Royal Camp Services Ltd v Sunshine Oilsands Ltd, 2019 ABQB 911

Court of Queen’s Bench of Alberta Citation: Royal Camp Services Ltd v Sunshine Oilsands Ltd, 2019 ABQB 911 Date: 20191128 Docket: 1603 13942 Registry: Edmonton Between: Royal Camp Services Ltd. Plaintiff/Respondent - and - Sunshine Oilsands Ltd. Defendant/Appellant _______________________________________________________ Memorandum of Decision of the Honourable Mr. Justice Sterling M. Sanderman _______________________________________________________ [ 1 ] On February 5, 2019, the parties were before Master Schlosser.

Sunshine Oilsands Ltd. (“Sunshine”) asked to have the Statement of Claim filed by Royal Camp Services Ltd. (“Royal”) dismissed because of an alleged violation of the Limitations Act (RSA 2000-c.L-12 ). Royal had a reply application for

summary judgment before the court. Royal sought the costs incurred in dismantling and decommissioning a camp that they operated in northern Alberta for the benefit of Sunshine. [ 2 ] Master Schlosser dismissed the application for

summary judgment brought by Sunshine. He granted Royal’s request. Sunshine appeals from that decision. Royal defends it. [ 3 ] Royal and Sunshine have been involved in a business arrangement since 2012. Sunshine is involved in the extraction of oil from the Athabasca oilsands. It operated at a location west of Fort McKay, Alberta. The workforce required to carry on this operation is

considerable. It is required to live onsite in a camp. The camp at this location was provided and operated by Royal. At times, Sunshine contemplated having over 300 employees onsite. Accommodation and catering were supplied by Royal until 2016. Sunshine ceased its operation in this area during that year even though it had anticipated a life for the site measured in decades. [ 4 ] Although Sunshine did not operate at this location during 2016 and 2017, discussions took place between the management of the two corporations up until June of 2017 about reopening the camp for occupation.

Extraction facilities of this sort come onstream depending upon the need for production. The uncontradicted evidence before Master Schlosser and this court is that these types of discussions took place between the parties well into 2017. Royal took no steps to dismantle and decommission the camp because of these discussions. It was a semi-permanent structure that remained in place as long as it appeared possible that the site would be reoccupied. [ 5 ] The cost of dismantling and hauling the camp away would be considerable.

The agreement between the parties set the charges for dismantling and decommissioning the camp at approximately $750,000. Sunshine asked that this claim initiated by Royal be dismissed. Royal asked for

summary judgment. Master Schlosser granted Royal’s request after determining that Royal had not run afoul of the Limitations Act . [ 6 ] Weir-Jones Technical Service Incorporated v Purolator Courier Ltd, 2019 ABCA 49 , has clarified the test for

summary judgment in Alberta. At paragraph 47, the court states: The proper approach to

summary dispositions, based on the Hryniak v Mauldin test, should follow the core principles relating to

summary dispositions, the standard of proof, the record, and fairness. The test must be predictable, consistent, and fair to both parties. The procedure and the outcome must be just, appropriate, and reasonable. The key considerations are:

a) Having regard to the state of the record and the issues, is it possible to fairly resolve the dispute on a

summary basis, or do uncertainties in the facts, the record or the law reveal a genuine issue requiring a trial?

b) Has the moving party met the burden on it to show that there is either “no merit” or “no defence” and that there is no genuine issue requiring a trial? At a threshold level the facts of the case must be proven on a balance of probabilities or the application will fail, but mere establishment of the facts to that standard is not a proxy for

summary adjudication.

c) If the moving party has met its burden, the resisting party must put its best foot forward and demonstrate from the record that there is a genuine issue requiring a trial. This can occur by challenging the moving party’s case, by identifying a positive defence, by showing that a fair and just

summary disposition is not realistic, or by otherwise demonstrating that there is a genuine issue requiring a trial. If there is a genuine issue requiring a trial,

summary disposition is not available.

d) In any event, the presiding judge must be left with sufficient confidence in the state of the record such that he or she is prepared to exercise the judicial discretion to summarily resolve the dispute. To repeat, the analysis does not have to proceed sequentially, or in any particular order. The presiding judge may determine, during any stage of the analysis, that

summary adjudication is inappropriate or potentially unfair because the record is unsuitable, the issues are not amenable to

summary disposition, a

summary disposition may not lead to a “just result”, or there is a genuine issue requiring a trial. [ 7 ] It is against this backdrop that the appeal brought by Sunshine is to be considered. [ 8 ] The standard of review on such an appeal is correctness. In essence, this is a de novo hearing as the court is entitled to consider any relevant evidence provided by the parties that was not before the Master. Royal has not supplemented the evidence they presented to the Master. They rely upon the affidavit evidence and examinations upon them of three of their managers.

Those individuals are still employed with the Respondent. [ 9 ] Sunshine filed additional affidavit evidence that was not before the Master. These affidavits were sworn in February and March of this year. They set out information that was available to Sunshine prior to the hearing before Master Schlosser. The affidavit of Frank Ng deals with the set-off claim that Sunshine would like to advance in relation to the alleged storage of the camp on their property from the time the operation ceased until the camp was completely removed in early 2018.

This information could have easily been provided to the Master. [ 10 ] The affidavit of Horst Wunschelmeier, sworn on February 11, 2019, largely addressed Sunshine’s application for a stay of execution pending the appeal of this matter. It added little to Sunshine’s position before the court and in no material fashion did it contradict the evidence placed before the Master. In essence, what he had to review, I have had the opportunity of reviewing. I am no better informed than he was. [ 11 ] An Amended Statement of Claim was filed August 7, 2018, by consent.

In order to offend s. 3 of the Limitation’s Act , the start of the limitation period would have to be prior to August of 2016. On the evidence before the Master and me, this is not an arguable position. The parties continued to discuss the feasibility of reopening the camp up until June of 2017. There was no contemplation of dismantling and decommissioning the camp prior to that time. It is certainly arguable that the limitation period did not start until sometime in 2018 when Sunshine refused to pay the invoice submitted for the dismantling and decommissioning charges.

The debt coalesced at that time. [ 12 ] Not being able to avail itself of the limitations defence, Sunshine argues that there are genuine issues in dispute between the parties that can only be resolved with a trial. Sunshine argues that a fair and just determination on the merits is impossible on the materials before the court without the necessity of a trial. Sunshine argues that there has not been a full exploration of the concept of termination of the contract between the parties and the effect this would have on obligations and remedies available to them.

Sunshine also argues that there was no possible way that the concept of set-off in relation to Royal’s storage of the camp on Sunshine’s property and the need to remediate the property after the removal of the camp by Royal was taken into consideration by the Master. [ 13 ] These are theoretical arguments at best as there was no evidence before the Master touching upon any of them. There is very

little additional information before me. It is incumbent upon the resisting party, according to Weir-Jones , to put its best foot forward at an application of this sort. There must be some evidence before the court that can be embraced in good conscience and acted upon. There was none before the Master. There is none before me to suggest that there is a genuine issue that merits a trial. No argument can succeed without a proper evidentiary foundation upon which to base it. Absent the evidence, the argument must fail.

The damages awarded by the Master are those that are set out contractually in the documents before the court. The costs for dismantling and decommissioning were bargained between the parties. That was the award given. If there is some claim that the site needed further remediation because of Royal’s actions in removing the camp, Sunshine can advance that claim against Royal. [ 14 ] The appeal against the Master’s decision is dismissed. Counsel may address costs in written argument or appear before before me at their convenience. Heard on the 27 th day of November, 2019.

Dated at the City of Edmonton, Alberta this 29 th day of November, 2019. Sterling M. Sanderman J.C.Q.B.A. Appearances: Kenneth G. Heintz, Venture Law Group LLP for the Plaintiff/Respondent Andrew McLeod, Peak Legal Counsel for the Defendant/Appellant