CCS Corporation v Secure Energy Services Inc, 2016 ABQB 582

Court of Queen’s Bench of Alberta Citation: CCS Corporation v Secure Energy Services Inc, 2016 ABQB 582 Date: 20161017 Docket: 0701 13328 Registry: Calgary Between: CCS Corporation Plaintiff - and - Secure Energy Services Inc., Rene Amirault, Daniel Steinke, Nick Wieler, Gordon Getzinger, Gary Perras, Myron Newman, David Engel, Stan Moodie, Corey Higham, Karen Myrheim, Enerland Consulting Services Ltd., David Baldock, Pembina Pipeline Corporation and Triumph EPCM Ltd. Defendants _______________________________________________________ Reasons for Judgment of the Honourable Chief Justice Neil Wittmann

_______________________________________________________ Introduction [ 1 ] The Defendant Pembina Pipeline Corporation (“Pembina”) has brought this application for

summary judgment in regard to certain allegations in the Re-Amended Statement of Claim of CCS Corporation (“CCS”). Background [ 2 ] CCS and Pembina, and the Defendant Secure Energy Services Inc. (“Secure”) are competitors in the oilfield waste disposal industry.

Secure was formed by Rene Amirault and Daniel Steinke, working together with the defendants Karen Myrheim, Nick Wieler and Gary Perras, all of whom are also former employees of CCS. [ 3 ] CCS alleges that, in 2005, Pembina entered into detailed negotiations with CCS about business opportunities that the two corporations could develop together, but shortly thereafter Pembina encouraged Steinke and Amirault to instead establish Secure as a competitor to CCS.

CCS alleges that Pembina conspired with Steinke, Amirault, and the other former CCS employees, as well as Secure’s full-time contractor Myron Newman (also a former CCS employee) to use CCS confidential information in developing a Pembina/Secure Joint Venture. That Joint Venture took the form of a Full Service Terminal (“FST”), a facility designed to remove water from crude oil before that oil enters a pipeline, located near La Glace, Alberta, directly across the road from an existing CCS FST.

Moreover, CCS contends that Secure, its senior employee Karen Myrheim, and Newman participated in the supply and use of CCS confidential process & instrumentation drawings (“CCS P&IDs”) to Triumph EPCM Ltd., a corporation engaged by Secure to design the La Glace FST. CCS has claimed damages for, inter alia , breach of contract, breach of confidence, breach of fiduciary duty and unlawful interference with economic interests. The First

Summary Judgment Application [ 4 ] In June 2013, Pembina applied for

summary dismissal of the allegations contained at paragraphs 43 through 46 of the Re- Amended Statement of Claim (“the First

Summary Judgment Application”). Those paragraphs provide: 43. In early 2005, CCS and Pembina entered into detailed negotiations about business opportunities that they could develop together. They discussed working together as joint business partners or as co-owners to build or develop midstream businesses, including building fractionation facilities and TRD facilities along the Pembina pipeline system. CCS had the Corporate Development Group, headed by Amirault, necessary to support continued development of facilities such as TRDs, and Pembina wanted to participate in such opportunities. 44.

During these negotiations, CCS and Pembina identified the mutual advantages for combining Pembina and CCS or in having them work together in other ways to develop projects which would be mutually profitable to the two companies (the “CCS/Pembina Business Opportunity”). In furtherance thereof, CCS shared with Pembina a substantial amount of CCS Confidential Information, and materials about the CCS Business and its anticipated projects and operations.

CCS, through Amirault and some of the other Former Employee Defendants, represented to Pembina that it would have the skill and technical expertise to build TRDs and landfills, and to provide the services offered by the CCS Business in order to implement the CCS/Pembina Business Opportunity. 45. These discussions between CCS and Pembina were ongoing in 2005, with Amirault taking responsibility for them on behalf of CCS. 46. In mid to late 2005, Amirault and Steinke began to consider taking for themselves the business opportunities presented to CCS in discussions with Pembina.

Pembina identified what it perceived to be certain benefits to it of transferring the CCS interest in the CCS/Pembina Business Opportunity to Amirault and Steinke for a new start-up company. Without notice of his true intentions of taking for himself CCS property and the CCS/Pembina Business Opportunity, with only two weeks’ notice and in breach of his contractual obligations to CCS, Amirault resigned from his position at CCS in January 2006. Amirault then joined Pembina purportedly as a business development consultant. [ 5 ] Pembina’s First

Summary Judgment Application was successful, and I granted

summary dismissal in respect of a number of allegations contained in paras. 43 to 46 of the Re-Amended Statement of Claim: Pembina Pipeline Corp. v CCS Corp. , 2013 ABQB 662 . Both that and the subsequent decision of the Alberta Court of Appeal are germane to this Application. What Pembina was seeking in the First

Summary Judgment Application is briefly summarized at para.5: In effect, what Pembina seeks is

summary judgment in respect of two questions of fact: whether the CCS/Pembina Business Opportunity was, after September 2005, a real prospect such that it could be taken from CCS for the benefit of Pembina, and whether any CCS confidential information in relation to the development of FSTs was acquired by Pembina and used to its benefit as a result of the discussions that took place in the summer and fall of 2005. [ 6 ] I concluded, at paras.46-47: Pembina has framed this application in terms of

summary judgment in respect of the allegations made in paragraphs 43 through 46 of the Re-Amended Statement of Claim. Rule 7.3 allows for

summary judgment in respect of “all or part of a claim”. There are allegations of fact in paragraphs 43 to 45 that are not in dispute. There is no dispute that in 2005, Pembina and CCS entered into negotiations about business opportunities that they could develop together, and that these negotiations included discussions about TRD/FST facilities (para.

43); that CCS represented to Pembina that it would have the skill and technical expertise to build such facilities (para. 44); and that Mr. Amirault took responsibility for these discussions on behalf of CCS (para. 45). It seems to me that what Pembina seeks is not

summary judgment in respect of all of the allegations of fact contained in these paragraphs, but

summary dismissal of two claims set out in paragraphs 44 and 46: that in the course of the 2005 negotiations, CCS shared confidential information with Pembina that Pembina later used to its advantage in the development of its FST facilities, and that Pembina identified what is perceived to be benefits to itself in transferring the CCS interest in the CCS/Pembina Business Opportunity to Mr. Amirault and Mr. Steinke and conspired with them to do so. Pembina is entitled to

summary judgment in respect of the question of whether a CCS/Pembina Business Opportunity to develop Full Service Terminals existed at the time of Mr. Amirault’s departure from CCS, and was taken by Amirault, Steinke and/or Secure for the benefit of Pembina. The answer to this question is no. CCS has provided no evidence that would support its claim that confidential information relating to FSTs was exchanged between CCS and Pembina in the course of the 2005 negotiations regarding the potential development of an FST in the Worsley area, and its claim in this regard is also dismissed.

For greater certainty, these claims are dismissed only as against Pembina. [ 7 ] CCS brought an appeal from the decision in the First

Summary Judgment Application: Pembina Pipeline Corp. v CCS Corp., 2014 ABCA 390 . [ 8 ] At paras.16-17, the Court of Appeal concluded the “proposed project” that was the subject of discussions between CCS and Pembina was a new pipeline, where none existed before, across the Peace River valley into the Worsley area and an FST to be built in conjunction with that new pipeline and its inlet terminal. The Court found, at para.25, that the La Glace FST was considered only after the Worsley pipeline venture was known to be not viable.

At paras. 26-30, the Court found that the only other proposal or venture discussed between CCS and Pembina was a fractionating plant, which is very different from an FST, and that any fractionating plant proposal was in any event rejected by Pembina. At paras.35-36, the Court held: Though the two sides’ evidence differs a little about who offered and who rejected certain ideas, they agree that only fractionation was of any possible interest to both sides, and that it never proceeded. The president of CCS had a plan to take out or buy Pembina, not a plan to form joint ventures (Amirault affidavit, p A410, para 6).

At the September 6 meeting, that president said that he would not consider Pembina as a joint venture partner in any full-service terminal, and explained why (Amirault affidavit, p A412, para 16). Both sides agree that a takeover by CCS of Pembina (a surprise offer by CCS) was formally rejected fairly soon after the September 6 meeting, on September 22 or 27. (See Dilger affidavit, p A372, para 9 and p A373, para 14; Amirault affidavit, p A411, para 11; Dilger Nov 15 ’11 examination for discovery, CCS’s Extracts, p A46. CCS’s own factum, para 52, is to like effect, citing September 27 email, p.

A147.) Conversely, around that time, Pembina was only interested in new services, not in selling existing ones (Amirault affidavit, p A410, para 7, and p A411, para 9).

So the chance of the two companies agreeing to cooperate on something was slight, and there was no realistic business opportunity in any deal between the two. [ 9 ] At paras. 38-40, under the heading “No Business Opportunity for Joint Full-Service Terminals”, the Court summarized the evidence as follows: One such read-in is reproduced in Evans’ affidavit, para 29 (Dilger examination for discovery transcript, pp A9-10, quoting p 44, pp A41 ff, lines 10 ff). That is in CCS’s Extracts. It says that Pembina offered (presumably at the September 6, 2005 meeting) to CCS jointly to build full-service terminals with CCS.

However, it adds that CCS’s president immediately totally rejected the idea, saying that CCS did not need any money or expertise from Pembina. Evans’ affidavit, para 33 (p A11) and Pembina’s factum, para 17 agree, and Amirault and Dilger both swear to that. Pembina’s factum, para 18 says that CCS has never challenged that evidence. We have found no contrary evidence, and certainly not from Mr. Werklund, CCS’s president (as discussed in Part H below). There were not many people from CCS at that meeting.

Werklund was the main one. (No order removed Evans’ para 29.) Evans’ affidavit (para 32, p A11) says that at the same September 6 meeting CCS then suggested taking over Pembina. To that Pembina’s president replied that he thought that Pembina was not interested. Pembina’s president added that a takeover would need Pembina’s Directors’ approval. A few weeks later they rejected it (Dilger affidavit, paras 13-14, p A373).

And Evans’ affidavit (para 30, p A10) also says that in August 2007 the same Pembina full-service terminal joint venture offer and the same CCS rejection were repeated! (He again quotes from Dilger’s examination for discovery transcript, p 269, or p A78, lines 36 ff.) The Remaining CCS claims against Pembina [ 10 ] CCS characterizes its claims as pleaded in the Re-Amended Statement of Claim, and remaining after the First

Summary Judgment, as: (

a) Knowing Assistance Liability: CCS alleges that Pembina, knowing that Amirault was a fiduciary to CCS, assisted Amirault in the breach of his fiduciary duty owed to CCS. (

b) Unlawful Means Conspiracy Liabilty: CCS alleges that Pembina conspired with Amirault and Secure by allowing Secure, through Amirault, to take a ripening corporate opportunity. (

c) Joint Tortfeasor Liability: CCS alleges that Pembina is liable as a joint tortfeasor with Secure and the SES [Secure] Defendants. They worked on a common enterprise, which was unlawful as Amirault was not allowed at law to take the Pembina JV Opportunity. Moreover, CCS alleges that Pembina is liable as a beneficiary of the “springboard” it and Secure obtained from the use of CCS confidential information. (

d) Vicarious Liability as Joint Venturer: CCS alleges that Pembina is a joint venture participant with Secure in the LeGlace FST and

that, at law, this puts Pembina and Secure in a partnership relationship where Pembina is vicariously liable for the torts and wrongdoings of Secure. Pembina’s Evidence: The Dilger and Michaleski Affidavits [ 11 ] In support of its application for

summary judgment, Pembina relies upon the Affidavits of Michael Dilger and Robert Michaleski, both sworn on January 29, 2015. [ 12 ] Michael Dilger is the President and Chief Executive Officer of Pembina since 2014, and prior to that time was Pembina’s Chief Operating Officer and Vice President of Business Development. In his Affidavit he states: (

a) He had no knowledge of the contractual obligations of Amirault and Steinke to CCS prior to Amirault’s departure from CCS, and that he first became aware that Amirault had joined Secure, with the intention of creating an oilfield services business, in 2007; (

b) He met with Amirault in February 2007, prior to Pembina entering into negotiations with Secure regarding a possible joint venture with respect to an FST in the Worsley area. He inquired into whether Amirault had any contractual obligations or existing fiduciary duties to CCS following his resignation. Amirault advised Dilger that he had no employment contract and no ongoing duties to CCS that would prevent him from participating in a joint venture with Pembina. (

c) Pembina did not provide any support to Amirault or Steinke in conceiving or creating a business plan, and Pembina has not provided any financial or other support to any of the other Defendants, save for its participation with Secure in the La Glace FST joint venture. (

d) Pembina had no knowledge of any arrangements as between Amirault and Steinke and any other Former Employee Defendants and did not have any discussions in establishing the La Glace joint venture with any Defendants other that Mr. Amirault. (

e) Pembina has not participated in the taking of confidential information of CCS by any of the Former Employee Defendants and Mr. Dilger has no knowledge of any confidential information of CCS being provided to or used by Pembina. (

f) Pembina did not participate in Secure’s 2007 application to Alberta Environment regarding its Grande Prairie landfill or in its AEUB application for a facility license for the FST at La Glace. [ 13 ] Michaleski was the Chief Executive Officer of Pembina from 2000 until his retirement in 2013. In his Affidavit, he states: (

a) Pembina was aware that if it should enter the full service terminal business, it would become a competitor of CCS, but Pembina was of the view that the volumes requiring processing in Northwestern Alberta were increasing and that there was room for additional full service terminal facilities. (

b) La Glace was chosen by Secure and Pembina for the location for an FST part based upon Secure’s information that truckers had complained of lineups and inadequate service at CCS’ La Glace facility and were seeking other alternatives, and Pembina was therefore of the view that there was sufficient growth potential to justify a further processing facility there. (

c) Pembina entered into a full service terminal business at La Glace not to cause harm to CCS but to compete with CCS and others, believing that was Pembina’s legitimate right. CCS Evidence [ 14 ] The evidence relied upon by CCS is voluminous. It includes affidavits and questioning of Pembina’s officers, including Michaleski and Dilger; Secure’s officers including Amirault, Steinke, Myrheim, Wieler and Newman; Triumph employees (or former employees) Derek Heaven, Tim Etchevarry, Greg Diduch, Guang Li and Maria Escrig, and CCS’s own officers and employees Werklund, Vince Lisch, Brian Huseby, and Lloyd Lipsett. The relevant facts, as established by that evidence, are as follows: (

a) Amirault as Fiduciary, and the Secure Defendants [ 15 ] Pembina was aware that prior to leaving CCS, Amirault was a senior officer of the corporation and as such would owe to CCS fiduciary duties. Pembina also knew that Steinke was a former long-term of employee of CCS with the responsibility, at the time of his departure, for expanding CCS’s market presence and “locating and building new facilities”. Steinke left CCS in March 2006 and together with Karen Myrheim, who had worked in the CCS Business Development Group, formed a company called Secure.

At CCS, Myrheim’s responsibilities included the development of an FST project located in Spirit River, Alberta. In that capacity, Myrheim had worked with Derek Heaven, a mechanical engineer employed by Gemini Engineering Limited (“Gemini”), on the Spirit River FST. Steinke and Myrheim’s Secure eventually merged with Amirault’s numbered company to become the Defendant Secure. [ 16 ] Myron Newman was also a long term employee prior to his departure from CCS on November 30, 2006.

In the course of his employment with CCS, Newman, in his capacity as construction manager for CCS’ treatment and disposal facilities, worked with Gemini on P&IDs for CCS FSTs. Mr.

Newman’s employment contract with CCS provided: 8.03 All notes and memoranda or any trade secrets or confidential information concerning the business of the Company [CCS], and its Subsidiaries or Associated Companies or any of their suppliers, agents, distributors, or customers, which shall be acquired, received, or made by the Project Manager during the course of his employment shall be the property of the Company and shall be surrendered by the Project Manager to someone duly authorized in that behalf at the termination of this employment or at the request of the Board at any time during the course of his employment.

[ 17 ] Even before his resignation from CCS in November 2006, Mr. Amirault’s numbered company had already budgeted for Newman to start work for it on January 1, 2007. Half the costs of Mr. Newman’s time from December 2006 to April 2007 were submitted for payment by Secure to Pembina. The contract between Newman and Amirault’s numbered company described the project that Newman was working on as the Worsley pipeline and terminal, but what Newman actually worked on was the La Glace FST.

Dilger acknowledged that he was introduced to Newman, that he knew Newman was not an engineer, and that Pembina was content to leave the entire design of the La Glace FST in Secure’s hands. Newman gave evidence that he did not give information to the engineering firm Triumph about the expected products and volumes that would go through the La Glace FST but that perhaps Steinke or Amirault did.

There is evidence to show that Secure’s copy of an internal calculation spreadsheet used to run project economics for the La Glace FST follows the exact format and information as required in a CCS spreadsheet used by Myrheim, another former CCS employee who left to join Secure. [ 18 ] Wieler was a long term employee of CCS who terminated his employment without giving prior notice on April 5, 2006.

By June 2006, he was working with Myrheim and Steinke to form Secure. [ 19 ] There is no dispute that CCS employees were required to sign employment contracts containing non-solicitation prohibitions on approaching current CCS employees with employment opportunities to leave CCS for a period of one year after leaving CCS. (

b) Pembina’s Business and Expansion into FSTs [ 20 ] In 2004 and 2005 Pembina was engaged in an expansion of the scope of its services and intended to become a major midstream service provider, and as part of this expansion Pembina contemplated FSTs to complement its existing dry terminal locations. By 2005, Pembina had identified at least 7 potential locations for FSTs, including both La Glace and Worsley. Discussions took place between Amirault for CCS and Dilger for Pembina about Pembina and CCS joint venture projects, to the point where Dilger and Amirault met together with the two CEOs of CCS and Pembina on September 6, 2005. At that meeting, as described in the First

Summary Judgment (QB) decision, at para. 40, Pembina’s offer to engage in a joint venture with CCS on the Worsley FST was rejected by CCS. [ 21 ] Dilger acknowledged in questioning that Pembina required an experienced partner for the development and operation of FSTs.

Michaleski acknowledged in cross examination on his affidavit that Pembina did not hire engineers to investigate designing FSTs before entering into the joint venture with Secure; that Pembina did not investigate the cost or time required to design FSTs; and that Pembina only approached CCS about the potential to partner on FSTs before proceeding with the Secure joint venture.

Dilger and Amirault met a number of times between October and January 2006, prior to Amirault’s departure from CCS, though neither Dilger nor Amirault could recall the specifics of their discussions at these meetings. [ 22 ] When the Worsley Joint Venture opportunity was rejected by CCS, Pembina did not give up on the opportunity, but instead continued to discuss the project with Amirault. Dilger knew from discussions with Amirault in late 2005, that Amirault was unhappy at CCS and he knew that Amirault was leaving CCS shortly after Amirault announced his resignation on January 13, 2006.

Immediately thereafter he talked to Amirault about joining Pembina. [ 23 ] Within weeks of Amirault’s departure from CCS, he was working with Pembina on various Pembina projects, including the Worsley pipeline proposal. Amirault and Dilger entered into a “handshake” deal in which Amirault would work on Pembina’s behalf to bring oil to a new pipeline in the Worsley area and, in return, Pembina would joint venture with Amirault on an FST to be built in connection with the pipeline.

Amirault was given the title of Executive Consultant and an office to work out of at Pembina. [ 24 ] On March 8, 2007, at a Pembina Board meeting, a Pembina director raised the question of who could build the FST at the Worsley location in the event that CCS “complained”, and Michaleski acknowledged that Pembina’s Board was aware that CCS may have concerns about the potential use of its confidential information, because Werklund had already visited Michaleski to raise the issue with him directly.

Michaleski further acknowledged that Pembina explored with Amirault whether the benefits associated with developing a joint venture FST was worth the risk in the face of CCS’s expressed concerns about the potential breach of Amirault’s fiduciary duties. Michaleski said that in any event Pembina was determined to proceed. [ 25 ] There is no question that Pembina wanted Amirault and his team’s knowledge of the FST business and that Pembina was aware that the team Amirault was putting together was made up largely or exclusively of former CCS employees.

There is also no question that Pembina was alive to at least some potential legal risk that could arise out of its dealings with Amirault because of his connection to its future competitor CCS. Pembina obtained indemnities from both Amirault and Secure as part of entering into the La Glace Joint Venture Agreement, though the indemnities themselves do not address the issue of a potential taking of CCS confidential information. [ 26 ] In questioning, Dilger admitted that the LaGlace FST “replaced Worsley as the project” that Pembina intended to develop jointly with Amirault.

For the purposes of Pembina’s internal decision-making, the projects were sufficiently linked that, once Pembina’s board had approved the Worsley FST, Dilger did not feel it was necessary to go back to the board for a resolution to approve the project at LaGlace. [ 27 ] Steinke, Myrheim, Wieler and Perras were to some extent working together with Amirault to form what would later become Secure throughout 2006; Kari Nyland was hired away from CCS by Secure while she was on maternity leave. (

c) CCS Warnings to Pembina [ 28 ] CCS warned Pembina that it was concerned about the potential use of CCS confidential information by Amirault and Secure. In February 2007 Werklund met with Michaleski and told him that he believed that Amirault was using CCS confidential information and that Pembina should not be working with him. Pembina knew that Amirault had received a warning letter dated January 16, 2007 from CCS’ counsel about potential misuse of CCS confidential information. Following the meeting between Werklund and Michaleski,

Pembina’s General Counsel met with Amirault in February 2007 and learned that Amirault did not know what modifications CCS has made to equipment in FSTs, and that Amirault knew what the CCS business priorities were. In August 2007 the then-President of CCS, Ralph Hesje, and CCS Vice President of Business development Jim McMahon, met with Michaleski and Dilger and again expressed their concern that Secure was using CCS confidential information for the La Glace FST.

Michaleski acknowledged that Pembina made no followup inquiries thereafter of Secure, Amirault or any other Secure personnel. [ 29 ] On October 9, 2007 Secure and Pembina entered into a Joint Venture Agreement in respect of the LaGlace FST (“the La Glace JVA”). Per the terms of the La Glace JVA: (

a) each of Pembina and Secure would own an undivided 50% interest in the La Glace FST; (

b) Secure would be the operator, with responsibilities for supervision of the design, construction and engineering of the La Glace FST; (

c) Pembina and Secure would each have two representatives on a management committee of the joint venture; and (

d) Costs for the design and construction of the La Glace FST would be shared between Secure and Pembina in accordance with their ownership interest. (

d) Use of CCS Confidential Information [ 30 ] Triumph had never designed an FST prior to the La Glace FST, and according to Brad LeDrew, Triumph’s CEO, none of its engineers had any experience in the design of FSTs when Secure came to Triumph with the La Glace FST project. Triumph has produced in this litigation a partial set of P&IDs, with the title block whited out, which Heaven and Bob Lipsett, an engineer at CCS, have identified as part of the CCS P&IDs prepared by CCS’ engineering firm Gemini, for the CCS FST in the Grande Prairie area (“the South Grande Prairie FST”).

Triumph has also produced a full set of CCS South Grande Prairie P&IDs, which Heaven says he brought with him when he joined Triumph in June 2007. [ 31 ] Internal emails exchanged by Triumph staff indicate that the partial CCS P&IDs were provided by Newman, who had been CCS’ construction manager on its South Grande Prairie FST, to Diduch, a senior engineer at Triumph, prior to June 2007.

Diduch, who was the senior process engineer at Triumph, acknowledged in questioning that Newman directed the design of the LaGlace FST, specifying the equipment in the PFDs and providing hand drawings to Triumph for its draftsmen to copy. In his Affidavit of December 11 2015, Diduch describes removing himself from the FST project because Newman required little or no technical input from him, and was working from a set of design drawings that appeared to be fairly detailed diagrams for a similar facility. After he left the project, Tim Etchevarry, a junior process engineer with Triumph, worked with Mr.

Newman to complete the design and drafting of process flow diagrams for the project. [ 32 ] In his Affidavit sworn December 11, 2015, Etchevarry describes Newman making reference to various design drawings that he carried with him, including process flow diagrams (“PFDs”) and piping and instrumentation diagrams which appeared to be printouts of electronically drafted designs. In a June 12, 2015 Affidavit, Etchevarry says that in his meetings with Newman he would be provided with a conceptual overview of what was required, and Newman would bring with him hand-drawn elements of the facility.

He says in the later affidavit that he has no recollection of ever seeing the CCS P&ID drawings and supporting materials which were found in Triumph’s production. He states that to his awareness neither he nor his colleagues copied any drawings, though he did not fully complete the PFD stage of the design. Etchevarry was reassigned to another project in the summer of 2007, shortly after Derek Heaven joined Triumph and took over responsibility for the project. [ 33 ] Mr.

Etchevarry’s account differs from that of Maria Escrig, who from April 2007 until March 2008 worked with Triumph as a Project Manager, with responsibility (until October 2007) for Triumph’s projects with Secure. It is her evidence that, at some time prior to May 18, 2007, Etchevarry told her that a set of drawings he had been given by Newman was missing certain pages, and as a result Etchevarry was having problems preparing the drawings for the La Glace FST.

Escrig asked to see the drawings and was given a partial set of P&IDs with Gemini’s name in the title block and the name of the engineer, Derek Heaven “scribbled over”(“the Partial Gemini P&IDs”). Escrig warned Etchevarry that use of the Partial Gemini P&IDs was not in keeping with his professional obligations, but she says that Etchevarry told her that he had to do the work and could not do it without the complete set of drawings for the waste processing part of the facility.

She says that Etchevarry was insistent that she follow up with Secure to attempt to obtain the missing pages from the Partial Gemini P&IDs. Escrig accordingly requested from Myrheim, Perras and Newman the missing pages, by email dated May 18, 2007 and again in her weekly report to Secure of May 21, 2007. On June 11, 2007 the same day that Heaven accepted employment at Triumph, as recorded in Escrig’s contemporaneous notes, Etchevarry told Escrig that he had received more P&IDs from CCS.

On June 20, 2007, Escrig received a detailed PFD in electronic form to send to Secure, which included the drawings for processes that had been missing from the Partial Gemini P&IDs. Escrig concluded that the only basis on which Etchevarry could have provided the detailed engineering drawings for the La Glace FST was by having recourse to copies of the Partial Gemini P&IDs.

Escrig also describes copying by a summer student at Triumph of the equipment list from the CCS P&IDs, pointing out that the preparation of an equipment list for a complex industrial facility is normally work that would be done by a team of engineers, working in collaboration with vendors, whereas what she observed at Triumph was the copying of the CCS equipment list and, ultimately, an equipment list for the La Glace FST that was identical to the equipment listed on the Gemini P & IDs. [ 34 ] In her second Affidavit, sworn on August 28, 2015, Escrig describes seeing Etchevarry working in his office from Gemini CCS-P&IDs strewn on his desk and floor.

She further states that, based on her experience of billing hours expended on major engineering projects, the hours billed by Triumph in designing the La Glace FST did not correspond at all with the complexity of the work.

This accords with the evidence of Lipsett, who in his two affidavits shows the thousands of hours expended by Gemini engineers for the creation of P&IDs for CCS facilities compared with the relatively small number of hours spent by Heaven and Triumph in the design and in the procurement of equipment for the La Glace FST. [ 35 ] Based upon the foregoing, it is reasonable to conclude that Triumph had some access to CCS confidential information in the form of PFD and P&IDs for CCS facilities, and specifically its Grande Prairie FST. Indeed, there is compelling evidence in the form of

the CCS Motor Control Centre (“MCC”) Building drawing produced by Triumph, that certain elements of the design for the La Glace FST were directly copied from drawings that were the property of CCS. There is some evidence upon which a court could conclude that Secure, through its officers Myrheim and Perras, was aware that Triumph was relying CCS drawings in the design of the La Glace FST, and there is evidence upon which a court could conclude that Secure and its joint venture partner Pembina benefited from Triumph’s use of CCS confidential information as a result of the significantly reduced costs associated with the design of the La Glace FST. (

e) The New Records [ 36 ] Pursuant to a case management order, Pembina was required to provide responses to undertakings from the April 15 2015 Questioning of Michael Dilger. Undertakings No.14 and 24, and Dilger’s responses, were as follows: Undertaking No. 14: To advise as to whether Pembina received any P&ID, PFD drawings, or any DBM drawings of the La Glace Pembina Secure facility. Response: Pembina received the following such drawings from Secure pursuant to the Joint Venture Agreement with Secure, which drawings have already been produced by Pembina.

PPC001452: Drawing re: La Glace Full Service Terminal – Piping & Instrumentation Diagram – Butane Bullet Area PPC001453: Drawing re: La Glace Full Service Terminal – Piping & Instrumentation Diagram – Pembina Lact Building PPC001457: Drawing re: Full Service Terminal – Process Flow Diagram Pembina has located to additional such drawings, copies of which are attached hereto. Undertaking No. 24: To advise whether Pembina participated in the engineering design of the La Glace facility. Response: Please see response to Undertaking No. 14.

Pembina only received and reviewed drawings from Secure regarding the La Glace facility pursuant to the terms of the Joint Venture Agreement. [ 37 ] On April 25, 2016, some time after the hearing of this

summary judgment application, counsel for CCS, Lillian Pan, undertook a review of digital imaged copies of Secure records that had been seized under the provisions of an Anton Piller Order in this Action (the “SZD Records”). She came upon SZD Record called a Design Basis Memorandum (“DBM”), which was labelled under document type as a “proposal” and described as a “Full Service Terminal Template”. The record contains attachments including a PFD and a set of P&IDs for the La Glace FST, and it indicates that it was prepared by Derek Heaven on November 25, 2007.

It also contains an equipment list for the La Glace FST. She also found a one page hard copy of an email chain between Gary Perras and Sam Stephenson, an engineer at Pembina and an attached document called “Points to discuss Secure DBM.doc”, which has handwritten notes referring to “Derek”, presumably Derek Heaven.

It appears from these records, as CCS contends, that Pembina’s engineer Stephenson must have received a DBM with PFDs and P&IDs for the La Glace FST from Secure and that Pembina was providing some input on its design. [ 38 ] On April 28, 2016, Derek Heaven participated in a conference call with counsel for Triumph and for CCS, at which time Heaven was shown the DBM document that Ms. Pan had found. He recognized the record as one that he had prepared at Triumph and hand delivered to Perras at Secure.

He recalled receiving the “Points to discuss Secure DBM” document, which he described as a memorandum prepared by Pembina’s engineer, containing a request for changes, which Heaven made, to the DBM. [ 39 ] By correspondence dated May 6, 2016, counsel for CCS wrote to advise that CCS wished to apply to file these new records (“the New Records”) and to correct Mr. Dilger’s answer to Undertaking No.14.

CCS contends that the New Records are material to this Application because they evidence the extent and depth of Pembina’s knowledge of the misuse of CCS confidential information by showing that Pembina’s manager of engineering received and reviewed at least two versions of P&IDs for the La Glace FST that CCS submits contain confidential information. CCS contends the New Records are significant because they show: (

a) Pembina has in its possession a set of 31 P&IDs that CCS, through the Escrig Affidavit, describes as containing confidential CCS designs; (

b) Pembina’s engineer Stephenson received the confidential and proprietary knowledge of the design of CCS FSTs embedded in the La Glace P&IDs, and he reviewed and commented upon them; (

c) Pembina’s engineer was working with Triumph and Secure in understanding and approving the DBM for the La Glace FST; (

d) Pembina also received a detailed “Equipment List” attached to the DBM, which CCS says is a copy from CCS P&IDs in Triumph’s possession; and (

e) the uses to which Pembina may have made of the La Glace FST P&ID drawings have not been examined on by CCS, since Dilger’s answer to Undertaking No. 14 did not disclose the existence of the New Records. [ 40 ] In response, Pembina argues that the CCS response to Pembina’s

summary dismissal application is based on CCS’ theories of vicarious and partnership liability, and that CCS has not claimed that Pembina at any time had any knowledge or participated in any alleged use by Triumph or Secure of any confidential CCS engineering drawings.

Pembina also says that its concern and comments in reviewing the drawings of the La Glace FST was solely with respect to connectivity to Pembina’s pipeline through a lease automatic custody control processing (“LACT”) unit and with respect to the blending of treated product for shipment on Pembina’s pipeline, both of which did not exist in the CCS Grande Prairie FST and therefore could not have been copied from CCS. Pembina points to its cross- examination of Heaven on his May 4 2016 Affidavit, wherein he stated:

...that at no time did I use any design drawings prepared on behalf of CCS in preparing the design of any facility designed by Triumphfor Secure, and at no time did I direct any employee of Triumph to use or copy any design drawings prepared on behalf of CCS inpreparing the design of any facility designed by Triumph for Secure.

Further, I can categorically state that while I was involved in thedesign of the Secure projects from July 2007 onward, I was not aware of, nor did I have any reason to suspect, any personnel under mysupervision making use of such drawings. [41] In short, Pembina contends that the fact that it received the DBM, including P&IDs for the La Glace facility is not relevant toPembina’s application for

summary dismissal. [42] I agree with CCS that, in relying on Heaven’s affidavit concerning the SZD Records, CCS does not thereby adopt otherevidence that Heaven previously gave to the effect that he did not copy CCS P&IDs. I further agree that the New Records are relevant tothis Application because they show that Pembina had in its possession a set of P&IDs that CCS, through the Escrig Affidavit, describesas containing confidential CCS designs.

The existence in Pembina’s possession of P&IDs that may contain confidential CCSinformation, together with the notes of Pembina’s engineer recommending changes (that, contrary to Pembina’s submission, go beyondthe LACT unit) is at least some evidence that would suggest that Pembina took some role in the design of the La Glace FST.

The NewRecords are therefore admitted into evidence in this Application, and Pembina is directed to correct its Response to Undertaking No.14and to provide an Amended Affidavit of Records listing the New Records and such further records that relate to the La Glace FST in itspossession or formerly in its possession.

Summary Judgment [43] Rule 7.3 of the Alberta Rules of Court (“ARC”) provides: 7.3(1) A party may apply to the Court for

summary judgment in respect of all or part of a claim on one or more of the followinggrounds: (

a) there is no defence to a claim or part of it; (

b) there is no merit to a claim or part of it; (

c) the only real issue is the amount to be awarded.

(2) The application must be supported by an affidavit swearing positively that one or more of the grounds described in subrule (1) havebeen met or by other evidence to the effect that the grounds have been met.

(3) If the application is successful the Court may, with respect to all or part of a claim, and whether or not the claim is for a single andundivided debt, do one or more of the following: (

a) dismiss one or more claims in the action or give judgment for or in respect of all or part of the claim or for a lesser amount; (

b) if the only real issue to be tried is the amount of the award, determine the amount or refer the amount for determination by a referee; (

c) if judgment is given for part of a claim, refer the balance of the claim to trial or for determination by a referee, as the circumstancesrequire. [44] In the period since the First

Summary Judgment Application, both the Supreme Court of Canada and the Alberta Court ofAppeal have considered the appropriate approach to

summary judgment, respectively, in Hryniak v. Mauldin, 2014 SCC 7, in Windsor vCanadian Pacific Railway Ltd., 2014 ABCA 108 and, more recently, in 776826 Alberta Ltd. v Ostrowercha, 2015 ABCA 49, whereinthe Court held, at paras. 9–11: The governing test for

summary judgment in Alberta finds expression in Windsor v CPR, 2014 ABCA 108 at para 13, 572 AR 317;Sherwood Steel Ltd v Odyssey Construction Inc., 2014 ABCA 320, at paras 7 to 8, 59 CPC (7th) 22; Maxwell v Wal-Mart, 2014 ABCA383 at para 12; W. P. and cases mentioned therein, inter alia. From the process perspective,

summary judgment can be given if adisposition that is fair and just to both parties can be made on the existing record by using that alternative method for adjudication:Hryniak v Mauldin, 2014 SCC 7 , [2014] 1 SCR 87. From the substantive perspective,

summary judgment can be granted if, in light of what that fair and just process reveals, there is nomerit to the claim. No “merit” means that, even assuming the accuracy of the position of the non-moving party as to any material andpotentially decisive matters -- matters which would usually require ordinary forensic testing through a trial procedure with viva voceevidence and which could not be resolved through the fair and just alternative -- the non-moving party’s position viewed in the round hasno merit in law or in fact.

Stated another way, in order for the non-moving party's case to have merit, there must be a genuine issue of a potentially decisivematerial fact in the case which cannot be summarily found against the non-moving party on the record revealed by the “fair and justprocess”. The mere assertion of a position by the non-moving party in a pleading or otherwise, or the mere hope of the non-moving partythat something will turn up at a trial, does not suffice.

The key is whether the circumstances require a viva voce evidence in order toproperly resolve the case: see Canada v Lameman, 2008 SCC 14 at paras 10 to 11, [2008] 1 SCR 372. Knowing Assistance in the Taking of the Pembina JVOpportunity

[45] Pembina says that the Re-Amended Statement of Claim does not allege that Pembina knowingly and actively assistedAmirault to breach an alleged fiduciary duty to not take the Pembina JV Opportunity, but in my view paragraphs 47, 48 and 64 plead thenecessary facts: 47. Prior to Amirault’s departure from CCS, with the support and assistance of Pembina and in breach of their contractual obligations toCCS, Amirault and Steinke, had conceived a plan to create a competing business to CCS (“the Competing Business”) which wouldfollow the model of CCS Business.

That plan included their taking not only CCS Confidential Information for their own use and benefit,but also the CCS interest in the CCS/Pembina Business Opportunity through a new company which they formed and which becameSecure. 48. Amirault and Steinke, together with Pembina, conceived that in the Competing Business, Pembina would be the single shipper andwould share in the profits of the Competing Business by participating as a joint venturer, or through some other mechanism, in buildingTRDs and landfills with Secure. 64.

At a time prior to the end of January, 2006, Amirault and Steinke together with Pembina planned to set up a competing business,which became Secure. Pembina wanted to be a joint venture participant with Secure to build facilities and landfills and other businessthat would be in direct competition with CCS. [46] CCS argues that what was determined by this Court and by the Court of Appeal in the First

Summary Judgment Applicationwas that Pembina had no liability to CCS for taking its own business opportunity. CCS distinguishes that from what it now argues is analternative basis for Pembina’s liability: that Pembina is liable for assisting former CCS officers in taking the business opportunity forthemselves. The knowing assistance claim, CCS argues, is tied to the issue of the alleged breach of fiduciary by Amirault and otherformer CCS employees in taking the Pembina Joint Venture Opportunity.

CCS characterizes the Pembina JV Opportunity as “maturing”and cites Canadian Aero Service Ltd. v O’Malley, (SCC), [1974] SCR 592, at p.607: An examination of the case law in this Court and in the Courts of other like jurisdictions on the fiduciary duties of directors and seniorofficers shows the pervasiveness of a strict ethic in this area of the law.

In my opinion, this ethic disqualifies a director or senior officerfrom usurping for himself or diverting to another person or company with whom or with which he is associated a maturing businessopportunity which his company is actively pursuing; he is also precluded from so acting even after his resignation where the resignationmay fairly be said to have been prompted or influenced by a wish to acquire for himself the opportunity sought by the company, orwhere it was his position with the company rather than a fresh initiative that led him to the opportunity which he later acquired. [47] The elements for a claim of knowing assistance are set out in Indutech Canada Limited v Gibbs Pipe Distributors Ltd., 2011ABQB 38, at para.402: 1.

The existence of a trust or fiduciary relationship; 2. The trustee’s or fiduciary’s fraudulent or dishonest breaches of his or her equitable or fiduciary duty 3. The stranger has actual knowledge of the misconduct, and; 4. The stranger assists in the fraudulent or dishonest design. [48] CCS alleges that Pembina assisted Amirault and his company in taking the Pembina JV Opportunity, thereby assistingAmirault in the breach of his fiduciary duties. The problem with this is that the Pembina JV Opportunity did not exist at the time thatAmirault is alleged to have taken it. From the First

Summary Judgment Decision (CA) at para.67: CCS’s claim is that the business opportunity was jointly to build and operate a full-service terminal. But a joint new full-service terminalto compete with an old full-service terminal owned and run by one of the new joint venturers, would be novel, indeed ridiculous, asPembina pointed out in oral argument on appeal. It is hard to see how that would be of any advantage to anyone. The case managementjudge says that CCS never offered a joint venture on any new CCS full-service terminals, and never planned a second full-serviceterminal at La Glace!...

That rebuts any idea of a joint plan to develop full-service terminals, and indeed any idea of a businessopportunity there. [49] To the extent that a Pembina JV opportunity ever existed, it was the opportunity to partner in an FST project in the Worsleyarea. That proposal was rejected by CCS. There is no evidence that Pembina ever intended to partner with CCS in the developmentand/or operation of any other FSTs in any other location. No Pembina JV Opportunity existed after the Worsley proposal was rejected byCCS.

Pembina cannot be found to have assisted Amirault, Secure, or the Secure Defendants in the taking of an opportunity that did notexist. CCS relies on Canadian Aero for the proposition that the “ripening corporate opportunity” taken by the fiduciary need not beexactly the same as the one previously discussed between the parties, but what the Supreme Court in Canadian Aero concluded (atp.616) was that the fiduciary duty would be reduced to an absurdity if it could be avoided merely because the same project “had beenvaried in some details”.

That is not the case here, where the Court of Appeal has concluded definitively that the La Glace FST is not thesame project and therefore not the same opportunity that was the subject of discussion between CCS and Pembina.

CCS also relies on Felker v Cunningham (2000), (ON CA), 191 DLR (4th) 734 (ONCA), Canadian Metals Exploration Ltd. v Wiese,2007 BCCA 318, and Abbey Glen Property Corporation v Stumborg (1975) (AB KB), 65 DLR (3d) 235 (ABSC) forthe proposition that a fiduciary has no right to take a corporate opportunity for himself even when his employer has turned it down, butthose cases are all similarly distinguishable on the basis that the La Glace FST is not the same opportunity as the Worsley pipeline andFST project that Pembina and CCS discussed. [50] In view of the findings made in the First

Summary Judgment Application, there is no merit to the allegation that Pembinaknowingly assisted in the taking of the Pembina JV Opportunity, and Pembina is entitled to

summary judgment in respect of this aspectof the CCS claim.

Unlawful Means Conspiracy in the Taking of the Pembina JV Opportunity [ 51 ] CCS argues that, while the First

Summary Judgment Application dealt with the issue of conspiracy concerning confidential information allegedly taken in 2005 by Pembina during negotiations with CCS, not all claims for conspiracy raised against Pembina have been determined. CCS alleges in paragraphs 50, 66 and 67 of the Re-Amended Statement of Claim: 50. Pembina has conspired with Amirault, Steinke and the other Former Employee Defendants to unlawfully cause the CCS interest in the CCS/Pembina Business Opportunities to be transferred to the Defendants including Secure and Pembina itself.

Pembina has participated in such unlawful conduct in part by participating in it as a joint venture with Secure and by otherwise providing financial and other support to the other Defendants to create a joint venture business which in part forms a part of Secure’s business, which shall hereinafter be referred to as the “Secure/Pembina Joint Venture”. 66. Pembina and Secure, by their conduct, definitely and unequivocally persuaded, induced and procured breaches of contract and breaches of fiduciary duties by the Former Employee Defendants as aforesaid. In doing so, Pembina and Secure acted without justification.

As a result, CCS has suffered loss and damage. 67. By assisting and working with Amirault in the establishment of a new business to compete directly with that of CCS using CCS Confidential Information, Pembina procured breaches of Amirault’s fiduciary duties and his contract of employment with CCS. Pembina, by its conduct, intended to damage CCS’ economic interests or knew that injury to CCS was likely.

Pembina also knew or reasonably ought to have known that by its assisting and procuring the unlawful taking of CCS Confidential Information, the unlawful solicitation of employees of CCS and the improper taking of the CCS interest in the CCS/Pembina Business Opportunity, it would cause serious economic injury to CCS which has in fact occurred. [ 52 ] The test for unlawful means conspiracy was recently set out by the Supreme Court of Canada in Pro-Sys Consultants Ltd. v Microsoft Corporation , 2013 SCC 57 , at para.80: ...“unlawful means conspiracy”, requires no predominant purpose but requires that the unlawful conduct in question be directed towards the plaintiff, that the defendant should know that injury to the plaintiff is likely to result, and that the injury to the plaintiff does in fact occur. [ 53 ] CCS contends that there is evidence with respect to all of the elements of this test, arguing: (

a) Pembina knew that Amirault was a fiduciary to CCS and that pursuing the La Glace FST Joint Venture would be a breach of Mr. Amirault’s duties to CCS; (

b) Pembina was aware that CCS would lose revenue and market share at La Glace as a result; and (

c) there is evidence in the form of an Affidavit sworn by John Gibson on December 10, 2014, that as a consequence, CCS has suffered losses. [ 54 ] The claim for unlawful means conspiracy to take the Pembina JV Opportunity fails for the same reason that the claim for knowing assistance fails: this Court and the Court of Appeal have concluded that the La Glace FST Joint Venture was never a potential CCS business opportunity and therefore it was not unlawful for Pembina to pursue that opportunity with Amirault and Secure.

Michaleski’s uncontradicted evidence is that Pembina’s decision to expand its business to include FSTs was made prior to any discussions with CCS, and was based on its view that the volumes requiring processing in Northwestern Alberta were increasing, justifying a further processing facility at La Glace. I agree with Pembina that its entry into the full service terminal business was for its own lawful purposes, which would include competing with, but not intending to injure, CCS. Pembina is entitled to

summary judgment in respect of the claim that Pembina conspired with Secure to take the Pembina JV Opportunity. Joint Tortfeasor Liability in the Taking of the Pembina JV Opportunity [ 55 ] CCS argues that, in knowingly assisting Amirault in breaching his fiduciary duty to CCS by taking the Pembina JV Opportunity for Secure, Pembina became a joint tortfeasor and cites in this regard Raywalt Construction Co.

Ltd. v J.R.B. , 2005 ABQB 989 , wherein Watson J. (as he then was), held at para.334: Speaking generally, persons are considered joint tortfeasors if (1) they engage in concerted action towards a common goal or (2) if they agree on a common course of action and one person commits a tort in furtherance of that agreement, provided the course of action was tortious in itself. [ 56 ] It is impossible to conclude that Pembina was a joint tortfeasor in the taking of the Pembina JV Opportunity because there was no Pembina JV Opportunity to take, and the concerted or common course of action, which was to develop an FST at La Glace, was not tortious in itself.

Joint or Vicarious Liability and the Taking or Use of CCS Confidential Information [ 57 ] At paragraphs 53, 57-59 and 70 of the Re-Amended Statement of Claim, CCS alleges: 57. When the Former Employee Defendants resigned from CCS, each took with them CCS Confidential Information, including much if

not all of the documents and files they generated which employed at CCS. Myrheim, or Enerland, took with her CCS Confidential Information, giving it first to Triumph, and then to Secure. The Former Employee Defendants used and are using CCS Confidential Information to enable Secure, Pembina and Triumph to continue Secure’s business in direct competition with the CCS Business. 58.

Pembina, which was at all material times aware of the Former Employee Defendants’ contractual and fiduciary obligations to CCS, did definitely and unequivocally persuade, induce and procure Secure, and the Former Employee Defendants, to unlawfully use CCS Confidential Information to develop and augment the value of Secure’s business, including its TRD facilities thereby causing loss and damage to CCS. 59.

Triumph has used CCS Confidential Information that it knew, or reasonably ought to have known, was the property of CCS and that has been unlawfully taken from CCS, to prepare documentation to assist Secure in its applications to regulatory authorities, and to design and build facilities for Secure. Specifically, Secure and Triumph copied and used CCS Confidential Information to assist Secure and Pembina in their spring 2007 application to Alberta Environment to build Secure’s landfill site in Grande Prairie.

Secure and Triumph copied and used CCS Confidential Information to assist Secure and Pembina in Secure’s application for a facility license to the Alberta Energy and Utilities Board to build a TRD facility at La Glace in which Pembina has a 50% working interest. [ 58 ] There is no evidence to support the allegation in paragraph 58 that Pembina persuaded, induced or procured Secure to unlawfully use CCS confidential information.

There is, however, some evidence upon which a court might conclude that Triumph had access to and used CCS Confidential Information in the design of the La Glace FST, and some evidence upon which a court could conclude that the confidential information was provided to it by former CCS employees with the knowledge of Secure. The question that remains is whether, despite an absence of any direct evidence to the effect that Pembina knew that Triumph and Secure were making improper use of CCS confidential information, liability for this improper use can be extended to Pembina.

CCS contends that Pembina is liable because (

a) Pembina and Secure are partners, and; (

b) even if Pembina and Secure are not partners, policy considerations of compensation, deterrence and loss internalization warrant extending liability to Pembina. [ 59 ] As a starting point to the joint and/or vicarious liability analysis, it is necessary to consider the role of Newman vis-à-vis Secure, La Glace, and Pembina. Pembina contends that Newman was hired as an independent contractor for Secure and that, as such, both Secure and Pembina are insulated from vicarious liability for any alleged wrongful use of confidential information by Newman because Newman was not an employee.

CCS argues that Newman was an employee of Secure, the La Glace Joint Venture, or both, and points to the decision of the Supreme Court of Canada in 671122 Ontario Ltd. v Sagaz Industries Canada Inc. , 2001 SCC 59 , at para.47: Although there is no universal test to determine whether a person is an employee or an independent contractor, I agree with MacGuigan J.A. that a persuasive approach to the issue is that taken by Cooke J. in Market Investigations , supra . The central question is whether the person who has been engaged to perform the services is performing them as a person in business on his own account.

In making this determination, the level of control the employer has over the worker's activities will always be a factor.

However, other factors to consider include whether the worker provides his or her own equipment, whether the worker hires his or her own helpers, the degree of financial risk taken by the worker, the degree of responsibility for investment and management held by the worker, and the worker's opportunity for profit in the performance of his or her tasks. [ 60 ] I agree with CCS that there is some evidence upon which a court could conclude that Newman’s relationship with Secure went beyond that of an independent contractor.

Specifically, Secure presented Newman as an employee of Secure in its presentations to Dilger and to its shareholders and bankers. He was given the title “Manager of Engineering and Construction” by Secure, and in Secure’s Corporate Profile in 2007, is identified to have worked for CCS and Pembina. Per Sagaz , it does not appear that Newman took any risks in his role, he received no extra rewards, and he was fully reimbursed for all expenditures.

He does not appear to have been, in his relationship with Secure, a “person in business for his own account”. [ 61 ] Determining Newman’s role vis-à-vis Secure, however, does not resolve the question of Pembina’s joint or vicarious liability arising out of Secure’s alleged liability for the acts of Newman. CCS contends that liability extends to Pembina because joint enterprises such as the La Glace joint venture are no different from partnerships in law and Pembina is therefore jointly liable for the actions of its partner, Secure.

CCS cites Atiyah, Vicarious Liability in the law of Torts (London: Butterworths, 1967) at p.122: A joint adventure may lack a firm name, its duration may be of a more limited, or transient character than that of an ordinary partnership, and the circumstances of a joint adventure may restrict the authority of a joint adventurer to pledge the credit of the joint adventure as a species of partnership. These remarks were spoken in a case in which the adventure had the ordinary business purpose of making profit, and so would fall within the legal definition of a partnership in s.1 of the Partnership Act 1890.

But it seems that the legal conception of a joint adventure is not so confined for present purposes, and that two or more persons who embark on a joint enterprise, with a common purpose, and are jointly in control of the enterprise, will be treated as joint adventurers for this purpose, even where profit is not the object of the venture. [ 62 ] CCS also points to s.1 (

g) and s.11(2) of the Alberta Partnership Act , RSA 2000, c.P-3 : 1 (g) “Partnership” means the relationship that subsists between persons carrying on a business in common with a view to profit; 11(2) Each partner in a firm is liable jointly with the other partners for debts and obligations of the firm incurred while that partner is a partner [ 63 ]

Section 2.2 of the JVA states: Nothing in this Agreement shall be read or construed as creating a partnership, or as imposing on any Party, any partnership duty, obligation or liability of any kind, whatsoever, it being the express intention of the Parties that the respective rights, obligations and liabilities of the Parties under this Agreement and in respect of the subject-matter hereof, shall be several and not joint or joint and several.

[64] It is Pembina’s position that s.2.2 of the JVA is a full answer to the proposition that Pembina and Secure are partners in theLa Glace FST, and argues that it is now well accepted in Alberta that a contractual joint venture may be distinguished from a partnership.CCS points to the recent decision of this Court in Woronuk v Woronuk, 2015 ABQB 116, wherein K.D. Nixon J. held, at para.316: A joint venture is not itself a legal entity capable of entering into a contract.

It takes one of three forms: a corporate joint venture, where a separate company is set up for the joint venture; a partnership among joint venture participants; a contractual joint venture where parties proceed with a joint venture based upon agreement. [65] At para.319, K.D.

Nixon J. cited the decision in Central Mortgage & Housing Corp. v Graham (1973), (NS SC), 43 DLR (3d) 686 (NSTD), at p706-707, wherein Jones J. cites Samuel Williston, Williston on Contracts, 3rd ed (New York:Baker Voorhis & Co, 1957) Vol 2 at 563: Besides the requirement that a joint venture must have a contractual basis, the courts have laid down certain additional requisites deemedessential for the existence of a joint venture.

Although its existence depends on the facts and circumstances of each particular case, andwhile no definite rules have been promulgated which will apply generally to all situations, the decisions are in substantial agreement thatthe following factors must be present: (

a) A contribution by the parties of money, property, effort, knowledge, skill or other asset to a common undertaking; (

b) A joint property interest in the subject matter of the venture; (

c) A right of mutual control or management of the enterprise; (

d) Expectation of profit, or the presence of 'adventure', as it is sometimes called; (

e) A right to participate in the profits; (

f) Most usually, limitation of the objective to a single undertaking or ad hoc enterprise." [66] In Roorda v McIntyre, 2010 ABCA 156 the Alberta Court of Appeal gave effect to a “no partnership” provision in a jointventure agreement, in the context of a dispute between the parties to the joint venture over alleged fiduciary duties owed between them,at para.14: The trial judge’s

interpretation of the JVA is correct. The JVA concerns a single undertaking. The JVA describes the scope of the projectin the singular as “the creation of a closed-end mutual trust fund” (emphasis added).

The JVA specifically authorizes the parties toconduct other business activities and precludes the parties from acquiring any interest in any other business conducted by a party.Moreover, the JVA specifically disclaims the creation of a partnership, thereby effectively excluding the operation of fiduciary dutiesthat might arise from a partner relationship. [67] The issue is whether a subjective intention on the part of the joint venture participants, expressed clearly through the terms ofthe joint venture agreement, is sufficient to negative what might otherwise be a partnership, based solely on the statutory definition.Roorda suggests that the intention of the parties may indeed be determinative, but it is important to note that the issue in Roorda (and inWoronuk) concerned the relationship and duties owed between the parties to the joint venture, and not outsiders to it.

In a case likeRoorda, where one party is essentially arguing the existence of a partnership despite having entered into an agreement that expresslydisavowed one, it is easy to see why a court might conclude that the language of the agreement prevails. [68] Moreover, as CCS points out, and K.D. Nixon J. recognized in Woronuk (at para.321), the decision in Graham is not withoutcriticism. In Robert Flannigan, The Legal Status of the Joint Venture, (2009) 46 Alta L Rev 713-739, Professor Flannigan argues (atpara.18) that the factors set out in Graham “perfectly describe a model partnership”.

Furthermore, to the extent that “limitation of theobjective to a single undertaking or ad hoc enterprise” might be considered determinative in distinguishing a joint venture from apartnership, the Supreme Court of Canada has held in Spire Freezers Ltd. v Canada, 2001 SCC 11 at para.25 that, “It is settled law thata partnership may be formed for a single transaction”. [69] Indeed, there is sufficient confusion in the jurisprudence that the Alberta Law Reform Institute (“ALRI”) has proposed draftlegislation that would recognize joint ventures as a different kind of business undertaking.

In its 2012 Joint Ventures Final Report, ALRIdescribed the practical problem at para.28: Apart from the corporation, the only legal category into which joint ventures, in the broad sense, fit easily is the partnership.Unfortunately, statutes governing partnerships in Canada are largely based on a Partnership Act adopted in England in 1890, and thecommon law relating to partnerships has developed over centuries, so that neither the partnership statutes nor the common law have beendeveloped with joint ventures of modern kinds in mind.

The advice of the Joint Advisory Group is that partnership law is oftenunsuitable for a joint venture, and that the lack of assurance that a joint venture can escape from the grip of partnership law causesuncertainty, confusion and inefficiencies for joint venturers. [70] Under ALRI’s proposed legislative scheme, the liability of joint venturers to third parties is described at para.65: It is our view that parties who are carrying on a business venture in common will be jointly and severally liable under the common lawfor debts and obligations incurred and wrongs committed, in the ordinary course of the business of the joint venture as described in thejoint venture contract, unless there is something in the relationship of the joint venturers to the outside persons affected that negativesthat liability, such as a contract between the joint venturers and the third party.

The courts have so held in some cases.

[71] The “some cases” in the ALRI report is a reference to the decision in Graham, which as noted above has been cited in supportof the proposition that joint ventures may be distinguished from partnerships. At the same time, Graham stands for the proposition that,like partners, joint venturers may be held jointly liable for wrongs committed in the ordinary course of business of the joint venture (atpara.74): In my view there was a contribution by both parties of money, property, skill and knowledge to a common undertaking.

There was a jointproperty interest in the subject matter even though evidenced only in the mortgages. The parties had a mutual control and management ofthe enterprise during the construction of the houses and in the sales. The arrangement was limited to this project. There is no doubt thatBras D'Or intended a profit from the project. While there was not a mutual sharing of the profits, Central Mortgage clearly had a financialinterest at stake and was vitally concerned with the successful completion of the venture...

Based on the evidence, the arrangementbetween Central Mortgage and Bras D'Or can be characterized as a joint venture. To the extent that Bras D'Or in carrying on the ventureincurred liabilities then both parties were bound. [72] In my view, therefore, it is not necessary to decide whether Secure and Pembina were partners under the provisions of thePartnership Act. As in Graham, Pembina had a financial interest in the La Glace FST and was concerned with the successful completionof the venture.

I agree with CCS that the evidence supports the proposition that Pembina very quickly gained a half ownership share, atwhat may have been a very unrealistically low cost, in a proven design for an industrial facility that it was itself unable to create. At thisstage of the litigation, there is evidence upon which a court could conclude that, at least in part, the design for the facility was takenunlawfully from Pembina’s competitor CCS.

Pembina, either as partner or participant in the La Glace joint venture, may be jointly liablefor liabilities incurred by Secure in course of the design, construction and business of the La Glace FST. [73] CCS further argues that, even if Secure and Pembina are not found to be partners, Pembina is vicariously liable for Secure’swrongful conduct under the doctrine of vicarious liability, pointing to Sagaz, at paras. 25-27: Vicarious liability is not a distinct tort. It is a theory that holds one person responsible for the misconduct of another because of therelationship between them.

Although the categories of relationships in law that attract vicarious liability are neither exhaustively definednor closed, the most common one to give rise to vicarious liability is the relationship between master and servant, now more commonlycalled employer and employee. In general, tort law attempts to hold persons accountable for their wrongful acts and omissions and the direct harm that flows from thosewrongs. Vicarious liability, by contrast, is considered to be a species of strict liability because it requires no proof of personalwrongdoing on the part of the person who is subject to it.

As such, it is still relatively uncommon in Canadian tort law. What policyconsiderations govern its discriminate application? As Fleming stated in an oft-quoted passage: [T]he modern doctrine of vicarious liability cannot parade as a deduction from legalistic premises, but should be frankly recognised ashaving its basis in a combination of policy considerations.... (The Law of Torts (9th ed. 1998), at p. 410, cited in Bazley v. Curry, (SCC), [1999] 2 S.C.R. 534, at para. 26, per McLachlin J. (as she then was); see also Jacobi v.

Griffiths, (SCC), [1999] 2 S.C.R. 570, released concurrently, at para. 29, per Binnie J.) However, McLachlin J. noted in Bazley, at para. 27 (cited in Jacobi, at para. 29) that "[a] focus on policy is not to diminish theimportance of legal principle." [74] CCS concedes that Sagaz is a decision that focuses on the policy rationale for vicarious liability in the employment context.Similarly, Blackwater v Plint, 2005 SCC 58, upon which CCS relies, concerned whether a worker at a residential school was anemployee of the United Church of Canada and the Government of Canada, such that those entities could be held vicariously liable for hisactions in the course of his employment.

However, in holding both the Government of Canada and the United Church of Canada liablefor the actions of the employee, McLachlin CJC clearly held, for a unanimous Court, that vicarious liability may extend to more than oneemployer, at paras.36-37: The [Court of Appeal’s] third reason [for not holding the United Church of Canada vicariously liable], and the one that seems to drivethe decision of the Court of Appeal on the Church’s vicarious liability, is discomfort with the idea that two defendants can be vicariouslyliable for the same conduct. This concern, however, may be misplaced.

There is much to support the view of P. S. Atiyah in Vicarious Liability in the Law of Torts,that "[t]here is, of course, no reason why two employers should not jointly employ a servant, and this would normally be the case withthe employees of a partnership. Here the servant is the servant of each partner and of all jointly, and they are all jointly and severallyliable for the servant's torts": (1967), at p. 149. Thus, joint vicarious liability is acceptable where there is a partnership.

In this case, the trial judge specifically found a partnership between Canada and the Church, as opposed to finding that each actedindependently of the other. No compelling jurisprudential reason has been adduced to justify limiting vicarious liability to only oneemployer, where an employee is employed by a partnership. Indeed, if an employer with de facto control over an employee is not liablebecause of an arbitrary rule requiring only one employer for vicarious liability, this would undermine the principles of fair compensationand deterrence.

I conclude that the Church should be found jointly vicariously liable with Canada for the assaults, contrary to theconclusions of the Court of Appeal. [75] It is worth noting that McLachlin CJC’s conclusion is based in part upon the trial judge’s finding of a partnership betweenCanada and the Church, in W.R.B. v Plint, (1998) (BC SC), 52 BCLR (3d) 18 (SC), at para.119: Although there was no formal partnership in the case at bar, there was in my view at the very least an informal one.

I have found thateach of the parties exercised control over the activities of the dormitory supervisors through the office of the principal. "Partnership" wasthe word used by each of the parties from time to time to describe their relationship and in my view it was accurate. The decision inSinclair was based on a finding that both companies exercised control over the employee and that both companies benefited from the

arrangement. The facts in the case at bar are similar and hence support a conclusion that both Canada and the Church are vicariouslyresponsible for Plint's activities. [76] In my view, Blackwater suggests that the scope of the doctrine of vicarious liability may be sufficiently broad to encompassand “informal partnership”, and therefore could be construed to extend to joint venturers such as Secure and Pembina.

I agree with CCSthat the policy considerations underlying the doctrine of vicarious liability, which include “compensation, deterrence and lossinternalization” and “the provision of a just and practical remedy for the harm and the deterrence of future harm” (Sagaz, at para.29) areoperative in the case at bar. [77] As noted above,

summary judgment can be granted to Pembina if there is no merit to the CCS claim against it, in light of whatthat fair and just process reveals. Based upon all of the foregoing, insofar as the CCS claim relates to the use of its confidentialinformation in the design of the La Glace FST, I conclude that there is some evidence that: (

a) confidential CCS information was used by Newman and Triumph in the design of the La Glace FST; (

b) Secure, via its officer Myrheim, and via Newman himself, was aware that Triumph had obtained and was using the confidential CCSinformation; (

c) Secure and Pembina reaped material benefits from the use of CCS confidential information because it significantly expedited thedesign of the La Glace FST. [78] The relationship between Secure and Pembina is such that the parties may be held to be jointly or vicariously liable for theuse of CCS confidential information. The CCS claim in this regard has merit and should not be summarily dismissed. The Remaining Allegations: Inducing Breach of Contract andthe Springboard Claim [79] In paragraphs 65 and 83 of the Re-Amended Statement of Claim, CCS alleges: 65.

Pembina and Secure knew that each of the Former Employee Defendants had a contract of employment with CCS and were boundthereunder and otherwise to maintain in strict confidence the CCS Confidential Information. Pembina and Secure, in assisting the FormerEmployee Defendants to use CCS Confidential Information to set up a competing business, intended to cause a breach of thoseemployment contracts and other legal obligations or had a substantial certainty that such breaches would result from its conduct,Pembina and Secure deliberately disregarded the effect of such breaches. 83.

By various communications to employees, customers and service providers of CCS, the Defendants have unlawfully induced orattempted to induce them to cease to deal with CCS and to become employees, customers or service providers for Secure and for theSecure/Pembina Joint Venture.

As a result of such unlawful activities, CCS has suffered loss and damages. [80] It is Dilgers’ uncontradicted evidence that Pembina had no communication with employees, customers or service providers ofCCS with the purpose of inducing them to cease to deal with CCS and/or to become employees, customers or service providers forSecure or for the La Glace joint venture. To the extent that there is evidence of communications between Amirault and the variousformer CCS employees who later joined Secure, it does not implicate Pembina in discussions with those employees in any way.

CCS hasprovided no evidence to the contrary. As against Pembina, the allegations contained in paragraphs 65 and 83 of the Re-AmendedStatement of Claim are dismissed. [81] At paragraph 70, CCS alleges: 70. The breach of their duties enabled the Former Employee Defendants to provide Secure, Pembina and Triumph with a “springboard”or the ability to gain a head start on Secure’s plans to launch itself into the same business being carried on by CCS in direct competitionwith CCS.

Without the unlawful taking of CCS Confidential Information, Secure, Pembina and Triumph would not have had thenecessary expertise, experience or technical ability to create or assist in creating a new business that could instantly compete directly withthe CCS Business. [82] The leading Canadian case regarding a “springboard” claim is Cadbury Schweppes Inc. v FBI Foods Ltd., (SCC), [1999] 1 SCR 142, at para.67: The trial judge acknowledged that the breached confidences had acted as a "springboard" to enable the appellants to bring CaesarCocktail to market 12 months earlier than would otherwise have been the case.

The "springboard" or "head start" concept descends fromthe judgment of Roxburgh J. in Terrapin Ltd. v. Builders' Supply Co. (Hayes) Ltd., [1967] R.P.C. 375 (Ch. D. 1959), aff'd [1960] R.P.C.128 (C.A.), at p. 391: As I understand it, the essence of this branch of the law, whatever the origin of it may be, is that a person who has obtained informationin confidence is not allowed to use it as a spring-board for activities detrimental to the person who made the confidential communication,and spring-board it remains even when all the features have been published or can be

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