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The following comment is typical of many that I have made on student papers:
When you cite a case, you should provide sufficient details so that a reader can assess its relevance. The discussion of the Hampshire Holdings case told me very little.
The assignment had been to draft a settlement release, and to discuss the reasons for substantive decisions made in the process. The case in question was Hampshire Holdings Ltd. v. Surrey (City), 1996 CanLII 3454 (BC S.C.), [1996] B.C.J. No. 2399, 1996 CarswellBC 2592, 67 A.C.W.S. (3d) 517, [1996] B.C.T.C. Uned. J02. The following comments, although to some extent a composite, and to some extent imaginary, are based on the actual student papers that I graded.
The precedent chosen to draft this particular release includes a very wide scope which is a very important point to consider when drafting a release. Specifically, the precedent used included the words " and forever discharge." Both in Hampshire Holdings Ltd. v. Surrey (City), and the precedent used for my clients, a reference to the past, present and future was included. The success of the mutual release in Hampshire Holdings Ltd. v. Surrey (City) illustrates that the scope of the mutual release for these clients is adequate to satisfy their needs.
In Hampshire Holdings Ltd. v. Surrey (City), Justice de Weerdt held that the parties were precluded from bringing or continuing the action by the release they had signed. Furthermore, the mutual releases were held to have the widest scope possible. The scope in this case included a specific reference to future liability which would in turn bar this action. Specifically the words "remise, release and forever discharge" were used. Furthermore, the release directed that both parties " have mutually agreed to compromise all claims that have arisen or may arise in the future by reason of or arising out of all concerning, or in any way connected with all their business dealings " Therefore this action was not allowed.
On reading this, I was left wondering what this case was actually authority for. Had the judge really commented in depth on the words "forever discharge", and on future causes of action? And if so, why was this important for purposes of our assignment? The student's discussion of the case had not answered these questions, and did not inspire confidence. So I concluded that I had to read the case myself.
The following are the details of the case that I think would have been helpful in deciding its relevance: Hampshire Holdings Ltd. had sued South Surrey Hotel Ltd. asserting claims which arose out of a contract between them. The case was then settled. The settlement included a mutual release in which each party agreed not to sue anyone, in respect of the claims released, who might claim contribution or indemnity from the other.
Despite this settlement, Hampshire Holdings proceeded to sue the City of Surrey. The City of Surry, in turn, made a third party claim against South Surrey Hotel. South Surrey Hotel moved to have the action against the City of Surrey dismissed; the court did dismiss it. It didn't matter, according to the court, that different damages had been claimed in the second action than in the first. The claims were included within the scope of the words of the release.
There was nothing in the decision specifically dealing with future causes of action. There was no emphasis on the words "forever discharge." The scope of the clause did indeed appear to be the central issue in the judge's mind. However, the judge's reasons were themselves so fuzzy as to the details of the claims asserted in the second action, and as to the reasons why they were included within that clause, that the case (at least as reported) was quite unhelpful on that point. Really, the most interesting thing about the case was that the City of Surrey and another third party were able to benefit from the agreement between Hampshire Holdings and South Surrey Hotel, even though they had not been privy to that agreement. The Ontario courts have sometimes found, in similar cases, that a release of this kind did not provide a defence to third parties. Unfortunately, the judge did not provide reasons for that aspect of the decision.
If you find this issue interesting, a good Ontario case to start with is Van Patter v. Tillsonburg District Memorial Hospital (1999), 45 O.R. (3d) 223 (QL), 122 O.A.C. 80, 36 C.P.C. (4th) 1, 42 M.V.R. (3d) 261, 1999 CanLII 3754, [1999] O.J. No. 2477, 1999 CarswellOnt 2042 (C.A.). When she was injured, Melissa Van Patter was a passenger in a car driven by Rhonda Rawlins and owned by William Rawlins. Her injuries were treated by Drs. Wright and Cheng. Melissa settled with the two Rawlins, and signed a release containing this clause:
AND FOR THE SAID CONSIDERATION it is further agreed not to make claim or take proceedings against any other person or corporation who might claim contribution or indemnity under the provisions of any statute or otherwise
When she gave this release, Melissa was unaware of the full extent of her injuries. She claimed this was due to the doctors' negligence.
Melissa sued the doctors, and they made a third party claim for contribution and indemnity against the two Rawlins. The Rawlins moved to strike out the third party notice. They also entered a defence to the main action, and moved for summary judgment. The motions judge granted the motion for summary judgment, and said that it was unnecessary to consider the motion to strike the third party notice.
The Court of Appeal allowed the plaintiff's appeal. Although Borins J.A.( Labrosse and Goudge JJ.A. concurring) said (para. 27, WL) that it would be inappropriate to decide at that stage whether the third party notice should be struck out, he also said (para. 30, WL): "Simply put, as the doctors were not parties to the release, they derived no rights under it. The release does not give the doctors a defence to the plaintiff's claim." He also said (para. 35, WL): "I believe that it may be helpful to bear in mind in respect to what may follow, that the plaintiff has acknowledged, through her counsel, that by virtue of the release she has no further claim against the third parties and that should she enjoy recovery from the doctors, any award of damages should exclude any damages for which the doctors could claim indemnity."
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