A sexual harassment lawsuit launched by a former Pan Am Games employee against former Ontario premier and TO2015 chair David Peterson has been dismissed.

Torys LLP, the law firm that represented Peterson, said Tuesday in a news release that the Ontario Superior Court dismissed the lawsuit in Toronto on Oct. 12.

Former Pan Am Games employee Ximena Morris has issued an apology to David Peterson and his wife for having launched the lawsuit. (CBC) Complainant Ximena Morris has issued an apology to Peterson and his wife, Shelley, for launching the lawsuit.

Lisa Talbot, Peterson's lawyer and a partner at Torys, said in an interview with CBC Toronto that the dismissal of the lawsuit is good news.

"What happened here is that Mr. Peterson was the subject of very serious allegations," Talbot said.

"We maintained from the outset that this action was brought solely to embarrass Mr. Peterson as a well-known public figure, someone who has contributed enormously to the service of the people of Ontario, and that the action was brought for the purpose of extracting funds from him and from his co-defendants and attempting to bring notoriety to Ms. Morris," she said.

In her statement of claim, Morris alleged that on several occasions Peterson made inappropriate comments toward her that escalated into unwanted touching. Peterson denied "all the allegations" levelled by Morris.

The lawsuit, filed in September 2015, named Peterson, the Pan and Parapan Am Games organizing committee, the Canadian Olympic Committee and three members of the TO2015 executive committee as defendants. (CBC) The lawsuit named as defendants Peterson, the Pan and Parapan Am Games organizing committee, the Canadian Olympic Committee and three members of the TO2015 executive committee in September 2015.

Morris alleged in an interview with CBC Toronto that, days before the Pan Am Games closing ceremony, her dream job quickly "turned into a nightmare."

In her statement of claim filed in August 2015, Morris sought $10 million, but later lowered that to $3 million. In response, Peterson issued a counter claim for defamation and abuse of process.

Morris was noted in default of the counter claim on May 24, 2016. That means she did not defend the counter claim and the allegations in the counter claim were treated as facts by the court.

Morris and Peterson consented to the dismissal of the action and counter claim without costs on Oct. 12. Her apology was read in court by her lawyer.

An attempt to get money?

Talbot said the counter claim by Peterson alleged that Morris used the threat of litigation and the threat of going to the media with allegations to try to obtain a substantial sum of money.

"Mr. Peterson also pleaded, in August 2015, two days before the end of the Parapan Am Games, of which he was chair, that Ms. Morris's counsel called counsel for TO2015 threatening to issue a statement of claim and to immediately disclose the very serious allegations to the press if the defendants did not pay Ms. Morris $500,000 within half an hour," Talbot said.

"When the defendants did not accept Ms. Morris's demand, Ms. Morris and her counsel then had the statement of claim issued immediately and went to the press."

Once the statement of claim was issued, Talbot said Morris did not take any steps to resolve the matter, which left the defendants in the position of having to take legal action to clear their names.

'Very distressing' for Peterson

"There's certainly a spotlight right now on sexual harassment. And sexual harassment in any form is intolerable. But that was not this case. I think this ruling establishes that," she said.

Talbot said Peterson is pleased the matter has been resolved. He found the case "very distressing," she said.

Rocco Achampong, Morris's lawyer, had said his client had been diagnosed with trauma.

Neither Morris nor Achampong could be reached for comment.