The Duty to Give a Release When Settling a Lawsuit
A release usually forms part and parcel of any settlement. Most of the time there is little or no dispute over the wording that goes into the release. However, a recent case is notable for giving a quick refresher (or crash course) in the law of releases.
To put it shortly, the case law is clear that where a settlement is reached, it is normally implied, absent some agreement to the contrary, that an executed final release will be given.
On the other hand, parties are not bound to execute a complex or unusual form of release. While the duty to give a release is implicit in the settlement itself, the terms of the release must reflect the agreement that was reached between the parties.
In the instant case, the defendant was seeking to have the plaintiff release it for “any and all disputes and claims between the parties that are presently known or reasonably discoverable and which arouse out of, or in any way relate to, the dealings between the parties that gave rise to the action and the appeal.”
The court found that the parties had agreed to settle all of the remaining issues in the action. In this particular case, the only issue that was outstanding was negligent misrepresentation. The court held that it was never contemplated that the settlement was inclusive of any discoverability rights the plaintiff may have. The court ruled in favour of the wording proposed by the plaintiff and awarded costs against the defendant in the sum of $5,000.
There is a good text called the Law of Releases in Canada by Fred Cass. It is a 2006 text that was published by Canada Law Book and has been cited in several decisions. It is interesting to me that the basic general release offered by the text is a release from:
“any and all actions, causes of action, suits, proceedings, [insert a host of other things like debts etc.], and demands of any nature and kind whatsoever, and howsoever arising, whther in law or in equity or otherwise, whether express or implied and whether presently known or unknow, which the Releasor ever had, now has or may hereafter have against the Releasees, or any of them, for, or by reason of, or in any way arising our of [blank].”
There is a footnote on “unknown” that there is uncertainty about whether a release on unknown claims would be upheld.
Matt, are you suggesting that we, or at least Ontario practitioners, should be reviewing our Release precedents?
I think that model release is a terrible example of legalese, full of needless repetition and archaic language. By all means cover everything, if that’s the intention (which it appears not to have been in the case cited up front), but not in this fashion.