The Plaintiff’s claims against the Attorney General of Canada, his Insurer and various other parties was dismissed by way of Summary Judgment after the Court found that the Release executed between the Plaintiff and his Insurer precluded commencing an action against a non-party to the Release in which a claim-over could be made against the Releasee. Accordingly, the Defendants’ motion for Summary Judgment dismissing the Plaintiff’s claims and the cross-claims was granted.

05. December 2005 0

Radvar v. Canada (Attorney General), [2005] O.J. No. 5239, Ontario Superior Court of Justice

This was an Application for Summary Judgment brought by the Defendants to dismiss the Plaintiff’s action. In addition, the Defendant Chubb Insurance sought Summary Judgment on its counter-claim against the Plaintiff.

In 1999, the Plaintiff, Mr. Radvar, had sought coverage under a policy of Tenant’s Insurance issued to him by the Defendant, Chubb Insurance Company (“Chubb”). The Plaintiff claimed the loss of personal property as a result of a break-in and when the Insurer did not pay the claim, Mr. Radvar commenced an action against Chubb. Chubb had retained the Defendant Signum, an investigation firm, to perform background inquiries concerning the Plaintiff. The investigation formed the basis of a background report, prepared by the Defendant Brooke Rye, which revealed that Mr. Rye had obtained the Plaintiff’s Social Insurance Number (SIN) from Human Resources Development Canada (“HRDC”).

The action against Chubb was settled following execution of a Release by the Plaintiff which included a Confidentiality and Non-Disparagement Agreement. Two years later the Plaintiff commenced this action, claiming against Chubb, Signum, Mr. Rye and the Attorney General of Canada as the representative HRDC. In this action, the Plaintiff sought damages for breach of privacy rights, fiduciary obligations and regulatory negligence. The claim was based on the release to Signum by HRDC of the Plaintiff’s personal information.

The Defendants’ position was that this action was an attempt to re-litigate the issues that were addressed in the previous action with respect to which the Plaintiff executed a Release and that it therefore could not proceed. The Plaintiff disputed that the allegations in this action were the subject matter of the Release.

The Court found that the history of the settled action made it clear that the Plaintiff knew the essential elements of the claim now being advanced prior to executing the Release.

The Court held that the provision in the Release that the Releasor would not commence an action against a non-party to the Release in which a claim-over could be made against the Releasee was an effective bar to an action against that non-party. Accordingly, the Court dismissed the cross-claim against Chubb by the Attorney General of Canada.

The Court held that an exception to the rule of privity of contract applied in this case and that Signum and Rye were therefore entitled to rely on the Release despite not being parties to it. This exception applies where the parties intend to extend unconditionally the benefit of the contract to the Third Party that relies on it. Accordingly, Signum and Rye were entitled to summary judgment dismissing the claim against them. Similarly, the action against the Attorney General of Canada and the Attorney General of Canada’s cross-claim against Signum were dismissed.

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