Signalta Resources Limited v Canadian Natural Resources Limited, 2023 ABKB 108

Court of King’s Bench of Alberta Citation: Signalta Resources Limited v Canadian Natural Resources Limited, 2023 ABKB 108 Date: 20230224 Docket: 1001 17217 Registry: Calgary Between: Signalta Resources Limited Plaintiff - and - Canadian Natural Resources Limited Defendant _______________________________________________________ Reasons for Decision of the Honourable Justice EJ Sidnell _______________________________________________________ Table of Contents I. Introduction . 6 A. Agreed Facts . 7 B. Heavy oil or bitumen . 11 C. Native gas or non-solution gas . 12 II. Issues . 12 III. Expert scientific evidence . 12 A. The role of the expert at trial 14

B. The role of counsel in presenting expert evidence . 16 C. Two-stage test to determine admissibility . 18 D. Applying Stage 1 – threshold requirements . 20 1. First factor – relevance . 20 2. Second factor –necessity . 20 3. Third factor - exclusionary rule . 20 4. Fourth factor – qualification . 20 5. Fifth factor - novelty . 22 E. Applying Stage 2 - gatekeeping . 22 1. Modified evidence-based approach . 22 F. The onus and the procedure for admitting expert evidence . 24 IV. SRL’s experts . 26 A. GJ (Gerry) DeSorcy, PEng . 26 1. Tendered expertise and expert reports . 26 2.

Stage 1 second factor - necessity – expert opinion on the ultimate issue . 27 3. Stage 1 third factor - exclusion under Rule 8.16(1) challenge . 30 4. Stage 1 fourth factor – qualifications . 31 5. Stage 1 conclusion . 31 6. Stage 2 gatekeeping cost-benefit analysis . 31 7. Weight: Mr. DeSorcy’s expert opinion evidence . 34 B. Ian Walker, PGeol 34 1. Tendered expertise and expert reports . 34 2. Stage 1 – fourth factor - qualifications . 35 3. Stage 1 conclusion . 42 4. Stage 2 cost-benefit analysis . 42 5. Weight: Mr. Walker’s expert opinion evidence . 44 C. Patrick Collins, PEng . 44 1.

Tendered expertise and expert reports . 44 2. Stage 1 second factor - necessity – expert opinion on the ultimate issue . 45 3. Stage 1 conclusion . 45 4. Stage 2 cost-benefit analysis . 45 5. Weight: Mr. Collins’ expert opinion evidence . 47 D. John Hitchner, PEng . 47 1. Tendered expertise and expert reports . 47 2. Stage 1 - fifth factor - novel science or scientific theory . 48 3. Stage 1 conclusion . 51 4. Stage 2 cost-benefit analysis . 51 5. Weight: Mr. Hitchner’s expert opinion evidence . 54

E. Robert White, CA, CBV, CFA .. 54 1. Tendered expertise and expert reports . 54 2. Stage 1 conclusion . 54 3. Stage 2 cost-benefit analysis . 54 4. Weight: Mr. White’s expert opinion evidence . 55 V. CNRL’s experts . 55 A. Dr. Kubica, petrophysicist 55 1. Tendered expertise and expert reports . 55 2. Stage 1 conclusion . 56 3. Stage 2 cost-benefit analysis . 56 4. Weight: Dr. Kubica’s expert opinion evidence . 58 B. Dr. Brad Hayes, PGeol 58 1. Tendered expertise and expert reports . 58 2. Stage 1 fourth factor – qualification . 59 3.

Stage 1 fourth factor – impartiality, independence, and absence of bias . 59 4. Conclusion on Stage 1 . 71 5. Stage 2 cost-benefit analysis . 71 6. Weight: Dr. Hayes’ expert opinion evidence . 73 C. Dennis Beliveau, PEng . 73 1. Tendered expertise and expert reports . 73 2. Stage 1 fourth factor – qualification . 74 3. Stage 1 fourth factor – impartiality, independence, and absence of bias . 74 4. Stage 1 conclusion . 75 5. Stage 2 cost-benefit analysis . 75 6. Weight: Mr. Beliveau’s expert opinion . 78 D. Michael Costello, accountant 78 1. Tendered expertise and expert report 78 2.

Stage 1 expertise necessity and qualification scope . 78 3. Stage 1 conclusion . 78 4. Stage 2 cost-benefit analysis . 79 5. Weight: Mr. Costello’s expert opinion evidence . 79 VI. Lay witnesses with specialized knowledge and skills . 79 A. Law relating to expert lay witnesses . 80 B. Robin Zabek . 83 1. Geology and gas caps . 83 2. CHOPS and wormholes . 84 3. SRL’s concerns with high GORs and CNRL’s investigations . 84 C. Devin Lowe . 85

1. Geology and gas caps . 85 2. CHOPS and wormholes . 86 3. SRL’s concerns with high GORs and CNRL’s investigations . 86 D. Lay witness evidence analysis . 86 1. Was Mr. Zabek’s and Mr. Lowe’s evidence both relevant and material? . 87 2. Did Mr. Zabek’s and Mr. Lowe’s evidence have a probative value that outweighs any prejudicial effect? . 87 3. Was the evidence limited to Mr. Zabek’s and Mr. Lowe’s observations, involvement, conclusions, and opinions in respect of the underlying facts, and limited to their skill, knowledge, training, and experience?

Or did they limit their evidence to what they did and why? . 88 4. Was the evidence limited to Mr. Zabek’s and Mr. Lowe’s conclusions and opinions formed as part of the ordinary exercise of their role? . 88 5. Was the evidence of Mr. Zabek and Mr. Lowe limited to the context or the position of the parties? 89 6. Conclusion on the evidence of Mr. Zabek and Mr. Lowe . 89 VII. Introduction to Issues 1 and 2 . 89 A. Well locations by legal description . 89 B. Locations by strata . 90 C. Well logging . 90 D. Neutron logs, gamma ray logs, and density logs . 91 E.

Neutron-density crossover and neutron-density approach . 92 F. Cut-offs . 92 G. Permeability . 94 H. Gas-oil contact or GOC .. 95 I. Free gas . 95 J. Associated gas . 95 K. Gas pay, gross gas pay and net gas pay . 95 L. Main Gas Cap and NW Gas Cap . 95 M. The Issue 1 and 2 analyses . 95 VIII. Issue 1: Did CNRL produce non-solution gas from the Split Title Lands? . 96 A. The spatial distribution of non-solution gas in the Waseca Formation . 97 1. Geologic structure . 97 2. Comparison of 195 m ASL contours . 98 3. Contours interpreted as closed or open . 98 4. Open-mindedness to structure . 100 5.

Conclusion on the structure of the Waseca Formation . 100 B. Upper Waseca gas pay in well logs . 101 1. Indications of free gas . 101 2. The 100/14-28-56-1W4 well 104 3. What are the indicia of a gas-saturated reservoir? . 107 4. Application of cut-offs . 110 5. Thickness of gas pay in well logs . 113

6. Upper Waseca gas pay map . 113 C. Solution or non-solution gas? . 114 1. The Main Gas Cap . 114 2. The NW Gas Cap . 116 D. Did CNRL produce non-solution gas from the Main Gas Cap and NW Gas Cap? . 116 1. Well completions at or near the gas-oil contact of the gas caps . 117 2. Purported mid-Waseca barrier and well completions in the Lower Waseca . 118 IX. Issue 2: If non-solution gas was produced, when and in what volumes? . 123 A. CHOPS, solution gas drive, foamy-oil drive, and wormholes . 124 1. Initial GOR .. 125 2. Volume and timing of non-solution gas production . 129 B.

Evidence of produced non-solution gas . 130 1. Producing GOR and total gas production . 132 C. What is the volume of produced non-solution gas and when was it produced? . 137 X. Issue 3: Is SRL’s claim, or a portion of it, statute barred pursuant to the Limitations Act , RSA 2000, c L-12? . 139 A. Pleadings . 139 B. Factual context 140 1. IOR ownership and sale of the Purchased Assets . 140 2. SRL’s review and bid . 141 3. SRL’s due diligence . 141 4. SRL’s development and optimization review .. 141 5. SRL contacts CNRL .. 143 6. SRL’s 2011 draft ID-99 application . 143 C. Section 3(1)(

a) of the Limitations Act 143 1. When did SRL, or its predecessor, first know or ought to have known that the injury for which SRL seeks a remedial order had occurred? . 144 2. When SRL knew that the injury was attributable to the conduct of CNRL .. 146 3. When SRL knew that the injury warranted bringing a proceeding . 147 4. Section 3(1)(

a) analysis . 147 5. How far back can damages be claimed? . 147 D. Sections 3(1)(

b) and 6 of the Limitations Act 148 E. Issue 3 Conclusion . 149 XI. Issue 4: Can SRL claim damages for non-solution gas produced prior to acquiring its interest in the P&NG Leases? . 149 A. Purchase and Sale Agreement 149 B. Confirmation of Assignment Agreement 152 C. Issue 4 Conclusion . 154 XII. Issue 5: If non-solution gas was produced: (

a) did CNRL know, or should it have known, that it was producing non-solution gas, and if so, is SRL entitled to harsh damages; and (

b) what is the quantum of damages? . 154 A. Context for the damages assessment 154

1. The ID-99 regulatory background and the gas over bitumen issue . 154 2. Trespass . 159 3. Unjust enrichment 161 B. The law of harsh and mild damages and negligent trespass damages . 162 1. Harsh and mild damages: characterizations and descriptions . 162 2. Court of Appeal analysis in Stewart Estate . 165 3. Harsh damages resulting in overcompensation or windfall 167 4. Negligent trespass damages . 168 5. Characteristics of harsh damages, negligent damages, and mild damages . 170 C. SRL’s claim for harsh damages . 171 D. CNRL’s refutation of SRL’s claim for harsh damages . 172 E. Time period under consideration . 172 XIII. Issue 5(

a) Did CNRL know, or should it have known, that it was producing non-solution gas, and if so, is SRL entitled to harsh damages? . 173 A. Wilful, intentional, deliberate or knowing conduct 173 1. The 100/4-4-57-1W4 well 173 2. The 12-33-56-1W4 well 174 3. The 14-28-56-1W4 well 176 4. Dual completions in 1999 . 176 5. Recompletions in 2007 and post-2007 . 177 6. Negligent trespass . 182 7. Mild damages . 183 8. Conclusion on the type of damages to be applied . 183 XIV. Issue 5(b): What is the quantum of damages? . 184 A. Overview of Mr. White’s calculations . 184 B. Overview of Mr.

Costello’s expert evidence . 185 C. Contentious points between the experts . 185 1. Use of analogues . 185 2. Drilling risk factor 185 3. Capital costs . 186 4. Royalties . 192 5. Internal rate of return . 196 D. Judgment interest 197 E. Conclusion on the type of damages to be awarded . 197 XV. Conclusion . 197 Glossary . 199 I. Introduction

[ 1 ] The main issue in this trial was what type of natural gas was produced from the Waseca Formation, near Frog Lake, Alberta, by the defendant, Canadian Natural Resources Limited (CNRL). [ 2 ] Both the plaintiff, Signalta Resources Limited (SRL), and CNRL have rights to produce in the Waseca Formation. SRL has the right to produce petroleum and natural gas, including non-solution gas. The CNRL Lease entitled CNRL to produce bitumen in the specified interval, including any gas exsolved from that bitumen, which is called solution gas.

Where these rights overlap, the areas are referred to as the “Split Title Lands”. [ 3 ] Given the technical nature of the matters dealt with in this trial, I have included a glossary at the end of this decision setting out the meanings of terms and acronyms that I have used. [ 4 ] From August 1, 1998, when it obtained the OSL, and for the first few years that it produced bitumen, CNRL did not conserve any natural gas from the Split Title Lands. Gas that was produced incidental to the bitumen production was either flared or vented without accounting for the volume produced.

Commencing in May 2000, CNRL introduced gas conservation and started producing gas for its own account and for delivery to the market. SRL claims that some of that produced gas was non-solution gas. CNRL claims that all of the gas it produced was solution gas. [ 5 ] Before a petroleum reservoir is disturbed by human intervention, it is in a state of equilibrium which has been reached over geologic time, the extensive interval of time occupied by the geologic history of Earth.

The parties’ rights are dependent on the state of the petroleum when the Waseca Formation was undisturbed, prior to any wells being drilled. Those rights relate to a formation that is approximately 500 m below the Earth’s surface. Much of the expert evidence tendered in this trial related to the composition of the petroleum in that undisturbed state, which has not existed for approximately 25 years, and which is far enough beneath the surface of the Earth that the geological conclusions must be based on analysis and

interpretation of a variety of geologic data. [ 6 ] In Anderson v Amoco Canada Oil and Gas , 2004 SCC 49 , the Supreme Court of Canada dealt with rights to hydrocarbons produced from split title lands. Major J, on behalf of a unanimous Court, at paras 18 and 19, summarized similar geological issues as follows: In the ground, pools may initially contain only liquid hydrocarbons (oil pools), only gaseous hydrocarbons (gas pools), or a mixture of both (mixed pools). ...

Prior to human intervention, a pool will be under relatively stable pressure and temperature conditions, and the ratio of gas phase to liquid phase hydrocarbons also remains fairly constant. When a pool is drilled into, the pressure changes, causing phase changes which alter this ratio. Some of the hydrocarbons originally found in liquid phase will, if there is a reduction in pressure, “evolve” into gas phase. ... This evolved gas is, technically, natural gas — it would tend to be in gas phase at [Standard Temperature and Pressure].

But in the pool, prior to human intervention, the “evolved gas” was in liquid phase. ... [ 7 ] Major J found that the appropriate time to determine the phase of the hydrocarbons and the relative ownership was before the pools had been affected by human contact: see Anderson at paras 28, 34 and 44 . [ 8 ] Both parties acknowledge that, before the reservoir pressure was disturbed by wells drilled into the Waseca Formation, there was a certain amount of solution gas dissolved in the bitumen, which CNRL had the right to produce.

The parties also agree that there was some non-solution gas in the Waseca Formation before any wells were drilled. SRL claims that there was a significant amount of non-solution gas in the undisturbed Waseca Formation. CNRL submits that there was some non-solution gas in the undisturbed Waseca Formation but that all of the gas it produced was solution gas. [ 9 ] SRL has the rights to the non-solution gas which existed in its gaseous state in the undisturbed Waseca Formation.

CNRL has the rights to the bitumen which existed in the undisturbed Waseca Formation, together with any solution gas which exsolved from it, in other words, gas which separated out from the bitumen when pressure in the Waseca Formation was lowered due to drilling and producing in the Area of Interest. [ 10 ] For the reasons set out below, I find that CNRL produced non-solution gas and SRL is entitled to damages. A.

Agreed Facts [ 11 ] After the evidence was heard and before closing argument, the parties submitted an Agreed Statement of Facts as follows: THE LANDS/LEASES 1. [SRL] acquired certain petroleum and natural gas leases pursuant to a Purchase and Sale Agreement with Imperial Oil, dated February 17, 2009 with an effective date of January 1, 2009 specifically P&NG Lease No. 0481100259, P&NG Lease No. 0487010101, P&NG Lease No. 0487070322, and P&NG Lease No. 0487100160, (the "P&NG Leases"). 2.

Pursuant to a Purchase and Sale agreement with Texaco Canada Petroleum Inc. dated August 1, 1998 CNRL is the assignee of Oil Sands Lease number 7290120052 (the "OSL") in respect of the following lands ("the Oil Sands Lands"): a. Twp 56 Rge 1 W4: Sections 9, 16, 19-21, 28-33 b. Twp 56 Rge 2 W4: Sections 10-16, 21-28, 34-36 c. Twp 57 Rge 1 W4: Sections 4-9; 16-21 d. Twp 57 Rge 2 W4: Secs 1-3; 10-15; 22-24

3. The OSL grants CNRL the exclusive right to win, work and recover the Leased Substances, defined as the Oil Sands in the Mannville Group as designated in ZD 2577, being the interval of 1462.00 to 2,027.00 feet within and under the Oil Sands Lands. 4. To the extent that the lands and zones covered by the P&NG Leases overlap with lands covered by the OSL, these shall be known as the "Split Title Lands". ZONES 5. Frog Lake falls under the Cold Lake Oil Sands areas in Alberta. The designated zone under the Alberta Energy Regulator's Interim Directive 99-01 [ID-99] is the Mannville Group. 6.

The Waseca and Cummings zones are geologic zones within the Mannville group. OWNERSHIP OF THE GAS 7. Under the Split Title Lands, the solution gas belongs to the Oil Sands Lease Holder (CNRL) and any Non-solution gas belongs to the P&NG Holder ([SRL]). THE 4-4 WELL PAD 8.

There are nine wells drilled on the well pad located at 4-4-57-01 W4 (the "4-4") Well Pad, legally identified as: a. 100/14-33-056-01 W4; b. 100/02-05-057-01 W4; c. 100/03-04-057-01 W4; d. 100/04-04-057-01 W4; e. 100/05-04-057-01 W4; f. 100/12-33-056-01 W4; g. 100/16-32-056-01 W4/02; h. 102/06-04-057-01 W4; and i. 102/08-05-057-01 W4. [ 12 ] During oral argument, on February 9 and 10, 2022, the parties also agreed to the following facts: (

a) there is a structural high on the 4-4 Well Pad; and (

b) all of the wells in the Area of Interest were produced using the CHOPS method. [ 13 ] Counsel and most of the witnesses at trial referred to the evidence in imperial measurement; however, some of the evidence was presented in metric measurement, which is what is used in the relevant legislation. To facilitate conversion and comparison, I asked counsel to provide agreed-upon conversion factors.

Those conversion factors are as follows: GORs 1 scf/bbl = 0.17811 m 3 /m 3 1 m 3 /m 3 = 5.61457 scf/bbl Natural Gas 1 mcf = 0.001 mmcf = 0.000001 bcf 1 bcf = 1,000 mmcf = 1,000,000 mcf 1 e 3 m 3 of gas = 35.31467 mcf 1 mcf of gas = 0.028317 e 3 m 3 Oil 1 barrel of oil = 0.15899 m 3 1 m 3 of oil = 6.28982 barrels of oil [ 14 ] After the trial, I requested that the parties provide a location map for the purpose of including it in this decision to assist the reader.

The parties made significant efforts and provided the map below with the permission of S&P Global Commodity Insights who created it and S&P Global, Inc who holds the copyright:

Diagram, engineering drawing Description automatically generated B. Heavy oil or bitumen [ 15 ] The terms “heavy oil” and “bitumen” were used interchangeably during the trial by some of the witnesses. During final argument, it became apparent that SRL was of the view that, in its undisturbed state, the Waseca Formation contained bitumen and free gas.

CNRL took the view that the Waseca Formation contained heavy oil and free gas. [ 16 ] Whether CNRL had the right under the OSL to produce bitumen or heavy oil, together with solution gas, is an important distinction because the Regulator applies certain rules to the production of different types of petroleum.

The Split Title Lands were produced in the context of this regulatory regime. [ 17 ] Crude bitumen means a naturally occurring viscous mixture, mainly of hydrocarbons heavier than pentane, that may contain sulphur compounds and that, in its naturally occurring viscous state, will not flow to a well and, for the purposes of the Oil Sands Conservation Regulation , includes declared oil sands: see Mines and Minerals Act , RSA 2000, c M-17 , s 1(1)(d), Oil Sands Conservation Act , RSA 2000, c O-7 , s 1(1)(

c) and Oil Sands Conservation Regulation , Alta Reg 76/1988 , s 1(2)(d). [ 18 ] The term “oil sands strata” is also defined in the Oil Sands Conservation Regulation and includes “the geological intervals defined in the Regulator’s Oil Sands Area Orders OSA 1, 2 and 3”. The Oil Sands Area Order No. OSA 3B designates the Mannville Group in the area shown on its accompanying appendix as the “Cold Lake Oil Sands” area. All of the Oil Sands Lands are within the identified Cold Lake Oil Sands area, which is confirmed in the Agreed Statement of Facts. [ 19 ] The Mines and Minerals Act , s 1(1)(

s) and Oil Sands Conservation Act , s 1(1)(l), both define “oil sands” as follows:

“oil sands” means sands and other rock materials containing crude bitumen, the crude bitumen contained in those sands and other rock materials, and any other mineral substances, other than natural gas, in association with that crude bitumen or the sands and other rock materials referred to in subclauses (

i) and (ii), and includes a hydrocarbon substance declared to be oil sands under section 7(2) of the Oil Sands Conservation Act . [ 20 ] Robin Zabek was CNRL’s Exploitation Manager for the Waseca Formation at Frog Lake from late 2006 until approximately mid-2011. He acknowledged that the area lies within the designated Cold Lake Oil Sands area, but was of the view that, in terms of operations and productivity, it should be considered heavy oil. Mr.

Zabek said that “heavy oil’ and “bitumen” are frequently used interchangeably; however, he was of the view that bitumen would require thermal extraction while heavy oil would be recoverable under primary extraction methods without the use of heat. [ 21 ] SRL refers to s 1(2)(

w) of the Oil Sands Conservation Regulation and the definition of “primary production well” which includes a well operated to produce crude bitumen that will flow to a well. [ 22 ] The parties agreed that ID-99 applied to the Oil Sands Lands.

ID-99 states its purpose is to outline: “requirements regarding gas/bitumen production in Oil Sands Areas”. [ 23 ] The OSL specifically refers to CNRL being entitled to produce the “Leased Substances” which are referred to in the OSL Appendix as “oil sands” and at clause 6 of the OSL as “bitumen”. [ 24 ] What is clear is that the Waseca Formation at Frog Lake was regulated as a “crude bitumen” reservoir, was subject to ID-99 and was produced without thermal assistance using CHOPS.

Further findings on the distinction between heavy oil and bitumen and the nature of the CNRL’s rights are not necessary for the determination of the issues. C. Native gas or non-solution gas [ 25 ] Solution gas is gas that is dissolved in crude oil or crude bitumen under reservoir conditions and evolves as a result of pressure and temperature changes: see Oil Sands Conservation Regulation , s 1(2)(z.1). [ 26 ] The term “non-solution gas” refers to gas in a gaseous phase when the reservoir was in its undisturbed state before human intervention.

Throughout the trial, many of the counsel and witnesses used the term “native gas”, which was not accepted by one of CNRL’s expert witnesses. I find that there was no confusion and that the term “native gas” was used as another name for “non-solution gas”. [ 27 ] I have chosen to use the term “non-solution gas” in this decision. II. Issues [ 28 ] Before trial, the parties agreed to the issues in this case, which I have slightly modified, as follows: 1. Did CNRL produce non-solution gas from the Split Title Lands? 2. If non-solution gas was produced, when and in what volumes ? 3.

Is SRL’s claim, or a portion of it, statute barred pursuant to the Limitations Act , RSA 2000, c L-12 ? 4. Can SRL claim damages for non-solution gas produced prior to acquiring its interest in the P&NG Leases? 5. If non-solution gas was produced: (

a) did CNRL know, or should it have known, that it was producing non-solution gas, and if so, is SRL entitled to harsh damages; and (

b) what is the quantum of damages? III. Expert scientific evidence [ 29 ] Given that a sizable portion of the evidence proffered at trial was expert opinion evidence, I first address the applicable principles relating to the role of experts at trial, the test for determining the admissibility of the expert evidence, and then apply the test to the nine experts who testified. [ 30 ] Scientific evidence is at the foundation of this case. The first issue to be determined has two parts and is simple to articulate: (

a) Did producible non-solution gas exist in the Split Title Lands? (

b) If so, did CNRL produce any non-solution gas? [ 31 ] The determination of the first sub-issue requires a finding of fact as to whether non-solution gas existed in the Waseca Formation at Frog Lake in its undisturbed state before human intervention. This fact must be determined based on scientific analysis and

interpretation of the geology half a kilometre below the surface the moment before it was drilled. Only if it is determined that non-solution gas existed under those conditions, can the second sub-issue of whether any non-solution gas was produced be considered. [32] If the first issue is resolved with a finding that non-solution gas was produced, then the scientific analysis and

interpretationundertaken for the second issue will determine the periods during which non-solution gas was produced and in what quantities. [33] The scientific analysis and

interpretation, including the applicable data to be relied on and the methodology to be used,together with the conclusions drawn from such analysis and

interpretation, were disputed by highly trained and experienced experts whohave spent their careers developing their expertise in their various fields. There were no capitulations at trial; each expert stood firm inhis conclusions. The experts analysed, interpreted, and applied their expertise to opine on both peripheral and near ultimate issues,including whether non-solution gas was produced by CNRL during the Production Period. [34] Glenn R Anderson, in his

article “Clear and Partial Danger: Defending Ourselves Against the Threat of Expert Bias”, 2004CBA Rev 285, Vol 83 No 2 (“Threat of Expert Bias”), at pages 288 and 289, footnotes omitted, discussed the concerns arising where, ashere, law and science intersect at trial: While all types of evidence have the potential to undermine the fact-finding process, the adversarial system is particularly vulnerable toexpert evidence because that evidence, by definition, is outside the knowledge and experience of judges and jurors.

According to DavidFaigman, of the University of California, the challenge of ascertaining the reliability of expert evidence is due to bringing together of lawand science: The difficulty of bringing science to the law should not be underestimated. There are four readily identifiable and quite substantial barriers to the use of science in every legal context: (1) the availability of data,(2) the lay person’s understanding of the science, (3) integrating science into other information, and (4) cultural conflicts between lawand science.

These barriers are inherent in the two disciplines’ different natures and the difficulty presented by their having to worktogether. [35] The difficulties in reconciling the expert scientific evidence, which has its own regime for making and testing hypotheses,with the legal issues in this case, which are to be determined on a balance of probabilities, cannot be underestimated. Further, the goal ofa civil trial is to make a final decision at the conclusion of the trial.

In contrast, scientific exploration and analysis often improves ourunderstanding in an iterative manner and sometimes there is no final conclusion, just a better understanding as knowledge is accumulatedand techniques are developed. A. The role of the expert at trial [36] In R v Mohan, (SCC), Sopinka J, on behalf of a unanimous Supreme Court of Canada, ushered in the modernapproach to the admission of expert witness testimony in Canadian trials. A new approach was required because of the acknowledgedfrailties of expert evidence.

In “Threat of Expert Bias”, at pages 291 and 292, footnotes omitted, Glenn Anderson synthesized thosefrailties of expert evidence: In R. v. Mohan, Justice Sopinka expressed several concerns about expert evidence: 1. It may require an inordinate amount of time not commensurate with its value; 2. It may be misleading in the sense it is out of proportion to its reliability; 3. It may be misused and distort the fact-finding process; 4. It may be dressed up in scientific language that may be accepted as virtually infallible and having more weight than it deserves; 5.

It may be dressed up in scientific language that makes judgment more difficult; 6. It may overwhelm and distract the fact-finding process; 7. It may be merely a personal opinion. Although Justice Sopinka did not use the term “expert bias”, it is certainly an implicit element of several of his concerns. Six years later,Justice Major, in R. v. D.D., explicitly identified the danger of lack of expert independence and impartiality, and added that it “cancontribute to miscarriages of justice.” Justice Major pointed out other dangers associated with expert evidence: 1. Its resistance to effective cross-examination; 2.

Opinions are “usually derived from academic literature and out-of-court interviews, which material is unsworn and not available forcross-examination”; 3. It is time-consuming and expensive. [37] In White Burgess Langille Inman v Abbott and Haliburton Co, 2015 SCC 23, at para 1, Cromwell J, also writing for aunanimous Court, refined the four factors set out in Mohan and succinctly articulated the role of experts in a technical case, such as thisone: Expert opinion evidence can be a key element in the search for truth, but it may also pose special dangers.

To guard against them, theCourt over the last 20 years or so has progressively tightened the rules of admissibility and enhanced the trial judge’s gatekeeping role.

These developments seek to ensure that expert opinion evidence meets certain basic standards before it is admitted. ... [38] After explaining the exclusionary rule for opinion evidence, Cromwell J noted the exception for expert evidence on mattersrequiring specialized knowledge, or skill, where judges are not necessarily equipped to draw true inferences from facts: White Burgess,para 15. [39] In R v SKM, 2021 ABCA 246, a unanimous decision, the Alberta Court of Appeal addressed the function of expert evidenceat trial, at para 74: This case is in keeping with matters calling for special knowledge.

Mohan, quoting R v Abbey, (SCC), [1982] 2 SCR 24at 42 … wherein Dickson J (as he then was), explained the function of an expert, found: … An expert’s function is precisely this: to provide the judge and jury with a ready-made inference from which the judge and jury, dueto the technical nature of the facts, are unable to formulate. “An expert’s opinion is admissible to furnish the Court with scientificinformation which is likely to be outside the experience and knowledge of a judge or jury.

If on the proven facts a judge or jury can formtheir own conclusion without help, then the opinion of the expert is unnecessary”. … [40] In “Threat of Expert Bias”, at page 290, footnotes omitted, Glenn Anderson commented on how challenging expert evidencecan be a significant barrier to the finding of facts: More recently, in R. v.

D.D., Justice Major questioned lawyers’ competence to effectively perform their function of challenging expertevidence and recited a passage by David Paciocco, [then] of the University of Ottawa, regarding dangers associated with expertevidence: As the Mohan Court explained, the four-part test serves as recognition of the time and expense that is needed to cope with expertevidence. It exists in appreciation of the distracting and time-consuming thing that expert testimony can become.

It reflects therealization that simple humility and a desire to do what is right can tempt triers of fact to defer to what the expert says. It even addressesthe fact that with expert testimony, lawyers may be hard-pressed to perform effectively their function of probing and testing andchallenging evidence because its subject matter will often pull them beyond their competence, let alone expertise. This leaves the trier offact without sufficient information to assess its reliability adequately, increasing the risk that the expert opinion will simply be attornedto.

In fact, the concerns about expert evidence expressed by the Supreme Court of Canada in R. v. Mohan, and in subsequent decisions, stemfrom doubts about the ability of trial judges and juries to ascertain reliability. Nowadays, most observers would agree that the evaluationof expert evidence is a daunting task. ... [41] An additional concern is that expert evidence can be presented in a manner that is inaccessible to the trier of fact, akin to ablack box that holds the answer but is not transparent as to the expert’s reasoning.

This concern was addressed in R v J-LJ, 2000 SCC51, at para 56, emphasis in the original, where Binnie J, for a unanimous Supreme Court of Canada, said: In Mohan, Sopinka J. held that the expert evidence in question had to be more than merely helpful. He required that the expert opinion benecessary “in the sense that it provide information, ‘which is likely to be outside the experience and knowledge of a judge or jury’, ... theevidence must be necessary to enable the trier of fact to appreciate the matters in issue due to their technical nature” (p. 23).

In Béland,supra, McIntyre J., speaking about the inadmissibility of a polygraph test, cited ... Davie v. Magistrates of Edinburgh, ... on the role ofexpert witnesses where Lord Cooper said: Their duty is to furnish the Judge or jury with the necessary scientific criteria for testing the accuracy of their conclusions, so as to enablethe Judge or jury to form their own independent judgment by the application of these criteria to the facts proved in evidence. ...

The purpose of expert evidence is thus to assist the trier of fact by providing special knowledge that the ordinary person would not know.Its purpose is not to substitute the expert for the trier of fact. What is asked of the trier of fact is

an act of informed judgment, not an actof faith. [42] In White Burgess, at para 18, Cromwell J noted the long-held concern that trials can devolve into trial by expert, and hereiterated the importance of the trier of fact being able to make an informed judgment rather than simply deciding a matter based on faithin the expert’s opinion. [43] The role of the expert is not to supplant the role of the trier of fact, but to provide the trier of fact with the necessaryinformation and tools with which to analyse the evidence.

In David M Paciocco, Palma Paciocco and Lee Stuesser, The Law of Evidence, 8th ed (Toronto: Irwin Law Inc, 2020) (“The Law of Evidence”), at page 238, the authors note the concern associated with technicalexpert evidence put before lay triers of fact, which, in my view, is applicable to any trier of fact who does not have the benefit offamiliarity with the area of science at issue: ...

There are also concerns relating to the evaluation and comprehension of specialized information by lay triers of fact: precisely becauseexpert evidence is so specialized, lay triers of fact may not be well-placed to assess its reliability or to otherwise make independentjudgments about what weight and significance it should be afforded. The expert evidence admissibility rules address these concerns ... [44] Expert witnesses have an obligation to prepare their materials in a manner that is appropriate for the trier of fact.

Experts whoare engineers in Alberta can refer to the “APEGGA Guideline for Professional Member as a Witness V1.0 October 2003”, at

section 4.3,which sets out the professional obligation to prepare reports and other evidence in a manner to assist the trier of fact: Professionals should prepare all data and documentary evidence in a way, which will help educate the non-expert tribunal.

B. The role of counsel in presenting expert evidence [ 45 ] Counsel have a role to play in engaging experts and tendering expert evidence. In Moore v Getahun , 2015 ONCA 55 , at paras 33 , 34, 57, 62 and 63, Sharpe JA considered the appropriate balance between the extremes of interfering in the preparation of an expert report and failing to provide the expert with sufficient feedback on the analysis or the clarity of the opinion: [33] Expert evidence is a significant and controversial feature of modern civil litigation.

It constitutes an exception to the rule that witnesses may only testify as to facts, not opinions, and that it is the exclusive prerogative of the trier of fact to draw inferences from proven facts. The expert evidence exception operates where specialized knowledge is required to determine the implications of the bare facts and where the trier of fact is not competent to draw the necessary inferences unaided ... [34] Expert evidence has become more significant with the explosion of scientific knowledge and technical innovation.

Many cases have been described as a "battle of experts"... . . . [57] First, the ethical and professional standards of the legal profession forbid counsel from engaging in practices likely to interfere with the independence and objectivity of expert witnesses. ... the Advocates' Society's Principles Governing Communications with Testifying Experts ... provides a thorough and thoughtful statement of the professional standards pertaining to the preparation of expert witnesses.

Principle 3 states: In fulfilling the advocate's duty to present clear, comprehensible and relevant expert evidence, the advocate should not communicate with an expert witness in any manner likely to interfere with the expert's duties of independence and objectivity. . . . [62] I agree ... that it would be bad policy to disturb the well-established practice of counsel meeting with expert witnesses to review draft reports.

Just as lawyers and judges need the input of experts, so too do expert witnesses need the assistance of lawyers in framing their reports in a way that is comprehensible and responsive to the pertinent legal issues in a case. [63] Consultation and collaboration between counsel and expert witnesses is essential to ensure that the expert witness understands the duties ... Reviewing a draft report enables counsel to ensure that the report (

i) complies with the Rules of Civil Procedure and the rules of evidence; (ii) addresses and is restricted to the relevant issues; and (iii) is written in a manner and style that is accessible and comprehensible. ... [ 46 ] Expert evidence is permitted where specialized knowledge is required to explain the evidence so that the trier of fact can form an opinion about a fact or issue. The objective is not to decide which expert had better credentials, was more eloquent, or displayed a superior demeanor and then accept that expert’s opinion.

Rather the purpose of having an expert provide opinion evidence is to receive an impartial explanation of the evidence accompanied by a transparent explanation for the expert’s conclusions.

Fundamentally, the expert is to provide independent assistance that will assist the trier of fact to understand the evidence which will lead to determining a fact or resolving an issue. [ 47 ] Expert evidence should assist the trier of fact by providing specialized information outside the trier of fact’s experience or knowledge, and this goal can be achieved only where technical evidence is explained in a manner accessible to the trier of fact.

Accessibility requires the logical implementation of elements as mundane as page numbers and paragraph numbers, proper titles and descriptions of graphs and tables, clear references to authorities, and inclusion of a table of contents, where required. For comprehension, experts should be encouraged to use plain language, define all acronyms, and explain terms not generally used by the lay person. Even complex science can be explained clearly if the expert considers the audience. [ 48 ] Counsel have an obligation to ensure that: (

a) the expert’s opinion and report comply with the evidentiary and procedural rules; (

b) the expert is impartial, independent and there is an absence of bias in the expert’s opinion; (

c) the expert’s opinion is relevant, clear, comprehensible, and accessible; (

d) the expert’s opinion is devoid of jargon and unexplained scientific terms and concepts; (

e) the expert’s report is written from the perspective of the trier(

s) of fact being the reader; (

f) the expert evidence sets out the expert’s opinion in a manner that makes sense to a lay person; (

g) the expert clearly identifies the facts or assumptions upon which the opinion is based; (

h) the expert does not fail to consider material facts that may be contrary to the expert’s opinion; (

i) there is a transparent explanation for the expert’s analysis, reasoning, and conclusions in the written report and oral testimony; (

j) the expert’s testimony does not go beyond the scope of the expert’s expertise; and (

k) the expert understands that, if the expert’s opinion changes after the preparation of a report, the expert has an obligation to disclose that change of opinion: Rule 5.38.

C. Two-stage test to determine admissibility [49] In R v Abbey, 2009 ONCA 624, leave to appeal denied, (Abbey #1), at para 71, Doherty JA contrastedfact evidence with expert opinion evidence: It is fundamental to the adversary process that witnesses testify to what they saw, heard, felt or did, and the trier of fact, using thatevidentiary raw material, determines the facts. Expert opinion evidence is different.

Experts take information accumulated from theirown work and experience, combine it with evidence offered by other witnesses, and present an opinion as to a factual inference thatshould be drawn from that material. The trier of fact must then decide whether to accept or reject the expert's opinion as to theappropriate factual inference. ... [50] Expert opinion is presumptively inadmissible.

Mohan set out four factors to be considered before admitting expert evidence.In White Burgess, Cromwell J developed a two-stage admissibility analysis and added a fifth factor relating to novel or contested scienceor science used for a novel purpose: para 23. [51] In R v Bingley, 2017 SCC 12, at paras 13 to 17, McLachlin CJ (as she then was), on behalf of the majority, articulated each ofthe analytical steps to be taken post-Mohan and White Burgess to ensure admissible expert evidence enhances, rather than distorts, thefact-finding process.

To set out a methodology for this case, I summarize these two analytical stages and each of the gatekeeping steps asfollows: Stage 1 The party tendering the expert evidence must show that it meets the threshold requirements of admissibility. Added to the four Mohanfactors is the optional fifth factor: First factor, relevance: the expert evidence must be logically relevant to a material issue.

Second factor, necessity: the expert evidence must be necessary to assist the trier of fact because the expertise is necessary to understanda fact or issue which ordinary people are unlikely to form a correct judgment without the expert’s assistance. Third factor, exclusionary rule: the expert evidence must not be subject to any exclusionary rule outside of the normal exclusionary rulefor opinion evidence. Fourth factor, qualification: the expert must be properly qualified such that the expert (

a) possesses special knowledge and experiencebeyond that of the trier of fact in relation to the subject of the opinion; and (

b) is able and willing to carry out the expert’s primary duty tothe court to provide evidence that is impartial, independent, and unbiased. Fifth factor, novelty: where the expert opinion is based on novel science, contested science, or science used for a novel purpose, theunderlying science must be reliable for its purpose. Stage 2 Stage 2 operates if the four or five factors, as applicable, are satisfied and is the gatekeeping stage.

This is where the trial judge balanceswhether the evidence ought to be admitted, considering its potential benefits, such as probative value, and its associated risks, such asprejudice, together with the necessity of, the reliability of, and the absence of bias in, the expert evidence. [52] The party tendering the expert evidence has the onus, on a balance of probabilities, to show that the evidence meets therequirements of both Stage 1 and 2. [53] While the authorities refer to a two-stage test, the trial judge has a continuing obligation throughout the trial to ensure that theexpert evidence remains within its proper scope: R v Sekhon, 2014 SCC 15, para 46.

This ongoing obligation is as important as theconsideration of Stage 1 and 2 factors. D. Applying Stage 1 – threshold requirements 1. First factor – relevance [54] Expert evidence must have a tendency, as a matter of human experience and logic, to make the existence or non-existence of afact in issue more or less likely than it would be without the evidence: R v Millard, 2018 ONSC 4410, para 43.

The experts called in thiscase all had expertise in fields relevant to the issues and, while there were specific challenges to the qualifications of certain experts,there is no basis on which to find any of the expert testimony not relevant. I find that all of the expert evidence had a tendency to affectthe determination of the issues and was relevant to the issues raised at trial. [55] I find that at the threshold consideration, Stage 1, the first Mohan factor has been met in relation to all nine of the experts. 2.

Second factor –necessity [56] There is no doubt that the expert evidence tendered related to subject-matter about which ordinary people are unlikely to forma correct judgment without assistance. The expert evidence was, for the most part, highly technical in nature. [57] CNRL challenged the necessity of two experts called by SRL: Mr. DeSorcy and Mr. Collins. CNRL submitted that theirrespective reports were opining on the ultimate issue. I address the challenges to the necessity of Mr. DeSorcy’s and Mr. Collins’

evidence based on ultimate issue opinions, below, at paragraphs [97] and [194]. For the remainder of the proffered experts, I find that allof the expert evidence was necessary to assist me in determining the issues and, at Stage 1, the second Mohan factor has been met inrelation to those seven other experts. 3. Third factor - exclusionary rule [58] An exclusionary rule can be a rule of evidence, but it can also be a procedural rule. CNRL raised an objection to the expertevidence of Mr.

DeSorcy on the basis of it being duplicative and therefore prohibited by Rule 8.16(1) of the Alberta Rules of Court, AltaReg 124/210. I will address this submission in relation to Mr. DeSorcy’s admissibility as an expert, below, starting at para [109]. Noother exclusionary rules were raised in relation to any of the other experts and I find that no exclusionary rule applies to the other eightexperts. 4. Fourth factor – qualification [59] As noted in paragraph [50], there are two elements to the fourth factor, each of which is addressed below. a.

The expert possesses special knowledge and experience beyond that of the trier of fact in relation to the subject of the opinion [60] All of the experts who testified had special knowledge as a result of extensive education, training, study, and experience. Eachof them obtained at least one university degree and several had more than one. All were seasoned professionals at varying stages of theircareers. [61] Included in the description of each expert’s qualifications, I have noted the most significant, but not all of, their respectiveeducational achievements.

I have not included any designations related to those educational achievements after their name. This omissionis not intended to diminish those achievements but is for readability and consistency. In addressing the admissibility of each of theexperts, I have included in each heading the most significant or relevant professional membership designation. Again, for readability andconsistency, I have omitted professional designations when referring to each of the experts in my reasons. [62] The qualification of two of SRL’s experts was challenged as to scope: Mr. DeSorcy and Mr. Walker.

Relying on the majorityopinion of McLachlin J in R v Marquard, (SCC), [1993] 4 SCR 223, both of CNRL and SRL submitted that the issue ofwhether an expert has the appropriate qualifications for the evidence proffered should go to weight. However, if an expert is notqualified, then the portion of the expert opinion that is not within the expertise of the expert is not admissible, and it is not a matter ofweight. There can be no allowance for evidence from an expert without the requisite qualifications: see R v Bingley, para 15. Either anexpert is qualified, or the expert is not.

Where the expert’s qualifications are not as broad as the opinion proffered, that portion not withinthe expert’s scope of expertise is not admissible. [63] I have addressed the scope of Mr. DeSorcy’s and Mr. Walker’s evidence, below. [64] The knowledge and expertise of the other seven experts was not challenged.

Having reviewed the qualifications noted in theirrespective reports and having heard the submissions on the voir dires held in relation to the admissibility of each of the experts, I findthat they had the requisite knowledge and expertise for the testimony that they gave to satisfy this part of the fourth factor. b. The expert is able and willing to carry out the expert’s primary duty to the court to provide evidence that is impartial,independent, and unbiased [65] All nine experts affirmed their obligation to be independent and impartial.

The obligation of independence and impartiality,and the absence of bias, was not challenged except in the case of CNRL’s experts: Dr. Hayes and Mr. Beliveau. [66] There was no objection on the voir dire relating to the admissibility of Dr. Hayes’ and Mr. Beliveau’s expert opinionevidence. As a result, as a matter of admissibility under the Stage 1 and Stage 2 analysis there was no information on which to make anadmissibility determination. The information which is relevant to this determination is found primarily in expert reports, and based, inpart, on the testimony given by these two experts.

The expert reports, though filed with the Court before the trial, were not provided tome before the trial began and I only was able to read them as each expert was called. My analysis regarding the independence,impartiality and lack of bias required time to consider, after the evidence was entered at trial, and is set out regarding Dr. Hayes and Mr.Beliveau starting at paragraphs [297] and [359], respectively. [67] The other seven expert witnesses appeared to appropriately carry out their duties to the Court in both their written reports andtheir testimony at trial.

I will not address this element of Stage 1 with respect to those seven experts as I am satisfied that the Stage 1threshold requirements have been met for each of them in relation to this part of the fourth factor. 5. Fifth factor - novelty [68] CNRL raised an objection to the evidence of SRL’s expert, John Hitchner, on the basis that his evidence consisted of novelscience, which I address below, starting at paragraph [219]. None of the other eight experts provided opinions based on alleged novelscience or scientific theory and this factor will not be addressed in relation to them. E.

Applying Stage 2 - gatekeeping [69] This stage only comes into play if the evidence has satisfied the Stage 1 factors and thereby passed the thresholdrequirements. As discussed above, Stage 2 is an opportunity to balance all aspects of the proposed expert evidence to determine whetherit is admissible. I address this balancing analysis in my discussion of the first expert, Mr. DeSorcy, starting at paragraph [121], and then

apply that same analysis to the other experts. [ 70 ] Before setting out my cost-benefit conclusion, I revisit the independence, impartiality, and absence of bias of each expert, and then apply a modified evidence-based approach to examine the expert opinion evidence. 1.

Modified evidence-based approach [ 71 ] In “Taking a ‘Goudge’ out of Bluster and Blarney: an ‘Evidence-Based Approach’ to Expert Testimony”, (2009) 13 Can Crim LR 135(“ Taking a Goudge ”), at pages 146 and 147, Professor David Paciocco (now Justice of the Ontario Court of Appeal) advocates for an evidence-based approach to considering expert evidence and sets out four principles he synthesized from the Ontario Pediatric Forensic Pathology Inquiry, also known as the Goudge Inquiry, which I will refer to as the “Paciocco Principles”, emphasis in the original: (1) the theory or technique used by the expert must be reliable, and so too must the use of that theory or technique by the expert; (2) the expert must not be biased (the expert must keep an open mind to a “broad menu of possibilities”); (3) the expert must be objective and complete in collecting evidence, must reject information that is not germane to the theory or technique being used, and must be transparent about all the information and influences they have been exposed to; and (4) the expert must clearly express not only the opinion, but also the complete reasoning process that led to it, and must be candid about shortcomings of the theory or technique and the opinion reached, offering fair guidance on the level of confidence that can be placed in the opinion expressed. [ 72 ] The Paciocco Principles can be compared to the criteria discussed by the United States Supreme Court in Daubert v Merrell Dow Pharmaceuticals Inc , 113 S Ct Rep 2786 (1993), where Justice Blackmun, for the majority, set out four criteria for assessing scientific evidence based on: theory testing, peer review and publication, potential error rate, and generally accepted technique. [ 73 ] In Abbey #1 , Doherty JA, for a unanimous court, reviewed the preferred expert evidence relating to the symbolism of tattoos in the context of street gang culture.

He noted, at para 109, that not all expert evidence can be scientifically validated and referred to the opinions of doctors, accident reconstructionists, economists and other professionals who testify about the standard of care of in their profession or the cause of a particular event, all of whom refer to specialized knowledge gained through experience and specialized training in their field of expertise. Doherty JA concluded that using reliability factors referable to scientific validity is inappropriate.

Regarding the four Daubert criteria, Doherty JA explained, at paras 110 and 111, that they are not definitive or mandatory: Tested exclusively against the Daubert factors, much of the expert evidence routinely accepted and acted upon in courts would be excluded despite its obvious reliability and value to the trial process. However, Daubert does not suggest that the factors it proposes are essential to the reliability inquiry. Instead, Daubert ... describes that inquiry as “a flexible one”. This flexibility was subsequently emphasized in Kumho Tire Co. ...

Unlike Daubert, Kumho Tire Co. did not involve an opinion, the validity of which relied upon the scientific method. The expert's opinion in Kumho Tire Co. depended in part on scientific principles but also upon the knowledge of the witness gained through his experience and training. In Kumho Tire Co., the court made it clear that, while all expert opinion evidence must demonstrate a sufficient level of reliability to warrant its admissibility, a flexible approach to the determination of reliability was essential.

Some Daubert factors, e.g., error rates, are not germane to some kinds of expert testimony. ... [ 74 ] The four Daubert criteria may be helpful in some cases, especially those which involve the testing of falsifiable scientific hypotheses against readily identifiable data, but those criteria are not a definitive checklist for every case involving scientific evidence. In this case, the experts theorized about the geology half a kilometre below the Earth’s surface.

Using a variety of scientific and engineering principles, and their own specialized knowledge, analysis and experience, the experts opined on the existence of non- solution gas before the first well was drilled, over 25 years ago, and the quantity produced from the Waseca Formation before 2015.

Their theories cannot be confirmed because subsurface geological features cannot be directly observed, the Waseca Formation is now disturbed, and data limitations precluded directly testing whether the gas produced before 2015 was non-solution gas. [ 75 ] The experts’ conclusions are based on their applications of scientific principles and

interpretation of certain indicative data. There is no method of theory testing or determining the potential error rate of the techniques used by the experts in forming their opinions in this case. As a result, the only Daubert criterion that is of assistance is whether a generally accepted technique was used. However, I return to the Daubert criteria in the context of novel scientific theory or technique where it can provide more assistance. [ 76 ] Applying a modified form of the Paciocco Principles to the expert evidence at Stage 2, in this case, will focus my analysis on its critical features.

Paciocco Principle 1 focuses on reliability. Paciocco Principles 2 and 3 relate to independence and bias and assist in the examination of impartiality by looking at the expert and the data. Paciocco Principle 4 addresses the transparency and objectivity required of experts. In my view, the examination of these principles assists in balancing of probative value versus prejudice of the expert evidence.

However, since I will review the impartiality, independence, and absence of bias separately, I have removed those elements and modified the Paciocco Principles for use in this case to arrive at a modified evidence-based approach with the following four areas of consideration: (

a) the theory or technique employed by the expert must be reliable and based on scientific principles and, where applicable, a generally accepted technique; (

b) the use of the theory or technique by the expert must be reliable and based on scientific principles and the knowledge of the expert; (

c) the expert must clearly express not only the opinion, but also the reasoning process that led to it; and

(

d) the expert must be candid about shortcomings of the expert’s theory or technique and the opinion reached, offering fair guidance on the level of confidence that can be afforded to the opinion. [ 77 ] For the experts who opined on the calculation of economic damages, Robert White and Michael Costello, the modified evidence-based approach is not applicable and is not used. F.

The onus and the procedure for admitting expert evidence [ 78 ] In a perfect world, the admissibility of the experts would be determined after a fulsome voir dire on admissibility and before each testifies in chief and the expert reports are entered as evidence in the trial. That is not what occurred in this case. One of the difficulties that I am faced with is that, at the conclusion of each expert voir dire , the opposing party stated it had no objection, or words to that effect, except in the case of Mr. Walker. [ 79 ] The only time an expert was cross-examined during a voir dire was when CNRL questioned Mr.

Walker and another expert witness called by SRL, Mr. Hitchner. With respect to the other seven experts, opposing counsel did not ask any questions during the voir dire before the expert was qualified and admitted in their proffered area of expertise. [ 80 ] In CNRL’s final written argument, for the first time, challenges were made regarding the admissibility of Mr. DeSorcy’s evidence on the basis of the Stage 1 second factor, necessity, the third factor, exclusionary rule, and the fourth factor, qualification. [ 81 ] CNRL’s challenge to Mr.

Collins’ expert evidence not meeting the second factor, necessity, was also raised for the first time in final written argument. [ 82 ] CNRL indicated its challenge to Mr. Hitchner through cross-examination but did not object to him being qualified as an expert as proffered. CNRL’s assertion that Mr. Hitchner’s evidence was inadmissible due to scientific novelty was raised for the first time in final written argument. [ 83 ] SRL challenged both Dr. Hayes’ and Mr. Beliveau’s qualifications to comment on Mr. Walker’s qualifications, and their respective independence, impartiality, and absence of bias.

These challenges were raised, for the first-time, during cross-examination, after Dr. Hayes and Mr. Beliveau were qualified at the conclusion of the voir dire without cross-examination by, or objection from, SRL. [ 84 ] SRL cross-examined Mr.

Costello about whether he had, in one comment of his report, encroached on one of the ultimate, and legal, issues to be determined in the trial, which it later asserted raised a potential concern on the basis of necessity and qualification on that narrow issue. [ 85 ] Writing for the majority in Ontario (Natural Resources and Forestry) v South Bruce Peninsula (Town) , 2022 ONCA 315 , paras 75 to 78 , footnotes omitted, Lauwers JA noted the often-perfunctory nature of the assessment of an expert’s independence, impartiality, and absence of bias at the admissibility stage: The procedure prescribed by White Burgess calls on the expert to attest that his or her duty to assist the court overrides any obligation to the party calling the expert as a witness.

Then: “the burden is on the party opposing the admission of the evidence to show that there is a realistic concern that the expert's evidence should not be received because the expert is unable and/or unwilling to comply with that duty.” But, “the burden to establish on a balance of probabilities this aspect of the admissibility threshold remains on the party proposing to call the evidence.” Where the evidence falls short, the witness can be disqualified, “or those parts of it that are tainted by a lack of independence or impartiality, should be excluded.” I make two observations about the qualification process.

First, testimonial qualification is determined in a voir dire with the proponent tendering the witness, the opponent cross-examining, and the judge deciding. The onus throughout the qualification process is on the proponent and the admissibility standard is on the balance of probabilities. Second, perfectly impeccable impartiality or independence is rarely possible and is not the standard.

In White Burgess , Cromwell J. explained that: “This threshold requirement is not particularly onerous and it will likely be quite rare that a proposed expert's evidence would be ruled inadmissible for failing to meet it.” He added this comment: “I emphasize that exclusion at the threshold stage of the analysis should occur only in very clear cases”. Deficiencies that are not disqualifying can be accounted for by imposing limits on the witness’s evidence and in weighing the evidence. This rarity usually leads counsel away from a full blown effort to disqualify a witness.

The voir dire is perfunctory, if it happens at all, once qualifications have been accepted and the parameters of the expert evidence are set.

Instead, the focus is on showing through cross- examination on the merits of the opinion that the witness has a measure of partiality that must be discounted in weighing the evidence. [ 86 ] This is indeed what occurred in this case: a perfunctory voir dire with the parties focussed on discounting the weight to be given to the evidence of the challenged experts after they had been admitted. [ 87 ] This process can be contrasted with that described in Dujardin v Dujardin , 2018 ONCA 597 , where, at para 31, Trotter JA, on behalf of the court, said: It would have been easy for the trial judge to have simply admitted Dr.

Judson’s evidence, and any opinion called in reply, postponing an exacting analysis of this body of evidence until the end of the trial. However, the modern approach to expert evidence requires more of trial judges. In R. v.

Abbey , 2017 ONCA 640 , 350 C.C.C. (3d) 102, Laskin J.A. said, at para. 53, “No longer should expert evidence be routinely admitted with only its weight to be determined by the trier of fact.” [ 88 ] Notwithstanding that the judge is the gatekeeper, the practical reality is that where there are numerous lengthy and complex reports relied on in a trial, and the trial judge has had no opportunity to review any of them in advance of the trial, the admissibility

analysis under Stage 1 and 2 necessarily relies on the evidence adduced by the parties in the voir dire.

If counsel do not pursue questionsof the expert during the voir dire, there is little for the trial judge to work with at this stage. [89] As Lauwers JA also noted in Ontario v South Bruce Peninsula (Town), at para 79, in some cases there may bedisqualification where disabling bias emerges during the cross-examination of the expert on the merits. [90] Although the voir dire process was, in all but two cases, perfunctory and there were no challenges to admissibility at trial,only to weight, I have determined that Stage 1 and Stage 2 must be undertaken in this decision.

I am of the view that it will be easiest forthe reader to understand my Stage 1 and 2 analyses by addressing the specific challenges to each of the experts on a one-by-one basis.This analysis will include some of the experts’ testimony, and portions of the expert reports, which was not heard during the voir diresbut was part of the trial evidence. [91] Following the Stage 1 and Stage 2 analysis for each expert, I have added an additional step of considering the weight to begiven to the opinion evidence.

Since all of the expert opinion evidence was entered at trial, with challenges reserved to weight, anyevidence found in hindsight to be inadmissible must now be given zero weight. IV. SRL’s experts [92] SRL called five experts who prepared a total of 13 expert reports. As noted above, only those factors which arose ascontentious matters in this trial are considered below and those factors that were not controversial are not addressed. A. GJ (Gerry) DeSorcy, PEng 1. Tendered expertise and expert reports [93] Mr. DeSorcy trained as a professional engineer and is a member of APEGA.

He has a remarkable amount of experience, over60 years, dealing with oil and gas regulatory, technical, and administrative issues. Mr. DeSorcy was with the ERCB for 38 years, the lastsix years as Chairman and, at the time of his retirement in 1993, Chief Executive Officer. Since retirement, Mr. DeSorcy has worked as aconsultant and has lectured at the University of Calgary on oil and gas regulation. In addition, he is an honorary life member of thePetroleum Society of Canadian Institute of Mining, Metallurgy and Petroleum. [94] SRL tendered Mr.

DeSorcy as an expert to provide engineering opinion evidence in the following areas: (

a) on the nature and quantification of subsurface hydrocarbons; (

b) the identification and quantification of non-solution gas in this case; and (

c) the regulation of energy resources, including natural gas, oil, and bitumen in Alberta. [95] Mr. DeSorcy prepared three expert reports for SRL: (

a) Primary Report: “Frog Lake Area, Waseca Sand Heavy Oil and Gas Production”, July 21, 2016, with addendum/errata, July25, 2016; (

b) Rebuttal Report: “Rebuttal Mr. Beliveau’s Report Entitled Gas Production at the Frog Lake Heavy Oil Field”, October 26,2016; and (

c) Surrebuttal Report: “Surrebuttal of Beliveau’s Rebuttal Report”, February 28, 2017. [96] The Primary Report included an addendum, which Mr. DeSorcy said he prepared when he received further informationregarding the flaring of gas in the early years of CNRL’s production, including in the Area of Interest. Mr. DeSorcy said that thisadditional information changed the quantities in his Primary Report, but not his conclusion. 2. Stage 1 second factor - necessity – expert opinion on the ultimate issue [97] CNRL challenged Mr.

DeSorcy’s expert opinion on the basis that it constituted opinion on the ultimate issue: specifically,that non-solution gas existed in the Waseca reservoir and that two bcf of non-solution gas was produced by CNRL. On this basis, CNRLsubmitted that the evidence was not necessary, and says in its Closing Brief on Expert Evidence: Mr. Desorcy’s opinion was also unnecessary. Despite his extensive career with the Regulator and in the oil and gas industry, he did nothave the requisite qualifications to conduct a complete reservoir study. Further, [SRL] also had an opinion from Mr.

Collins as itsreservoir engineer, also opining on the ultimate issue, making Mr. Desorcy’s opinion duplicative and in breach of Rule 8.16(1) regardingthe use of multiple experts opining on the same issue. [98] On the issue of an expert opining on the ultimate issue, Sopinka J, in Mohan, stated at para 25 (references here and below areto 1994 CarswellOnt 1155): These concerns were the basis of the rule which excluded expert evidence in respect of the ultimate issue. Although the rule is no longerof general application, the concerns underlying it remain.

In light of these concerns, the criteria of relevance and necessity are appliedstrictly, on occasion, to exclude expert evidence as to an ultimate issue. ... [99] In Graat v R, (SCC), the Supreme Court of Canada put to rest the objection that lay witnesses cannot speak to

the ultimate issue; however, this objection can still be raised in relation to expert evidence. In The Law of Evidence, at page 243, theauthors state, emphasis in the original, footnotes omitted: ... the fact that an expert is about to testify on one of the ultimate issues in the case will sometimes be a factor to consider in determiningwhether that testimony will be admitted.

It will call for a closer level of scrutiny of the relevance and necessity requirements of theadmissibility rule, including in the context of novel or contested scientific evidence. [100] Where an expert undertakes a role similar to that of the trier of fact, including reviewing the evidence, drawing of inferences offact, and making conclusions of law, and offers an opinion on the ultimate issue, the opinion should be excluded: Murray v Galuska,2002 BCSC 1532 , para 21.

In that case, the proposed expert was a lawyer whose opinion was that a prosecution was notmalicious, founded on his review of trial transcripts and assumptions about the trial, and based on conclusions that were contrary to thoseof the trial judge. The facts in Murray make it distinguishable from the expert evidence of Mr.

DeSorcy who testified as to his scientificmethodology, his analysis that non-solution gas was present in the Waseca formation, and his estimate of the volume of non-solution gasthat was produced by CNRL. [101] Determining whether expert evidence addresses the ultimate issue should be considered as part of the necessity factor.

InProfessor Peter Sankoff, Law of Witnesses and Evidence in Canada (Toronto: Thomson Reuters Canada, 2020) (WL Can Release 2022-2), the effect of experts touching on the ultimate issue is discussed, at §16.24, footnotes omitted: In other words, the “ultimate issue” principle is better regarded as one aspect of the necessity principle, and courts should be wary ofrelying on the fact that an expert's opinion simply touches on the same matter that the jury needs to decide as a singular reason toexclude. The Supreme Court made this abundantly clear in R. v. R. (D.) ...

The trial judge refused to permit an expert to testify as to hisconclusions as to the reliability of the children's memories of certain of the events on the basis that this would usurp the function of thejury. In allowing the accused's appeal from a conviction, Major J. stated: Expert testimony is admissible even if it relates directly to the ultimate question which the trier of fact must answer. In R. v.

Burns ...McLachlin J., writing for the court, said, While care must be taken to ensure that the judge or jury, and not the expert, makes the final decisions on all issues in the case, it haslong been accepted that expert evidence on matters of fact should not be excluded simply because it suggests answers to issues which areat the core of the dispute before the court … At the same time, it is incorrect to assume that concerns relating to the ultimate issue are irrelevant to admissibility.

Reference to theultimate issue is simply a compendious way of stating that if the question asked of the expert does go to an issue that must be determinedby the jury, the trial judge in deciding whether to allow it should especially bear in mind the dangers inherent in all expert opinionevidence, most importantly the risk of undue weight being given to the testimony. As Warner J. helpfully suggested in LunenburgIndustrial Foundry & Engineering Ltd. v.

Commercial Union Assurance Co. of Canada, “it is not an absolute exclusionary rule barringtestimony, but rather a rule that the closer the testimony gets to the ultimate issue, the stricter the court will apply the requirements ofrelevance and necessity before admitting it”. [102] When an expert opinion approaches or touches the ultimate issue to be determined, the court’s scrutiny of the expert opinion is heightened.

In Expert Evidence, 3rd ed (Markham: LexisNexis, 2014) (“Expert Evidence”), at §5.100 to §5.102, footnotes omitted, GlennR Anderson discusses several cases where the expert opinion was scrutinized more carefully because it approached or touched theultimate issue: The significance of an opinion on ultimate issue is the rigour of scrutiny. The J.(J.-L.) Court reiterated the Mohan direction that thecloser the evidence approaches an opinion on an ultimate issue the stricter the scrutiny.

The British Columbia Supreme Court, inMacEachern ... described the scrutiny as determining whether the proposed evidence was truly necessary and relevant: As noted at p. 24 of Mohan, there is no longer a rule of general application that otherwise admissible opinion evidence must be excludedif it touches on the ultimate issue. The degree to which an opinion relates to the ultimate issue is rather a consideration in determiningwhether the proposed evidence is truly necessary and relevant. [103] Mr.

DeSorcy stated the purpose of his report was to: ... provide an opinion as to whether ... natural gas that was in a gaseous state at original reservoir conditions ([non-solution] gas) waspresent and has been produced with heavy oil from the Waseca Sands in the Lower Mannville Group in the Frog Lake Area ... If it isconcluded that [non-solution] gas has been produced with heavy oil, [Mr. DeSorcy] was further requested to provide comments and anopinion as to the volumes of such gas that may have been produced. [Mr.

DeSorcy] was also asked to provide general comments on theimportance of good production practices and sound conservation principles in heavy oil pools, particularly where [non-solution] gas ispresent. ... [104] None of the areas of Mr. DeSorcy’s expert opinion are within the general knowledge of a lay person. The determination of theissues in this case requires the consideration of all of the expert evidence. While Mr.

DeSorcy has provided his opinion on the ultimateissue, it is not to displace the Court’s decision, but to provide his analysis, along with that of the other experts, including those called byCNRL, of the Waseca Formation. CNRL has challenged Mr. DeSorcy because he prepared a study of the Waseca Formation anddetermined that two bcf of non-solution gas was produced by CNRL. However, CNRL’s own experts have also undertaken studies andhave determined that, on the ultimate issue, there was no non-solution gas produced by CNRL. [105] I have already found that Mr. DeSorcy’s expert evidence is relevant.

With regard to necessity, I note Mr. DeSorcy opines on theultimate issue, as do other experts for both SRL and CNRL. However, I find that his expert evidence does not supplant this Court’s rolein determining the issues based on all of the evidence. There would be no point in Mr. DeSorcy providing an expert opinion with hisnumerous findings and not providing his conclusion based on his expertise, either to the existence of non-solution gas or the quantity ofit. On the face of it, I find that Mr. DeSorcy’s expert evidence is necessary, at the time when his evidence was entered and heard.

[ 106 ] However, as will be apparent from the remainder of this decision, Mr. DeSorcy’s evidence was not relied on by SRL as a scientific basis for its claim that there was non-solution gas in the Waseca Formation at Frog Lake in its undisturbed state, for which SRL relied on the opinion of Mr. Walker. Further, Mr. DeSorcy’s opinion was not relied on by SRL as a scientific basis for the quantity of non-solution gas produced by CNRL from the Waseca Formation at Frog Lake. In this sense, while Mr.

DeSorcy was an articulate and reliable witness, and his expert reports were clear and useful, his evidence was not necessary to SRL’s case, except to the extent that he spoke to matters that were not addressed by Mr. Collins and Mr. Walker, such as the regulatory framework. [ 107 ] As a result, I find that Mr. DeSorcy’s evidence was necessary, but only to the extent that it was not the subject of Mr. Collins’ and Mr. Walker’s respective expert opinions. This narrows the scope of the opinion evidence from Mr.

DeSorcy to: (1) the nature and quantification of subsurface hydrocarbons; and (2) the regulation of energy resources, including natural gas, oil, and bitumen in Alberta. [ 108 ] The evidence of other experts did not result in overlapping evidence in the manner that Mr. DeSorcy’s opinion evidence did with the evidence of Mr. Collins and Mr. Walker. As a result, I do not need to consider a claim of redundant evidence for the other experts. 3. Stage 1 third factor - exclusion under Rule 8.16(1) challenge [ 109 ] CNRL objected to the evidence of Mr.

DeSorcy on the basis of it being duplicative and therefore prohibited by Rule 8.16(1): Unless the Court otherwise permits, no more than one expert is permitted to give opinion evidence on any one subject on behalf of a party. [ 110 ] The limitation on the number of expert reports set out in Rule 8.16(1) is important.

A few years before he was put on trial in 1633 for his scientific beliefs and teachings, Galileo is reputed to have noted that, in matters of science, the authority of thousands is not worth the humble reasoning of one single person: see National Research Council 2011, Reference Manual on Scientific Evidence: Third Edition (Washington, DC: The National Academies Press, 2011) at pages 38 and 47. [ 111 ] Rule 8.16(1) precludes duplicative expert evidence, except when permitted by the Court.

I have no information as to whether CNRL raised this objection when expert reports were exchanged, which would be the natural time to have done so and would have been in accordance with Rule 5.36: 5.36(1) A party who receives an expert’s report must notify the party serving the report of (

a) any objection to the admissibility of the expert’s report that the party receiving the report intends to raise at trial, and (

b) the reasons for the objection.

(2) No objection to the admissibility of an expert’s report is permitted at trial unless (

a) reasonable notice of the objection was given to the other party, or (

b) the Court permits the objection to be made. [ 112 ] Rule 8.16(1) was not raised by CNRL until after all of the experts had testified, its Closing Brief had been submitted, oral argument had been made, and I had requested further submissions on the law relating to expert evidence. By that time, it was far too late to raise an objection to the expert evidence offered by SRL at trial and was contrary to Rule 5.36. [ 113 ] Under Rule 8.16(1), the party calling the opinion evidence has the opportunity to seek leave of the Court to present it, failing which, to adjust its case to account for its exclusion.

If the exclusionary rule is not raised in a timely fashion, then one party is stripped of its potential remedies. [ 114 ] A Rule 8.16(1) challenge should have been raised within a reasonable time of all of the expert reports having been exchanged, in accordance with Rule 5.36. Had leave of the C

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