Nadeau Poultry Farm Ltd. et al. v. Desjardins and Desjardins Consultants Inc. et al., (2014) 425 N.B.R.(2d) 1 (TD)

• Judge: LaVigne, J.
• Court: Court of Queen's Bench of New Brunswick (Canada)
• Case Date: January 15, 2014
• Jurisdiction: New Brunswick
• Citations: (2014), 425 N.B.R.(2d) 1 (TD);2014 NBQB 81

Nadeau Poultry Farm v. Desjardins (2014), 425 N.B.R.(2d) 1 (TD);

    425 R.N.-B.(2e) 1; 1107 A.P.R. 1

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Sommaire et texte intégral

[French language version follows English language version]

[La version française vient à la suite de la version anglaise]

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Temp. Cite: [2014] N.B.R.(2d) TBEd. NO.004

Renvoi temp.: [2014] N.B.R.(2d) TBEd. NO.004

Nadeau Poultry Farm Limited and Maple Lodge Farms Ltd. (plaintiffs) v. Desjardins & Desjardins Consultants Inc., Village de Saint-François de Madawaska and Madawaska District Planning Commission (defendants) and Portage la Prairie Mutual Insurance Company, Added by Order Pursuant to Subsection 104.1(1) of the Insurance Act, R.S.N.B., 1973, C. I-12 as third party (third party)

(E/C/19/2004; 2014 NBQB 81; 2014 NBBR 81)

Indexed As: Nadeau Poultry Farm Ltd. et al. v. Desjardins and Desjardins Consultants Inc. et al.

Répertorié: Nadeau Poultry Farm Ltd. et al. v. Desjardins and Desjardins Consultants Inc. et al.

New Brunswick Court of Queen's Bench

Trial Division

Judicial District of Edmundston

LaVigne, J.

April 1, 2014.

Summary:

Résumé:

The plaintiffs suffered a fire at their poultry processing plant located in the Village of Saint-François de Madawaska. They sued their building design consultant (Desjardins), the Village and the Madawaska District Planning Commission. The plaintiffs alleged breach of contract and negligence against Desjardins for failing to ensure that appropriate fire protection and supression systems were included in the design of the plant. They alleged that the Village and the Planning Commission were negligent for failing to ensure that plans and specifications conformed to the applicable laws, regulations, and bylaws before approving them, and for failing to carry out proper building inspections. The defendants filed a statement of defence and cross-claims. Portage La Prairie Mutual Insurance Co. was added as a third party pursuant to s. 104.1(1) of the Insurance Act. The plaintiffs and two of the defendants, namely Desjardins and the Village (collectively referred to as "settling parties" and the defendants collectively referred to as "settling defendants") entered into a form of proportionate share settlement agreement (i.e., a Pierringer Agreement). If the agreement was implemented, the plaintiffs' action against the settling defendants would be settled and the settling defendants would withdraw from the litigation. The plaintiffs' action against the non-settling defendant, the Madawaska District Planning Commission, would continue but the Commission would be liable only for the proportion of damages it actually caused, i.e. its several share of liability. The Commission and the third party (Portage) (collectively referred to as "non-settling parties") were not parties to the settlement agreement and were not agreeable to settling with the plaintiffs. They had not consented to a discontinuance of the plaintiffs' action against the settling defendants, nor had they consented to the dismissal or discontinuance of the cross-claims they made against the settling defendants. The settling defendants would not settle with the plaintiffs if they remained as parties in the file and continued to be exposed to claims by the plaintiffs or to cross-claims by the non-nettling parties for contribution and indemnity. The settling parties brought a motion for leave under rules 25.01(b), 25.03, 25.06 and 25.07 of the Rules of Court, so that the different claims and cross-claims against the settling defendants could be discontinued or dismissed without costs and the plaintiffs would be barred from bringing subsequent action against the settling defendants arising out of the facts alleged in the plaintiffs' statement of claim. In addition, pursuant to Rule 27.10(2)(c), the plaintiff sought to file and serve an amended statement of claim in order to reflect the settlement agreement.

The New Brunswick Court of Queen's Bench, Trial Division, granted the motion. The plaintiffs were granted leave to discontinue their action against the settling defendants without costs to any party. The plaintiffs were barred from bringing a subsequent action against the settling defendants arising out of the facts alleged in the plaintiffs' statement of claim. All cross-claims against the settling defendants were dismissed without costs. To prevent double recovery, the settlement figure was to be disclosed to the court following the court's determination of the liability and damages issues at trial. To give effect to the settlement agreement, leave was granted to the plaintiffs to file and serve an amended statement of claim after the time to appeal the court's decision had passed. If the decision was appealed, the amended statement of claim was to be held in abeyance and dealt with by the Court of Appeal. The court noted that since this was the first time a Pierringer agreement had been the subject of a motion before a New Brunswick court, each party should bear its own costs.

Practice - Topic 9851.1

Settlements - Mary Carter or Pierringer agreements - The New Brunswick Court of Queen's Bench, Trial Division, discussed generally the use of proportionate share settlement agreements (i.e., Pierringer agreements and Mary Carter agreements) - The court discussed when a Pierringer agreement had to be disclosed to the non-settling parties and to the court - The court compared Pierringer agreements and Mary Carter agreements - See paragraphs 20 to 46.

Practice - Topic 9851.1

Settlements - Mary Carter or Pierringer agreements - The New Brunswick Court of Queen's Bench, Trial Division, stated, inter alia, that "In a Pierringer agreement, the settling defendants are removed from the action while in a Mary Carter agreement, the settling defendants remain as parties in the litigation and the agreement is structured so that the settling defendants limit their exposure but retain an interest in the action so as to maximize the liability of the non-settling defendants" - See paragraph 38.

Practice - Topic 9851.1

Settlements - Mary Carter or Pierringer agreements - The New Brunswick Court of Queen's Bench, Trial Division, stated, inter alia, that "There are fundamental differences between a Mary Carter agreement and a Pierringer agreement. Although such agreements change the landscape of the litigation, the Mary Carter agreement does so more substantially than the Pierringer agreement. In a Mary Carter agreement, the settling defendants remain as parties in the lawsuit and have a stake in the outcome of the trial. The settling defendants agree to pay a certain contribution to the plaintiff; however that contribution has the potential to decrease depending on the result at trial. It typically contains a provision whereby the settling defendant is to recover some of the monies paid in the event the plaintiffs recover more than they were paid under the agreement. The settling defendants try to impart liability on the non-settling defendants as much as possible, in order to decrease their contribution to the plaintiff. This explains, in part, why immediate disclosure of the fact of its existence is so important" - See paragraph 42.

Practice - Topic 9851.1

Settlements - Mary Carter or Pierringer agreements - The New Brunswick Court of Queen's Bench, Trial Division, stated, inter alia, that "In a typical Mary Carter agreement, the settling defendant is no longer adverse to the plaintiff. Instead, the settling defendant now has an incentive to establish the liability of the non-settling defendant. In a Pierringer agreement, the settling defendant is extricated from the lawsuit and no longer has any stake in the outcome of the trial. The settling defendant has no incentive to establish the liability of the non-settling defendant. As such, a Pierringer agreement does not change the landscape of the litigation in the same manner as a Mary Carter agreement does" - See paragraph 43.

Practice - Topic 9851.1

Settlements - Mary Carter or Pierringer agreements - Parties to a Pierringer agreement (the settling parties) brought a motion seeking, inter alia, to have the different claims and cross-claims against the settling defendants discontinued or dismissed without costs - The non-settling parties claimed the relief sought by the settling parties should be denied because the Pierringer agreement had not been disclosed to them or to the court in a timely fashion - The New Brunswick Court of Queen's Bench, Trial Division, discussed the duty of disclosure in this context and determined that on the facts of this case the agreement had been disclosed in a timely fashion - See paragraphs 27 to 46.

Practice - Topic 9851.1

Settlements - Mary Carter or Pierringer agreements - The New Brunswick Court of Queen's Bench, Trial Division, discussed whether proportionate share agreements (i.e., Pierringer agreements) had to be submitted to the court for approval - The court stated that "A Pierringer agreement requires a discontinuance or dismissal of the plaintiff's action against the settling defendant. If all parties consent to the discontinuance or dismissal, then I am not convinced that there is a need for the court's intervention. If the non-settling parties impugn the fairness of the agreement then obviously they will not consent to the discontinuance or dismissal of the claims and cross-claims. If leave to discontinue or dismiss is required then the agreement is to be placed before the court so that the fairness of the agreement can be considered" - See paragraphs 47 to 52.

Practice - Topic 9851.1

Settlements - Mary Carter or Pierringer agreements - Parties to a Pierringer agreement (the settling parties) brought a motion seeking, inter alia, to have the different claims and cross-claims against the settling defendants discontinued or dismissed without costs - The non-settling parties claimed that the relief should be denied because the Pierringer Agreement had not been submitted to the court for approval - The New Brunswick Court of Queen's Bench, Trial Division, stated that "The Pierringer Agreement was disclosed in a timely fashion and has been placed before the Court. The parties were able to address the issues which arise from the partial settlement agreement. This gave the Court the opportunity to consider the fairness of the agreement when deciding whether or not to give effect to it. In my view, nothing more is required. I do not accept the argument made by the Non-Settling Parties that this motion should be rejected on the basis of the failure of the Settling Parties to seek court approval of the Pierringer Agreement" - See paragraphs 47 to 52.

Practice - Topic 9851.1

Settlements - Mary Carter or Pierringer agreements - Parties to a Pierringer agreement (the settling parties) brought a motion seeking, inter alia, to have the different claims and cross-claims against the settling defendants discontinued or dismissed without costs (i.e., such that the settling defendants would not longer be parties to the action) - The non-settling parties claimed that if the relief requested was granted it would impair their procedural entitlements and offended basic procedural fairness, especially with regard to discovery - The New Brunswick Court of Queen's Bench, Trial Division, held that the non-settling parties failed to show tangible prejudice arising from the implementation of the Pierringer Agreement - The non-settling parties would continue to benefit from the non-party discovery provisions of the Rules of Court (N.B.) - There was therefore no need to expressly allow them to seek directions as had been done in decisions emanating from Alberta - See paragraphs 53 to 73.

Practice - Topic 9851.1

Settlements - Mary Carter or Pierringer agreements - Following a fire at their plant, the plaintiffs sued their building design consultant (Desjardins), a Village and a Planning Commission - Cross-claims were filed - An insurer was added as third party - The plaintiffs and two of the defendants, Desjardins and the Village (settling defendants), entered into a proportionate share settlement agreement (i.e., a Pierringer Agreement) under which, if implemented, the plaintiffs' action against the settling defendants would be settled and the settling defendants would withdraw from the litigation - The plaintiffs' action against the non-settling defendant would continue with the Commission being liable only for the proportion of damages it actually caused, i.e. its several share of liability - The settling parties moved for leave to have the different claims and cross-claims against the settling defendants discontinued or dismissed without costs and to preclude claims respecting the same subject matter - The plaintiffs also sought leave to amend the statement of claim - The New Brunswick Court of Queen's Bench, Trial Division, granted the motion - There was no good reason for refusing to implement the Pierringer agreement - The court allowed the plaintiff to file and serve an amended statement of claim - See paragraphs 72 to 85.

Practice - Topic 9853

Settlements - By one of multiple defendants - Effect of - [See third, fourth and eighth Practice - Topic 9851.1 ].

Practice - Topic 9862

Settlements - Court approval - [See sixth and seventh Practice - Topic 9851.1 ].

Practice - Topic 9867

Settlements - Disclosure - [See first, third, and fifth Practice - Topic 9851.1 ].

Procédure - Cote 9851.1

Règlements amiables - Ententes Mary Carter ou Pierringer - [Voir Practice - Topic 9851.1 ].

Procédure - Cote 9853

Règlements amiables - Règlements conclus par l'un des défendeurs, ou par l'un des auteurs conjoints ou coauteurs de délits - Effet - [Voir Practice - Topic 9853 ].

Procédure - Cote 9862

Règlements - Approbation par la cour - [Voir Practice - Topic 9862 ].

Procédure - Cote 9867

Règlements amiables - Divulgation - [Voir Practice - Topic 9867 ].

Cases Noticed:

Sable Offshore Energy Inc. et al. v. Ameron International Corp. et al. (2013), 446 N.R. 35; 332 N.S.R.(2d) 1; 1052 A.P.R. 1; 2013 SCC 37, refd to. [para. 21].

Amoco Canada Petroleum Co. et al. v. Propak Systems Ltd. et al. (2001), 281 A.R. 185; 248 W.A.C. 185; 2001 ABCA 110, refd to. [para. 22].

Bioriginal Food & Science Corp. et al. v. Gerspacher et al. (2012), 390 Sask.R. 77; 2012 SKQB 14, refd to. [para. 30].

Aecon Buildings v. Brampton (City) et al., [2010] O.A.C. Uned. 727; 2010 ONCA 898, refd to. [para. 30].

Laudon v. Roberts et al. (2009), 249 O.A.C. 72; 308 D.L.R.(4th) 422; 2009 ONCA 383, refd to. [para. 36].

Hudsons Bay Mining & Smelting Co. v. Wright et al. (1997), 120 Man.R.(2d) 214; 12 C.P.C.(4th) 94 (Q.B.), refd to. [para. 39].

Aecon Buildings v. Brampton (City) et al., [2011] N.R. Uned. 68; 2011 SCC 33, refd to. [para. 40].

Rains v. Molea et al., [2012] O.T.C. Uned. 4906; 2012 ONSC 4906, refd to. [para. 49].

Canadian Truck Stops Ltd. v. Imperial Oil et al. (2006), 396 A.R. 361; 2006 ABQB 116, refd to. [para. 63].

Amoco Canada Petroleum Co. et al. v. Propak Systems Ltd. et al. (1999), 74 Alta. L.R.(3d) 194; 1999 ABQB 716, affd. (2001), 281 A.R. 185; 248 W.A.C. 185; 2001 ABCA 110, refd to. [para. 64].

J.M. et al. v. Bradley et al. (2004), 187 O.A.C. 201; 71 O.R.(3d) 171 (C.A.), refd to. [para. 66].

Hollinger Inc. et al., Re, [2012] O.T.C. Uned. 5107; 2012 ONSC 5107, refd to. [para. 67].

Sable Offshore Energy Inc. et al. v. Ameron International Corp. et al. (2010), 287 N.S.R.(2d) 113; 912 A.P.R. 113; 2010 NSSC 19, refd to. [para. 87].

Counsel:

Avocats:

G.C. Thibodeau, Q.C., Raj K. Datt and Marie-Pierre Nadeau, appeared on behalf of the plaintiffs, Nadeau Poultry Farm Limited and Maple Lodge Farms Ltd.;

Deirdre L. Wade, Q.C., appeared on behalf of the defendant, Village of Saint-François de Madawaska;

Sarah Letson, appeared on behalf of the defendant, Desjardins & Desjardins Consultants Inc.;

Gary McLaughlin, Q.C., appeared on behalf of the defendant, Madawaska District Planning Commission;

William G. Stephenson, appeared on behalf of the third party, Portage La Prairie Mutual Insurance Company.

This matter was heard on January 15, 2014, before LaVigne, J., of the New Brunswick Court of Queen's Bench, Trial Division, Judicial District of Edmundston, who delivered the following decision on April 1, 2014.