The Owners Of Strata Plan KAS3204 v. Navigator Development Corporation, 2020 BCSC 1954

• Published date: 23 June 2021
• Subject Matter: Litigation, Mediation & Arbitration, Trials & Appeals & Compensation, Professional Negligence
• Law Firm: CLC (Canadian Litigation Counsel)
• Author: Mr Jeremy Ellergodt (Whitelaw Twining)

The Owners of Strata Plan KAS3204 v Navigator Development Corporation, 2020 BCSC 1954 is a recent decision that sets out a strong view on joint and several liability and the doctrine of privity within the context of partial settlement agreements. In summary, Madam Justice Warren confirmed that BC Ferry agreements preserve joint and several liability among non-settling parties and do not confer a benefit on non-settling parties for the purpose of relying on an exception to the doctrine of privity.

The Basics: Multiple Tortfeasors and Settlement Agreements

In negligence claims, a plaintiff's loss is apportioned among wrongdoers based on their degree of fault. However, s. 4(2) of the Negligence Act entitles plaintiffs who are not contributorily negligent to recover their entire loss from a single wrongdoer. If a plaintiff collects judgment against a wrongdoer, for more than their apportioned fault, that wrongdoer is left with a right of contribution against the other wrongdoers for the latter's apportioned fault. Section 4(2) thus places the risk of recovering from individual parties on wrongdoers instead of innocent plaintiffs.

As a statutory right, partial settlement agreements do not alone prevent a wrongdoer from claiming contribution against settling wrongdoers under s. 4(2) and dragging them back into the litigation (Tucker (Public Trustee of) v. Asleson, (1993) 78 B.C.L.R. (2d) 173). To avoid a situation where the settling wrongdoer is liable to the non-settling wrongdoers, the court in British Columbia Ferry Corp. v. T&N plc, (1995) 16 B.C.L.R. (3d) 115 held that a plaintiff may amend its pleadings to limit its claim to the loss attributable to non-settling parties or waive its right of recovery against settling parties. When such amendments are made to the claim, the non-settling wrongdoer has no ability to seek contribution from a settling wrongdoer. Such agreements have since been coined "BC Ferry agreements."

The Facts of the Case at Hand

Navigator Development is a case where a third party, Greyback Construction Ltd. ("Greyback"), brought a summary trial application to dismiss claims made against it in an underlying construction defects action. The plaintiff had settled with some parties through two BC Ferry agreements which provided a waiver of the plaintiff's right to recover for amounts attributable to settling parties, a "release of liability, an indemnity, and a covenant that the plaintiff would amend its pleadings to remove the Settling...