Gas Plus Inc v Levelton Consultants Ltd, 2017 ABQB 655

Court of Queen’s Bench of Alberta Citation: Gas Plus Inc v Levelton Consultants Ltd, 2017 ABQB 655 Date: 20171027 Docket: 1201 05626 Registry: Calgary Between: Gas Plus Inc. and Handel Transport (Northern) Ltd. Applicants (Plaintiffs) - and - Levelton Consultants Ltd., Sabatini Earth Technologies Inc., Ken Hugo, Tank Testers Plus Inc., Dover Corporation (Canada) Limited operating under the trade name and style of OPW Fuel Management Systems of Canada, Hose Master Inc. and the City of Calgary (Defendants) - and - Flex-Pression Limitée aka Pressure Flex Limited and OPW Fueling Containment Systems Inc.

Respondents _______________________________________________________ Memorandum of Decision of the Honourable Mr. Justice P.R. Jeffrey _______________________________________________________ Introduction [ 1 ] Gasoline leaked from a Calgary gas station in 2010. Gas Plus Inc. owned and operated the station (“ Gas Plus ”), on land owned by Handel Transport (Northern) Ltd. (collectively the “ Plaintiffs ” or “ GP ”). They face multiple lawsuits related to those events,

which are in Case Management together with this action. [ 2 ] On May 4, 2012, the Plaintiffs commenced this action to recover their losses from, among others, Hose Master Ltd (“ Hose Master ”).

GP alleged that Hose Master negligently manufactured a flexible fuel line (the “ FFL ”), which caused the leak and all or some of the resulting losses. [ 3 ] GP later formed the view that Hose Master Ltd. did not manufacture the FFL, but that one or both of the respondents on this application did, namely Flex-Pression Limitée aka Pressure Flex Limited (“ FP ”) or OPW Fueling Containment Systems Inc. (“ OPW ”). [ 4 ] On August 15, 2014, GP filed this application to add them as defendants and amend its latest Statement of Claim accordingly. It also seeks to amend its pleading to allege OPW is liable as distributor.

GP says FP and/or OPW manufactured the FFL negligently and that Dover Corporation (Canada) Limited (“ Dover ”) and OPW distributed the FFL without properly ensuring its quality. [ 5 ] FP and OPW oppose the application. They say that if they became defendants, then they could each successfully apply for

summary dismissal of those claims. Therefore, they say, adding them would be pointless. [ 6 ] For the reasons that follow, I deny the application in respect of both FP and OPW.

Facts [ 7 ] In March 2007 Corey Handel directed Mike Wournell, Construction Manager at Gas Plus, to undertake a retrofit at the Bowness gas station. [1] The retrofit involved the removal and replacing of fuel lines between the underground fuel storage tanks and the above surface retail fuel dispensers, within the containment sumps underneath the dispensers. [ 8 ] Mike Wournell’s practice was to assemble all the needed parts before commencing a retrofit. The retrofit commenced in May 2007.

The dismantling of the old equipment took about a week and the installation of the new about two to three weeks. [ 9 ] Mike Wournell says he installed the FFL “on or about the third week of May” 2007. The remainder of his evidence suggests it equally possible that another member of his crew installed that part. [ 10 ] No record of its purchase is before the Court. No record revealing its manufacturer is before the Court. No record revealing its distributor is before the Court. [ 11 ] The FFL originated from inventory shared by Gas Plus and Tank Testers or from a purchase specifically for that installation.

They say it was not used previously. There are no records of the shared inventory. [ 12 ] FP manufactured such fuel flex lines in the years leading up to the 2007 installation of the FFL. So did five or six other companies. They all look pretty much the same because all must comply with “UL” requirements (meaning “Underwriter’s Lab”). The differences between the flexible fuel lines produced by the various manufacturers of them are minor. OPW’s affiant says there is no way to distinguish different manufacturers’ flexible fuel lines without close physical inspection.

Other manufacturers were Toastmaster, Flexing, Hose Master, and Suzhou Falcon Cycle-Parts Co Ltd. The latter made a flexible fuel line that OPW’s affiant said “look[ed] pretty much exactly alike” to FP’s. [ 13 ] Around that time, OPW distributed such flexible fuel lines into the Calgary and area market, including to Keller Equipment Supply Ltd (“ Keller ”). OPW was not the only local distributor of flexible fuel lines. [ 14 ] There are no records of FP shipping flexible fuel lines before the 2007 installation by GP.

There are no records of OPW shipping flexible fuel lines to the Calgary area. [ 15 ] Sal Handel believes GP purchased flexible fuel lines from Keller or National Energy Equipment or ALS Mechanical. He bases this upon a belief that the FFL originated with OPW or Dover and that those three carried OPW and Dover parts.

His reasoning is circular; his evidence that the FFL came from or via OPW is only an assumption. [ 16 ] Gas Plus accounting records show that it paid for equipment from Keller, from National, and from Gregg Distributors for the months encompassing the time prior to the installation of the FFL. [ 17 ] Both Mike Wournell and Corey Handel purchased such equipment for Gas Plus. Mike Wournell did not purchase from Gregg.

He believed that if he purchased the FFL that spring then it would have been from Keller not National because (1) he bought “probably 90 percent of our equipment from Keller because of pricing at that time” and (2) as far as he is aware, “National Energy does not supply OPW.” Mike Wournell’s second reason assumes the conclusion GP relies on his evidence to prove.

He concluded that the FFL came via Keller based on which of the two likely sources carried OPW parts, whereas GP rely on his evidence to establish that it was distributed by OPW because it came from Keller. [ 18 ] The installer pressure tested the FFL for 2 hours. No leak was evident at that time, not from its connection at either end or anywhere along its length. A “Site Commission Form” was signed off on June 4, 2007, following which the system was placed into service.

The “start-up agent name” indicated on the associated “start-up data sheet” is Mike Wournell and the company named across from his name is Tank Testers Inc”. [ 19 ] Following being placed into service and prior to 2010, there was no indication of any leak. [ 20 ] In April or May 2010, Gas Plus started to have irregularities in its fuel reconciliations. In June 2010 Gas Plus received a call that raw fuel product was observed on its Bowness site.

[ 21 ] Gas Plus investigated the cause. It sent Corey Handel, Don Handel (a Gas Plus employee), and Ken Hugo. Don Handel is a cousin to Corey and nephew of Sal Handel. At the time, Ken Hugo was employed by the consulting firm Sabatini Earth Technologies Inc; both are defendants in this action. [ 22 ] Only those three people saw first-hand the FFL connected in place in 2010. [ 23 ] Don Handel took photographs of the FFL before Corey Handel disconnected and removed it. The photos show gasoline accumulating in the containment basin, or “spill box”, below the FFL.

Therefore, fuel was escaping from some part or parts of the underground equipment within that containment area, maybe from the FFL. After removal and replacement of the FFL the leaking ceased. [ 24 ] Sal Handel said Don Handel did the visual inspection and observed the leak. Sal Handel was not there to know that first hand. No other evidence was adduced from Don Handel. [ 25 ] The photographs do not show any active leaking. They do not show any distinctive markings that identify the manufacturer or the distributor of the FFL. The FFL does have a hex nut at its end in the foreground of one photo.

FP says it manufactured flexible fuel lines with hex nuts only until 2002. [ 26 ] Corey Handel and Ken Hugo each suggest a different cause of the leak.

On August 5, 2010, Ken Hugo reported to Alberta Environment and Sustainable Resource Development (“ AESRD ”) that the: …source of leak traced to bad connection in pump, compounded by hole in spill box below pump, compounded by alarm in spill box being placed above hole in spill box [ 27 ] In a September 1, 2015, affidavit, Corey Handel said: Upon attending the site, I opened a sump under one of the dispensers and identified a pin-hole leak in a fuel flex pipe. … [ 28 ] In cross examination on that affidavit Corey Handel described the leak as follows: Q. Where on the hose did the leak occur? A.

I think it occurred – it was probably – it was in the coil wire part. I’m not exactly sure what location, but it was squirting out the wire part. Q. Are you certain that the leak was not occurring at the connection? A. Yes. Q. Based on what? A.

Based on vision that I seen it coming out the side of the hose when the pump was turned on, or when it was pressurized, I guess, … [ 29 ] Corey Handel also said on September 1, 2015: I identified the make and model of the leaking fuel flex pipe as a 1½” Flex Pression, fuel flex pipe and travelled to Keller Equipment Supply Limited in Calgary where Gas Plus routinely … obtained … fuel flex pipes. I knew I could obtain an identical pipe to replace the leaking pipe as Gas Plus had obtained the original equipment installed at the site from Keller. [ 30 ] Corey Handel proceeded to remove and replace the FFL.

He then disposed of the FFL. About that he said: The faulty pipe was later discarded in what was

an act of caution at the time. I did not want the faulty pipe, which showed no obvious sign of malfunction, to be inadvertently installed in another instance and as such, it was discarded. [ 31 ] Sal Handel said that because “we were in panic mode” the FFL was “misplaced”. Again, he has no firsthand knowledge of the loss or disposal of the FFL. [ 32 ] Either way, the FFL was not tested in any way prior to loss or discard.

It has not been available since, for inspection or analysis or use at trial. [ 33 ] The only remaining record of the FFL are two photographs and a third that is an enlargement of a portion of one of those two. From that photographic evidence, it is not possible to determine on a balance of probabilities who manufactured the FFL or who distributed the FFL. [ 34 ] GP commenced this action in May 2012 and named Hose Masters as the manufacturer.

Sal Handel said that resulted from “a verbal discussion amongst myself, my son and our technician that Hose Master, OPW and Dover were all of the same corporation, which I guess was an error.” [ 35 ] Distributors of flexible fuel lines affix to them a yellow label containing required wording, but each distributor’s label may configure that wording on the yellow label in the manner it chooses. Therefore, seeing the label of the FFL might inform of its distributor and, perhaps, its manufacturer (if, for example, the labelling process forms part of the manufacturing process).

[36] On August 27, 2013, Sal Handel purchased from Keller an OPW FP flexible fuel line. He compared it to the Don Handelphotographs of the FFL. He concluded they were “identical”. [37] On August 15, 2014, GP filed this application.

The overwhelming majority of the delays since then in arranging andproceeding with its hearing are not GP’s fault; rather, GP displayed considerable forbearance throughout that time. [38] In September 2015, Corey Handel swore his affidavit saying, among other things, he knew back in 2010 the FFL was fromFlex Pression. [39] In January 2016, while cleaning out his trailer, Mike Wournell discovered two “OPW/Flex-Pression fuel flex pipes” with thewords “Flex Pression” etched into a metal portion of it, along with some other numbers and “05-16-2007”.

Bands around them indicate“OPW A Dover Corporation” along with UL and other markings. Mike Wournell testified to being “absolutely certain” they wereobtained from Keller in May 2007 for the Bowness retrofit, were installed as part of that retrofit along with the FFL, but unlike the FFLremained in operation there until they were dismantled in 2012 and then stored in his trailer until rediscovery in January 2016. GPsuggests that the FFL therefore was, like these two, manufactured by FP and distributed by OPW. [40] FP says it manufactures flexible fuel lines under a UL license from OPW.

It says that in and around May 2007, OPW was theonly recipient of all the flexible fuel lines FP manufactured. FP shipped them from its Quebec manufacturing facility to OPW in NorthCarolina by truck. [41] OPW worked with FP in developing FP’s product. OPW says other parties also sold and distributed FP’s flexible fuel lines.OPW shipped such flexible fuel lines from its North Carolina warehouse to retailers, including Keller, also by truck. Preliminary Issues 1.

GP’s Use of Transcript of the Examination of Its Own Witness(es) [42] FP took exception to GP relying on the transcript of another party’s cross-examination of one of its affiants, Mike Wournell.This objection is without foundation. GP’s counsel is right that, unlike the answers given in questioning on discovery, the answers givento cross-examination on an affidavit automatically form part of the record before the Court: Alberta (Attorney General) v Alberta Power(2000) Ltd, 2017 ABQB 195 at para 24. All parties may rely on that evidence in the subject application. 2.

FP Consenting to Court Order Containing an Adverse Recital [43] On August 8, 2016, in response to a Notice to Admit Facts, FP admitted that it manufactured the FFL. Soon after, it said itshould not have made that formal admission and that it resulted from its counsel’s error (by FP’s predecessor counsel, not its counsel onthis application). FP filed an application with the Court to permit it to withdraw the admission.

In support it presented evidence it hopedwould satisfy the applicable test (set out in Stringer v Empire Life Insurance Company, 2015 ABCA 349, including from paragraph 12thereof that: “the admitted fact may not be true, and that there is a genuine issue about an important enough fact to warrant sending thedisputed fact to trial”). [44] Given the evidence of what had occurred, GP acceded and an order permitting FP’s withdrawal of the admission received theconsents of GP and FP (the “Consent Order”). I approved the Consent Order as presented on November 16, 2016.

The Consent Ordercontains in the recitals the following words (the “Impugned Recital”): UPON it appearing that the issue of whether the [FFL] was manufactured by [FP] is a genuine issue regarding a sufficiently importantfact to warrant sending that disputed fact to trial; (emphasis in original) [45] GP acknowledges that FP consenting to the Impugned Recital does not estop FP from taking the position it does now.However, GP says that FP’s express agreement to the Consent Order in entirety, including the Impugned Recital, is nevertheless of somerelevance now.

After all, it implies, FP earlier agreed to there being an issue warranting trial, how can it now say the exact opposite? [46] The words in the Impugned Recital track closely the wording of the applicable legal test. I infer from those words and fromthe context (of a lawyer attempting to undo something significantly adverse both to his client’s legal position and to his own solicitorclient relationship) that FP agreed to this wording only to facilitate the disposition of the interlocutory proceeding, not for any broaderpurpose.

See analogously in this regard: Guy v Brady (1885), (NB KB), 24 NBR 563 (NBCA), at paragraphs 5 and 6.Therefore, I am disinclined to GP’s approach. [47] In any event, I take the words in the Impugned Recital not to state the exact opposite of FP’s current position. In agreeing tothe Impugned Recital FP is saying the issue of whether it manufactured the FFL is at least a genuine issue warranting trial, and now FPis saying its position on the issue is even stronger than that. It now says there is not even any point in going to trial on the issue there isso little indication of FP being the manufacturer.

On the question of whether to permit the withdrawal of the erroneous admission,therefore, the Impugned Recital speaks to the minimum level necessary to justify the permission. It was not a complete statement of FP’sposition on the quality of evidence on the question of whether it manufactured the FFL. That is, FP was not by that phrasing foreclosingthe possibility of later saying, as it is now, that there is not even sufficient evidence of it being the manufacturer to warrant a trial on thepoint.

Further, the commencing words “UPON it appearing” are words of enough breadth and ambiguity to entail ‘possibility’ notnecessarily ‘certainty’. [48] In light of those commencing words, the Impugned Recital cannot be taken as itself a clear admission of the point or even ofsome indication by FP that should be a relevant consideration on this application. FP has not agreed that there is a genuine issue on thepoint, only that it appears to be so at that time. It is not inconsistent for FP to now take the position, on the basis of all the evidence on

this application, that there is not even “a genuine issue regarding a sufficiently important fact to warrant sending that disputed fact to trial”. 3. Outstanding Undertaking Response [ 49 ] OPW’s affiant said it is not the exclusive distributor of FP’s flexible fuel lines. FP’s affiant said OPW is its only distributor. FP’s affiant said there was an agreement between them. He was asked to undertake to produce it, which was ‘taken under advisement’.

Specifically, the request was for production of: “some kind of agreement in or around May of 2007 between OPW and Flex-Pression” regarding whether OPW was FP’s exclusive distributor at the time. [ 50 ] Despite requests from GP since then for the agreement, none has been produced. GP believes production of any such agreement will reveal whether or not there was an exclusivity clause, which will “clearly strengthen [GP’s] theory of the case”. [ 51 ] GP filed a separate application for an order compelling its production and included with the hearing of this application its arguments in support of that application.

It seeks a ruling now on that application also.

Regardless of its production now, however, GP says the conflict in evidence between FP and OPW on whether all FP’s product goes to OPW, demonstrates another triable issue. [ 52 ] The test of whether to compel production of a record in the context of an examination of an affidavit, is best stated by the Master in Dow Chemical Inc v Shell Chemicals Canada Ltd , 2008 ABQB 671 , at para 5 : […] the court should be reluctant to direct that undertakings be provided by a party proffering a deponent who is unable to answer all questions put to the deponent during a cross-examination.

It should be more difficult to have undertakings directed on a cross- examination than at examinations for discovery. Undertakings should only be directed on a cross-examination where: (

a) the deponent has referred to information or documents in the affidavit, or could only have made the assertions contained in the affidavit after having reviewed the information or documents being sought, or (

b) the undertakings relate to an important issue in the application, and the provision of such information: (

i) would not be overly onerous, and (ii) would likely significantly help the court in the determination of the application. This statement of the test has been regularly adopted by this Court since. See, for example: Rozak (Estate) , 2011 ABQB 239 , at para 37 ; PM&C Specialists Contractors v Horton CBI Limited , 2015 ABQB 248 , at para 10 ; and Alberta (Attorney General), supra , at para 26. [ 53 ] The requested document was not referred to in the affiant’s affidavit or the foundation for any statement in that affidavit; therefore, the first branch does not apply.

GP says any such agreement will likely significantly assist the Court in determining whether to grant the requested amendments. FP says the agreement is not relevant to the issues. [ 54 ] The test has a relatively high threshold: “…the court should be reluctant” ( Dow Chemical at para 5). In my view, that threshold has not been met. In my view, the record would not assist the determination of this application.

Even if the agreement somehow assisted in showing that whether FP or OPW manufactured or distributed the FFL are triable issues, it could do nothing to overcome the other reasons I describe below for denying the amendment application. [ 55 ] But here the agreement will not inform whether FP and/or OPW is the manufacturer. The most the agreement could show, if it actually contains a covenant of exclusivity requiring all FP flexible fuel lines go to OPW, is that if the FFL originates with FP, then any such agreement would significantly assist in determining whether OPW was the distributor.

It will not inform the question of whether the FFL originates with FP. [ 56 ] If it is shown that there is a genuine issue to be tried on whether OPW distributed the FFL, then any exclusivity clause in the agreement would not significantly assist determining that there is a genuine issue to be tried on whether FP manufactured it. There is no evidence that all OPW flexible fuel lines came from FP.

Just because all FP flex lines go to OPW does not mean that all OPW flex lines came from FP. [ 57 ] The only basis for ordering production of the agreement, then, would be if GP shows there to be a genuine issue to be tried on whether FP manufactured the FFL. If so, then it will significantly assist in determining whether OPW distributed it. However, for the further reasons below GP has failed to show a genuine issue to be tried on whether FP manufactured the FFL. Therefore the application to compel production of any such agreement also fails.

Applicable Law [ 58 ] The test for whether to allow an amendment of pleadings was described by the Alberta Court of Appeal, in Foda v Capital Health Region , 2007 ABCA 207 , at paragraph 10 : Generally, pleadings can be amended at any time, subject to the following exceptions: it causes the opposing party serious prejudice not compensable by an award of costs; the amendment is hopeless; unless permitted by statute, it adds a new cause of action or adds a new party outside the statutory limitations period; the failure to amend earlier is indicative of bad faith, ….

This was repeated and followed in Attila Dogan Construction and Installation Co Inc v AMEC Americas Limited , 2014 ABCA 74 , at paragraph 25 .

[ 59 ] The parties agree that it is the second exception at issue here, whether the amendments are hopeless (that is, amendments that, if they were in the original pleadings, would have been struck). OPW says the third exception also applies, that the applicable limitation period has expired. [ 60 ] In Attila Dogan , the Court of Appeal added, at paragraph 26: […] the amount of evidence required to justify an amendment is low. It is not necessary for the amending party to show that the amended pleading can be proven at trial, nor that it meets the test for

summary judgment. In Balm v 351 2061 Canada Ltd , 2003 ABCA 98 at para 29 , 14 Alta LR (4th) 221 , 327 AR 149 it was said that “a modest degree of evidence justifies an amendment to pleadings”. Evidence may be sufficient to support an amendment even if contradictory evidence is presented: Balm at para 15 . Even though the test is low, it is not necessarily met by producing “one piece of evidence on each point”. [ 61 ] However, the Court of Appeal added, at paragraph 29: As noted, the evidentiary standard for amendments is low, but the test does not preclude all weighing of the tendered evidence by the judge.

While it is true that the mere presence of contradictory evidence would not necessarily prevent an amendment, it does not follow that merely providing “some evidence” on each point is sufficient.

The judge is allowed to engage in some limited assessment of the evidence presented in determining if the threshold necessary to justify amendment has been met. [ 62 ] In Madill v Alexander Consulting Group Limited , 1999 ABCA 231 , at paragraph 27 , the Court of Appeal said: As tempting as it may be to defer an amendment application to the trial court, the objective is to have pleadings in order well before the trial commences.

When a court is in the position to decide the matters before it, particularly when the decision will promote the streamlining of the litigation and increase the efficient utilization of the courts’ resources, such a decision ought to be made.

While a chambers judge is not required to make such decisions, it is expected that the judge will do so when there is sufficient evidence, or when the issue is one of law alone. … Of course, if there is conflicting evidence, or good reason to think that credibility is in issue, or where the issue can only be decided in the context of live evidence, or that further evidence will emerge at trial, the decision about amendments and limitations should be left to the trial judge. [ 63 ] Regarding the second exception, GP must be able to resist notional applications by FP and OPW to dismiss summarily the claims GP wishes to add.

The onus in those notional

summary dismissal applications is on FP and OPW. [ 64 ] To succeed on the notional

summary dismissal applications, the Respondents must satisfy the revised test established by the Alberta Court of Appeal. The Alberta Court of Appeal followed the SCC’s direction in Hryniak v Mauldin , 2014 SCC 7 , which was based on Ontario’s civil practice rules, calling for a culture shift and challenging courts not to think of a trial as the only or the optimal process for dispute resolution. The Alberta Court of Appeal established a revised test for

summary dispositions, stating: “The modern test for

summary judgment is therefore to examine the record to see if a disposition that is fair and just to both parties can be made on the existing record.”: Windsor v CPR , 2014 ABCA 108 at para 13 . [ 65 ] In 776826 Alberta Ltd v Ostrowercha , 2015 ABCA 49 , the Alberta Court of Appeal says this test comprises both procedural and substantive considerations. As a matter of process, a case may be disposed of summarily if a fair and just result can be reached on the current record. As a matter of substance, a case may be disposed of summarily if the respondent’s position is without merit. Not all issues of fact constitute an issue of merit. To survive

summary disposition, the responding party (GP here, on what I have called the notional dismissal applications) must show “a genuine issue of a potentially decisive material fact” which cannot be determined fairly and justly without trial: Ostrowercha at para 11 . [ 66 ] On such applications parties must put their ‘best foot forward’ now, not rely on future evidence: Canada (Attorney General) v Lameman , 2008 SCC 14 , at paras 11 and 19 . They need not adduce all their evidence, but enough to satisfy the test for, or successfully resist the case for,

summary disposition now. [ 67 ] Not all conflicts in evidence are of sufficient materiality to necessitate a trial: Sandhu v Siri Guru Nanak Sikh Gurdwara of Alberta , 2015 ABCA 101 , at para 81 . See also the useful discussion in: R Floden Services Ltd v Solomon , 2015 ABQB 450 , at paras 18 - 24 .

In Condominium Corporation No. 0321365 v Cuthbert , 2016 ABCA 46 , at para 28 , the Alberta Court of Appeal said: “Summary judgment is not possible if opposing parties’ affidavits and evidence conflict on material facts...” (underlining in original). [ 68 ] Regarding the third exception to permitting an amendment, the expiry of a limitation period, in Dow Chemical Canada Inc. v Nova Chemicals Corporation, 2010 ABQB 524 , Wittmann, CJ said, at para 64: Traditionally, when there is an issue of limitations and an amendment is sought, a court may: 1.

Determine the limitation period has not expired and allow the amendment. 2. Rule the limitation period has expired and therefore consider s.6 of the Limitations Act which provides for when an amendment can be made beyond the limitation period. 3. Find that because of uncertainty in the evidence, the amendments should be allowed subject to the determination of the limitation issue at trial: Hill v. Hill, [2007] A.J. No. 1515 (Q.B.) at para. 22 , aff’d 2007 ABCA 293 at para. 10 . A variation of the last option is to determine whether s. 6(2) (

b) of the Limitations Act saves a claim otherwise barred by the statute. [ 69 ] OPW says this case falls in the second category and is not saved by s 6 of the Limitations Act . GP and FP say that it falls in the third category. [ 70 ] The Limitations Act , RSA 2000, c L-12, says, at sections 3 and 6 :

3(1) … if a claimant does not seek a remedial order within (a) 2 years after the date on which the claimant first knew, or in the circumstances ought to have known, (

i) that the injury for which the claimant seeks a remedial order had occurred, (ii) that the injury was attributable to conduct of the defendant, and (iii) that the injury, assuming liability on the part of the defendant, warrants bringing a proceeding, … the defendant, on pleading this Act as a defence, is entitled to immunity from liability in respect of the claim. … 6(1) Notwithstanding the expiration of the relevant limitation period, when a claim is added to a proceeding previously commenced, either through a new pleading or an amendment to pleadings, the defendant is not entitled to immunity from liability in respect of the added claim if the requirements of subsection ... (4) are satisfied. ...

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

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

(5) Under this section, ... (

b) the defendant has the burden of proving that the requirement of subsection ... (4)(b), if in issue, was not satisfied. [ 71 ] On the limitations issues I find helpful the

summary of jurisprudence applicable in the province provided by Renke, J in Condominium Plan No 0125764 v Amber Equities Inc , 2015 ABQB 235 , at paragraphs 92 to 98 . Analysis Evidence of the Specific Manufacturer or Distributor [ 72 ] GP says that whether FP and/or OPW is the manufacturer, and OPW the distributor, are genuine issues of material facts based upon a number of “foundations in fact”.

They point to: First, Mike Wournell’s evidence about the FFL before its installation in May 2007; Second, Corey Handel’s personal observation in June 2010 when investigating the source of leaked gasoline; Third, Sal Handel’s comparison of the FFL in the photographs of it prior to removal, to a new one he purchased in 2012; Fourth, Mike Wournell’s discovery in January 2106, while cleaning out his work trailer, of two used FP flexible fuel lines dated May 16, 2007; Fifth, the admission by FP; and Sixth, the inability of either Respondent to rule out that the allegations were possible. [ 73 ] First, Mike Wournell, in his affidavit of April 8, 2016, recalled from May 2007 when he undertook the retrofit that: I did not know Flex Pression was the manufacturer.

I called them OPW pipes because of the clear OPW label attached to the pipes. He said the FFL was new and that it was either recently purchased or came from the joint inventory of Gas Plus and Tank Testers Plus. [ 74 ] Second, in his affidavit of September 1, 2015, Corey Handel said that in June 2010, when he observed the FFL leaking, he saw that it was a FP flex line. He purchased an identical replacement part for the repair, purchasing from Keller a FP flex line. [ 75 ] Third, on August 29, 2013, Sal Handel purchased new flexible fuel lines to then compare to the photographs of the FFL.

He concluded they were “identical”. [ 76 ] This has no probative value. It is an opinion derived from his comparison of his recently purchased flexible fuel lines to the photos of the FFL, which anyone could do. Sal Handel never once saw the FFL. The photos of it do not reveal any identifying or distinguishing features as to the manufacturer or distributor of the FFL. In describing the FFL he said “There is also a stamp in the metal of the [FFL] bearing the name of [FP].” No such stamp is visible on the photograph of the FFL. It is visible on the one he purchased in 2012, but not on the photographs of the FFL.

With respect, the photographs of FP manufactured flexible fuel lines he purchased in 2013, on my similar simple observations, show them not to be identical to the photographs of the FFL. [ 77 ] Further, Sal Handel’s “analysis” was demonstrably ‘result driven’. He did not assemble flexible fuel lines from all

manufacturers and distributors supplying the 3 or so retailers Gas Plus may have purchased the FFL from, and seek to identify objectively the most similar. It appears he purchased only ones that would enable him to reach his desired conclusion.

If he selected a flexible fuel line manufactured by any of the others available on the market would his conclusion have been the same? [ 78 ] In fairness, GP may not currently rely on this evidence of Sal Handel for the merits of the issues it says warrant trial, but rather in respect of the discovery of the Respondents’ involvement for limitations purposes. [ 79 ] Fourth, regarding the FP flexible fuel lines discovered in 2016 in Mike Wournell’s work trailer, he said that in 2012 the entire apparatus at the Bowness gas station was dismantled and all the equipment removed.

Gradually, some of the removed equipment was re- used elsewhere. [2] He believed the two found in his trailer were from the 2007 retrofit, just like the FFL was. [ 80 ] Under cross examination Mike Wournell conceded that all he could say with certainty is that the used flexible fuel pipes belonged to Gas Plus. He could not say where the discovered ones went before being found early 2016 in his trailer. He could not confirm they were ever installed at the Bowness gas station, or removed therefrom in 2012.

He acknowledged that between 2012 and 2016 lots of parts from Gas Plus stations and from other stations went in and out of his trailer. He admitted there is no way to know if the two he found were ever installed at the Bowness station. He admitted to not seeing the FFL leaking, from which to enable a visual comparison of his recollection of the FFL to the two found in his trailer.

That is, he had no basis to know which of the many he saw during the installation during the retrofit, if he recalled any of them specifically, was the FFL and from which to make any subsequent comparison. [ 81 ] When asked why he said he was certain FP manufactured the FFL, Mike Wournell said because they purchased 90% of their equipment from Keller and that National did not sell “that brand”. That is, on why FP manufactured the FFL, Mike Wournell said because it was from Keller. When asked how he knows the FFL came from Keller, he said in effect, because Keller (not National) carries FP products.

As I stated earlier (para 17 above), his reasoning on this point is circular. It is without probative value. [ 82 ] In any event, I find it most improbable that the FFL was like the two used flexible fuel lines that Mike Wournell found in his trailer January 2016, seemingly manufactured by FP on May 16, 2007. [ 83 ] First, the photos of the ones Mike Wournell found in early 2016, marked “05-16-2007”, have wording on the OPW band on them that is in different positions and a different font than the portion of the comparable label that can be seen in the photos of the FFL.

In addition, on the FFL the label wording is all in upper case whereas in the ones found by Mike Wournell, it is not all upper case. These are significant.

It means that it is actually very unlikely the FFL was a FP flexible fuel line manufactured on or before May 16, 2007; it received a different label than the two marked May 16, 2007. [ 84 ] Second, if the FFL was manufactured on May 16, 2007, the FP affiant said the FFL would have “an integral hexing pad in [its] casting, on the end connection” and no such hexing pad is evident in the photographs of the FFL. [ 85 ] Third, if all 3 originated with FP at the same time and were all installed at the Bowness station in May 2007, they all would have to have made their way to the work site in Bowness prior to Mike Wournell commencing the work, but after receiving that date stamp on May 16, 2007.

This seems virtually impossible. The first step of the work was dismantling the existing apparatus, which commenced sometime in May 2007. The FFL was installed “on or about the third week of May”, that is, somewhere between May 15 to 21, perhaps plus or minus a few days at either end because it is an approximation. The FFL arrived on site prior to commencement of the work, therefore at the earliest prior to the date of its manufacture.

If the FFL was installed at the end of the time range Mike Wournell estimates, therefore on or about May 21st, that means in 5 days the FFL had to make its way from the date stamping part of the FP factory in Quebec to the work site. This would involve moving within the FP facility from the stamping location to where such products are gathered together for shipping in bulk to OPW in North Carolina, USA.

From there they had to be loaded onto the transport truck, travel to North Carolina (including any delays for the border crossing clearing processes), get unloaded in North Carolina and streamed for labelling, receive the label, get streamed for shipping to market, get loaded onto a transport truck, travel to Calgary by that truck or a number of them (including again the border clearing processes), be received, unloaded and placed on some stocking shelf by Keller, purchased by Gas Plus and transported to site – all within about 5 days. [ 86 ] Is that time line possible? Yes, perhaps. Is it at all probable? No.

Given the distances, methods of transport and other steps necessitated, arrival on site for installation by May 21, even by May 23 being generous to GP, is extraordinarily unlikely. It is not impossible, but it is most implausible. This significant doubt is shared by one of the affiants for an affiliate of OPW. The two lines found in the trailer, therefore, do nothing to implicate FP or OPW. All they do is rule out that the FFL was made by FP on May 16, 2007. [ 87 ] Fifth, regarding FP’s admission, first the admission of law in the

preamble can have no adverse effect on OPW since it was not involved with that event (and GP acknowledges that). Second, the alleged admission of law in the Impugned Recital, for the reasons given above, does not bear out the conclusion GP invites me to draw against FP. Third, the admission of fact also has no residual relevance. The admission of fact was made in error. It was permitted to be withdrawn by court order. Therefore, it is now as if the fact was never admitted.

It can have no residual evidentiary value that erodes the effect of or collaterally attacks that order. [ 88 ] Sixth, GP emphasizes that none of the Respondents can rule out the possibility of their involvement. Alone, of course, merely showing that something is not impossible does not warrant a trial. There must be more. GP says there is more, but if alone this basis is meaningless, then that means it adds nothing to the analysis if there are other pieces of evidence militating in favour of trial.

It cannot, therefore, help GP get over the bar, as low as it is, to merit either claim proceed to trial. [ 89 ] Of the six possible “foundations in fact”, then, the only evidence possibly probative is that of (

i) Mike Wournell regarding OPW, and (ii) Corey Handel regarding FP. Is this enough to demonstrate a genuine issue to be tried on a material fact? Trial is not needed to fairly decide the issues or to assess their substantive merit. The issues of who manufactured and who distributed the FFL are definitely facts that are material to GP’s claim. But these two bits of evidence are not enough to merit trial, particularly in light of their frailties. [ 90 ] Mike Wournell’s recollection is almost a decade old. He said under oath that he recalls “the requirement of ‘5’ OPW/Flex-

Pression fuel flex-pipes for the job” and refers to notes from that time of a list of parts requirements that he received from Corey Handel. However, those notes do not refer at all to “OPW/Flex-Pression” pipes, only to “5 flex risers”. He does not recall whether the FFL came from inventory or was purchased specifically for the retrofit, yet he recalls specifically they were OPW/FP risers. I consider this inconsistency unlikely. Elsewhere in his evidence he says he thinks of all risers as OPW pipes.

In his affidavit he said he was “absolutely certain that these OPW/Flex-Pression fuel flex pipes were obtained by me from Keller Equipment Supply Ltd.”. In cross-examination his certainty about purchasing them at Keller was based on, as I indicated above, circular reasoning. None of the contemporaneous invoices from Keller show such parts having been purchased there by Gas Plus. I find the apparent confidence and certainty expressed in his affidavit is about other details, not about OPW or FP being their source. He has assumed they are OPW/FP sourced.

I strongly doubt he has any current recollection on that point. It is an assumption seemingly based on industry parlance (that all such risers or hoses are ‘OPW’ hoses), like ‘aspirin’ became the commonly used name for all acetaminophen tablets, regardless of manufacturer, or ‘Kleenex’ became the commonly used name for all tissues, regardless of manufacturer. The most that could be inferred, then, is that OPW may have enjoyed a larger share of the market for such parts, therefore becoming the common name for them.

In light of all the evidence presented, there is insufficient merit to the allegation that OPW was a source of the FFL to warrant granting the amendments against its interests. [ 91 ] I find similarly with respect to FP. Corey Handel’s evidence of a specific recollection from June 2010 demonstrates truly remarkable recollection, that I find unreliable, given the following factors. First, it is common ground that these flexible fuel lines from different manufacturers appear similar.

One affiant, who would be more familiar with this point, said they are virtually indistinguishable one from another, without careful inspection. On June 3, 2010, Corey Handel’s paramount attention was on identifying the cause of the leak. I strongly suspect his ancillary objective was on stopping any such leak so the Bowness station facilities could resume normal business operations. If he was being careful enough to identify the particular manufacturer of whatever part or parts might have been found to be the source of the leak, as he now suggests, then there is no way he would have discarded them.

That he discarded the FFL confirms conclusively that he was not paying attention to the manufacturer(

s) or distributor(

s) or vendor(

s) of any faulty parts, or to what might be needed for any possible future recourse measures including, perhaps, a lawsuit. Second, over 5 years passed after his observation before his attestation to it. Third, his evidence expressing certainty as to source of the FFL lacks credibility, after he participated in a discussion that got the identification wrong the first time – likely because they are all so similar and, as Sal Handel said, were believed to be all one big company.

It appears that he did not tell Sal Handel that he recalled with certainty that FP manufactured it, when discussing with him about naming Hose Master as the defendant manufacturer. This was some three years closer in time to the events, so it is much more likely his recollection was clearer then. The other possibility, of course, is that during that much earlier discussion referred to by Sal Handel, Corey Handel did specifically report his observation that FP was the manufacturer but, despite that, GP named Hose Master not FP and/or OPW.

This other possibility exacerbates GP’s limitations problem, discussed below. [ 92 ] Therefore, while the possibilities of what GP alleges cannot be conclusively ruled out (that FP and/or OPW manufactured the FFL or that OPW distributed it) they are tenuous at best – theoretical possibilities only. In my view, any such possibilities are each extraordinarily remote. On this record in my view, there is virtually no hope of trial success by GP showing that either OPW or FP was the source of the FFL. Among other things, the record before me strongly suggests the GP affiants have assumed these conclusions.

The case against each lacks sufficient merit to warrant the amendments GP requests and then both FP and OPW continuing towards trial to face these allegations. [ 93 ] GP suggests that the credibility of these affiants is a matter for trial not for interlocutory disposition. That approach is not absolute. Credibility findings can be made without a trial. More to the point in this case, even if all GP’s affiants are found credible on the matter of their now identifying FP and/or OPW as the source of the FFL, I cannot conceive of any different outcome following a trial.

Evidence of Negligent Manufacture, Causation, Failure to Warn [ 94 ] Even if GP had demonstrated the requisite level of merit as to the manufacturer and/or distributor of the FFL to warrant continuing on towards trial, it would be of no consequence. To succeed ultimately against FP and/or OPW, GP must also prove the negligent manufacture of the FFL.

In the absence of the FFL itself, this is extraordinarily unlikely. [ 95 ] In support of there being negligent manufacture, GP can point only to the evidence of Corey Handel seeing a pin-hole leak when the FFL came under pressure. [ 96 ] Against that lone piece of evidence are, first, the potentially contrary evidence of Ken Hugo as to the cause. [3] Second, there is no information as to the operating pressure at the time the pin-hole leak was observed (versus the design pressure of the FFL). Third, negligent manufacture does not automatically follow merely from the existence of a pin-hole leak.

There are many other equally plausible possible causes for a pin-hole leak, including for example an impact during delivery, an impact during its display by its retailer or during movement or storage by the retailer, negligent installation, damage by repetitive pressurizing/depressurizing events outside acceptable levels during operation, use beyond the recommended number of hours of operation under pressure before replacement is advisable, and so on. [ 97 ] Without the FFL available for inspection, in this case I cannot conceive of GP having any hope of succeeding at trial of proving on balance, that anyone manufactured the FFL negligently or, therefore, that any distributor could be found liable for its distribution. [ 98 ] Regarding possible liability of OPW as distributor, any duty to warn on its part requires proof first of an awareness of the alleged defect.

No evidence is presented of that element of the cause of action against it, therefore there is no merit to any claim a duty to warn was triggered. [ 99 ] A fair and just result can be reached on the current record. There is no genuine issue warranting trial on any possible negligent manufacture or that it was known or knowable to any distributor triggering any duty to warn.

Expiry of Limitation Period [ 100 ] GP and FP say the limitation cannot properly be determined at this stage, because they say the evidence before the Court conflicts as to the date of discovery. In light of this uncertainty in the evidence, GP says, the amendments should be allowed but subject to determination of the limitation issue at trial, or in the alternative to be revisited after discoveries. [ 101 ] OPW says it can be determined now, on this record. It says that the expiry of the limitation period provides an additional basis for the notional

summary dismissal and, therefore, an additional basis for denial of the application to add OPW. [ 102 ] GP says the key to this issue is ‘what did GP know and when did it know it?’ It focuses on the evidence of Sal Handel, the litigation representative of both corporate Plaintiffs. GP says it is a triable issue whether Cory Handel’s knowledge of June 2010, disclosed in his affidavit of September 1, 2015, was known or reasonably knowable by the Plaintiffs prior to September 2015.

GP says that: … what’s missing here is the objective evidence that a person in the position of Sal Handel, as representative for Gas Plus and Handel Transport, ought to have known prior to August of 2013 that the action should have been commenced against OPW and Flex-Pression. [ 103 ] I disagree. First, the test for “ought to have known” is reasonable diligence analyzed in the light of the three s. 3(1)(

a) factors: Amber Equities , at paragraph 93. That has not been demonstrated here. At paragraph 95 of Amber Equities , Justice Renke adds: …there is no statutory requirement that a claimant have “clear information” respecting an injury: CNRL at para 41.

The test, as set by the Limitations Act , is whether the claimant “ in the circumstances ought to have known” of the claim – whether the claimant was reasonably diligent in determining whether it had a claim, in the claimant’s circumstances. (emphasis in original) [ 104 ] I find the Plaintiffs were not reasonably diligent in the circumstances in determining whether they had a claim against the Respondents. [ 105 ] Second, I disagree that such evidence is missing here. There is such objective evidence.

Corey Handel said in his September 1, 2015, affidavit that in June 2010 when he opened the sump and inspected its contents, he observed a “pin-hole” leak when the FFL was under pressure (that is, when the pump it connected to was operating). He “identified the make and model of the leaking fuel flex pipe as a 1½” Flex Pression fuel flex pipe” and said he then travelled to Keller to obtain an identical replacement pipe.

He said he was unsure of the length he required so purchased one each of 18” and 24” in length. [ 106 ] I find that the Plaintiffs did know of this recollection of Corey Handel before May 4, 2012, when they filed their initial Statement of Claim. That is the only possible conclusion from the Plaintiffs alleging in that May 4, 2012 Statement of Claim, at two different paragraphs, that the FFL had a “pin-hole” leak. The only source of that information could have been Corey Handel.

Sal Handel’s evidence that the naming of Hose Master in that initial Statement of Claim resulted from a conversation he had with, among others, Corey Handel, reinforces this conclusion. [ 107 ] A copy of the invoice resulting from Corey Handel’s June 2010 purchase of a replacement riser is attached to his affidavit. Notably, Keller issued the invoice to Gas Plus Inc, not Tank Testers Plus, in respect of the purchase by “Corey” on behalf of Gas Plus. I find further, therefore, that Corey Handel was acting on behalf of Gas Plus and that his knowledge at that time was the knowledge of Gas Plus.

This role of Corey Handel within and on behalf of Gas Plus is confirmed also by Corey Handel’s role as the superior to Mike Wournell, by “Corey’s” name appearing on Keller invoices to Gas Plus from 2007 for credit purchases in excess of $30,000, his being dispatched to the scene for and by Gas Plus in 2010, by GP’s acknowledgement in argument that these are a family business, and by the apparent ignoring of any distinction between the different corporations by people like Mike Wournell (see, for example, para 18 above). [ 108 ] Further, reasonable diligence would have revealed to GP that Keller invoiced Gas Plus (not Tank Testers or any other potential third party) for the replacement riser (that Corey Handel later said was an identical riser), indicating on that invoice that at least one of the two was a “Flex-Pression” part.

Follow-up inquiries with Corey Handel could have revealed the information contained in his September 2015 affidavit. [ 109 ] I also find the Plaintiffs ought to have known the manufacturer shortly after June 3, 2010. On June 3, 2010, Corey Handel, Don Handel and Ken Hugo traced the source of the leaking gasoline to the sump under a fuel dispenser.

Corey Handel said the FFL at that location had a pin-hole leak; Ken Hugo is reported to have said, on August 5, 2010, that the leak traced back to: … bad connection in pump, compounded by hole in spill box below pump, compounded by alarm in spill box being placed above hole in spill box. [ 110 ] From these observations, the Plaintiffs ought to have investigated the source of the potentially faulty parts, including the FFL. The loss or disposal of the FFL at the time of its replacement precluded any such further investigation. That does not become the Respondents’ problem.

If anything, the unavailability of the FFL for any further identification ought to have accelerated GP’s fallback efforts to make the identification. That it erred the first time around (it says) in naming Hose Master does not entitle it to reset the limitation clock. I find the date GP ought to have known the manufacturer and any at-risk distributor was, being generous to GP, September 30, 2010.

This is almost two months after the second of the two reports of a possible parts failure, according ample time for the necessary investigations and inquiries, in the absence of the actual FFL for direct study. [ 111 ] On August 15, 2014, the Plaintiffs filed this application to amend the Statement of Claim to add FP and OPW as defendants. That was more than two years past the expiry of the applicable limitation period.

When Sal Handel purchased what he thought were identical OPW risers, late August 2013, it was already past the expiry of the limitation period. [ 112 ] The possible expiry of a limitation period in the context of an application to add a defendant, however, also requires consideration of

section 6 of the Limitation Act . To rely on the expiry of a limitation, the proposed new defendant must show that it

received insufficient knowledge of the added claim before the expiry of the limitation plus “the time provided by law for the service of process”. The “insufficient knowledge” refers to enough knowledge that the new defendant “will not be prejudiced in maintaining a defence to it on the merits”. The proposed new defendant bears the burden of proof on that requirement. [ 113 ] I find that OPW received sufficient knowledge from GP to avoid any such prejudice but that FP did not.

One or more affiliates of OPW appear to have had much earlier knowledge of the first version of the Statement of Claim in this litigation, and related claims relating to the escape or release of hydrocarbons at the Bowness station. The original Statement of Claim alleges breaches of contract and of statutory duties against those parties ostensibly related to OPW, not the proposed new causes of action against OPW in negligence. OPW argues that it “has no records available of its orders, shipments received or shipments sent for fuel flex lines to use in its defence”.

In my view, the timing of the service of the original Statement of Claim, well within the limitation, accorded sufficient knowledge to OPW. I am not persuaded OPW has been prejudiced in defending the proposed new claims on the merits as it describes. [ 114 ] FP, on the other hand (and ironically since it is not relying on any limitation expiry), appears to have been prejudiced by the delay and is able to rely on the expiry of the limitation period. It was unaware of the claim until service of this application.

The over 4 1/3 years passing between when the proposed cause of action against FP was known and this application filed, or the almost 4 years between when the proposed cause of action against FP ought to have been known, is roughly double the time set by the legislators. Memories fade over time. Over time, records are lost or destroyed. Over time, institutional knowledge is lost with retirements and other staff departures. The longer such delays continue, the more likely the prejudice. The roughly 4 years passing in this case is, I find for these reasons, presumptively prejudicial.

In any event, though FP’s affiant does not speak to any prejudice from the delay, the remainder of the evidentiary record satisfies me that FP has been prejudiced by the very significant delay. Conclusion [ 115 ] In result, there is no genuine issue of the following decisive material facts: who manufactured the FFL, whether the manufacture of the FFL was deficient, who if anyone may have distributed the FFL, and whether any such distributor had the prerequisite knowledge to trigger any duty to the Plaintiffs.

FP is also able to rely on the expiry of the limitation period without the necessity of trial. [ 116 ] Therefore I dismiss the application. Heard on the 21 st day of March, 2017 and the 3 rd day of August, 2017. Dated at the City of Calgary, Alberta this 27 th day of October, 2017. P.R. Jeffrey J.C.Q.B.A. Appearances: R.J. Daniel Gilborn/T.C. Stepper for the Applicants (Plaintiffs), Gas Plus Inc. D.M. Saunderson for the Respondent, OPW Fueling Containment Systems Inc. L.C. Galvin for the Respondent, Flex-Pression Limitée