JL Energy Transportation v Alliance Pipeline Limited Partnership, 2021 ABQB 223

Court of Queen’s Bench of Alberta Citation: JL Energy Transportation v Alliance Pipeline Limited Partnership, 2021 ABQB 223 Date: 20210423 Docket: 1601 06322 Registry: Calgary Between: JL Energy Transportation Inc.

Respondent - and - Alliance Pipeline Limited Partnership, Alliance Pipeline Ltd., Alliance Pipeline LP, Alliance Pipeline Inc., Aux Sable Liquid Products LP (formerly known as Alliance Pipeline NGL, LP), and Aux Sable Liquid Products Inc. (formerly known as Alliance Pipeline NGL Inc.) Applicants _______________________________________________________ Reasons for Decision of the Honourable Madam Justice Anne L.

Kirker _______________________________________________________ Introduction Relief Sought by the Applicants [ 1 ] The Defendants, Alliance Pipeline Limited Partnership, Alliance Pipeline Ltd., Alliance Pipeline LP and Alliance Pipeline Inc. (collectively, the “Alliance Defendants”) and the Defendants, Aux Sable Liquid Products LP (formerly known as Alliance Pipeline NGL, LP), and Aux Sable Liquid Products Inc. (formerly known as Alliance Pipeline NGL Inc.) (collectively, the “Aux Sable Defendants”), apply for Orders declaring that the Plaintiff, JL Energy Transportation (“JLET”), has waived privilege and must produce the following records: (

a) All electronic and hard copy files containing communications that:

(

i) JLET had with its former counsel, Mr. Jeff Bright and Miller Thomson LLP (“Miller Thompson”); and that, (ii) Mr. Bright and others at Miller Thompson may have had with third parties, regarding the subject matter of this action while Mr. Bright was a lawyer practicing law with Miller Thomson. Mr. Bright was a member of Miller Thomson law firm from January 2012 to December 5, 2016. (

b) An unredacted copy of a May 25, 2014 letter prepared by the 20/20 Law Group for Mr. John Lagadin, who was the President and Chief Executive Officer of JLET at the time (the “20/20 Law Group Letter”). A redacted copy of the 20/20 Law Group Letter is exhibited to the January 23, 2020 affidavit sworn by Mr. John K. Lagadin, who is John Lagadin’s son and who is now the President and Chief Executive Officer of JLET (the “Lagadin Affidavit”).

How the Issue in Dispute on this Application Arises [ 2 ] The dispute at the heart of the litigation between the parties is whether the Defendants have made unauthorized use of, or disclosed information about, technology developed by JLET to transport and process enriched natural gas (the “Technology”). [ 3 ] JLET alleges that it had the following limited use license agreements with the Defendants: (

a) A May 1996 license agreement with Alliance Pipeline Limited Partnership, allowing it to use the licensed technology for a single purpose Canadian pipeline; (

b) A June 1996 license agreement with Alliance Pipeline LP allowing it to use the licensed technology for a single purpose US pipeline; and, (

c) A June 1996 license agreement with Aux Sable Liquid Products LP and Aux Sable Liquid Products Inc allowing them to use the licensed technology for a single purpose pipeline connecting the US Pipeline to a US extraction facility (collectively, the “License Agreements”). [ 4 ] JLET says that the Defendants have used the Technology to transport natural gas in pipelines other than those covered by the License Agreements. More specifically, JLET alleges that in 2010, the Defendants began transporting and processing natural gas using the Technology in the following, allegedly infringing, pipelines: (

a) Septimus Pipeline (BC); (

b) Prairie Rose Pipeline (North Dakota); and (

c) Tioga Pipeline (North Dakota) (collectively, the “Lateral Pipelines”). [ 5 ] In doing so, JLET alleges that the Defendants have: (

a) Breached their duty of confidentiality by providing the Technology to third parties for use in the Lateral Pipelines; (

b) Breached their duty of good faith; (

c) Breached their fiduciary duties; (

d) Breached the limited use License Agreements; (

e) Infringed patents held by JLET that relate to the Technology; and, (

f) Unjustly enriched themselves. [ 6 ] As a result of these breaches, JLET claims that it has suffered losses. It asks that the Defendants disgorge all revenue arising from the breaches and pay damages. [ 7 ] The Defendants deny all of the allegations made. Among the defences pleaded in the Statement of Defence filed by the Alliance Defendants in August 2016 are limitations defences. The Defendants assert that JLET’s claims are time barred pursuant to ss. 3 and 10 of the Limitations Act , RSA 2000, c L-12 (the “ Limitations Act ”).

The Aux Sable Defendants have not yet filed a Statement of Defence as there are issues related to a request for particulars to be addressed. However, they too assert that JLET’s claims are time barred. [ 8 ] As is often the case in a dispute such as this, there are a number of interlocutory applications to be determined. They include: (

a) applications (originally filed by the Aux Sable Defendants on September 28, 2016, and by the Alliance Defendants on October 24, 2016, and updated on December 13 and 16, 2019, respectively) for orders striking, or in the alternative, summarily dismissing, the action on the basis that it was commenced after the expiry of the applicable limitation period; and, (

b) an application by JLET to amend its Statement of Claim. The Defendants resist the amendment application on the basis that the proposed amendments seek to add new causes of action that are also time barred. [ 9 ] The limitations issues engage factual questions about when JLET’s claims arose and what it knew, or ought reasonably to

have known, more than two years before the Statement of Claim was filed on May 11, 2016. [10] The Alliance Defendants assert that “...

JLET knew, or ought to have know[n], about [the facts alleged in the Statement ofClaim] more than two years before the [Claim was filed] on May 11, 2016; or, in the alternative, [that] one or more of the alleged claimsarose more than 10 years before the filing of the Statement of Claim in this action...” [11] The Aux Sable Defendants contend that JLET “...knew, or ought reasonably to have known, of the facts on which it bases itsclaims against the Aux Sable Defendants ... before May 1[1], 20[14], all such claims being barred generally by operation of theLimitations Act, such that there is no reasonable prospect of such claims succeeding, and similarly there is no genuine issue requiring atrial of such claims.” [12] The waiver of privilege issue arises because included in the affidavit evidence filed by JLET in response to the Defendants’summary dismissal applications is a redacted copy of the 20/20 Law Group Letter (exhibit J to the Lagadin Affidavit) and an affidavitsworn by JLET’s former counsel, Mr.

Bright, on March 5, 2020 ( the “Bright Affidavit”), explaining what he and his client understoodabout the Defendants’ use of the Technology between 2012 and 2015, and the basis of that understanding. [13] A second affidavit sworn by Mr. Bright on May 15, 2020, was served upon the Defendants after they filed and served theirwaiver of privilege applications.

The Parties’ Positions [14] The Defendants argue that in relying upon the redacted 20/20 Law Group Letter and the Bright Affidavit in support of JLET’sposition in relation to the limitations issues, JLET has implicitly waived privilege over the redacted content of the 20/20 Law GroupLetter and relevant portions of the Miller Thompson files. The Defendants say that production of this otherwise privileged material isrequired so that they can test the validity of factual assertions made by Mr.

Bright and in the Lagadin Affidavit. [15] JLET disagrees. [16] It argues that there has been no waiver of privilege in the Miller Thomson files because it was the Defendants who “injectedinto the litigation the issue of JLET’s knowledge of the claim or [of the] unauthorized use of the technology more than two years prior tothe filing of the Statement of Claim on May 11, 2016” and because there is “nothing privileged” in the information recounted by Mr.Bright in his affidavits. [17] JLET says that the significance of the 20/20 Law Group Letter exhibited to the Lagadin Affidavit is its date in the context ofthe sequence of events described in the Bright Affidavit.

Consequently, it says, there has been no implied waiver of the privilege overthe legal advice contained in that letter either. The Law [18] There is little disagreement between the parties about the nature and scope of solicitor-client privilege and of litigationprivilege, or about the law that governs the waiver of privilege. The law is nicely summarized in Angus Partnership Inc. v SalvationArmy, 2011 ABQB 512, and Nixon v Timms, 2012 ABQB 65, both cited in the parties’ materials. [19] The parties agree that privilege can be waived by a party expressly or by implication.

Here, there has been no express waiver.The Defendants seek to establish an implied waiver. The onus is on them. The parties recognize that solicitor-client privilege is zealouslyguarded: Angus at para 16.

While neither absolute in its scope nor permanent in duration, they also recognize that litigation privilegeprovides protection essential to the proper operation of the adversarial process: Blank v Canada (Department of Justice), 2006 SCC 39,paras 37-41. [20] The Alliance and Aux Sable Defendants acknowledge that the burden of proving that privilege has been waived is a heavyone: Nixon at para 15, citing Freyberg v Fletcher Challenge Oil and Gas Inc., 2007 ABQB 80, at para 2. [21] Implied waiver may occur where a party: 1. voluntarily puts its state of mind at issue, as distinct from cases in which the state of mind is put in issue by the party seeking to havethe privilege waived; 2. relies upon privileged communications to ground a claim or base a defence; or, 3. attempts to support an argument that it acted in good faith based upon undisclosed legal advice: see Nixon at para 14, citing Anguspara 10. [22] In United States of America v Friedland, (1996) 30 O.R. (3d) 568 p 572, para 12 (ONSC), Sharpe J. (as hethen was) referred to the following passage from Wigmore on Evidence (McNaughton rev., 1961) vol. 8, para. 2327, as guiding theanalysis: What constitutes a waiver by implication?

Judicial decision gives no clear answer to this question. In deciding it, regard must be had to the double elements that are predicated inevery waiver, i.e., not only the element of implied intention, but also the element of fairness and consistency. A privileged person wouldseldom be found to waive, if his intention not to abandon could alone control the situation. There is always also the objective

consideration that when his conduct touches a certain point of disclosure, fairness requires that his privilege shall cease whether heintended the result or not. He cannot be allowed, after disclosing as much as he pleases, to withhold the remainder.

He may elect towithhold or to disclose, but after a certain point his election must remain final. ... [italics in original] [23] In S & K Processors Ltd. v Campbell Avenue Herring Producers Ltd., [1983] 4 WWR. 762 p 765-766, para10 (BCSC), McLachlin J (as she then was) relied upon the same passage and observed that: As pointed out in Wigmore...double elements are predicated in every waiver — implied intention and the element of fairness andconsistency.

In the cases where fairness has been held to require implied waiver, there is always some manifestation of a voluntaryintention to waive the privilege at least to a limited extent. The law then says that in fairness and consistency it must be entirely waived.In Rogers v. Hunter, the intention to partially waive was inferred from the defendant's act of pleading reliance on legal advice. In Harichv.

Stamp (1979), (ON CA), 27 O.R. (2d) 395, 11 C.C.L.T. 49, 14 C.P.C. 247, 59 C.C.C. (2d) 87, 106 D.L.R. (3d) 340(C.A.), it was inferred from the accused's reliance on alleged inadequate legal advice in seeking to explain why he had pleaded guilty to acharge of dangerous driving. In both cases, the [party seeking to maintain the privilege] chose to raise the issue.

Having raised it, hecould not in fairness be permitted to use privilege to prevent his opponent exploring its validity. [24] In Petro Can Oil & Gas Corp. v Resource Service Group Ltd. (1998), 90 AR 220 at 223, , Justice Masonexplained the underlying rationale for finding implied waiver in circumstances where a party relies upon privileged communications toground a claim or base a defence as follows: ... It would be unfair to permit a party who has set up a claim or defence based on privileged communications to preclude his opponentfrom discovering against that claim by relying upon the privilege.

If privilege were successfully raised, the opponent would be left withno reasonable method for exploring the validity of the claim or defence ... [citations omitted]. [25] JLET is not attempting to support an argument that it acted in good faith on the basis of undisclosed legal advice.

Rather, thequestion in this case is whether JLET has voluntarily put its state of mind in issue, or relied upon privileged communication to ground itsanswer to the Defendants’ limitations defence, such that fairness and consistency require disclosure of all of the privilegedcommunications sought by the Alliance and Aux Sable Defendants. Relevant Evidence [26] There is affidavit evidence filed by parties on both sides of the dispute that is relevant to the waiver of privilege question.

The Hargreaves Affidavit [27] As previously mentioned, JLET contends that it was compelled to provide the Bright Affidavit to respond to and addresscertain assertions made in the affidavit evidence of the Defendants. [28] The affidavit evidence JLET is concerned about is the Affidavit affirmed by Chris Hargreaves on December 12, 2019 (the“Hargreaves Affidavit”). In that affidavit, under the heading “JLET’s Knowledge of the Claims against the Alliance Defendants”, Mr.Hargreaves refers to two Miller Thomson memos dated July 6, 2012 and March 4, 2013, that were drafted by Mr.

Bright (the “BrightMemos”) while he was lawyer practicing law with Miller Thomson. The Bright Memos were both addressed to John Lagadin, but wereshared with the Alliance Defendants at or around the time each was prepared. [29] The body of the Hargreaves Affidavit quotes excerpts from the two Bright Memos (the same excerpts were quoted in anearlier affidavit sworn by Neil Coghlan on October 24, 2016 filed by the Defendants in support of their original applications for ordersstriking, or in the alternative, summarily dismissing, the Action on the basis of the limitations defence).

The Memos themselves areexhibited in their entirety to the Hargreaves Affidavit. [30] The Hargreaves Affidavit also exhibits the emails sent by Mr. Bright to the Alliance Defendants when the 2012 Bright Memowas shared with them. The emails provide some sense of what was happening at the time. A July 26, 2012, email sent by Mr. Bright toMr.

Larry Dunn, a senior lawyer in the Alliance Pipeline Ltd. legal department, with a copy to Murry Birch, then President and CEO ofAlliance Pipeline Ltd., stated: Hi Larry, I have been working with John Lagadin with respect to the JL Energy/Alliance license agreements and have reviewed the current licensesas well as the proposed “Paid Up License Agreement” that you had provided to him. I’ve attached a memo to John which explains ourunderstanding of the current license and some brief comments on the proposed license.

I think the most beneficial course of action wecould undertake would be for me to have a meeting with you to have the “legal” discussion and then later meet with John and Murray(and hopefully Bill since Aux Sable is involved as well) to discuss what appear to be some misunderstandings, and the relationship goingforward. I would be happy to discuss this with you at your convenience and look forward to scheduling a meeting soon to get it all sortedout. [31] The 2012 Bright Memo was re-sent with the same email by Mr. Bright to Mr.

Dunn on October 24, 2012. [32] While all of the evidence contained in the Hargreaves (and Coughlin) affidavit is evidence upon which the Defendants rely, itis the particular emphasis they have placed upon certain statements made by Mr. Bright in the Bright Memos that has caused JLET’sconcern. The Defendants highlight the following excerpts from the Bright Memos to assert that by May 11, 2014, JLET had the requisiteknowledge to start the running of the limitation period.

[ 33 ] The excerpts quoted in the Hargreaves Affidavit are the following: (

a) From the July 2012 Bright Memo that: ... the parties agree that there are currently no further amounts owing to JL under the licenses for Canadian gas transported in the System. ... ... Alliance is currently adding volume to the US Pipeline System by feeding gas in from other pipelines in the US, including the pipelines now owned by Aux Sable. It is our understanding that neither Aux Sable nor Alliance has any rights under the license agreements to use the technology in these other pipelines, for the transportation of such gas in the System, or for processing such gas at the Facility, and is therefore violating JL[ET]’s patent rights. ... (

b) From the March 2013 Bright Memo that Alliance and Aux Sable were: ... violating [JLET’s] patent rights and operating outside their licensed rights. [ 34 ] JLET argues that these extracted portions of the 2012 and 2013 Bright Memos are misleading; appearing to have “deliberately excluded” other sentences in the Memos to suggest “a disingenuous

interpretation in support of the Defendants’ limitation issue.” [ 35 ] Consequently, it says, it was compelled to respond merely “... to explain and clarify the content and context of the statements made by Mr. Bright” in the Bright Memos respecting the alleged breach of the Licence Agreements and violation of JLET’s patent rights. [ 36 ] In this sense, JLET denies that the Bright Affidavit evidence evinces any voluntary intention to waive privilege. The Bright Affidavit [ 37 ] What do Mr. Bright’s affidavits say? [ 38 ] In the Bright Affidavit, Mr. Bright: (

a) Particularizes the documents referenced in his July 26 and October 24, 2012 emails to Mr. Dunn and Mr. Birch, none of which are privileged; (

b) Repeats what he noted of his understanding in his 2012 Bright Memo and explains what he reviewed in reaching his understanding, none of which is privileged; (

c) Sets out, in considerable detail, what he “further” understood at the time he authored the 2012 Bright Memo; and, (

d) Explains the deficiencies and concerns he had with a draft Paid Up License Agreement (“PUL”) that had been provided to JLET by Alliance in or about April 2011, and how the draft PUL suggested to Mr. Bright that the Defendants were acknowledging their unauthorized use, or intended use, of the Technology. [ 39 ] At paragraph 12 Mr. Bright makes the statement: To be clear, neither [JLET] nor I had any verification or confirmation, independent or otherwise, that the [Lateral Pipelines were] using or [were] intending to use the [Technology] in [the] operations to transport gas into the US Pipeline System.

This was particularly so given my understanding that [Alliance Defendant representatives] had expressly denied that the [Lateral Pipelines were] using the [Technology]. [ 40 ] Mr. Bright goes on to explain that: ... the timing, coincidence and contents of the draft PUL, relative to the status of the [Lateral Pipeline] operations, suggest[ed] to [him] that such laterals may have been using or intending on using the [Technology], the confirmation and verification of which w[ere] being sought from Alliance and Aux Sable by means of the ... 2012 [Bright Memo]. [ 41 ] At paragraph 13 of the Bright Affidavit, Mr.

Bright sets out the questions that he thought needed clarification; namely whether “the [Lateral Pipelines] were or were not using the [Technology].” [ 42 ] Mr. Bright then describes what was discussed during a meeting he had with Mr. Dunn, legal counsel for Alliance Pipeline Ltd., on March 1, 2013. Mr. Bright’s evidence in this respect is essentially that Mr. Dunn advised him: (

a) the Lateral Pipelines were, or would be, using different technology, (

b) if they used or intended to use the licensed Technology, Mr. Dunn was of the view the existing License Agreements did not prohibit that use; (

c) the draft PUL had been proposed by the President and CEO of Alliance Pipeline Ltd. as a “good faith payment” for the world-wide right for Alliance and its affiliates to use the Technology in all of their present and future pipelines, including the Lateral Pipelines, notwithstanding Mr. Dunn’s view that the License Agreements already granted Alliance and its affiliates a world-wide right to use the Technology.

[ 43 ] The Bright Affidavit describes how Mr. Bright responded to Mr. Dunn. Mr. Bright deposes that he expressed his view that: (

a) the proposed PUL suggested a deemed admission that Alliance and its affiliate, Aux Sable, were using, or intended to use, the Technology in the Lateral Pipelines; (

b) the License Agreements did not grant a world-wide unrestricted right to use the Technology, but rather only authorized use of the Technology as defined in the License Agreements; and that, (

c) further discussions between their respective clients would be more productive if Alliance and Aux Sable provided technical and operating information that would allow JLET to verify they were not using the Technology. [ 44 ] Mr. Bright also advised Mr. Dunn that JLET would be conducting an independent review of the License Agreements to address Mr. Dunn’s

interpretation of those Agreements and the permitted use of the Technology thereunder. The Law Group 20/20 Letter is the result of that review. I will come back to the letter. [ 45 ] At paragraphs 22 – 23 of the Bright Affidavit, Mr. Bright refers to discussions he had with Ian Morris, the inventor of the Technology. It is not clear from the Affidavit when those discussion took place. When he was cross-examined, Mr. Bright confirmed that he spoke with Mr. Morris while he was at Miller Thomson. Based upon those discussions, Mr.

Bright deposes that he understood that “at no time prior to 2014, did [JLET] have, or Alliance or Aux Sable publish on their websites, gas quality and other operating information respecting the [Lateral Pipelines], and that absent such information, use of the Technology on such pipelines could not be reasonably concluded.” [ 46 ] Mr. Bright goes on to state that it was not until 2014 that the Alliance and Aux Sable Defendants published Gas Quality Reports containing operating information respecting the Lateral Pipelines on their websites, which allowed Mr.

Morris to later conclude that the Defendants were “each probably using” the Technology. [ 47 ] Mr. Morris has sworn an affidavit dated January 23, 2020 in this proceeding to the same effect: see paragraphs 29-30. [ 48 ] At paragraph 24 of the Bright Affidavit, Mr. Bright describes what was discussed at an August 14, 2014 meeting he attended with John Lagadin, Terrance Kutryk (who had succeeded Mr. Birch as President and CEO of Alliance Pipeline Ltd.) and Mr. Dunn. Mr. Bright states that this meeting took place before Mr. Morris completed his analysis. Mr. Bright recalls that: (

a) John Lagadin recounted the discussions and meetings he had had with the Defendants’ representatives and explained what he understood from those discussions and meetings; namely, that the Alliance and Aux Sable Defendants maintained that the Technology was not being used on the new Lateral Pipelines and that the License Agreements would in any event allow it. (

b) Mr. Lagadin advised Mr. Kutryk that he was having Mr. Morris, the inventor of the Technology, review the gas quality information recently located on the website and that “if it was determined from such review that [the] [Lateral Pipelines] were using the Technology, he would use the results of such review to either negotiate a solution or he would commence litigation.” [ 49 ] Mr. Bright deposes that Mr.

Lagadin also advised that he had engaged a law firm to provide an independent review of the License Agreements and that based upon that review completed in May 2014, he had concluded that “the License Agreements did not permit the use of the [Technology] to transport gas on the [Lateral Pipelines] ...” This is another reference to the 20/20 Law Group Letter. [ 50 ] Following the August 14, 2014 meeting, Mr. Bright deposes that he received a letter from Mr. Dunn summarizing the Defendants’ position, which was consistent with what was recounted during the August 14, 2014 meeting. [ 51 ] At paragraph 30 Mr.

Bright states: It was only in late 2014, as noted above, that Ian Morris had been able to conclude that the [Lateral Pipelines] were, in his opinion, probably using the [Technology], thereby allowing JL[ET] to conclude that the insistence in the 2010-2014 time period by the Alliance Pipeline and Aux Sable CEOs that they were not using the Technology on [Lateral Pipelines], was false and misleading. [ 52 ] At paragraphs 29 and 31-36 Mr.

Bright explains what certain references to JLET being “...involved in discussions with Alliance ... with respect to certain existing license and patent infringements by Alliance and its regulated and unregulated affiliates...” in National Energy Board filings on September 15, 2014 and January 29, 2015, and in a Federal Energy Regulatory Commission filing dated June 17, 2015, were intended to mean. [ 53 ] Mr. Bright’s May 15, 2020 affidavit sworn after this waiver of privilege application was filed, states in relevant part: ...

The evidence set out in my Affidavit sworn March 5, 2020 in this Action is primarily within my personal knowledge, with the exception of the paragraphs relating to my conversations with [JLET]’s consultant, Ian Morris, the inventor of the [Technology], which paragraphs were presented for context and not the truth of their content. Such evidence relates solely to matters and events that occurred in the 2012- 2015 time period, while I was a member of the law firm Miller Thomson LLP.

The evidence set out in my Affidavit sworn March 5, 2020 in this Action was for the purposes of explaining and clarifying the contents and context of: (

i) the [Bright Memos]; and (ii) the documents which I assisted [JLET] in submitting to the National Energy Board and The Federal Energy Regulatory Commission in the 2014-2015 time period ... No statement made in my Affidavit sworn March 5, 2020 in this Action was intended nor should be deemed to be a waiver of any client privilege of [JLET]. All statements are reflective of my recollection of events in which I participated that transpired with representatives of the Defendants or are matters of public record.

.... The Lagadin Affidavit [ 54 ] The Lagadin Affidavit explains that John K. Lagadin had taken over his father’s responsibilities as President and CEO of JLET because John Lagadin was terminally ill. It then exhibits documents in the possession of JLET, including a redacted copy of the 20/20 Law Group Letter. Analysis Did JLET put its state of mind in issue? [ 55 ] For the purpose of analysing this question, it is helpful to situate the evidence I have just described within the limitations issue it is intended to inform. [ 56 ]

Section 3 of the Limitations Act states that, 3(1) Subject to subsections (1.1) and (1.2) and sections 3.1 and 11, 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, or (b) 10 years after the claim arose, whichever period expires first, the defendant, on pleading this Act as a defence, is entitled to immunity from liability in respect of the claim. [ 57 ] When the application to summarily dismiss (an application to strike can involve no evidence) is heard, the Defendants will have the initial burden to show that there is no merit to JLET’s claim against them, or any part of it, because the action was commenced outside of the two-year limitation period established by s. 3(1) of the Limitations Act (or, alternatively, in the Alliance Defendants’ case, the 10 year “ultimate” limitation period). [ 58 ] With respect to the two-year limitation period, this means the Defendants must establish facts, proven on a balance of probabilities, that more than two years before JLET filed its Statement of Claim (i.e., before May 11, 2014), it knew, or in the circumstances ought to have known, that: (

i) its alleged injuries had occurred; (ii) were attributable to the conduct of the Defendants; and, (iii) assuming the Defendants were liable, warranted bringing a proceeding. [ 59 ] To meet their initial burden, the Defendants rely, in large part, upon the information shared with them by John Lagadin and Mr. Bright before May 11, 2014, including the Bright Memos and references to the 20/20 Law Group Letter.

The Defendants do not argue that this initial sharing of information manifested a voluntary intention to waive privilege in a way that requires further production from the Miller Thomson file or an unredacted copy of the 20/20 Law Group Letter. Rather, they say the information that was shared is enough to show that before May 11, 2014, JLET had the requisite knowledge to start the limitation period clock running. [ 60 ] If a Court accepts that the Defendants’ initial burden is met, JLET “… is required to 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 [answer to the moving parties’ claim], 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”: Weir-Jones Technical Services Incorporated v Purolator Courier Ltd , 2019 ABCA 49 para 47 . [ 61 ] Faced with the Defendants’ evidence in support of their

summary dismissal applications, JLET therefore had a choice to make. [ 62 ] It could argue that the Defendants’ evidence falls short of establishing that JLET had the requisite knowledge before May 11, 2014. In this regard, if JLET’s only issue with the Defendants’ use of the Bright Memos was how “deliberately excluded” sentences change the meaning of the excerpted portions upon which the Defendants rely, that issue could, in my view, be addressed in argument. The Bright Memos were exhibited in their entirety to the Hargreaves (and Coughlin) Affidavit. The trier of fact’s attention could be drawn to the Bright Memos themselves and urged to reject the Defendants’

interpretation. [ 63 ] Alternatively, JLET could challenge the moving parties’ assertions; that is, present evidence to demonstrate a positive answer to the Defendants’ claims or otherwise demonstrate a genuine issue requiring a trial. [ 64 ] JLET chose to do the latter.

[ 65 ] The Bright Affidavit goes further than just clarifying and contextualizing the portions of the Bright Memos excerpted in the Hargreaves Affidavit. Mr. Bright makes categorical statements about what he and others at JLET knew about the Defendants’ use of the Technology in the Lateral Pipelines, and how and when they knew it. [ 66 ] The trier of fact will not just be asked to find that the moving parties failed to meet their burden, but will, undoubtedly, also be asked to accept Mr.

Bright’s evidence as raising, at the very least, a triable issue in relation to whether JLET had the requisite knowledge to start the limitation clock running before May 11, 2014. [ 67 ] This is not to criticize JLET’s choice in defending the

summary dismissal applications. It is just to recognize that JLET was not compelled to provide all of the evidence in the Bright Affidavit in the way it contends it was. [ 68 ] In this sense, the Bright Affidavit evidence and the Lagadin Affidavit reference to the 20/20 Law Group Letter have been voluntarily given. [ 69 ] While this is not a situation in which the party seeking to maintain the privilege has voluntarily put its state of mind in issue in the proceeding – it is the Defendants, not JLET, that put JLET’s state of mind in issue by pleading the limitations defence and relying upon the evidence they do in support of their

summary dismissal application – it is a circumstance in which JLET voluntarily relies upon the Bright Affidavit and the Lagadin Affidavit exhibiting the redacted 20/20 Law Group Letter to ground its answer to the Defendants’

summary dismissal applications and limitations arguments. Does JLET rely upon privileged communications to ground its position? [ 70 ] All of that said, the law does recognize that it is open to a party to have a lawyer recount events the lawyer has witnessed without giving rise to an implied waiver of privilege: H.M.B. Holdings Limited v Replay Resorts Inc ., 2018 BCCA 263 at para 53 . There are times when a lawyer is in the best position to do so: H.M.B . at para 55. Given John Lagadin’s serious illness, it is fair to say that is the case here. [ 71 ] In so far as the Bright Affidavit speaks to Mr.

Bright’s recollection of information exchanged during meetings, or in correspondence, with the Defendants’ representatives, there is no implied waiver of privilege because there is nothing privileged about that evidence. [ 72 ] The documents that Mr. Bright deposes he reviewed and considered in preparing the Bright Memos are not privileged either. They have, I understand, all been disclosed. Consequently, his references to those documents in the Bright Affidavit cannot give rise to any implied waiver of privilege. [ 73 ] The true issue is whether Mr.

Bright’s detailed account of his understanding and his factual statements about: (

a) he and JLET having no “... verification or confirmation, independent or otherwise ...” that the Defendants were using, or intended to use the Technology on the Lateral Pipelines or access to “gas quality and other operating information respecting the Lateral Pipelines ...” prior to 2014; and, (

b) having to wait until late 2014, when Mr. Morris was able to conclude that the Defendants were “probably using” the Technology, to conclude that representations made by the Defendants’ representatives were “false and misleading”, are connected to or made in reliance upon privileged communications: see Iozzo v Weir , 2004 ABQB 259 para 19 . [ 74 ] In my view, they are. [ 75 ] JLET has chosen to establish these asserted facts to support its case by leading the evidence of its former counsel. Mr.

Bright conceded during his cross-examination that while he was a lawyer practicing with Miller Thomson, he was retained “to assist JLET and Mr. Lagadin in matters relating to the [Licensed Pipelines]”, including in relation to “concerns about whether the [D]efendants or their affiliates were wrongfully making use of the [T]echnology...”. He acknowledges that his understanding of the facts deposed to in the Bright Affidavit is based upon a “combination of what he understood and what Mr. Lagadin or JLET told him they understood.” [ 76 ] Mr.

Bright further confirmed that “the factual research and investigation that is part of the Miller Thomson file would include copies of whatever factual information was provided to Miller Thomson by JLET or Mr. Lagadin,” as well as factual information supplied by third parties, some of whom were connected to JLET and some of whom were not. [ 77 ] Having elected to rely upon the Bright Affidavit, JLET must be taken, by implication, to have waived claims of privilege attaching to the information upon which Mr. Bright’s asserted understanding of the facts is based. [ 78 ] Mr.

Bright’s May 15, 2020 affidavit stating that the paragraphs in the Bright Affidavit related to his conversations with Mr. Morris “were presented for context and not truth of their content” does not help JLET preserve the privilege it has, by implication, waived. This is because, for the purposes of the limitations arguments, it does not matter whether Mr. Morris’ conclusion that the Defendants were “probably using” the Technology was true or accurate. It is the information upon which his conclusion was based and the timing of his advice that JLET relies upon. [ 79 ] Unless Mr.

Bright’s May 15, 2020 affidavit is intended to suggest that what he said in the Bright Affidavit about his conversations with Mr. Morris are not to be taken as truth – which cannot be the case - it would be unfair to permit JLET to set up its answer to the limitations defence based on the Bright Affidavit, parts of which are clearly premised on communications between Mr. Bright and his client and upon Miller Thomson’s undisclosed factual investigation, and then preclude the Defendants from testing the

factual assertions made with reliance upon claims of solicitor-client and litigation privilege. To conclude otherwise would leave theDefendants with no reasonable method for testing JLET’s evidence. [80] Within the parameters I have described; that is, in so far as JLET has placed reliance on evidence given by Mr. Bright inrelation to his understanding and investigation of the facts related to the Defendants’ alleged use of the Technology on the LateralPipelines between 2012 and 2015, I find the circumstance here analogous to the situation in Canadian Appliance Source Inc. vUltradecanada.com Inc., 2018 ONSC 2960.

At paragraph 10 of that decision the Court held: ... where extensive reliance is placed on evidence given by a party’s solicitor, the solicitor’s work may become an integral part of thePlaintiff’s case. When that occurs, there is a deemed waiver of privilege, which comes about not as a matter of compulsion but as a resultof the party’s own choice: Guelph v Super Blue Box Recycling Corp., (ON SC), [2004] OJ No 4468.

Thus, a client isgenerally deemed to have waived privilege if its counsel supports its case by means of an affidavit of his or her own that addressesmatters of substance in the proceeding: Sky Solar v Economical Mutual Insurance Co., 2015 ONSC 4714, at para 108.

According toSharpe J. (as he then was), this includes incidents where a lawyer’s affidavit is submitted to establish the facts necessary to support theclient’s case: United States v Friedland, (ON SC), 1996 CarswellOnt 3604, at para 14. [81] With respect to the redacted 20/20 Law Group Letter, I am not satisfied that the Defendants have discharged their onus todemonstrate a compelling need to see the privileged content of that Letter based on considerations of fundamental fairness.

I havereached this conclusion for two reasons. [82] First, and as noted in Talisman Energy Inc. v Petro-Canada Inc., 2000 ABQB 147, at paras 25-27: ... where the existence or adequacy of the legal advice is not in itself a basis for the claim or the defence, the privilege is not waived by asimple reference to legal advice in pleadings or disclosed documents: see for example Lac La Ronge Indian Band v. Canada, (SK QB), [1996] 10 W.W.R. 625 (Sask. Q.B.) and Sabem Developments Ltd. v. Dutchmen (1976), 1 C.P.C. 101 (Ont.H.C.). ...

Solicitor/client privilege is not waived by disclosing that a solicitor’s advice was obtained.

It is waived when the evidence shows that theclient by his words or actions held a view or followed a course because of advice given to him or perhaps not given to him by his counseland that he relied on this act or omission for resolution of an issue at trial. ... waiver is triggered by demonstrating reliance on legal advice for the resolution of an issue, not by the mere reference to havingreceived it. ... [83] Second, it is well-established that ignorance or mistake of law does not have the effect of postponing commencement of thelimitation period.

Discovery in the Limitations Act sense relates to the facts, not the applicable law: Weir-Jones para 56; Templanza vWolfman, 2016 ABCA 1 para 19. [84] JLET does not rely upon the legal advice contained in the 20/20 Law Group Letter to ground its response to the Defendants’limitations arguments, and nor could it. The relevance of the 20/20 Law Group Letter from JLET’s perspective is merely its date in thesequence of events the Bright Affidavit describes. Conclusion [85] Having implicitly waived: (

a) its right to assert solicitor-client privilege in relation to its communications with Mr. Bright and other lawyers at Miller Thomsonabout the facts underlying its claim; and, (

b) its right to assert litigation privilege over any factual information shared with or gathered by Miller Thomson, from the date Mr. Bright and Miller Thomson were retained in relation to concerns about whether the Defendants were wrongfullymaking use of the Technology until the date when the Statement of Claim was filed, I conclude that JLET and/or Miller Thomson mustdisclose the following: 1. Emails and documents exchanged between JLET and Miller Thomson containing information about the facts known, understood orbeing investigated in relation to the Defendants’ use of the Technology.

To be clear, the only information I am directing be disclosedhere, and in the paragraphs below, is information related to the facts. Privilege in relation to any legal advice sought or received remainsin place; 2. Handwritten notes and/or memos to file recording telephone conversations or meetings between JLET and Miller Thomsonregarding the facts known, understood or being investigated in relation to the Defendants’ use of the Technology; 3. Emails and documents exchanged between JLET and/or Miller Thomson on the one hand, and Mr.

Morris and/or other persons onthe other hand, containing information about the facts known, understood or being investigated in relation to the Defendants’ use of theTechnology; 4. Handwritten notes and/or memos to file recording telephone conversations or meetings between JLET and/or Miller Thomson onthe one hand, and/or any third parties on the other hand, regarding the facts known, understood or being investigated in relation to theDefendants’ use of the Technology; and

5. Documents gathered by JLET and/or Miller Thomson related to the investigation of the Defendants’ use of the Technology. [ 86 ] In finding that privilege has been lost with respect to the above communications, I am mindful of the fact that additional production will occur and that it will require JLET and its counsel to review what may be voluminous hard copy and electronic files.

I am also mindful of the concerns expressed by Groberman J in Thermo Tech Technologies Inc. v Branconnier , 2003 BCSC 1019 , wherein the Court addressed why it was not properly situated to participate in that review to decide what records were producible.

While I am hopeful that no such difficulties will arise in this case, if there is a dispute about what is producible given my directions above, the parties may appear before me to make submissions on the appointment of a referee to act as facilitator, pursuant to the procedure provided for by rules 6.44 – 6.46 of the Rules of Court and as laid out in Alberta v Suncor Energy Inc ., 2016 ABQB 26 paras 95-97 ; varied, in part on appeal, 2017 ABCA 221 para 52 , leave to appeal to SCC refused (2018 CarswellAlta 882 , May 03, 2018). [ 87 ] The parties may also arrange to speak to costs if they are unable to agree.

Heard on the 28 th day of January, 2021. Dated at the City of Calgary, Alberta this 23 rd day of March, 2021. Anne L. Kirker J.C.Q.B.A. Appearances: Michael D. Briggs, Timothy S. Ellam, QC and Keith Gunn for the Alliance Applicants Matthew Lindsay QC, Andrew Wilkinson for the Aux Sable Applicants Ariel Z. Breitman and Jonathan J. Bouchier for the Respondent