action.
[39] Furthermore, the overarching purpose of a general release is to resolve all matters as between the settling parties arising from the subject matter of the claims released, and not only the specific causes of action pled. A standard general release is typically broad in its scope. It covers not only the specific litigation being resolved, but any and all actions, causes of action, demands, rights or claims, etc., howsoever arising from further damages, indemnities, costs, etc. of any other matters that were raised, or could have reasonably been raised, in the resolved litigation. The standard general release is not designed to only prevent the releasor from continuing with the resolved litigation against the releasee. Instead, a standard general release presumptively extends to any other proceeding against the releasee that could be commenced or continued with whether it be within the same settled proceeding by non-settling parties or by virtue of a new proceeding being commenced against the releasee by a non-settling party or a non-party. This general proposition is subject, of course, to public policy or statutory considerations such as the ineffectiveness of civil releases to bar criminal proceedings, and to the absence of any specifically carved out exceptions identified by the settlement agreement.
[40] Finally, the accepted Offer to Settle stated that the form and content of the release must ultimately be accepted by the Crosslinx Defendants “acting reasonably”. Terranata observed, correctly in my view, that the accepted Offer to Settle did not dictate who was to draft the release. However, the Crosslinx Defendants drafted the release, and Terranata then proposed 12 revisions, the majority of which related to removing any language that would require it to provide contribution and indemnity, eliminating the claims over clause, and restricting the subject matter of the release to the Lien Claim.
[41] Having determined that what the parties bargained for was a standard general (full and final) release with respect to all matters encompassed in the Terranata Action, I will now consider whether the revisions proposed by Terranata ought to have been accepted by the Crosslinx Defendants acting reasonably.
Are Claims Over and Contribution/Indemnity Clauses “usual” Terms that will be Implied into Standard General Releases
[42] Terranata submits that claims over clauses, including contribution and indemnity obligations, are not usual in full and final releases and therefore it was unreasonable for the Crosslinx Defendants to have rejected the proposed revisions.
[43] Terranata relies on Abouchar v. Conseil scolaire de langue franaise d’Ottawa-Carleton, [2002] O.R. (3d) 675 (“Abouchar”) in support of its position that the proposed claims over clause and the indemnity and save harmless language proposed by the Crosslinx Defendants are unusual and therefore inconsistent with a standard full and final release.
[44] In Abouchar, the court had to determine whether a non-disclosure clause was an implied term of the standard general release that was required by the settlement and silent with respect to the required terms. There was no discussion leading to the settlement concerning inclusion of a non-disclosure clause as a term of the release. When the defendant inserted a non-disclosure clause into the draft release in its favour, 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 parties bargained for a standard general release with only the usual terms. Therefore, this type of clause was not specifically agreed upon by both parties 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 form proposed by the defendant excluding the non-disclosure clause: “The gist of a “complete and final” release is for the plaintiff to discharge the 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 a non-disclosure clause is not a usual term of a general release. Accordingly, the court would not imply a non-disclosure clause into this standard general release because it was not specifically agreed upon in advance of the settlement.
[47] Terranata also relies on Betser-Zilevitch v. Nexen Inc., 2018 FC 735, aff’d 2019 FCA 230 (“Betser”). However, in Betser the disputed clause in the release was the addition by the releasor of the term “assertable” in the claims over clause expanding the scope of the release from all claims “asserted” to all claims “asserted and assertable”. The court rejected that modification because the accepted offer to settle expressly referenced a discharge of all claims that were “asserted” only. In these circumstances, the court held that the releasee could not expand the scope of the settlement by using a term in the release that differed from what was expressed in the offer to settle. This fact situation is different from the present matter and is therefore distinguishable.
[48] Betser is nonetheless instructive for its expression at para. 83 of the objective approach to be taken in determining what terms of a release the parties intended to be implied: “[n]o objectively reasonable, sensible, or businesslike release drafted in the context of the settlement of litigation would continue to expose parties to the risk of continued litigation; to be a release in this context, the release must put an end to the litigation against those exposed to it.”
[49] This passage emphasizes that the approach to be taken in determining the scope of a release bargained for in an accepted offer to settle, in the absence of terms having been specified, must be derived from an objective perspective informed by the purpose of a release.
[50] Terranata also relies on Roberts v. Canada Trustco Mortgage Co., 1997 CanLII 12282 (ON SC), [1997] 35 O.R. (3d) 396 (“Roberts”). In Roberts, the court held there was no settlement because the releasor did not agree to a claims over clause that would prevent him from suing his lawyer for negligence. The court found on the facts of that case it was quite clear to the parties that the releasee always intended to preserve his right to sue his lawyer in another proceeding. Therefore, in this case, there was no meeting of the minds with respect to this term of the settlement. However, this case is also distinguishable because Terranata and the Crosslinx Defendants agree that there has been a meeting of the minds and that they have agreed to a standard “full” release as part of the settlement.
[51] The issue then becomes whether a claims over clause and language requiring that the releasor indemnify and hold harmless the releasee from claims arising from the subject matter of the release fall into the category of those usual types of provisions that form part and parcel of a general release which the court will imply when the settlement agreement itself is silent as to the form and content of the required release.
[52] In my view, claims over/contribution and indemnity clauses are usual elements of a standard general release. The court will therefore imply these types of provisions as terms of standard general releases, unless expressly carved out or narrowed by the parties prior to reaching a settlement. If there is to be any narrowing in scope of these types of provisions, it must be specifically negotiated, agreed upon and reflected in the settlement agreement. This conclusion is supported by the caselaw and informed by a purposive analysis of general releases.
[53] The jurisprudence establishes that claims over clauses, preventing the releasor from commencing or maintaining any claims arising from the matters pled in the settled proceeding that could give rise to a claim against the releasee, and language requiring that the releasor indemnify the releasee in the event any such claim against the releasee is brought, are “part of and parcel” of a standard full and final releases. As Warkentin J. stated in Brager v. Ontario (Natural Resources), 2017 ONSC 1759, at para. 22:
I find there was a final settlement between the parties the terms of which were contained in the Minutes of Settlement that required the Applicants to execute a full and final Release. The form of Release provided by counsel for the Respondent was a standard form of Release. The inclusion of a contribution and indemnity clause in a Release is standard. Without such a clause, the release would not be a full and final release.
[54] This court came to the same conclusion in Ahmed v. Shang, 2016 ONSC 4794 (“Ahmed”), at para. 35:
It is well established that the delivery of a full and final release, in a customary form, whose terms give effect to common sense and normal business practice, is an implied term of the settlement of an action unless the parties otherwise agree.
[55] In Ahmed, the moving party also alleged that the release was overbroad because it had a claims over clause. However, the court concluded that a claims over clause is a usual term that will be implied into standard releases. See also Radvar v. Canada (Attorney General), [2005] O.J. No. 5239; Fred Cass, The Law of Releases in Canada (Aurora: Canada Law Book, 2006).
[56] Terranata knew that it was suing other parties for claims asserted in the same proceeding and that the Crosslinx Defendants were being sued by Teti Transport in other proceedings arising from the same occurrence. The onus was on Terranata to expressly seek a carve out from the general broad usual release terms. Terranata did not do so.
What is the subject matter of the Release agreed to by the Parties?
[57] Terranata states that because its claims against the non-settling defendants will continue, and because there were related proceedings commenced by Teti Transport against the Crosslinx Defendants arising out of the same occurrence as is raised in the Action, it was understood by the Crosslinx Defendants at the time they made their Offer to Settle that Terranata intended to continue with its Contaminated Soil Claims against the non-settling Defendants and would not wish to indemnify the Crosslinx Defendants in relation to the joined Teti Actions. Therefore, preserving Terranata’s Contaminated Soil Claim against Teti Transport, while releasing the Crosslinx Defendants from only the Lien Claim, is in Terranata’s view, consistent with the settlement agreement.
[58] Again, the difficulty with Terranata’s position is that there is nothing in the accepted Offer to Settle that suggests any such limitations. As stated earlier, there is nothing in the accepted Offer to Settle that suggests that the settlement was to be a partial settlement. Moreover, the litigation steps taken by the Crosslinx Defendants prior to the accepted Offer to Settle, and the communications immediately preceding the settlement, demonstrates that the Crosslinx Defendants saw potential exposure to all of the claims asserted by Terranata in the Terranata Action. On the other hand, there is no evidence to support Terranata’s position that both parties knew a carve out of Terranata’s Contaminated Soil Claim was implicit in any settlement as between the parties. The release was called a “full” release. There is no wording in the accepted Offer to Settle that can reasonably give rise to Terranata’s submission that the Crosslinx Defendants would only be released from some of the claims advanced in the Action would continue to face exposure within the Action and potentially in other related proceedings.
[59] It is worth reiterating that it is the fundamental premise of full settlements that the release is intended to buy the releasee peace of mind in relation to all claims arising from, and in connection with, the matters raised in the statement of claim both in the settled proceeding, and any other proceeding in which the releasee could be brought back into the dispute (even if by another party or nonparty). If that objective is not to be reflected in the intended release, then the limitations to, and restrictions in, the scope of a release must be express; such as would be the case in a Pierringer Agreement or a Mary Carter Agreement.
[60] The general purpose of a release has been repeatedly stated to reflect the objective that the releasee is being severed from any ongoing or future involvement in the settled litigation whether it is at the suit of the releasor or at the suit of some other party or nonparty who might have a claim against the releasee for contribution and indemnity arising from the same subject matter as the releasee is being discharged from.
[61] In the oft-quoted passage from Sinclair-Cockburn Insurance Brokers Limited v. Richards, [2002] O.R. (3d) 105 (C.A.), at para. 14, the Court of Appeal stated with respect to the purpose of a general release:
[the Releasee] paid a substantial sum of money to buy peace, not just peace from potential liability for a judgment but peace from even having to respond to a claim from the ‘non-party’ defendant…[the releasee] is entitled to all the benefits that flow from that release, which include its reputational interest and its interest in not being dragged into a lawsuit. [The releasee] is entitled to expect the party who signed the release to live up to its bargain.
The subject matter of the release, as drafted by the Crosslinx Defendants, relates to all claims that were asserted or could have been asserted in the Statement of Claim. The Statement of Claim does restrict the prayer for relief relating to the Contaminated Soil Claim to Teti Transport alone. However, Terranata cannot control whether or not Teti Transport will issue a third party claim for contribution and indemnity once the Action against the Crosslinx Defendants is dismissed pursuant to the settlement. It is not relevant to this analysis to opine on whether or not Teti Transport would be ultimately successful in any such proceeding claiming contribution and indemnity against the Crosslinx Defendants.
[62] If a key term to the proposed settlement from Terranata’s perspective was to preserve its claims against the remaining non-settling defendants, then Terranata had to raise that issue specifically and carve out that exception. Terranata offered no authority for its position that a narrowing of the usual claims over and contribution and indemnity clauses in order to keep the releasee potentially exposed to liability post settlement will be implied into a general release, absent a specific provision to that effect in the settlement agreement.
[63] It is again noteworthy that both Terranata and the Crosslinx Defendants are uniform in their collective assertion that the accepted Offer to Settle reflects a binding settlement agreement. Implicit in this assertion is that there was a meeting of a minds. By accepting, unconditionally, the accepted Offer to Settle presented by the Crosslinx Defendants, Terranata agreed that the release would be consistent with the standard and usual terms implied by the courts in general releases. It cannot change its mind after the settlement has been finalized.
Ruling
[64] Accordingly, I find that the following revisions proposed by Terranata relate to matters that do not fall within the scope of a standard general release, and that the Crosslinx Defendants were acting reasonably in rejecting them. I am referring to the numbering of phrases to the proposed revised form of release prepared by Terranata and appended as Schedule C to its Factum. The revisions that I reject are items: 1, 3, 7 (up to the last part of that struck phrase following “in the Action”), 8, 9 (excluding “on a full indemnity basis”), 10, 11 and 12.
[65] There are some revisions proposed by Terranata that I find ought of have been accepted by the Crosslinx Defendants “acting reasonably” when assessed against the expressed terms of the accepted Offer to Settle. These revisions generally make it clear that Terranata is only releasing those claims that Terranata is capable of releasing, that Terranata is only releasing the Crosslinx Defendants from past events, and/or provide clarity to resolve potential ambiguity within the release.
[66] I agree with Terranata that the phrase “or that relate to a claim of contamination or pollution of the Lands” introduces a potential ambiguity into the release and in any event the remaining sentence covers the scope of the claims that are the subject of the release.
[67] With respect to the recovery of costs, a claim for full indemnity is an extraordinary remedy under the Rules and should not be implied as the scale of costs to be recovered in a claim for contribution and indemnity arising from a settlement. For example, Rule 49.10 (consequences for failure to accept an offer to settle) references partial indemnity and substantial indemnity costs, but not full indemnity costs. Counsel did not provide me with any authority on this subject. Therefore, the issue of the scale of costs to be recovered, should the Crosslinx Defendants have to pursue them, will be left to the discretion of the judicial officer making that determination.
[68] The revisions by Terranata that should have been accepted by the Crosslinx Defendants are as follows (again, using the numbering by Terranata in Schedule C to its Factum):
2 (“owed to the Releasor”), 4 (“as against the Releasees”), 5 (“which Terranata now has or hereafter can, shall or may have”), 6 (“existing up to the date of this Release”), 7 (striking only “or that relate to a claim of contamination or pollution of the Lands”) and 9 (striking only “on a full indemnity basis and go forward basis”).
These phrases, as modified, are consistent with the usual provisions of a standard release and thus consistent with the settlement of the Action, using an objective standard.
[69] It occurred to me as I deliberated that it remains open to Terranata to seek to amend its Statement of Claim so as to claim several liability only as against the non-settling Defendants. My decision is without prejudice to Terranata’s right to seek that and related relief in a subsequent motion, should it deem that to be advisable.
Order
[70] Terranata is required to execute the Release in favour of the Crosslinx Defendants in accordance with the determinations made by me. For greater certainty, I have attached the Release in the form and content to be signed by Terranata as a Schedule to these Reasons.
[71] The parties have provided me with their respective cost outlines.
[72] If the parties cannot agree on costs, the moving party is to provide its written submissions (no longer than 3 pages double spaced in length) by December 11, 2020 if it wishes to supplement its costs outline. The responding party is to provide its written submissions, no longer than 3 pages double spaced in length by December 17, 2020 if it wishes to supplement its cost outline.
Justice S. Vella
Date: December 8, 2020
DATE: 2020-12-08
ONTARIO
SUPERIOR COURT OF JUSTICE
BETWEEN:
TERRANATA WINSTON CHURCHILL INC.
and
TETI TRANSPORT LTD., METROLINX, a Crown Agency of the Government of Ontario, CROSSLINX TRANSIT SOLUTIONS CONSTRUCTORS, ELLISDON CIVIL LTD., DRAGADOS CANADA, INC., SNC-LAVALIN CONSTRUCTORS (PACIFIC) INC., AECON INFRASTRUCTURE MANAGEMENT INC., CROSSLINX TRANSIT SOLUTIONS GENERAL PARTNERSHIP, ACS CROSSLINX PARTNER INC., AECON CROSSLINX GP INC., ELLISDON CROSSLINX PARTNER INC., and SNC-LAVALIN CTS PARTNER INC.
REASONS FOR JUDGMENT
Justice S. Vella
Released: December 8, 2020
APPENDIX TO REASONS FOR DECISION
TERRANATA WINSTON CHURCHILL INC v. TETI TRANSPORT LTD. et al
FULL AND FINAL RELEASE
(made as of April 23, 2019)
WHEREAS:
Terranata Winston Churchill Inc. (“Terranata”) registered a construction lien in the amount of $1,149,074.40 on January 28, 2019 against title to the lands and premises legally described in Schedule “A” hereto as Instrument No. AT5064066 (the “Registered Lien”).
Crosslinx Transit Solutions Constructors (“Crosslinx”) posted a construction lien bond issued by Chubb Insurance Company of Canada, AIG Insurance Company of Canada and Aviva Insurance Company of Canada bearing Bond No. 8252-37-43/913-680/8253-03-40/12505-19 with the Court as security for the Registered Lien in the amount of $1,199,074.40, being the amount of the Registered Lien plus $50,000 as security for costs, with the Accountant of the Superior Court of Justice as account number 553794, on February 26, 2019.
By Order of Master Short dated February 26, 2019, the Registered Lien was vacated.
On March 13, 2019, Terranata issued a Statement of Claim in Court File No. CV-19-00616122-0000 (the “Action”) against Teti Transport Ltd., Metrolinx, a Crown Agency of the Government of Ontario, Crosslinx Transit Solutions Constructors, EllisDon Civil Ltd., Dragados Canada, Inc., SNC-Lavalin Constructors (Pacific) Inc., Aecon Infrastructure Management Inc., Crosslinx Transit Solutions General Partnership, ACS Crosslinx Partner Inc., Aecon Crosslinx GP Inc., EllisDon Crosslinx Partner Inc. and SNC-Lavalin CTS Partner Inc. The claim relates to mining spoils allegedly dumped on land at 701 and 759 Winston Churchill Boulevard, Mississauga, Ontario (the “Lands”).
On April 16, 2019, Crosslinx Transit Solutions Constructors, EllisDon Civil Ltd., Dragados Canada, Inc., SNC-Lavalin Constructors (Pacific) Inc., Aecon Infrastructure Management Inc., Crosslinx Transit Solutions General partnership, ACS Crosslinx Partner Inc., Aecon Crosslinx GP Inc., EllisDon Crosslinx Partner Inc. and SNC-Lavalin CTS Partner Inc. (collectively, the “Crosslinx Defendants”) made an offer to settle their dispute with Terranata (the “Offer to Settle”).
Terranata accepted the Offer to Settle on April 23, 2019.
One of the terms of the settlement is that Terranata “shall sign a full release in favour of the Crosslinx Defendants in a form acceptable to counsel for the Crosslinx Defendants, acting reasonably.”
IN RESPECT OF THE CONSIDERATION outlined in the Offer to Settle and for other good and valuable consideration (the receipt and sufficiency of which are hereby irrevocably acknowledged), Terranata, together with its officers, directors, employees, predecessors, successors, subsidiaries, assigns, partners, agents and legal representatives (the “Releasor”) does hereby release, remise, indemnify, hold harmless and forever discharge the Crosslinx Defendants (which term includes each of the Crosslinx Defendants’ respective officers, directors, employees, predecessors, successors, subsidiaries, assigns, partners, agents and legal representatives) (the “Releasees”), from any and all actions, causes of actions, demands, rights or claims for damages, indemnity, interest, costs and loss or injury of every nature and kind howsoever arising, including but not limited to by statute or common law, by reason of the commission of a tort (intentional or unintentional), by reason of any breach of contract or other agreement (oral or written), by reason of any breach of duty (including any legal, statutory, equitable or fiduciary duty or breach of a standard of care), by reason of any fraud (actual or constructive) or by reason of any ownership of, management of, control of or title to property or assets (or rights in respect thereof) or right to a trust or deemed trust (statutory, express, implied, resulting, constructive or otherwise) and, whether or not any indebtedness, liability or obligation owed to the Releasor is reduced to judgment, liquidated, unliquidated, fixed, contingent, matured, unmatured, disputed, undisputed, legal, equitable, secured, unsecured, present, future, known, unknown, by guarantee, surety, insurance deductible or otherwise, and whether or not such right is executory or anticipatory in nature including the right or ability of any person to advance a claim for contribution or indemnity or otherwise as against the Releasee with respect to any matter, action, cause or chose in action, which Terranata now has or hereafter can, shall or may have for, or by reason of, or in any way arising out of, any cause, matter or thing whatsoever existing up to the date of this Release that relates in any manner whatsoever to the allegations which were raised or which could have been raised in the Action (individual, a “Claim” and collectively, “Claims”).
AND THE RELEASOR HEREBY acknowledges and agrees to not make or continue any Claims or proceedings against any other person, entity, agency or corporation, in any manner or forum, who may claim contribution or indemnity in common law or in equity or under the provisions of any statute, regulation or otherwise, including the Negligence Act (Ontario) and the amendments thereto, against any of the Crosslinx Defendants with respect to the subject matter hereof. In the event that any such Claims or proceedings are brought, the Releasor shall indemnify and hold harmless the Releasees, including but not limited to paying for the Releasees’ defence costs. This Release may be pleaded as a complete defence and reply by the Crosslinx Defendants to any such proceedings, and may be relied upon in any proceeding to dismiss the Claims or proceedings on a summary basis as against any of the Releasees. The Releasor, for the same consideration, further covenants and agrees not to join, assist or act in concert in any manner whatsoever with any person, firm or corporation in the making of any Claim or demand in the bringing of any proceeding or action in any manner whatsoever against any of the Releasees hereto arising out of or in relation to the matters herein remised, released and discharged.
AND THE RELEASOR HEREBY CONFIRMS that it has full authority and capacity to release its rights and interests as against the Releases on the terms outlined herein.
AND FOR THE SAID CONSIDERATION the Releasor represents and warrants that it has not assigned, pledged, or gifted to any entity, person, partnership, limited partnership, corporation or trust any of the matters which the Releasor releases by this Release, or with respect to which the Releasor agrees not to make any claim or take any proceedings herein.
THE RELEASOR DECLARES that it has read this Release and fully understands the terms of this settlement and that it voluntarily accepts the terms of this settlement for the purpose of making full and final compromise, adjustment and settlement of any and all matters released by this Release. The Releasor further declares that the settlement herein is without admission of any liability by the Releasees to the Releasor, or vice versa, with respect to any and all matters released by this Release.
THIS RELEASE is binding upon and enures to the benefit of the respective administrators, successors, and assigns of the Releasor and the Releasees.
THE RELEASOR hereby declares that it fully understands the terms of this Release, has received independent legal advice prior to executing this document, and that it voluntarily accepts the consideration offered in the Settlement Agreement for the purpose of making full and final compromise and settlement of the matters aforesaid.
THE RELEASOR agrees that nothing in this Release shall be deemed to constitute an admission of liability by the Releasees (which liability is specifically denied) and that nothing in this Release shall be deemed an admission by the Releasees of any facts or allegations related to the matters being released herein. The Releasor acknowledges that the Releasees deny that the Releasor has any Claims against them.
THIS RELEASE may be delivered by facsimile copy or scanned electronic copy and such copy shall, once executed and delivered, be deemed for all purposes to be delivery of an executed original.
THIS RELEASE is governed by the laws of Ontario.
TERRANATA WINSTON CHURCHILL INC.
Per:
Name:
Title:
I have the authority to bind the Corporation and the Releasor.