Crystal Ridge Fuels Limited v McIntosh, 2013 ABQB 618

Court of Queen ’ s Bench of Alberta Citation: Crystal Ridge Fuels Limited v McIntosh, 2013 ABQB 618 Date: 20131022 Docket: 0401 11012 Registry: Calgary Between: Crystal Ridge Fuels Limited, Gregory Binks and Sally Binks Plaintiffs - and - Reese McIntosh, Janice Pearce and Big Rock Petroleum Ltd. Defendants _ ________________________________________ ______________ Memorandum of Decision of the Honourable Mr. Justice C. M.

Jones _________________________________________ ______________ [ 1 ] The Defendant, Reese McIntosh, (“McIntosh”), sought an order permitting him to file a counterclaim (the “Proposed Counterclaim”) against Gregory Binks, Sally Binks and Crystal Ridge Fuels Limited (“Crystal Ridge”). Further, he sought costs and an order compelling answers to undertakings. The analysis which follows addresses the Proposed Counterclaim. I deal briefly with undertakings at the end of this judgment.

I. Background A. The Action Generally [ 2 ] McIntosh and his common law spouse, Janice Pearce (“Pearce”), were employed with Crystal Ridge from 2001 to May 2, 2003, at which time McIntosh and Pearce resigned. At the time of McIntosh’s resignation as CEO of Crystal Ridge, Gregory Binks was a director and Sally Binks was a shareholder. [ 3 ] This action began on July 14, 2004. Crystal Ridge, Gregory Binks and Sally Binks (collectively, the “Crystal Ridge Plaintiffs”) filed a Statement of Claim against McIntosh, Pearce and Big Rock Petroleum Ltd. (“BRP”), a corporation wholly owned by McIntosh.

The Crystal Ridge Plaintiffs alleged, inter alia , that: 1. McIntosh and Pearce had unlawfully and fraudulently misappropriated and converted to their own use funds belonging to Crystal Ridge; 2. McIntosh used funds belonging to Crystal Ridge to form BRP with the intention of competing with Crystal Ridge; 3. McIntosh caused BRP to appropriate Crystal Ridge’s client base, revenue and good will; 4. McIntosh falsely claimed to own Crystal Ridge and improperly pledged its credit; 5. McIntosh breached his fiduciary duty to Crystal Ridge; and 6.

BRP was unjustly enriched to the detriment of Crystal Ridge as a result of McIntosh’s breach of fiduciary duty. [ 4 ] The Binks also alleged that they were required, as a consequence of McIntosh’s conduct, to expend their personal funds to service financial obligations of Crystal Ridge. [ 5 ] By Order dated March 15, 2006, Master Waller struck the pleadings in this action of Gregory and Sally Binks against Pearce.

By order dated August 1, 2006, Master Alberstat struck the pleadings in this action of Gregory and Sally Binks against McIntosh. [ 6 ] McIntosh now seeks, through the Proposed Counterclaim, to add Gregory and Sally Binks as parties to this action, their involvement as plaintiffs having been terminated by the orders described above. II. Issues [ 7 ] McIntosh’s application gives rise to the following issues: 1. Does s. 3 of the Limitations Act, RSA 2000, c L-12 (the “ Limitations Act ”) preclude McIntosh from advancing his Proposed Counterclaim? 2.

If so, does s. 6 of the Limitations Act override the application of s. 3, allowing McIntosh to file his Proposed Counterclaim? 3. Should the Court exercise its discretion to allow McIntosh’s application? III. The Income Tax Basis of the Proposed Counterclaim [ 8 ] Proper analysis of McIntosh’s application requires an understanding of the basis for the Proposed Counterclaim, such that it may be determined if it is related to the conduct, transaction or events described in the original pleadings in this proceeding. [ 9 ] McIntosh’s assertions, as set forth in his Affidavit of July 11, 2012, are as follows: 1.

Crystal Ridge, at the direction of Gregory and Sally Binks, withheld employee source deductions in respect of McIntosh’s income for the 2003 taxation year in the amount of $23,968.30; 2. Crystal Ridge, at the direction of Gregory and Sally Binks, submitted a T4 (the “Crystal Ridge T4”) to the Canada Revenue Agency (“CRA”) which underreported McIntosh’s income for 2003 by $14,538.00; 3. The Crystal Ridge T4 also underreported the amount withheld from McIntosh’s income by Crystal Ridge on account of source deductions by the same amount ($14,538.00); 4.

When McIntosh received the Crystal Ridge T4, he, without contacting the Binks or Crystal Ridge, prepared and filed a new T4 (the “McIntosh T4”) reflecting what he considered to be his actual income for 2003 ($73,265.81) and the amount actually withheld from his income ($23,968.30) which he understood had been remitted by Crystal Ridge to the CRA. These amounts were in contrast to income depicted on the Crystal Ridge T4 ($58,727.81) and the amount shown on that T4 as having been withheld ($9,430.30) and presumably remitted to the CRA; 5.

McIntosh was reassessed in respect of his 2003 taxation year, receiving a Notice of Assessment dated October 6, 2005 (the “Notice

of Assessment”) alleging an amount owing by him of $10,515.15; 6. The CRA assessed him on the basis of the Crystal Ridge T4 and not the McIntosh T4. It was not made clear to me why McIntosh was assessed an additional $10,515.15 despite the CRA’s recourse to the lower values depicted on the Crystal Ridge T4; 7. McIntosh filed a Notice of Objection to his 2003 assessment; 8. He eventually appealed his assessment to the Tax Court of Canada (the “Tax Court”), asserting that the CRA, in assessing his 2003 taxation year, understated his employment income and the amount withheld by Crystal Ridge.

He does not appear to have put the Crystal Ridge Plaintiffs on notice of his intention to pursue a remedy in the Tax Court; and 9.

His appeal sought an upward adjustment to his income from that assessed by the CRA on the basis of the Crystal Ridge T4 and an adjustment to his assessment on the basis that Crystal Ridge had withheld more on account of source deductions than reflected on the Crystal Ridge T4, which it should have remitted and which should have been applied to his tax owing. [ 10 ] On March 8, 2011, the Tax Court dismissed McIntosh’s appeal, citing authority for its finding that the Tax Court has no jurisdiction to entertain appeals that would result in a higher tax liability than that previously assessed by the CRA.

The Tax Court also dismissed McIntosh’s appeal for a determination by the Tax Court that it had power to determine his tax owing, taking into account amounts withheld by an employer as source deductions and which, in this case, McIntosh asserts should have been but were not remitted by Crystal Ridge. [ 11 ] The Tax Court noted that its jurisdiction was limited to appeals from assessments, not appeals in respect of amounts which might or might not be owing on account of tax taking into account source deductions which may or may not have been withheld and which, having been withheld, may or may not have been remitted.

The Tax Court noted that it does not have jurisdiction to credit a taxpayer for amounts which an employer is alleged to have withheld from income on account of source deductions. [ 12 ] Consequently, McIntosh was left with a tax debt. As discussed in IV below, he asserts that debt arose from the improper actions of the Crystal Ridge Plaintiffs. Further, he asserts that the limitation period in respect of his Proposed Counterclaim commenced only on March 8, 2011, the date the Tax Court dismissed his appeal. IV.

The Proposed Counterclaim [ 13 ] The dismissal of McIntosh’s appeal to the Tax Court prompted him to pursue resolution as part of this action. He asserts the following in the Proposed Counterclaim: 1. The Crystal Ridge Plaintiffs, with ill and malicious intent, deliberately falsified records, misrepresenting tax withheld in respect of his 2003 income, causing McIntosh to have to pay additional tax and allowing the Binks and Crystal Ridge to retain unremitted withholdings for their personal use; 2.

The Crystal Ridge Plaintiffs hold funds withheld from McIntosh’s income but not remitted to the CRA, and monies or other property to which such funds may be traced, in trust for McIntosh; 3. The Crystal Ridge Plaintiffs conspired in their efforts to access withholdings which should have been remitted to the CRA and in their efforts to cause McIntosh injury. [ 14 ] In the Proposed Counterclaim, McIntosh seeks: 1. Damages of $17,103.38, representing the sum of $10,510.15 reassessed by the CRA and $6,593.23, asserted to be his costs of pursuing his unsuccessful appeal to the Tax Court; 2.

Damages estimated to be $13,000.00 representing interest accrued on outstanding balances owed to the CRA; 3. In the alternative, set-off of the aggregate of amount claimed under 1. and 2. above against any amount which he is determined to owe Crystal Ridge; 4. Punitive damages of $60,000; and 5. Costs and interest. A.

McIntosh’s Arguments in Support of the Proposed Counterclaim [ 15 ] In support of his application, McIntosh first cites Rule 3.65 of the Alberta Rules of Court , which provides as follows: Permission of Court to amendment before or after close of pleadings 3.65(1) Subject to subrule (5), 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.

(4) If the Court directs or allows a pleading to be amended at trial, (

a) the amendment must be recorded in writing by the court clerk, and (

b) no order need be filed.

(5) This rule does not apply to an amendment to a pleading to add, remove, substitute or correct the name of a party to which rule 3.74 applies. [ 16 ] I would note for completeness that Rule 3.65 should be read in conjunction with Rule 3.62, which provides in part that: 3.62(1) A party may amend the party’s pleading, including an amendment to add, remove, substitute or correct the name of a party, as follows: (

b) after pleadings close, (

i) for the addition, removal, substitution or correction of the name of a party, with the Court’s prior permission in accordance with rule 3.74, or (ii) for any other amendment, with the Court’s prior permission in accordance with rule 3.65; [ 17 ] As noted in Marlborough Ford Sales Ltd v Ford Motor Co of Canada, 2003 ABQB 298 , 13 Alta LR (4 th ) 336 at para 9 , the effect of a counterclaim being conjoined with the statement of defence is that a defendant “must bring an application to amend his or her pleadings to add a counterclaim.” This Court also viewed an application to bring a counterclaim as an amendment to the statement of defence in Deuruneft Deutsche-Russische Mineralol Handelsgesellschaft mbH v Bullen 2002 ABQB 304 , 310 AR 164 at para 26 .

I conclude that adding a counterclaim engages the procedure under Rule 3.62 and, subsequently, either Rule 3.65 or Rule 3.74. [ 18 ] Before me, counsel debated whether the Proposed Counterclaim was for the “addition, removal, substitution or correction of the name of a party.” If so, then the governing rule is 3.74; if not, the governing rule would be 3.65.

As discussed below, which rule applies will be determined by whether or not the Binks are still parties to the current action. [ 19 ] In respect of amendments generally, the McIntosh Brief makes reference at para. 12 to the classic statement in Balm v 3512016 Canada Ltd , 2003 ABCA 98 , 327 AR 149 at para 43 : The classic rule is that an amendment should be allowed, no matter how careless or late, unless there is prejudice to the other side, and even that is no obstacle if it is repaired... [ 20 ] It is pointed out in the McIntosh Brief at para. 13 that this Court in 869120 Alberta Ltd v B & G Energy Ltd , 2011 ABQB 209 affirmed that the current Rules do not materially alter the principle articulated in Balm and, accordingly, that reliance may be placed on the case law predating the current Rules.

I note that at para. 23 of her decision in 869120 , Justice Eidsvik observed that: …[Rule 3.74(3)] basically codifies the “classic rule” that “an amendment should be allowed no matter how careless or late, unless there is prejudice”... [ 21 ] At para. 14 of the McIntosh Brief, McIntosh argues that in a number of decisions under the current Rules, the Alberta courts have adopted the approach in Balm and developed a four-part test for analyzing applications to amend pleadings. McIntosh cites Kent v.

Postmedia Network Inc , 2012 ABQB 559 , 548 AR 73, in which Justice Tilleman noted as follows at para 5: The Defendants also point me to Kent v.

Martin ( supra ) and Balm ( supra ) agree that courts generally should allow pleadings to be amended at any time, subject however to the following exceptions: 1) The amendment causes the opposing party serious prejudice not compensable by the award of costs; 2) The amendment is hopeless; 3) Unless permitted by statute, it adds a new cause of action or adds a new party outside the statutory limitation period; or 4) The failure to amend earlier is indicative of bad faith. [ 22 ] The criteria for amendments were articulated slightly differently by Hughes J. in Marlborough at paras. 11 and 12: An amendment should be allowed if: 1) it can be made without prejudice or injustice to the opposing party, other than prejudice or injustice compensable in costs; 2) it raises a triable issue; 3) it is not embarrassing; 4) it is pled with particularity; and 5) there is some evidence to support any new facts of substance alleged.

Further, the addition of a counterclaim should bear some proportionality to the claim and should not substantially increase the time or costs involved.

[ 23 ] At paras. 15 through 29 of the McIntosh Brief, McIntosh analyzes the four factors set forth in Kent , in light of his articulation of the facts, taking the position that: 1. The Crystal Ridge Plaintiffs would not experience serious prejudice because:

a) they should be accountable for actions which, though not capable of being addressed by the Tax Court, have allegedly injured McIntosh and may trigger a set-off in the action;

b) allowing the Proposed Counterclaim would serve to clarify the real questions and issues between the parties and the associated costs would be minimal; and

c) Gregory Binks was aware of McIntosh’s tax difficulties from an early stage of this process. 2. McIntosh’s efforts are not “hopeless” because: a) “hopelessness” is overcome if the facts, as suggested by McIntosh, raise an issue which is triable in the eyes of the Court;

b) the Rules do not require any evidence in support of an amendment request;

c) Balm is authority for the proposition that the requirement for evidence in support of a proposed amendment is low; and

d) amendments should be allowed if “arguable”, though “doubtful”. 3. The Proposed Counterclaim does not add a new party or a new cause of action outside a limitation period because:

a) McIntosh’s claim is connected to the original claim advanced by the Crystal Ridge Plaintiffs in terms of the factual underpinnings; and

b) a limitation period, if applicable, should only toll against McIntosh from March 8, 2011, the date his appeal before the Tax Court was dismissed. 4. McIntosh’s failure to amend earlier is not indicative of bad faith because:

a) the notion of “bad faith” is rendered less important by the reasoning in Balm to the effect that amendments are permitted, no matter how careless or late, unless there is irreparable prejudice to the other side; and

b) McIntosh’s attempts to address his potential injury by appeal to the Tax Court indicate a sincere effort to deal with his concerns. [ 24 ] McIntosh’s Statement of Defence, filed April 22, 2005, made no mention of a claim, by way of set-off or otherwise, against the Crystal Ridge Plaintiffs in respect of any unaddressed income tax liability. I note that Balm , upon which McIntosh places considerable reliance, articulated a view regarding amendments to pleadings which specifically assumed no limitation issue: see paras. 25, 28 and 29.

As discussed below, the Crystal Ridge Plaintiffs raise a limitation argument in opposition to the Proposed Counterclaim. B. The Position of Gregory and Sally Binks W ith R espect to the Proposed Counterclaim [ 25 ] The position of the Crystal Ridge Plaintiffs in response to McIntosh’s application is found partly in Gregory Binks’ Affidavit of September 4, 2012 (the “Binks Affidavit”). Gregory Binks makes the following assertions in the Binks Affidavit: 1. McIntosh inappropriately paid himself overtime pay without the approval of the Binks or Crystal Ridge, based on records kept by Pearce [para 3.a.]; 2.

The McIntosh T4 overstates his income by $14,538.00 [para. 3.b]; 3. McIntosh should have filed his Proposed Counterclaim within the time period in which he was required to file his statement of defence [para. 3.d.]; 4. McIntosh delayed unreasonably in advancing the Proposed Counterclaim [para. 3.e.]; 5. McIntosh did not discuss with the Plaintiff his plans to appeal to the Tax Court in an attempt to resolve his tax issues [para 3.f.]; 6. The Binks should not be prejudiced by McIntosh’s unsuccessful decision to attempt to resolve his issues by way of appeal to the Tax Court.

McIntosh was in a position as early as March 2004 (when he received the Crystal Ridge T4) to know that he should be taking action in the Court of Queen’s Bench if he wanted to preserve his rights of action [para. 3.h.]; and 7. Records which the Binks would require to properly respond to issues raised in the Proposed Counterclaim are no longer available [para. 3.k. and l.]. [ 26 ] The Binks and Crystal Ridge respond further to the Proposed Counterclaim in the brief filed by Crystal Ridge on February 27, 2013 (the “Crystal Ridge Brief”). Those arguments may be summarized as follows: 1.

A counterclaim is an independent action. Provisions of the Rules which apply to filing, service of and replies to a statement of claim apply to a counterclaim. Crystal Ridge refers to Rules 3.58 and 3.60 which provide, respectively, that:

3.58 A counterclaim is an independent action. 3.60(1) Except when the context or these rules otherwise provide, a rule that applies to or in respect of (

a) a plaintiff applies equally to or in respect of a plaintiff-by-counterclaim and a third party plaintiff-by-counterclaim, (

b) a defendant applies equally to or in respect of a defendant-by-counterclaim and a third party defendant-by-counterclaim, and (

c) a pleading related to a claim made by statement of claim applies equally to or in respect of a pleading related to a counterclaim.

(2) If the defendant-by-counterclaim does not file a statement of defence or demand for notice in respect of a counterclaim, a judgment on the counterclaim may be obtained only with the Court’s permission after notice of the application has been served on the defendant-by- counterclaim. 2. A defendant who files a statement of defence, as is the case here, may also file a counterclaim. Crystal Ridge refers to Rule 3.32, which provides that: 3.32 A defendant may do one or more of the following: (

a) file a claim against a co-defendant in accordance with rule 3.43; (

b) file a third party claim in accordance with rule 3.44; (

c) file a counterclaim in accordance with rule 3.56. 3. A counterclaim, rather than a separate claim, should be utilized by a defendant when the facts underlying the counterclaim overlap with those underlying the plaintiff’s original statement of claim. Crystal Ridge cites no authority for this proposition, but refers to Rule 3.56, which provides as follows: 3.56(1) A defendant may, by counterclaim, file a claim against (

a) a plaintiff, or (

b) the plaintiff and another person whether the other person is a party to the action by the plaintiff or not.

(2) A third party defendant may, by counterclaim, file a claim against the plaintiff, defendant or third party plaintiff, or any combination of them, with or without any other person, whether the other person is a party to the action or not. 4. Rule 3.57 operates to require a counterclaim to be filed within the same period available to the plaintiff by counterclaim to file a statement of defence. Rule 3.75 provides that: 3.57 A counterclaim must (

a) be in Form 21, (

b) comply with the rules about pleadings in

Part 13, Division 3, and (

c) be filed and served on the defendant-by-counterclaim within the same time period that the plaintiff-by-counterclaim must file a statement of defence under rule 3.31(2). Rules 3.31(2) and (3) provide that: 3.31(2) The defendant must file the statement of defence and serve it on the plaintiff within the applicable time after service of the statement of claim.

(3) The applicable time is (a) 20 days if service is effected in Alberta, (

b) one month if service is effected outside Alberta but in Canada, and (c) 2 months if service is effected outside Canada. 5.

Notwithstanding the time limitations contemplated by Rule 3.57, this Court traditionally allows amendments, but only if the limitation period applicable to the cause of action had not expired and there is no injustice to the opposing party which cannot be rectified with a costs award. [ 27 ] The crux of the Crystal Ridge Plaintiffs’ opposition to the Proposed Counterclaim is their assertion at para. 18 of the Crystal Ridge Brief of a limitation defence: The failure of McIntosh to commence a separate action within 2 years of when he first knew or ought to have [known] of his alleged claim or to apply to amend his pleadings to assert a Counterclaim in the Action, as he is doing now, must establish that his limitation period expired. [ 28 ] Despite the possible limitation defence, it is clear that I may approve an amendment if I believe the circumstances so warrant.

In Austec Electronic Systems Ltd v Mark IV Industries Ltd , 2001 ABQB 349 , 285 AR 154, Justice Burrows noted as follows at para. 34:

The court has a discretion to grant leave to amend pleadings to add a claim or new parties after the limitation period has expired. This isso both under the regime governed by the old Limitations of Actions Act and the new Limitations Act. [29] In support of its assertion that the limitation issue invokes a different model in which to consider proposed amendments,Crystal Ridge cites the decision of this Court in Hunter Financial Group Ltd v Maritime Life Assurances Co, 2007 ABQB 263, 428 AR150. There, Justice Thomas made a number of observations describing how the courts approach amendment applications.

Significantly,he reviewed what he referred to as the “common law functional approach” that applies when no limitation issue arises. He succinctlydescribed it as follows at paras. 12-15: Most prejudice will be compensable with costs. Nevertheless, there are some circumstances where prejudice to the defendant will not becompensable. Serious delays may result in prejudice that is not compensable with costs: Canada Southern Petroleum Ltd. v. AmocoCanada Petroleum Co., reflex, (AB KB), [1998] A.J. No. 1782, [1999] 1 W.W.R. 436 (Alta. Q.B.) at para. 26["Amoco"].

Similarly, the death or unavailability of a star witness may also prejudice a defendant: Madill v. Alexander Consulting GroupLtd., [1999] A.J. No. 865, 1999 ABCA 231 at para. 69. Other examples may arise on a case by case basis. The finding of a triable issue also has a low threshold. A triable issue is one that gives rise to a claim recognized in law. The question iswhether the facts, if proven, would constitute the claim. However, the court does not consider the applicant's ability to prove that claim:Stolk v. 382779 Alberta Inc., [2005] A.J. No. 734, 2005 ABQB 440 at para. 16; Ilic v. Calgary Sun, [1998] A.J.

No. 583, 1998 ABQB419 at para. 14. Similarly, the court should allow an amendment even if it raises a doubtful plea so long as it is arguable: Balm, supra atpara. 12. Amendments to pleadings, like original pleadings, must be pled with particularity. In Stolk, supra the defendant argued that if the pointof the amendments was only to particularize, they were unnecessary. The court allowed the amendments on the basis that it shouldexercise generous discretion so long as the new facts alleged were not extraneous or useless.

The purpose of the requirement ofparticularity is "to allow both the court and the parties to determine the real matters in issue": ibid at para. 17. Finally, there should be some evidence for new facts alleged. However, this is also a low threshold requiring only a modest degree ofevidence: Balm, supra at para. 25. [30] As Justice Thomas noted at para. 12, some prejudice may not be compensable with costs.

The Crystal Ridge Plaintiffs assertat para. 5 of the Crystal Ridge Brief that they will be prejudiced in responding to the Proposed Counterclaim because many importantrecords were accidently destroyed in the office of their counsel. [31] Under the predecessor to the Limitations Act, there was some uncertainty as to which party bore the onus of establishingprejudice or the lack thereof. However, Burrows J. clearly articulated the placement of the onus under the current statute in Austec atpara. 39: The circumstances here would be within s. 6(4) if the new Act applies.

Mark IV would have the burden of proving that the proposedCounterclaim was related to the events described in the original Statement of Defence, and Austec would have the burden of provingthat, within the limitation period plus the time for service, it did not receive sufficient knowledge of the added claim to prevent it beingprejudiced in maintaining a defence to the Counterclaim on its merits. V. Discussion A.

Section 3 of the Limitations Act [32] The threshold issue on this application is whether a limitation issue arises to guide our selection of an approach to McIntosh’sapplication to file the Proposed Counterclaim.

Section 3 of the Limitations Act provides that: 3(1) Subject to

section 11, if a claimant does not seek a remedial order within (a) 2 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, or (b) 10 years after the claim arose, whichever period expires first, the defendant, on pleading this Act as a defence, is entitled to immunityfrom liability in respect of the claim. [33] McIntosh asserts that he neither knew nor ought to have known until March 8, 2011 that he had suffered an injury. I do notaccept that assertion.

McIntosh clearly had knowledge of the acts that he alleges form the basis for his Proposed Counterclaim when hereceived the Crystal Ridge T4 in March of 2004. The “injury”, that is, the alleged failure to remit source deductions in respect of his2003 income, was sufficiently obvious to him that he chose to prepare and file the McIntosh T4.

In filing that T4, he must be taken tohave understood that Crystal Ridge’s actions in failing to issue what he considered to be an accurate T4 could expose him to additionalincome tax expense. [34] Even if I am incorrect in finding that McIntosh had sufficient knowledge as of March 2004, there are other dates well before

March 2011 when he had such knowledge. McIntosh stated in Questioning that in October 2004, Gregory Binks advised him, through theBinks’ counsel, that source deductions had been remitted. Also, McIntosh had confirmation of his unpaid tax liability on October 6,2005, when he received the Notice of Assessment. [35] McIntosh claims that he pursued recourse in the Tax Court based on legal advice. While he may have done so, this does notrelieve him of the limitation set out in s. 3(1) of the Limitations Act pertaining to his claim against the Crystal Ridge Plaintiffs. [36] In Hill v.

South Alberta Land Registration District (1993), 1993 ABCA 75 , 135 AR 266, the Court of Appeal statedthat discoverability does not require perfect knowledge. Rather, “[i]t suffices that the material facts on which [the cause of action] isbased...ought to have been discovered by the plaintiff by the exercise of reasonable diligence...”: para. 8. [37] From a common-sense standpoint, McIntosh was clearly aware of the circumstances regarding his re-assessment by the CRAprior to the decision of the Tax Court.

This is evidenced by the fact that he brought the application to have the reassessment reviewed bythe Tax Court. Therefore, McIntosh was aware of the “injury” he suffered. [38] The last requirement has been said to mean whether the plaintiff “was sufficiently cognizant of who bore responsibility”: JN vGJK, 2004 ABCA 394, 361 AR 177 at para 11. There is no indication that McIntosh was not cognizant or was incapable ofunderstanding who bore the responsibility for his alleged injury.

He was aware the reassessment was a result of the Crystal Ridge T4, sohe knew or ought to have been aware that the “injury” was the result of an action by Crystal Ridge. [39] As a result, I reject McIntosh’s claim that the limitation period did not begin until the decision of the Tax Court. Thelimitation period has expired and McIntosh must, therefore, seek relief from s. 3(1) of the Limitations Act. Does s. 6 provide that relief? B.

Section 6 of the Limitations Act [40] As discussed above, s. 6 established a new test, replacing what had been referred to as the common law functional approach.The application of that

section is integral to the determination of this issue in the case before me and warrants presentation of theprovision in its entirety: 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 theadded claim if the requirements of subsection (2), (3) or (4) are satisfied.

(2) When the added claim (

a) is made by a defendant in the proceeding against a claimant in the proceeding, or (

b) does not add or substitute a claimant or a defendant, or change the capacity in which a claimant sues or a defendant is sued, the addedclaim must be related to the conduct, transaction or events described in the original pleading in the proceeding.

(3) When the added claim adds or substitutes a claimant, or changes the capacity in which a claimant sues, (

a) the added claim must be related to the conduct, transaction or events described in the original pleading in the proceeding, (

b) the defendant must have received, within the limitation period applicable to the added claim plus the time provided by law for theservice of process, sufficient knowledge of the added claim that the defendant will not be prejudiced in maintaining a defence to it on themerits, and (

c) the court must be satisfied that the added claim is necessary or desirable to ensure the effective enforcement of the claimsoriginally asserted or intended to be asserted in the proceeding.

(4) When the added claim adds or substitutes a defendant, or changes the capacity in which a defendant is sued, (

a) the added claim must be related to the conduct, transaction or events described in the original pleading in the proceeding, and (

b) the defendant must have received, within the limitation period applicable to the added claim plus the time provided by law for theservice of process, sufficient knowledge of the added claim that the defendant will not be prejudiced in maintaining a defence to it on themerits.

(5) Under this section, (

a) the claimant has the burden of proving (

i) that the added claim is related to the conduct, transaction or events described in the original pleading in the proceeding, and (ii) that the requirement of subsection (3)(c), if in issue, has been satisfied, and (

b) the defendant has the burden of proving that the requirement of subsection (3)(

b) or (4)(b), if in issue, was not satisfied. [41] At first glance, it would seem that any of subs. 6(2), (3) or (4) could apply in these circumstances. In argument,McIntosh’s counsel argued that s. 6(2) applied. He asserted that the Binks, having been parties are one time, are still parties for purposesof applying s. 6(2).

[42] As noted above, early on in the litigation, the defendants (McIntosh, Janice Pearce and BRP) moved to have Gregory andSally Binks’ claim against them struck. They were successful and the result was that neither Gregory nor Sally Binks had claims to beadjudicated in the proceeding. However, no request was made by any party to remove Gregory and Sally Binks from the proceedings andno order by the Court was ever made to that effect. [43] It would also not make sense to assume that simply because their claims were struck, the Binks would cease to be parties tothe litigation.

As noted in a report by the Alberta Law Reform Institute (the “ALRI”), “an application for striking out does notnecessarily mean that an action is over because amendment is an option under that rule”: Alberta Rules of Court Project:

SummaryDispositions of Actions, Aug 2004, online: <www.law.ualberta.ca/alri/docs/cm01212.pdf> at para 154 [“ALRI,

Summary Dispositions”]. [44] The defendants, McIntosh, Pearce and BRP, all moved under old rule 129(1)(

a) to have Gregory and Sally Binks’ pleadingsstruck, rather than applying for

summary judgment. The effect of this is that, absent an order stating they are removed from the action,the Binks remain as plaintiffs to the action, even if they have no claim. Such an order appears to be required; see Becze v Edmonton(City) (1993) (AB KB), 144 AR 321 at paras 46-49. [45] Since McIntosh is making a claim in the Proposed Counterclaim where he had none before, it seems that the requirements ofthe plain wording of subs. 6(3) are met as “the added claim adds… a claimant”.

However, this subsection was not intended to encompasseach time a defendant in the litigation brings a first claim in the proceedings. The ALRI, in its report on limitations (Alberta Law ReformInstitute, Limitations, December 1989 (“ALRI, Limitations”), identified four instances where a claimant will be added, substituted orchanged. The first two come from an original misdescription of the claimant and are not relevant here. The third is when the added claimis that of a true stranger to the litigation. That is also not the case here.

The final instance is where the added claimant is necessary if theoriginal claim asserted is to be enforced effectively. McIntosh’s Proposed Counterclaim does not assist the Crystal Ridge Plaintiffs in theenforcement of their claims. Thus, as the Proposed Counterclaim does not fall into any of these categories, I conclude that subs. 6(3) isnot the operative provision. [46] Subsection 6(4) applies where a defendant has been added or substituted and in cases of misnomer, misdescription of thedefendant, and naming the wrong defendant. It also applies when a true stranger is added to the litigation.

So long as the claim againstthe true stranger is related to the conduct or events in the original proceeding and there is no prejudice to the defendant, subs. 6(4) willnegate a limitations defence. [47] Finally, subs. 6(2) applies where there is no change in either the claimant or the defendant. [48] It would appear that either subs. 6(2) or subs. 6(4) could apply in this case. If the Binks are neither claimants nor defendants inthe proceeding, then they must be added as defendants, engaging subs. 6(4).

If they are claimants or defendants as defined by theLimitations Act, then the added claim adds neither a claimant nor defendant and, as a result, subs. 6(2) would apply. [49] Sections 1(

b) and 1(

c) of the Limitations Act define claimant as “the person who seeks a remedial order” and defendant as “aperson against whom a remedial order is sought”, respectively. By virtue of their claims having been struck, neither Gregory nor SallyBinks has a claim in the proceeding. Therefore, neither is seeking a “remedial order.” [50] The Binks also are not defendants as, prior to this application, no claim had been made against either of them.

Thus, theProposed Counterclaim would have the effect of adding Gregory and Sally Binks as defendants and subs. 6(4) applies in respect of theadded claims against them. [51] By contrast, Crystal Ridge is already a claimant as defined in the Limitations Act. Therefore, subs. 6(2) applies to theProposed Counterclaim in respect of claims against Crystal Ridge. [52] This raises the question of whether the Proposed Counterclaim can be separated into distinct claims against each of GregoryBinks, Sally Binks and Crystal Ridge. C.

Definition of “claim” [53] The courts have defined “claim” as meaning not a court document, but facts; see Calgary Mack Sales Ltd. v Shah, 2005ABCA 304, 380 AR 195 at para 16. A counterclaim has been found to be a “claim” and a “pleading”: see Austec at para 43. TheLimitations Act defines a claim in s. 1(

a) as “a matter giving rise to a civil proceeding in which a claimant seeks a remedial order.”. InALRI Limitations, the ALRI stated at p. 50 that the word “claim”, as defined by the Limitations Act, is substantive and not procedural innature in that “it refers to facts and circumstances which give rise to the alleged right to a remedy, not to the process by which the claimis made.”.

The ALRI also states at p. 47 that the key to interpreting the Limitations Act is to focus on the term “remedial order” as it “iscentral to the application of the Act.” The ALRI further states at p. 47 that: A "remedial order" is, by definition, restricted to a claim requesting the enforcement of a right-duty relationship.

This is because thepurpose of the Act is to limit the time available to a claimant for bringing a claim that requires a defendant to do something. [54] Similarly, in Stuffco v Stuffco, 2006 ABCA 317, 397 AR 111, the Court of Appeal held at para. 40 that the term “claim” in theLimitations Act refers to the “facts giving rise to the injury or offence for which a remedial order is sought”. [55] Thus, a “claim”, as defined in the Limitations Act, is a set of facts that allows a claimant to request a remedial order against adefendant.

Those facts must disclose a cause of action that would permit the court to grant a remedial order against each nameddefendant. [56] While the events that give rise to the Proposed Counterclaim are the same in respect of all of the Crystal Ridge Plaintiffs,there is a separate claim against each of them because McIntosh alleges that a different person/entity is responsible for various aspects ofthe injury giving rise to his claim; that is, Crystal Ridge is alleged to be responsible for the first claim, Gregory Binks is alleged to be

responsible for the second claim and Sally Binks is alleged to be responsible for the third claim. The corollary to this is that this Court could find one, two, all, or none of the Crystal Ridge Plaintiffs liable for McIntosh’s alleged injury. If liability can be assessed on an individual basis, there must be a separate claim for each named defendant. [ 57 ] As the Proposed Counterclaim includes a separate claim against each of the Crystal Ridge Plaintiffs, each must be assessed individually under the appropriate subsection of the Limitations Act , assuming that the limitation period has expired.

As previously mentioned, neither Gregory nor Sally Binks is a claimant or defendant in the proceeding. Therefore, for the claims against them to be allowed, the requirements of subs. 6(4) must be met.

As Crystal Ridge is a claimant in the proceeding and McIntosh is a defendant, the claim by McIntosh against Crystal Ridge must meet the requirements in subs. 6(2). [ 58 ] The Binks have the burden proving that they did not, within the two-year limitation period plus time for service (a total of three years), receive sufficient knowledge of the added claims to prevent them being prejudiced in maintaining a defence to the Proposed Counterclaim. McIntosh has the burden of proving that the Proposed Counterclaim articulates issues related to events described in the original Statement of Defence.

In applying subs. 6(2) to his claim against Crystal Ridge and subs. 6(4) to his claims against the Binks, McIntosh must demonstrate that the added claims are related to the conduct, transaction or events described in his original pleading. D. The Case Law [ 59 ] It is clear that both Crystal Ridge’s claim and the Proposed Counterclaim arise out of McIntosh’s employment with Crystal Ridge. The case law provides several principles to help decide whether the claims are related. [ 60 ] The Alberta Court of Appeal has considered this issue on a few occasions and has provided some clarity as to its breadth.

The phrase “related to” has been held to have a very broad meaning: Calgary Mack at para 14. However, the Court of Appeal has cautioned that giving the phrase too broad a meaning would give a party an “unlimited ability to add statute barred claims.”; see De Soto Resources Limited v EnCana Corporation , 2010 ABCA 100 , 477 AR 334 at para. 8 . The starting point for determining whether a proposed claim is related is an assessment of the “whole factual and legal context.” : De Soto at para 8. [ 61 ] There is no single test for determining relatedness; rather, a variety of factors may be taken into account.

In DeSoto at para. 10, the Court of Appeal considered the extent to which a new set of conduct, transactions and events would have to be proven at trial. Similarity in the documents and witnesses to be used at trial to prove the various claims will strengthen the connection among them; see Divestco Inc v Devon Energy Corp , 2011 ABQB 750 , 530 AR 133 at para 26 . [ 62 ] Crystal Ridge’s action against McIntosh arose as a result of an alleged breach of his duty as an employee of Crystal Ridge.

The Proposed Counterclaim pertains to the duty of Crystal Ridge and the Binks to withhold and remit tax to CRA on behalf of McIntosh as a result of his employment with Crystal Ridge. Therefore, broadly speaking, the factual and legal matrix of the case at bar is McIntosh’s employment with Crystal Ridge. E. Cases in the employment context [ 63 ] The scope of s. 6 of the Limitations Act in the context of an employment relationship has been examined in only a few cases.

Of those, only in Barker v Budget Rent-A-Car of Edmonton Ltd, 2012 ABCA 76 , 522 AR 134 did the Court conclude that the new claim was not related to the events in the original pleading,. However, in that case the Court had already decided at para. 15 that the there was no evidence to support the amendments and that the application to amend should be dismissed. [ 64 ] In Greentree v Martin, 2004 ABQB 365 , 369 AR 263, the plaintiff’s vehicle was struck by the defendant’s employee, who was driving in the course of employment.

The plaintiff sought to amend the Statement of Claim to include a claim that the defendant was negligent in hiring the employee and should have verified the employee’s health and qualifications prior to hiring. [ 65 ] The Court found that the new claims were related to the original pleading. The Court held at para. 13 that the original pleading “clearly put the Martins on notice that all aspects of their relationship with Slater both as employee and consensual operator of their vehicle would be under scrutiny”.

In addition, the Court reiterated that, although the cause of action in the new claim differed from that in the original pleading, the issue was whether the claims, not the causes of action, were related. The Court held that the employee’s use of the vehicle and the subsequent accident were related to the circumstances surrounding his hiring and training. It could be said, then, that the employment relationship was merely ancillary to the actual relating factor between the claims – the car accident and the circumstances that led to it. F.

Cases outside the employment context [ 66 ] Cases outside the employment context also provide some guidance. In DeSoto , the fact that the proposed amendments were related to different misrepresentations involving different parties at a different time than those in the original pleading was sufficient for the Court to conclude that the claims were not related and the requirements of s. 6 of the Limitations Act were not satisfied. In that case, the commonality of the claims extended only to the land lease on which the original claim was based.

Proof of the new claim would require new documentation and witnesses not related to the original claim.

In essence, there was only a cursory, superficial “relatedness” between the claims and, as a result, the amendment failed. [ 67 ] In Dow Chemical Canada Inc v Nova Chemicals Corp , 2010 ABQB 524 , 495 AR 338, the amendments were allowed as the new claims involved the same agreements that were part of the joint venture that led to the original claims. [ 68 ] In Divestco , the plaintiff sought to add a claim that one of the defendants, Twin Butte, improperly shared information with Devon Energy, while the original claims stated that Devon improperly shared information with Twin Butte.

The Court allowed the amendment and stated that overlap between witnesses and documents between the claims strengthened the connection.

[ 69 ] In 422252 Alberta Ltd v Messenger , 2013 ABQB 399 , the new claim was sought 23 years after the events giving rise to the original claim. The original claim was that the defendant law firm had a duty to tell the plaintiffs whether a particular transaction would attract tax. The new claim was that the law firm had an obligation to tell the plaintiffs all the ways they could avoid tax.

The Court held at paras. 44 – 46 that, while the relatedness requirement is not unlimited, the new claim was related in the broadest sense and was, at least, not unrelated to the original claim. [ 70 ] In CHS v Alberta (Director of Child Welfare) , 2006 ABQB 528 , 403 AR 103, the Court held that there must be some degree of specificity to relate the conduct and noting at para. 32 that “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.” [ 71 ] The difficulty in analyzing the jurisprudence in this area is that there is no “bright-line” test.

However, no matter how broadly the relatedness requirement of s. 6 of the Limitations Act is to be interpreted, we should be mindful, as stated by the Court in Messenger , that it cannot be unlimited in scope. At some point, lines have to be drawn and claims that have only a brief or fleeting relation ought not be permitted. Claims for which facts will have to be proven by new documents and new witnesses are only weakly connected to the original claims and should be closely scrutinized. Where only a cursory, superficial connection exists, as in DeSoto , the amendments should not be allowed. G.

Conclusion [ 72 ] In the case at bar, the original claim and the Proposed Counterclaim have significant commonality beyond the overall employment context. In the original claim, McIntosh is alleged to have breached his duty to Crystal Ridge by, inter alia , misappropriating company money and taking customers away from Crystal Ridge following his dismissal. In the Proposed Counterclaim, McIntosh alleges that Crystal Ridge breached its duty by failing properly to withhold and remit income tax on his behalf to CRA.

Proof of the original claim would require an examination of McIntosh’s employment contract, duties, and position within Crystal Ridge, including his involvement with company finances. It would also require an examination of the his termination and post- termination conduct. Evidence required to prove the claim likely would include McIntosh’s employment contract and company books and accounting records.

Witnesses at trial likely would include superiors, co-workers, and customers of Crystal Ridge. [ 73 ] Proof of the Proposed Counterclaim would require an examination of McIntosh’s employment contract, any documents regarding his salary, pay increases or bonuses, Crystal Ridge’s accounting records, CRA forms including McIntosh’s T4s and Record of Employment, and any communications between CRA and McIntosh. Witnesses required likely would include McIntosh, Crystal Ridge’s bookkeeper or accountant, an expert such as a forensic accountant, managers or directors of Crystal Ridge, and a representative from CRA.

The common documents between the claims would be limited to the employment contract and Crystal Ridge’s accounting records, and common witnesses between the original claim and the new claim likely would be managers or directors of Crystal Ridge and McIntosh. [ 74 ] Given the common factual background, documents and witnesses, I find that the claims are related within the meaning of s. 6 of the Limitations Act . Both claims require an examination of company finances and of McIntosh’s role within the company.

While the overlap is not perfect, there is enough similarity to meet the low threshold set by the relatedness requirement.

McIntosh has satisfied the burden on him in this respect. [ 75 ] Turning specifically to subs. 6(4), in addition to being satisfied that the Proposed Counterclaim is related to the original pleading, the Court must be satisfied that “the defendant must have received, within the limitation period applicable to the added claim plus the time provided by law for the service of process, sufficient knowledge of the added claim that the defendant will not be prejudiced in maintaining a defence to it on the merits.” [ 76 ] Time for service of a claim is one year.

I find the limitation period here began to run when McIntosh received the Crystal Ridge T4 in March 2004. Therefore, the limitation period expired in March 2007 and the Proposed Counterclaim is being brought outside the period. [ 77 ] The Crystal Ridge Plaintiffs must be taken to have been aware of the factual matrix giving rise to the Proposed Counterclaim from at or near the time McIntosh received the Crystal Ridge T4. Para. 16(

d) of the Statement of Claim dated July 14, 2004 refers to McIntosh’s unauthorized payments to himself of overtime pay. The Crystal Ridge Plaintiffs based the Crystal Ridge T4 on what they thought McIntosh should have paid himself, taking the position that any excess was unauthorized.

It would have been clear to them that a dispute regarding amounts which should have been remitted to the CRA, based on disagreements with respect to the appropriate level of McIntosh’s income, would lead to dispute over tax owing. [ 78 ] There remains only the question of whether there is sufficient prejudice that the Proposed Counterclaim should not be allowed.

As noted above, while prejudice to the opposing party is a factor under subs. 6(4) of the Limitations Act , it is conspicuously absent from subs. 6(2). [ 79 ] However, even if the requirements of subs. 6(2) are satisfied, the Court retains the discretion under the Rules not to allow amendment of a statement of defence to include a counterclaim. Thus, satisfying the requirements of s. 6 of the Limitations Act is a necessary but not sufficient condition for permitting amendments; see Messenger at para 49 .

In practice, prejudice may still play a role in determining whether an amendment to the pleading will be allowed by the Court. [ 80 ] In my view, the Crystal Ridge Plaintiffs had sufficient knowledge of the added claim within the relevant time period that they will not be prejudiced. I can appreciate that the inadvertent destruction of their records may present some difficulties in the course of the litigation.

However, given my analysis above of the nature of the claims on both sides and of the type of evidence that will be required to prove those claims, I am not satisfied that the absence of the records will prevent the Crystal Ridge Plaintiffs from mounting an effective defence to the Proposed Counterclaim. [ 81 ] Therefore, I am exercising my discretion in favour of McIntosh and his application to file the Proposed Counterclaim is

granted. I direct that McIntosh must file and serve the Proposed Counterclaim within thirty days of the date of this judgment. The parties are to provide me with written submissions regarding costs in connection with this application within thirty days of the date of this judgment. VI. Application to Compel Responses to Undertakings [ 82 ] McIntosh also applied for an Order requiring Crystal Ridge to provide answers to what he alleges are deficient responses to undertakings given at the discovery of Gregory Binks on May 20, 2009.

The Undertakings at issue are as follows: [ 83 ] Undertaking No. 7: Request from Parkland Fuels a copy of the Fuel Supply Contract between Binks Petroleum and Resorts of the Canadian Rockies; [ 84 ] Undertaking No. 8: Swear an Affidavit of Records that contains all relevant and producible documents and in particular any documents corresponding to the second

schedule that were once available to him and are not now; and [ 85 ] Undertaking No. 9: Produce bank records for the year 2001 or confirm that the record revealed in document 113 from Mr. McIntosh’s Affidavit of Records revealing approximately ten cheque payments in 2001, represents the expenses that were paid to Mr. Binks from Crystal Ridge Fuels in 2001. [ 86 ] McIntosh asserts that the purpose of Undertaking No.7 is to clarify assertions by Crystal Ridge of a pre-existing contractual relationship between Binks Petroleum and Resorts of the Canadian Rockies.

He asserts that the purpose of Undertaking No. 8 is to clarify what documents were accidentally destroyed by Crystal Ridge Plaintiffs’ counsel. He asserts that the purpose of Undertaking No. 9 is to clarify the expenses paid to Gregory Binks by Crystal Ridge Fuels. [ 87 ] McIntosh points to a letter dated November 22, 2012 from his counsel to counsel for Crystal Ridge clarifying McIntosh’s position regarding the alleged deficiencies.

McIntosh’s counsel asserted that counsel for Crystal Ridge never replied to this letter and that this justified the Application before me to compel responses. [ 88 ] Crystal Ridge asserted that its responses to these Undertakings were provided to McIntosh on January 31, 2011, that the responses were sufficient, that no further information can be provided and that the Application to compel responses was unnecessary. [ 89 ] In its Brief dated February 20, 2103, Crystal Ridge offered explanations for its positions.

With respect of Undertaking No. 7, Crystal Ridge claims that it has provided information which relates to the alleged pre-existing contract. With respect to Undertaking No. 8, it asserts that it prepared a Supplemental Affidavit of Records, to the best of its ability, given that many of its records were inadvertently destroyed in its counsel’s office. Lastly, with respect to Undertaking No. 9, it asserts that the financial information provided answers McIntosh’s questions. [ 90 ] McIntosh’s counsel reiterated before me that he has received no response to his letter of November 22, 2012 to Crystal Ridge’s counsel.

He takes the position that it would be inappropriate for McIntosh to have to conduct further questioning on the responses provided by Crystal Ridge. He asserts that requiring additional questioning would offend the principle enunciated in Rule 1.2 that the Rules seek to promote timely and cost-effective resolution of claims, the inference being that Crystal Ridge’s lack of cooperation is interfering with McIntosh’s attempt to honour the intent of Rule 1.2. [ 91 ] Counsel for Crystal Ridge asserted before me that: 1.

He thinks his client’s responses are adequate and counsel for McIntosh should be able to extract the information he requires from the material provided; 2. McIntosh can question further on answers to undertakings if he continues to believe that they are deficient; 3. His client has sworn a Supplemental Affidavit of Records responding to the best of its ability and has identified new documents; and 4.

His client is hampered in its ability to comply more fully with Undertaking No. 8 (identifying documents which were once in the possession of counsel for Crystal Ridge but which were destroyed) because there is no record that sets out every document which counsel had prior to the incident which resulted in destruction of some records. [ 92 ] In response, counsel for McIntosh claims not to have been provided with the Supplemental Affidavit of Records. Counsel for Crystal Ridge asserted that “I sent all this stuff to Mr.

Anderson”. [ 93 ] In my view, Crystal Ridge’s Brief dated February 20, 2013 answers the questions surrounding Undertakings #7 and #9.

To the extent McIntosh does not accept that answer, he is at liberty to conduct further questioning. [ 94 ] With respect to Undertaking #8, I accept representations from Crystal Ridge’s counsel that he cannot provide a list of what records he once had but that have been destroyed because the list of what he once had has, if I understood counsel correctly, itself been destroyed. [ 95 ] In my view, however, this application would have been unnecessary had Crystal Ridge’s counsel responded to the letter from McIntosh’s counsel dated November 22, 2012.

Consequently, costs in respect of the application to Compel Undertaking Responses are awarded against Crystal Ridge in favour of McIntosh in accordance with Column 1, Division 2, to

Schedule C of the Rules. Heard on the 26th day of February, 2013.

Dated at the City of Calgary, Alberta this 22nd day of October, 2013. C. M. Jones J.C.Q.B.A. Appearances: Peter J. Major McMillan LLP for the Plaintiffs Norman D. Anderson Shea Nerland Calnan LLP for the Defendants