Patil v Cenovus Energy Inc, 2018 ABQB 994

Court of Queen’s Bench of Alberta Citation: Patil v Cenovus Energy Inc, 2018 ABQB 994 Date: 20181205 Docket: 1201 09674 Registry: Calgary Between: Trilokeshwar S. Patil Respondent - and - Cenovus Energy Inc. Applicant _______________________________________________________ Reasons for Decision of the Honourable Madam Justice J.A. Antonio _______________________________________________________ Overview [ 1 ] The defendant, Cenovus, has applied under Rule 4.33(2) of the Alberta Rules of Court for dismissal of this action on the basis that more than three years have elapsed without any significant advance.

The plaintiff, Mr. Patil, submits that three significant steps have been taken since May 2014: (

a) on May 17, 2016 he provided additional documents to Cenovus, in accordance with its request of April 6, 2015; (

b) on May 17, 2016 he abandoned his claims for expenses related to mitigation, his claim for damages due to financial hardship

and his claim for damages for emotional trauma; (

c) the parties entered a consent order for a case conference on May 26, 2017. [ 2 ] The standard of review on appeal from a Master to a Justice, on all issues, is correctness: Bahcheli v Yorkton Securities Inc , 2012 ABCA 166 at para 30 . Facts [ 3 ] Mr Patil filed his Statement of Claim on July 30, 2012. In it, he alleges that Cenovus wrongfully and retroactively terminated his employment in February 2012 “while [he] was out of the Country receiving medical treatment for injuries sustained as a result of a motor vehicle accident in January, 2011”. Mr.

Patil alleges that he experienced financial hardship and emotional trauma, and incurred expenses in seeking new employment and attempting to mitigate his losses. He claimed damages for three months’ salary, pro-rated bonuses for 2011 and 2012, and other specified losses; special damages, punitive or exemplary damages or alternatively damages for bad faith; and interest and GST. [ 4 ] Cenovus defended on September 14, 2012. It alleges that Mr.

Patil abandoned his employment in December 2011 by being absent without authorization, and that he never informed Cenovus that he was out of the country receiving medical treatment. Cenovus further alleges that Mr. Patil breached the terms of his employment contract by failing to relocate to Cold Lake/Bonnyville. [ 5 ] Over the next year and a half, the parties exchanged Affidavits of Records and their producible records; Mr. Patil questioned Cenovus’ corporate representative; Cenovus provided responses to undertakings; and by agreement Mr. Patil sent written questions to Cenovus.

On May 27, 2014 Cenovus provided written responses. [ 6 ] The Master found that the provision of written responses constituted a significant step in the action. Cenovus has not disputed that finding. Rather, it contests the Master’s findings that significant advances were made in May 2016 and May 2017. For ease of reference, I have reproduced the Master’s timeline of events after May 2014, which I adopt: • October 27, 2014 - counsel for Patil provided Cenovus’s counsel with a Form 37 – request to

schedule a trial date. Counsel for Patil had not answered Cenovus’s earlier correspondence asking whether Patil wanted to question any further employees of Cenovus. Cenovus took this Form 37 as indirect confirmation that Patil would not be seeking to question any further witnesses of Cenovus; • October 28, 2014 - counsel for Cenovus confirmed that she would not be in a position to complete all of the items in Form 37 until she had an opportunity to question Patil.

She requested available dates for questioning in November or December, 2014; • November 3, 2014 - counsel for Patil stated that Patil was in Thailand and required conduct money to attend for questioning. He asked for confirmation that Cenovus would pay for same and also asked for possible dates for questioning “over the next several months”; • November 6, 2014 – counsel for Cenovus requested dates when Patil would be available for questioning, noting that this would be at the Patil’s own expense (subject only to the requirement of payment of conduct money available to a Calgary resident).

Additionally, counsel for Cenovus stated that in advance of questioning she would require full and up-to-date documentation evidencing Patil’s mitigation efforts; • January 20, 2015 – counsel for Patil responded, providing only one option of questioning during one week in April of 2015.

The communication was silent with respect to outstanding documentation and disregarded Cenovus’s position regarding conduct money; • January 20, 2015 – counsel for Cenovus confirmed her availability for questioning on April 14, 2015, subject to the parties having dealt with the matters she raised in her November 6, 2014 letter; • January 23, 2015 - counsel for Patil indicated that Patil would require conduct money from Rayong, Thailand in the sum of approximately US$2,720.00 plus two or three nights’ hotel, and daily meal allowance for the questioning; • February 4, 2015 - counsel for Cenovus reminded counsel for Patil that no advance notice was given that Patil would be leaving Alberta to work in Thailand, nor had formal confirmation been provided of Patil’s change in residence; • February 11, 2015 – counsel for Patil provided a written response regarding Patil’s status in Thailand and expressly noted that “Mr.

Patil is not prepared to be questioned in Calgary at his own expense, but requires conduct money for same”; • April 6, 2015 - counsel for Cenovus sent a letter to Patil’s counsel relating to Patil’s continuing obligation to produce records and listed 18 categories of documents that she sought to be provided prior to questioning Patil; • April 12, 2015 – counsel for Patil reminded counsel for Cenovus that Cenovus had not set out a proposed amount for security for costs despite earlier advice from Patil that he was prepared to post security for costs; • April 27, 2015 - counsel for Patil responded to the April 6, 2015 request for documentation and stated that he would endeavour to have responses as soon as possible; • May 17, 2016 – Patil provided documents and answers in response to some of Cenovus’s request for 18 categories of documents.

I would summarize what was provided as follows: - An unsworn supplemental affidavit of records;

- In response to Cenovus’s category #1 and #2 requests for records confirming Patil’s current address and confirmation as to when he first resided at the address, a business card was provided showing current work addresses for Patil in Thailand and a resume which showed his current occupation as “Vinarco International, Rayon, Thailand”.

Also included was a Thai “Income Tax Payment Certificate” which indicated a (presumably home) address in Bangkok for Patil; - A refusal to provide documentation with respect to categories of documents #3, #4 and #5; - A resume in response to Cenovus’s category #6 request for a current resume; - In response to Cenovus’s category #7, #8 and #9 requests for the 2012, 2013 and 2014 Income Tax Return and Notice of Assessment: o a 2 page Notice of Assessment from the Canada Revenue Agency for tax year 2012 (missing the first page); o two separate 3 page Notices of Assessment from the Canada Revenue Agency for tax year 2013; o an Income Tax Payment Certificate for Thailand for tax year 2014; - In response to Cenovus’s category #10 request for copies of all medical records for all treatment received relating to the motor vehicle accident of January 2011, only non-responsive documents were provided (results of lab tests); - In response to Cenovus’s category #11 request for all records showing that Patil rented an apartment in Cold Lake/Bonnyville, Alberta and all moving expenses related records (per paragraph 7 of the Statement of Claim), Patil provided a residential tenancy agreement dated September 27, 2010.

Cenovus complains that the agreement does not state the location other than street address, but these documents were provided prior to questioning and issues such as confirmation that the street address was in Cold Lake could be handled during the questioning; - In response to Cenovus’s category #12 request for all records of expenses incurred in relation to Patil’s efforts to mitigate losses (per paragraph 12 and 14 of the Statement of Claim), Patil indicated that these portions of the claim were being abandoned; - In response to Cenovus’s category #13 request for all records confirming subsequent employment obtained, Patil provided a letter from Vinarco International confirming Patil’s employment since October 13, 2014 and his salary; - In response to Cenovus’s category #14 request for records detailing financial hardship incurred or otherwise faced by Patil (per paragraph 13 of the Statement of Claim) and category #15 request for all records detailing Patil’s emotional trauma (per paragraph 13 of the Statement of Claim), Patil indicated that these portions of the claim were being abandoned; - In response to Cenovus’s category #16 request for all records confirming property(ies) owned by the plaintiff in Alberta, this request was refused. - In response to Cenovus’s category #17 request for all records indicating travel dates of the plaintiff for December 2011, January 2012 and February 2012, no records were provided. - In response to Cenovus’s category #18 request for all cellular phone(

s) statements of the plaintiff for December 2011, January 2012 and February 2012, this request was refused. • January 26, 2017 - counsel for Patil demanded proposed dates for questioning of Patil; • January 31, 2017 - counsel for Cenovus pointed out that many of the requested documents remained outstanding and that she required production of the same in advance of questioning. She noted that Patil was to have returned to Alberta after October 10, 2016.

She asked for Patil’s availability to be questioned between March and June 2017; • March 29, 2017 - counsel for Patil advised that he would be seeking case management to move the matter forward.

He further noted that Patil still lived in Thailand and stated “conduct money will thus be required”; • April 7, 2017 - counsel for Cenovus responded to the request for case management, noting that the Court required parties contemplating case management to consider whether a one-time case conference would be a better alternative; • April 27, 2017 – Cenovus proposed an amount for security for costs, and noted that counsel for Patil had apparently concluded that a one-time case conference would be appropriate, and asking Patil’s counsel to confirm this; • May 15, 2017 - counsel for Cenovus provided a revised form of consent order for a one-time case conference pertaining to the action.

Cenovus stated “Please note that our client’s consent to the terms of the Order shall in no way be construed as a waiver of any other provisions of the Alberta Rules of Court which our client may rely upon to its favour”; • May 26, 2017 - a consent order regarding a case conference was pronounced. Counsel for Patil completed a Request for Appointment of a Case Management Justice and provided it to the Court.

The consent order listed the topics for which directions would be sought at the case conference as follows: a. the determination as to the requirement for the provision of any further documents by the parties in this action by way of supplemental affidavits of records; b. the timing for the provision of any such supplemental affidavits of records; c. the determination of whether the plaintiff is entitled to an allowance for attending for questioning in this action;

d. the determination of the amount of allowance, if any, to be paid to the plaintiff for his attendance for questioning; e. the determination of the amount of security for costs, if any, to be provided by the plaintiff in this action; f. to set timelines for questioning of the plaintiff, the provision of any undertaking responses arising therefrom, and subsequentquestioning on undertaking responses; g. to set timelines for this matter to be set for trial; and h. such further and other timelines and determinations as counsel may seek, and this Honourable Court may allow. • August 23, 2017 - a Justice [myself] was assigned to handle the case conference; • September 14, 2017- a date for the case conference was set at October 19, 2017; • October 5, 2017 - Cenovus filed this application seeking a dismissal of the action for long delay asserting that more than threeyears had passed and the action had not been advanced; • October 19, 2017 – the case conference occurred.

Due to the recently filed Cenovus delay application, the Court did not deal withthe topics listed in the consent order but rather directed that Cenovus’s delay application be heard by a Master in special chambers. Legal framework [7] Rule 4.33(2) provides that: If 3 or more years have passed without a significant advance in an action, the Court, on application, must dismiss the action as againstthe applicant, unless (

a) the action has been stayed or adjourned by order, an order has been made under subrule (9) or the delay is provided for in alitigation plan under this Part, or (

b) an application has been filed or proceedings have been taken since the delay and the applicant has participated in them for apurpose and to the extent that, in the opinion of the Court, warrants the action continuing. [8] Rule 4.33 must be interpreted in conformity with the foundational principles set out in Rule 1.2. The purpose of the Rules ofCourt is to establish a means of concluding claims fairly and justly, in a timely and cost-effective way.

The Rules encourage the partiesto resolve claims as early as is practicable, within “an effective, efficient and credible system of remedies and sanctions to enforce theserules and orders and judgments.” They “are intended to facilitate the quickest means of resolving a dispute at the least expense”. Thoughthe Rules apply to both parties, the plaintiff bears the ultimate responsibility for prosecuting its claim in a timely manner.

A defendantmust not purposively obstruct, stall or delay, but is never required to actively move the action along: XS Technologies Inc v VeritasDGC Land Ltd, 2016 ABCA 165 at para 7, Flock v Flock Estate, 2017 ABCA 67 at para 17. [9] Rule 1.2 not only informs the determination of what constitutes a “significant advance in an action” for purposes of Rule4.33, it “places a particular emphasis on the use of these provisions to conclude inactive civil litigation matters”: Huerto v Canniff,2014 ABQB 534 at paras 18-19, citing Nash v Snow, 2014 ABQB 355 at paras 18-20, Franchuk v Schick, 2013 ABQB 532 at para 23,Vincent v Moduline Industries (Canada) Ltd., 2011 ABQB 571at para 63. [10] The approach to determining whether a significant advance has been made is a functional one.

The question is whether thesteps taken moved the action closer to a resolution in a meaningful way, having regard to their nature, quality, genuineness, timing andoutcome: XS Technologies at para 8; see also Ursa Ventures Ltd v Edmonton (City), 2016 ABCA 135, Weaver v Cherniawsky, 2016ABCA 152 , 2016 ABCA152, Ro-Dar Contracting Ltd v Verbeek Sand & Gravel Inc, 2016 ABCA 123. [11] In Flock v Flock Estate, supra at para 17, the Court of Appeal confirmed the functional approach to Rule 4.33.

To determinewhether an action has been “significantly advanced” the Court must assess the effect of what happened during the period of allegeddelay, measured in light of the facts and the objectives of the Alberta Rules of Court. Formalistic characterizations are to be avoided.Even steps mandated by the Rules must be assessed functionally.

Steps taken by the applicant (usually the defendant) may be relevant.Where a defendant’s participation could lead a plaintiff to fairly assume waiver of delay, a court may decline to dismiss the action.Where three years have elapsed without a significant advance, and where none of the enumerated exceptions applies, Rule 4.33 ismandatory: the action must be dismissed. [12] Surveys of precedents, such as those provided in Huerto v Canniff, supra and Donnelly v Brick Warehouse Corp, 2013ABQB 621, are useful in helping to understand the threshold for a significant advance.

However, the functional approach is context-sensitive and incompatible with a catalogue approach. Precedents in which a particular step was or was not found to constitute asignificant advance are not necessarily determinative of whether the same step taken in a different case would constitute a significantadvance. See Barlot v Eisner, 2017 ABQB 636 at paras 11-12, Steparyk v Alberta, 2014 ABQB 367 at para 7, Nash v Snow, 2014ABQB 355 at para 40. Provision of additional records in May 2016 [13] In the course of trying to arrange for questioning of Mr.

Patil, Cenovus wrote on April 6, 2015 to request additionaldocuments falling into 18 categories.

[ 14 ] Thirteen months later, Mr. Patil provided some records under cover of an unsworn affidavit. Little turns on the form in which the records were provided. Cenovus relies their substance, or more precisely on the lack thereof. [ 15 ] The only documents provided in full pertained to Mr. Patil’s current address. These records were perfunctory. Nothing hinged on them and they did not advance the action: Le v 1055168 Alberta Ltd, 2013 ABQB 431 at para 20 . [ 16 ] Some of Cenovus’ requests, including a request for cell phone statements from December 2011 to February 2012, were refused on the basis of relevance.

Some were refused with the comment that “Mr. Patil abandons this portion of his claim”; the abandonments will be discussed below. In response to a request for records showing Mr. Patil’s travel details from December 2011 to February 2012, Mr. Patil’s counsel wrote an answer “to the best of Mr. Patil’s recollection” but provided no documents. Other requests were refused with no explanation. [ 17 ] Cenovus asked for documents evincing Mr. Patil’s relocation to Cold Lake/Bonnyville, which had been a condition of his employment. Mr.

Patil provided a residential tenancy agreement showing a street address but no city or town. He did not provide records of moving expenses, as had been requested, and he did not explain their absence. [ 18 ] Cenovus asked for records showing any employment Mr. Patil had held since starting with Cenovus in 2010. Mr. Patil provided his curriculum vitae and a letter confirming his employment from October 2014 to April 2015. Similarly, Cenovus asked for Mr. Patil’s tax returns and notices of assessment for 2012-2014. Mr. Patil provided only his notices of assessment.

The absence of the tax returns and some records relating to employment was not explained. [ 19 ] Cenovus asked for “Copies of all medical records for all treatment received relating to the motor vehicle accident of January 2011, including treatment received in Alberta and elsewhere.” As the Master found, only non-responsive documents were provided. [ 20 ] Along with the squabble over conduct money, the lack of a complete response to Cenovus’ questions created what Mr.

Patil’s counsel called an “impasse” during which neither side would proceed to questioning. [ 21 ] At paragraph 10 of his reasons, the Master held that “it rarely lies in the mouth of a party seeking information to complain that the provision of that information did not significantly advance the action”. He relied on Le v 1055168 Alberta Ltd. , supra, a case involving undertakings and responses. There, the Court held it ma y generally be assumed that counsel has sought an undertaking because it is material; therefore a court should be slow to assume that undertaking responses do not advance the litigation.

The Court underscored that this generality is not an absolute rule, and that the analysis must always be a functional one. [ 22 ] Le’s generality would not apply strongly to a request for records. Rule 5.2 provides that records and information are relevant and material only if they could reasonably be expected to significantly help determine an issue raised in the pleadings or to ascertain evidence that would. Provision of a record, standing alone, is not an acknowledgement that the record is relevant or material.

The implication of Rule 5.2 is that not all records are material – in contrast to the assumption about undertakings on which Le’s generality is premised. [ 23 ] Here, the Master treated the general rule for undertakings as a complete answer to this question regarding records. He did not assess whether the provision of these particular records, in the context of this case, significantly advanced the action. In failing to do so, he erred. [ 24 ] Mr. Patil was absent from work from December 2011 to the time of his dismissal in February 2012.

The reason for that absence is central to the action: hence Cenovus’ request for information on his employment, income sources, location (as shown through travel and cell phone records) and medical treatment during this time. Information on employment and income after February 2012 would be relevant to damages. [ 25 ] Though peripheral information was provided, it framed an uninterrupted absence of information touching the matters at the core of the claim. [ 26 ] Counsel for Mr. Patil submits that the inadequacy of the records may become relevant at trial, if Mr.

Patil cannot prove his case, but it is not relevant on an application under Rule 4.33. I disagree. I am bound to assess the nature, quality, genuineness, timing and outcome of the documents that were actually provided. [ 27 ] Assessed functionally, the provision of documents in May 2016 did not significantly advance the action. Abandonment of claims in May 2016 [ 28 ] Mr. Patil asserts that he significantly advanced the action when he abandoned his claims regarding expenses incurred in mitigation, financial hardship and emotional trauma.

The abandonment appears in his May 2016 response to Cenovus’ April 2015 request for additional records, where it was offered as the rationale for not producing some of the requested records. Cenovus asked Mr.

Patil to amend his Statement of Claim to reflect the abandonment; to date, no amendments have been filed. [ 29 ] At paragraph 12 of his reasons, the Master stated that the abandonment of these claims “narrowed and simplified the action, thus constituting a significant advance.” In the right circumstances, an abandonment that narrows the issues could constitute an advance, but it does not follow that every abandonment is an advance. As always, a functional assessment is necessary. [ 30 ] It is striking that Mr.

Patil’s claims regarding mitigation expenses, financial hardship and emotional trauma were abandoned when Cenovus asked for evidence that could support them. Material evidence on these claims should have been provided in the initial Affidavit of Records. I have not been informed that any such records were disclosed. They must not have been, or Mr. Patil would not have needed to abandon his claims. I infer that these claims were never capable of being supported.

[31] Mr. Patil’s abandonment of vacant claims did not advance the action. [32] Rule 4.33(2), in conjunction with Rule 1.2, is designed to influence litigants’ conduct of actions. It should not be applied in away that could encourage plaintiffs to load statements of claim with ballast that can be jettisoned in a hurry if it becomes necessary toshow a significant advance. Consent to attend a case conference in May 2017 [33] Mr. Patil submits that a significant advance was made when both parties consented to have a Justice appointed to hear a caseconference. He says this was the only available option to break the parties’ impasse over questioning. He suggested some improprietyon Cenovus’

part in consenting to the Order for a case conference and then bringing this application. He further suggests that byconsenting to the Order Cenovus participated in the action for purposes of the exception in Rule 4.33(2)(b), such that I should permit theaction to continue. [34] Cenovus denies any impropriety. Its counsel has explained her actions with reference to the Law Society’s Code of Conductand this Court’s Notice to the Profession #2016-03 governing case management.

Cenovus submits that the Consent Order does notdeprive it of recourse to the mandatory operation of Rule 4.33. [35] The Master treated the consent order as an agreement to arrange a case conference. He cited Turek v Oliver, 2014 ABCA 327at para 5: The appellants [defendants] argue that obtaining an agreement from opposing counsel that something will be done by a particulardeadline does not significantly advance the action, unless that agreement is performed. This seems to imply that it is unreasonable,foolish or naïve for one barrister to rely on the undertaking of another.

Notably, in Turek¸ the long delay arose from the defendants’ failure to comply with deadlines to produce their affidavit of records, evenafter the plaintiff graciously agreed to extensions. [36] At paragraph 13 of his Reasons, the Master applied Turek to the case at bar: In this case, the defendant agreed to a case conference, negotiated the terms of the case conference order, and the order was signed andentered, all within the relevant 3 year period, yet the defendant submits that the agreement to hold a case conference, as opposed to thecase conference being held, was not a significant advance.

Following Turek I reject this submission. [emphasis in original] [37] This case is distinguishable from Turek. The purported advances are different and the delay roles are reversed. Moresignificantly, this question does not turn on the distinction between the holding of a case conference and the agreement to do so. [38] A case conference is a form of case management. Entry into case management is not per se a step in an action. It is a differentmethod of scheduling steps in an action.

It does not relieve parties of their obligations under the Rules of Court, nor does it remove theplaintiff’s obligation to move the action along. Participation in case management does not alter the functional and case-specificapproach to measuring the advance of an action: Humphreys v Hanne, 2016 ABQB 579 at paras 44-46; see also Haymour vCondominium Plan No 802 2845, 2016 ABQB 393, Howe v Joplet Resources Co, 2006 ABQB 772, Griendt v Canvest CapitalManagement Corp, 2014 ABQB 542, Donnelly v Brick Warehouse Corporation, supra, St.

Jean Estate v Edmonton (City), 2014ABQB 47. [39] The appointment of a Case Management Justice may offer the “prospect of a more expeditious progress, but it is certainly notevidence of advancement in fact”: Steparyk v Alberta, 2014 ABQB 367 at para 22. Nor is an agreement to have a Case ManagementJustice appointed. [40] Courts should use caution in equating the mere entry into case management, or an agreement to that end, with a significantadvance, lest applications for case management become a tactic to defeat the purpose of Rule 4.33 and to undermine the foundationalprinciple of Rule 1.2. See St.

Jean Estate v Edmonton (City), 2014 ABQB 47 at paras 27, 30-31. [41] Here, Mr. Patil’s invitation to case management was far from timely. Once issued, it had a stalling effect in the short term, asthe parties corresponded about the form and parameters of case management, entered a consent order, waited for me to be appointed,waited to

schedule time before me, and then waited for my authorization to

schedule the Rule 4.33 application before a Master.Functionally, the agreement to enter case management did not advance the action. [42] Cenovus’ agreement to attend a case conference was not participation that would warrant the action continuing. “[C]asemanagement should not necessarily be held against defendants as a sign of acquiescence or waiver”: Humphreys v Hanne¸ supra at para47, citing Young v Dei-Baning (

A) Professional Corp (1996), 1996 ABCA 213 , 184 AR 209 at para 15. In this case, counselfor Cenovus made it clear in her letter of May 15, 2017 that by consenting to the order for a case conference, Cenovus was not waivingits ability to rely on the Rules of Court to its favour. Just as the stunted attempt at case conferencing did not lead to any significantadvance on which Mr. Patil can rely, it did not lead to any participation by Cenovus that would fit the exception in Rule 4.33(2)(b). Conclusion [43] I have concluded that none of the steps taken in 2016 and 2017 significantly advanced the action.

At the time Cenovus filed itsapplication under Rule 4.33, more than three years had elapsed since the last significant advance was in May 2014. The exceptions statedin paragraphs (

a) and (

b) of Rule 4.33(2) do not apply. Therefore, I must and do dismiss the action.

[ 44 ] If the parties wish to address costs, they may do so by letter to my chambers, attaching submissions not exceeding five double-spaced pages in length plus attachments (if any) and a draft order. Alternatively, they may jointly submit a draft consent order. In either event, the costs materials shall be submitted no later than December 21, 2018. Heard on the 26 th day of November, 2018. Dated at the City of Calgary, Alberta this 5 th day of December, 2018. J.A. Antonio J.C.Q.B.A. Appearances: Shane B. King for the Respondent Lindsay A. Mullen Caylee Rieger for the Applicant