Executive Summary: Key Legal and Evidentiary Issues

• The plaintiff alleged defamation stemming from union statements published in local media, claiming reputational and business harm.

• A Pierringer Agreement was entered into by some defendants to settle and exit the litigation while limiting their future liability.

• The remaining defendants opposed the settlement, arguing it would unfairly shift full liability onto them.

• The court evaluated whether the agreement would cause actual legal prejudice to the non-settling defendants.

• It found that the agreement preserved proportionate liability and the ability to defend on all relevant facts.

• The judge emphasized the public interest in encouraging partial settlements through mechanisms like Pierringer Agreements.

Facts of the case

Jung Ran Hong was the manager of the Super 8 Hotel in Moose Jaw, Saskatchewan, engaged in tense collective bargaining negotiations with the employees’ union, Unite Here! Local 41. During this period, the union’s president, Garry Whalen, made strong public statements about Hong. These statements were quoted in articles authored by Gordon Edgar and published by Moose Jaw Publications Limited Partnership, operating under the name Moose Jaw Today. Hong considered the statements defamatory and claimed they damaged her personal reputation and harmed the hotel’s business operations.

In response, she initiated a lawsuit against four parties: Moose Jaw Publications Limited Partnership, Gordon Edgar, Garry Whalen, and Unite Here! Local 41. During litigation, Moose Jaw Publications and Gordon Edgar (the “settling defendants”) entered into a Pierringer Agreement with Hong. This allowed them to settle out of the litigation, indemnified them against further contribution claims, and limited the remaining defendants’ liability to only their proportionate fault.

Court's consideration and outcome

The court was tasked with deciding whether to approve the Pierringer Agreement, a necessary step before it could take legal effect. Garry Whalen (whose estate was now involved due to his passing) and Unite Here! Local 41 (the “additional defendants”) opposed the agreement. They argued that by removing the settling defendants from the pleadings, they would be exposed to the full extent of damages without any recourse for contribution.

Justice A.S. Davis rejected this position, ruling that the Pierringer Agreement was properly drafted and did not cause actual legal prejudice to the non-settling defendants. The amended pleadings still referenced the actions of the settling defendants, and the agreement preserved the court’s authority to determine proportionate liability. The additional defendants retained the right to amend their defense and assert facts regarding the role of the settling defendants. The judge found no credible basis for the claim that the agreement unfairly shifted full liability.

Moreover, the court highlighted that even if there were some speculative risk of increased damages, it would not outweigh the strong public interest in promoting settlement. The Pierringer Agreement’s fundamental features—including barring future contribution claims and limiting liability to several liability—were upheld as consistent with Canadian jurisprudence.

Accordingly, the court approved the agreement, allowed the plaintiff to amend her Statement of Claim to reflect the settlement, and barred the non-settling defendants from pursuing any claims for contribution or indemnity against the settling parties. The plaintiff was awarded costs for the application.