ALTALINK, L.P. by its general partner ALTALINK MANAGEMENT LTD. Plaintiff - v. -, 2022 ABKB 772

Court of King’s Bench of Alberta Citation: AltaLink, LP v SNC-Lavalin ATP Inc, 2022 ABKB 772 Date: 20221122 Docket: 1601 14644 Registry: Calgary Between: ALTALINK, L.P. by its general partner ALTALINK MANAGEMENT LTD. Plaintiff - and - SNC-LAVALIN ATP INC., HD SUPPLY CANADA INC., by its trade names HD SUPPLY POWER SOLUTIONS and HD SUPPLY UTILITIES, ANIXTER POWER SOLUTIONS CANADA INC., HELIX UNIFORMED LTD., PREFORMED LINE PRODUCTS (CANADA) LIMITED and PREFORMED LINE PRODUCTS COMPANY Defendant - and - SNC-LAVALIN ATP INC. Third Party Plaintiff - and - ALLTECK LINE CONTRACTORS INC., FORBES BROS. LTD., FORBES BROS.

LTD. o/a R.S. LINE CONTR. CO., R.S. LINE CONTR. CO. LTD., R.S. LINE CONTRO. CO., R.S. LINE CONTRACTORS COMPANY LTD., HENKELS & McCOY CANADA ULC, amalgamation successor to HENKELS & McCOY PEI INC., VALARD CONSTRUCTION LP and VALARD CONSTRUCTION 2008 LTD., HD SUPPLY CANADA INC. by its trade names HD SUPPLY POWER SOLUTIONS and HD SUPPLY UTILITIES, ANIXTER POWER SOLUTIONS CANADA INC., HELIX UNIFORMED LTD., PREFORMED LINE PRODUCTS (CANADA) LIMITED, PREFORMED LINE PRODUCTS COMPANY and ABC CORP. Third Party Defendant

_______________________________________________________ Reasons for Decision of the Honourable Justice Colin C.J. Feasby _______________________________________________________ Introduction [ 1 ] The Helix Defendants apply pursuant to Rule 5.25 for an order compelling AltaLink’s corporate representative to answer certain questions that were objected to and undertakings arising from questioning that were refused.

AltaLink’s corporate representative declined to respond to the questions and undertakings on the basis that they do not seek relevant and material information; specifically, the questions and undertakings pertain to an electrical line, the CB Line, that did not use products manufactured by the Helix Defendants.

The Helix Defendants contend that information related to the CB Line is relevant and material because the CB Line and BW Line were originally designed as a single project called the CBW Line and, accordingly, the CB Line and BW Line have similar design characteristics and experienced similar weather conditions. Background – The CB and BW Electrical Lines [ 2 ] AltaLink commenced this action against SNC which was responsible for engineering, procurement, and construction of various electrical lines where Helix Dampers failed and had to be replaced (the “Projects”).

AltaLink also claimed against the Helix Defendants alleging that the Helix Dampers were defective. SNC brought a third party claim against the Helix Defendants on substantially the same basis. [ 3 ] The Helix Defendants seek to compel AltaLink’s corporate representative to answer certain questions and undertakings relating to the Cassils to Bowmanton Line, or CB Line as it is known. The CB Line runs east from the Cassils Substation on the west side of Brooks to the Bowmanton Substation northeast of Medicine Hat. For much of its distance, it runs parallel to the TransCanada highway.

The Bowmanton to Whitla Line, or BW Line as it is known, runs south from the Bowmanton Substation on the east side of Medicine Hat before turning west and ending at the Whitla Substation which is located south of Highway #3 near Etzikom in Forty Mile County. [ 4 ] The CB Line and the BW Line were originally part of a single project called the CBW Line. SNC was responsible for engineering, procurement, and construction for both the CB Line and BW Line.

The CBW Line, before it was divided into two projects, was designed to use vibration dampening equipment called Stockbridge Dampers together with rigid spacers. [ 5 ] The CBW Line was divided into two projects because there were not enough Stockbridge Dampers available to complete the whole CBW Line. The CB Line uses Stockbridge Dampers manufactured by a company called Fargo with rigid spacers; whereas the BW Line uses Helix Dampers.

The Helix Dampers are sometimes called spacer dampers because they incorporate a spacer. [ 6 ] Around September 2014 it was discovered that some Stockbridge Dampers on the CB Line had failed. The Helix Defendants assert that one of their theories of the case is that the failure of the Helix Dampers on the CB Line and BW Line were caused by vibrations or movement of the electrical wires. This vibration or movement of the electrical wires was caused by weather conditions. [ 7 ] When wind passes over electrical lines it creates a vortex which, in turn, causes the wires to move.

This movement is called aeolian vibration after Aeolus, the Greek God of wind. Aeolian vibration, if not managed appropriately, can damage electrical lines. Aeolian vibration is typically managed through use of dampers. A more extreme kind of movement of electrical wires is called galloping.

Galloping occurs when high winds pass over electrical lines covered in snow or ice causing the electrical lines to move up and down in a motion like a galloping horse. [ 8 ] The Helix Defendants submit in their written argument that one of their theories of the case is that galloping occurred on the BW Line and perhaps other lines in issue causing the Helix Dampers to fail.

The Helix Defendants submit that galloping is a consequence of AltaLink’s or SNC’s failure to appropriately design the BW Line and perhaps other lines in issue for the weather conditions prevalent in Alberta. [ 9 ] AltaLink submits in its written brief that “it has no information that galloping events occurred on any of the Project lines prior to de-energization and replacement of the Helix spacer dampers.” This may be true but it may also reflect a difference between the parties in the definition of what constitutes galloping, a failure to observe or detect galloping, or inadequate investigation of potential galloping events.

The Helix Defendants point to AltaLink documents that show that galloping is a common issue for electrical lines in Alberta and that many “potential galloping” events occurred on AltaLink electrical lines during the period 2006-2014. [ 10 ] The Helix Defendants believe that galloping also occurred on the CB Line and that caused or contributed to failure of the Stockbridge Dampers used on the CB Line. Investigations into the failure of the Stockbridge Dampers on the CB Line were carried out between September 2014 and January 2015.

The manufacturer of the Stockbridge Dampers asserted that the failures were caused by galloping.

[ 11 ] The SNC root cause analysis concluded that the failure of the Stockbridge Dampers used on the CB Line was attributable to a manufacturing defect. AltaLink submitted that the SNC conclusion that a manufacturing defect with the Stockbridge Dampers means that information concerning the failure of the Stockbridge Dampers is irrelevant. That may prove to be the case, but at this stage the Court cannot accept the SNC root cause analysis as conclusive on the point.

This is particularly so given that the SNC root cause analysis was produced for the first time by AltaLink in the affidavit opposing this application and without contextual information which may be required to understand whether the conclusions are credible and reliable.

The Helix Defendants seek to ask questions concerning the investigation into the failures of the Stockbridge Dampers, root cause analysis, and the extent to which galloping caused or contributed to the problems experienced on the CB Line. [ 12 ] The failed Stockbridge Dampers used on the CB Line were replaced with Stockbridge Dampers from a different manufacturer. Following the replacement of the failed Stockbridge Dampers with new Stockbridge Dampers, the CB Line performed without problems according to AltaLink. [ 13 ] Failures of Helix Dampers on the BW Line were identified starting in January 2015.

After discovering significant problems with the Helix Dampers on the BW Line, AltaLink and SNC decided to replace all the Helix Dampers and revert to the original design choice for the CBW Line of Stockbridge Dampers with rigid spacers.

SNC’s corporate representative in questioning described the rationale for the change as follows: “Essentially, due to the proximity of the – the CB line and looking at that – that particular set-up performed well without issues [after replacement of the failed Stockbridge Dampers], so that was the proposal put forward.” Refused Questions and Undertakings [ 14 ] Since the refused questions and undertakings all touch in some way on the CB Line, I must determine the relevance and materiality of information relating to the CB Line to determine whether AltaLink’s corporate representative should be directed to answer the refused questions and undertakings.

The specific refusals in issue are as follows: UT #112: To confirm that there was [an] issue with respect to the manufacturing quality of the dampers on the Cassils to Bowmanton line and that the issue was rectified and the line was re-energized or returned to service. UT #113 If Undertaking 112 is accurate, to confirm that AltaLink has not experienced any problem with the loosening of hardware from the Cassils to Bowmanton line once the Fargo manufactured dampers were rectified and the Cassils to Bowmanton line was re-energized.

UT #216 To provide AltaLink’s facts and information with respect to whether AltaLink, SNC-Lavalin, or anyone else made inquiries or conducted any sort of investigation with respect to the cause of the damper failures on the Cassils to Bowmanton line, and if so, to advise what the results of those inquiries/investigations were and whether or not AltaLink ever formed a view that it had a reason or an explanation in relation to those failures, and if so, what that view was based on. UT #217 To inquire and advise whether or not the Cassils to Bowmanton line ever experienced galloping prior to January 8, 2015.

UT #218 With regard to ALTAL0653204, to inquire and advise if something resembling this draft was sent to SNC-Lavalin, if SNC-Lavalin responded in writing or otherwise, and if so, to provide documentation regarding the same. UT #219: To provide a copy of the AltaLink Management Limited root cause report referenced in ALTAL0653204. Question: “Okay.

Do you know, sir, whether or not, either as a result of an investigation conducted by AltaLink and/or SNC or others, whether or not AltaLink ever formed a view with respect to the cause of the damper failures on the CB Line?” Question: “So I’m suggesting to you, sir, that we’ve seen documentation that made reference to a root cause analysis. Do you know whether or not AltaLink conducted a root cause analysis or investigation in relation to the CB line? Answer: “So I’m – I’m not aware of an investigation on the CB line.

I do recall an investigation into what I remember being a Fargo damper concern that involved several -- several projects, including the CB project. Question: “And what were the results of that investigation?” [Objection based on relevance] [p. 661, L26- 27, p. 662, L.1-2.] Question: “Were any other causes other than a manufacturer issue identified in relation to that investigation?” [Objection based on relevance] [p. 662, L.15-22] Analysis [ 15 ] The Helix Defendants apply to this Court pursuant to Rule 5.25 which provides as follows: 5.25

(1) During questioning, a person is required to answer only (

a) relevant and material questions, and (

b) questions in respect of which an objection is not upheld under subrule (2).

(2) A party or a witness being questioned may object to an oral or written question during questioning but only for one or more of the following reasons: (

a) privilege; (

b) the question is not relevant and material; (

c) the question is unreasonable or unnecessary; (

d) any other ground recognized at law.

(3) A corporate representative may object to an oral or written question during questioning on the basis that it would be unduly onerous for the corporate representative to inform himself or herself in the circumstances.

(4) If an objection to a question cannot be resolved the Court must decide its validity.

(5) After the questioning party has finished questioning a person, that person may be questioned by the party for whom the person is or may be a witness to explain, elaborate or provide context for an answer initially given.

(6) Following answers to the explanatory, elaborative or contextual questions, the person may be questioned again about the person’s answers. [ 16 ] Rule 5.2(1) provides that “a question, record or information is relevant and material only if the answer to the question, or the record or information, could reasonably be expected (

a) to significantly help determine one or more of the issues raised in the pleadings, or (

b) to ascertain evidence that could reasonably be expected to significantly help determine one or more of the issues raised in the pleadings.” [ 17 ] The Alberta Court of Appeal explained in Dow Chemical Canada Inc. v Nova Chemicals Corp. , 2014 ABCA 244 at para 17 : “relevance is primarily determined by the pleadings, whereas materiality relates to whether the information can help, directly or indirectly, to prove a fact in issue.” Materiality, as Rule 5.2(1) indicates, requires that the information sought must have a degree of significance.

Significance or materiality is measured by the potential of the information sought to directly or indirectly prove a fact that is in issue.

Considering the discovery regime under the previous version of the Rules of Court which, in this respect is continued in the current Rules of Court governing questioning, the Court of Appeal in NAC Constructors Ltd. v Alberta Capital Region Wastewater Commission , 2006 ABCA 246 at para 12 held that “[o]ral examination for discovery is now confined to eliciting facts of primary relevance, that is, facts that are directly in issue, or of secondary relevance, that is, facts from which the existence of the primary facts may be directly inferred.” [ 18 ] The inquiry accordingly starts with a review of the pleadings and then moves to the question of whether the information sought is potentially significant in the sense described in NAC Constructors .

Slatter J, as he then was, in Weatherill Estate v Weatherill , 2033 ABQB 69 observed at para 16 that “[a]t an interlocutory stage of proceedings, the Court should not measure counsels’ proposed line of argument too finely; if counsel can disclose a rational strategy in which the disputed document plays a material part, that should be sufficient.” On an interlocutory application, the Court should be careful not to foreclose a party from pursuing a plausible theory of a claim or defence. [ 19 ] The Helix Defendants’ Statement of Defence is comprised of an admission that the Helix Defendants supplied the Helix Dampers, an assertion of contractual limitations, a series of boilerplate denials of the facts and allegations pleaded by AltaLink, and allegations that the acts or omissions of AltaLink and SNC caused the problems with the Helix Dampers on the Projects.

The facts and allegations pleaded by the Helix Defendants against AltaLink and SNC pertain only to the Projects. There is no pleading by the Helix Defendants that expressly points to the CB Line. [ 20 ] Relevance, however, is not defined only by the pleading of the Helix Defendants. As I held in AltaLink, LP v SNC-Lavalin ATP Inc , 2022 ABQB 585 at paras 33-35 citing Yamauchi J in Collacutt v Briggs Bros Student Transportation Ltd , 2008 ABQB 505 at para 37 , relevance is determined by all the pleadings in the case. The present case is one with multiple defendants and third-party defendants.

The standard of relevance does not vary depending on the party; there is one standard of relevance for the case and it is determined by the pleadings of all the parties. [ 21 ] The pleadings taken together engage with what the Helix Defendants now say is an issue that is central to one of their theories of the case – that the Helix Dampers failed because of the weather conditions prevalent in Alberta.

AltaLink’s Statement of Claim alleges that the Helix Defendants “fail[ed] to design and manufacture the Helix Dampers and their components for adequately withstand fluctuations in operating temperatures” and “fail[ed] to design and manufacture the Helix Dampers to adequately withstand foreseeable vibration and fluctuations in vibration.” SNC pleaded that the Helix Defendants failed to take “adequate steps to determine whether the Helix Dampers ... could adequately withstand fluctuations in operating temperatures or vibrations.” SNC further pleaded that the Helix Defendants failed “to warn if there were any limitations to the application and performance of Helix Dampers, such as but not limited to snow, ice, high winds, galloping and sub-conductor oscillation.” [ 22 ] The question to be decided on this application is whether broad pleadings that put in issue the design of and weather conditions affecting one piece of infrastructure, the BW Line, makes information about a second piece of infrastructure not mentioned in any pleadings, the CB Line, relevant and material.

To answer this question, I must consider the standard of pleading that can reasonably be expected in cases of this type (hybrid construction and product liability claim). [ 23 ] Infrastructure construction disputes with a product liability component are common in Alberta. Informational asymmetries are often found in these cases. The owner and designer of the infrastructure typically have significant information about the infrastructure project as well as other similar infrastructure projects in the area whether or not they have the same owner and designer.

However, the owner and designer may have limited knowledge of the product used other than what was provided by the manufacturer.

The manufacturer of the product used in the infrastructure project is often based outside Alberta and will have extensive knowledge ofthe development and characteristics of the product but may have only the information about the infrastructure project provided by theowner and designer. [24] The informational asymmetries result in predictable pleading strategies.

The owner and designer typically plead a series ofstandard or boilerplate allegations against the manufacturer – that the goods were not fit for intended purpose, that there was inadequatetesting, that there was a design flaw, that the manufacturing process was compromised, and so forth. Conversely, the manufacturertypically defends the claims by asserting boilerplate allegations against the owner and designer including negligent design and operationof the infrastructure.

For an example of this type of case, see Canadian Natural Resources Limited v Wood Group Mustang (Canada)Inc (IMV Projects Inc), 2017 ABQB 106; varied Canadian Natural Resources Limited v Wood Group Mustang (Canada) Inc. (IMVProjects Inc.), 2018 ABCA 305; leave to appeal denied Wood Group Mustang (Canada) Inc., formerly IMV Projects Inc., et al vCanadian Natural Resources Limited, et al, (SCC). [25] The Helix Defendants could not reasonably be expected to make an express pleading about the CB Line in their initialStatement of Defence.

They only found out about the CB Line, its relationship to the BW Line, and the issues with dampers on the CBLine through questioning. Once the Helix Defendants became aware of the CB Line and concluded that it was relevant to one of theirtheories of the case, they could have brought an application to amend their Statement of Defence to plead facts about the CB Line. Likemany litigants, however, they did not bring an application to amend and instead continued to litigate under the banner of the originalpleading.

This decision is understandable given that amending pleadings to account for information learned during questioning is oftenimpractical and is unnecessary where parties do not take a strict approach to relevance and materiality. [26] A similar pleading issue in a case of this sort was considered by Hughes J, as she then was, in Canadian Natural ResourcesLimited v Arcelormittal Tubular Products Roman S.A. (Mittal Steel Roman S.A.), 2013 ABQB 439 aff’d Canadian NaturalResources Limited v Arcelormittal Tubular Products Roman S.A., 2013 ABCA 425.

The project owner, CNRL, brought an actionagainst Arcelormittal for manufacturing and supplying defective metal pipe and against various other parties involved in the design andconstruction of the project for other alleged failings. CNRL sought production of records concerning similar pipe supplied to otherbuyers including concerns and complaints from other customers. The CNRL pleading, however, only referred to the “Subject Pipe”which was the pipe purchased by CNRL: Canadian Natural Resources Limited v Arcelormittal (QB) at para 19.

Despite the limitationin the CNRL pleading, Hughes J concluded: If there were manufacturing issues and/or inherent defects respecting the A106 Grade B pipe manufactured by Mittal at the Roman Millduring the same time-frame as that when the Subject Pipe was being made, this is evidence which could give rise to a very stronginference regarding the manner of the pipe’s manufacture which could significantly help determine the negligence and breach of contractissues raised in CNRL’s Statements of Claim, and as such it would qualify as “secondary” evidence as described by the Court of Appealin NAC Constructors.

Therefore, I find the information sought by CNRL is relevant. [27] The present case is the opposite of Canadian Natural Resources Limited v Arcelormittal (QB). The Helix Defendants, themanufacturer, are seeking disclosure of information from the project owner, AltaLink. Hughes J’s reasoning that compelled disclosureby the manufacturer in Canadian Natural Resources Limited v Arcelormittal (QB) is equally applicable to the project owner in thepresent case.

Information concerning the CB Line which tends to prove, by inference or otherwise, that the design or operation of theBW Line or weather-induced problems such as galloping caused or contributed to the failure of the Helix Dampers is secondaryevidence as that term is used in NAC Constructors Ltd. Information concerning the CB Line is relevant because: (

a) it has the same owner and operator as the BW Line; (

b) it was designed by the same engineering firm as the BW Line; (

c) it was originally part of same project as the BW Line (ie. the CBW Line); (

d) it is in the same area as the BW Line and experiences the same weather conditions; (

e) it experienced damper failures shortly before the BW Line experienced damper failures; (

f) the experience with damper failures on the CB Line informed AltaLink’s and SNC’s response to the damper failures on the BW Lineand perhaps other electrical lines owned or operated by AltaLink where the Helix Dampers were used; and (

g) the manufacturer of the dampers on the CB Line asserted that galloping was the cause of the damper failures which is consistentwith the Helix Defendants’ theory of what happened to the Helix Dampers on the BW Line and perhaps other lines. [28] Information concerning the CB Line can reasonably be expected to significantly help determine issues asserted by the HelixDefendants; namely, negligent design and operation of the BW Line and perhaps other electrical lines owned by AltaLink where theHelix Dampers were used. [29] Even if I were not persuaded that the pleadings in the case make information concerning the CB Line relevant, as casemanagement judge overseeing a pre-trial process that has four and a half months to run before the commencement of an eight-week trial,I must be pragmatic.

The Helix Defendants could simply seek to amend their Statement of Defence to plead the facts that they nowknow about the CB Line. Applications to amend pleadings are typically allowed absent demonstrated prejudice: Castledowns LawOffice Management Ltd. v. FastTrack Technologies Inc., 2012 ABCA 219 at paras 16-18. By the time that an application to amendpleadings is heard and decided a period of weeks to months would pass and we would likely still be confronted with the question ofwhether information concerning the CB Line is relevant and material.

Dismissing the present application because of a failure by theHelix Defendants to expressly plead facts that would support a conclusion that information pertaining to the CB Line is relevant andmaterial would jeopardize the trial date. Jeopardizing the trial date makes no sense when the pleading defect complained of could beeasily remedied.

Conclusion [ 30 ] AltaLink shall answer each of the questions and undertakings identified in para 13 of these reasons as soon as reasonably possible. [ 31 ] The Helix Defendants are awarded costs of this application. If the parties are unable to agree on the appropriate amount of costs, they may provide me with written submissions of two pages or less enclosing a Bill of Costs. Heard on the 15 th day of November, 2022. Dated at the City of Calgary, Alberta this 22 nd day of November, 2022. Colin CJ Feasby J.C.K.B.A.

Appearances: Ricki Johnston and Theresa Nolan for Helix Uniformed Ltd., Preformed Line Products Canada Ltd., and Preformed Line Products Co. Robert J. Simpson for ALTALINK, L.P. by its general partner ALTALINK MANAGEMENT LTD.