Dow Chemical Canada ULC v NOVA Chemicals Corporation, 2021 ABQB 845

Court of Queen’s Bench of Alberta Citation: Dow Chemical Canada ULC v NOVA Chemicals Corporation, 2021 ABQB 845 Date: 20211026 Docket: 0601 07921 Registry: Calgary Between: Dow Chemical Canada ULC and Dow Europe GmbH Respondents/Plaintiffs - and - NOVA Chemicals Corporation Applicant/Defendant _______________________________________________________ Decision of the Honourable Madam Justice B.E. Romaine _______________________________________________________ I. Introduction [ 1 ] In this long-standing litigation, the Defendant NOVA Chemicals Corporation seeks an Order pursuant to Rule 3.65 of the

Alberta Rules of Court granting permission to file its Fifth Amended Statement of Defence. The Plaintiffs, Dow Chemical Canada ULC and Dow Europe GmbH have consented to a number of the proposed amendments, but object to amendments in two specific areas that they submit are an attempt to reargue matters decided at trial and affirmed by the Court of Appeal, and on which both this Court and the Court of Appeal are functus .

Dow submits that therefore the proposed amendments are hopeless. [ 2 ] NOVA submits that the proposed amendments directly address issues raised by Dow in its pleadings or expert reports, and respond to what it says are new forms of liability alleged by Dow post-trial. [ 3 ] Shortly after this application was heard, Dow alerted the Court to concerns it had with respect to the inability of the parties to agree to the scope of the long-scheduled hearing that commences on November 8, 2021, and concerns over a recent massive production of documents from NOVA.

This decision addresses both the amendment application and the scope of the November hearing. [ 4 ] Defined terms used in this decision have the meaning given to them in the Reasons for Judgment. II. Issues Relations to the Scope of the November Hearing A. Scope of the Hearing [ 5 ] In considering both the contested proposed amendments to NOVA's fifth amended statement of defence, and the question of identifying the proper issues to be decided at the hearing that will commence on November 8, 2021, it is useful to note the primary purpose and scope of that hearing:

a) to calculate damages for the period from 1997 to the date of judgment in accordance with the assessment principles accepted in the Reasons for Judgment dated June 20, 2018, (the Trial decision) except with respect to the Court of Appeal's directions with respect to the

interpretation of

section 14.1 of the Operating and Services Agreement in 2020 ABCA 320 , (the Trial Appeal decision). This arose from NOVA's new position taken on appeal regarding the

interpretation of

section 14.1. As a result, this Court was directed to determine the direct losses arising from NOVA's breaches, excluding indirect or consequential damages; and

b) to calculate damages, if any, for the "top-up" period from January 1, 2013 (for most categories of damages) to the date of judgment, again in accordance with the assessment principles accepted in the Reasons as modified by the directions of the Court of Appeal. B. Relevant Background [ 6 ] A judgment in this matter was released in June 2018 after many months of trial: 2018 ABQB 482 .

In the Reasons for decision, I allowed each party to make pleading amendments to suit the trial evidence and arguments, both at the end of the trial and after judgment: paras 842, 1190-1198 and 1462 of the Reasons. [ 7 ] By September 2019, both parties had made their amendments. I reserved on the issue of top-up damages from the agreed- upon cut-off of evidence of damages from the end of 2012 to the date of judgment if the parties were unable to resolve that issue through application of the principles I had accepted in the judgment: para 1466.

The parties were unable to agree, and in late 2019 and early 2021, this Court undertook a process to identify the issues remaining to be heard. [ 8 ] The Court of Appeal in its decision cited as 2021 ABA 153 at para 6 described in

summary fashion what I had decided in the Reasons: 6. The trial judge found NOVA had engaged in a deliberate and continuing course of conduct to favour its own interests to the legal detriment of Dow, with respect to both imposing ethane allocation and failing to operate E3 with the objective of optimizing production. The trial judge further found NOVA was in breach of its contractual obligations, its actions constituting gross negligence and wilful misconduct.

Specifically, she found: [236] From the evidence, I am satisfied that Nova’s imposition of ethane allocation, with the result that it deliberately took for itself some of the ethylene and co-products that Dow was entitled to, was a repeated course of conduct in the nature of conversion. [1084] I find from the evidence that Nova, to the extent that it acted as Operator, engaged in a deliberate and continuing course of conduct to favour the interests of Nova as Co-owner, both with respect to imposing ethane allocation and failing to operate E3 with the objective of optimizing production.

This conduct both breached the terms of the OSA [Operating Services Agreement] and constituted a failure to act in accordance with the terms of that agreement, in other words, with Wilful Misconduct. [1116] As I have noted, the conduct of Nova as Operator that forms the basis of this litigation consistently reflects both Wilful Misconduct and Gross Negligence as defined. To the extent that Nova acted as Operator when it failed to run E3 to its capacity and its failure to prevent conversion of part of Dow’s share of the products produced at E3 were not the result of inadvertence or oversight.

They were not accidental. Rather they were deliberate actions and failures to act, in violation of the terms of the OSA, or at best on utter disregard for harmful, foreseeable and avoidable consequences. [1144] Section 3(3) establishes when a claim arises, including: (

a) a claim or any number of claims based on any number of breaches of duty, resulting from a continuing course of conduct or a series of related acts or omissions, arises when the conduct terminates or the last act or omission occurs;

(

b) a claim based on a breach of a duty arises when the conduct, act or omission occurs; [1145] The claims at issue are all claims that fall under (3)(a). [ 9 ] The reservation of quantification of top-up damages is described in the Reasons at paragraphs 704 and 1182, and further set out in the Judgment Roll filed on September 24, 2019. [ 10 ] There were other issues reserved in the Reasons that will be described later in this decision to the extent that they are relevant to the November hearing.

There are also issues related to the primary issues that must be decided during the November hearing, again described later in this decision. Seven weeks have been scheduled for the hearing. [ 11 ] In the Court of Appeal's Trial Appeal decision, NOVA submitted, among other grounds of appeal, that this Court was in error in finding that under the OSA, NOVA was obligated to maximize ethylene production at E3 (the "optimization claim").

The Court held that NOVA had failed to identify any reviewable error in the trial judge's finding that NOVA was under an obligation to try to operate E3 at full capacity and that it was in breach of that obligation: Trial Appeal decision, para 42. The Court of Appeal also affirmed other findings of this Court. [ 12 ] The appeal was allowed in part. The Court found this Court was in error with respect to the

interpretation of the

section 14.1 of the OSA, an exclusion of damages clause, and remanded the calculation of direct damages back to this Court in accordance with its accepted

interpretation. The Court of Appeal also held that allocation damages should be converted using a monthly or other periodic exchange rate, such as the ones proposed by Dow's expert. If the parties could not agree on details of conversion, the issue was referred to this Court.

This Court's conclusion that the balance of the damages should be converted to Canadian currency as of the date of judgment revealed no reviewable error. [ 13 ] The Court of Appeal overturned this Court's method of calculating interest and held that interest should be calculated on the last day of each calendar month, applying the Prime Rate plus two percentage points on that date to all of the damages that accrued during that month. It upheld this Court's dismissal of NOVA's counterclaim, except that the remedial effect of the illegality of

section 15.5 of the OSA was remitted to this Court in accordance with the Court of Appeal's reason. This issue is discussed in greater detail later in this decision. The balance of NOVA's appeal was dismissed. [ 14 ] In a decision of this Court cited as 2020 ABQB 441 (the July decision), I found that issues of NOVA's liability were not appropriate issues for the top-up hearing because:

a) I had no jurisdiction to reopen or change my judgment, which did not provide for a reservation of issues of liability, that I was functus on these issues; and

b) it was not necessary for the liability issues identified by NOVA to be relitigated in order to arrive at a consistent and reasonable adjudication of the quantification of damages to which Dow may be entitled in the top-up period. [ 15 ] As a result, I rejected as inappropriate certain issues proposed by NOVA for the top-up hearing, which NOVA did not deny were liability issues. Among others, I rejected the following "optimization" issues: (

i) Did the Operator (NOVA) conduct operations at E3 during the Top Up Period with the objective of optimizing product production? (ii) If the Operator (NOVA) was in breach of any of its Optimization obligations during the Top Up Period, did that conduct constitute Gross Negligence or Wilful Misconduct? (iii) If the Operator (NOVA) did not deliver Dow’s EPP of E3’s productive capability in any month of the Top-Up Period, were there constraints at E3 that precluded the Operator from doing so? (iv) Taking into consideration any production constraints at E3, what was Dow’s shortfall for ethylene, if any, in each month of the Top-up Period? [ 16 ] In the July decision, which pre-dated the Trial Appeal decision, I set out a list of issues for the top-up hearing at paragraph 81.

These were:

a) Do the expert reports comply with the assessment principles accepted in the Reasons?

b) Should optimization damages for the months of February 2014, September 2014 and December 2016 be excluded on the ground that in those months, Dow declined a portion of NOVA’s turndown volume?

c) Did the plant equipment changes made to E3 after the 2014 plant turnaround improve its production capacity, and if so, should they have been implemented as part of the 2014 turnaround, were they necessary, were they foreseeable and avoidable and could they have been implemented without affecting plant production?

d) Is the commencement date for the ethane fixed costs adjustment January 21, 2012 or January 1, 2013?

e) Did Mr. Mikulka fail to use the correct ethane cost data found in the Feedstock Cost Statements?

f) Should life-to-date or year-to-date variable ethane prices be applied to the optimization damages calculation and the life-to-date adjustment?

g) Is the commencement date for the life-to-date adjustment January 21, 2012 or January 1, 2013?

h) Should 2018 infrastructure revenues be awarded in this action, or must Dow commence a new action for NOVA’s cancellation of fees from NCCL after December 31, 2017?

i) Have Mr. Mikulka’s calculations taken into account any over-delivery of C3s to Dow as documented in the production data?

j) For currency conversion, after applying Mr. Mikulka’s approach at trial, as of what date should the US dollar amounts be converted to Canadian dollar amounts? [ 17 ] Issues

d) and

g) have since been decided in 2021 ABQB 621 . The parties have agreed with respect to issue

h) that it will be an issue for the top-up hearing and will not require a new action. [ 18 ] This list of issues must of course be amended to add the direction of the Court of Appeal that this Court determine direct losses arising from NOVA's breaches, in accordance with the Court's

interpretation of

section 14.1 of the OSA, both for the trial period and the top-up period. [ 19 ] The July decision was appealed, and the appeal was dismissed: 2021 ABCA 153 . With respect to whether I erred in excluding issues of liability for the top-up hearing and erred by finding that I was functus officio in relation to such issues, the Court of Appeal stated as follows at paragraph 37: Dow submits that NOVA, despite being fully aware the Judgment Roll at paragraph 6(

b) reserved only quantification of Dow’s remaining damages for the top-up period between January 1, 2013 and June 20, 2018, did not raise in its appeal of the Trial Decision any issue about reservation as to liability of NOVA for Dow’s claimed top-up damages. As such, Dow says, the underlying premise for NOVA’s current appeal is nothing more than an impermissible collateral attack on both the Trial Decision and the Appeal Decision, because both levels of court are now functus officio on the issue of NOVA’s liability for top-up damages.

We agree . (emphasis added) [ 20 ] The Court noted at paragraph 39 that: [p]ut simply, and crucially to this appeal, the trial judge made fact and law findings as to what was the Agreement between the parties.

This was the principal purpose of the trial. [ 21 ] And further at paragraphs 41 to 89: A fortiori , where the finality concerns arise in relation to a deeply negotiated and extensively litigated Agreement in rich detail and involving sophisticated corporations with their own interests firmly in mind, the further comment of LeBel and Abella JJ at para 73 has resonance: “Litigation must come to an end, in the interests of the litigants themselves, the justice system and of our society. . . .

Although the Appeal Decision removed some conclusions of the trial judge, this Court did affirm key fact and mixed fact and law findings by the trial judge as to what was the Agreement and as to results that flowed from those elements of her set of conclusions. The overall conclusion as to what was the Agreement was the foundation for aspects of the matter which are dispositive here. The trial judge found and this Court affirmed her findings as to the essential basis of NOVA’s liability to Dow in relation to the optimization obligation of NOVA at E3 . . . .

In that light, once the formal judgment of the trial judge was entered, and once the formal judgment of this Court was entered, the trial judge was functus officio as to the findings of what was the Agreement . But, as noted, the barrier of functus officio would apply not only against NOVA, but also for NOVA and against Dow. The Agreement as thus identified by the trial judge, led to her finding that there was “Gross Negligence or Wilful Misconduct” within the meaning of Clause 14.1 of the Agreement.

Most specifically, her decision gave meaning to what the Agreement connoted would constitute “Wilful Misconduct” as contemplated by the Agreement. Her surviving post-appeal findings remained that, for the purposes of the optimization obligation, it was never open to NOVA to unilaterally privilege business considerations favorable to itself -- such as marketplace prices, alternative contracts, ethane allocation under a 1996 agreement binding on NOVA and so forth. None of this can be relied on by way of answer to NOVA’s obligation under the Agreement to optimize production. . . .

This Court did not disturb the specific conclusion of the trial judge as to what the obligation of NOVA was under the Agreement. . . . There was no basis presented to the trial judge or to this Court by NOVA to conclude that, at the end of the year 2012, NOVA had an epiphany of some sort and adjusted its

interpretation of its rights under the Agreement during the ‘top-up’ period and, therefore, took steps to meet the optimization requirement demanded by Dow. In light of NOVA’s position at trial and on appeal, there is no logic to such a theory and no evidence or positions taken that would support it. It could not therefore be concluded that there was some sort of sub silentio reservation of the question of liability for the top-up period that could be litigated at the initiative of either NOVA or Dow despite the foregoing conclusions about the proper

interpretation of the Agreement. It is not as if the trial judge lost track of the fact that significant matters affecting damages did in fact remain to be litigated after the judgment of this Court: see paras 18, 19 and 28 of our Reasons above. Put another way, it is clear that NOVA never challenged on appeal that it continued to operate from 2013 to 2018 under its

interpretation of its rights under the Agreement. In that light, any attempt by NOVA at the top-up phase to suggest that it has excuses for continued failure to optimize production from 2013 to 2018 arising from

factors excluded by the effect of the decisions of the trial judge and this Court must also necessarily and inevitably amount to collateral attacks on both judgments. Furthermore, any attempt by NOVA to ask this Court to address trial findings that were not raised on appeal, would also constitute an impermissible collateral attack on this Court’s Appeal Decision even if there were no express preclusionary coverage by this Court of topics now pressed by NOVA for the top-up period. It is now too late to challenge the findings made by the trial judge as to the very essence, and nature, of NOVA’s liability. . . .

For this appeal, the trial judge made clear the Judgment Roll correctly reflected her judgment; NOVA’s ongoing liability for Dow’s damages during the top-up period had been decided. In our view, the Trial Decision and the Judgment Roll are patently clear - the trial judge did not reserve jurisdiction to re-decide liability for future damages based on a fresh reading of what the contract obliged NOVA to do in the period from 2013 to 2018. NOVA’s remaining option had been to appeal, and it did not appeal this aspect of the Judgment Roll.

The trial judge was correct in determining that the Judgment Roll having been entered, she was functus officio . We are unpersuaded by the NOVA submission that the trial judge never decided NOVA’s liability for the top-up period, because “the Judgment Roll sets out orders that are made , not orders that are absent”. NOVA contends, contrary to the plain language of the Judgment Roll, that quantification of damages was yet to be determined for the top-up period, and the trial judge did not finally determine NOVA’s liability for same. We disagree for the common law reasons mentioned above. . . .

Further, and to repeat, having concluded the trial judge did find NOVA’s liability for Dow’s ongoing damages during the top-up period, which finding was not appealed, upon entry of its formal judgment, this Court also became functus officio . For the reasons above, we find that the trial judge became functus officio upon entry of the trial court’s Judgment Roll, on the issue of NOVA’s ongoing, continuing liability for Dow’s damages for the top-up period under the Agreement as interpreted.

To like effect, this Court became functus officio upon entry of its Judgment Roll, as to any matters that NOVA did not raise but could have raised on appeal. As noted, there are a variety of other concepts related to the principle of finality that would also apply, including collateral attack. . . . Throughout the trial proceedings and on appeal, NOVA vigorously contested any liability as claimed by Dow, and maintained the position that its approach to running E3, founded on a broad discretion in its manner of operation, had always been proper.

As previously noted, the trial judge rejected NOVA’s defence, finding it was in ongoing breach of its obligations to Dow by operating E3 to satisfy its own demands and to maximize its own profit, thus unlawfully engaging in a “deliberate and continuing course of conduct” : Trial Decision at para 632-642, 1084. The trial judge found that because NOVA’s conduct was continuing, Dow’s damages continued. Since post-2012 damages remained to be quantified, the trial judge properly reserved jurisdiction to quantify them.

Therefore, her reservation of jurisdiction to quantify post- 2012 damages flowed from her clear finding that NOVA was engaging in a continuing course of conduct. The trial judge made clear the “reservation of relief beyond the cut-off date for the purpose of experts’ calculations ... related only to the quantification of damages for the top-up period”, an approach never disputed by NOVA: Top-up Decision at paras 12-14; Trial Decision at para 1084.

The Judgment Roll, providing for “quantification of the Plaintiffs’ remaining damages”, does not encompass determination of the liability therefor; liability had already been decided. Court time is a scarce and valuable resource. Litigants and the court must determine a dispute-resolution trial process that both accords parties due process and absorbs no more court time than is necessary. This is what good lawyers and judges do. This is what happened here. . . .

In conclusion, irrespective of which doctrine under the overall principle of finality is called in aid, we are satisfied that there was no error by the trial judge in finding herself functus officio on the determined aspects of NOVA’s liability by operation of the Agreement as correctly interpreted, and we add that this Court is likewise functus officio on the same points.

This conclusion disposes of NOVA’s first two grounds of appeal, which are dismissed. (emphasis added) [ 22 ] I have quoted so extensively from the Court of Appeal's decision with respect to the July decision (the July Decision Appeal) with respect to the issue of the scope of the November hearing because it is hard to imagine a clearer message: this Court is functus officio with respect to the determination of NOVA's liability for the top-up period. C. Liability Issues [ 23 ] Despite the July decision, NOVA raises a number of issues relating to liability that it submits must be addressed at the November hearing.

For example, it submits that even if Dow could make a case for breach of NOVA's optimization obligations during the top-up period in order to be eligible for a damage award (which, it notes, in any event must exclude excluded damages), Dow must prove that NOVA's particular operational strategies during the top-up period amounted to gross negligence or wilful misconduct and that the gross negligence or wilful misconduct directly caused the damages. This flies in the face of the Reasons and paragraph 48 of the July Decision Appeal.

[ 24 ] As I noted, and as the Court of Appeal confirmed, the Reasons give meaning to what would constitute wilful misconduct and gross negligence at paras 1084 and 1116, and this Court is functus on that issue. [ 25 ] The Reasons in fact include the finding that where actual production is less than plant capacity, calculated in accordance with the methodology accepted in the Reasons, NOVA is necessarily in breach of its obligation to operate E3 with the objective of optimizing production. [ 26 ] NOVA also submits that a finding of wilful misconduct requires cogent contemporaneous evidence of the facts and the applicable standard of care.

NOVA asserts that Dow is asking the Court to apply the doctrine of functus officio "to deny NOVA's legitimate defence to liability". [ 27 ] It bears repeating: this Court and the Court of Appeal are functus officio on liability. At any rate, NOVA's liability will not be merely assumed at the November hearing. Dow must adduce evidence that establishes that, either the ethane allocation scheme or a failure to optimize production continued in the top-up period.

If it does so, the finding in the Reasons that this would constitute wilful misconduct and/or gross negligence would continue to apply, and Dow would not be obliged to go further.

Evidence of NOVA's operational strategies or of compliance with the Operator's standard of care, which was not an issue at trial, does not relieve the Operator of its contractual obligation to optimize production in accordance with the Reasons, and this evidence is thus irrelevant. [ 28 ] NOVA submits that this Court made no finding in the Reasons that any particular operational strategies executed during the top-up period constituted wilful misconduct or gross negligence.

If Dow adduces evidence that NOVA failed to optimize production in the top-up period in accordance with the principles accepted in the Reasons, NOVA's operational strategies are irrelevant. [ 29 ] NOVA submits that, despite this Court's finding in the Reasons that NOVA's conduct was continuing, the facts that underpin this Court's finding of liability do not continue in the top-up period. The comments of the Court of Appeal in its dismissal of the appeal of the July decision are cogent in this regard, particularly at paras 6 and 91 to 94.

Whether NOVA is correct remains to be addressed in the top-up hearing, but if those facts, or any of them, are established by Dow, further determination of liability is not necessary and would be a collateral attack on the Reasons with respect to an issue that was not appealed. [ 30 ] NOVA appears to rely on two excerpts from the July decision of this Court and the July Decision Appeal to justify its submissions that liability is still an issue for the top-up hearing.

In the July decision, I commented as follows at paragraphs 18-19: I do not disagree that liability during the top-up period cannot merely be assumed; that it requires evidence as a foundation for any further award of damages. However, NOVA appears to ignore the rest of this paragraph: That evidence exists in the business documents that have been exchanged between the parties and provided to the experts as supporting material for their reports .

These materials relating to E3’s productive capability and ethylene production and Dow’s profit margins and capacity data can be entered as evidence at the top-up hearing without the need of lay witnesses . NOVA will not be precluded from attempting to prove, as it has stated an intention to do, that the operation of E3 may have changed during the top-up period, or that E3 was supplied with ethane to maximize ethylene production, based on this evidence .

NOVA is not precluded from using its chosen experts to do so, relying on post-2012 evidence relevant to damage quantification in accordance with the principles set out in the [Trial Decision] . (emphasis added) [ 31 ] Therefore, this Court made it plain that NOVA may seek to establish that the operation of E3 may have changed during the top-up period or that E3 was supplied with sufficient ethane to meet its obligation to optimize production in accordance with E3's productive capability through the use of the business documents that had been exchanged between the parties and provided to the experts.

Nor would NOVA be precluded from using expert evidence to do so "in accordance with the principles" set out in the Reasons. [ 32 ] The comment did not open the issue of liability in the top-up period to a variety of new defences to liability: it merely notes that Dow must adduce evidence that the facts, or some of the facts, that underpin the finding of liability in the Reasons continued during the top-up period. [ 33 ] NOVA also relies on a comment in the July Decision Appeal's dismissal of the appeal at paragraph 103: Dow concedes, and we agree, that NOVA is not precluded from calling lay witnesses to counter the allegation that it unilaterally challenged Dow’s Feedstock Fraction in November 2017.

Moreover, nothing in the extant procedural rulings prohibits NOVA from identifying new constraints on E3’s productive capability for the top-up period, or its ability to prove that such constraint, or constraints, impacted damages for the top-up period.

From a procedural standpoint , there is also nothing precluding NOVA from leading evidence to demonstrate it tried, but was unable to comply with its obligations under the joint venture agreements due to circumstances beyond its control, or due to circumstances that would constrain production for reasons that are verifiable or reasonable . (emphasis added) [ 34 ] NOVA submits that, by this comment, the Court of Appeal has expanded the definition of relevant constraints from what is set out in the Reasons. That cannot be a correct

interpretation. [ 35 ] The comment is made in the part of the Court's decision relating to NOVA's third ground of appeal, that I misdirected myself on fundamental issues of procedural fairness and trial procedure. This ground of appeal was also dismissed. The Court commented at paragraphs 91 to 103 that: The judicial methodology for the calculation or quantification of damages for a continuing claim, are summarized as follows.

Damages are generally calculated up to the time the court makes its assessment which, as here, is generally the date of judgment, although possibly later: r 9.9; trial evidence almost always concludes before the date of the judgment and often, long before. If a defendant claims to have changed its continuing conduct or terminated its offending conduct before or during trial, it is that defendant’s obligation to adduce evidence of such change or termination. If a defendant claims that its continuing conduct changed sometime after the trial ended,

pursuant to r 9.13 the party may apply to adduce evidence of the change at any time until formal judgment is entered, whereupon the trial court becomes functus officio : r 9.13; Milner at para 2. . . . NOVA asserts that assessing future damages based on a past finding of liability is unfair. This assertion is misplaced. . . . in our view, this Court in the Appeal Decision upheld the essential rationale for liability which NOVA is now disputing.

If NOVA genuinely believed its conduct had changed in ways that would render the trial judgment’s finding of its continued course of conduct no longer applicable after the trial started in January 2015, then NOVA had an obligation of due diligence. It was obliged to alert the trial judge to any distinction it claimed existed as between its actions before the trial started on the one hand, and after that to the trial judgment date on the other, and certainly before the minutes of the Judgment Roll were settled in September 2019. . . .

It appears, instead, that only after the Judgment Roll was entered and NOVA engaged new counsel, did NOVA seek to persuade the trial judge to reopen her judgment, as Dow states, “to graft a retrial of liability onto the quantification of damages that she had reserved. Properly, she declined”. We agree, the trial judge properly declined. Accordingly, while issues of procedural fairness engage a correctness review on appeal, here, we discern no unfairness embedded in the November 25, 2020 order.

NOVA objects that the trial judge’s November 25, 2020 order precludes it from gathering relevant evidence for the top-up period through document production and discovery, and precludes it from leading relevant witness evidence at the top-up hearing. We conclude, as does Dow, that there is nothing in the trial judge’s procedural rulings precluding either such intentions or efforts by NOVA. . . .

The productive capacity methodologies that the trial judge accepted, unchallenged and undisturbed on appeal, continue to apply . . . . this Court affirmed the trial judge’s finding that NOVA is under an obligation to operate E3 at full capacity. This Court did not alter, nor was it asked to alter, the trial judge’s definition of productive capability, or the way in which the trial judge decided productive capability was to be calculated.

Accordingly, we conclude the experts need not address these issues again . (emphasis added) [ 36 ] It was at this point in its reasons that the Court of Appeal made the comment relied upon by NOVA as justification for the expansion of the categories of relevant constraints that may affect productive capability.

It cannot be said that, after the Court's clear language with respect to both this Court and the Court of Appeal being functus officio on the issue of productive capability, the Court then purported to change the language in the Reasons relating to relevant constraints that may affect that analysis. [ 37 ] NOVA points out that the language of the comment was taken from its appeal factum, but that does not support its contention that the Court deliberately widened the test for relevant constraints despite its agreement that this Court was functus on the issue of optimization. [ 38 ] It is noteworthy that in para 54 of the same decision, the Court of Appeal noted that any attempt by NOVA to suggest that it has excuses for continued failure to optimize production from 2013 to 2018 " arising from factors excluded by the effect of the decisions of the trial judge and this Court must necessarily and inevitably amount to collateral attacks on both judgments." para 54 (emphasis added) [ 39 ] At trial, NOVA referred to a number of specific mechanical issues that it submitted supported its position that it ran E3 to its maximum capacity.

After considering these issues, I concluded that they were overstated, or, while perhaps a plant issue that needed to be addressed in a timely manner, did not constrain production. I accepted the opinions of Dow's experts that NOVA had failed to address these issues expeditiously: para 626. [ 40 ] In conclusion on the optimization claim, I accepted the evidence of Mr. Kapur with respect to the productive capacity of E3. I also accepted the evidence of Mr. Holloway that there were no uncommon mechanical constraints that ought to have restricted E3 from reaching its full capacity, other than some of the fouling.

But, with respect to the fouling and the burner replacement issues, I found that NOVA's approach to repairing the issues was slow, a lower priority given that it did not need extra ethylene that could have been produced. [ 41 ] It was clear from their testimony that the operations people were not pressed to repair mechanical issues with any speed and that they were under the direction of the NOVA commercial people on how to run E3. [ 42 ] Finally, while I accepted Mr.

Holloway's opinion that there were no uncommon mechanical constraints that would limit E3's productive capacity, I found that Dow's damages expert used a more conservative basis to calculate damages. [ 43 ] I noted that Mr.

Mikulka's calculation of damages, which I accepted, made no claim for periods when E3 was not operating, "which in my view accounts fairly for the downtime whatever uncommon mechanical constraints may have caused had they been addressed diligently": para 760 of the Reasons. [ 44 ] In the July decision, when considering (and rejecting) NOVA's suggested liability issues for the top-up hearing, I confirmed that NOVA would not be precluded from attempting to prove, as it had stated an intention to do, that the operation of E3 may have changed during the top-up period, or that E3 was supplied with ethane to maximize ethylene production, based on evidence in the business documents that have been exchanged between the parties and provided to the experts as supporting materials for their reports: para 18.

[ 45 ] I also confirmed that if the operational and documentary evidence exchanged by the parties indicates that, in accordance with the principles accepted in the Reasons, the operation of E3 changed during the top-up period such that quantification of damages is affected, NOVA has the opportunity to make those submissions: para 21. [ 46 ] At paragraphs 24 and 25, I noted that Dow was alive to the issue that NOVA may submit that specific volumes of ethylene could not be provided during the top-up period because of uncommon and unavailable mechanical constraints.

I stated that, as set out in the Reasons, the threshold principle for consideration of alleged constraints is whether they were uncommon or whether they were unforeseen and unavoidable: pars 24 and 25. Also in accordance with the Reasons, even uncommon or unavoidable constraints may be taken into account with respect to the method of quantifying available capacity that I accepted in the Reasons. NOVA's proposed issue for determination at the November hearing relating to post 2012 constraints and damage quantification must therefore be considered in accordance with these principles.

Constraints are not a relevant issue unless they meet the threshold consideration of whether they were uncommon or whether they were unforeseen and unavoidable, and not the wider test submitted by NOVA. [ 47 ] It was on this basis that I determined I was functus on the liability issues that NOVA submitted should be heard at the November hearing that related to constraints. D. Illegality of

Section 5.15 of the OSA [ 48 ] The Court of Appeal affirmed this Court's findings that, as a result of a breach of the Competition Act , any attempt to enforce the Ethane Pooling covenants against Dow would be unenforceable, as their performance would be illegal by operation of law: Trial Appeal decision para 157. However, the Court did not accept this Court's conclusion that there was no connection between the covenant to provide Ethane Services under

section 4.3 and the Ethane Covenants in

section 5.15 of the OSA. The Court of Appeal found that the only reasonable

interpretation of the OSA is that there is a clear and direct link between the covenant to provide Ethane Services under

section 4.3 and the Ethane Covenants in

section 5.15: para 161. [ 49 ] The Court of Appeal also rejected this Court's "reading down" of the Ethane Pooling covenants. It noted that: . . . on the issue of severance the equities favour NOVA, and its preferences with respect to the now illegal clause should prevail unless Dow can demonstrate some prejudice or unfairness . If NOVA, for example, favours the termination of the Pool as the remedy for the illegality created by Dow's ownership interest in E3, that should be the presumptive remedy. . . . … it is an open question whether the invalidity of the covenants taints all of

section 5 (the Ethane Pooling covenants), or only the particular

section 5.15. It may be that the appropriate remedy is to sever as invalid the entire Ethane Pooling covenant, and possibly other provisions in the Operating and Services Agreement (such as the covenant to supply Ethane Services).

The appropriate remedy in the circumstances was not fully argued on appeal, so the effect of the illegality of the covenants is referred back to the trial court for further consideration . (emphasis added) [ 50 ] The appeal of the dismissal of NOVA's counterclaim was dismissed, "excepting that the remedial effect of the performance of [the] Ethane Pooling covenant" was referred back to this Court. [ 51 ] NOVA submits that one of the consequences of the Court of Appeal's reasons on this issue is that Dow was never entitled to optimization damages for any period, and that thus, this issue is a critical threshold legal issue that must be resolved before the issue of Dow's claim for damages in the November hearing. [ 52 ] NOVA submits that the logical implication of

Article 5 being void ab initio , or void as of February 6, 2001, is that NOVA had no contractual obligation to supply E3 with Ethane during the claim period and, as such, Dow's optimization claim (and related claims) must fail. [ 53 ] It is important to note that the effect of the illegality of

section 5.15 of the Ethane Covenants is an open question. NOVA may certainly pursue its submissions with respect to the appropriate effect of the illegality when this issue is addressed, but the effect on the remainder of

section 5 of the OSA has not been decided. [ 54 ] I must address NOVA's suggestion that this Court adjourned a July 2021 hearing at which NOVA intended to address the legal consequences of the illegality of

section 5 at the request of Dow, and, impliedly without input from NOVA. The transcript of the attendance at which this application was adjourned read into the record by Mr. Yorke-Slader clearly indicates that this Court asked Mr. Leitl for his position, and that he agreed to the adjournment. [ 55 ] Mr. Leitl submits that he made it clear at that time that he intended for this issue to be addressed at the November hearing.

I have no available notes of this given the short time I have to address these issues. [ 56 ] Another factor affects the decision of whether this issue should be determined during the November hearing. [ 57 ] The Court of Appeal at para 167 of the Trial Appeal decision commented as follows: E3 is obviously a valuable asset for both parties. Now that Dow has assumed the position of Union Carbide, some aspects of the original arrangement are impractical.

Since the parties will want to work together in the future to their mutual advantage, a consensual resolution of the outstanding issues respecting ethane supply would be preferable to one imposed by the Court. [ 58 ] Mr. Leitl appears to believe that the parties had shut down business discussions on this issue on October 6, 2021. However, Mr. Yorke-Slader was in possession of a letter from NOVA dated October 6, 2021 that indicates that NOVA no longer sees a need for discussions to continue on a without prejudice basis but asks for available dates to continue the process on a with prejudice basis.

[ 59 ] The issue of the effect of the illegality of

section 5.15 of the OSA will not be the subject of the November 8 hearing for three reasons:

a) I am reluctant to interfere with negotiations over the issue or to make a decision that would give one or the other party a strategic advantage in negotiations with respect to ethane supply until it is clear that negotiations have ceased. I agree with the Court of Appeal: E3 is a valuable asset for both parties and if the parties are able to agree on a solution that would work to their mutual advantage in a business, rather than a legal sense, it would be to their benefit to do so;

b) I disagree that this is an issue that must be determined in priority to the long-scheduled issues that are the subject of the November hearing. If the result of the hearing is that Dow is entitled to additional damages for the top-up period, submissions can be made to ensure that NOVA is not prejudiced before the illegality issue is decided. I will work with counsel to ensure that a hearing on this issue can be scheduled as early as April of 2022 if negotiations have failed by that time; and

c) realistically, there will not be sufficient time in the seven weeks scheduled for the November hearing to address the issue. E.

Impact of NOx. [ 60 ] NOVA submits that the extent to which any damages based on productive capacity should be adjusted to account for regulatory constraints on NOx emissions, which it submits would preclude operating E3 at the rate upon which Dow bases its damages claims, should be an issue to be decided at the November hearing. [ 61 ] In an order pronounced on November 25, 2020, this Court stated that NOVA may make submissions on the implications of the NOx issue from the testing to be done in the fall of 2020 "as corroborated by an independent third-party report." [ 62 ] NOVA refers to a report of Mr.

Subramanian, which was served on Dow on August 31, 2021. Dow notes that all permitted expert reports regarding productive capability were exchanged in late 2019 and early 2020, subject to the Court's further directions in July and August 2020, which were affirmed on appeal. Dow notes that these expert reports raised no genuine issue of any impact of NOx limits on E3's productive capacity. The Court's November 25, 2020 order provided for an update on NOVA's delivery of an independent or internal report on NOx testing, which was provided December 14, 2020.

In Dow's view, that appeared to end the matter. [ 63 ] I have not reviewed Mr. Subramanian's report, and am not aware of his opinion. Dow is certainly entitled to object to the admission of the report on any basis, including factors such as Mr. Subramanian's qualifications or the lateness of the report. F. Impact of NOVA's Recent Production [ 64 ] NOVA does not dispute that it produced a large number of documents commencing on September 16, 2021 and continuing through October 12, 2021.

NOVA says that 86,224 records were produced and Dow's undisputed submission is that approximately 1.3 million pages of documents were produced. It is also not in dispute that NOVA delivered this production on the basis that these were documents on which it intended to rely. [ 65 ] It is clear that it would be impossible for Dow to review all of these documents before the commencement of the hearing on November 8, 2021, let alone conduct meaningful questioning on them. NOVA submits that since the production was made electronically, they are more easily searchable, through, for instance, the use of "key words".

However, it would be imprudent, if not negligent, for Dow not to review the documents carefully to be prepared for the November hearing, and the use of "key words" is not an adequate answer to the problem. [ 66 ] NOVA also submits that Dow has already received some of these documents. It is unclear whether these documents are identifiable as such. [ 67 ] The directions I have made with respect to the appropriate issues for the November 8 hearing, and those that are not appropriate, should help to resolve the problem by narrowing the scope of relevant documents.

I direct that NOVA identify for Dow the documents on which it no longer intends to rely at the hearing. [ 68 ] The parties also agreed that they would inform each other a minimum of three days before a witness testifies of the documents that the witness intends to refer to in their testimony. In addition, if Dow is prejudiced by its inability to review a document that was the subject of this late production, this Court will be open to suggestions of options that would ensure fairness between the parties. G.

Process [ 69 ] As counsel for NOVA appears aggrieved by the process that led to the application with respect to the identification of appropriate issues for the November 8 hearing, addressing it at some length, I will respond to his comments. [ 70 ] When counsel for Dow brought to my attention the concerns outlined in his letter of October 4, 2021 about the parties continued disagreement with respect to the scope of the hearing, including indications that NOVA appeared to be intending to lead evidence that would reopen the issues of liability, the calculation of productive capability, gross negligence and wilful misconduct, I became concerned about how this would affect the impending hearing.

I was also concerned about counsel's advice that NOVA had since September 20, 2021 delivered what appeared to be more than 1.3 million pages of production "upon which it presently intends to rely". [ 71 ] I asked the parties to address these concerns during the amendments application to be heard on October 5, 2021. Mr. Leitl responded that he was unable to address the matters on that date as he had a commitment on another matter, and that Mr. Walker would be making submissions on behalf of NOVA on the proposed amendment issue.

[ 72 ] Despite this, I raised the matter with Mr. Yorke-Slader and Mr. Walker on October 5, indicating that, despite Mr. Leitl's advice that he would not be available on that day, we were on the eve of a 7-week hearing, that this was not the time to delay much further, and that the issues were "pretty important". I suggested that they may require briefing and preparation before the hearing. I allowed both Mr. Yorke-Slader and Mr. Walker to address the issues and I then made some procedural directions. I subsequently became aware that Mr. Leitl was concerned about how events had unfolded on October 5.

I sent counsel an email on October 12 which, given NOVA's continued concerns, is repeated here: I refer to Mr. Yorke-Slater’s letter of October 8, which, in addition to complying with my direction of October 5, attached a copy of Mr. Leitl’s October 7 letter, which I had expected would be copied to the Court. It is clear that there are material issues, specifically relating to the scope of the November 8 damages hearing, that must be addressed before the hearing. I therefore direct that the parties appear before the Court (by Webex) on Monday, October 18 at 10 am to address these issues.

Given the nature of the issues, the questioning of Ms. Deutscher and Ms. Dieser must be postponed. While I would normally canvass counsel’s availability, the need to determine these issues as soon as possible precludes me from offering this courtesy. Addressing Mr. Leitl’s concern about what occurred on October 5, please note that the directions I made were designed to clarify and specify the issues between the parties referred to in Mr. Yorke-Slade’s October 4 letter, and obtain NOVA’s written responses to Dow’s concerns before oral submissions are made.

I made no substantive decision on the issues, and will certainly permit Mr. Leitl, as the responsible NOVA lawyer on these issues, to make full submissions on them, including what may be in NOVA’s written submissions to be delivered today, which I ask be copied to the Court. [ 73 ] Mr. Leitl was given a full opportunity to address the issues on October 18, 2021.

Counsel for NOVA complains that I did not require Dow to file a formal application, and suggests that while NOVA is always required to file an application, Dow is apparently not bound by such a requirement. [ 74 ] The implication that I was favouring Dow in this way is incorrect. It may be that NOVA has always filed a formal application when pre-hearing issues have arisen in the past, but circumstances are presently different.

Insisting on full formality may have had the effect of delaying resolution of these important issues until the commencement of the November hearing, which would lead to delay, inefficiencies and complications during the November hearing, with the real concern that the seven weeks to the Christmas break scheduled for the hearing of the issues may be insufficient.

I now understand that NOVA would prefer that the issues be deferred to the November hearing, but I do not agree that this would be productive or a responsible use of hearing time. [ 75 ] As this decision indicates, these are important issues that warrant consideration before the hearing, and I exercised my jurisdiction to control the process in a way that attempts to ensure efficient and effective use of court time and fairness to the parties. H.

Conclusion [ 76 ] Given the extent of the disagreement between the parties, and the fact that NOVA appears intent on raising issues at the November hearing that this Court has found, and the Court of Appeal has affirmed, that it cannot reopen as it is functus officio , I agree that it is necessary to clarify the issues that are to be determined at the November hearing.

Those issues are set out in Appendix A to this decision. [ 77 ] While it may also be useful to set out a list of subjects that are not issues to be addressed at the November hearing, I am cognizant that it may be premature to eliminate issues that may arise from the evidence as it unfolds at the hearing. Therefore, subject to the subjects that have been clearly identified in this decision as inappropriate, I will not make a list of non-issues at this time.

However, if either party raises an issue at the hearing that is not set out in Appendix A, the other party may raise such objections to the introduction of such issue, or any evidence relating to the issue, as it may see fit. [ 78 ] NOVA's 63-page brief with respect to the issue of the scope of the hearing is in certain respects a list of what it hopes to establish at the hearing, akin to an opening statement. The fact that this decision does not address every submission made in the brief does not mean that these submissions have been accepted. Many of them are matters on submissions for the hearing. III.

Proposed Amendments A. Legal Principles [ 79 ] The parties are substantially in agreement with respect to the tests to be applied with respect to amendments to pleadings, and these tests were addressed in the Reasons at paras 1194 and 1195. The issue with respect to the proposed amendments is whether they are hopeless because they are designed to reargue decided matters on which this Court has been affirmed by the Court of Appeal and on which this Court is functus .

Dow also submits that late amendments, and these proposed amendments are certainly late, should be subject to greater scrutiny, but it is not necessary that I rely on that principle in this analysis. B. Proposal Amendments 112C-112H [ 80 ] Nova submits that these amendments advance substantive defences, which it says it is entitled to raise at the damages hearing, to Dow's Ethane Fixed Costs claim. Dow says that the Court has already refused to entertain what it characterizes as EFC set-off claims. [ 81 ] In the Reasons, I discuss Dow's claim for damages on the basis that:

a) NOVA did not adjust the initial Feedstock Fractions in accordance with the actual usage of the E1Toll, which terminated in 2008,

and still uses the initial Feedstock Fraction despite that termination; and

b) the initial Feedstock Fractions should have been adjusted to take into account actual usage of the Toll, in accordance with

section 5.9(

b) of the Operating Agreement: (Reasons paras 833 to 837) [ 82 ] I noted Mr. Mikulka's calculations of the amount of this claim. I rejected NOVA's arguments with respect to the

interpretation of

section 5.9(b), and found that Mr. Mikulka's

interpretation of the

section was correct (paras 830 and 842), and that NOVA's breach of

section 5.9(

b) was a continuing breach. I found that the claim for damages under this heading was barred for limitation reasons "during the damages period", (which I subsequently found to have ended on July 20, 2012), but I allowed Dow to amend its pleadings, which resulted in amendments on this issue filed on September 19, 2018. [ 83 ] One of the proposed amendments is said by NOVA to be responsive to Dow's amendment paragraph 38H.

NOVA's amendment says that "as a result of NOVA's requests for additional ethane for E3", the Operator delivered additional ethane, which "increased" the co-owners respective . . . ethane quantities and resulted in an adjustment of their respective Feedstock Fractions.

It then asserts that "Dow has been properly charged for its share of EFC following the November, 2017 adjustment to the Feedstock Fractions of the Co-Owners". [ 84 ] The problem is that Dow's amended paragraph 38H, a statement that NOVA violated the Operating Agreement and continued to do so up to the date of judgment, only refers to the immediately preceding paragraphs 38E to 38G, which refer to Dow's claim that NOVA failed to adjust the initial Feedstock Fractions in accordance with the quantity of ethane processed pursuant to the E1 Toll.

This Dow amendment does not open the door to a claim or defence that an adjustment was triggered by NOVA's request for additional ethane in accordance with

section 5.9(

c) of the OSA. Nor was this an issue that was raised at trial. [ 85 ] The same problem arises with respect to other NOVA's proposed amendments.

They are said to be in response to Dow's paragraphs 38G and 38H, which again only relate to NOVA's alleged failure to adjust the Feedstock Fractions in accordance with the quantity of ethane actually processed pursuant to the E1 Toll, and its continued deduction of the maximum amount of the Toll after the E1 Toll had expired. [ 86 ] NOVA concedes that Dow has not expressly advanced any claim with respect to adjustments made to its Feedstock Fraction in its Sixth Amended Statement of Claim other than in respect of the use of the E1 Toll, but submits that Dow's expert Charles Mikulka has nevertheless calculated damages as a result of this adjustment.

However, Dow submits that Mr. Mikulka did not in fact take into account the November 2017 Feedstock Fraction adjustment made by NOVA, and that therefore NOVA's complaint is really Mr. Mikulka's failure to take into account this adjustment. Therefore, Dow submits that Mr. Mikulka's calculations do not open the door to the NOVA proposed amendments. [ 87 ] I agree with NOVA that if Mr. Mikulka has calculated damages under this heading beyond the issue of the use of the E1 Toll, before and after it was terminated, this may give rise to whether Mr. Mikulka has raised a new claim not previously pled.

NOVA may object to this under the heading of whether or not the expert reports are consistent with the Reasons. This is not a determination that I must make at this point in time, but a matter for cross-examination of expert witnesses and argument at the hearing. NOVA's expert witness John Williams refers to this issue of Ethane Sales Contributions in his report. The same consideration of whether the report is consistent with the Reasons on this issue would apply to Mr. Williams' report. This is not a determination that it would be appropriate for me to make at this point in time.

However, in any event, the proposed amendments are not required or justified as the issues are subsumed in the issue of whether the expert reports are consistent with the Reasons in this regard.

As noted by the Court of Appeal in Dow v NOVA , 2021 ABCA 153 , functus officio applies not only against NOVA but also for NOVA and against Dow: para 47. [ 88 ] I note that the language of one of NOVA's proposed amendments encompasses a new claim for the period prior to the expiry of the E1 Toll in April, 2016 that alleges that, to the extent that Dow is awarded damages for NOVA's failure to adjust Feedstock Fractions to account for the expiry of the E1 Toll earlier than April, 2016, those damages must reflect certain deductions - the Ethane Sales Contributions - that Dow would have received as a result of its lower Feedstock Fraction. [ 89 ] NOVA submits that the amendments should be allowed because the Court of Appeal in 2021 ABCA 153 at para 103 noted that Dow had conceded, and the Court agreed, that NOVA was not precluded from calling lay witnesses to counter the allegation that it unilaterally challenged Dow's Feedstock Fraction in November 2017.

Counsel for Dow points out that this was in response to NOVA's argument before the Court of Appeal that this Court had prohibited it from calling lay witnesses to counter an allegation that in 2017, NOVA had unilaterally changed Dow's Feedstock Fraction. Dow says that it submitted to the Court of Appeal that this Court had never made such a prohibition and that the fact that NOVA had made this unilateral change itself was not in dispute, because NOVA's experts mention it in their reports.

In this context, which was not disputed, Dow is not precluded from raising objections to the proposed amendments, as suggested by NOVA.

To clarify the matter, however, NOVA is allowed to call lay witnesses to give evidence that NOVA's change in Dow's Feedstock Fraction in November, 2017 was not made unilaterally by NOVA. [ 90 ] In addition, this Court has already rejected a substantially similar claim to the one sought to be added through these amendments. [ 91 ] In the July decision, I addressed NOVA's submission that the following issue was appropriate for the top-up hearing: What is the credit, if any, to NOVA resulting from the adjustment to the Feedstock Fractions for the increased quantity of ethane necessary to meet the Co-Owners' monthly ethylene nominations? [ 92 ] I rejected this issue on the following basis: In paras 826 to 842 of the Reasons, I reviewed Dow’s adjustment claims, including the “Ethane Fixed Cost Adjustment”, which related to an

interpretation of the definition of Feedstock Fractions in the OSA. I noted that NOVA had not adjusted the initial Feedstock Fraction,

and that Dow submitted that the initial Feedstock Fraction should have been adjusted to take into account actual usage of the Toll, in accordance with

section 5.9(

b) of the OSA. . . . However, at paras 838 to 840 of the Reasons, I made the following comments with respect to Feedstock Fractions: NOVA submits that this claim must fail because the OSA provides for how and when the Feedstock Fractions will change, either increasing or decreasing, in sections 5.9(

c) and (d), and requires written notice to the Operator in either case. However,

section 5.9(

c) sets out that the Feedstock Fraction of a Co-owner will be increased if either Co-owner requests an increase in its entitlement to Joffre ethane, in which case written notice of the Operator must be provided, and the Operator must use reasonable efforts to accommodate the increase. Certain conditions apply to that request to increase ethane entitlements.

Section 5.9(

d) applies to a request to decrease a Co- owners feedstock fraction if a material event occurs that would result in a decrease in its ethane requirements. However, Dow’s claim does not relate to either a request for an increase or decrease of entitlement to Joffre ethane, but merely the adjustment of the initial Feedstock Fraction on a continuing basis to take into account the quantity of the E1 Toll actually processed with both parties remaining entitled to the same quantity of ethane as before . . . .

This method of adjusting Feedstock Fractions was not pled or argued at trial, nor is it consistent with what the Reasons indicate about this adjustment claim. The Reasons indicate that Dow’s Ethane Fixed Costs Adjustment does not relate to a request in its entitlement to Joffre ethane, but merely the adjustment of the Feedstock Fraction on a continuing basis consistent with the availability of the E1 Toll actually processed. As I indicated, the requirement to vary the Feedstock Fractions in this way ceased when the E1 Toll terminated in 2008.

This new NOVA claim, which would result in an increase in Dow’s Feedstock Fraction and additional Ethane Fixed Costs attributable to Dow, cannot be said to fall within the reservation of the assessment of Dow’s claim for damages during the top-up period. [ 93 ] The only difference between the issue as previously characterized and as now sought to be included in the proposed amendments is that NOVA now alleges that it was NOVA, rather than Dow, as the Co-Owner that supposedly made the request.

The claim would fail for the same reasons: it is not included in this Court's reservation of jurisdiction. [ 94 ] For all these reasons, I find that these proposed amendments are hopeless and must fail. C. Proposed Amendments 103B to 103D [ 95 ] These proposed amendments refer to the issue of whether NOVA is able to raise limitations defences at the November hearing with respect to Dow's LTD and EFC claims.

It is clear that the parties agreed at the hearing on February 17, 2021 that NOVA would be able to advance limitations defences at the fall hearing, and that this Court summarized that agreement in the decision cited as 2021 ABQB 621 . [ 96 ] It is arguable that circumstances may have changed as a result of this Court's August 6, 2021 decision, but I accept that there may have been some confusion about whether that decision rendered the earlier agreement moot. [ 97 ] I therefore allow these amendments, with the proviso that Dow will be able to argue during the November hearing that this Court is functus on the issue.

IV. Questions of Dow witnesses [ 98 ] On October 5, 2021, I postponed the questioning of two Dow witnesses by NOVA until the issue of the scope of the November hearing was decided. [ 99 ] Such questioning may now proceed, with the scope of questioning limited to the issues to be decided at the November hearing. [ 100 ] Specifically, with respect to Ms. Dieser, the questioning set out in paragraph 1 of Mr. Gelbman's October 12, 2021 letter is to be limited to constraints that meet the threshold requirement of relevance in the Reasons for Judgment. [ 101 ] With respect to Ms.

Deutsher, the question set out in paragraph 3 of Mr. Leitl's October 12, 2021 letter should be similarly amended, and the questions set out in paragraphs 5 and 6 are irrelevant given this Court's finding that it is functus on this issue. Question 10 is premature given that this will not be an issue for the November hearing. [ 102 ] If the parties are unable to agree, I reserve jurisdiction with respect to the costs of these two applications. Heard on the 5th and 18th days of October, 2021. Dated at the City of Calgary, Alberta this 26th day of October, 2021.

B.E. Romaine J.C.Q.B.A. Appearances: Blair C. Yorke-Slader, Q.C, E. Bruce Mellett, Denise Brunsdon, Ciara J. Mackey, Alyssa Marshall for the Plaintiffs//Respondents Steven Leitl, Q.C., Tommy Gelbman, Bryan H. Walker, Fergus I. Schappert, Gunnar Benediktsson, Olivia C. Dixon, Emily MacKinnon for the Defendant/Applicant Joshua Weedman, David Hile Appendix A Issues for Damages Hearing A. Do the expert opinions comply with the assessment principles approved in this Court's June 30, 2018 Reasons for Judgment, except as they may have been modified by the Court of Appeal's September 16, 2020 Memorandum of Judgment?

To be clear, the methodology for calculating E3's productive capability, for converting E3's productive capability to Effective Capability by removing budgeted downtime and assuming continuous plant operation, for converting Effective apabili6y to Available Capacity by reducing for E3's actual downtime each month, for calculating E3's Production Shortfall by subtracting E3's actual product from Available Capacity, and for calculating the Dow Production Gap on which Dow's damages are to be calculated, from the Production Shortfall, were all established at trial and undisturbed on appeal and are res judicata , except for issue D which was found to be an issue for the hearing in this Court's July 31, 2020 decision, the appeal of which was dismissed.

B. What, if any, is the amount of Dow's direct losses for the ethylene that it should have received, but did not? C. Should optimization damages for the months of February 2014, September 2014 and December 2016 be excluded on the ground that, in these months, Dow declined a portion of NOVA's turndown volume? D. Did plant equipment changes made to E3 after the 2014 plant turnaround improve E3's production capacity?

If so, should they have been implemented as part of the 2014 turnaround, were they necessary, were they foreseeable and avoidable, and could such plant equipment changes have been implemented without affecting plant production? E. Were there any constraints in the top-up period that meet the threshold requirement of relevant constraints, and what is the appropriate way to account for them? F. Did Mr. Mikulka fail to use the correct ethane cost data found in the Feedstock Cost Statements? G.

Should life-to-date or year-to-date variable ethane prices be applied to the optimization damages calculation and the life- to-date adjustment? H. May NOVA avoid any obligation to pay 2018 Infrastructure Revenues by reason of its purported amendment of the MOUS effective January 1, 2018 to exclude the Infrastructure Revenues payable by its affiliate? I. Have Mr. Mikulka's calculations taken into account any over-delivery of C3's to Dow as documented in the production data? J. To what extent do periods in which NOVA exceeded E3's optimum productive capacity, if any, impact Dow's damage claim?

This issue does not prejudge the admissibility of Mr. Waguespack's most recent report. K. To what extent, if any, should damages based on productive capacity be adjusted to account for regulatory constraints on NOx emissions? L. Life-to-date/Ethane Fixed costs - Are either of these claims barred or limited by limitations?

M. Should Dow's claim (other than for allocation damages) be calculated in US dollar if the majority of its claimed damages are sustained in Canadian dollars? While this is a very late issue raised by NOVA, I accept that it may be valid in terms of the appropriate quantification of direct damages. I note that the following issue was found to be appropriate for the full hearing in the July decision: For currency conversion, after applying Mr. Mikulka's approach at trial, as of what date should the US dollar amounts be converted to Canadian dollar amounts?