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Release Agreements are Not Presumed to Have Confidentiality Clauses

McMillan Estate v Booth, 2021 NSSC 284.

Reading Time: 3 Minutes

Author: Weston McArthur

In this case, Douglas McMillan, as Executor of the Estate of Veronica McMillan, (the Plaintiff) brought a claim against Steven Booth (the Defendant) pursuant to Nova Scotia’s Fatal Accidents Act.

The Plaintiff and the Defendant came to a settlement. This agreement included a release which would prevent the Plaintiff from taking legal action against the Defendant for matters related to the claim. When it came time for the release to be executed, one of the terms included was a confidentially clause which restricted the Plaintiff from disclosing the settlement’s existence and terms.

While the Plaintiff and Defendant both agreed that a confidentiality clause had never been explicitly agreed to during the settlement negotiations, they disagreed as to whether such clauses are the norm in releases of this type.

The Plaintiff filed a motion to have the Court affirm the terms of settlement reached earlier in the year, stating that this clause had not bee negotiated or agree to. The Defendant argued that this type of clause is standard practice in the insurance industry.

The Court ruled in the Plaintiff’s favour, noting that the Defendant’s evidence was unconvincing and ordering the release to be executed with the confidentiality clause removed.

The Court cautioned that “Parties negotiating settlements […] should be careful to clearly state any terms and conditions of settlement, including: […] specific terms to be included in any consent orders or releases that are required to conclude the settlement” [para 35].

Link: https://www.canlii.org/en/ns/nssc/doc/2021/2021nssc284/2021nssc284.html?searchUrlHash=AAAAAQAXTWNNaWxsYW4gRXN0YXRlIHYgQm9vdGgAAAAAAQ&resultIndex=1

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