Association of Professional Engineers and Geoscientists of Alberta v Wood Group Canada Inc, 2023 ABKB 688

Court of King’s Bench of Alberta Citation: Association of Professional Engineers and Geoscientists of Alberta v Wood Group Canada Inc, 2023 ABKB 688 Date: 20231205 Docket: 1901 18478 Registry: Calgary Between: Association of Professional Engineers and Geoscientists of Alberta Plaintiff - and - Wood Group Canada Inc Respondent -and- CNOOC Petroleum North America ULC Intervener _______________________________________________________ Reasons for Judgment of the Associate Chief Justice D.B. Nixon _______________________________________________________

I. Introduction [ 1 ] The present judgment derives from an application by Wood Group Canada Inc (“Wood Group”) for production and disclosure against the Association of Professional Engineers and Geoscientists of Alberta (“APEGA”). [ 2 ] This application relates to four separate proceedings, those being:

a) Action No. 1901 18478, being an application for Advice and Direction brought by the APEGA with respect to the production of certain information and documents from Wood Group (the “APEGA Application”);

b) Action No. 1901 11892, being a request for judicial review of the refusal by APEGA to stay its investigation into Barry Bauhuis’s work on Nexen Energy ULC’s K1A Pipeline (the “Bauhuis Judicial Review”);

c) Action No. 2001 03244, being a request for judicial review of the refusal by APEGA to stay its investigation of Wood Group relating to APEGA requests for certain information and documents from Wood Group in the context of its investigation of Mr. Bauhuis (the “Wood Group Judicial Review”); and

d) Action No. 1701 07427 being civil litigation involving Wood Group, CNOOC Petroleum North America ULC (“CNOOC”) and others, commenced on June 2, 2017, based on the Nexen Energy ULC’s K1A Pipeline failure (the “Pipeline Failure”) of July 15, 2015 (the “CNOOC Litigation”).

APEGA is not a party to this action. [ 3 ] The application at issue involves Wood Group seeking the production of two reports that were provided to APEGA by CNOOC, namely the Nexen Report and Skystone Report (collectively, the “Reports”), as well as a few additional production requests. [ 4 ] I have found that Wood Group is entitled to the Reports from CNOOC in the CNOOC Litigation in the application dealt with at CNOOC Petroleum North America ULC v ITP SA , 2023 ABKB 689 .

The present application, however, involves separate considerations, being based on questions of procedural fairness in investigations by regulatory bodies. The determinations below deal solely with the issues advanced in this application. II. Issues to decide [ 5 ] In the present application I must decide the following:

i) Whether procedural fairness requires APEGA to produce the Reports to Wood Group or to Mr. Bauhuis? ii) Whether APEGA is obligated to answer the questions and produce the materials arising from the March 10, 2020, questioning on the affidavit of Garth Jesperson? III. Analysis A. The Reports [ 6 ] Shortly after the Pipeline Spill on July 15, 2015, CNOOC held a meeting with senior management. Present at that meeting was Ms. Marianne “Chuck” Davies, then General Manager – Assistant General Counsel and Corporate Affairs of CNOOC. [ 7 ] Ms.

Davies affirms that she requested a “legally privileged and confidential investigation be undertaken.” This internal investigation is what culminated into the Nexen Report. [ 8 ] Ms. Davies attested that the purposes of the investigation were to determine the causal factors which led to the Pipeline Failure. She pursued this investigation to determine CNOOC’s legal rights and remedies, and to prepare for civil litigation and regulatory prosecution associated with it. [ 9 ] On July 17, 2015, the CNOOC investigation team retained Skystone Engineering to conduct its own investigation of the Pipeline Failure.

This resulted in the Skystone Report. [ 10 ] Ms. Davies indicated the purpose of the Skystone Report was to “provide CNOOC’s legal team with guidance on matters which would inform their provision of legal advice to CNOOC and to assist in the assessment and analysis of the anticipated regulatory and civil litigation.” [ 11 ] Part of the motivation that had been given as well, attested to in the affidavits, was the view that CNOOC understood that it was under a legal obligation: (

i) under the Pipeline Act , RSA 2000, c P-15 to provide the Reports to the Alberta Energy Regulator (“AER”); and (ii) under the Engineering and Geoscience Professions Act , RSA 2000, c E-11 to provide the Reports to APEGA. There is specific reference to a request under

section 76 of the Pipeline Rules , Alta Reg 91/2005 , enacted pursuant to section 3(1) , to provide the Skystone Report to the AER. CNOOC provided the Reports to APEGA in 2016. B. APEGA - Statutory Framework

[ 12 ] APEGA’s mandate and regulatory powers are set out in the Engineering and Geoscience Professions Act , RSA 2000, c E-11 (the “ Act ”). As a self-governing body, APEGA’s mandate is to regulate the engineering and geoscience professions within the province. [ 13 ]

Part 5 of the Act deals with discipline. Under this Part, APEGA has the ability to investigate and discipline members; (

i) for conduct that is unprofessional; or (ii) for unskilled practice. As set out in

section 44 of the Act : 44(1) Any conduct of a professional member, licensee, permit holder, certificate holder or member-in-training that in the opinion of the Discipline Committee or the Appeal Board (

a) is detrimental to the best interests of the public, (

b) contravenes a code of ethics of the profession as established under the regulations, (

c) harms or tends to harm the standing of the profession generally, (

d) displays a lack of knowledge of or lack of skill or judgment in the practice of the profession, or (

e) displays a lack of knowledge of or lack of skill or judgment in the carrying out of any duty or obligation undertaken in the practice of the profession, whether or not that conduct is disgraceful or dishonourable, constitutes either unskilled practice of the profession or unprofessional conduct, whichever the Discipline Committee or the Appeal Board finds.

(2) If an investigated person fails to comply with or contravenes this Act , the regulations or the bylaws, and the failure or contravention is, in the opinion of the Discipline Committee, of a serious nature, the failure or contravention may be found by the Discipline Committee to be unprofessional conduct whether or not it would be so found under subsection (1). [ 14 ]

Section 49 of the Act outlines the powers of an investigative panel: Evidence for preliminary investigation 49(1) An investigation panel may (

a) require the investigated person or any other member of the Association to produce any plans, drawings, detailed drawings, specifications, reports, books, papers or other documents or records in that person’s possession or control, and (

b) copy and keep copies for the purposes of this Part of any thing that is produced under clause (a).

(2) An investigation panel may investigate any other matter regarding the conduct of the investigated person that arises in the course of the investigation. B. Investigations and Judicial Review Applications [ 15 ] APEGA has been in the process of a preliminary investigation of the Pipeline Failure since August 3, 2016. On that date, the Practice Review Board of APEGA recommended that the Investigative Committee commence an investigation into Mr. Bauhuis’s work and its relation to the Pipeline Failure .

In its recommendation there was reference to the Nexen Report provided by CNOOC to APEGA on July 12, 2016. [ 16 ] On September 1, 2016, APEGA advised Mr. Bauhuis that it had begun an investigation (“Investigation 16-39”) into an allegation against him of unskilled work in relation to the Pipeline Failure. [ 17 ] Both Wood Group and Mr. Bauhuis requested that APEGA stay Investigation 16-39 claiming that this would cause serious prejudice to the CNOOC Litigation. APEGA denied this request and Mr.

Bauhuis has challenged this denial in the Bauhuis Judicial Review. [ 18 ] On July 5, 2019, APEGA advised Wood Group that it had initiated an investigation (“Investigation 19-24”) in relation to Wood Group’s failure to provide information and documents to APEGA in relation to Investigation 16-39. [ 19 ] Wood Group requested that APEGA stay Investigation 19-24 claiming that this would cause serious prejudice to the CNOOC Litigation. APEGA denied this request and Wood Group has challenged this in the Wood Group Judicial Review. C. Production - Nexen Report and Skystone Report [ 20 ] Wood Group, supported by Mr.

Bauhuis, argue that the Reports are improperly claimed as privileged because CNOOC voluntarily provided them to APEGA. The Wood Group assertion is that any privilege that might have applied to the Reports have since been waived. [ 21 ] Wood Group further argues that procedural fairness requires that these Reports be produced to allow Wood Group and Mr. Bauhuis to address the investigations against them. [ 22 ] APEGA responds that it has obligations toward CNOOC, including an express confidentiality undertaking that it will not produce materials given to it unless required to do so by law.

Further, APEGA argues that at this point in the investigatory process, procedural fairness only requires that APEGA maintain an open mind.

[23] I agree with the formulation presented by APEGA that this is not really a question of privilege, but rather one based on issuesof procedural fairness. Accordingly, I do not find that at this stage of the investigatory process that APEGA has an obligation to disclosethe Reports to Wood Group or Mr. Bauhuis. i. Does procedural fairness require disclosure of the Reports at the investigatory phase? [24] I find that Wood Group conflates the requirements of procedural fairness in the investigatory stage with those required at theadjudicative stage.

As highlighted by the Supreme Court of Canada in Baker v Canada (Minister of Citizenship and Immigration), (SCC), [1999] 2 SCR 817 [Baker]: 21 The existence of a duty of fairness, however, does not determine what requirements will be applicable in a given setof circumstances. As I wrote in Knight v. Indian Head School Division No. 19, (SCC), [1990] 1 S.C.R. 653, at p. 682,“the concept of procedural fairness is eminently variable and its content is to be decided in the specific context of each case”.

All of thecircumstances must be considered in order to determine the content of the duty of procedural fairness: Knight, at pp. 682-83; Cardinal,supra, at p. 654; Old St. Boniface Residents Assn. Inc. v.

Winnipeg (City), (SCC), [1990] 3 S.C.R. 1170, per Sopinka J. [25] This leads into the well canvassed Baker factors which set out non-exhaustive criteria to consider when determining what isincluded within the duty of fairness: (1) the nature of the decision being made and the process followed in making it; (2) the nature of the statutory scheme; (3) the importance of the decision to the individual affected; (4) the legitimate expectations of the person challenging the decision; and (5) the choices of procedure made by the administrative decision maker itself. [Baker at paras 23 to 27] [26] As has been highlighted by the Alberta Court of Appeal, the level of procedural fairness that is owed at the investigative stageis lower than at the adjudicative one: MK Engineering Inc v Association of Professional Engineers and Geoscientists of AlbertaAppeal Board, 2017 ABCA 17 [MK Engineering]. [27] Further, under the statutory scheme, there remains significant discretion as to whether to proceed any further beyond theinvestigatory stage: see sections 47-52 of the Act. [28] Based on my review of the law, I do not agree with APEGA that there is no discernible duty of procedural fairness before itreaches the Discipline Committee.

I make this determination because APEGA itself notes in its submissions that there remains, at thevery least in the investigatory phase, a requirement to hold an open mind: see also MK Engineering at paras 7-8; Fitzpatrick v College ofPhysical Therapists of Alberta, 2019 ABCA 254 at para 43. I make this comment because any bias or prejudgment during theinvestigatory phase would violate the duty of procedural fairness. [29] As for the importance of the decision to the individual affected, an investigation for unskilled practice may bring reputational,economic and legal harm.

Nevertheless, I find that at this stage the reputational, economic and legal impact the investigation would haveon Mr. Bauhuis is minimal. I make this determination because Mr. Bauhuis has retired. [30] Wood Group has similarly not convinced me that there will be a significant impact against it during this investigatory phaseby APEGA. The level of disclosure required under procedural fairness is higher at the adjudicative stage.

As highlighted in MKEngineering: [7] The level of procedural fairness owed at the investigative stage of the professional disciplinary spectrum is lower than that owedat the adjudicative stage.

Although the Investigative Committee has the power to terminate an investigation, recommend a disciplineorder or refer the matter to the Discipline Committee for a formal hearing, it does not exercise an adjudicative function when doing so.The power to decide whether a member is guilty of unprofessional conduct lies with the Discipline Committee. [Citations removed;emphasis added] [31] Based on the evidence and my analysis of the law, I find that the legitimate expectation is that the Reports would not have tobe disclosed at this stage.

I make this determination because Wood Group itself highlights that at the adjudicative stage APEGA wouldbe bound to disclose the Reports. That said, it does not follow that that requirement would exist during the investigatory phase were thereis less procedural fairness requirements. [32] In making the above determination, I acknowledge that Wood Group asserts that the early disclosure of the Reports “wouldstreamline the investigations and proceedings, saving institutional and party resources”.

This may well be true but by inference thissuggests that Wood Group recognises that this disclosure does not have to occur at the current stage. [33] There has been nothing to suggest that Wood Group or Mr.

Bauhuis had a reason to have legitimate expectations that theinvestigatory process would unfold differently than it has. [34] Finally, the investigatory process undertaken by APEGA has been in accordance with the broad mandate and statutoryframework of the Act. [35] In conclusion, based on the evidence before me and my analysis of the law, I find that APEGA is not required due toprocedural fairness to produce the Reports to Wood Group or to Mr. Bauhuis.

ii. Is APEGA required to answer the questions and address the undertakings associated with the Jesperson affidavit? [ 36 ] For the same reasons of procedural fairness outlined above, I also that APEGA is not required to answer the related questions asked or address the undertakings associated with at the Jesperson Examination. IV. Conclusions [ 37 ] In

summary, I agree with the formulation presented by APEGA that this dispute is not really a question of privilege. Rather, it is a question of procedural fairness. Given that determination, I turn to address the issues that were framed above. Based on the evidence before me and my analysis of the law, I find as follows. a. Procedural fairness does not require APEGA to produce the Reports to Wood Group or to Mr. Bauhuis. As a result, I dismiss the application by Wood Group. b. APEGA is not obligated to answer the questions and produce the materials arising from the March 10, 2020 questioning on the affidavit of Mr.

Jesperson. V. Costs [ 38 ] The parties may speak to costs if they cannot otherwise agree. Heard on the 24 th day of July, 2023. Dated at the City of Calgary, Alberta this 5 th day of December, 2023. D.B. Nixon A.C.J.C.K.B.A. Appearances: S. Hunka for Association of Professional Engineers and Geoscientists of Alberta M. Mysak, M. Lafleche, B. Harding for Wood Group Canada, Inc. D. Schindelka for Mr. Bauhuis R. Reichelt and S. Mansfield for CNOOC Petroleum North America ULC