Arcelormittal Tubular Products Roman S.A., formerly known as Mittal Steel Roman S.A. v. as, 2013 ABQB 578

Court of Queen ’ s Bench of Alberta Citation: Arcelormittal Tubular Products Roman S.A., (Mittal Steel Roman S.A.) v Canadian Natural Resources Limited, 2013 ABQB 578 Date: 20131008 Docket: 0701 12323 Registry: Calgary Between: Arcelormittal Tubular Products Roman S.A., formerly known as Mittal Steel Roman S.A. and as Ispat Petrotub S.A. and sometimes known as Ispat Petrotubas S.A. Romania, and Arcelormittal Galati S.A., formerly known as Mittal Steel Galati S.A. and as Ispat Sidex S.A. and sometimes known as Ispat Sidex S.A. Romani, and Arcelormittal Pipes & Tubes Galati S.R.L.

Plaintiffs (Applicants/Respondents) - and - Canadian Natural Resources Limited Defendant (Applicant/Respondent) Editorial Notice: The scanned document in

Schedule 1 has been replaced with text of the same document. _ ________________________________________ ______________ Memorandum of Decision of the Honourable Madam Justice E.A. Hughes _________________________________________ ______________ Introduction [ 1 ] This action is under case management. An overview of the actions and the parties is set out in Canadian Natural Resources

Limited v Arcelormittal Tubular Products Roman S.A. (Mittal Steel Roman S.A.) , 2012 ABQB 679 , 549 AR 72 (“ CNRL #1 "). [ 2 ] This decision relates to two applications in the Mittal defamation action: 1) Mittal seeks to amend its Statement of Claim. CNRL opposes many of the amendments submitting Mittal has not met the test under Rule 3.65 of the Alberta Rules of Court , Alta Reg 124/2010 [the “Rules”] in that there is no evidence to support the amendment and/or some of the amendments are barred under the Limitations Act , RSA 2000, c L-12 [the “ Limitations Act ”]. The Proposed Amended Statement of Claim is found at

Schedule 1 of this judgment; and 2) CNRL seeks to strike those parts of the Statement of Claim and/or Proposed Amended Statement of Claim that allege the Quality Alert Document it published on November 29, 2005 is defamatory and/or an injurious falsehood. CNRL submits the document is not defamatory and the action is hopeless. Mittal opposes the application arguing the pleadings disclose a reasonable cause of action in both defamation and injurious falsehood.

Background Facts [ 3 ] Mittal’s Statement of Claim in the defamation action alleges CNRL “falsely, improperly and maliciously” wrote and published false statements, one of which was the Quality Alert issued on November 29, 2005. It reads as follows: QUALITY ALERT Piping material failure Two significant piping defects have been recently discovered in new material. The first was found during preparation for welding, the second was found during hydro test.

Upon further investigation it was discovered that both pieces of pipe were from the same manufacturer, although different lots (for further clarity, the material is seamless). The specific cause for the defects is presently under investigation and will be reported to all Project Managers when the investigation is complete. In the interim all material from the steel producer in question is to be quarantined in an attempt [sic] avoid safety related incidents. Please work with your contractors to ensure this material is taken out of circulation on the Horizon Project until further notice.

If it has already been installed please identify precisely how much and where it is to allow an opportunity to verify the material is suitable for use. The material to be quarantined is from the following producer(s); Ispat Petrotubas SA Romania Ispat Sidex SA Romania Two photos followed the text of the document which depicted the defects. A copy of the photos is found at

Schedule 2 of this judgment. [ 4 ] Mittal submits the underlined text above is defamatory. The Statement of Claim alleges at paragraph 10: The words used in the False Statements including the Alert Document, in their natural and ordinary meaning, meant and were understood to mean that the pipe manufactured by the Plaintiffs has been found to be, and therefore is, inherently defective. In the alternative, the said words meant and were understood to mean that the Plaintiffs’ pipe had defects that would result in material failure if used.

The said words were calculated by the Defendant to, and did, disparage the Plaintiffs as manufacturers and distributors of piping and tubing. [ 5 ] In response to CNRL’s requests for particulars Mittal stated: (

i) The words considered defamatory are “Piping material failure”, “significant piping defects”, “same manufacturer”, “all material from the steel producer in question is to be quarantined in an attempt to avoid safety related incidents”, “to verify the materials suitable for use”. All of these words when read together say or suggest that the Plaintiffs manufactured pipe that was inherently defective or would result in material failure if used, and that they required quarantine. They also say or suggest that the pipe manufactured by the Plaintiffs was not safe to be used and was not suitable for use.

Further, the Quality Alert advises that there will be a report to all Project Managers when the investigation is complete. Since CNRL has not to date reported the results of its investigation or retracted the Quality Alert (which thereby remains outstanding), this inaction continues the implication from the Quality Alert that there are serious issues with the Plaintiffs’ pipes. Further, the parties identified to be the pipe manufacturers in the Quality Alert are Ispat Petrotub S.A. Romanian (“ArcelorMittal Roman”) and Ispat Sidex S.A. Romania (“Sidex”).

Sidex did not manufacture the two alleged pipes which are the subject matter of the Quality Alert. To date CNRL has not withdrawn the Quality Alert against Sidex despite CNRL’s acknowledgement in this litigation and the two related lawsuits that none of the pipe in issue was manufactured by Sidex.

As for Mittal Roman, the Quality Alert read as a whole suggests that the “defects” in the pipe related to the manufacturing process when CNRL’s own analysis found that one of the two alleged pipes was damaged during transportation and the other pipe in the Quality Alert has not been shown to be a pipe manufactured by Mittal Roman. These matters are pleaded in paragraphs 9 to 12 of the Statement of Claim. [ 6 ] The Amended Statement of Claim at paragraph 54 alleges the words used in the Quality Alert document are defamatory in that: The words used in the Alert Document that are considered defamatory are:

“QUALITY ALERT” “piping material failure” “Two significant piping defects have been recently discovered in new material.” “both pieces of pipe were from the same manufacturer, although different lots” “The specific cause for the defects is presently under investigation and will be reported to all Project Managers when the investigation is complete.” “all material from the steel producer in question is to be quarantined in an attempt avoid safety related incidents” “ensure this material is taken out of circulation” “If it has already been installed please identify precisely how much and where it is” “the material to be quarantined is from the following producer(s): Ispat Petrotubas S.A.

Romania Ispat Sidex S.A. Romania” All of these words when read together in the context of the Alert Document say or suggest that the Plaintiffs’ manufactured pipe that was inherently defective or would result in material failure if used, and that it required quarantine. They also say and imply that the pipe manufactured by the Plaintiffs was and is not safe to be used and was and is not suitable for use. Further, the Alert document advises that there will be a report to all Project Managers when the investigation is complete.

Since CNRL has not to date reported the results of its investigation or retracted the Alert Document (which thereby remains outstanding), this inaction continues the implication from the Alert Document that the piping materials manufactured by the Plaintiffs are and continue to be defective and do not comply with the standard to which they are represented to have been built.

Law and Analysis Issue 1 – Amendment of Pleadings [ 7 ] Rule 3.65 allows the Court to grant leave to amend pleadings: 3.65(1) Subject to subrule (5) [which is not applicable in this case], before or after close of pleadings, the Court may give permission to amend a pleading.

(2) If the Court gives permission for a pleading to be amended, the Court must specify the time period within which the amended pleading must be filed and served.

(3) An order giving permission to amend a pleading under this rule ceases to have effect unless the amended pleading is filed and served within the time specified by the Court. [ 8 ] The law respecting the amendment of pleadings is set out paragraphs 35 - 36 and 47 - 56 of CNRL #1 . [ 9 ] Other relevant Rules to this application include Rule 13.6 and Rule 13.7 which set out the requirements of a pleading: 13.6(1) A pleading must be (

a) succinct, and (

b) divided into consecutively numbered paragraphs, with dates and numbers expressed in numerals unless words or a combination of words and numerals makes the meaning clearer. 13.6(2) A pleading must state any of the following matters that are relevant: (

a) the facts on which a party relies, but not the evidence by which the facts are to be proved; ... (

c) the remedy claimed, including (

i) the type of damages claimed, (ii) to the extent known, the amount of general and special damages claimed, or if either or both are not known, an estimate of the amount or the total amount that will be claimed, (iii) a statement of any interest claimed, including the basis for the interest, and the method of calculating the interest, and (iv) costs, including any known special costs.

13.6(3) A pleading must also include a statement of any matter on which a party intends to rely that may take another party by surprise, including, without limitation, any of the following matters: (

a) breach of trust; (

b) duress; (

c) estoppel; (

d) fraud; (

e) illegality or invalidity of a contract, including the grounds; (

f) malice or ill will; (

g) misrepresentation; (

h) payment; (

i) performance; (

j) release; (

k) undue influence; (

l) voluntary assumption of risk; (

m) waiver; (

n) lack of capacity or authority; (

o) wilful default; (

p) tender of payment; (

q) a limitation period; (

r) a provision of an enactment. 13.7 Pleadings: other requirements A pleading must give particulars of any of the following matters that are included in the pleading: ... (

f) defamation. [ 10 ] Mittal seeks to substantially amend its Statement of Claim. The Statement of Claim, filed November 28, 2007, comprises 26 paragraphs. The Proposed Amended Statement of Claim is 111 paragraphs. [ 11 ] CNRL does not oppose the proposed amendments in paragraphs 1, 6 - 13, 15, 52 - 54, 56, 61 - 63, 99, 108 and 111. I allow the amendments to paragraphs 1, 6, 11, 52-54, 56, 61-63, 108 and 111. [ 12 ] CNRL opposes the balance of the amendments sought by Mittal in this application. It submits the amendments must fail because: 1.

Paragraphs 16 - 51 of the Proposed Amended Statement of Claim are substantially identical to the amendments Mittal sought in its Proposed Amended Statement of Defence, a number of which were not allowed in CNRL #1; 2. There is no evidence to support many of the amendments; and, 3. Some of the amendments raise new claims which are barred by the Limitations Act . [ 13 ] Paragraphs 8 - 12 of the Proposed Amended Statement of Claim are, in essence, identical to paragraphs 7 - 11 of Mittal’s Proposed Amended Statement of Defence in CNRL #1 .

Paraagraphs 14 - 51 of the Proposed Amended Statement of Claim are again, in essence, identical to Mittal’s Proposed Amended Statement of Defence in CNRL #1 . [ 14 ] I denied most of the amendments sought by Mittal respecting paragraphs 40 - 51 of its Proposed Amended Statement of Defence in the CNRL #1 decision, aff’d 2013 ABCA 87 , 544 AR 24. For the same reasons, I deny the amendments sought by Mittal to paragraphs 40 - 51. [ 15 ] Mittal clearly submits this claim is an action for defamation and injurious falsehood based upon the Quality Alert issued by

CNRL. Paragraphs 7 - 10 and 12 – 51 plead no material or relevant facts with respect to the elements of these torts. (The elements of bothtorts are discussed later in this judgment.) While I acknowledge CNRL does not oppose the amendments to paragraphs 8 - 10 and 12, Ifail to see how these proposed amendments are material facts to the defamation and injurious falsehood actions and I deny theamendments.

Evidence Relating to the Amendments sought in paragraphs 55, 57 - 59, 60, 64, 65, 69 -73, 78 - 80, 82 - 88, 92, 94 - 98, 100 - 105,107 and 109 [16] Mittal submits the evidence in support of this application is found in the affidavit of Daniel T. Butterbrodt sworn August 3,2011 and his questioning on his affidavit on October 5 and 6, 2011, the affidavit of Sanjiv Goel affirmed July 11, 2011, and certaindocuments produced pursuant to Rule 6.11. [17] Paragraph 55 - this paragraph of the Proposed Amended Statement of Claim is composed of ten sub-paragraphs.

Each is adifferent submission by Mittal that the Quality Alert Document was defamatory and slandered their product. This paragraph is whollyargument and is therefore an improper pleading. See Marlborough Ford Sales Ltd. v Ford Motor Company of Canada, 2003 ABQB 298at para 17, 13 Alta LR (4th) 336.

Further, there is no evidence to support this amendment. [18] Paragraph 57 - this paragraph alleges CNRL made the following defamatory statements verbally and by email: • “the piping materials manufactured by (the Plaintiffs) are defective” • “the piping materials manufactured by Petrotub do not meet the standard for A106B pipe” [19] The general rule is that a plaintiff must set out the defamatory words “fully and precisely” in the statement of claim: RaymondE Brown, Brown on Defamation: Canada, United Kingdom, Australia, New Zealand, United States, 2d ed, (looseleaf), (Toronto:Thomson Reuters Canada, 1999) at 19-28; Neuschater v Lesku, 2008 ABQB 18 at para 46, 435 AR 350; Lougheed v CanadianBroadcasting Corp., (AB KB), [1978] 4 WWR 358 (ABQB) at paras 16 - 17, aff’d (1979), 1979 ALTASCAD 77, 98 DLR (3d) 264 (ABCA). [20] Mittal submits the evidentiary basis for this amendment is found at paragraphs 13 - 15 and Exhibit “B” of Mr.

Butterbrodt’sAffidavit. I have reviewed the paragraphs in question as well as Exhibit “B”. The emails referenced by Mr. Butterbrodt all refer to theQuality Alert, however, the alleged defamatory phrases in paragraph 57 are not found in the Quality Alert or the emails. Further, there isno evidence the statements were made orally.

This amendment is not supported by the evidence and is denied. [21] Paragraph 58 details a “False Statement” other than the Alert Document: an email dated January 13, 2006, sent by DarrellMellott of CNRL to Don Reed with copies to various employees of SNC Lavalin attaching the Alert Document and containing furtherallegedly defamatory words. The amendment is supported by the evidence and normally would be allowed. CNRL argues that thisamendment should be rejected because it raises a new claim after the expiry of the limitation period.

Mittal argues that the amendmentmerely particularizes its original pleadings. [22] An added or new claim is one that is based on different and distinct events giving rise to a different and distinct loss, whencompared to the allegations made and loss claimed in the original pleadings: Madill v Alexander Consulting, 1999 ABCA 231, 237 AR307.

In general, amendments do not add a new claim if they relate to the original series of events set out in the original pleading: Stolk v382779 Alberta Inc., 2005 ABQB 440 at 25, 383 AR 203; Madill at paras 32-33; Edmonton v Lovat Tunnel, 2000 ABQB 39 at para 43,257 AR 343. [23] Determining whether a proposed amendment further particularizes the original pleadings requires a careful consideration ofthe original pleadings. If the original pleadings do not provide enough detail to create valid claims, then the amendments effectivelybring new claims.

This was Noble J’s conclusion in Shinkaruk v Saskatoon (City), (SK KB), [1985] SJ no 467 (QB).The plaintiff alleged the defendant made defamatory statements and the CBC broadcast them. There were no further details regarding thewords uttered, the time and place of utterance, etc.

The judge concluded at para 12 that the pleading was “so woefully inadequate thatany amendment will really amount to a new proceeding”. [24] Although Mittal’s original pleadings make broad claims for ongoing and repeated publications of the Quality Alert, thespecificity required in defamation pleadings makes it impossible to conclude that the January 13, 2006 email is a particularization of theoriginal claim. [25] Specificity in pleadings is particularly important in defamation actions. Rawlins J reviewed the requirements for defamationpleadings in Cooper v Hennan, 2005 ABQB 709 at para 18, 393 AR 146.

Defamation pleadings must contain the details of thepublication including the words published by the defendant, the time, place and manner of publication, and to whom the publication wasmade, so as to provide the defendant with adequate notice of the specific occurrence constituting the wrong. Rawlins J at para 19explained that to plead publication effectively, a statement of claim must allege publication of the defamatory expression to at least onenamed or identifiable person other than the plaintiff: The names of all individuals to whom the defamatory expressions were published must be pleaded.

Every delivery of a written orprinted copy of libel is a fresh publication, for which a new action lies.

However, plaintiffs have been allowed to allege publication toboth named and unnamed persons so long as they file material on the motion establishing a prima facie case of such publication anddeposing that they have no further particulars within their knowledge. [26] If the specific person who published the statement on behalf of the defendant is not identifiable, the plaintiff must plead thatthe identity is within the knowledge of, and can be discovered by, the defendant: Brown, at 19-95. [27] As stated above, every delivery of a defamatory statement amounts to a new publication, giving rise to a separate cause ofaction even if the defendant is repeating or referring to something previously said: Brown, at 7-42.

As such, each defamatory statement,

whether or not it is a repetition or republication, is subject to its own limitation period. [ 28 ] The Original Statement of Claim refers to False Statements generally and gives as an example of such False Statements the Quality Alert issued on or about November 29, 2005. The original pleading identifies CNRL as the source of the publication but does not specify to whom the publication was sent.

Paragraph 7 of the original Statement of Claim reads as follows: In connection with its Horizon Project, CNRL falsely, improperly and maliciously spoke, and also wrote, and then published, or caused to be written, published and communicated, to persons and parties throughout the world, certain false, slanderous and misleading statements concerning the Plaintiffs and the pipe manufactured, sold and distributed by the Plaintiffs (the “False Statements”).

The False Statements were defamatory and have caused damages to the Plaintiffs as described below. [ 29 ] The original pleading goes on to state how the Quality Alert Document was published: The Alert Document was published and sent by CNRL to numerous persons and parties, including persons and parties involved in the Horizon Project, many of whom were purchasers or potential purchasers of piping and tubing manufactured by the Plaintiffs.

Further, since November 29, 2005, CNRL has continued to publish and disseminate False Statements to purchasers and potential purchasers of the Plaintiffs’ piping and tubing such False Statements being similar in substance to those set forth in the Alert Document (i.e. that pipe manufactured by the Plaintiffs is or has been found to be defective).

The full particulars of those False Statements (other than the Alert Document) are, however, currently not known to the Plaintiffs. [ 30 ] The proposed amendment in paragraph 58 makes a claim for the defamatory words contained in an email dated January 13, 2006, which also forwards the Quality Alert. Prima facie this email is a different publication, on a different date, than the November 29, 2005 Quality Alert described in the Statement of Claim and presumptively raises a new claim. [ 31 ] The first question is to determine whether this new claim is out of time.

Section 3 of the Limitations Act provides that an action must be commenced within two years after the date on which the claimant first knew, or in the circumstances ought to have known (

i) that the injury for which the claimant seeks a remedial order had occurred; (ii) that the injury was attributable to conduct of the defendant; and (iii) that the injury, assuming liability on the part of the defendant, warrants bringing a proceeding. [ 32 ] Mittal argues that it did not become aware of any of the claims raised in the amended pleadings until it received CNRL’s Affidavit of Records on March 31, 2010. I find that Mittal knew of the various injuries alleged. In fact, Mittal’s legal counsel threatened to take legal action against CNRL for those very issues in a letter delivered on April 2, 2007.

The letter makes clear that Mittal knew that some of its customers had received information contained in the Quality Alert and it was affecting Mittal’s sales. The substance of letter reads as follows: As you know, we have been advised by a customer that CNRL issued the enclosed Quality Alert in November, 2005 regarding alleged “significant piping defects” in certain pipe manufactured by Ispat Petrotub (now Mittal Steel Roman) and Ispat Sidex (now Mittal Steel Galati), which document we never directly received from your company.

We have repeatedly advised you in, among other communications, Dan Butterbrodt’s letter to you dated November 28, 2006, that your issuance of the Quality Alert and other disparaging communications about our product were wrongful and defamatory for the following reasons: Despite your contention that the Roman pipe was defective as determined by CNRL’s tests (in which Mittal Steel was not invited to participate to develop a mutually-agreed test protocol), the test data supplied to us by CNRL, along with Roman’s review of production data, show the pipe to conform to A-106 specifications.

Further corroboration that our pipe complied with specifications was provided by testing conducted by Fluor and OPTI/NEXEN. Moreover, the allegation by CNRL that our pipe is defective is belied by your continued installation and use of the pipe, through at least August 2006, despite your “discovery” of alleged problems with pipe dating to the end of 2005. The pipe at issue was not even manufactured by Ispat Sidex (Mittal Steel Galati), so there is absolutely no basis for including it in the Quality Alert. Despite that fact, CNRL refuses to correct or rescind the Quality Alert as to Mittal Steel Galati.

Your issuance of the erroneous and defamatory Quality Alert, and your refusal to clarify and correct same, have resulted in irreparable damage to Mittal Steel , both in regard to our customers and the marketplace generally, as you have been repeatedly told. In at least one instance, Mittal Steel was quality audited by a customer who expressed concern over Mittal Steel Galati product due to the Quality Alert. Further, the Quality Alert has dissuaded other customers from using Mittal Steel tubular products and has substantially negatively impacted our sales opportunities.

In an attempt to defend our good name and correct this wrongful perception of our product, Mittal Steel has been forced to expend valuable time and resources on explaining the facts and providing assurance to customers who had no reason to question our product prior to the Quality Alert. Please be advised that Mittal Steel is putting CNRL on formal notice that the Quality Alert wrongfully disparages our pipe product , and we demand an immediate retraction and/or correction of that communication.

In addition, to the extent that CNRL continues to defame Mittal Steel’s reputation and product , we demand that you immediately cease and desist from doing so. Please respond to us in writing, no later than April 11, 2007, as to whether you will take the necessary action to rescind and/or correct the Quality Alert and refrain from wrongfully disparaging Mittal Steel in the future. We reserve the right to take appropriate legal action as necessary to protect our reputation and interests in this matter, including recovering our lost sales and expenses in providing assurances to our customers.

We trust that CNRL will govern itself accordingly. [ 33 ] Mittal need not have known “the full extent” of the injuries it had suffered to bring a claim. It need only have known that

CNRL caused it injury that warranted bringing a proceeding. Its claim needed to identify the defamatory statement and plead the specific exception to the republication rule upon which it relied to keep open the possibility of future amendments with greater particulars (discussed in more detail below). [ 34 ] Having found the amended claims are out of time, I must consider whether

section 6 of the Limitations Act applies to allow them nonetheless.

Section 6 permits the addition of claims after the expiry of the limitation period where the added claim relates to the conduct, transaction or events described in the original pleading: 6(1) Notwithstanding the expiration of the relevant limitation period, when a claim is added to a proceeding previously commenced, either through a new pleading or an amendment to pleadings, the defendant is not entitled to immunity from liability in respect of the added claim if the requirements of subsection (2), (3) or (4) are satisfied.

(2) When the added claim … (

b) does not add or substitute a claimant or defendant, or change the capacity in which a claimant sues or a defendant is sued, the added claim must be related to the conduct, transaction or events described in the original pleading in the proceeding. [ 35 ] The Alberta Court of Appeal considered

section 6 in DeSoto Resources Limited v EnCana Corporation , 2010 ABCA 110 , 487 AR 138. The court held at para 8 that the assessment of whether a new pleading arises from the same “conduct, transaction or events” as the original pleading must be based on an assessment of the entire factual and legal context. The court reiterated the caution voiced in CHS v Alberta (Director of Child Welfare) , 2006 ABQB 528 , 403 AR 103, affirmed 2006 ABCA 355 , 401 AR 215 that too general an

interpretation of the relational requirement to the original pleadings would give the plaintiff an unlimited ability to add statute-barred claims. Slatter J in CHS v Alberta discussed the need for specificity in the original pleadings at para 32: ...Whether an amendment arises out of the same events as an original pleading will obviously be a matter of degree and judgment. A certain amount of specificity is however required. It is not sufficient for the Plaintiffs to argue that “everything arises out of the operation of the child welfare system”, so all the events and transactions are related.

That would grant the Plaintiffs an almost unlimited ability to amend after the limitation has expired. ... [ 36 ] In DeSoto , the Court of Appeal noted that if the conduct, transaction or events underlying the new claim are qualitatively different in time and content from the original claim, then the new claim is most likely unrelated to the original pleading.

On the facts, the court concluded at para 9 that there were qualitative differences in the time and content of the new claims and those in the original pleadings: …The proposed amendments are about different misrepresentations to third parties made before the appellant was restructured ... the conduct, transaction and events underlying the various misrepresentations are qualitatively different in time and content: one set was before the bankruptcy, and the other set after.

The misrepresentations , while all allegedly relating to the validity of the leases, were made to different persons at different times in different contexts. [Emphasis added.] [ 37 ] The court explained the reason for the exception in

section 6 of the Act is to permit new claims where the defendant will not be prejudiced or surprised, since the claims arise out of the same conduct, transaction or events. The test to determine whether a new claim is involved is “to examine the extent to which a new set of conduct, transactions and events would have to be proven at the trial” (at para 10). In essence, would the documents and other evidence needed to prove the plaintiff’s new allegations differ significantly from those required to prove the originally pleaded facts? [ 38 ] In Divestco Inc. v Devon Energy Corporation , 2011 ABQB 750 at para 15 , 530 AR 133 Master Mason summarized the principles applicable to the

section 6 analysis articulated by Chief Justice Wittmann in Dow Chemical Canada Inc. v Nova Chemicals Corp. , 2010 ABQB 524 , 495 AR 338: 1. The objective is to have pleadings in order well before the trial commences. Where a court is in the position to decide the matters before it, particularly when the decision will promote the streamlining of the litigation and increase the efficient utilization of the courts’ resources, such a decision ought to be made. 2. Traditionally, when there is an issue of limitations, the court may: (

i) determine the limitation has not expired and allow the amendment; (ii) rule the limitation has expired and then consider

section 6 of the Limitations Act which provides for when an amendment can be made beyond the limitation period; or (iii) find that due to the state of the evidence, the amendments should be allowed subject to the determination of the issue at trial. A variation of option (iii) is to determine whether section 6(2) (

b) saves a claim otherwise barred by statute; 3. A legislated functional approach applies, requiring the court to evaluate whether the requirements of

section 6 are fulfilled within the circumstances of each case. 4. The language of the provision does not require that the cause of action in the amendment be related to the original cause of action, but rather that the added claim be related to the conduct, transaction or events in the original pleading, indicative of a broader perspective. 5. The phrase “related to” has a very broad meaning and “does not appear to be a particularly high threshold”. 6. Whether an amendment is related to the original pleading is a matter of degree and judgment with which a certain amount of specificity is required. 7.

An over broad definition would bestow on the plaintiff an unlimited ability to add on statute barred claims. [Citations omitted]

[39] On the facts in Divestco, the plaintiff’s original pleadings related to the unauthorized sharing of data by the defendant andbreaches of copyright and confidentiality. The amended pleadings sought to add similar claims, but in relation to different data. MasterMason allowed the amendments on the grounds that she did not have sufficient evidence to conclude that the limitation period for theproposed amendments had expired. Although unnecessary for her decision, she went on to consider in obiter whether the amendmentsfell within the parameters of

section 6 of the Limitations Act. [40] She concluded that the proposed amendments related to the conduct, transaction or events of the original pleadings, eventhough the amendments related to a distinct agreement that was entered into three years after the agreement at issue in the originalpleadings. The terms in both agreements were the same and the Master held, at para 20, the main issue at trial would be theinterpretation of the same clause appearing in both agreements. She noted that the court was not dealing with misrepresentations made bydifferent persons in different contexts, as was the case in DeSoto.

In Divestco, the original and the proposed claims concerned thedefendants’ alleged breach of the same terms of their respective licensing agreements with the plaintiff, by improperly disclosing theplaintiff’s data to one another within a time span of a few months. [41] The Master found there would be some overlap in the documents required for the original and proposed claims, strengtheningthe connection between them, as well as overlap in the witnesses.

The Master concluded the claims were “sufficiently connected” andwere not “qualitatively different”. [42] I must decide whether the proposed amendment, detailing a January 30, 2006 publication, relates to the conduct, transactionor events described in the original pleading, which specifies a November 29, 2005 publication and makes general allegations about otherpublications. [43] Mittal argues that the proposed amendments merely further particularize the pleadings set out in the original Statement ofClaim.

In the alternative, Mittal argues that the proposed amendment relates to the conduct, transaction or events described in theoriginal Statement of Claim, namely, the publication of the Quality Alert in which CNRL disparaged Mittal’s products and business.Mittal argues that there is a readily recognizable temporal and factual relationship between the conduct, transaction and events on whichthe original Statement of Claim is based and those on which the proposed amendment is based. [44] I have set out above the relevant passages of the original pleadings.

Mittal states the relevant facts favouring the amendmentsinclude: an overlap in the documents required in respect of the Statement of Claim and the Proposed Amendments (as is evidenced by the factthat the documents supporting the Proposed Amendments were produced by CNRL in respect of the Statement of Claim); there would be an overlap in the witnesses as between the Proposed Amendments and the Statement of Claim; and CNRL has not, and could not, suggest that it would be prejudiced or surprised in meeting the allegations in the Proposed Amendments. [45] More specifically, Mittal argues the original Statement of Claim specifically pleads that CNRL made and published the“False Statements”.

The original Statement of Claim provided particulars of the exact wording of the Quality Alert, the words consideredby Mittal to be defamatory, the date of the original publication of the Quality Alert, and the then known recipients of the Quality Alert. [46] CNRL argues the Mellott email is a distinct publication requiring a separate analysis of whether it is defamatory based onwho made the statement, who received it, in what context, etc.

It claims the lack of specificity in the original Statement of Claim and inMittal’s response to the Request for Particulars regarding the “other False Statements” was so inadequate that the added details in theproposed amendment amount to a new claim. [47] The case law favours CNRL’s position. In Dickhoff v Armadale Communications Ltd. (1993), (SK CA),108 DLR (4th) 464 (SKCA), the plaintiff sued a newspaper for defamation arising from an

article it published accusing the plaintiff ofmortgage fraud. The plaintiff later tried to add a claim against another newspaper for a similar, but not identical, article. The sole issuebefore the court was whether the two claims “arose out of the same transaction or occurrence”. The court concluded the two separatepublications did not arise from the same transaction or occurrence. Each libel was a separate publication to which separate defencesmight apply.

Although the underlying material or content was similar, the second publication did not arise from the same transaction oroccurrence as the originally pleaded publication. [48] In Pootlass v Pootlass (1999), (BC SC), 63 BCLR (3d) 305 (SC) the plaintiff sought to amend hisstatement of claim to allege the defendant slandered him by calling him a murderer in August 1996.

The original statement of claimalleged the defendant slandered the plaintiff at a public meeting in 1995 when he made statements suggesting the plaintiff should havebeen charged with aggravated assault causing death or with second-degree murder in relation to their father’s death.

The defendantargued the amendment was out of time. [49] Burnyeat J found the August 1996 statement was clearly a different event from the comments made at the 1995 communitymeeting and that it would be inappropriate to allow it at para 15: …Pleadings relying on one event should not be used by a plaintiff to claim a cause of action arising out of a different event inorder to allow the plaintiff to take advantage of the original writ for the purpose of defeating the Limitation Act. …[Emphasis added.] [50] The judge commented that if the plaintiff could make such an amendment the Limitation Act would be meaningless as long asongoing proceedings between the same parties were extant.

The judge held the amendment did not arise from the same events whichfounded the first cause of action. The only factual connection between the two claims was the defendant’s general belief that the plaintiffwas somehow responsible for his father’s death. [51] The American jurisprudence comes to similar conclusions. In Herron v KING Broadcasting Company, 746 P 2d 295 (Wash1987), the plaintiff brought an action against a broadcasting company for its broadcast of various defamatory false statements. After the

expiry of the limitation period, the plaintiff sought to amend his claim to include a second broadcast later in the evening containing similar, but not identical, information. [ 52 ] The court considered whether the second broadcast related back to the claim asserted in the original pleading, that is, whether the amended pleading arose out of the conduct, transaction, or occurrence set forth in the original pleading.

The court at 300 concluded the second broadcast by a different reporter did not arise from the same conduct, transaction or occurrence: “The 11 p.m. newscast was the result of a conscious independent act, using a new script and broadcaster, and so clearly constitutes a separate publication…” [ 53 ] In State v Superior Court , 921 P 2d 697 (Ariz App 1996) the plaintiff tried to link statements made about her in 1992 with later statements made in 1994 on the grounds they were related to the same transaction, the revocation of her nursing home license. The court rejected her assertions.

First, the original pleadings were too vague alleging only the statement involved “major misrepresentations of her character and activities”, thus the court could not determine the substance of the statements. Second, the same statement was not alleged in each complaint, so they could not be said to arise from the same conduct, transaction or occurrence.

The court said at para 15: Each communication of a defamatory statement, even though identical in content, constitutes a separate publication, giving rise to a separate cause of action. … a claim based on a subsequent statement does not arise from the same conduct, transaction, or occurrence as a claim based on the first statement, and … will not relate back to the earlier claim. [ 54 ] In Caudle v Thomason , 942 F Supp 635 (DDC 1996) the plaintiff sought to add a slander claim to an already alleged libel claim.

The libel claim alleged the defendant published a memorandum discrediting the plaintiff in relation to his contracts providing charter airline services to the White House Press Corps. The slander claim was premised on statements allegedly made by the defendant to various members of the White House staff and administration. The defendant argued the slander claim was time-barred. [ 55 ] The court found the claim for slander did not relate back to the original libel complaint at 640-641: …the alleged slander was not referred to in the original complaint.

There was nothing in that complaint to give notice to Thomason that he would be required to defend against allegations concerning any publication other than that of the White House Press Charters memorandum. … Nor are the allegations regarding the slanderous remarks implicit in the original complaint.

Because the slander claim involved publications entirely distinct from the publication of the memo, and made to a number of individuals not mentioned in the original complaint, the Court finds that the slander claim does not relate back to the filing of the original complaint. [ 56 ] In Luisi v JWT Group Inc. , 488 NYS 2d 554 (Sup 1985) the plaintiff’s original claim related to allegedly libelous statements contained in a press release issued by the defendant in March 1982.

The plaintiff sought to add complaints alleging libellous comments made by the defendants appearing in various magazines from April 1982 through August 1982. She argued these additional allegations were not time-barred because they related back to the libels alleged in the original complaint. [ 57 ] The court refused to allow the plaintiff’s amendments finding they raised not only additional libel claims but also additional facts upon which the claims were based.

The original complaint setting forth the libelous words in the March 30, 1982 press release did not give the defendants notice of the alleged libels contained in the various publications between April and August 1982. [ 58 ] The court also rejected the plaintiff’s further argument that the allegations were merely an expansion or amplification of the allegations in her original complaint at 558: The additional libels asserted in the second amended complaint cannot be saved by the amplification-expansion theory advanced by the plaintiff.

An analysis of the cases accepting this theory of amplification shows that, in each, the language of the original complaint, although inadequately pleaded, embraced everything that was alleged in the amended complaint. Here, the second amended complaint asserts additional causes of action in libel as well as additional facts upon which these new claims are based.

As a result, plaintiff’s second amended complaint cannot be held to amplify or expand those causes of action previously asserted in the original complaint. [ 59 ] Mittal relies in part on Brown v Cole , 1994 CarswellBC 3019 (Master) , aff’d 1994 CarswellBC 1859 (SC) , in which the plaintiff sought to amend his pleading to add details of subsequent publications of which he was aware, but had not been able to identify with sufficient precision. He had given the defendant advance notice of his intention to bring such amendments at some future time.

Master Doolan allowed the amendments finding they were no more than a “fleshing out” or “amplification” of the original claim and that the defendant had not suffered any prejudice in any event.

The original pleading and the proposed amendments are not set out in the judgment so it is impossible to compare the relationship between them. [ 60 ] Mittal nonetheless relies on this case for the proposition that a plaintiff, upon becoming aware of the particulars of the publication or republication of a defamatory statement, is entitled to plead the specific circumstances in an amended claim without concern for any limitation periods.

Mittal argues this principle is consistent with the well-established principle discussed in Cooper that a plaintiff may allege publication of defamatory statements to named and unnamed persons and later fill in the necessary details, so long as they establish a prima facie case of such publication. [ 61 ] Justice Hood, in affirming Master Doolan’s decision, focused on the lack of prejudice resulting to the defendant and did not address the adequacy of the original pleadings. The judge commented that the court allows amendments to pleadings so long as “injustice or prejudice to the other side does not occur”.

If the amendment involves a statute-barred cause, the court presumes prejudice, which presumption must be rebutted; the court must be satisfied it is just to allow the amendment. The judge found the master allowed the amendments because he was satisfied with the plaintiff’s explanation for the relatively brief delay and found there was no prejudice to the defendant. [ 62 ] The general test for amending pleadings applied in Brown v Cole based on the presence or absence of prejudice is very different from the specific requirements of

section 6 of the Alberta Limitations Act, which requires proof the statute-barred amendments relate to the conduct, transaction, or events described in the original pleading. The conclusions in Brown are distinguishable on this basis. By contrast, the American case law is highly persuasive, given its consideration of whether the added claims relate to the same conduct, transaction or occurrence, a test markedly similar to that found in

section 6 of the Limitations Act.

[63] The Mellott email is a new publication and amounts to a new claim that is not related to the conduct, transaction or eventspleaded in the original Statement of Claim. It matters not that the publication relates to the same issue of the defective pipe. This newclaim requires a separate analysis to determine whether it is defamatory, depending on who made the publication, who received it andthe surrounding circumstances. Further, different defences might apply.

In other words, different factual and legal issues arise for thispublication than for the publication of the Quality Alert alleged in the original Statement of Claim. [64] In addition, I find the claims in the original Statement of Claim regarding other “False Statements” are too general to satisfythe requirements for defamatory pleadings. They do not give the defendant adequate notice of the specific occurrence constituting thewrong.

In my view, any amendment providing the necessary details amounts to a new claim. [65] In McIvor v Manitoba Keewatinowi Okimakanak Inc., 2005 MBQB 214 the defendant brought an application to strike theplaintiff’s claim. The pleadings alleged the defendant “made, directly and indirectly, statements to the community at large” that theplaintiff was an untrustworthy employee.

The pleading did not state who made the statements, when they were made and what was said.Master Cooper found these broadly-worded pleadings to lack the necessary specificity. [66] The pleadings also alleged the defendant “caused” defamatory statements to be printed. The Master found these wereimproper pleadings: “Surely, to constitute a cause of action in defamation, the allegations must be that MKO itself made or published thealleged defamatory statements to a third party”.

The Master granted the plaintiff leave to amend his pleadings to provide the necessaryspecifics. [67] Following the reasoning in all of the above cases, I find the Mellott email referenced in paragraph 58 of the ProposedAmended Statement of Claim is a separate publication from the original Quality Alert. The message contained in the Mellott Email, towhich the Quality Alert is attached, is not part of the same publication as the Quality Alert; it contains significantly different wordingand was published at a different time to a different audience.

This amendment is denied. [68] Paragraphs 59 - 60 – These amendments seek to broadly plead further False Statements and republication of those statements,the precise language of which is unknown to Mittal and at times and under circumstances known only to CNRL. As observed above,pleadings in defamation require the exact words alleged to be defamatory. In addition, the plaintiff must be able to identify “…the timewhen, the place where, and the persons to whom they were published.” See Brown at 19-2 citing Duke v Putts, (SKKB), [1998] 6 WWR 510 at 513 (SKQB).

The amendments are not supported by the evidence and are denied. [69] Paragraphs 64 - 65 – the first sentences of paragraphs 64 and 65 are supported by paragraphs 16-20 of Mr. Butterbrodt’sAffidavit and the referenced exhibits.

These amendments are allowed. [70] Paragraphs 66 - 69 – These paragraphs detail how the publication of the Alert Document was carried out, identifying its originwith Mike Hudgins, the Chief Inspector at the Horizon Project and approval by CNRL Vice-President Peter Jansen, and its receipt by 33CNRL Project Managers and 11 additional CNRL employees. [71] Unlike the proposed amendment in paragraph 58, I find paragraphs 66 - 69 relate to the conduct, transaction or eventsdescribed in the original pleading; they particularize the pleadings set out in the original Statement of Claim.

These amendments identifyby name 44 recipients of the November 29 Quality Alert, recipients who were described more generally in the original pleadings. [72] Paragraph 70 introduces for the first time Mittal’s “Radiated Email Publication” theory.

It alleges the 44 initial recipients ofthe Alert Document republished it by forwarding or copying the email to further recipients with the implicit admonishment that thosenew recipients would further distribute it, resulting in the Alert Document being “republished and distributed all around the world topersons and parties having involvement in pipe manufacturing, sales, distribution and pipe utilization industries…”.

This amendedpleading contains the first direct reference to republication by CNRL employees and an implicit reference to republication by thirdparties. [73] Paragraphs 71 - 84 provide specific examples regarding the transmission of the Radiated Email Publication, includingrepublication by third parties outside of CNRL. [74] Paragraphs 85 - 86 plead the ongoing proliferation and republication of Quality Alert and other “False Statements” via the“Radiated Email Publication” was the natural and probable consequence of CNRL’s original publication of the Quality Alert, given thedirection it contained to “act on the attached alert”.

The pleadings allege CNRL intended and authorized the republication of the QualityAlert and the recipients were under a moral, legal and business duty to repeat the information. [75] Paragraph 87 – Mittal claims damages arising from these republications. [76] Republication has a special meaning in the law of defamation. It occurs where the person to whom the words were originallypublished communicates them to someone else: Brown at 7-39.

As a general rule, defendants are not liable for the republication ofdefamatory statements by independent third parties unless one of three exceptions applies: (1) where the defendant authorized or intended the person to whom he published the words to repeat or republish them to some thirdperson; (2) where the repetition or republication of the words to a third person was the natural and probable result of the original publication; and (3) where the person to whom the original publication was made was under a moral duty to repeat or republish the words to a thirdperson: Cooper at para 21. [77] Where a plaintiff seeks to make a defendant liable for republication of the defamatory statements by others, the statement ofclaim must specifically plead the exception(

s) to the general rule upon which the plaintiff relies: Cooper at para 22.

[ 78 ] When a plaintiff seeks to amend pleadings to include claims for republication of the defamatory statements, as in the case at bar, the court will allow the amendments only if they relate back to the original publication. Brown explains at 17-194: Where there is a publication for which an action has been brought, and a subsequent republication of the same words for which an amendment is sought, the republication will relate back to the original publication only if the original complaint alleged republication.

This is because each communication of a defamatory statement gives rise to a separate cause of action and, therefore, “a claim based on the subsequent statement does not arise from the same conduct, transaction or occurrence as a claim based on the first statement”, even though the underlying circumstances giving rise to the statements are the same. [ 79 ] Thus, the question before me is whether the original Statement of Claim adequately pleaded republication. Mittal states the following passages from the original pleadings raise the republication issue: 7.

In connection with its Horizon Project, CNRL falsely, improperly and maliciously spoke, and also wrote, and then published, or caused to be written, published and communicated, to persons and parties throughout the world , certain false, slanderous and misleading statements concerning the Plaintiffs... 9. ...Further, since November 29, 2005, CNRL has continued to publish and disseminate False Statements to purchasers and potential purchasers of the Plaintiffs’ piping... 18.

To date, CNRL has continued to falsely and maliciously speak, write, print and publish or cause to be spoken, written, printed and published , False Statements concerning the Plaintiffs... [ 80 ] Mittal argues it properly pleaded republication by stating republication was the intended natural and probable consequence of the original publication of the False Statements, thereby satisfying the requirement to plead the exception to the general rule that a defendant is not liable for republication.

Mittal also argues its Response to Particulars references “persons and parties [who] were to further disseminate” and “persons within CNRL and Fluor further published...” the False Statements. [ 81 ] I do not find the above references clearly plead republication by third parties, nor do they identify the specific exception to the general rule that a defendant is not liable for republication by a third party.

While Mittal specifically pleads the exceptions to the general republication rule at paragraph 86 of its Proposed Amended Statement of Claim, I find no equivalent pleading of this exception in the original Statement of Claim. I find Mittal did not adequately plead republication in its original Statement of Claim and cannot relate the republication amendments back to its original pleadings. [ 82 ] I am supported in my conclusion by the decision in Weber v Cueto , 624 NE 2d 442 (Ill App 5 Dist 1993).

The plaintiff brought an action against the defendants for libel alleging the defendants circulated a libelous letter dated January 14, 1983 to county officials. The plaintiff sought to amend her pleadings after the expiry of the limitation period to allege the defendants also circulated the letter to various newspapers. The plaintiff argued the amended claim related back to her original pleading because the allegations grew out of the same transaction or occurrence set up in the original pleading.

The court held it did not. [ 83 ] The court explained that an amended complaint relates back to the original complaint only when the original complaint supplies the defendant with all the information necessary to prepare the defence to the subsequently asserted claim. The focus of the analysis is on the alleged facts and occurrence, not on the name of the cause of action or legal theory used to support the claim for damages.

The court must determine that the two actions or remedies, even though different, require the same proof. [ 84 ] On the facts the court concluded at 449 the complaint about publication to county officials did not put the defendants on notice of a further complaint about publication to newspapers: ...According to the plaintiff, “The timely filed original complaint advised defendants that plaintiff was complaining of the January 14, 1983 letter and its publication to the twenty-nine members of the Madison County Board, the Chief Judge of Madison County, Illinois and the ARDC [and] the original complaint also advised the defendants that plaintiff alleged the letter had been published generally within Madison County, Illinois.” However, we believe that these allegations in the original complaint did not put the defendants on notice that they were being sued for having delivered the letter to newspapers or for causing republication of the letter by newspapers… While the allegations of the original complaint and … the first-amended complaint involve a common element, i.e., the allegedly libelous letter, the allegations of fact are distinct and the proofs necessary to establish the causes of action are entirely distinct. … [ 85 ] The court later noted at 451 the general allegation that the letter was published throughout Madison County, Illinois was “too conclusory to serve as notice to defendants that publication to newspapers was at issue.” [ 86 ] Similarly in the case at bar, the general allegations contained in the original Statement of Claim that CNRL “published, or caused to be written, published and communicated, to persons and parties throughout the world”, does not put the defendants on notice of the specific claims they had to meet.

As I have stated repeatedly, defamation pleadings require great specificity and the necessary specifics in relation to republication of the original Quality Alert communication by CNRL employees or third parties are lacking in Mittal’s original pleadings.

The republication claims do not relate back to the original pleadings. [ 87 ] Mittal relies upon Pacific Coast Savings Insurance Services v Strong (1996), 4 CPC (4th) 37 (BCSC) to argue the proposed amendments should be allowed because they plead republication for the purposes of establishing the extent of damages resulting from CNRL’s original publication and it does not assert the republications as separate claims.

Mittal refers to paragraphs 87 and 88 of its Proposed Amended Statement of Claim in which it makes clear it pleads republication strictly for damages purposes. [ 88 ] In Pacific Coast Savings , the court considered an application for further particulars. The defendant argued it was necessary for the plaintiff to plead the particulars of the alleged republication of the defamatory statements where the plaintiff relied upon the fact of republication for damages purposes.

The plaintiff had pleaded the defendants were the original publishers of defamatory comments and the republication of those comments was the natural and probable result of the original publication. The defendants argued the plaintiff should have provided particulars as to who was responsible for the republication, who received the republication and when and how the

republication was made. [89] Edwards J stated that, in general, particulars are required to help the opposing party know the nature of the case it has to meet.The judge found the pleadings clearly alleged the letter containing the libel reached identified people who rejected the plaintiff’s jobapplication as a result. He held those allegations were sufficient, if proven, to establish the libel was repeated to people who acted on it tothe plaintiff’s detriment.

For this reason, the particulars of republication were unnecessary because the plaintiff had clearly pleaded theexceptions regarding the defendant’s liability for republication. Edwards J held at para 26-27: …where republication is pleaded, as it is here, as the primary source of damages arising from the original publication, the issue iswhether the defendant intended, authorized or foresaw the republication, not how republication actually occurred nor what defencesmight be open to the republisher.

I conclude the details of how the republication took place, which are necessarily outside the plaintiff’s means of knowledge, need not beparticularized where the plaintiff properly pleads an exception to the normal rule that the original publisher is not liable for unauthorizedor unintended republication. [90] This case does not assist Mittal. First, there was no question in Pacific Coast Savings that the plaintiff had properly pleadedthe exceptions to liability for republication. Second, the application was a request for further particulars, not an application to amendpleadings by adding republication claims.

Pacific Coast Savings would be more persuasive if Mittal’s pleadings identified third partieswho refused to contract with Mittal after receiving CNRL’s Quality Alert. In such a case, the details of republication would beunnecessary since, as in Pacific Coast Savings, the issue would be whether CNRL intended, authorized or foresaw republication.

In thecase at bar, I find the original pleadings did not adequately allege republication or the harm arising therefrom; the republication claimsconstitute new claims that are out of time. [91] Mittal further argues that pleadings can be amended after the expiry of a limitation period to add claims for different heads ofdamage arising from the same facts giving rise to the original claim. It relies on Cahoon v Franks, (SCC), 1967 SCR455 for this proposition.

Cahoon was a motor vehicle accident case in which the original claim was for property damage only; after theexpiry of the limitation period, the plaintiff added a claim for personal injury.

The court permitted the amendment on the basis the newclaim for damages arose from the same accident, same facts, and same cause of action, namely, negligence in an auto collision. [92] Cahoon is distinguishable here since each republication, according to the law of defamation, presumptively raises a separatecause of action; the underlying facts and context are different with respect to each publication and different defences might apply. [93] Mittal also cited Grey Condominium Corp.

No. 27 v Blue Mountain Resorts Ltd. (2007), (ON SC), 277DLR (4th) 644 (ONSC), affirmed 2008 ONCA 384, 90 OR 3d 321 for the same proposition. Yet the principle in Cahoon was rejected inGrey (a construction case). The court held each construction defect provided a different factual basis for the claim thus generating aseparate cause of action. [94] I do not accept Mittal’s argument that it may add the republication claims because it does so for the sole purpose of furtherestablishing its damages claim. There is nothing in the defamation jurisprudence to suggest such a distinction is possible.

The proposedamendments at paragraphs 70 - 87 are denied. [95] Paragraph 88 – Mittal alleges the Radiated Email Publication and the republication of the Quality Alert and the other FalseStatements was carried out by CNRL’s employees and contractors within the scope of their duties and seeks to hold CNRL responsible indamages for all such publications and republications. Given this amendment relates to the disallowed republication claims, it is denied. [96] Paragraph 92 – This amendment relates to the alleged CNRL/Fluor Engineering Error.

In light of my rejection of theamendments at paragraphs 38-51 of the Proposed Amended Statement of Claim, this amendment is denied. [97] Paragraphs 94 - 98 – These amendments allege CNRL acted maliciously with respect to republication of the Alert Document.Given my rejection of the republication amendments generally, this amendment is denied. [98] Paragraphs 100 - Paragraph 100 identifies the projects and customers Mittal alleges chose to avoid Petrotub’s pipe as a resultof CNRL’s Quality Alert. This amendment is supported by the affidavit evidence of Mr.

Butterbrodt, and is allowed. [99] Paragraphs 101 - 106 – These paragraphs propose amendments to Mittal’s damages related to the republication claims. In lightof my rulings on the republication amendments, the parties may make further submissions as to what, if any, damages amendments arenecessary. [100] Paragraph 107 seeks to add a reference to the CNRL/Fluor Engineering Error; it is denied. [101] Paragraph 109 – This minor amendment reads “as well as the Act”. Its meaning is unclear; the amendment is denied.

Issue 2 - Application to Strike [102] CNRL originally brought an application to strike out pleadings pursuant to Rule 3.68(2)(b). In light of Mittal’s application toamend its pleadings, counsel for CNRL advised that it seeks to strike the allegations relating to the Quality Alert. The test governing thisapplication is set out at paras 39 - 46 of CNRL #1. Simply put, the test to determine if there is a reasonable claim under Rule 3.68(2)(

b) iswhether it is “plain and obvious” that the Plaintiffs’ claim must fail. [103] In spite of my rulings above regarding the proposed amendments, for the purposes of the Application to Strike, I haveconsidered Mittal’s Statement of Claim, Mittal’s Response to CNRL’s Request for Particulars and Mittal’s Proposed AmendedStatement of Claim. This said, I did not consider paragraphs 40-51 of the Proposed Amended Statement of Claim as I previously denied

those amendments (see CNRL #1). The Tort of Defamation [104] The Parties agree on the elements of the tort of defamation as set out in Chohan v Cadsky, 2009 ABCA 334 at para 88, 464 AR57. In Chohan, the court adopted Professor Brown’s definition of defamation stating: It is common ground that the correct definition of a defamatory statement is as set out in Brown at 1-31: A publication is considered defamatory if it has the tendency to lower that reputation in the estimation of reasonable persons in thecommunity. In order to recover in an action for defamation, the plaintiff must show:

(1) That the words about which the plaintiff complains are defamatory;

(2) That they referred to the plaintiff; and

(3) That they were published to a third person. [footnotes omitted] [105] There is no question the Quality Alert referred to the Plaintiffs and was published to a third person. These elements of the tortare not in issue.

The question is whether the words about which the Plaintiffs complain are defamatory. [106] The tort of defamation is a tool for protecting personal reputations and the reputations of businesses: Bou Malhab v DiffusionMetromedia CMR Inc., 2011 SCC 9 at para 1, [2011] 1 SCR 214; Walker v CFTO Ltd. (1987), (ON CA), 59 OR (2d)104 (CA) at paras 25-26. [107] The law of defamation keeps pace with changes in society and with the importance attached by society to freedom ofexpression: Bou Malhab at para 1.

The concept of defamation requires that the right to the protection of reputation be reconciled with theright to freedom of expression, since that which belongs to the former is generally taken away from the latter: Bou Malhab at para 16.There is no precise mechanism for determining the balance point between these rights, but the intersection point changes as societychanges: Bou Malhab at para 19.

Deschamps J, writing for the majority, stated: …Indeed, particularly in recent decades, the law of defamation has evolved to provide more adequate protection for freedom ofexpression on matters of public interest. … [108] To determine whether a document is defamatory, a court must employ an objective standard, that of the right thinking orreasonable person. The Supreme Court of Canada in Bou Malhab discussed this standard at paras 36-37: 36 …the right-thinking person standard was subsequently adopted, including in Canadian case law [citations omitted].

In Color YourWorld, the Ontario Court of Appeal, per Abella J.A., outlined the right-thinking person standard as follows: The standard of what constitutes a reasonable or ordinary member of the public is difficult to articulate. It should not be so low as to stiflefree expression unduly, nor so high as to imperil the ability to protect the integrity of a person's reputation.

The impressions about thecontent of any broadcast -- or written statement -- should be assessed from the perspective of someone reasonable, that is, a person whois reasonably thoughtful and informed, rather than someone with an overly fragile sensibility.

A degree of common sense must beattributed to viewers. [p. 106] 37 Raymond Brown conducted an extensive review of Canadian and foreign case law and summarized the ordinary person'sperspective as follows: The court will assume that the ordinary reasonable person is someone who is thoughtful and informed and of fair, average intelligence.They are persons who have a common understanding of the meaning of language and who, in their evaluation of imputation, entertain asense of justice and apply moral and social standards reflecting the views of society generally...

The reasonable reader or listener makes an effort to strike a balance between the most extreme meaning the words will bear and themost innocent meaning... The ordinary reader will draw conclusions from general impressions. He or she is likely to read an

article casually or uncritically and notgive it concentrated attention or read it a second time... [109] In assessing whether the words themselves are defamatory, a court will take into “...consideration the plain, fair, natural andordinary meaning, or popular construction of the words which persons ‘of common and reasonable understanding would ascribe tothem’, read or heard in the context in which they were spoken or written, and applying ‘their general knowledge and common sense’,after taking into consideration the reasonable implications of the words and all the surrounding circumstances of the case, including thesubject matter of the publication, the audience to whom they were published, the connection in which the words were used, and the modeand manner in which they were presented” [footnotes omitted]: Brown, at 5-60 – 5-64. [110] I find that a reasonable, thoughtful and informed person of average intelligence, with a degree of common sense, would not findthe words in the Quality Alert to be defamatory.

In considering the ordinary meaning of the language and the evidence presented by theattached photographs, the reader would understand that two pipes contained defects and public safety required some caution in usingpipes from the same manufacturer until the cause of the defects were identified. Nothing in the Quality Alert imputes the defects resultedfrom manufacturing problems; the reasonable reader could make his or her own assumptions as to cause, be it manufacturing defect ordamage caused by improper transportation, storage or handling.

There is nothing in the Quality Alert to lower Mittal’s reputation in the

community. [ 111 ] Furthermore, given the importance of freedom of expression for matters in the public interest, such as oil pipeline safety, the balance in this case weighs heavily towards the public interest. [ 112 ] I find that the Quality Alert is not defamatory. For this reason, it is plain and obvious the Plaintiffs’ claim in defamation is bound to fail. Injurious Falsehood [ 113 ] The tort of injurious falsehood is also known as slander of goods and malicious falsehood. Lewis N Klar sets out the elements of this tort in his text Tort Law , (5th ed), (Toronto: Thomson Reuters Canada, 2012) at 837: 1.

There must have been a statement made of and concerning the goods of the plaintiff. 2. The statement must have been false. 3. The statement must have been published maliciously, that is to say, dishonestly or with improper notice, and 4. The plaintiff must have suffered special damages. See also Philip H Osborne, The Law of Torts , (4th ed), (Toronto: Irwin Law, 2011) at 318-319. [ 114 ] Osborne at 301 observes that injurious falsehood protects a person’s business and commercial interests while defamation protects a person’s reputation.

He describes the overlap between the two torts in footnote 212: Nevertheless, there is a substantial overlap between the two torts because an attack on a person’s business may reflect poorly on his character and an action can be brought by a corporation for harm to its good name. It is normally advantageous to frame an action in defamation because the falsity of the statement is presumed, damage is presumed, and there is no need to prove malice. Brown distinguishes the two torts at 28-3 – 28-4: Superficially, the tort of injurious falsehood appears to be comparable to defamation. ...

Nevertheless, it “is in no way derived or descended from, or related to, the defamation actions for libel and slander.” The actions are distinct, and there are some fundamental differences between the two. Both actions involve false and injurious statements published to a third person. However, defamation involves an attack upon reputation, while injurious falsehood generally does not. An injurious falsehood involves an adverse reflection not on the plaintiff personally, but on his or her goods or property, or interest in that property.

There is no requirement in an action for injurious falsehood that the publication be defamatory, but the plaintiff, unlike in a defamation action, must plead and prove that the words were false, that they were actuated by malice, and that the plaintiff suffered special damages. [ 115 ] I find the Plaintiffs are unable to meet the second requirement for a claim of injurious falsehood. The Quality Alert makes a statement about the Plaintiffs’ goods; however, the photograph is evidence that the statement is not false, two significant piping defects were found.

I find that the remainder of the statement does not disparage the Plaintiffs’ goods in any other way. It is plain and obvious the Plaintiffs’ claim in injurious falsehood is bound to fail. [ 116 ] I grant CNRL’s application to strike the pleadings related to the Quality Alert from the Statement of Claim. Dated at the City of Calgary, Alberta this 8 th day of October, 2013. E.A. Hughes J.C.Q.B.A. Appearances:

Clerk’s Stamp Stanely Carscallen, Q.C./Lillian Pan/Hema Ahuja/Piotr Bychawski/Christy Lee Carscallen LLP for the Plaintiffs (Applicants/Respondents), ArcelorMittal Tubular Products Roman S.A., formerly known as Mittal Steel Roman S.A., and as Ispat Petrotub S.A. and sometimes known as Ispat Petrotubas S.A. Romania, and ArcelorMittal Galati S.A. formerly known as Mittal Steel Galati S.A. and as Ispat Sidex S.A. and sometimes known as Ispat Sidex S.A. Romani, and ArcelorMittal Pipes & Tubes Galati S.R.L. Jeff E. Sharpe/David Strand/Julie Taylor/Paul Chiswell Burnet, Duckworth & Palmer LLP for the Defendant(Applicant/Respondent), Canadian Natural Resources Limited

Schedule 1 COURT FILE NUMBER 0701-12323 COURT Queen’s Bench of Alberta JUDICIAL CENTRE Calgary PLAINTIFFS ARCELORMITTAL TUBULAR PRODUCTS ROMAN S.A., formerly known as MITTAL STEEL ROMAN S.A. and as ISPAT PETROTUB S.A. and sometimes known as ISPAT PETROTUBAS S.A. ROMANIA, and ARCELORMITTAL GALATI S.A., formerly known as MITTAL STEEL GALATI S.A. and as ISPAT SIDEX S.A. and sometimes known as ISPAT SIDEX S.A. ROMANI, and ARCELOR MITTAL PIPES & TUBES GALATI S.R.L. DEFENDANT CANADIAN NATURAL RESOURCES LIMITED

DOCUMENT AMENDED STATEMENT OF CLAIM ADDRESS FOR SERVICE AND CONTACT INFORMATION OF PARTY FILING THIS DOCUMENT Carscallen Leitch LLP 1500, 407 – 2nd Street S.W. Calgary, Alberta T2P 2Y3 Telephone: (403) 262-3775 Attention: Stanley Carscallen, Q C / Lillian Pan File No.: 21877.001 INTRODUCTION 1. The Plaintiff ArcelorMittal Tubular Products Roman S.A., formerly known as Mittal Steel Roman S.A. and as Ispat Petrotub S.A. and sometimes known as Ispat Petrotubas S.A.

Romania (“Petrotub”), is a corporation incorporated under the laws of Romania, which carried on business in Romania as a manufacturer of seamless carbon steel pipe^ from its mill located at Roman, Romania (the “Roman Mill”), including pipe that meets the internationally recognized standard known as ^American Society for Testing and Materials A106^ Grade B ^carbon steel pipe (“A106B Pipe ”). 2. The Plaintiff ArcelorMittal Galati S.A., formerly known as Mittal Steel Galati S.A. and as Ispat Sidex S.A. and sometimes known as Ispat Sidex S.A.

Romania (“ Sidex ”), is a corporation incorporated under the laws of Romania, which carried on business in Romania as a manufacturer of welded pipes of large diameter through a double submerge arc-welding process that was certified as meeting the internationally recognized standards known as API 5L type B and/or X42 (“ API 5L Pipe ”).

3. Arcelor Mittal Pipes & Tubes Galati S.R.L. (“ Galati S.R.L. ”) is a corporation incorporated under the laws of Romania which carries on business in Romania as a manufacturer of API 5L Pipe. 4. On or about December 31, 2006 Sidex transferred its entire Romanian pipe and tube manufacturing business, including all rights in relation thereto, to Galati S.R.L. 5. The Defendant Canadian Natural Resources (“ CNRL ”) is an Alberta Corporation with its head office in Calgary. CNRL carries on business in Alberta and elsewhere as an oil and gas exploration and development company.

CNRL is currently developing the Horizon Oil Sands Project (the “ Horizon Project ”), a large oil sands extraction operation and upgrading facility, located approximately 70 kilometres north of Fort McMurray, Alberta. 6. The Plaintiffs have manufactured pipe for delivery to various United States based pipe distributors including Vass Pipe and Steel Co. Inc. (“Vass”), for use in a wide range of general applications. None of the Plaintiffs, however, produced pipe for the purpose of the Horizon Project or for any other project or use in Canada. ^ SALES OF A106B PIPE TO VASS 7.

A106B Pipe manufactured at the Roman Mill was sold both directly by Petrotub to Vass as well as through an affiliate of the Plaintiffs, for delivery to Vass at Houston, Texas, U.S.A. 8. At all material times, the A106B Pipe sold to Vass met the specifications therefor which were contractually set by Vass as well as the standards for A106B Pipe prescribed by the American Society for Testing and Materials (the “ASTM Standard”). The ASTM Standard for A106B Pipe, as amended from time to time, describes among other things the acceptable

range for the chemical composition, the mechanical properties and the workmanship quality, as well as the method of manufacture for A106B Pipe. The ASTM Standard is a minimum specification. It contemplates that end-users such as CNRL are responsible to specify any additional or supplemental requirements beyond the minimum set forth in the ASTM Standard, and in that regard the ASTM Standard provides by way of Appendices, certain common additional or supplemental requirements that such end-users may specify when selecting the attributes of the A106B Pipe to be manufactured to meet their needs.

Petrotub shall refer to the ASTM Standard at the trial of this action for its full terms and provisions. 9. The workmanship and quality, including the surface appearance of A106B Pipe as described in the ASTM Standard, are subjective standards and it is up to a buyer such as Vass to reject A106B Pipe if the buyer considers that the pipe does not meet the buyer’s specifications or the ASTM Standard. At no material time did Vass ever reject A106B Pipe ordered by it from Petrotub either directly or through its said affiliate or before Vass shipped it to a final destination or to its customer. 10.

At all material times, the Roman Mill followed the accepted method under the ASTM Standard for the manufacture of A106B Pipe, using a hot forming seamless pipe making process. At Houston, Vass took possession and ownership of the A106B Pipe that it purchased, and responsibility for the further transportation and storage thereof thereafter. Petrotub has no knowledge concerning the further transportation and the storage thereof after such sale and delivery to Vass as aforesaid. 11. Neither Sidex nor Galati S.R.L. carrying on business under the n

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