Coffey v. Nine Energy Canada Inc, 2017 ABQB 417

Court of Queen’s Bench of Alberta Citation: Coffey v. Nine Energy Canada Inc, 2017 ABQB 417 Date: 20170630 Docket: 1501 04513 Registry: Calgary Between: Nathan Brian Coffey Plaintiff - and - Nine Energy Canada Inc. Defendant _______________________________________________________ Memorandum of Decision of J. Farrington , Master in Chambers _______________________________________________________ The Application [ 1 ] This is primarily a wrongful dismissal action. [ 2 ] The plaintiff Nathan Brian Coffey seeks

summary judgment against the defendant Nine Energy Canada Inc. He also claims 1% of North American revenues arising from a product which the plaintiff claims to have co-invented called a “flow gun”. The defendant made it clear during argument that dismissal for cause will not be argued. Instead, the defendant takes issue with the amounts sought by the plaintiff both in terms of the appropriate notice period and regarding the claim for compensation arising from the flow gun. The defendant also counterclaims for what it alleges was improper conduct by the plaintiff after the termination.

The defendant says that the plaintiff disparaged it in the oil and gas industry and that he competed in business against the defendant improperly using its confidential information. [ 3 ] During argument, the defendant put squarely into issue matters pertaining to the nature of

summary judgment applications, and their utility and availability in a wrongful dismissal context such as this one.

Jurisdiction to Assess Damages on this Application [4] I will consider the defendant’s jurisdictional arguments first. [5] Generally speaking, and ignoring appeals and dismissals for delay, actions typically end in one of four ways: 1. By agreement (typically a settlement) 2. A successful

summary judgment application pursuant to Rule 7.3 of the Alberta Rules of Court by a plaintiff or defendant 3. By a

summary trial pursuant to Rule 7.5 4. By a trial [6] While only a part of the issue of my jurisdiction on this application, it is important to consider the constraints on thejurisdiction of a master in chambers under Subsection 9(3) of the Court of Queen’s Bench Act, RSA 2000, c. C-31. It provides in part:

(3) Notwithstanding subsection (1), the power of and the jurisdiction exercisable by a master in chambers does not include (

a) the trial of actions, (

b) the determination of disputed or contentious questions of fact unless the parties agree to the disposition of the questions inchambers on affidavit evidence and without the trial of an issue or the hearing of oral evidence, [7] Subsection 9(1)(

b) of the Court of Queen’s Bench Act provides: 9(1) In regard to all matters brought or proposed to be brought in the Court, a master in chambers… (

b) with the consent of the parties, has the same power and may exercise the same jurisdiction as a judge for hearing, determining anddisposing of all applications and other matters. [8] Accordingly, even with the consent of the parties, masters cannot try actions, and masters cannot resolve disputed questionsof fact if oral evidence is required. Kensington Floor Covering

(1979) Ltd. v. Watson, (ABQB) makes that clear. [9] The nature of a

summary judgment application also plays an important role in the discussion. Of course, Hryniak v.Mauldin, 2014 SCC 7 , [2014] 1 SCR 87 heralded a new litigation culture and encouraged lower courts to be more receptive togranting

summary judgment in appropriate cases. Since Hryniak, our Court of Appeal has further developed the law of

summaryjudgment in Alberta. A common theme in

summary judgment cases is that a party must typically show an “unassailable” case in order tobe awarded

summary judgment or

summary dismissal (see for example Ghost Riders Farm Inc v Boyd Distributors Inc, 2016 ABCA331). [10] My brother Masters Robertson and Schlosser have granted

summary judgment in wrongful dismissal cases, and in doing so,assessed and determined reasonable notice periods. For example, Master Robertson did so in Nixdorf v Broadstreet Properties Ltd, 2017ABQB 132 and Master Schlosser did so in O'Donnell v Soldan Fence and Metals

(2009) Ltd, 2015 ABQB 764. I declined to do so inoral reasons in an unreported decision in Slatni v Weatherford Canada Partnership, Action 1501-04258 given November 30, 2015. [11] Mr. Justice Brown, as he then was, in Orr v Fort McKay First Nation, 2014 ABQB 111 highlighted the nature ofAlberta Rule 7.3 as compared to the Ontario Rule 20 that was under consideration in Hryniak v.

Mauldin when he held at paragraphs 18to 20: In short, while masters may not weigh evidence to resolve disputed or contentious questions of fact, they may examine the evidence todetermine whether an issue remains to be tried or to otherwise determine (by applying the facts to the law) whether a party’s position isso compelling that the likelihood it will succeed is so high that it merits granting

summary judgment. (Janvier v 834774 Alberta Ltd,2010 ABQB 800 at para 15.) I recognize that, at some level, all evidence – even extremely compelling evidence – requiresweighing. (Brown, “The Possibility of ‘Inference Causation’: Inferring Cause-in-Fact and the Nature of Legal Certainty” (2010) 55McGill LJ 1 at 31-35.) To carry that proposition to its logical conclusion would, however, defeat the constitutional purpose served byappointing masters of facilitating the administration of justice. This conundrum need not be resolved here.

It suffices for presentpurposes to reiterate that masters may not carry out the weighing of evidence contemplated in Ontario’s Rule 20.04(2.1), which is thefirst reason why the guidance in Hryniak v Mauldin regarding the standard of review is inapplicable to an application for

summaryjudgment under Rule 7.3. The second reason relates to Ontario’s policy preference to which I have referred for expanding the judicial role on applications forsummary judgment, as opposed to adopting a

summary trial procedure. The result is that Ontario’s Rule 20.04(2.1) provides for aprocess that is broadly comparable to an application under Alberta’s civil procedure not for

summary judgment under Rule 7.3, butfor judgment by way of

summary trial under Rule 7.5. This is because Rule 7.3 confines the Court to granting

summary judgment onlywhere there is no defence or (conversely) merit to a claim or where the only issue to be determined is the amount to be awarded. Thisleaves no room on a

summary judgment application brought under Rule 7.3 for the weighing of evidence which Ontario’s Rule20.04(2.1) permits. (Murphy Oil Co v Predator Corp (2006), 2006 ABCA 69 , 384 AR 251 at 257: “[w]hen a chambers ...judge must necessarily assess the quality and weight of the evidence to come to a decision, the failure of the case is not beyond doubt”); Beir v Proper Cat Construction, 2013 ABQB 351 at para 68; and Richter v Chemerinski, 2010 ABQB 302 at para21.) Conversely, Rule 7.5 affords litigants access to a

summary process, which – like the process contemplated under Ontario’s Rule20.04(2.1) – allows for and typically entails the weighing of evidence. (Pecek v Fedun, 2007 ABQB 133 at para 133.) The Supreme Court’s direction in Hryniak v Mauldin regarding the deference to be shown to the motions judge on an application under

Ontario’s Rule 20 for

summary judgment therefore does not apply to first-instance decisions on applications for

summary judgmentbrought under Alberta’s Rule 7.3 – irrespective of whether that decision was taken by a master or a judge – for

summary judgment. Itdoes, however, apply to decisions on applications for judgment by way of a

summary trial under Alberta’s Rule 7.5 (which decisionsmust always be taken by a judge, and not a master). (Emphasis added) [12] As reminded by the Court of Appeal in S.B.I. Management Ltd. v. 109014 Holdings Ltd., 1981 ABCA 235, a master inchambers cannot weigh evidence. At paragraph 57 Lieberman, JA held: The master would be exceeding his jurisdiction if he assessed damages in the sense that he weighed evidence in order to arrive at anamount. That is the ratio of Lucy, Cameron and Boyce, supra. Here, however, there was no weighing of evidence.

The amount of$2,110.00 is the result of the addition of liquidated amounts set out in the lease or acknowledged by the parties… [13] There is no doubt, however, that masters have the jurisdiction to grant

summary judgment applications in appropriate cases.At paragraph 30, Lieberman JA held: That a master, in the proper case, can grant

summary judgment is beyond dispute. I do not interpret the ratio in Lucy, Cameron andBoyce v. International Development Ltd. (ABQB), [1975] 1 W.W.R. 244 to hold otherwise. If it does I respectfullystate that it is in error. [14] The real issue here is not a question about the jurisdiction of a master in chambers. It is more properly a question about thenature of

summary judgment applications. [15] So what exactly is a

summary judgment application? [16] Wakeling, J., as he then was, describes the nature of a

summary judgment application at paragraph 61 of Beier v. Proper CatConstruction Ltd., 2013 ABQB 351 : Rule 7.3 of the new Alberta Rules of Court allows a court to grant

summary judgment to a moving party if the nonmoving party’sposition is without merit. A party’s position is without merit if the facts and law make the moving party’s position unassailable andentitle it to the relief it seeks. A party’s position is unassailable if it is so compelling that the likelihood of success is very high. [17] Access Mortgage Corporation

(2004) Limited v Arres Capital Inc., 2014 ABCA 280 cites Beier with approval at paragraph45. [18] In my view, when a court grants

summary judgment, it is finding that the probability distribution for the possible set of resultsin a matter is skewed so significantly in favour of a certain result (either in favour of the plaintiff or the defendant), that a trial is not aworthwhile exercise. In other words, the moving party has shown an “unassailable” case in which a trial would very likely lead to thesame result. [19] During oral argument, Mr. Smith on behalf of the defendant equated

summary judgment to the concept of a directed verdict ina jury case, namely that there must be only one possible result. While I do not specifically adopt that characterization, the point that hemakes is that in order to grant

summary judgment, the result must be found to be unassailable in that it is predictable with a degree ofcertainty. [20] When attempting to apply the

summary judgment rule within a plaintiff wrongful dismissal context, plaintiffs often argue arange of possible outcomes. In this case, for example, the plaintiff argues that the appropriate range for the notice period is 10 to 15months, and that an award of 12 months would be proper. The defendant disagrees. [21] The plaintiff worked for the defendant for approximately six years and seven months. He relocated from Grand Prairie towork in the Calgary office of the defendant. He says that the relocation affected his wife’s employment prospects.

He also says that thecurrent slump in oil and gas related activity likely had some effect on mitigation and reemployment prospects, and that those economicfactors should increase his notice period. The defendant says that the economic climate justifies a shorter notice period. The plaintiff alsoargues inducement by the employer to relocate him to Calgary, while the employer says that the relocation was voluntary. Althoughthere are some differences on the facts, they are not particularly large differences. [22] Most wrongful dismissal cases involve the consideration of the classic factors in Bardal v.

Globe & Mail Ltd., . This one does as well, although it likely requires the consideration of other factors too. [23] A court must decide which factors should be given greater weight in a particular case.

In my view, that involves weighingevidence, as the Court must decide in a given case how much weight to give to any particular fact in the consideration of the reasonablenotice period, and it must do so in a way that is not capable of precise quantification. [24] By way of illustration, consider three simultaneous hypothetical trials of this matter, and assume for the sake of argument thatthe 10 to 15 month range suggested by the plaintiff is appropriate, although I make no finding or comment on that aspect. One juristmight agree with the plaintiff’s submission that the appropriate notice period is 12 months.

Another might arrive at a figure of 10months. Yet another might arrive at a figure of 14 months. The first jurist must weigh all of the appropriate factors and then make anaward. The second jurist does exactly the same thing, and arrives at a different notice period. The third jurist arrives at yet again adifferent notice period. [25] Now consider hypothetical appeals of those three decisions.

The Court of Appeal, when considering the appeals, recognizesthat there is some flexibility within a given range of possible outcomes, and for that express reason it applies a standard of review testwith deference to the trial judge. The Court of Appeal does not merely substitute its opinion for that of the trial judge. If the decision is

reasonable, and within a range that is consistent with the facts and the cases, the appeals are dismissed. All three trial judges are “right”, but they have come to different answers. [ 26 ] In my view, when a master (or a judge for that matter) hears a

summary judgment application, they are determining whether the result of a case appears sufficiently certain that a trial is not worthwhile. That is the nature of Rule 7.3. [ 27 ] An assessment of damages is something much more akin to a trial, because it involves weighing all relevant factors and picking an appropriate figure. That is not something that is part of a

summary judgment application. The result is not necessarily unassailable. Indeed different jurists might reach different conclusions on the notice period and they can all be “right”. One cannot pick the result with the necessary degree of certainty for a

summary judgment application. [ 28 ] The concept of

summary judgment looks at cases from a different perspective. A

summary judgment application determines whether a certain specific result is unassailable. When reasonable jurists can correctly (in law) arrive at different conclusions as to a result, neither result can be said to be unassailable. An equally plausible argument can be made for a different result. [ 29 ] With the greatest of respect to my brother Masters Robertson and Schlosser, I respectfully disagree with their conclusion that we can assess notice periods on a

summary judgment application. That task is beyond the scope of a

summary judgment application. There is a

summary process under which one can have damages assessed in a wrongful dismissal setting, but in my view that process is a

summary trial. [ 30 ] While the

summary trial process in some respects may be less appealing to a plaintiff because they are bound by the result, and appeals from a judge are on a more deferential standard, there is a

summary process available. In fact, recall that Brown, J. (as he then was) equated the

summary trial rule to the

summary judgment rule under consideration in Hyrniak as the

summary process where evidence is weighed. [ 31 ] My concern in this matter is not primarily based upon issues pertaining to the jurisdiction of masters in chambers, but instead upon the purpose and nature of

summary judgment applications, trials and

summary trials. [ 32 ] There is a place for

summary judgment applications in employment law matters. For example, the issue of liability can certainly be determined in appropriate cases pursuant to the

summary judgment rule and the matter can referred to a justice for an assessment of the damages and the notice period. Similarly, an employer could deal with the issue of cause if it wished. The process of considering the evidence, the law, and arriving at a specific award from a choice of a continuum of possible awards, however, falls outside the scope of a

summary judgment application for the reasons set out above. That must be done either at some form of trial process or a damages assessment hearing before a judge, because it involves the weighing of evidence (see paragraph 12 of these reasons). [ 33 ] I am mindful of the argument in some cases (such as Nixdorf ) based upon Rule 7.3(3) of the Alberta Rules of Court . It provides:

(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 and undivided debt, do one or more of the following: ... (

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; ... (Emphasis added) [ 34 ] I note the wording of Rule 7.3(3)(b). It expressly uses the words “issue to be tried” in relation to amount and in my view that is an acknowledgement that a determination of damages in that context is in the nature of a trial. That brings into play the constraints on masters set out in subsection 9(3) (

b) of the Court of Queen’s Bench Act and the inability of masters to conduct trials, whether

summary or otherwise. [ 35 ] In addition, while Rule 7.3(3) also allows the determination of amount to be referred to a referee, Veit, J. held in Kramer’s Technical Services Inc v Eco-Industrial Business Park Inc , 2015 ABQB 383 at paragraph 1 : Because the parties have been unable to agree on the appointment of a specialized referee, the court would be required to appoint a court clerk or a Master as the referee on an assessment of damages: Rule 6.44.

However, even a Master has no expertise in construction/demolition, inadequate facilities to hear potentially lengthy contested factual disputes, and no ability to finally dispose of the matter. In all the circumstances, therefore, the assessment of damages should be undertaken by the court in the ordinary way, i.e. in a trial process . (Emphasis added) [ 36 ] The report of a referee must always go back to the referring party for consideration and adoption (Rule 6.46).

As such, while the Court (and hence also a master) can certainly delegate tasks to a referee, it would be unable to delegate tasks that are beyond the referring party’s own jurisdiction, such as the assessment of damages in the case of a master. Partial

Summary Judgment?

[ 37 ] The employer defendant does not plead cause. It says that it has provided a proper amount of payment in lieu of notice. The employer also defends based upon damage assessment issues, and it counterclaims based upon what it alleges were improper actions of the plaintiff post-termination. The plaintiff denies the alleged post-termination conduct in his affidavit.

I do note, however, that the questioning on the plaintiff’s affidavit in support of this application at least corroborates the existence of interactions with the people to whom the plaintiff is alleged to have made inappropriate statements in the post-termination period. Those extracts are contained at pages 66 to 68 of the questioning of the plaintiff that took place on March 23, 2017. [ 38 ] Based upon the existing record, I do not think that it is appropriate to summarily dismiss the counterclaim of the employer. Viva voce evidence is likely necessary to deal with issues pertaining to the counterclaim.

Whether the employer has put its best foot forward or not, the evidence that it has put forward is sufficient to show issues on the counterclaim that are not capable of being resolved by way of

summary judgment. [ 39 ] In the result, no purpose would be served by making a finding of liability on the main claim and directing an assessment. That is essentially what the pleadings already dictate as cause is not pleaded by the defendant. The parties have unresolved issues with respect to the notice period which cannot be resolved by way of

summary judgment, and they have issues with respect to entitlement to the claimed flow gun revenues, and whether those are a royalty or a commission. Further, they have issues on the counterclaim. Partial

summary judgment is not appropriate in this case. Disposition [ 40 ] The plaintiff’s application for

summary judgment and

summary dismissal of the counterclaim is dismissed. I thank counsel very much for their submissions, both oral and written. They were helpful. If the parties cannot agree on costs they can apply before me to resolve any of those issues. If needed, the parties can simply coordinate a day with the Masters’ office to appear at the end of one of my morning lists to speak to the costs issue. Heard on the 15 th day of June, 2017. Dated at the City of Calgary, Alberta this 30 th day of June, 2017. J. Farrington M.C.Q.B.A. Appearances: McLennan Ross LLP D. Robb Beeman and Alexander MacDonald for the Plaintiff Smith Mack Lamarsh C. Michael Smith for the Defendant