Settling parties are taken out of the equation, but their apportionment of liability is not. Madam Justice Warren then went on to briefly consider the two Settlement Agreements themselves to see whether Greyback could rely on them to sever liability as between the remaining defendants when Greyback was not a party to the Settlement Agreements.
The Settlement Agreements did not extend any benefit to Greyback. The Plaintiff did not intend to insulate the non-settling wrongdoers from claims for contribution or indemnity. The Settlement Agreements provided the settling parties with a release of liability, an indemnity and a covenant that the Plaintiff would amend its pleadings to remove the settling parties and limit its claim to preclude any claim over against the settling parties.
The Plaintiff did not intend to limit its claim against each of the remaining non-settling defendants to the portion of loss ultimately attributed to the fault of that remaining defendant.
This was achieved by providing the Settling Parties with a release of liability, an indemnity, and a covenant that the Plaintiff would amend its pleadings to remove the Settling Parties and circumscribe its claim to preclude any claim over against them. Construing the Plaintiff's obligation to limit its claim to extend to eliminating the Plaintiff's right to joint recovery from the remaining defendants for loss attributed to them as a group would be commercially absurd since it would represent a significant detriment to the Plaintiff and would not confer any corresponding benefit on the Settling Parties.
This decision seems to shut the door on arguing that liability is severed between the remaining non-settling defendants when settling parties enter into a BC Ferries agreement unless there are unusual circumstances giving the non-settling parties the benefit of that agreement. This should give parties pause when they know that other parties are considering BC Ferries agreements-especially if there are impecunious parties who are left in the action.
While a non-settling party will not be responsible for paying the portion of loss ultimately attributable to the settling parties, they may be on the hook for paying the lion's share of any award where the other non-settling parties are unable to pay. The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances. All Rights Reserved. Password Passwords are Case Sensitive. Forgot your password? Free, unlimited access to more than half a million articles one-article limit removed from the diverse perspectives of 5, leading law, accountancy and advisory firms.
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To print this article, all you need is to be registered or login on Mondaq. The Considerations of the Court The main consideration before the court was whether a settlement between a plaintiff and some, but not all, alleged wrongdoers has the effect of extinguishing non-settling wrongdoers claims' for contribution and indemnity against each other.
The court held that no principled exception to privity of contract applied in this case. The Conclusion In dismissing Greyback's application, at para 61, Madam Justice Warren said this: [61] Finally, the obvious objective of the Settlement Agreements was to extricate the Settling Parties from the litigation in exchange for a payment of money, while permitting the Plaintiff to continue the action against the remaining defendants.
Jennifer O'Leary. When it was complete and operational, it was turned over to InTransit B. Rates and fares on the Canada Line, however, are still subject to specific approval by the Transit Commissioner. It would need to be completely owned and operated by a private consortium. Just as the Ferry Commissioner now regulates and approves fares and charges for B. Ferries, that would still apply here to any private operator. There are already some privately-operated smaller systems in the interior of the Province.
They operate under contract to government and fares if charged are subject to approval by the Ferry Commissioner. The plaintiff argued that the law is clear that a BC Ferry Agreement does not eliminate the joint liability of the remaining defendants for the portion of the loss attributed to them as a group and that Greyback, as a stranger to the Settling Agreements, could not rely on them.
The Court addressed Greyback's fairness argument, stating the Greyback had misinterpreted the fundamentals of contribution and indemnity. The Court explained that regardless of any settlement, the wrongdoer who pays the plaintiff for more than its proportionate share of the loss the "Paying Defendant" will not be able to spread responsibility for the insolvent party's portion of the loss among the other wrongdoers.
This is because a Paying Defendant cannot compel another defendant to contribute more than its proportionate share. The Paying Defendant is on the hook for the insolvent party's portion of the loss, whether or not there is a BC Ferry Agreement. The Court determined that none of the case law cited by Greyback and its supporters could support Greyback's assertion that BC Ferry Agreements extinguish joint liability between non-settling defendants.
In Sable Offshore Energy Inc. Ameron International Corp. The Court stated that the plaintiff may recover from any one of the non-settling defendants on a joint and several basis and they may make claims of contribution and indemnity between each other.
A BC Ferry Agreement extinguishes the joint liability between the settling parties, as a group , and non-settling defendants, as a group. The Court determined that this is what was referred to in the sentence in question in the Settling Agreements, which provides that the Plaintiff will limit its claim "to the several extent of liability of the Remaining Defendants.
The principled exception to privity allows a person who is not a party to a contract to rely on a benefit conferred to it if the parties to the contract intended to extend a benefit to that person and activities performed by the person come within the scope of the contract. The Court found no indication that the Plaintiff and settling defendants had intended to extend any benefit to Greyback or the non-settling defendants. This case ends any debate on whether or not a BC Ferry Agreement will sever the joint liability of non-settling parties as a group.
Non-settling parties are reminded that, after a BC Ferry Agreement is made, the plaintiff may recover the entire amount attributable to the non-settling parties as a group, from any one of them on a joint and several basis. The content of this article is intended to provide a general guide to the subject matter.
Specialist advice should be sought about your specific circumstances. All Rights Reserved. Password Passwords are Case Sensitive. Forgot your password? Free, unlimited access to more than half a million articles one-article limit removed from the diverse perspectives of 5, leading law, accountancy and advisory firms.
We need this to enable us to match you with other users from the same organisation. It is also part of the information that we share to our content providers "Contributors" who contribute Content for free for your use. Learn More Accept. Your LinkedIn Connections with the authors. To print this article, all you need is to be registered or login on Mondaq. Raman Johal. Brooke Fortugno.
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