Weatherford Canada Partnership v. Addie, 2013 ABQB 25

Court of Queen ’ s Bench of Alberta Citation: Weatherford Canada Partnership v. Addie, 2013 ABQB 25 Date: 20130110 Docket: 1003 15916 Registry: Edmonton Between: Weatherford Canada Partnership Plaintiff - and - Dave Addie, David Anderson, Glen Kinnee, Ted Harland, Europump Systems Inc., Rebel Holdings Ltd., 1412571 Alberta Ltd. and Double D Imports Ltd. Defendants _______________________________________________________ Memorandum of Decision of the Honourable Madam Justice D.L.

Shelley _______________________________________________________ Background [ 1 ] In 2006 Weatherford commenced Queen’s Bench Action No. 0603 04628 (the “2006 Action”) against several defendants. The Statement of Claim filed in the 2006 Action has been amended several times. [ 2 ] In 2010 Weatherford commenced this Action. Certain of the defendants in this Action (Addie, Anderson, Kinnee, Harland and Europump, who are collectively referred to as the “Europump Defendants”) are also defendants in the 2006 Action, which involves a number of defendants who are not named as defendants in this Action.

Rebel Holdings, 1412571 Alberta and Double D (who are collectively referred to as the “New Defendants”) are not defendants in the 2006 Action.

[ 3 ] Weatherford had started another action in 2007 (Queen’s Bench Action No. 0703 13544). After Weatherford was permitted to amend the Statement of Claim in the 2006 Action to add new parties and make new allegations, Weatherford discontinued the 2007 Action. This Application [ 4 ] The Europump Defendants now bring this application to strike out the Statement of Claim, as amended, in this Action as it relates to them.

If successful, it would leave, as defendants in this Action, the New Defendants. [ 5 ] The Europump Defendants also apply to have the discovery / questioning and trial evidence of Weatherford and the Europump Defendants from the 2006 Action available for use in this Action as if the Europump Defendants were still parties to this Action, where and to the extend that such evidence is relevant, material and admissible in this Action. Applicable Law [ 6 ] The Europump Defendants rely on Rule 3.68 of the Alberta Rules of Court , Alta.

Reg. 124/2010 (the “ Rules ” or individually a “ Rule ”), which states in part: 3.68(1) If the circumstances warrant and a condition under subrule (2) applies, the Court may order one or more of the following: (

a) that all or any part of a claim or defence be struck out; (

b) that a commencement document or pleading be amended or set aside; (

c) that judgment or an order be entered; (

d) that an action, an application or a proceeding be stayed.

(2) The conditions for the order are one or more of the following: .... (

d) a commencement document or pleading constitutes an abuse of process; . . . Position of the Parties Position of the Europump Defendants [ 7 ] The Europump Defendants submit that the this Action duplicates the 2006 Action in relation to them and is therefore an abuse of process. [ 8 ] The Europump Defendants point to numerous common facts, allegations of wrongdoing, and requests for remedies and relief

which are essentially the same in the Statements of Claim filed in the 2006 Action and this Action.

They submit that any wording differences are insignificant and do not amount to a substantive difference between the two Actions. [ 9 ] The Europump Defendants submit that the actual difference between the 2006 Action and this Action, in relation to them as Defendants, are limited to some additional allegations of fact, the addition of the New Defendants, and additional allegations of conspiracy, which include misrepresentations concerning the ownership of information and Weatherford’s future business plans. [ 10 ] The Europump Defendants take the position that the creation of the New Defendants, allegedly to divert profits from the other Europump Defendants, to pay secret commission and to hide proceeds, did not create new causes of action.

They submit that Weatherford must link these allegations about the New Defendants with other facts to establish a cause of action.

The Europump Defendants have concluded that Weatherford is trying to establish this by alleging either conspiracy on the part of the New Defendants with the Europump Defendants and / or that the New Defendants are the means by which the Europump Defendants have wrongfully harmed Weatherford. [ 11 ] I take it from the Europump Defendants’ submissions that they acknowledge that the establishment of a conspiracy or a mechanism of harm in the manner outlined above might create a cause of action or claim.

However, I also take it from the Europump Defendants’ submissions that they are of the view that such claims or causes of action are already fully plead in the 2006 Action and are therefore duplicative in this Action insofar as the Europump Defendants are concerned. The Europump Defendants submit that these allegations are merely further particulars of claims already plead in the 2006 Action. [ 12 ] In relation to the new allegations of misrepresentation set out in the Statement of Claim in this Action, the Europump Defendants submit that these new allegations do not establish any new cause of action.

They submit that the same misrepresentations were plead in the 2006 Action, albeit in different words. Therefore these additional allegations also essentially duplicate allegations already made in the 2006 Action. Position of Weatherford [ 13 ] Weatherford submits that this Action relates to allegations and new parties which occurred or were incorporated after the commencement of the 2006 Action. It therefore submits that this Action is different from the 2006 Action.

It further maintains that a plaintiff is entitled to sue defendants more than once for the same type of wrongful act where the acts themselves give rise to separate causes of action. Weatherford submits that there is no duplication and therefore Rule 3.68 does not apply. [ 14 ] Weatherford also confirms that at one time the Europump Defendants had proposed that the pleadings and pre-trial steps in this Action and the 2006 Action be consolidated. As a result, Weatherford prepared draft Consent Orders which would have had the effect of combining the two Actions.

However, it says the Europump Defendants then changed their minds and brought this application. [ 15 ] Weatherford submits that it was not aware of the identity or the involvement of the New Defendants until years after the 2006 Action was commenced. It submits that the New Defendants became involved in 2009 but Weatherford was not aware of that until recently.

It maintains that the New Defendants and new causes of actions could not have been plead in the 2006 Action because neither the New Defendants nor the conduct existed at that time. [ 16 ] Weatherford concedes that the two Actions involve similar background facts, which include similar allegations regarding improper conduct of the Europump Defendants.

However, Weatherford submits that, although the background is similar, the 2006 Action relates to conduct in 2005 and 2006, while this Action relates to conduct that occurred as late as 2009. [ 17 ] Weatherford maintains that this Action raises new causes of action against the Europump Defendants because it relates to new wrongful acts that were undertaken jointly with the New Defendants. [ 18 ] In addition, Weatherford submits that all conspirators to an alleged conspiracy must be sued in the same action so that the

Trial Judge can determine whether the cause of action is made out and award the appropriate remedy. Weatherford points out that its Statement of Claim in this Action requests monetary judgment against all of the Defendants on a joint and several basis and, accordingly, all Defendants alleged to be part of the conspiracy must be part of this Action. [ 19 ] Weatherford submits that Rule 3.68 does not apply here because this Action is not identical to or the same as the 2006 Action. Accordingly, there is no abuse of process and the prerequisite for invoking the Rule is not satisfied.

Weatherford relies on the Alberta Court of Appeal decision in Bröeker v. Bennett Jones 2012 ABCA 67 as establishing a high threshold for the striking of a pleading.

At paragraph 20 of that decision, the Alberta Court of Appeal made it clear that “a Court should not strike out a pleading...as being an abuse of the process of the Court, which in most cases would have the affect of dismissing an action..., unless the question is beyond doubt and there is no reasonable cause of action.” [ 20 ] Weatherford is in agreement with the Europump Defendants’ suggestion that the Actions be streamlined and that the use of discovery/questioning and trial evidence from the 2006 Action be applied in this Action to the extent relevant, material and admissible.

It also agrees that the trial of this Action should be held immediately following the 2006 Action, before the same Trial Judge. This is consistent with its agreement to the Europump Defendants’ initial proposal to combine the pleadings and permit use of common evidence in both trials. Analysis [ 21 ] While the 2006 Action and this Action share a factual background and some common defendants, I conclude that this Action is not just a duplication of the 2006 Action.

Certainly the allegations made against the New Defendants are capable of being viewed as a continuation of a course of conduct that is described in the 2006 Action.

However, it is clear that the allegations advanced against the New Defendants could not have been pled in the 2006 Statement of Claim, nor could the then non-existent New Defendants have been named as Defendants in that Action. [ 22 ] While it might have been preferable, for efficiencies sake, to have proceeded with the proposal originally advanced by the Europump Defendants, which would have had the effect of combining the 2006 Action with this Action, consecutive trials of the two Actions will have the same effect.

One of the reasons suggested for the withdrawal of the Europump Defendants’ proposal to combine the Actions was that certain of the defendants in the 2006 Action (which have generally been referred to as the “Supplier Defendants”) objected to having the allegations against the New Defendants dealt with in the 2006 Action.

While there may have been other alternatives (e.g., not requiring them to attend during portions of the trial which did not have any bearing on their alleged liability), hearing the allegations against the New Defendants in a separate action will have the effect of limiting the Supplier Defendants’ involvement in proceedings that do not involve them. [ 23 ] I am satisfied that the Europump Defendants have not met the high threshold for the striking of the Statement of Claim as against them.

I cannot conclude that the allegations made against the Europump Defendants in this Action in relation to their dealings with the New Defendants, are duplicative of allegations made in the 2006 Statement of Claim. I cannot conclude that this Action results in an abuse of process.

I conclude that this Action represents a different and new cause of action against the Europump Defendants from that which was pled in the 2006 Action. [ 24 ] I agree that these Actions should be streamlined by using discovery/questioning and trial evidence from the 2006 Action in the trial of this Action, to the extent relevant, material and admissible. I also agree the trial of this Action should be held immediately following the trial of the 2006 Action, before the same Trial Judge.

A finding by the Trial Judge in the 2006 Action that the Defendants are not liable might eliminate the need for a trial of this Action in any event. Heard on the 31 st day of May, 2012 Dated at the City of Edmonton, Alberta this 8 th day of January, 2013.

D.L. Shelley J.C.Q.B.A. Appearances: Fausto Franceschi, Joe Rosselli, Fraser Milner Casgrain LLP for the Plaintiff Tim Mavko Reynolds, Mirth, Richards & Farmer LLP for the Defendants Addie, Anderson, Kinnee, Harland and Europump Systems Inc.