Foley-Cornish v. Nabors Drilling Limited, 2013 ABQB 186

Court of Queen ’ s Bench of Alberta Citation: Foley-Cornish v. Nabors Drilling Limited, 2013 ABQB 186 Date: 20130325 Docket: 0103 25897 Registry: Edmonton Between: Judy Elizabeth Foley-Cornish, Judy Elizabeth Foley-Cornish As Administratix of the Estate of Jason Paul Cornish, Deceased, and Her Majesty the Queen In Right of Alberta Plaintiffs - and - Nabors Drilling Limited, Ryan Eric Hafso, Cenalta Well Servicing Inc. and Stanley Alan Hunt Defendant _______________________________________________________ Reasons for Decision of the Honourable Madam Justice J.E.

Topolniski _______________________________________________________ A. Introduction [ 1 ] Claiming unilateral mistake, Nabors Drilling Limited ( “ Nabors ” ) seeks to set aside a Consent Order made in the context of larger litigation brought by the estate of Jason Cornish ( “ Cornish ” ) concerning injuries sustained in a motor vehicle accident ( “ Accident ” ). The Consent Order directs a trial of an issue regarding the

interpretation of

Part 5, Division 1of the Hospitals Act , R.S.A. 2000, H-12 which would (as was agreed by the parties) determine Nabors' liability, if any, for the cost of health services provided by Her Majesty the Queen in Right of Alberta, represented by the Minister of Health and Wellness (“Alberta”) to Cornish (“Trial of the Issue”). [ 2 ] A brief overview of the history of the proceedings germane to this application is necessary. [ 3 ] The Accident happened on December 24, 1999. Cornish was ejected from a front-end loader leased by Nabors operated and operated by Ryan Hafso ( “ Hafso ” ). He sustained significant injuries, later dying from unrelated causes. The litigation was commenced in late 2001.

[ 4 ] In 2009 Alberta undertook to not call viva voce evidence at the trial on the operation of Division 2,

Part 5 of the Hospitals Act . [ 5 ] In late 2010, a trial and non-binding JDR were scheduled. A pre-JDR meeting was held January 11, 2011 when, after canvassing the merits of continuing with a JDR, the parties agreed to enter into a Consent Order adjourn the 13 day trial set to begin May 9, 2011and to proceed instead with the Trial of the Issue. They also agreed to certain preparatory steps, the first of which was Nabors delivering a draft agreed statement of facts ( “ ASOF ” ) to Alberta. [ 6 ] The Consent Order was granted on March 3, 2011. It reads, in part, as follows: 1.

The Court, pursuant to Rule 7.1, hereby orders a question or an issue to be heard or tried before trial for the purpose of disposing of part of a claim, substantially shortening the trial and saving expense. 2. The question or issue to be heard before trial is a question of law as follows: “ Does Her Majesty the Queen in Right of Alberta, as represented by the Minister of Health and Wellness, have a statutory claim against Nabors Drilling Limited pursuant to the Hospitals Act , R.S.A. 2000, c. H-12,

Part 5, Division 1, as amended, for the cost of health services provided to Jason Paul Cornish, deceased, with respect to injuries sustained on or about Friday, December 24, 1999? ” 3. Given this Order that a question or issue be heard before trial, and the proximity of the scheduled trial dates of this matter, the full trial of this matter, currently scheduled for 13 trial days from Monday, May 9 through Thursday, May 26, 2011 is hereby adjourned, without costs to either party. [ 7 ] Nabors delivered a draft ASOF on February 11, 2011 which was not responded to until August 9, 2011.

Then, Nabors indicated it would not continue with the ASOF unless it received, in its opinion, an adequate expert accident reconstruction report. Here, I digress to add that Nabors had asked for Alberta ’ s accident reconstruction report on several occasions before the pre-JDR meeting and, according to its counsel ’ s recollection, repeated its request at the pre-JDR meeting. [ 8 ] In late March, 2011, Nabors wrote to Alberta, stating it agreed to the Trial of the Issue on the assumption that the accident reconstruction report would “ point to the driver of the front-end loader as the principal cause of Mr.

Cornish ’ s injuries ” . [ 9 ] In June, 2011, Alberta delivered an accident reconstruction report signed by Mark Sawa ( “ Sawa ” ) of Anderson Associates Consulting Engineers Inc. (“Report”). Nabors responded with advice that the Report was not an expert or engineering report, and that without a “true” expert accident reconstruction report there was no good reason to move forward with the Trial of the Issue. The deficiencies in the Report alleged by Nabors are expanded upon later. [ 10 ] Alberta ’ s response contending that there were no deficiencies in the Report was sent June 15, 2012.

More correspondence followed and then Nabors sought an informal meeting with me (as the pre-JDR judge). I declined and instead urged counsel to take out whatever motions they thought necessary before any judge (as I was not seized with the matter). [ 11 ] On November 16, 2012, Alberta applied before me for advice and directions and an Order requiring compliance with the Consent Order. I declined to immediately grant the application, directing instead that Nabors could apply to set aside the Consent Order on the appropriate evidence, failing which the Trial of the Issue would proceed in May, 2013.

These events followed: ∙ December 3, 2012 - Nabors Motion returnable March 19, 2013 to vacate the Consent Order is filed; ∙ Januray 21 and 28, 2013 - Written submissions are filed; ∙ February 19, 2013 - Nabors serves a Notice to Admit Facts (“NTA”);

∙ March 11, 2013 - Alberta replies to the NTA(“Reply to NTA”). [ 12 ] In the NTA, Nabors specified its objections to the Report, alleging, among other things, that the engineer failed to: ∙ Take appropriate measurements; ∙ Indicate the location of Jason Cornish on the front-end loader; ∙ Inspect the bridge deck of the accident; ∙ Review the medical records of Jason Cornish; and ∙ Indicate whether Jason Cornish was thrown or jumped from the front-end loader. [ 13 ] In the Reply to NTA, Alberta states that it has no knowledge of whether Nabors ’ allegations are true and puts it to the strict proof thereof.

Alberta further states that the evidence relied on in preparation of the Report is evident on the face of that document and that the Report will likely not be the same as what would be produced (by Alberta) at the trial of this matter. This was affirmed at the hearing of this application; Alberta ’ s advice being then that the Report would likely be updated for the ( main) trial and, if a rebuttal expert report was obtained by Nabors, be amended to address anything raised therein. B.

Analysis [ 14 ] Rule 9.15(4) of the Alberta Rules of Court , Alta Reg 124/2010, gives the court broad discretion in determining whether to set aside interlocutory orders. The Rule states that the court may set aside an interlocutory order with the consent of every party, where information arose or was discovered after the order was made, or on other grounds the court considers just.

Alberta courts have specifically addressed the nature of consent orders and considerations that apply in deciding whether one should be varied or set aside. [ 15 ] It is common ground that a consent order is evidence of a contract between the parties and as such the rules for variation of a contract apply and that generally, will only be varied on grounds of common or unilateral mistake, misrepresentation, fraud, or unilateral mistake where the opposing party was aware of the mistaken understanding on a crucial point: Simonelli v Ayron Developments Inc. , 2010 ABQB 565 at paras 66-67 . [ 16 ] Nabors raises two grounds to set aside the Consent Order; “ timeliness ” , or lack thereof, and unilateral mistake. 1.

Timeliness as a Stand Alone Ground [ 17 ] Nabors alleges that Alberta ’ s failure to produce the Report in a timely manner, or in Nabors ’ opinion at all, is grounds to set aside the Consent Order. Although it may be implicit in the nature of a Consent Order that time is of the essence, this ground is not in itself sufficient to set aside. The nature of a Consent Order is such that the Court must exercise its discretion to set aside judiciously and sparingly. [ 18 ] That said if timeliness is implicit in the Consent Order delay may give rise to other remedies.

For example, a party may bring an application to deal with the delay or for an order for costs, and if liability is ultimately found, unwarranted delay may found a reduction of prejudgment interest. 2. Unilateral Mistake [ 19 ] Nabors argues that when entering into the Consent Order, it relied on Alberta to deliver an expert accident reconstruction report in a timely manner and that from prior correspondence Alberta must have known that. Two complaints flow from this; timeliness

and the failure to produce an adequate report. [ 20 ] I turn therefore to whether Nabors ’ has established a unilateral mistake. i. Timeliness as Part of Unilateral Mistake [ 21 ] Before the pre-JDR meeting and the Consent Order, Nabors repeatedly asked Alberta for the Report so it could determine whether it would need to call rebuttal evidence.

After the pre-JDR meeting, on January 18, 2011, Nabors wrote again saying: … with respect to the Draft Agreed Statement of Facts, I recall our discussion being to the effect that a bald statement of the statutory framework would not be enough for the Court, and that the factual context of this particular lawsuit would have to be provided. Part of that factual context is the story of the accident, and your expert ’ s report is likely to be relevant to the factual context.

Accordingly, I expect I will need a copy of your expert ’ s report in order to complete the draft . [Emphasis added]. [ 22 ] The Consent Order does not refer to the Report and there is no indication in any of the communications between Nabors and Alberta that the Consent Order was contingent production of the Report.

The only reference to it is for the purposes of drafting the ASOF, which was delivered on February 11, 2011, approximately one month before the Consent Order was presented and granted. [ 23 ] As the reasons communicated to Alberta for the production of the expert report, namely the preparation of a draft ASOF for the Trial of an Issue, seem to have been satisfied at this point, there is no evidence to support Nabors ’ allegations of unilateral mistake founded on timeliness.

In these circumstances, Alberta could not reasonably have known that Nabors ’ entering into the Consent Order was contingent upon production of the expert report within a timely manner. Even if it could be viewed otherwise, which I do not, an approximate three and one half month delay between the Consent Order and delivery of the report would not support finding failure to produce the report in a timely manner. ii.

Failure to Produce an Adequate Report [ 24 ] I turn to what and for what purposes requests were made of Alberta. [ 25 ] A letter dated March 28, 2011 (after the Consent Order) discloses why Nabors wanted the expert report. It says Nabors: “ … agreed to isolate and move forward with the statutory

interpretation question on the underlying assumption that the report [would] point to the driver of the front-end loader as the principal cause of Mr. Cornish ’ s injuries ” . [ 26 ] Nabors contends that “ the deficiency of the document delivered by Alberta on June 23, 2011 is evident on its face ” . Further complaints to Alberta are these: 1. “ While Mr. Sawa ’ s signature line indicates that he is a professional engineer, the document you have forwarded is neither an expert report nor an engineering report.

I look forward to prompt receipt of the Plaintiff ’ s expert accident reconstruction report ” (Letter of June 27, 2011). 2. “ … it is now clear that the remaining Plaintiff does not have an Expert Accident Reconstruction Report that establishes the factual foundation for a trial of the statutory

interpretation question (namely, whether the statutory reimbursement exemption operates only when a wrongdoer had Alberta-based insurance). Without such a report, it is extremely speculative to assume that either Nabors or the driver was negligent to any significant degree or at all with respect to Mr. Cornish ’ s injuries, i.e. that either was a “ wrongdoer ” (Letter of August 29, 2011).

3. Nabors clarifies the words in parentheses in its August 29, 2011 and expands on the alleged deficiencies saying: a. “I meant the words in parentheses to qualify the text that immediately preceded, namely, “the statutory

interpretation question”. Ihave never meant to suggest that any opinion on accident reconstruction should determine a question of statutory

interpretation. I wouldsuggest, however, that such an opinion also should not be commenting on the meaning of statutory language, which the Plaintiff’sdocument does do”; and b. “Until recently, it seemed that you had acquiesced to our long-standing position that the document is not an expert report ascontemplated by our courts (cf. R v Mohan, (SCC), [1994] 2 S.C.R. 9 and R. v.

Abbey, 2009 ONCA 624)”. (Letter ofAugust 31, 2011). [27] From the NTA, Nabors calls for admissions that, among other things, the engineer failed to: ∙ Take appropriate measurements; ∙ Indicate the location of Jason Cornish on the front-end loader; ∙ Inspect the bridge deck of the accident; ∙ Review the medical records of Jason Cornish; and ∙ Indicate whether Jason Cornish was thrown or jumped from the front-end loader. [28] In part, the Report reads as follows: “Anderson Engineering was retained to review the available information and determine, if possible, the sequence of events that occurredduring the incident and to define certain terms from the perspective of an expert in the area of Accident Reconstruction. [29] In making his report, Sawa indicates that he reviewed several pieces of information, including: 1.

The Alberta Collision Report Form, dated December 24, 1999; 2. Colour copies of seventeen scene photographs taken by the RCMP; 3. Nabors’ Accident Investigation Report, taken by Wayne Wait; 4. Jason Cornish’s February 23, 2000 statement; 5. Collision Statement of Ryan Hafso, dated December 25, 1999; 6. Collision Statement of Stanley Hunt, dated December 28, 1999; and 7. A site visit of Sheep Creek Road, where the accident occurred, on May 5, 2011. [30] Sawa opined about whether the front-end loader would be considered a “motor vehicle” and whether Sheep Creek Roadwould be considered a “highway”.

He also offered this: “The sequence of events that occurred was determined through a combination of the physical evidence depicted in the RCMP scenephotographs and the common witness evidence. Based on the witness information, all three individuals agree that they had traveled on the roadway shortly prior to the incident in apickup. All three witnesses agree that the pickup lost control and ended up in a ditch. This should clearly have indicated to Ryan Hafso

that the roadway was icy to the extent that control of the pickup could not be maintained without appropriate caution by the driver. Allthree witnesses agree that they had to walk on the roadway back to the drilling rig site that the Caterpillar was situated at. Again, thisgave Ryan Hafso the opportunity to travel the entire length of the roadway between the pickup and Caterpillar and assess its icy snowcovered nature. The witnesses all agree that Ryan Hafso drove the Caterpillar off of the drilling rig site on the roadway toward the pickup’s location inthe ditch.

The RCMP scene photographs confirm that the Caterpillar descended a hill and traveled through a slight curve prior toreaching the bridge. However, the hill depicted in the RCMP scene photographs did not appear to be particularly steep. All of thewitnesses agreed that Ryan Hafso failed to keep the Caterpillar in control as it descended the hill and entered onto the bridge deck. One witness indicated that the bucket impacted the bridge rail, one witness indicated that the right rear wheel hit the bridge rail and onewitness felt both the bucket and right rear wheel impacted the bridge rail.

The RCMP scene photographs did not depict any visibledamage to the bucket of the Caterpillar. However, the RCMP scene photographs clearly showed that the right rear wheel of theCaterpillar had unseated from its rim and that the right guard rail of the bridge was scuffed. This confirms that, at the very least, the rightrear wheel of the Caterpillar had contacted the right rail of the bridge. In order for the Caterpillar’s right rear wheel to have impacted the right guard rail, the Caterpillar had to have been in a counterclockwiseyaw (rotating counterclockwise) as it moved onto the bridge.

This is consistent with the driver of the Caterpillar losing control of thevehicle just prior to moving onto the bridge deck. Once the right rear wheel of the Caterpillar impacted the right rail of the bridge, the rotation of the Caterpillar reversed and it rotatedclockwise as it left the bridge deck. Shortly after leaving the bridge deck, the clockwise rotation of the Caterpillar ceased and theCaterpillar rolled backward into the left ditch and came to a stop at the position depicted in the RCMP scene photographs. The witnesses indicated that Jason Cornish came to rest a few feet from the roadway.

The RCMP photographs show the blue jacket(which may have been placed in the ditch by the RCMP) and the white hardhat are consistent with Jason Cornish coming to rest in theeast ditch close to the roadway just past where the Caterpillar entered the east ditch. Based on this information, it is most likely thatJason Cornish was thrown from the Caterpillar after the Caterpillar had exited the bridge deck and before the Caterpillar came to restin the left ditch.” [Emphasis Added] [31] In the end, Sawa opined that Hafso (the driver of the front-end loader) was responsible for the accident.

Additionally,although not conclusive, the report indicates that it is most likely that Jason Cornish was thrown from the front-end loader. This is thevery reason why Nabors wanted the expert report. Recall that in its letter of March 28, 2011 this is what was said: “…to isolate and move forward with the statutory

interpretation question on the underlying assumption that the report will point to thedriver of the front-end loader as the principal cause of Mr. Cornish’s injuries”. [Emphasis Added] [32] At the application before me, Nabors argued that the expert report produced by Alberta would not pass the Mohan criteriafor admission of expert reports established by the Supreme Court of Canada in R v Mohan, (SCC), [1994] 2 SCR 9.

InNabors’ submission, the Report does not pass the necessity requirement, as the court would be capable of drawing those sameconclusions based on the information the engineer relied on; namely the written statements from the participants in the accident, theiranticipated testimony at trial, and the anticipated photographs that would go into evidence at trial. Nabors concludes that the deficienciesin the Report render it likely inadmissible at trial - hence, it is deficient.

Nabors’ indicates that the unspoken expectation was for Albertato “show me your evidence”; meaning that which it would rely on at the trial. [33] The report was prepared by a professional engineer in a recognized field of expertise. It provides an opinion on the sequenceof events leading up to the accident at issue, including the clockwise rotating yaw the front-end loader was sent into as a result of hittingthe bridge guardrail. It addresses the likely path of the loader. These matters are typically considered to be outside of the Court’sexpertise and hence admissible on the Mohan necessity criteria.

Regardless, at this stage of the proceedings, this is an irrelevant point.Whether it would pass the other admissibility requirements is a question for the trier of fact to determine at the time of trial. Theapplication before me concerns an agreement between counsel and not a question of the ultimate admissibility of an expert report. Theadmissibility, or inadmissibility of the Report as the case may be, does not advance Nabors’ unilateral mistake argument.

[ 34 ] The evidence does not support Nabors ’ contention that their agreement to enter into the Consent Order was contingent upon the production of an admissible accident reconstruction report that did not suffer from the deficiencies it alleges. Nabors did not particularize its expectations about the expert accident reconstruction report beyond what is written. There is no evidence that Alberta knew of Nabors’ unspoken expectation and improperly relied upon it to Nabors’ detriment. It would be unreasonable to impute such knowledge and conduct to Alberta in these circumstances.

In the result, Nabors’ has not established unilateral mistake. 3. Prejudice [ 35 ] Had I determined that Nabors discharged its onus of establishing that the Consent Order should be vacated, the following prejudice alleged by Alberta would have to be addressed. I engage in that exercise should another court disagree with my other findings. 1. Cancellation of the JDR of February 2, 2011. The JDR date would likely have been lost due to the expert report being then incomplete. In any event, it is something that is compensable in costs. This would not have constituted prejudice. 2.

Cancellation of the trail of May 9-26, 2011. For the same reasons, this would not have constituted prejudice. 3. Early production of case summaries, brief of law and cases on contributory negligence. On February 2, 2011, Alberta provided Nabors these materials to negotiate the issue of contributory negligence. Two days later Nabors advised that its materials would be provided shortly, but then on April 28, 2011, said that given the Alberta courts ’ “ relative fault ” approach to contributory negligence, it was not willing to concede fault. This is a loss of strategic advantage.

It would not have constituted prejudice as the missing material did not pertain to the subject of the Consent Order. 4. Early production of the expert accident reconstruction report. This too is a loss of strategic advantage. 5. Early disclosure of its position on the facts in the revised ASOF. Similarly, this is a loss of strategic advantage. In any event, the first draft of the ASOF was sent by Nabors to Alberta on February 11, 2011 and Alberta responded with proposed revisions on August 9, 2011. The parties would have been similarly prejudiced. It is a neutral factor. 6.

Delay and expenses incurred from January 11, 2011. This is compensable in costs.

7. Costs of the November 16, 2012, application. This is compensable in costs. 8. Loss of the voluntary evidence of Judy Foley-Cornish at trial. A settlement was negotiated between Judy Foley-Cornish and the Estate of Jason Cornish. A Partial Discontinuance of Claims without Costs filed May 21, 2011. Since then, Ms. Foley-Cornish has advised that she will not be a “voluntary” witness at trial. Nabors’ view is that this simply gives Alberta more latitude in questioning her as a hostile witness. It was always open to Nabors to settle this claim at any time. However, counsel for Alberta was also counsel for Ms.

Foley-Cornish and facilitated the settlement on the parties’ agreement to enter into the Consent Order. The loss of Ms. Foley-Cornish as a voluntary witness at trial would constitute a significant prejudice to Alberta. 9. Inability to call witnesses at trial on the operation of Division 2,

Part 5 of the Hospitals Act . Alberta entered into an undertaking on June 16 2009, that it would not call viva voce evidence at trial on the operation of Division 2,

Part 5 of the Hospitals Act . It retained its ability to file Certificates of the Directors of Alberta Health and Wellness, Third Party Liability and Superintendent of Insurance, and to rely upon the relevant statutory and regulatory provisions and the relevant papers and reports of the proceedings of the Legislative Assembly of Alberta. If the Consent Order were set aside, Alberta would remain bound by its undertaking. The undertaking was made long before the Consent Order. While Alberta could seek to be relieved of its undertaking and/or to tender affidavit evidence, its success is not guaranteed.

This would constitute significant prejudice to Alberta. [ 36 ] Although the numbers of items I would have found truly prejudicial are outweighed by those I would have found were not, their significance is high. In light of that, had I found that it was appropriate to vacate the Consent Order, I would nevertheless have declined to do so on the basis that Alberta would suffer from real prejudice. III. Costs [ 37 ] If they are unable to agree, the parties may speak to costs for this application in 30 days .

The costs of the November 16, 2012 application were deferred to the hearing of the present application; a question that I find will be best determined at the conclusion of the Trial of the Issue. IV. Conclusion a. Nabors ’ application is dismissed with costs to Alberta based on

Schedule C; b. If they are unable to agree, the parties may speak to costs for this application in 30 days; c. Costs of the November 16, 2012 application shall be addressed at the conclusion of the Trial of the Issue. Heard on the 18 th day of March, 2013.

Dated at the City of Edmonton, Alberta this 25 th day of March, 2013. J.E. Topolniski J.C.Q.B.A. Appearances: Kevin P. Feehan, Q.C. and Allison L. Murray Fraser Milner Casgrain LLP for Her Majesty the Queen in Right of Alberta Laura C. Snowball Barrister & Solicitor for Nabors Drilling Limited