Hunka v. Degner, 2011 ABQB 195

Court of Queen ’ s Bench of Alberta Citation: Hunka v. Degner, 2011 ABQB 195 Date: 20110324 Docket: 0803 11436, 0903 14588, 0903 14546 Registry: Edmonton

Between: Action No. 0803 11436 Dwayne Hunka and 1052517 Alberta Ltd. Plaintiffs - and - Theodore Degner, Donald Oborowsky, Obcorp Holdings Inc., 317508 Alberta Ltd. Waiward Steel Fabricators Ltd., Waiward Management Inc., Waiward Energy Corporation, Little Red Holdings Ltd., Terry Degner, Jim Kanerva, Hustle Holdings Ltd., and M & D Drafting Ltd. Defendants - and - M & D Drafting Ltd. Plaintiff by Counterclaim - and - Dwayne Hunka Defendant by Counterclaim - and - Donald Oborowsky and Theodore Degner Third Parties And Between: Action No. 0903 14588

Theodore Degner and 317508 Alberta Ltd. Plaintiffs - and - Dwayne Hunka and 1052517 Alberta Ltd. Defendants And Between: Action No. 0903 14546 Donald Oborowsky and Obcorp Holdings Inc. Plaintiffs - and - Dwayne Hunka and 1052517 Alberta Ltd. Defendants _______________________________________________________ Reasons for Judgment of the Honourable Mr. Justice John. J. Gill _______________________________________________________ I. Introduction [ 1 ] This case is under case management. This decision addresses two applications.

An application by the Defendants to sever the issue of “share value” for purposes of discovery (and trial) and an application by the Plaintiffs for production of certain documents. Background

[ 2 ] The Plaintiff Dwayne Hunka (“Hunka”) is a former employee of the Defendant Waiward Steel Fabricators Ltd. (“Waiward”) having started as an employee in 1973. His employment ended in 2008. The Plaintiff 1052517 Alberta Ltd.(“1052517" ) is an Alberta Corporation.

The sole director and shareholder of 1052517 is Hunka. [ 3 ] Hunka also alleges that he became a director and shareholder of Waiward in 2002. [ 4 ] The Plaintiffs are advancing claims against the Defendants for breach of contract, shareholder oppression, interference with contractual relations, unjust enrichment, constructive trust and damages, among others. [ 5 ] Some details of the allegations by the Plaintiffs include various breaches of a Management Buy Out Agreement (the “Buy Out Agreement”) entered into between the Plaintiffs and various of the Defendants.

Under the Buy Out Agreement it is alleged that the Plaintiffs were to receive and be offered shares, and Hunka was to receive various profits and bonus amounts. [ 6 ] The Plaintiffs also advance the following claims: 1. Breach of an alleged agreement between the Plaintiffs and Degner Sr., Oborowsky and the respective holding companies, 317508 Alberta Ltd. and Obcorp Holdings Inc. (collectively the “Holding Companies”), the performance of which agreement would have allegedly resulted in the Plaintiffs owning certain shares of the Defendant companies. (Statement of Claim paras. 21 to 32). 2.

Breach of an alleged agreement between the Plaintiff, 1052517 Alberta Ltd. (“1052517”) and the Holding Companies, the performance of which agreement would have also allegedly resulted in the Plaintiff owning certain shares in the Defendant companies (the “M & D Agreement”). (Statement of Claim paras. 21 to 32). 3. Intentional interference with contractual relations by Degner Sr., Oborowsky, the Holding Companies, Degner Jr., Kanerva, and Little Red Holdings relating to the refusal to complete the deals allegedly contemplated by Buy Out Agreement and the M & D Agreement. (Statement of Claim paras. 33 to 36). 4.

Inducement by Degner Jr., Kanerva, and Little Red Holdings of Degner Sr., Oborowsky and the Holding Companies to breach the Buy Out Agreement and the M & D Agreement. (Statement of Claim paras. 33 to 36). 5. Unjust enrichment of Degner Sr., Oborowsky and the Holding Companies as a result of their alleged breach of the Buy Out Agreement, or alternatively unjust enrichment as a result of the Plaintiffs’ alleged reliance the Buy Out Agreement. (Statement of Claim paras. 33 to 36). Submissions of the Defendants [ 7 ] The Defendants applied to sever the issue of Share Value.

They submit that severing this issue will promote the efficient resolution of the action, both from a costs and time perspective. [ 8 ] The Defendants submit that the facts satisfy the requirements of the test for severance under the new Rules of Court (“the Rules”) and the circumstances are appropriate for the Court to exercise its discretion to grant the Order. It submits that at least one of the questions that the Court has to address under Rule 7.1(1)(a)(

i) has been met and that severance is also in accordance with the Foundational Rules. [ 9 ] The Defendants submit that the issue of Share Value is a distinct and separate issue from the liability issue. That there is no

overlap between the liability issue and the Share Value issue. A determination of the liability issue may dispose of the necessity of dealing with the Share Value issue at all. [ 10 ] Referring to Rule 7.1(1)(a)(ii) the Plaintiffs submit that a trial to determine liability would be substantially shorter then the trial determining liability and the Share Value issue.

The liability issue and the Share Value issue are separate and distinct questions severing the Share Value issue which substantially shortens the trial. [ 11 ] Referring to Rule 7.1(1)(a)(iii) severing the Share Value issue would also save the parties expense if the trial judge upon hearing the trial regarding liability rejects the Plaintiffs claim of oppression or refuses to order a buy out of the Plaintiffs’ shares it would not be necessary to consider the Share Value issue at all.

This would mean that it would not be necessary to undergo the financial records disclosure process, prepare expert reports or conduct a trial regarding this issue. This would result in significant cost savings to both the parties and the Court. [ 12 ] It is submitted that Rule 7.1(1)(

a) only requires the Court to find in favour of one of the three grounds in order to exercise its discretion to order severance. In this case at least one of the three grounds has been met, meaning the threshold has been met for this Court to exercise its discretion to severe the Share Value issue. [ 13 ] Having met at least one if not all of the Rule 7.1(1)(

a) grounds the Court must then consider the severance application in light of the Foundational Rules. Referring to Rule 1.2(1) the Plaintiff submits that considerations of timeliness, cost effectiveness, the intentions of the Rules, fairness, justice and proportionality all support the application for a severance. [ 14 ] The Defendants submit that the approach taken by the Court in the Envision Edmonton Opportunities Society v. Edmonton (City) , [2011] A.J.

No. 67 should be applied in this case. [ 15 ] The Defendants point to a number of Canadian Cases under the older more strict test for severance in which the Courts have ordered severance where it would have the effect to protecting confidential financial information particularly whether the issue to sever relates to a remedy which would only become available and therefore relevant if liability is first established. The cases referred to are the Hollinger Canadian Publishing Holdings Co. v. Mostad Publications Ltd. , [2007] B.C.S.C. 1496; Riply v. McLeod Young Weir Ltd. , [1988] N.S.J.

No. 496 (TD (affirmed [1989] N.S.J. No. 47 (C.A.) ); Wahpeton Canvas Co. v. Inland Plastics Ltd. , [1991] S.J. No. 212 ; Davis v. Woodbridge Foam Corp. , [2005] O.J. No. 38 . [ 16 ] The Defendants note that in the Ontario Court of Appeal case of Alldrew Holdings Ltd. v. Nibro Holdings Ltd. , [1996] O.J. No. 2221 commented that in cases where parties are seeking a remedy which requires its shares to be valued, such as the case is here, it is proper for the date as at which the shares will be valued to be determined at the trial of the liability issue.

Thereafter, at a separate hearing, the Court should determine the actual value of the shares. This two stage process is most efficient and cost effective as it enables the experts to simply give evidence regarding value based on one valuation date. [ 17 ] The Defendants also note that the Plaintiffs clear and express intention to have the Plaintiffs’ interests valued as at August 2008 and notes also the vast majority, if not all, the information sought by the Plaintiffs in the financial disclosure application relate to financial information post 2008.

This is another reason to doubt that the Plaintiffs will suffer any prejudice if severance is ordered and one more factor to weighing in favour of severance. [ 18 ] The Defendants also note that the financial records sought by the Plaintiffs are highly sensitive and confidential, that Hunka is currently employed by a direct competitor of the Waiward Companies with his role to bring in work for that competitor. [ 19 ] In

summary the Defendants acknowledge that if the Court grants severance in this case there may be a delay in the discovery and trial of the Share Value issue, if it is ever deemed necessary to try at all. This delay is to be weighed against a multitude of benefits achieved by severance including a quicker less expensive trial of issues and the protection of confidential financial information from a competitor. It is respectively submitted that the balance clearly favour severance and that it is therefore fair and just to sever the Share Value issue.

Submissions of the Plaintiffs [ 20 ] The Plaintiffs oppose the application to sever the Share Value issue. They submit that the exceptional case test for severance which had been developed and applied by the Courts under the old Rules still applies. However if the old test does not apply and the New Rules are applied they submit that the Applicants to do not meet the test for severance. [ 21 ] Referring to the Rule 7.1(1)(

a) the Plaintiffs submit that there are many potential outcomes at trial and it is impossible for the Court to consider the vast liability and damage issues without considering the same financial information that would be relevant to this Share Value issue. It points to the fact of the following: (

a) The Plaintiffs are claiming a breach of the Buy Out Agreement. The Court will have to hear evidence and consider evidence in relation to financial information in order to determine whether the Buy Out Agreement has been satisfied. (

b) If the Court concludes that the appropriate remedy is damages, as opposed to specific performance for the transfer of shares, the same financial information evidence will be required to determine the share valuation as the damages issue. (

c) The acts of oppression that are being claimed by the Plaintiffs relate to financial matters and the Court cannot consider these liability issues without the production and review of the relevant financial information. (

d) If the Court finds there has been no oppression or breach of contract but there has been unjust enrichment then in order to determine the damages for unjust enrichment, financial information regarding the financial and business success of the companies will be required. [ 22 ] The Plaintiffs submit that in Envision Edmonton Opportunities Society v. Edmonton (City) , [2011] A.J. No. 67 the Court was dealing with severance of a simple and distinct preliminary issue (limitations).

The present case however deals with a complex and multifaceted commercial dispute where all of the liability and damages issues will be considered and determined in the main trial. These issues, and the evidence and witnesses necessary to prove them, are entirely intertwined with evidence and witnesses needed to determine the Share Value issue will not therefore be any savings in costs or time by bifurcating the Share Value issue. The Plaintiffs submit that the Share Value issue is not a severable issue and severance will not dispose of all or part of the claim.

Severance also will not substantially shorten the trial or save expense. [ 23 ] In addition under a Rule 1.2 analysis taking into account timeliness and cost effectiveness, fairness and justice in proportionality, severance should not be ordered as there will be clearly a repetition of evidence between a first and second trial.

It would also create an injustice through delay, and resulting negative effect on witnesses. [ 24 ] As regards the submission that the Defendants will suffer potential prejudice if the confidential records of the Waiward Companies are produced, the Plaintiffs point to the Alberta decision of Weatherford Canada Partnership v.

Addie , [2009] ABQB 538 where the Court found that concerns over confidentiality could be adequately protected by a confidentiality order. [ 25 ] The Court also found in that case that much of the evidence regarding liability was intertwined with damages and therefore the complex issues were not capable of being severed.

They also found that the overlap of evidence and witnesses with respect to liability and damages would not save the parties any time and money. [ 26 ] The Plaintiff point to the fact that Rule 5.33 of the Alberta Rules of Court imposes an express confidentiality obligation on parties that they not use the information and documents obtained in the discovery process for any ulterior purposes.

In addition the parties in this action have entered into a Consent Order to provide the Waiward Companies with assurance that the Plaintiffs will only use the financial information of the Waiward Companies for the purpose of this litigation.

[ 27 ] Hunka is now working for a competitor of Waiward which does some of the same business as Waiward. But prior to accepting this position he notified Waiward that he would be seeking employment in the same industry and he received a letter from counsel from Waiward encouraging him to return to work. He is alleging he was wrongfully dismissed and he needs to work.

He has worked in the same industry for his entire life. [ 28 ] The Plaintiff notes also that there is no evidence that Hunka has used any financial or other confidential information received from the Waiward Companies in these proceedings for any ulterior purpose. Analysis and Decision Issue # 1 Should the issue of Share Value be severed? [ 29 ] Rule 7.1(1) provides the Court with a discretion to order that an issue be severed and reasons why a Court would sever an issue: 7.1(1) On application, the Court may (

a) order a question or an issue to be heard or tried before, at or after a trial for the purpose of (

i) disposing of all or part of a claim, (ii) substantially shortening a trial, or (iii) saving expense, [ 30 ] In exercising discretion under Rule 7.1(1) the Court must be guided by the purpose and intention of the Rules as set out in Rule 1.2(1): 1.2(1) The purpose of these rules is to provide a means by which claims can be fairly and justly resolved in or by a court process in a timely and cost-effective way.

(2) In particular, these rules are intended to be used (

a) to identify the real issues in dispute, (

b) to facilitate the quickest means of resolving a claim at the least expense, (

c) to encourage the parties to resolve the claim themselves, by agreement, with or without assistance, as early in the process as practicable, (

d) to oblige the parties to communicate honestly, openly and in a timely way, and (

e) to provide an effective, efficient and credible system of remedies and sanctions to enforce these rules and orders and judgments. [ 31 ] Would severing the issue of Share Value, dispose of all or part of a claim, substantially shorten a trial, or save expense?

[ 32 ] The issue of Share Value is obviously relevant to the issue of damages and other remedies.

The Defendants submit that a severance is appropriate as those “remedy” related issues can be decided efficiently in a separate process after the questions of breach of contract and liability have been determined. [ 33 ] I am not convinced that there would be a substantial saving of time and expense if there was a separate trial on the issue of remedies after a liability trial, as there could be significant overlap of witnesses and evidence in both trials, however even if I were to accept the Defendant’s submission on the potential saving of expense and shortening of process, the application for severance fails for a much more fundamental reason which is ,that the issue of Share Value is also relevant to issues of breach of contract and liability. [ 34 ] Referring to the Statement of Claim the issue of Share Value is relevant either directly or indirectly to the following allegations: (

a) In paragraph 49 of the Statement of Claim under “Oppression, breach of fiduciary duty and duty of care”: 49. Further, or in the alternative: . . . iii. Failing to market Waiward and M & D Drafting in such a manner so as to maximize shareholder value and that is in the best interests of Waiward, M & D Drafting and its shareholders, or at all; iv. Accepting a non-arms length offer from Degner Jr. (Kanerva and Little Red) to purchase Waiward and M & D Drafting without obtaining all material information and advice required to make a reasoned and informed decision regarding the offer; v.

Accepting an offer by or on behalf of Degner Jr., Kanerva and Little Red that is significantly less than the market value of Waiward and M & D Drafting; and (

b) In paragraphs 34 and 35 of the Statement of Claim Under “Unjust enrichment”: 34. Obcorp, 317508, Degner Sr. and Oborowsky all received substantial enrichment and benefit from the services provided by Hunka during the tenure of his employment with Waiward and M & D Drafting. At the same time, Hunka suffered a corresponding deprivation, including foregoing other business and career opportunities, during his 35 years of employment. There is no juristic reason for the enrichment and benefit received by Degner Sr., Oborowsky and the Holding Companies that was obtained to the detriment of Hunka. 35.

As a consequence of the unjust enrichment, Degner Sr., Oborowsky, Obcorp and 317508 hold 40% of the equity of Waiward and M & D Drafting in trust for Hunka and 1052517. (

c) In subparagraphs 29 (g), (

h) and (

i) of the Statement of Claim: Under “Breach of the Agreement and the drafting Agreement, conspiracy and intentional interference and contractual relations”: 29. Degner Sr., Oborowsky, Obcorp and 317508 breached the terms of the Agreement and the M & D Agreement, particulars of which include:

a) Degner Sr., Oborowsky, Obcorp and 317508 refuse to value the shares of Waiward at $20 Million; . . .

e) Degner Sr., Oborowsky, Obcorp, 317508 and Waiward have failed or refused to pay Hunka his portion of the $30 million of profits of Waiward and M & D Drafting as at March 31, 2008 as a 10% shareholder of Waiward and M & D Drafting;

f) In the alternative, Degner Sr., Oborowsky, Obcorp, 317508 and Waiward have failed or refused to pay 1-lunka his portion of the $30 million of profits of Waiward and M & D Drafting as at March 31, 2008 as a 32.5% shareholder of Waiward and M & D Drafting;

g) Degner Sr., Oborowsky, Obcorp and 317508 have failed or refused to transfer to Hunka 22.5% of the equity of Waiward and M & D Drafting effective April 1, 2007;

h) Degner Sr., Oborowsky, Obcorp and 317508 have failed or refused to transfer to Hunka a further 17.5% of the equity of Waiward and M & D Drafting;

i) Degner Sr., Oborowsky, Obcorp and 317508 have failed or refused to transfer to Hunka 50% of the Class t1C” shares held by the Holding Companies; and [ 35 ] Since the issue of Share Value is inextricably intertwined with breach of contract and /or liability, severing the issue of Share Value would not be practical or useful. Applying Rule 7.1(1) severance of the issue of Share Value would not help to dispose of all or part of the claims, or substantially shorten a trial or save expense. [ 36 ] This conclusion is reinforced when one considers the purpose and intention of the Rules. Severing the Share Value issue would not meet the purpose and intention of the Rules: (

a) Rule 1.2(1): The purpose of these rules is to provide a means by which claims can be fairly and justly resolved in or by a court process in a timely and cost-effective way. There could be a substantial duplication of witnesses and documentary evidence if the Share Value issue was heard in a bifurcated process subsequent to a liability trial. It would be more efficient to have the issues heard at the same time. (

b) Rule 1.2(2)(c): To encourage the parties to resolve the claim themselves, by agreement, with or without assistance as early in the process as practicable. If the Plaintiff is successful, the issue of Share Value will be a major component in the calculation of any damages or the awarding of other remedies. How then can a party make a settlement offer or respond to an offer without some understanding of the Share Value? Resolution is more likely to occur if the parties have a realistic understanding of the value of any potential gains or losses flowing from this action. (

c) Rule 1.2(2)(d): To oblige the parties to communicate honestly, opening and in a timely way. The issue of Share Value is a critical part of the claims in this litigation (both in regard to liability and remedy) therefore an obligation to make timely and open communication on the issue should facilitate progress in the litigation. [ 37 ] The Defendants suggest that it is virtually impossible to address the issue of Share Value until a judge fixes a date for the valuation after a trial on the liability issues. I do not agree. There is no reason why the parties cannot take steps to immediately obtain a

valuation of the shares which can be updated as required. The issue of Share Value will apparently require expert evidence . It is therefore an issue that the parties could potentially work on cooperatively with the goal of providing a single or a range of valuations for the Court to consider; thereby attempting to resolve this issue in a timely and cost effective manner as encouraged in Rule 1.2(1). [ 38 ] The application to sever the issue of Share Value is dismissed.

Issue # 2: What documents have to be disclosed? [ 39 ] The Plaintiffs have requested disclosure of a number of financial records asserting that these documents are relevant to issues of liability and remedy. The Defendants object to producing many of these documents suggesting that the requested disclosure is too broad and requires the production of irrelevant information of the ongoing financial and operational condition of the corporate Defendants. [ 40 ] The relevant Rules are Rules 5.1(1) and 5.2(1): 5.1(1) Within the context of rule 1.2, the purpose of this

Part is (

a) to obtain evidence that will be relied on in the action, (

b) to narrow and define the issues between parties, (

c) to encourage early disclosure of facts and records, (

d) to facilitate evaluation of the parties’ positions and, if possible, resolution of issues in dispute, and (

e) to discourage conduct that unnecessarily or improperly delays proceedings or unnecessarily increases the cost of them. 5.2(1) For the purposes of this Part, a question, record or information is relevant and material only if the answer to the question, or the record or information, could reasonably be expected (

a) to significantly help determine one or more of the issues raised in the pleadings, or (

b) to ascertain evidence that could reasonably be expected to significantly help determine one or more of the issues raised in the pleadings. [ 41 ] The principles outlined by the Court of Appeal in Mustard v.Brache , 2006 ABCA 265 in regard to former Rule 186.1 are still applicable. At paragraphs 10 to 12: [10] ..... The rule makes clear that the parties’ pleadings are the basis for determining relevance and materiality.

[11] Discovery of records is now confined to eliciting facts of primary relevance, i.e., facts that are directly in issue, or of secondaryrelevance, i.e., facts from which the existence of the primary facts may be directly inferred. Both primary and secondary relevance aredetermined by reference to the issues raised by the pleadings.

Records seeking information that could reasonably be expected to lead tofacts or records of secondary relevance need not be produced. [12] In addition to being relevant within the meaning of Rule 186.1, records must also be material, that is, they must be reasonablyexpected to significantly help determine one or more of the issues raised in the pleadings. The materiality of evidence refers to itspertinency or weight in relation to the issue it is adduced to prove: Black’s Law Dictionary, (6th ed. 1990).

Records may be relevantwithin Rule 186.1, but, either alone or in combination with other evidence, be of no significant help to the examining party in proving afact in issue: NAC Constructors Ltd. v. Alberta Capital Region Wastewater Commission, 2006 ABCA 246 , 2006 ABCA 246, atpara. 13. [42] The approach outlined by Mr. Justice Slatter in Weatherill (Estate of) v.Weatherill ,2003 ABQB 69 at paragraphs 16 and 17is appropriate to this case: [16] .....

At an interlocutory stage of proceedings, the Court should not measure counsels’ proposed line of argument too finely; ifcounsel can disclose a rational strategy in which the disputed document plays a material part, that should be sufficient. Again it must beremembered that the purpose of the Rule was to avoid abusive, excessive, and unnecessarily expensive discovery, not to cut offlegitimate lines of inquiry. [17] That relevance is determined by the pleadings, while materiality is more a matter of proof can be seen by the wording of theRule.

The Rule talks about records that can “help determine” an issue, or that can “ascertain evidence” that will determine an issue.These are words of proof, and materiality must be determined with that in mind. [43] The pleadings in this action raise numerous causes of action in relation to the Waiward Companies including shareholderoppression, breach of contract, interference with contractual relations, unjust enrichment, and claims for constructive trust.

The remediessought include damages, a buyout of shares, transfer of shares, rectification of the share registry, redemption of shares and repayment ofshareholder loans. [44] The documents requested by the Plaintiffs are set out in Appendix “A” of this judgment. They include financial statements ofthe corporate defendants, major contract documents and documents showing shareholder transactions.

Some of the documents requestedto be produced include financial documents which the plaintiff’s expert considers necessary to conduct a valuation of the shares. [45] The documents in Appendix A appear relevant and material to the claims and allegations raised in the Statement of Claim andas set out in 5.2(1) could reasonably be expected: (

a) to significantly help determine one or more of the issues raised in the pleadings, or(

b) to ascertain evidence that could reasonably be expected to significantly help determine one or more of the issues raised in thepleadings. These documents should be disclosed. [46] In addition disclosure would be in accordance with the purposes outlined in Rule 5.1(1). [47] The Defendants are not however required to provide regular financial or operational records on a daily or monthly basis. Therecords to be provided are those which provide a “snapshot” of the companies at a relevant point in time (eg: a year end).

Confidentiality of the Document Production [48] The Defendants have raised legitimate concerns in relation to protecting the confidentiality of the records. They note thatHunka now works for a competitor thereby increasing the potential risks that can be caused by any breach of confidentiality by thePlaintiff.

[ 49 ] I note that no allegation of actual breach of confidentiality has been made. I note also there is a Consent Order in place that imposes the requirement of confidentiality. [ 50 ] Taking into account the Consent Order and the required confidentiality imposed by Rule 5.33(1) I am satisfied that no further steps need to be taken at this time.

Summary [ 51 ] In

summary, the Defendants application to sever is denied and the Plaintiffs application for disclosure is granted. Heard on the 11 th day of March, 2011. Dated at the City of Edmonton, Alberta this 24 th day of March, 2011. J.J. Gill J.C.Q.B.A. Appearances: David Hawreluk Bennett Jones LLP for the Plaintiffs Dwayne Hunka and 1052517 Alberta Ltd. Bryan Kickham, Q.C. and Debra Curcio Lister Miller Thomson LLP for the Defendants Donald Oborowsky and Obcorp Holdings Inc. Brian Summers and Peter Banks Fraser Milner Casgrain LLP for the Defendants Theodore Degner and 317508 Alberta Ltd.

Ray Baril, Q.C. and Kelly Robinson Chomicki Baril Mah LLP for the Defendants Waiward Steel Fabricators Ltd., Waiward Management Inc., Waiward Energy Corporation Hustle Holdings Ltd. and M & D Drafting Ltd. Sigurd Delblanc Bryan & Company LLP for the Defendants Terry Degner, Jim Kanerva and Little Red Holdings Ltd.

APPENDIX “A” Waidward Steel Fabricators Ltd. · Corporate Income Tax Return 2008; · Corporate Income Tax Return 2009; · Corporate Income Tax Return 2010; · Detailed list of Capital Assets as at March 31, 2008; · Detailed list of Capital Assets as at March 31, 2009; · Detailed list of Capital Assets as at March 31, 2010; · Management Bonus Payable - general ledger detail for fiscal 2008, 2009 and 2010 (commentary as to whether this represents a merit bonus and, if so, who it is paid to); · Working paper on the further income tax assets and liabilities, notation as to the origination of these items; · Lease Agreement with Hustle Holdings for land and building as well as all historical amendments; · Major customer contracts; · List of top 10 customers by revenue; · Employee listing including salary, tenure, and position for fiscal 2008, 2009 and 2010; · Due to affiliates (4), terms of the receivable.

Is it interest bearing? Is there a

schedule or payment? Is there a history of payment (general ledger)?

Waiward Management Inc. · Corporate Income Tax Return 2008; · Corporate Income Tax Return 2009; · Corporate Income Tax Return 2010; · Joint Venture agrement between Ft. McKay Group and Caribou Energy; · Agreements between Ft. McKay Group and Caribou Energy; · Audited financial statements for Caribou Energy (past five years); · Any lease agreement that the company has entered into; · Shareholder Loan Balance, due to Shareholders (if present) – general ledger detail for fiscal 2008, 2009 and 2010; · Management Bonus Payable (if present) – general ledger detail for fiscal 2008, 2009 and 2010.

Commentary as to whether this represents a merit bonus and who it is paid to; · Capital Asset listing and net book value as at December 31, 2008, 2009 and 2010; · Any appraisal documents on the capital asset holdings; · Terms on the demand loan (interest rate, security, terms of repayment); · Employee listing including salary, tenure and position for fiscal 2008, 2009 and 2010; and .

Waiward Energy Corporation · March 31, 2010 Notice to Reader financial statements; · Corporate Income Tax Return for 2004 to 2010; · Shareholder Loan Balance due to Shareholder 2004 to 2010; · Management Bonus payable (if any); and · Capital Asset listing and net book value 2008, 2009 and 2010. M & D Drafting Ltd. · Corporate Income Tax Returns 2005 to 2009; · Detailed listing of capital assets as at December 31, 2005 to 2009; · Shareholder Loan Balance due to Shareholder – general ledger detail for fiscal 2009; · Management Bonus Payable – general ledger detail for fiscal 2008 and 2009.

Commentary as to whether this represents a merit bonus and, if so, who it is paid to; · Working paper on the further income tax assets and liabilities, notation as to the origination of these items; · Lease Agreement with Six Pointe Properties and M & D Drafting; · Major customer contracts; · Employee listing including salary 2008 and 2009;

· Due to affiliates and term of receivable. Is it interest bearing?

Additional Financial information required with respect to the Waiward Companies for 2010: Waiward Management Inc. · December 31, 2010 Notice to Reader Financial Statements; M & D Drafting Ltd. · December 31, 2010 unaudited Financial Statements; · Corporate Income Tax Return for 2010; · Detailed list of capital assets as at December 31, 2010; · Shareholder Loan Balance due to Shareholder – general ledger detail for fiscal 2010; · Management Bonus Payable – general ledger detail for fiscal 2010 (including commentary as to whether this represents a merit bonus and, if so, who it is paid to); · Employee listing including salary and position for 2010.

Additional Financial information required with respect to the Waiward Companies after March 31, 2011: Waiward Steel Fabricators Ltd. · March 31, 2011 audited financial statements; · Corporate Income Tax Return 2011; · Detailed list of Capital Assets as at March 31, 2011; · Shareholder Loan Balance, due to Shareholders – general ledger detail for fiscal 2011; · Management Bonus Payable – general ledger detail for fiscal 2011 (including commentary as to whether this represents a merit bonus and, if so, who it is paid to); · Employee listing including salary and position for 2011; and Waiward Energy Inc. · March 31, 2011 Notice to Reader Financial Statements.