Questor Technology Inc Plaintiff/Respondent - v. -, 2021 ABQB 636

Court of Queen’s Bench of Alberta Citation: Questor Technology Inc v Stagg, 2021 ABQB 636 Date : 20210811 Docket: 1801 11473 Registry: Calgary Between: Questor Technology Inc Plaintiff/Respondent - and - Richard Stagg, also known as Ritchie Stagg Jeffrey Nelson, also known as Jeff Nelson Justin Bouchard and Emission Rx Ltd. Defendants / Applicants _______________________________________________________ Endorsement of the Honourable Mr. Justice D.B. Nixon _______________________________________________________ I. Introduction

[ 1 ] The decision in this application was given orally on Wednesday, August 11, 2021. In the oral decision, I reserved the right to review the transcript and to add in case names and citations. I also indicated that the Court would be issuing an endorsement of the reasons and conclusions, which follows below. [ 2 ] The Plaintiff in the underlying action is Questor Technology Inc (“ Questor ”). It has filed an application to compel further and better records production (the “ 2021 Application to Compel ”).

The records are allegedly held by Emission Rx Ltd (“ Emission Rx ”). [ 3 ] The underlying litigation concerns an intellectual property dispute (the " Action "). The four defendants in the underlying litigation are Ritchie Stagg (" Mr. Stagg "), Jeff Nelson (" Mr. Nelson "), and Justin Bouchard (" Mr. Bouchard " and, collectively, the " Individual Defendants ") and Emission Rx (collectively, the " Defendants "). [ 4 ] The 2021 Application to Compel is scheduled to be heard on September 24, 2021.

In anticipation of the Application to Compel, the Defendants have made an application to strike (the “ 2021 Application to Strike ”) portions the affidavit of Audrey Mascarenhas sworn on June 30, 2021 (the “ Mascarenhas Affidavit ”). This decision deals with the 2021 Application to Strike. [ 5 ] A critical issue in the underlying Action concerns the design of a competing low-pressure combustor technology by the Defendants (the “ ERx Technology ”).

Questor alleges that the Defendants have failed to produce records relevant to the design the ERx Technology. [ 6 ] Questor also alleges that the Defendants developed the ERx Technology prior to the Individual Defendants leaving its employment. In asserting this allegation, Questor contends that the Defendants built the prototype and started the process to apply for patent protection for the ERx Technology while the Individual Defendants were still employed by the Plaintiff. [ 7 ] Questor pleads that the ERx Technology belongs to it because it was developed by the Individual Defendants while they were: (

i) employed by Questor; and (ii) under a duty to design such technology for Questor. Questor also alleges that the ERx Technology was copied from some or all of its technology. [ 8 ] The pleadings in the Action make the design, engineering and fabrication drawings prepared by the Defendants relevant and material to this lawsuit. However, Questor is concerned because the Defendants have only produced 14 discrete design records or drawings related to the ERx Technology. Of the 14 records produced, six are heavily redacted. [ 9 ] Questor retained Dr. Sudarshan (Raj) Mehta for purposes of this litigation.

He is alleged to be a combustion expert. In his Affidavit sworn on June 10, 2021, Dr. Mehta stated that he could not compare the competing technologies of the parties based on the limited records produced by the Defendants, and their extensive redaction. [ 10 ] Since the hearing of the injunction application in 2019 (the “ 2019 Injunction Application ”), Questor states that it has made numerous requests for production of additional design records. The Court is advised that the Defendants have refused all such requests.

As a result, Questor brought the 2021 Application to Compel, relying in part on the Mascarenhas Affidavit. II. Facts [ 11 ] The context is important to decisions made by a Court. The 2021 Application to Strike should not be considered in a vacuum. As a result, I review the relevant background. A. History [ 12 ] On or about May 30, 2013, Questor hired Mr. Nelson as a project engineer. Mr. Nelson had no incineration or combustion systems experience at the time. [ 13 ] On or about May 1, 2014, Questor hired Mr. Bouchard as a project engineer. Mr.

Bouchard had no incineration or combustion systems experience at the time. [ 14 ] In 2017, Questor asked Mr. Nelson and Mr. Bouchard to develop a low-pressure waste gas combustion solution: Questor Technology Inc v Stagg , 2020 ABQB 3 at para 5 [ Questor 2020 ] . While still employed by Questor, Mr. Nelson began developing a competing low-pressure waste gas combustion solution: Questor 2020 at para 7.

In May and June of 2018, these Individual Defendants left Questor to start their competing venture, Emission Rx: Questor 2020 at para 6. [ 15 ] The 2019 Injunction Application was heard in the summer and fall of 2019. The Court concluded that Questor has a strong prima facie case for several of its claims, including: (

i) that Mr. Nelson and Mr. Stagg breached their contractual duty of confidentiality by copying and taking Questor records upon their departure from Questor; and (ii) that Mr. Nelson and Mr. Bouchard are liable for breach of fiduciary duties owed to Questor for competing against Questor without waiting for a reasonable period of time to pass after their departures: Questor 2020 at para 29.

The Court also found a serious issue to be tried on various other claims brought by Questor: Questor 2020 at para 34. [ 16 ] This Court declined to grant the 2019 Injunction Application, in part because it found that Questor would not suffer irreparable harm if an injunction were not granted. B. Record Production Issues [ 17 ] During the 2019 Injunction Application, the Defendants were ordered to produce multiple categories and types of records that

Questor is still seeking to be produced in its Application to Compel. The Court is advised that there were at least three instances of particularly broad production obligations where the Defendants responded with minimal, piecemeal, and redacted records, or none at all. As a result, Questor is again applying for an order concerning the same production. [ 18 ] First, during the cross-examination on the Affidavit of Mr. Nelson sworn May 21, 2019, Mr.

Nelson undertook to produce all design records relating to the modifications to the expired patent prototype, including all engineered drawings, purchase orders, invoices, correspondence and other records relating to the design, fabrication, testing and any computational fluid dynamic modeling. In the response filed June 10, 2019, and referenced in the Mascarenhas Affidavit, minimal records were produced, and all contained redactions. No unredacted counsel’s eyes-only versions were offered. [ 19 ] Second, and also within the context of the 2019 Injunction Application, the Defendants refused: (

i) to answer several questions on cross-examination; and (ii) to address certain undertakings. This forced Questor to bring an earlier application to compel, heard on June 24, 2019. As a result, the Court ordered the Defendants to respond to numerous questions and undertakings, including the production of any records of Mr. Nelson’s “...discussions and research and other activities in relation to Emission Rx Limited for the time period between incorporation and when Jeffrey Nelson left Questor Technology Inc.” Notwithstanding this directive, Emission Rx provided no design records despite the time period being between: (

i) the Emission Rx incorporation on November 14, 2017; and (ii) the departure of Mr. Nelson on or about June 1, 2018. [ 20 ] Third, at the same time this Court also ordered the Defendants to produce “...a copy of [the Emission Rx] financial records to date.” After being so ordered, Emission Rx provided, on a counsel’s eyes-only basis, a single financial record. This record consisted of a three-page financial statement, only containing revenue associated with combustor sales.

It covered a six-month time period, from December 1, 2018 to May 31, 2019. [ 21 ] After requests from Questor, the Defendants updated the financial statement disclosure to November 30, 2019. This update was in advance of the hearing concerning the Application for a Preservation of Profits filed by Questor (the “ 2021 Preservation Application ”). However, the documents provided by the Defendants had significant redactions, which were not present in the initial financial statement. Despite multiple requests by Questor, no further updated financial records or statements have been provided. C.

Two Key Time Periods - Design Records [ 22 ] Design records typically provide a timeline, and map the progress of technological development. Questor asserts that the design records the Defendants likely have in their possession would enable their expert, Dr. Mehta, to determine if significant alterations were made after the Individual Defendants left Questor. [ 23 ] The Defendants assert that they made “significant modifications” to the ERx Technology design between: (

i) the time they left Questor in May or June 2018; and (ii) September 1, 2018. Indeed, the Defendants allege that they did not have a “viable technology” until these significant modifications were completed on or about September 1, 2018. [ 24 ] Questor wants to test the timeline assertion which the Defendants claim. This is why Questor asserts the design records are so relevant to the underlying Action for the time periods: (

i) before the Individual Defendants left Questor; and (ii) after the Individual Defendants left Questor. [ 25 ] I am informed there are no disclosed records which reflect any design changes made to the ERx Technology between mid- June 2018 and September 1, 2018. Questor asserts that the design records from this time period are critical to its ability to test the “complete redesign” narrative which the Defendants have advanced. D.

Summary of Requested Records and Sample Combustors [ 26 ] Questor served the 2021 Application to Compel on the Defendants in June 2021. The 2021 Application to Compel is scheduled to be heard on September 24, 2021. Questor seeks an order directing the Defendants to produce relevant and material records, including the following. (

a) All unredacted sketches, designs, design information, technical drawings, engineering drawings, production drawings, and as-built drawings in all file formats in which they exist, including in CAD or similar design software relating to the combustors Emission Rx sells, and that incorporate the Emission Rx patent. (

b) All communications, evolutions of prototypes, and material provided to the Defendants’ patent agent up to September 2018. (

c) A sample of ERx Technology for inspection purposes, unredacted Emission Rx financial records, a native form of all records, and the answers to undertakings on all cross-examination of Mr. Nelson, sworn May 21, 2019. E. Mascarenhas Affidavit – An Overview [ 27 ] The Mascarenhas Affidavit is the focus of the 2021 Application to Strike. In particular, the Defendants are seeking to strike 23 paragraphs from the Mascarenhas Affidavit. [ 28 ] The Mascarenhas Affidavit includes the following particulars:

(

a) A

summary of Ms. Mascarenhas experience as an engineer, in the combustion industry, and at Questor . (

b) An explanation of Questor’s method of developing combustors and generating records. This explanation includes the time period during which Mr. Nelson and Mr. Bouchard worked at Questor, throughout which they learned how to engineer and design combustors. (

c) A

summary and listing of records that, in the experience of Ms. Mascarenhas, are generated during the combustor design process. (

d) A comment concerning how few design records have been produced in the Defendants’ Affidavit of Records, whether in volume, format, or meta-data. (

e) The details concerning the numerous written requests Questor’s counsel made for the relevant and material records. F. Questor Expert [ 29 ] Dr. Mehta has been retained by Questor as an independent combustion expert. Dr. Mehta is a Professor at the University of Calgary in the area of chemical and petroleum engineering. He holds bachelor, masters, and doctorate degree in engineering. [ 30 ] Questor asserts that Dr. Mehta has significant experience in combustion.

He is a member of the Society of Petroleum Engineers International, the Combustion Institute and Canadian Heavy Oil Association, the Canadian Association of Drilling Engineers, and the Drilling and Completions Committee of the Canadian Association of Petroleum Producers. [ 31 ] The evidence is that Dr. Mehta agrees with the assertion of Ms. Mascarenhas’ regarding the nature of the design records that typically would be created in the process of designing a combustor. He confirms that additional records are needed to assess the differences in the technologies. [ 32 ] The Defendants have not objected to Dr.

Mehta’s affidavit. Further, they have not applied to strike his evidence. III. Issue [ 33 ] The primary issue is whether the Mascarenhas Affidavit contains impermissible statements. [ 34 ] If it is determined that the Mascarenhas Affidavit contains impermissible statements, the secondary issue is whether the impermissible evidence: (

i) can be ignored; (ii) can be attributed no weight; or (iii) must be struck. IV. Analysis [ 35 ] As a general comment, the law of evidence governs the presentation of facts before the court.

Its purpose is to facilitate the introduction of all logically relevant facts into a judicial hearing, without sacrificing any fundamental policy of the law which may be of more importance than the ascertainment of the truth: see Sopinka, Lederman and Bryant, The Law of Evidence in Canada , 5 th ed (Toronto: LexisNexis, 2018) at § 1.37 [ Sopinka ]. [ 36 ] To the extent possible, the appropriate approach to evidentiary questions should be to admit what is relevant and material, but no more.

As a result, if a particular matter is neither relevant nor material, it should be excluded from the judicial forum. [ 37 ] That said, the determination of what is relevant and material is not always clear in the early segments of the litigation process. In this case, questioning has not even occurred. As the Plaintiff, Questor is just trying to identify the documentation that it needs to review for the purposes of preparing for questioning. [ 38 ] There is a tension between the breadth of the discovery process and what the Defendants assert should be permitted to stand within the Mascarenhas Affidavit.

The theory underlying discovery (and the related questioning process) is that all parties will attend trial with as much knowledge and information as possible, and that neither party will be able to withhold secrets from the other (with some exceptions, such as what is protected by solicitor-client privilege). The purpose of affidavit evidence is to place the necessary facts before the court.

As a result, affidavits "should not contain argument, opinions or conclusions", and such information may be struck as being frivolous irrelevant or improper: Alberta Treasury Branches v Leahy , 1999 ABQB 185 at para 84 . [ 39 ] In this case, the Defendants seek to strike portions of the Mascarenhas Affidavit on the basis that particular components are: (

i) irrelevant; (ii) opinion; (iii) conjecture or speculation; or (iv) argumentative. [ 40 ] Rule 3.68 of the Alberta Rules of Court governs applications to strike. [1] Rule 3.68(4) establishes that a Court may strike all or part of an affidavit that contains frivolous, irrelevant or improper information. [ 41 ] The judicial guidelines stipulate that it is within the discretion of the Court to determine whether it is necessary to hear an application to strike discretely, in advance of a substantive application.

Since it is within the scope of the Court to ignore evidence that is irrelevant or improper, in certain circumstances it may not be necessary to strike out material that can be disregarded by the Court: Veselic-Titheridge v Titheridge , 2007 ABQB 456 at para 16 . [ 42 ] Concerning questions of relevance, the judge considering the substantive application is usually in the best position to determine the characterization and admissibility of evidence: Murphy v Cahill , 2012 ABQB 793 at para 33 .

That is the case because the judge will have the benefit of knowing the case more fully, and will be better situated to balance the competing arguments: see Orr v Alook , 2019 ABQB 713 at para 33 [ Orr ] .

[43] I acknowledge that Courts routinely exercise their discretion to hear an application to strike at the same time as the substantiveapplication is heard: Orr at paras 27-33.

I also acknowledge that the case management judge may hear a strike application discretely andresolved evidentiary issues in advance of cross-examination: Orr at paras 28-29. [44] When there is uncertainty concerning the nature of the disputed evidence, the most appropriate way to deal with the potentialinadmissibility is often through submissions at the substantive hearing on the issue of whether the material is either inadmissible or thatit should be given no weight: Murphy v Cahill, 2012 ABQB 793 at para 34.

This procedure was followed by the parties in the 2021Preservation Application. [45] I considered the Defendant’s argument that Questor’s decision not to cross-examination the Defendants on their Affidavit ofRecords should act as a barrier.

Based on my review of the law, there is no requirement that an applicant seeking to compel furtherproduction of documents must first cross-examine an adverse party on their affidavit of records. [46] In making this determination, I acknowledge the Defendants argued that the sole purpose of a cross-examination on anaffidavit of records is to test the accuracy of the affidavit: 694994 Alberta Ltd v Fort McKay Metis Corp, 2001 ABQB 424 at para 4(Master Funduk) [Fort McKay Metis]. However, a cross-examination is not the only method by which an affidavit of records can beshown to be inaccurate.

In my view, a party can rely on any relevant evidence to support an assertion that an affidavit of records manyhave omitted documents: Re/Max Real Estate (Edmonton) Ltd v Border Credit Union Ltd, [1988] 6 WWR 146, atparas 1, 21. [47] The Defendants provided the Court with a

schedule detailing each impugned paragraph, and summarizing the basis for theirobjections. Questor responded to each of these objections. [48] I now turn to address each of the Defendants four categories of objections, being: (

a) relevance; (

b) opinion; (

c) conjecture orspeculation; and (

d) argument. A. Relevance [49] The test for relevance is whether the fact is of consequence in determining the application.

As long as the particular fact hassome tendency to make the proposition for which it is advanced more or less likely, it may be admissible: DM Paciocco, and P Paciocco,L Struesser, The Law of Evidence, 8th ed, (Toronto: Irwin Law, 2020) at 35; R v McDonald, 2017 ONCA 568 at paras 66-67. [50] A fact that triggers a chain of inferences based on logic or experience, which ultimately makes a point in issue more or lesslikely, also satisfies the relevance inquiry: R v Watson, (ON CA), 1996 CarswellOnt 2884, 30 OR (3d) 161 at para16. [51] Based on my review of the Mascarenhas Affidavit in the context of this litigation, I find the statements impugned by theDefendant are relevant to the 2021 Application to Compel.

I make that finding because in that affidavit, Ms. Mascarenhas makesstatements detailing her experience in the combustor industry, and the records typically generated during the development, design,engineering and fabrication of combustors. The relevance of the impugned statements is further supported by the evidence provided byMs. Mascarenhas where she speaks to comparing such records with the Affidavit of Records provided by the Defendants.

When I readthese statements conjunctively, I find they form a chain of inferences which makes the question of whether the Defendants haveproduced all relevant and material records more likely. Based on my review of the facts and the associated analysis, I find that thissatisfies the test for relevance. B. Opinion [52] The role of a witness is to provide knowledge of facts “within her or his knowledge, observation and experience”: Sopinka at§12.2.

A witness must not give opinion evidence, which is the drawing of inferences through facts: Dow Chemical Canada ULC v NovaChemicals Corporation, 2015 ABQB 401 at para 7 [Dow Chemical]. It is the function of the Court, rather than a witness, to assessrelevant facts and to draw such inferences: Dow Chemical at para 7. [53] The majority of the Defendants’ objections concerning the alleged opinion evidence relate to statements concerning theexperiences of Ms. Mascarenhas.

As I read the statements which the Defendants have challenged, I find they are properly characterizedas statements of fact. [54] I make this finding because the subject statements Ms. Mascarenhas made in her affidavit related to her business experience inthe design, fabrication and patenting of combustors and the related records produced by Questor. As I construe matters, these statementsdo not draw an inference from facts.

To the contrary, these statements provide me with background context, which assists me in myunderstanding of the types of records that are typically produced during the design of a combustor. [55] I acknowledge that the Defendants may do things differently than Questor. However, given that the Individual Defendantswere trained by Questor, I would expect some overlap in the records produced as between Questor and Emission Rx. If I am in error, itremains open to the Defendants to submit an affidavit denying the existence of any sought records.

Further, once the Court has all of theevidence before it, the judge can determine the weight that will be attributed to the subject evidence before drawing any inference as towhether the Defendants’ minimal production in this Action has been insufficient. [56] Based on my review of the law, statements of past experience are permissible statements of fact, provided they do not drawimpermissible inferences of fact.

This determination is supported by the Ontario Court of Appeal which has found that statements bytelephone company employees, concerning their past experience that cell phone signals will generally bounce off the nearest cell phonetower, were determined to be permissible statements of fact: R v Hamilton, 2011 ONCA 399 at paras 237-240, and 259. Similarly, theSaskatchewan Court of Queen’s Bench found statements of an affiant’s experience in dealing with trade unions was a statement of fact,

and was permissible in an affidavit: Verdient Foods Inc v United Food and Commercial Workers, Local 1400 , 2019 SKQB 288 at paras 14-15 [ 57 ] Permiting a witness to speak of their past experience also may be justified as a development of the lay opinion evidence rule: ANC Timber Ltd v Alberta (Minister of Agriculture and Forestry) , 2019 ABQB 653 at paras 106-07 [ ANC Timber ] . Courts recognize that the lines between direct statements of fact and opinions can get blurred, and are not easily discernable: ANC Timber at para 103 .

As a result, “[l]ay witnesses may present their relevant observations in the form of opinions where: ... the witness, although not expert, has the experiential capacity to make the conclusion”: Dow Chemical at para 10 . [ 58 ] To qualify as permissible lay opinion evidence, the statement must meet four requirements. Those requirements are as follows: Dow Chemical at para 10 . (

a) The lay person is in a better position than the trier of fact to form the conclusion. (

b) The conclusion is one that persons of ordinary experience are able to make. (

c) The witness, although not expert, has the experiential capacity to make the conclusion. (

d) The opinions being expressed are merely a compendious mode of stating facts that are too subtle or complicated to be narrated as effectively without resort to conclusions: see also Sopinka at § 12.3 [ 59 ] Where these requirements are met, the Court may permit a witness to make inferences of fact which otherwise would normally fall within the purview of the Court. [ 60 ] The law has developed to recognize that by stating her experience, Ms. Mascarenhas has not made an inference of fact which would constitute impermissible opinion evidence.

Further, even the statements which do qualify as opinion evidence may be viewed as a compendious mode of stating facts permissible through the lay opinion evidence exception. [ 61 ] While certain of Ms. Mascarenhas statements could be artificially divorced into direct statements of fact , the enforcement of this requirement would require superfluous additional testimony. I do not think that is appropriate in this case. [ 62 ] Based on my review of the facts and analysis, I find Ms. Mascarenhas is best placed with personal knowledge of her past patent filings to form a conclusion based on her experience.

This finding is supported by the fact that patent filings are within her experiential capacity and any opinion being expressed is a compendious mode of stating these facts that would be too subtle or complicated to otherwise be narrated effectively: Sopinka at § 12.3. Further, if Ms. Mascarenhas is stating an opinion drawn from her experience, I find she is entitled to do so through the lay opinion evidence exception because each of the above four elements is satisfied. C.

Conjecture or Speculation [ 63 ] As I understand the assertions of the Defendant, the “conjecture and speculation” allegation is directed at evidence that Ms. Mascarenhas provides which contrasts: (

i) the design records typically generated by Questor in developing a new combustor, based on her knowledge and experience; against (ii) the records that have been disclosed in the Defendants’ Affidavits of Records. In particular, the Defendants assert that the comparison by Ms.

Mascarenhas of these two sets of facts equate to speculation of what documents are within the possession of the Defendants, but which have not been produced. [ 64 ] Based on my review of the overall context, I find the subject statements in the Mascarenhas Affidavit do not speculate as to what documents the Defendant has in their possession. I make that determination because the statements which are the focus of this debate contrast, as mentioned above: (

i) what has been produced in the Defendants’ Affidavit of Records; against (ii) records Ms. Mascarenhas has seen produced, based on her knowledge and experience, during the design of a new combustor. As I read the Mascarenhas Affidavit, these contrasts assist me in my understanding as to why Questor believes the Defendants have not met their document production obligation. [ 65 ] In the context of an application for further and better production, it is permissible to provide a descriptive context. In this case, the narrative in the Mascarenhas Affidavit assists the Court in understanding why Questor believes: (

i) additional records are likely to exist; and (ii) it was appropriate to bring the 2021 Application to Compel. [ 66 ] In making these comments, I accept that it is sometimes appropriate for a well-drafted affidavit to contain a description of the allegations in order to provide the reader with context to better understand the evidence provided in the affidavit: Kissel v Rocky View ( County) , 2020 ABQB 406 at para 62 . Assertions of fact may need to be placed in an explanatory context to assist the court in understanding the relevance of particular facts.

In my view, this is not improper: see Alberta Treasury Branches v Leahy , 1999 ABQB 185 at para 84 . [ 67 ] The additional information is important in this case because it provides a contextual framework within which I am better able to consider matters. I make this comment because the details provided in the Mascarenhas Affidavit explained that the number of records produced by the Defendants in their Affidavit of Records is small compared to the number that Ms.

Mascarenhas has seen created in parallel circumstances, based on her experience. [ 68 ] Based on the above facts and analysis, I find the alleged conjecture and speculation in the Mascarenhas Affidavit is permissible context, because it references back to Ms. Mascarenhas’ experience. D. Argument [ 69 ] The Defendants take issue with two particular statements in the Mascarenhas Affidavit, which they allege to be argumentative.

[ 70 ] This first concerns the evidence of Ms. Mascarenhas which is in support of the need for additional financial disclosure. The context for this is that, to date, the Defendants have only produced limited financial information covering a particular period of time, being one year. [ 71 ] Ms. Mascarenhas swears that in order for Questor to establish its claim “for a constructive trust, or for the disgorgement of the Defendants’ profits, Questor requires the production of the Defendants’ financial statements on an ongoing basis”.

Given the nature of the claim, I accept this assertion by Questor at this stage of the litigation. [ 72 ] Further, this is not “argument”. It is better characterized as evidence that is within the common understanding of the witness. In particular, if Questor is to prove the quantum of profits the Defendants have earned using ERx Technology, it requires the production of financial statements that cover the entire time period during which the Defendants used the disputed technology . In

summary, I find no merit to the Defendants’ allegations of “argumentative” evidence. [ 73 ] The second concerns the complaint by the Defendants regarding the request by Questor that prior undertakings of Mr. Nelson in respect of the financing of the Defendants’ business be updated. Ms. Mascarenhas notes that, after the undertaking was answered, the Defendants expanded into the USA.

Since that expansion may have required additional funding, she wants the undertaking to be updated. [ 74 ] Based on my review of the facts and analysis, I find the relevant paragraphs in the Mascarenhas Affidavit are not “argumentative”. Instead, they are more appropriately characterized as evidence that is within the ordinary experience of any lay witness. I make this determination because the Questor claim includes a disgorgement of profits and a constructive trust.

Given that context, Questor requires updated information concerning the Defendants’ financing in order to quantify the lost profits or the profits to be disgorged. In my view, there is no merit to the Defendants’ complaint that Ms. Mascarenhas’ evidence is “argumentative”. V. Penultimate Comments [ 75 ] The parties to this Action have been vigorous in their respective litigation efforts. I have no difficulty with that conduct, provided the Rules are followed appropriately.

While the records being sought by Questor may not exist, the Plaintiff has provided sufficient evidence that I am of the view that the alleged record deficiency needs to be explored further. [ 76 ] When I read the Mascarenhas Affidavit in the context of the 2021 Application to Strike, I find that it sets out the nature and type of records that, in experience of Ms. Mascarenhas, are typically created in the process of designing, engineering, and fabricating a new combustor. As mentioned, context is important. Significantly, Ms.

Mascarenhas' evidence concerning the design process is largely based on the design practices at Questor, where both Mr. Nelson and Mr. Bouchard were trained in combustor design engineering. Neither of those individuals had previous experience in this area. [ 77 ] In other words, Ms. Mascarenhas described in her affidavit the design practices likely followed by Mr. Nelson and Mr. Bouchard. Ms.

Mascarenhas then explained the anticipated records, which have not been produced by the Defendants in their Affidavits of Records. [ 78 ] Given the background training of these two Individual Defendants, I find the unexplained gap between: (

i) the reasonable expectation of Questor, on one hand; and (ii) the contents of the Defendant’s Affidavits of Records, on the other hand, is one that should be explored. This type of evidentiary foundation is routine and common on applications for production of further records and a proper affidavit of records.

Framing my determination from a different perspective, I find the Defendant has not proved, on a balance of probabilities, that the impugned statements are impermissible when considered in the full context of the Mascarenhas Affidavit. [ 79 ] I emphasize that the Defendants have an obligation to continually produce relevant and material records. When considering this obligation, it is important to remember that the right to the disclosure of records does not depend on a litigant, such as Questor, proving with certainty that some relevant records exist.

Indeed, if that was the case, litigation would not be able to proceed in an effective and efficient fashion. To ensure that the litigation process operates in an appropriate fashion, the onus is on the Defendants to review their own records and prepare an affidavit of records listing relevant records that do exist: Kaddoura v Hanson , 2015 ABCA 154 at para 17 . [ 80 ] The need for continual updating of relevant facts is particularly true in the context of financial records.

As an example, the Mascarenhas Affidavit provided the current factual information about the expansion of the Defendants’ business in order to give me the evidentiary background upon which to make a decision in respect of the 2021 Application to Strike. In my view, that is a common sense approach to litigation in this context. [ 81 ] As a final comment, I acknowledge the merit inherent in many of the assertions advanced by the Defendants. Indeed, in many circumstances I would accept the proposed striking of the clauses the Defendants have identified.

That said, this is not a case where I think the parsing of the Mascarenhas Affidavit as suggested by the Defendants is appropriate. For the reasons mentioned above, I exercise my discretion in favour of Questor. VI. Conclusion [ 82 ] Based on the facts and analysis, the 2021 Application to Strike is dismissed in its entirety. I make this determination because I find the Mascarenhas Affidavit does not contain impermissible statements when it read in its full context.

Given that determination, the primary issue has been addressed. [ 83 ] Based on my determination concerning the primary issue, the secondary issue becomes moot at this stage.

VII. Costs [ 84 ] The parties may speak to costs, if they cannot otherwise agree. Heard on the 4 th day of August, 2021. Oral Decision Given on Wednesday, August 11, 2021 Endorsement Dated at Calgary, Alberta this 11 day of August, 2021. Justice D. Blair Nixon J.C.Q.B.A. Appearances: Frank Tosto, Loni da Costa and Matthew Schneider Borden Ladner Gervais LLP for the Defendants/Applicants Michael Theroux and Denise Brundson Bennett Jones LLP for the Plaintiff/Respondent