Trachuk v. Southward Energy Ltd., 2010 ABQB 823

Court of Queen ’ s Bench of Alberta Citation: Trachuk v. Southward Energy Ltd., 2010 ABQB 823 Date: 20101222 Docket: 0203 04713 Registry: Edmonton Between: Dennis John Trachuk and Valerie Lynn Trachuk Plaintiffs - and - Southward Energy Ltd., Tempco Drilling Company Inc., Trican Well Service Ltd., Schlumberger Well Services, and Schlumberger Canada Limited Carrying on Business As Schlumberger Well Services Defendants _______________________________________________________ Memorandum of Decision of L.A.

Smart, Master in Chambers _______________________________________________________ Background [ 1 ] The Defendants Schlumberger Well Services, and Schlumberger Canada Ltd. carrying on business as Schlumberger Well Services applied to strike this action pursuant to Rules 244 and 244.1. The application pursuant to Rule 244.1 was withdrawn ostensibly as Schlumberger’s counsel recognized that a Consent Confidentiality Order signed on December 20, 2005 and entered January 13, 2006 constituted a thing which materially advanced to the action.

[ 2 ] The Statement of Claim was issued on March 7, 2002 and served on the Defendants on January 9, 2003. Defences and Affidavit of Records were filed and examinations for discovery scheduled for November 18 and 19 th 2004. It was agreed that Schlumberger would not participate in the examinations until a suitable Confidentiality Order was put in place which as noted above occurred on December 20, 2005.

Set out below is the timeline taken from the Plaintiff Trachuk’s brief for the period January 16, 2006 (date the Confidentiality Order was filed) to December 1, 2009 being the point at which Schlumberger refused to attend discoveries: 12. A Consent order relating to the confidentiality of Schlumberger’s production was filed on January 16, 2006. 13. The Plaintiffs requested the answer to undertakings from the Defendant Trican on April 7, 2008. 14. The Plaintiffs distributed an expert report to all parties on April 7, 2008. 15.

On June 2, 2009 the Plaintiffs filed a Notice of Motion and Affidavit to compel Trican to complete undertakings. 16. A Consent Order was filed on June 22, 2009 wherein Trican agreed to deliver their answers to undertakings by July 31, 2009. 17. On August 4, 2009 Trican provided answers to undertakings to the Plaintiffs. 18. On August 10, 2009 the Plaintiffs wrote to the Solicitors for Trican requesting available dates to complete Examinations on Undertakings in September/October 2009. This letter was copied to the solicitor of record for Schlumberger. 19.

August 13, 2009 the Defendant Schlumberger wrote to the Plaintiffs advising that “as you have now indicated an intention to move forward this action, I can advise that we will be bringing a Rule 244 application.” 20. On September 14, 2009 after receiving no response from the Solicitors for Trican to the letter dated August 10, 2009, Plaintiffs’ counsel emailed Trican’s legal counsel advising that an Appointment for Examination for Discovery would be forthcoming requesting Trican’s officer to attend at Examinations on October 28 and 29, 2009. 21.

On September 18, 2009 Plaintiffs’ counsel served an Appointment for Examination for Discovery on Trican’s officer. 22. On October 16, 2009 legal counsel for the Defendant Trican, wrote to Plaintiffs’ counsel and requested that the appointment be set aside and that Examinations be set on alternate dates.

In that letter, Trican’s legal counsel wrote “I confirm my advice to you that having acknowledged receipt of your Appointment for Examination for Discovery I will not rely upon any delay form the date of delivery of that Appointment to the date of the actual Examination for Discovery in any applications relating to delay of prosecution of the action.” 23. On November 10, 2009 the Plaintiffs wrote to counsel for Trican requesting that the dates advanced by Trican be set for Examinations. 24.

By letter dated November 23, 2010 the Plaintiffs requested that the Defendant Schlumberger attend examinations for discovery to be scheduled to coincide with the Examinations of Trican.

25. By email dated November 23, 2009 Plaintiffs counsel requested confirmation from Trican’s counsel that the dates provided by Trican were set down for Examinations. 26. On November 27, 2009 counsel for Trican wrote advising that they were only available on December 22 and 23, 2009. 27. On November 30, 2009, December 1, 2009 and December 14, 2009 the Plaintiffs wrote to Counsel for Trican advising that these dates should be set for Examinations. 28.

On December 1, 2009 the Defendant Schlumberger responded stating that Schlumberger refused to attend discoveries on the basis that they intended to bring a motion to dismiss. Rule 244 [ 3 ] Rule 244 of the Alberta Rules of Court provides: 244(1) Where there has been a delay in an action, the Court on application by a party to the action may, subject to any terms prescribed by the Court, (

a) dismiss the action in whole or in part for want of prosecution, or (

b) give directions for expeditious determination of the action.

(2) If the Court denies the relief sought under subrule (1)(a), the Court (

a) shall prescribe terms or give directions that, in the opinion of the Court, are sufficient to substantially prevent or remedy, as the case may be, any non-trivial prejudice caused to any adverse party by reason of the delay, and (

b) may prescribe terms or give directions that, in the opinion of the Court, are sufficient to substantially prevent or remedy, as the case may be, any non-trivial prejudice caused to any adverse party by reason of the delay, and

(3) If in the opinion of the Court it is unable to devise terms or directions that are sufficient to satisfy subrule (2)(a), the Court shall find that there has been serious prejudice to the party moving to dismiss the action.

(4) Where, in determining an application under this Rule, the Court finds that the delay in any action is inordinate and inexcusable, that delay shall be prima facie evidence of serious prejudice to the party that brought the application. [ 4 ] The Alberta Court of Appeal in Lethbridge Motors Co. v. American Motors (Canada) Ltd. , 1987 ABCA 150 (CanLII) , [1987] 79 A.R. 321 (C.A.) sets out the three-part test to be applied: (

a) there has been an ordinate delay; (

b) that this inordinate delay is inexcusable; and (

c) that the defendants are likely to be seriously prejudiced by the delay.

Discussion and Conclusion [ 5 ] Officers of the Defendant’s Tempco Drilling Co. Inc. and Trican Well Services Ltd. were examined in November, 2004. Subsequent to the Consent Order, the Plaintiff requested undertakings from Trican in April 2008 eventually receiving them in August 2009. On August 10, 2009 the Plaintiff contacted Trican only then copying the solicitor for Schlumberger. By correspondence on August 13, 2009 counsel for Schlumberger advised the Plaintiff that they would be bringing a Rule 244 application.

The Plaintiff thereafter dealt principally with Trican attempting to arrange dates for examinations on the undertakings. The one other “thing” done was the delivery of a July 2002 expert report on April 7, 2008. [ 6 ] The Plaintiff argues that the various interactions with Trican amount to things which materially advance the action and those things together with the delivery of the expert report are sufficient to overcome the allegation of inordinate delay made by Schlumberger.

And although not offered as an excuse, the Plaintiff notes that this is a complicated lawsuit by a landowner against four corporations who drilled, completed and operated a gas well on their property. In such circumstances efficiency and cost are an important if not overriding issue for the landowner. Furthermore, prior to preceding with examinations of Schlumberger undertakings from Trican were important: (1) for identifying the relationship between Tempco and Trican, (2) the content of the cement and (3) the cementing process used during the drilling of the well.

The fact that it took four years to get those undertakings before resumption of examinations for discovery should not be shouldered solely by the Plaintiffs. [ 7 ] I agree with the Defendant Schlumberger that delivery of a 2002 expert report in 2008 did little or nothing to advance litigation. It simply doesn’t assist the Plaintiffs. [ 8 ] In my view the three-year time frame dealing with Trican before advising Schlumberger of an intention to proceed with litigation borders on inordinate delay.

Regardless, I have concluded that the requiring of certain information from the Trican discovery and undertakings before proceeding with the Schlumberger discoveries provides an acceptable excuse in these circumstances albeit perhaps the thinnest possible.

Nonetheless having reached that conclusion, it is unnecessary for me to consider the issue of prejudice except to note that there appears to be no actual prejudice to Schlumberger as a consequence of the delay since the last thing done to materially advance the action. [ 9 ] The Plaintiffs cannot continue at this pace if they hope to ever have this matter proceed to trial. Schlumberger quite correctly wishes to have this action resolved. Given the history of this litigation, I am of the view that although Schlumberger’s application has been unsuccessful that each of the parties should bear their own costs.

I direct the party’s attention to the new Rule 4.4(2) which provides for any party to prepare and serve a litigation plan. All parties would be well served in this case if such a plan were prepared and agreed upon. Heard on the 12 th day of May, 2010. Dated at the City of Edmonton, Alberta this 22 nd day of December, 2010. L.A. Smart M.C.C.Q.B.A.

Appearances: Richard Secord/ Debbie Bishop Ackroyd LLP for the Plaintiffs Robert Maxwell Fasken Martineau DuMoulin LLP for the Defendants