NOV Enerflow ULC (NOV Pressure Pumping ULC) v Enerflow Industries Inc, 2016 ABQB 9

Court of Queen ’ s Bench of Alberta Citation: NOV Enerflow ULC (NOV Pressure Pumping ULC) v Enerflow Industries Inc, 2016 ABQB 9 Date: 20160105 Docket: 1401 02364 Registry: Calgary Between: NOV Enerflow ULC (formerly NOV Pressure Pumping ULC), Grant Prideco, Inc., and Dreco Holding ULC Plaintiffs - and - Enerflow Industries Inc. (an Alberta Corporation), Willind Holdings Inc., LGL Two Holdings Ltd., MKW Two Holdings Ltd., Larmar Holdings Inc. (an Alberta Corporation), LGL One Holdings Ltd., MKW One Holdings Ltd., Lindholm Family Holdings Ltd., Lindholm Family Trust, Williamson Family Holdings Ltd., Williamson Family Trust, Larry Lindholm and Mark Williamson Defendants _______________________________________________________ Memorandum of Decision of the Honourable Mr.

Justice J.T. McCarthy _______________________________________________________ [ 1 ] The Court directs the parties to take the following steps to implement its decision on the Plaintiff’s application to amend its

pleadings as reported at NOV Enerflow ULC v Enerflow Industries Inc , 2015 ABQB 759 :

a) At paragraph 17, delete reference to articles 8.12 and 8.15 of the Purchase and Sale Agreement;

b) At paragraph 39, delete reference to articles 8.12 (Financial Statements) and 8.15 (Business Carried on in Ordinary Course); and

c) Delete subparagraphs 39(b), (c), (d), (l), and 43(

e) entirely. [ 2 ] The Court understands that the parties have already agreed to each of these changes. [ 3 ] As for subparagraphs 39(f), (g), (h), and (

i) and the residual part of the proposed amendment, the Court directs as follows:

a) Delete only the latter part of each subparagraph that states “including in the Interim Unaudited Financial Statements for the period ending November 30, 2011”; and

b) At the paragraph between (

e) and (f), delete “Financial Statements”. [ 4 ] The Defendants had proposed to delete these subparagraphs in their entirety as they were originally “premised on” breaches of the expired representations and warranties contained at

article 8.12 of the Purchase and Sale Agreement; however, a closer reading of the pleading, as amended, demonstrates that the particulars contained at paragraphs 39(f), (g), (h), and (i) “included” but were not limited to the financial statements. The Plaintiffs are free to prove these claims at trial, but they will not establish a breach of

article 8.12, which has expired. [ 5 ] It bears repeating that generally the amount of evidence required to support an amendment is “low”: NOV Enerflow ULC v Enerflow Industries Inc , 2015 ABQB 759 at para 8 . While the evidence offered to support the amendments at subparagraphs 39(f), (g), (h), and (

i) principally concerned problems with the financial statements, I am satisfied that problems with the financial statements is some evidence, albeit circumstantial and weak, that similar errors might have been made in the books and accounting records of the business on which the financial statements are based. Since the warranty at

article 8.11 (Books and Records) has not expired, the remaining claims at subparagraphs 39(f), (g), (h), and (

i) are not hopeless. [ 6 ] No other changes are required to implement the Court’s decision on this application. Written submissions provided December 23, 2015. Dated at the City of Calgary, Alberta this 5 th day of January, 2016. J.T. McCarthy J.C.Q.B.A. Appearances: Kevin Feehan/Gary J. Draper for the Plaintiffs Michael Theroux/Olivia Dixon for the Defendants