Kudzin v APM Construction Services Inc, 2023 ABKB 425

Court of King’s Bench of Alberta Citation: Kudzin v APM Construction Services Inc, 2023 ABKB 425 Date: 20230718 Docket: 1701 08473 Registry: Calgary Between: Helen Ann Kudzin, Rischa Reynolds, Charles Reynolds, Toni Leblanc, Tim Heath, Andrew Ewan, Samantha Ewan, Judith Ewan, David Robert Palmer, Jenny Marie Palmer, Venita Sobering, John Montgomery, Eleanor McRory (Deceased) By Her Personal Representative John McRory, Lorna Kuhn, Dieter Kuhn, Alaric Fish, Roberta Fish, Scott Lee Egger, Janice Fong, Andrew Kirk, Nancy Kirk, Christian Hery, Veronique Hery, George Biggy, Theresa Biggy, Lindsey Madden, Brendan Madden, Brenda Lea Cook, Robert V.

Knowlden, Valerie C. Knowlden, Clifford Alexander White, Johanne Margaret Marie White, John Lloyd Gingles, Kathleen Louise Gingles, Katherine Scott, Theresa Zakli, Mike Zakli, David Graham, Victor George Batycki, Wendy Batycki (Deceased) by her Personal Representative, Jivan Maher, Rambha Maher, Wilmar Homes Ltd., Debra Loraine Reeve, Marie Antoinette Owen (Deceased), David William Owen, Carolyn E.

Kennedy, Larry Lehr, Lester Lehr, Eileen Lehr, John Doe I-IV, and Jane Doe I-IV Plaintiffs - and - APM Construction Services Inc., DCR Construction Inc., DCR Inc., David Rowe, Ground Zero Excavation, Ground Zero Grading Inc., ATCO Gas and Pipelines Ltd., ATCO Gas a division of ATCO Gas and Pipelines Ltd., Cam-Tel Communications Ltd.

O/A Cam-Tel Line Locating Ltd, Alberta One-Call Corporation, Alberta One-Call Location Corporation, Alberta Social Housing Corporation, The Alberta Social Housing Corporation a division of Alberta Seniors, His Majesty the King in Right of Alberta, Bow Valley Regional Housing, Alberta Network of Public Housing, the Town of Canmore, ABC Corp. Ltd., DEF Corp. Ltd., Dave Arbeau, Jerry Arbeau, Ben Arends, Andrew Pacaud, Kavon Sharifi, John Doe I and John Doe II Defendants [1] _______________________________________________________ Reasons for Decision of the Honourable Justice M.A.

Marion _______________________________________________________ Table of Contents I. ......... Introduction . 3 II. ....... Background and Issues Raised in the Pleadings . 4 A. The Claims . 4 B. DCR/Rowe’s Third Party Claim .. 6 C. APM’s Third Party Claim .. 7 D. The Contract Issues . 7 III. ...... Record . 7 IV. ...... Issues . 8

V. ....... Analysis . 10 A. Can the Neighbour Plaintiffs Rely on the PL Compendium? . 10 1. The Neighbour Plaintiffs May Rely on the Rowe Questioning . 10 2. The Neighbour Plaintiffs Cannot Rely on the Other Defendant Questioning . 11 3. The Neighbour Plaintiffs May Rely on the PL Selected Records Produced in the Actions For a Limited Purpose . 15 B. Can DCR/Rowe Rely on the J. Arbeau Questioning? . 17 C. Can DCR/Rowe Rely on the Selected Arends Questioning Excerpt? . 17 D. Can DCR/Rowe rely on the DCR/Rowe Supplemental Compendium? . 18 E.

Has DCR/Rowe Met the Burden to Show No Merit to the Claims and That there is No Genuine Issue Requiring a Trial? . 19 1. Is There No Merit to a Claim that DCR/Rowe are Vicariously Liable for the Actions of Ground Zero? . 19 2. Is there No Merit to a Direct Negligence Claims against DCR/Rowe? . 34 3. Is There No Merit to Nuisance, Trespass or Misrepresentation Claims? . 39 F. If DCR/Rowe Have Met the Burden, have the Plaintiffs Demonstrated a Genuine Issue Requiring a Trial? . 40 G.

Is it Possible to Fairly Resolve the Claims against DCR/Rowe and if so, is the Court Prepared to Exercise its Discretion to Do So? . 40 H. What is an Appropriate Order in this Case? . 43 VI. ...... Conclusion . 43 I. Introduction [ 1 ] On June 26, 2015, during the course of construction work to expand the Bow River Seniors Lodge in Canmore, Alberta ( Project ), an excavator struck and ruptured ( Rupture ) a live pressurized methane gas line ( Gas Line ) operated by ATCO, causing natural gas to escape.

An hour later, escaped natural gas ignited and an explosion ( Explosion ) occurred causing property damage at the site and on nearby properties. [ 2 ] The Explosion resulted in thirteen separate actions. In those actions there are over 90 different plaintiffs and over 20 defendants. There are numerous common parties and hundreds of pleadings, including numerous notices to co-defendants pursuant to rule 3.43 and several third party claims pursuant to rule 3.44.

By way of an October 2018 Consent Order ( Farrington Order ), the thirteen actions were ordered to proceed together as much as practicable, with common document production and questioning. One of the actions, started by the Town of Canmore, has been discontinued. [ 3 ] In December 2022, I was appointed case management judge in respect of the remaining twelve actions. In January 2023, at the request of the parties I directed the hearing of this

summary dismissal application ( Dismissal Application ) at a full-day special application. At the same time, I directed a separate special application ( Insurance Applications ) to deal with an Originating Application seeking a declaration of an insurer’s duty to defend claims made in relation to the Explosion, together with a cross-application to adjourn the Originating Application and have it heard concurrently or consecutively with the Dismissal Application pursuant to rule 3.72.

The parties have expressed a desire to have both Applications heard and decided quickly as there is a mediation scheduled for August 2023. [ 4 ] These are my Reasons in respect of the Dismissal Application, by which DCR Inc ( DCR ) and its principal David Rowe ( Rowe ) apply for

summary dismissal of eleven actions ( Actions ). The remaining action (Action Number 1701-03619 commenced by ATCO Gas and Pipelines Ltd. ( ATCO )) is not part of this application. [ 5 ] My Reasons in respect of the Insurance Applications have been prepared and published separately: Royal & Sun Alliance Insurance Company of Canada v Co-Operators General Insurance Company, 2023 ABKB 426 . [ 6 ] DCR/Rowe allege that there is no merit to the claims against them in the Statements of Claim in the Actions and that they should be summarily dismissed.

DCR/Rowe acknowledge that a third party claim filed against them in the Actions by the general contractor on the Project, APM Construction Services Inc ( APM ), is not ripe for

summary dismissal and is not included in the Dismissal Application. [ 7 ] The Dismissal Application is opposed by the plaintiffs in the Actions, including the owner of the Project, Alberta Social Housing Corporation ( ASHC ), and various other nearby property owners or their children ( Neighbour Plaintiffs ). APM also opposes the application. Other defendants, including the corporate employer of the operator of the excavator that struck the Gas Line, Ground Zero Grading Inc. ( Ground Zero ), did not participate or take any position on the application.

[ 8 ] The determination of this application requires an assessment of whether there is no merit to the claims made against DCR/Rowe, whether there are no genuine issues requiring a trial, and whether the court can fairly deal with those claims summarily on the admissible record before the court. [ 9 ] For the reasons set out below, DCR/Rowe’s Dismissal Application is dismissed. II. Background and Issues Raised in the Pleadings [ 10 ] It would be unwieldy to attempt to summarize all the pleadings in this matter. I have focused below on the key pleadings that are engaged in this application.

Even in doing so, I do not purport to precisely describe each and every key pleading in each of the Actions, but rather provide a general

summary of them to facilitate my analysis. A.

The Claims [ 11 ] The Actions were filed in 2017 and are comprised of: Action No. 1701-07303 ( Wollner Action ); Action No. 1701-07584 ( Lepper Parents Action ); Action No. 1701-08200 ( Lepper Children Action ); Action No. 1701-05276 (Hanna-Seed Action ); Action No. 1701-05277 ( Lazdowski Action ); Action No. 1701-08196 ( Palmer Action ); Action No. 1701-08473 ( Kudzin Action ); Action No. 1701-08528 ( ASHC Action ); Action No. 1701-08541 ( Pasemko Action ); Action No. 1701-08542 ( Hatley Action ); and Action No. 1706-00185, which was transferred to the Judicial Centre of Calgary and became Action No. 1801-16715 ( Cherak Action ). [ 12 ] Although there are many nuanced variations in the Statements of Claim, the general crux of the relevant claims in the Actions plead that ASHC was the owner of the relevant lands and the Project, that APM was the general contractor for the Project, that DCR and/or Ground Zero were subcontracted or did work in respect of earthworks and utilities work for the Project, and that an employee of one of these contractors caused the Rupture.

The Actions, or some of them, claim negligence, trespass, misrepresentation, and nuisance. In aggregate, the quantified claims involve at least approximately $15 million in damages. [ 13 ] In their brief, at paragraph 50, DCR/Rowe note that, while there are differences in how the various Actions particularize the allegations of negligence, DCR/Rowe have provided a

summary. While I should not be taken as adopting DCR/Rowe’s

summary as a full and complete account of all of the negligence claims or particulars of the claims made in all of the Actions, it is nonetheless a helpful

summary. DCR/Rowe’s

summary of the plaintiffs’ negligence claims includes: (

a) failing to warn nearby persons about the potential impact that the Project could have on their property; (

b) failing to safeguard nearby property and persons; (

c) failing to ensure that the plans for the Project met all regulations and guidelines; (

d) failing to take care in arranging for Ground Zero to perform the work; (

e) failing to properly train employees; (

f) allowing unqualified personnel to perform excavation work; (

g) failing to maintain proper equipment for the excavation work; (

h) failing to conduct hazard assessments; (

i) failing to ensure proper workplace safety practices were followed; (

j) failing to take proper or appropriate measures in performing excavation work at the Project; (

k) failing to follow ATCO’s requirements; (

l) failing to require that the Gas Line be hand-exposed; (

m) failing to inspect the area to be excavated regarding potential presence of gas lines; (

n) failing to supervise the excavation work; (

o) failing to excavate in a proper and workmanlike manner; and (

p) failing to warn persons that a Gas Line was struck. [ 14 ] DCR/Rowe’s Statements of Defence in the Actions generally allege, among other things, that (capitalization from original): (

a) APM was retained by ASHC to perform construction work on the Project; (

b) DCR submitted a bid to perform certain work on the Project with respect to Earthworks and Underground Utilities, as those scopes of Work are identified in the bid documents provided to DCR (the Work ); (

c) APM sent a letter of acceptance ( LOA ) to DCR with respect to an Earthworks Subcontract for the Project, which Rowe signed on behalf of DCR;

(

d) the LOA included Standard Purchase Order Terms and Conditions which reference that DCR’s contract may be with ASHC, not APM; (

e) the entire scope of the Work that DCR was originally anticipated to perform was performed by Ground Zero, not DCR; (

f) the Work and any contracts related thereto was assigned to, accepted by, and the subject of a novation of, Ground Zero; (

g) APM, ASHC and their consultants were aware at all material times that the entirety of the Work was being performed by Ground Zero; (

h) APM, ASHC and Ground Zero conducted themselves as accepting and agreeing that Ground Zero was solely responsible for the Work; (

i) on June 26, 2015, an APM employee, Jerry Arbeau ( J. Arbeau ) specifically instructed a Ground Zero employee, Ben Arends ( Arends ), to return to work after Ground Zero instructed its employees to stop work. J. Arbeau instructed Arends to conduct further earth works and, in the course of doing so, Arends caused the Rupture; and (

j) J. Arbeau and Arends were not employees, or under the direction and control, of DCR and Rowe. [ 15 ] In respect of the negligence claims, DCR/Rowe’s defence include allegations that: (

a) DCR/Rowe did not owe any duty of care to the plaintiffs; (

b) if DCR/Rowe owed a duty of care, they met the duty of care; (

c) if DCR/Rowe breached a duty of care, they did not cause the Rupture, the Explosion or any damages arising therefrom; and (

d) the plaintiffs did not suffer damages as alleged or at all, or have failed to mitigate their damages. Further, if the plaintiffs suffered damage, the damage was caused by other defendants in the action, including ATCO, Ground Zero (through Arends, Andrew Pacaud ( Pacaud ), Kavon Sharifi and Jason Middlemiss ( Middlemiss )(collectively the Ground Zero Individual Defendants ), and APM (through J. Arbeau and Dave Arbeau ( D.

Arbeau )(collectively the APM Individual Defendants ). [ 16 ] DCR/Rowe further defended on the basis that DCR/Rowe are not liable for the acts of ATCO, APM, Ground Zero or some of their respective employees, and that all DCR employees, agents, contractors and any other person and entity that DCR may be vicariously liable for were properly trained and qualified to perform all tasks required of them with respect to the Work. B.

DCR/Rowe’s Third Party Claim [ 17 ] In its third party claim against APM and the APM Individual Defendants, DCR/Rowe claim that APM and its employees breached contractual and common law obligations to DCR/Rowe to follow a “chain of command”, by ensuring instructions to Ground Zero workers flowed through Ground Zero’s on-site supervisor, and to supervise and coordinate the Work on the Project in a safe and responsible manner. DCR/Rowe plead that APM assumed liability for damages arising from J.

Arbeau’s instructions to Arends. [ 18 ] In its third party claim against Ground Zero and the Ground Zero Individual Defendants, DCR/Rowe claim that any DCR contractual obligations relating to the Project were assigned and novated to Ground Zero, or alternatively that Ground Zero was DCR’s subcontractor. Ground Zero and the Ground Zero Individual Defendants deny that DCR’s contractual obligations were assigned or novated to Ground Zero, but rather plead that Ground Zero was performing work in accordance with a verbal agreement with DCR.

DCR/Rowe claim that the Ground Zero Individual Defendants breached duties relating to ensuring safety of the Work, and the provision of information to, and the supervision and training of, Ground Zero personnel. C. APM’s Third Party Claim [ 19 ] In APM’s third party claim against DCR/Rowe, that is not the subject of the Dismissal Application, APM pleads that APM subcontracted with DCR to perform the Work and DCR breached that contract. In the alternative, APM pleads that DCR/Rowe assigned their contractual obligations to Ground Zero.

APM also claims against DCR/Rowe in negligence raising many similar allegations as raised by the plaintiffs against DCR/Rowe. [ 20 ] In its defence to APM’s third party claim, DCR/Rowe repeat many of the allegations they raised in their Statements of Defence. D. The Contract Issues [ 21 ] The pleadings in the Actions illustrate that important issues will involve the determination of the existence and terms of contractual relationships and obligations in respect of earthworks work for the Project, if any, amongst ASHC, APM, DCR and Ground Zero ( Contract Issues ).

For example, some of the pleadings disclose issues as to whether DCR contracted with APM or ASHC in respect of the Work, whether any contractual obligations of DCR were assigned to Ground Zero, whether Ground Zero was novated into any contract for the Work to replace DCR, whether Ground Zero was DCR’s subcontractor, agent or something else, or whether Ground Zero was subcontracted to, or working directly for, APM or ASHC at the time of the Rupture. [ 22 ] DCR/Rowe acknowledge that the Contract Issues raised in the APM third party claim and, as noted above, DCR’s defence thereto, are not ripe for

summary determination and that it does not seek

summary dismissal of APM’s third party claims.

III. Record [ 23 ] DCR/Rowe filed a 1,144-page Compendium of Evidence ( DCR/Rowe Compendium ) it asserted contained a complete evidentiary record for the Dismissal Application. The Compendium includes a May 18, 2022 affidavit of Rowe ( Rowe Affidavit ), a July 15, 2022 cross-examination of Rowe on his affidavit ( Rowe Cross ), an August 5, 2022 affidavit of D. Arbeau ( Arbeau Tort Affidavit ), a cross-examination of D.

Arbeau conducted on January 17, 2023 ( Arbeau Cross ), an August 5, 2022 affidavit of Middlemiss ( Middlemiss Affidavit ) and February 24, 2023 written questions and answers of Middlemiss respecting his affidavit ( Middlemiss Answers ). [ 24 ] The DCR/Rowe Compendium also includes excerpts of a 2019 questioning for discovery of J. Arbeau ( J. Arbeau Questioning ) pursuant to

Part 5 of the Alberta Rules of Court , Alta Reg 124/2010 ( Rules ) (

Part 5 questioning ) that DCR relies on against APM’s opposition to

summary dismissal. [ 25 ] In response to the Dismissal Application, the Neighbour Plaintiffs filed and sought to rely on their own 149-page Compendium of Evidence ( PL Compendium ). The PL Compendium included: (1) excerpts from

Part 5 questioning transcripts of Rowe [Tab 1] ( Rowe Questioning ); (2) excerpts from

Part 5 questioning transcripts of several individual witnesses as parties and employees or ex-employees of various corporate defendants, including Rowe, Middlemiss, Arends, J. Arbeau, and Duane Lamont [Tabs 2-5] ( Other Defendant Questioning ); and (3) certain records produced by parties in the Actions but not exhibited to any affidavit filed in the Actions [Tabs 6-22] ( PL Selected Records ). [ 26 ] DCR/Rowe object to the court’s admission or consideration of the entirety of the PL Compendium, other than the Rowe Questioning and an excerpt of the Arends

Part 5 questioning ( Selected Arends Questioning Excerpt ) that DCR/Rowe want to rely on. [ 27 ] In response to the PL Compendium, DCR/Rowe filed a 56-page Supplemental Compendium ( DCR/Rowe Supplemental Compendium ) which included, among other things, excerpts from the

Part 5 questioning of Middlemiss ( Middlemiss Questioning ) and numerous records produced by APM in the Actions ( APM Records ). IV. Issues [ 28 ] Rule 7.3(1)(

b) provides that a defendant may apply for

summary judgment in respect of all or part of a claim on the basis that there is no merit to a claim or part of it. [ 29 ]

Summary judgment cannot be granted if the application presents a genuine issue for trial: Hannam v Medicine Hat School District No. 76 , 2020 ABCA 343 at para 13 ; Clearbakk Energy Services Inc v Sunshine Oilsands Ltd , 2023 ABCA 96 at para 5 . [ 30 ] There will be no genuine issue requiring a trial when the judge is able to reach a fair and just determination on the merits on a motion for

summary judgment. This will be the case when the process (1) allows the judge to make the necessary findings of fact, (2) allows the judge to apply the law to the facts, and (3) is a proportionate, more expeditious and less expensive means to achieve a just result: Hryniak v Mauldin , 2014 SCC 7 at para 49 ; Weir-Jones Technical Services Incorporated v Purolator Courier Ltd , 2019 ABCA 49 at para 21 . [ 31 ] The proper approach to

summary dispositions in Alberta has been laid out by the Court of Appeal in Weir-Jones at para 47 (emphasis in original): [47] The proper approach to

summary dispositions, based on the Hryniak v Mauldin test, should follow the core principles relating to

summary dispositions, the standard of proof, the record, and fairness. The test must be predictable, consistent, and fair to both parties. The procedure and the outcome must be just, appropriate, and reasonable. The key considerations are: (

a) Having regard to the state of the record and the issues, is it possible to fairly resolve the dispute on a

summary basis, or do uncertainties in the facts, the record or the law reveal a genuine issue requiring a trial? (

b) Has the moving party met the burden on it to show that there is either “no merit” or “no defence” and that there is no genuine issue requiring a trial? At a threshold level the facts of the case must be proven on a balance of probabilities or the application will fail, but mere establishment of the facts to that standard is not a proxy for

summary adjudication. (

c) If the moving party has met its burden, the resisting party must put its best foot forward and demonstrate from the record that there is a genuine issue requiring a trial. This can occur by challenging the moving party’s case, by identifying a positive defence, by showing that a fair and just

summary disposition is not realistic, or by otherwise demonstrating that there is a genuine issue requiring a trial. If there is a genuine issue requiring a trial,

summary disposition is not available. (

d) In any event, the presiding judge must be left with sufficient confidence in the state of the record such that he or she is prepared to exercise the judicial discretion to summarily resolve the dispute. To repeat, the analysis does not have to proceed sequentially, or in any particular order. The presiding judge may determine, during any stage of the analysis, that

summary adjudication is inappropriate or potentially unfair because the record is unsuitable, the issues are not amenable to

summary disposition, a

summary disposition may not lead to a “just result”, or there is a genuine issue requiring a trial. [ 32 ] In this case, in order to determine whether

summary dismissal is appropriate I must determine the record before the court in light of the evidence relied on and the objections. [ 33 ] Accordingly, the issues or considerations in the Dismissal Application are:

(

a) Can the Neighbour Plaintiffs rely on some or all of the PL Compendium? (

b) Can DCR/Rowe rely on the J. Arbeau Questioning? (

c) Can DCR/Rowe rely on the Selected Arends Questioning Excerpt? (

d) Can DCR/Rowe rely on the DCR/Rowe Supplemental Compendium? (

e) Have DCR/Rowe met the burden to show that there is no merit to some or all of the plaintiffs’ claims, and that there is no genuine issue requiring a trial? (

f) If DCR/Rowe have met the burden, have the plaintiffs demonstrated from the record that there is a genuine issue requiring a trial? (

g) Is it possible to fairly resolve the claims against DCR/Rowe on a

summary basis and, if so, is the court prepared to exercise its judicial discretion to do so? (

h) What is an appropriate order in this case? V. Analysis A. Can the Neighbour Plaintiffs Rely on the PL Compendium? 1. The Neighbour Plaintiffs May Rely on the Rowe Questioning [ 34 ] Rule 5.31 provides: 5.31(1) Subject to rule 5.29, a party may use in support of an application or proceeding or at trial as against a party adverse in interest any of the evidence of that other party in a transcript of questioning under rule 5.17 or 5.18 and any of the evidence in the answers of that other party to written questions under rule 5.28.

(2) Evidence referred to in subrule (1) is evidence only of the questioning party who uses the transcript evidence or the answers to the written questions, and is evidence only against the party who was questioned.

(3) If only a portion of a transcript or a portion of the answers to the written questions is used, the Court may, on application, direct that all or each other portion of the transcript or answers also be used if all or any other portion is so connected with the portion used that it would or might be misleading not to use all or any other portion of the transcript or other answers. [ 35 ] Rule 6.11 provides that the written answers in

Part 5 questioning, that may be used under rule 5.31, is evidence that courts may consider when making a decision about an application. Specifically, Rule 6.11 provides: 6.11(1) When making a decision about an application the Court may consider only the following evidence: (

a) affidavit evidence, including an affidavit by an expert; (

b) a transcript of questioning under this Part; (

c) the written or oral answers, or both, to questions under

Part 5 that may be used under rule 5.31; (

d) an admissible record disclosed in an affidavit of records under rule 5.6; (

e) anything permitted by any other rule or by an enactment; (

f) evidence taken in any other action, but only if the party proposing to submit the evidence gives every other party written notice of that party’s intention 5 days or more before the application is scheduled to be heard or considered and obtains the Court’s permission to submit the evidence; (

g) with the Court’s permission, oral evidence, which, if permitted, must be given in the same manner as at trial. [ 36 ] The Rowe Questioning transcript is properly useable by the Neighbour Plaintiffs on the Dismissal Application because Rowe is a party and DCR’s corporate representative, DCR/Rowe are adverse in interest, and the Neighbour Plaintiffs seek to use that evidence against DCR/Rowe. DCR/Rowe acknowledge that the Rowe Questioning is admissible and useable. 2.

The Neighbour Plaintiffs Cannot Rely on the Other Defendant Questioning [ 37 ] DCR/Rowe object to the admission or use of the Other Defendant Questioning on several grounds: (1) it cannot be used because it is not permitted evidence under rule 6.11(1)(c); (2) it is inadmissible hearsay; and (3) it is unfair because it was filed late and not in accordance with the spirit of the procedural scheduling for the Dismissal Application. a. Rule 6.11(1)(

c) and

Part 5 Questioning Transcripts [ 38 ] DCR/Rowe argue that the Neighbour Plaintiffs cannot rely on rule 6.11(1)(

c) to use the Other Defendant Questioning because

those transcripts cannot be used under rule 5.31. The Neighbour Plaintiffs argue that rule 6.11 applies and they can use the transcripts. [ 39 ] Rule 6.11(1)(

c) provides that

Part 5 questioning may be used in an application if the answers “may be used under rule 5.31”. [ 40 ] Rule 5.31 is clear that evidence given by a party in

Part 5 questioning is only admissible in evidence under rule 5.31 as against that party but is inadmissible against any other party whether on the same side or not: rule 5.31(2); Waquan v Canada , 2002 ABCA 110 at para 17 ; Syncrude Canada v Canadian Bechtel Limited , 1994 ABCA 35 at para 5 ; Spady v Spady Estate , 2022 ABQB 591 at para 62 ; Cicalese v SSMPG Integrating Services Inc , 2020 ABQB 605 at para 187 . [ 41 ] One of the purposes of

Part 5 questioning, and the specific purpose of rule 5.31, is to allow a party to get admissions against adverse parties that can be used against the admitting party at trial or on an application without having to otherwise prove those admissions: Samsports.Com Inc v Canada Revenue Agency , 2007 ABCA 151 at para 19 ; Cana Construction Co Ltd v Calgary Centre for Performing Arts , 1986 ABCA 175 at para 5 ; Alberta-Pacific Forest Industries Inc v Ingersoll-Rand Canada Inc , 2002 ABQB 791 at para 25 , citing Mikisew Cree First Nation v Canada et al , 2000 ABQB 485 .

The rule limiting the use of the admissions is in place because it is unfair to put into evidence against a person an admission by a different person: Syncrude Canada at para 10 ; Rallon v Fort McMurray (Hamlet) , 2006 ABCA 58 at para 7 . [ 42 ] There has been some uncertainty about whether rule 5.31 can be relaxed in the context of a

summary judgment application. In Condominium Plan 9320022 v ACTA General Inc , 2004 ABQB 932 , a respondent argued that the general rule should not apply in a

summary judgment application, relying on Pete v Terrace Regional Health Care Society , 2003 BCCA 226 at para 12 . In Pete , the British Columbia Court of Appeal held, in the context of

summary trials, that the general rule did not prevent discovery transcripts from being used to apprise the chambers judge of the existence of evidence to demonstrate that it would be unjust to decide the issues summarily: Pete at para 12 . The logic in Pete continues to apply in British Columbia: see e.g.

Mikhail v Northern Health Authority (Prince George Regional Hospital) , 2010 BCSC 1817 at para 91–92 ; Everest Canadian Properties Ltd v Mallmann , 2007 BCSC 311 ; Gill v Fraser Health Authority , 2022 BCSC 1553 at para 8 ; Ari v Insurance Corporation of British Columbia , 2022 BCSC 1475 at para 16 ; Reilly v Bissonnette , 2008 BCCA 167 at paras 45–46 ; Global Pacific Concepts Inc v The Owners, Strata Plan NW 141 , 2013 BCSC 2190 at paras 18–23 .

However, the Court in Condomimum Plan 9320022 at para 23 described the argument that the general rule should be relaxed in Alberta as an “interesting argument” that did not need to be decided in that case. [ 43 ] In Kent v Martin , 2012 ABQB 507 , Justice Tilleman did not allow a party to use

Part 5 questioning from one defendant against another defendant in the context of an interim injunction. The party seeking to rely on the questioning proposed that it was not using the statements to prove the truth of their contents, but only to prove that they were made. Justice Tilleman rejected that argument, at para 25: I appreciate the distinction that the Plaintiff is attempting to make, but in the end what the Plaintiff seeks is to use evidence given in the questioning of some defendants in an application against other defendants, contrary to express provisions of Rules 5.31(2) and 6.11(1)(c).

Distinguishing between statements admitted for the truth of the contents therein and statements admitted as proof that the statement was made is sometimes necessary when considering the rule against hearsay, and even then it can be a difficult distinction. But there is nothing in Rules 5.31 or 6.11 that would suggest that this is a permissible distinction when determining whether evidence from questioning may be admitted. [ 44 ] In CCS Corporation v Secure Energy Services Inc , 2013 ABQB 34 [ CCS QB ], Chief Justice Wittmann (as he then was) also took a different approach than in Pete .

He held that a party responding to a

summary judgment application cannot use

Part 5 questioning from other parties for other purposes, including to raise triable issues. The party seeking to use the transcripts relied on, among other things, rule 6.11. Wittmann CJ said, at para 29 (emphasis added): [29] I cannot accept the argument of CCS that answers during the Questioning of a witness, under

Part 5, conceded to be evidence only against the party questioned, once admitted, is evidence on the application and can be used for other purposes. That is the substance of CCS’s position. It is to be remembered that the expression of the rule in ARC 5.31 and our Court of Appeal’s statement in Mikisew referred to above, must be considered to be all encompassing.

That is to say, one cannot be permitted to “back door” evidence by saying we agree that when I read in answers to questions, it is evidence only against the party giving the answers and against no one else, but once it is before the Court, the Court can in effect use it to decide whether there is a triable issue. So, reading in the answers to the Questioning of witnesses pursuant to

Part 5, other than Pembina witnesses, will not be allowed as part of the Application Record . On this application, the Court is not concerned with the evidence against Secure or the Secure defendants. It is only concerned with evidence against Pembina. [ 45 ] CCS QB was upheld on appeal: CCS Corporation v Pembina Pipeline Corporation , 2014 ABCA 390 [ CCS CA ]. However, the Court of Appeal decision cast doubt on Wittmann CJ’s conclusions on the use of

Part 5 questioning in response to a

summary judgment application. First, in deciding the appeal the majority reviewed all the evidence regardless of whether it had been held admissible or not, and noted at para 87 that, as a result, whether some of the objected-to evidence was legally admissible became academic. Second, in his concurring reasons, Justice Slatter noted that it was not necessary to resolve certain issues and that the dismissal of the appeal should not be taken as necessarily endorsing the conclusions in CCS QB : CCS CA at para 92 . [ 46 ] Since CCS CA , at least one Alberta superior court has refused to allow a party to use

Part 5 questioning of witnesses from one party against another party: Proline Pipe Equipment Inc v Provincial Rentals Ltd , 2019 ABQB 983 at paras 26–30 . The Court held that the evidence could not be used for “narrative” purposes or otherwise: para 30. Recently the Alberta Court of Justice reached a similar conclusion in Burkhardt v Smith , 2023 ABPC 63 at para 58 . See also First Capital Holdings (Alb) Corporation v Metropolitan Ventures Inc , 2015 ABQB 54 at para 58 . [ 47 ] In Ontario, courts have recently been more flexible in the use of discovery transcripts in the context of

summary judgment motions, including by a plaintiff seeking to avoid

summary dismissal in circumstances similar to this case: Kolosov v Lowe’s , 2015 ONSC 4761 at paras 75-104 ; Bonello v Gores Landing Marina

(1986) Limited , 2017 ONCA 632 at paras 25–29 . However, as was pointed out in Yara Belle Plaine Inc v Ingersoll-Rand Company , 2019 SKQB 90 at para 23 , the Ontario Court of Appeal’s decision in

Bonello relied on the fact that the Ontario Rules of Civil Procedure had a more flexible rule for use of discovery transcripts on a motion versus at trial (Ontario Rules of Procedure rule 39.04 versus rule 39.11). In contrast, in Alberta, the use of a questioning transcript on an application under rule 6.11(1)(

c) is directly linked to the same requirements as rule 5.31. [ 48 ] Rule 6.11(1) restricts the evidence a court can consider on an application. Courts “may consider only” the listed forms of evidence. The rule does not distinguish between different types of applications. Rule 6.11(1)(

c) expressly provides that

Part 5 questioning can be used if it is evidence that “may be used” under rule 5.31. In turn, rule 5.31(1) provides that a party may use “in support of an application or proceeding ... as against a party adverse in interest any of the evidence of that other party in a transcript of questioning under rule 5.17 ...”. Rule 5.31(2) provides that “[e]vidence referred to in subrule (1) is evidence only of the questioning party who uses the transcript evidence ... and is evidence only against the party who was questioned”. [ 49 ] I agree with the

interpretation of these rules that, absent agreement of the parties involved, party A cannot seek to admit, as part of its case,

Part 5 questioning evidence of a party adverse in interest (party

B) against another party in the action (party C), whether in trial or in an application (including a

summary process) regardless of whether party C is adverse or not. There may be exceptions to this, for example if the witness is no longer available, but no such exceptions have been suggested here. [ 50 ] The Neighbour Plaintiffs argued that they have no other way to get the Other Defendant Questioning evidence before the court. With respect, that is incorrect.

Rule 6.8 allows for the questioning of a person for the purpose of obtaining a transcript of that person’s evidence for use at the hearing of an application, and the transcript of that questioning is filed and available to be used on the application under rule 6.11(1)(b). Rule 6.8 may be used to question parties or individuals (including employees or former employees of parties): Guillevin International Co v Barry , 2022 ABCA 144 at paras 34–35 ; Gow Estate (Re) , 2021 ABQB 305 at paras 13–16 . [ 51 ] In the context of

summary judgment/dismissal applications, this

interpretation of rules 6.11(1)(

c) and 5.31 is consistent with the obligation of parties to put their best foot forward: CCS CA at para 56 ; Weir-Jones at para 37; Canada (Attorney General) v Lameman , 2008 SCC 14 at para 11 [ Lameman ]. [ 52 ] However, as has been recognized in Ontario, such a technical approach could cause delays and increased costs as responding parties use potentially duplicative other ways, for example pursuant to rule 6.8, to put the same evidence before the court. I have some sympathy for that concern, and it may make sense for rule 6.11(1)(

c) to be reconsidered in the future or for parties to agree to a more flexible use of transcripts. But unlike the Ontario Court in Kolosov , I cannot characterize the Neighbour Plaintiffs’ attempt to use the questioning transcript as only a procedural non-compliance that is correctible under rule 1.5. Rule 1.5 should not be used to effectively amend the Rules or to override mandatory or limiting provisions like rule 6.11: see e.g. Kwadrans v Kwadrans , 2023 ABCA 203 at para 35 ; Klein v Wolbeck , 2016 ABQB 28 at para 20 .

A material change to the fundamentals of adducing evidence on applications should be the subject of an express provision of the rules: CCS QB at para 25 . In my view, an amendment to the Rules to expand rule 6.11(1)(

c) would be required to allow the Neighbour Plaintiffs to rely on the Other Defendant Questioning in the way they have attempted. [ 53 ] In conclusion, the Neighbour Plaintiffs are not entitled to rely on the Other Defendant Questioning pursuant to rule 6.11(1)(

c) in the Dismissal Application. It is not admitted. b. Hearsay Exception [ 54 ] The Neighbour Plaintiffs suggested that the Other Defendant Questioning was admissible as a principled exception to hearsay. DCR/Rowe object to it as inadmissible hearsay. The Neighbour Plaintiffs’ arguments are not persuasive. [ 55 ] The Neighbour Plaintiffs did not adduce an affidavit and attempt to rely on facts in the Other Defendant Questioning as hearsay pursuant to rule 13.18.

As a result, the Other Defendant Questioning does not fit into one of the types of evidence that the court may review on an application under rule 6.11(1). Accordingly, the “open questions” noted by Justice Slatter, in CCS CA at para 94 (set out below), about the ability of an affiant to review questioning testimony and records and provide hearsay evidence about them as information and belief, are not engaged here (emphasis added): [94] Further, R 13.18 permits the use for some purposes of hearsay found in affidavits based on information and belief, so long as the source of the information is disclosed.

It remains an open question whether an affiant can depose to belief in a fact, and give as the source of that belief: (

a) the fact that a witness gave testimony to that effect, under oath, during questioning, notwithstanding that the party tendering the affidavit could not read in that questioning except against the party being questioned , or (

b) that the fact is disclosed in, or based on, a document listed in the affidavit of records of one of the parties, even though the affiant does not have personal knowledge of the contents of the document. [ 56 ] In addition to the Other Defendant Questioning not falling within one of the types of evidence that can be considered on an application under rule 6.11(1), the Neighbour Plaintiffs have not established that the transcripts would be admissible under a principled exception to hearsay in any event.

Hearsay may be admitted into evidence under the principled exception when it meets the necessity and threshold reliability criteria: R v Philip , 2022 ABCA 39 at para 22 , citing R v Bradshaw , 2017 SCC 35 at para 1 . The Neighbour Plaintiffs do not meet the necessity requirement since they could have used rule 6.8 to effectively call those witnesses to testify: Bruen v University of Calgary , 2019 ABCA 211 at para 30 . c. Procedural Fairness [ 57 ] Given my conclusions above, I do not need to decide DCR/Rowe’s procedural fairness argument.

I only note in passing that DCR/Rowe did not seek an adjournment of the Dismissal Application to address the Other Defendant Questioning, but rather took the opportunity to file response evidence in case the Other Defendant Questioning was admitted. Had I admitted the Other Defendant Questioning, I would have found that DCR/Rowe had a reasonable opportunity to respond to the Other Defendant Questioning.

DCR/Rowe did not suggest other evidence it would have adduced, or steps it would have taken, if the PL Compendium had been provided earlier. d. Conclusion re Other Defendant Questioning [ 58 ] Based on the foregoing, I have not considered the Other Defendant Questioning on the Dismissal Application. 3.

The Neighbour Plaintiffs May Rely on the PL Selected Records Produced in the Actions For a Limited Purpose [ 59 ] Some of the records in the PL Compendium are also in the DCR/Rowe Compendium and are therefore not objectionable and may be used in the Dismissal Application. [ 60 ] However, some of the PL Selected Records are records disclosed by the parties in Affidavits of Records and produced in the Actions, but which are not exhibits to admissible questioning transcripts or otherwise included as part of an affidavit. The raises a question about the scope and application of rule 6.11(1)(d). [ 61 ] Rule 6.11(1)(

d) provides that, when making a decision about an application the court may consider “an admissible record disclosed in an affidavit of records under rule 5.6”. [ 62 ] In CCS QB , Chief Justice Wittmann rejected an attempt by a party to use rule 6.11(1)(

d) to adduce records as proof of the truth of the contents of the record. In that case, it was not an issue of authenticity or whether the documents were transmitted as indicated by the sender to the receiver and received by the receiver. [ 63 ] In CCS CA , Justice Slatter, after indicating that the Court of Appeal was not necessarily endorsing all the conclusions in CCS QB , stated at para 93 : For example, R 6.11(1)(

d) permits use on an application of “an admissible record disclosed in an affidavit of records”. This provision is clearly intended to permit the use of something, and it remains an open question whether it merely repeats the presumptions of authenticity found in R 5.15. [ 64 ] Since CCS CA , two Masters (as they were then known) have reviewed records produced in affidavits of records for “non- hearsay purposes”, but not for the truth of their contents: First Capital Holdings at paras 49–51, 100; 1490703 Alberta Ltd v Chahal , 2020 ABQB 33 at paras 70–73 . 1490703 was affirmed in 2021 ABQB 495 )but rule 6.11(1)(

d) was not addressed). [ 65 ] Rule 5.15(2) provides that a party who makes an affidavit of records or on whose behalf an affidavit of records is filed and a party on whom an affidavit of records is served are both “presumed to admit” that (

a) a record specified or referred to in the affidavit is authentic and (

b) if a record purports or appears to have been transmitted, the original was sent by the sender and was received by the addressee. The meaning of “authentic” includes that a document that is said to be an original was printed, written, signed or executed as it purports to have been, and a document that is said to be a copy is a true copy of the original: rule 5.15(1). It also includes that a record is what it purports to be and is not a forgery: Waquan at para 21; Canadian Natural Resources Limited v Wood Group Mustang (Canada) Inc (IMV Projects Inc) , 2017 ABQB 106 at para 446 , rev’d in

part 2018 ABCA 305 . [ 66 ] The rule 5.15(2) presumptions have exceptions. It does not apply if the maker or recipient of the affidavit of records objects in accordance with rule 5.15(4). Further, it does not prejudice the right of a party to object to the admission of the record in evidence and does not constitute an agreement or acknowledgment that the record is relevant and material: rule 5.15(3). It does not apply if the authenticity, receipt or transmission has been denied by a party in a pleading: rule 5.15(6).

And the court maintains a discretion to order that the presumption does not apply: rule 5.15(5). [ 67 ] In my view, the purpose of rule 5.15 is to foster efficiency, consistent with rule 1.2, by creating certain presumed admissions about records so that parties do not need to unnecessarily waste time proving the authenticity of records or that they were sent and received as indicated. In my view, rule 6.11(1)(

d) then provides a method by which the court may admit, in an application, the records that are subject to those admissions. In my view, the reference to “an admissible record” is a reference to the fact that the court must still admit the record into evidence. In my view, if one of the above-noted exceptions to the presumption applies, or if the presumptions are otherwise rebutted, then the record is not “admissible” under rule 6.11(1)(

d) and it would not be enough to simply rely on the record. Further, the court may decide the record is not admissible for other reasons, for example if it is not relevant or is privileged. But if the exceptions do not apply, the presumptions are not rebutted, and the record are otherwise admissible, then the records subject to the rule 5.15(2) admissions are admissible records that may be relied on by parties, and considered by the court, on an application under rule 6.11(1)(d). [ 68 ] However, to be clear, records admitted into evidence under 6.11(1)(

d) are not admitted for all purposes — at best they are only admitted as authentic records that are true copies of the original, that are what they purport to be, and which were transmitted and received as they purport or appear to have been. They are not admitted to prove the truth of the their contents: Canadian Natural Resources Limited at para 446. [ 69 ] The parties acknowledged that the PL Selected Records were disclosed in affidavits of records and produced in the Actions.

There were no objections to the admission of the records in the PL Compendium on the basis that one of the exceptions to rule 5.15(2) applied and the rule 5.15(2) presumptions were not rebutted. Therefore, the records in the PL Compendium, unless otherwise proven elsewhere in the admissible record, are admissible only for the purposes of proving they are authentic records sent and received on or about the time they appear to have been transmitted. They are not admissible as proof of the truth of their contents.

I have only reviewed the PL Selected Records for this limited purpose (unless they are otherwise proven). [ 70 ] In case I am wrong, I have considered whether, if I had completely excluded the PL Selected Records, it would have changed

my decision on the Dismissal Application. It would not have changed my decision. B. Can DCR/Rowe Rely on the J. Arbeau Questioning? [ 71 ] As noted above, the DCR/Rowe Compendium includes an excerpt from the J. Arbeau Questioning conducted under

Part 5 of the Rules . I have been advised that APM has acknowledged his evidence as some of APM’s information. For the reasons noted above, DCR/Rowe is only entitled to rely on that transcript as evidence against APM. However, it does not become evidence at large and DCR/Rowe cannot rely on it as evidence as against the plaintiffs to support

summary dismissal of the claims, including as referenced at paragraph 222 of DCR/Rowe’s Brief. I have not considered the J. Arbeau Questioning as against the plaintiffs. [ 72 ] In case I am wrong, I have considered whether, if I had admitted the J. Arbeau Questioning against the plaintiffs, it would have changed my decision on the Dismissal Application. It would not have changed my decision. C.

Can DCR/Rowe Rely on the Selected Arends Questioning Excerpt? [ 73 ] DCR/Rowe asserted that it is entitled to rely on the Selected Arends Questioning Excerpt because it is against the interests of the Neighbour Plaintiffs and because the Neighbour Plaintiffs’ counsel was the “agent” of the Neighbour Plaintiffs in adducing the evidence. DCR/Rowe provided no specific authority for their position, instead relying on an excerpt from an evidence text in oral argument.

None of the excerpts from the evidence text dealt with alleged admissions made by counsel in seeking to adduce objected-to evidence. [ 74 ] I reject DCR/Rowe’s position. It seeks to exclude the Other Defendant Questioning, except specific components that are presumably helpful to DCR/Rowe’s position on the Dismissal Application.

DCR/Rowe’s position, taken to its logical conclusion, could lead to unfairness and absurd results, as it would mean that any time a party seeks to admit objected-to evidence, the opposite party could challenge the admissibility of that evidence but then turn around and cherry-pick and rely on aspects it likes as admissions made by counsel. [ 75 ] I have already found the Neighbour Plaintiffs cannot rely on the Other Defendant Questioning under rule 6.11(1)(c).

For the same reasons, it cannot be used by DCR/Rowe against the plaintiffs absent agreement or DCR/Rowe otherwise establishing it is admissible under rule 6.11(1). DCR/Rowe have not established agreement or that they can admit it under rule 6.11(1). Therefore, DCR/Rowe cannot rely on the Selected Arends Questioning Excerpt, including as referenced at para 63 of their Reply Brief. [ 76 ] In case I am wrong, I have considered the Selected Arends Questioning Excerpt to determine if it would change my conclusions on the Dismissal Application if I admitted it. It would not have changed my decision. D.

Can DCR/Rowe rely on the DCR/Rowe Supplemental Compendium? [ 77 ] DCR/Rowe included the complete copy of the Middlemiss Answers in their Supplemental Compendium to correct a minor omission in the version in their original Compendium.

This is not objected to and is admissible. [ 78 ] The rest of the DCR/Rowe Supplemental Compendium was filed in response to the PL Compendium. [ 79 ] Given my conclusion about the inadmissibility of the Other Defendant Questioning, I have not found it necessary or appropriate to refer to the correspondence amongst counsel (Tab 6) as they are not included in an affidavit and nobody has suggested they were produced in an affidavit of records or admitted by agreement. [ 80 ] For the same reasons noted above for the PL Compendium, the Middlemiss Questioning transcript is not useable by DCR/Rowe or useable in this application.

Further, for the same reasons as above, the APM Records at Tabs 8-19 of the DCR/Supplemental Compendium are admissible pursuant to rule 6.11(1)(

d) only for the purposes of proving they are authentic records sent and received on or about the time they appear to have been transmitted. They are not admissible as proof of the truth of their contents. [ 81 ] In case I am wrong, I have considered whether my decision would be different if I admitted and allowed DCR/Rowe to rely on all the materials in the DCR/Rowe Supplemental Compendium as some proof of the truth of their contents. It would not have changed my decision. E. Has DCR/Rowe Met the Burden to Show No Merit to the Claims and That there is No Genuine Issue Requiring a Trial? [ 82 ] In Weir-Jones , the Court of Appeal described the threshold burden upon an applicant for

summary judgment at paras 32–33 (emphasis added): [32] A notable aspect of

summary judgment applications is that there is no symmetry of burdens. The party moving for

summary judgment must, at the threshold stage, prove the factual elements of its case on a balance of probabilities, and that there is no genuine issue requiring a trial . If the plaintiff is the moving party, it must prove “no defence”. If the defendant is the moving party, it must prove “no merit” . The resisting party need not prove the opposite in order to send the matter to trial. The party resisting

summary judgment need only demonstrate that the record, the facts, or the law preclude a fair disposition, or, in other words, that the moving party has failed to establish there is no genuine issue requiring a trial : see para. 35, infra . [33] The threshold burden on the moving party with respect to the factual basis of a

summary judgment application is

therefore proof on a balance of probabilities. If the moving party cannot meet that standard,

summary judgment is simply notavailable. On the other hand, merely establishing the factual record on a balance of probabilities is not sufficient to obtain

summaryjudgment, because proof of the facts does not determine whether the moving party has also proven that there is no “genuine issuerequiring a trial”. Imposing standards like “high likelihood of success”, “obvious”, or “unassailable” is, however, unjustified. Adisposition does not have to be “obvious”, “beyond doubt” or “highly likely” to be fair. [83] In argument, the parties addressed claims that DCR/Rowe are vicariously liable for the negligence of Ground Zero/Arends, orthat DCR/Rowe are directly liable in negligence.

Some of the Actions also plead misrepresentation, trespass and nuisance, but thosewere not addressed in argument before me. I will focus my analysis on vicarious liability and direct negligence, and addressmisrepresentation, trespass, and nuisance if I find it necessary or appropriate to do so. 1. Is There No Merit to a Claim that DCR/Rowe are Vicariously Liable for the Actions of GroundZero? [84] Vicarious liability is not a distinct tort.

It is a theory that holds one person responsible for the misconduct of another becauseof the relationship between them: 671122 Ontario Ltd v Sagaz Industries Canada Inc, 2001 SCC 59 at para 25.

It is a species of strictliability because it requires no proof of personal wrongdoing on the part of the person subject of it: 671122 Ontario at para 26. [85] Vicarious liability is based on the rationale that the person who puts a risky enterprise into the community may fairly be heldresponsible when those risks emerge and cause loss or injury to members of the public: John Doe v Bennett, 2004 SCC 17 at para 20[Bennett]; Jacobi v Griffiths, [1999] 2 SCR 570 at para 67, (SCC); KLB v British Columbia, 2003 SCC 51 at para 18;Bazley v Curry, [1999] 2 SCR 534 at paras 30–31, (SCC); Heikkila v Apex Land Corporation, 2016 ABCA 126 atpara 21 [Apex].

Its policy rationales include effective compensation and deterrence of future harm: Bennett at para 20. [86] In Fullowka v Pinkerton's of Canada Ltd, 2010 SCC 5, the Supreme Court of Canada set out the framework for determiningwhether vicarious liability should be imposed, at para 142: The question of whether vicarious liability should be imposed is approached in three steps. First, the court determines whether the issueis unambiguously determined by the precedents. If not, a further two-part analysis is used to determine if vicarious liability should beimposed in light of its broader policy rationales: Bazley v.

Curry, (SCC), [1999] 2 S.C.R. 534, at para. 15; John Doe v.Bennett, 2004 SCC 17, [2004] 1 S.C.R. 436, at para. 20. The plaintiff must show that the relationship between the tortfeasor and theperson against whom liability is sought is sufficiently close and that the wrongful act is sufficiently connected to the conduct authorizedby the party against whom liability is sought: Bennett, at para. 20.

The object of the analysis is to determine whether imposition ofvicarious liability in a particular case will serve the goals of doing so: imposing liability for risks which the enterprise creates or to whichit contributes, encouraging reduction of risk and providing fair and effective compensation: Bennett, at para. 20. [87] The parties spent significant energy in arguing the line of “inherently dangerous” cases, which addresses when a contractorcan be liable for its subcontractor’s negligence.

The parties argued this issue based on the existing precedents, and nobody suggested thata two-stage policy-based analysis as set out above in Fullowka at para 142 was appropriate. [88] Accordingly, below I assess DCR/Rowe’s potential vicarious liability on the assumption the Contract Issues are resolved onthe basis that Ground Zero is held to be DCR’s subcontractor. After that, I will consider the potential vicarious liability claims in theevent the Contract Issues are determined in such a way that Ground Zero is held not be DCR/Rowe’s subcontractor but something else. a.

Is There No Merit to a Vicarious Liability Claim if Ground Zero is a Subcontractor? [89] The potential for vicarious liability for subcontractor negligence has been the subject of significant judicial consideration inCanada dating back well over a century. [90] The general rule is that someone who employs an independent contractor is not responsible for the negligence of thatsubcontractor unless the work is inherently dangerous: City of St John v Donald, [1926] SCR 371 at 383, (SCC);Savage v Wilby, [1954] SCR 376 at 379, (SCC); Lamont Health Care Centre v Delnor Construction Ltd, 2003 ABQB998 at para 57; Apex at para 33; Condominium Corporation No 9813678 v Statesman Corporation, 2009 ABQB 493 [Statesman QB],affirmed 2012 ABCA 265 [Statesman CA], leave to appeal to SCC refused, 32254 (31 January 2008). [91] The corollary is that where a party undertakes to do something that is dangerous and is bound to result in damage if donenegligently, delegation of the task to an independent contractor will not exempt the one who delegates that task from liability should thecontractor to whom the task is delegated perform the task negligently, thereby causing the kind of damage that is to be expected: Lamont at para 157, citing GHL Fridman, The Law of Torts in Canada, 2nd ed (Toronto, Ont: Carswell, 2002)[Fridman] at p 312; Savage at 379.The duty of the first party is sometimes referred to as a non-delegable duty: Apex at para 16; Lewis (Guardian ad litem of) v BritishColumbia, [1997] 3 SCR 1145 at paras 49–51, (SCC); Statesman QB at para 170; Statesman CA at para 3; Evans vKuvaja, 2007 ABPC 304 at para 17. [92] The determination of the Contract Issues will decide whether DCR undertook, or continued to be liable, to conduct the Work.However, DCR/Rowe argue that, even if the Contract Issues are not decided in its favour, and it is decided that Ground Zero was DCR’ssubcontractor, there is still no merit to any claim that they are vicariously liable for Ground Zero or Arends’ conduct.

DCR/Rowe arguethat the work being done by Ground Zero/Arends at the time of the Rupture: (1) was not inherently dangerous; (2) was collateral to ornot within the scope of the LOA; and (3) was done without DCR/Rowe’s sufficient knowledge or control. DCR/Rowe argue that each ofthese arguments take it outside the principles of vicarious liability for inherently dangerous work conducted by a subcontractor. I addressthese arguments below. i. Was the Work Being Conducted by Ground Zero / Arends at the Time of the Rupture Inherently Dangerous?

[93] Work is not inherently dangerous just because it, if done in a negligent manner, may have dangerous implications, as thatwould involve circular reasoning and cover almost all significant physical work being performed by subcontractors on a constructionsite: Apex at para 35. In my view, it is also insufficient for a party arguing that work is not inherently dangerous to show that the workcould be done safely and without dangerous repercussions, as that too would cover virtually everything done on a construction site. [94] Whether work is inherently dangerous will depend on the circumstances of the case.

Factors that suggest that work isinherently dangerous include if it is dangerous even if carried out with care and in the usual manner: Kerrybrooke Development Ltd andSimpsons-Sears Ltd v Ellis-Don Ltd, Westeel-Rosco Ltd et al, (SKKB)[Kerrybrooke KB], aff’d(SKCA), aff’d [1990] 1 SCR 275, (SCC); Eisert v Martin (Rural Municipality), (SKCA).

Further,work may be inherently dangerous if it is of such a nature that, if the employer were doing the work itself, the duty to take specialprecautions would be indisputable: City of St John at 383; Savage at 380. [95] DCR and Ground Zero were aware of the Gas Line in the vicinity of the Project.

However, there is limited and unclearevidence in the admissible record before the court as to what precise work was being conducted by Arends at the time of the Rupture.The evidence is from the Middlemiss Answers, which confirmed that Arends was instructed to “build a ramp from ground level downinto an excavated trench at which footings for the new part of the Bow River Seniors Lodge ... were being constructed, so that thetrenches could be compacted”, and then Arends used an excavator and snagged the Gas Line causing the Rupture. [96] DCR/Rowe argue that building a ramp, or excavating and digging ditches, is not inherently dangerous, without more.

Theyrely on several cases involving fires or damage to power lines, all of which I find are distinguishable, not applicable, or do not otherwiseassist DCR/Rowe in the way they argued. [97] In Kerrybrooke KB, in the course of conducting repairs to a roof damaged by a storm, a contractor left mops and tar on awarehouse roof which caused a fire that caused damage to the warehouse. The Court held that the tarring operation was not, in itself,inherently dangerous provided it was carried out with due care and in the usual manner, and the contractor was not liable for thesubcontractor’s negligence.

This case is of limited utility, since tarring of a roof is significantly different than industrial earthworksexcavation in the vicinity of a buried natural gas line. Further, Kerrybrooke KB was decided after a trial and there was some evidence asto the usual manner of conducting the work in the form of a roofing manual.

There is little evidence before me as to the usual manner ofconducting an earthworks excavation, or ramp construction, in the vicinity of a buried natural gas line, beyond regulated safety coderequirements. [98] In Wall v Apollo Roofing & Builders Ltd, (MB CA), 1972 CarswellMan 126, 28 DLR (3d) 636, theManitoba Court of Appeal decided the question of whether a contractor was liable for the negligence of a roofing contractor thatallegedly used a blowtorch or soldering iron to remove a downspout pipe.

The Court found that the removal of the downspout pipe wasnot inherently dangerous because it could have been done using a tin-snip without any danger of creating a fire hazard. Again, these factsare distinguishable. Further, DCR/Rowe has not adduced evidence that Arends’ work at the time of the Rupture could have been carriedout differently. [99] In Bowaters Newfoundland Ltd v Lundrigans Ltd, 1970 CarswellNfld 15, 1 Nfld & PEIR 223 (NSCTD), the Court held thattree cutting near a power line was not inherently dangerous.

The Court noted that it would only be in exceptional circumstances thatdamage to the transmission line could result, and that the power line was in plain view. Cutting trees near a power line in plain view issignificantly different than doing excavation work with heavy machinery in the vicinity a buried natural gas line.

For example, an ownercould not escape liability for negligent excavation by a subcontractor that resulted in an adjoining building collapsing: Dalton andAngus (1881), 6 AC 740 as discussed in Bennett v Imperial Oil Ltd, 46 MPR 50 (Nfld SC) at 59–60, (NLSC).Further, the record before me suggests that damage to a buried natural gas line is less remote than the risk in Bowaters.

There is evidencethat there had been other line strikes on the Project before the Rupture. [100] In Seaway Hotels Ltd v Consumers Gas Co, 17 DLR (2d) 292 (Ont HCJ), (ONSC), aff’d (ONCA), a gas company severed a buried power line and caused a neighbouring plaintiff damage due to loss of electricity. The Courtfound the gas company liable directly in negligence for failing to take precautions to warn its contractor or otherwise to eliminate orlessen the risk of harm.

Arguably in obiter, it held that “digging a ditch and laying a pipeline is not an inherently dangerous activity” anddid not hold the gas company vicariously liable for the contractor’s negligence. In my view, however, working in the vicinity of buriedpower lines is different than working in the vicinity of buried natural gas lines given the risk of explosion if natural gas is released andexposed to flame.

Further, in a more recent case, the Ontario Divisional Court noted that excavating might be found to be inherentlydangerous work: Parker v Casalese, 2010 ONSC 5636 at para 13, aff’d 2011 ONCA 764. [101] There are several cases involving hydrocarbon-carrying pipelines which DCR/Rowe did not rely on. They illustrate the inherentdanger associated with natural gas, its carriage, and the need to protect it from escaping pipelines: (

a) in Ballentine v Ontario Pipe Line Co, (1908) 16 OLR 654 (Ont Trial Court), 1908 CarswellOnt 391, the defendant gascompany hired an independent contractor to connect gas lines to the gas company’s customers. The contractor’s employees, whileconstructing a necessary trench, allowed gas to escape which ignited and exploded. The gas company was not relieved of liability byallowing or directing a contractor to perform their work for them. It is implied from the cases relied upon, some of which were alsorelied upon by the Supreme Court of Canada in City of St John, that the digging of the trench near the existing gas line was considereddangerous; (

b) in Weisler v District of North Vancouver, 17 DLR (2d) 319, (BCSC), a power shovel operator broke a gasline, gas escaped and an explosion destroyed a building. It was admitted that the gas under high pressure was a dangerous substance,citing London Guarantee & Accident Co v Northwestern Utilities Ltd, (UK JCPC), [1935] 4 DLR 737, [1936] AC108 [Northwestern Utilities](which involved the escape of gas from a gas main due to a faulty weld); (

c) in McKenzie v Hyde, (MBKB), aff’d (MBCA), a contractor (Hyde) hired by a propertyowner (Forrester) disrupted a gas line when breaking up old concrete in a driveway, the gas leaked, and caused an explosion that

damaged a neighbouring property. The lower court noted that “any escape of natural gas presents an emergency”. It then went on to say: Hyde and his employee Baraniuk were performing

an act that to the knowledge of Forrester was dangerous or extra hazardous. Digging aditch is not an inherently dangerous activity, but the work here, having regard to the presence of the gas line, was inherently dangerousand of a nature likely to involve injurious consequences to others unless executed with care. (

d) in School Division of Assiniboine South No 3 v Hoffer et al, (MBKB), a snowmobile hit a gas riser near aschool which allowed gas to escape and caused an explosion. The Court noted that “[e]scaping gas is by its nature a dangerous substancewhich must be kept under control”; (

e) in Fenn v City of Peterborough (1976), 14 OR (2d) 137, (ONSC), var’d (ONCA), aff’d (SCC), [1981] 2 SCR 613, a defendant utilities commission was replacing water service lines in a residentialneighbourhood. The excavation work exposed a gas main and caused gas to escape, which resulted in an explosion that destroyed aneighbouring home and killed its occupants. The Court stated that it “is common knowledge that gas is dangerous and when mixedwith air in certain proportions and ignited it will burn or explode.

It is to be expected, therefore, that gas distribution andtransmission systems and gas-operated equipment will be treated with the greatest of care. There is a high risk and this producesa correspondingly high duty.” (emphasis added); (

f) in Ostash v Sonnenberg, 67 DLR (2d) 311, (ABCA), members of a family became ill with carbonmonoxide poisoning following an allegedly negligent conversion of a furnace from coal burning to gas burning by a contractor and hisinexperienced helpers. The Court of Appeal cited Northwestern Utilities for the proposition “[t]hat gas is a dangerous thing within therules applicable to things dangerous in themselves is beyond question”. The Court stated that the “[t]he risk in the case at bar was mostgrave if the duty should not be fulfilled.

The case of dangerous things is ‘a special instance of negligence where the law exacts a degreeof diligence so stringent as to amount practically to a guarantee of safety...’”; and (

g) in Henuset Bros Ltd v Pan Canadian Petroleum Ltd, (ABKB), a low-pressure oil pipeline was severedby a large rotary ditching machine excavating a pipeline trench for a natural gas gathering system. The Court noted that “the degree ofperil was such as to impose on all concerned a very high degree of care” and the risk of harm was extreme.

A similar result was found inrespect of an oil pipeline in Blackmore v Murphy Oil Company Ltd et al, (SKKB). [102] The plaintiffs also rely on R v APM Construction Services Inc, 2020 ABPC 15, which is the sentencing decision from APM’sguilty plea to an offence under the Occupational Health and Safety Act, RSA 2000, c O-2 (OHSA) related to APM’s conduct followingthe Rupture. The Court noted that pressurized methane gas is an inherently dangerous substance, toxic to humans quite apart from itsexplosive properties, and that fire and explosion are the predictable results of its release into an oxygenated environment.

I agree withDCR/Rowe that R v APM does not decide the question of whether the work being done by Arends that led to the Rupture was inherentlydangerous, however, like several of the cases noted above it is indicative of the inherent dangerousness of natural gas as a substance, andthat working in the vicinity of a gas leak, and responding to a gas leak, can be inherently dangerous activity. [103] I agree with the plaintiffs that the Occupational Health and Safety Code’s detailed provisions governing locating and excavatingnear buried gas lines, while not determinative, is at least some indication that working with heavy excavation equipment in the knownvicinity of natural gas lines is an inherently dangerous activity.

The purpose of OHSA and the Safety Code is to maximize the safety ofworkplaces: R v Kal Tire, 2020 ABCA 200 at para 10. Section 447(1.1) of the Occupational Health and Safety Code, Alta Reg 87/2009(Safety Code), which was an OHSA regulation in effect at the time of the Rupture, required that the ground could not be disturbed untilburied facilities had been identified and their locations marked.

Section 448(1) reflects the specific inherent danger associated with usingheavy equipment near buried lines, because it prohibits work with mechanical excavation equipment within a “hand expose zone” of anactive buried facility until it has been exposed to sight. [104] In this case, the admissible evidence does not allow the court to apply the tests noted above as to whether the work being doneat the time of the Rupture was inherently dangerous.

There is insufficient, unclear or conflicting evidence of exactly what Arends wasdoing to excavate or to construct the ramp, where he was doing it, or all of the circumstances prevailing at the time.

There is no evidenceof the “usual manner” of heavy equipment excavation near pipelines, or of constructing a ramp from ground level into a trench, toestablish that it is not a dangerous activity if “carried out with care and in the usual manner.” For example, there is insufficient evidenceto establish that excavating and working near operating pressurized pipelines in the normal manner does not continue to be inherentlydangerous even where any normal precautions are taken and the base safety requirements of the OHSA and the Safety Code are followed(for example with locate marks in place and/or where buried facilities have been hand-exposed).

The existence of previous line strikes onthe Project suggest that working around buried natural gas facilities may very well be inherently dangerous. [105] Further, DCR/Rowe has not adduced evidence as to whether contractors working in the vicinity of a buried gas line wouldnormally take special precautions, over and above the OHSA requirements, to avoid a line-strike. This evidence is required to assesswhether the party in DCR/Rowe’s position would likely have taken special precautions if it had done the work itself rather than the workbeing completed by Ground Zero.

Without more, based on the numerous cases above expressing the heightened duty of care whileworking near gas pipelines due to the inherent dangerousness of natural gas, it seems likely that a contractor would normally take specialprecautions to avoid a line-strike. [106] Accordingly, in light of the authorities noted above (and in particular McKenzie), which in my view on balance suggest thatexcavating in the vicinity of a buried gas pipeline is inherently dangerous, and in light of the known potential catastrophic consequencesof a pipeline leak, I find that, even if all the evidence DCR/Rowe has presented were to be accepted, DCR/Rowe has not established thatthere is no merit to a claim based on vicarious liability because the work being done was not inherently dangerous.

Whether the workbeing done at the time of the Rupture was inherently dangerous is a genuine issue requiring trial. [107] DCR/Rowe’s argument focused almost exclusively on whether the work immediately prior to the Rupture was inherentlydangerous, but largely ignores the potential for vicarious liability in respect of Ground Zero’s response to the Rupture even though itacknowledges in its Brief that one of the claims being made relates to a failure to warn that the Gas Line had been struck. There is

insufficient evidence before the court about Arends’ or Ground Zero’s actual response to the Rupture, or what an earthworks contractor’snormal manner of response would be to a line strike, to assess whether a vicarious liability claim may flow against DCR/Rowe in respectof Ground Zero’s response to the Rupture. Whether DCR/Rowe can be vicariously liable for Ground Zero’s response to the Rupture isalso a genuine issue requiring a trial. ii.

Was the Work Done by Arends Collateral Negligence or Not Part of the LOA Scope of Work? [108] DCR/Rowe also argue that, in any event, DCR cannot be held vicariously liable for Ground Zero’s conduct because, even ifDCR remained obligated under a contract with APM, the work Arends was doing at the time of the Rupture was outside the scope of anysuch contract.

They argue that the scope of any contract did not include building a ramp or operating in breach of the Safety Coderequirements. [109] The “casual or collateral negligence” concept in the context of vicarious liability for subcontractors puts some limits on when acontractor may be held vicariously liable for the work of its subcontractor.

A contractor/employer may not be vicariously liable if thenegligent work done by the subcontractor was not work the subcontractor was hired to perform and is outside the scope of the dutyimposed on the contractor/employer: City of St John at 383; Kerrybrooke KB at paras 130–131; Eisert at para 19.

Vicarious liability forthe negligence of an independent contractor is justified where it is “not merely casual or collateral but entails a breach of duty that wasconclusively imposed on the employer of the contractor”: Sherman v 21 Degrees Heating and Air Conditioning Inc, (ONSC) at para 17, citing Fridman at 310; Connelly & Company Management Ltd v Rohling, 2009 ABQB 614 at para 41; Evans atpara 16; Vandenbrink Farm Equipment Inc v Double-D Transport Inc, (ONSC) at para 48. [110] DCR’s potential vicarious liability turns, at least in part, on the Contract Issues and the terms of the possible contract betweenDCR and APM.

That alone likely gives rise to a genuine issue for trial as to whether Ground Zero’s work was collateral or outside thescope of the LOA. However, I have nonetheless conducted a review of the evidence before me to see if DCR/Rowe have established nomerit based on Arends’ work at the time of the Rupture being outside the terms of any DCR/APM contract. [111] On January 28, 2015, DCR submitted a bid to APM which provided a lump sum for earthworks and a lump sum forunderground utilities.

The bid included “excavation and backfill of all structural foundations”, excluded a number of other items in thelump sum price, and provided “all hourly work” would be charged at an hourly rate. [112] On April 18, 2015, APM provided the LOA to DCR in reference to “an Earthworks, UnderGround Utilities” subcontract, whichwas signed and returned by DCR on April 27, 2015. The LOA provided: We are pleased to inform you to proceed with the Earthworks Subcontract for the above noted contract.

The Scope of Work is defined inthis document and the tender documents submitted by your firm and by all Drawings, Specifications and Addenda that were issued fortender. Refer to the attached Document List and Scope of Work for additional information and further qualifications (if applicable). The contract amount will be $288,000 ... + (GST) A Purchase Order will be prepared and forwarded for execution. In the interim, the Tender Document, Drawings, Specifications,Addenda, Project

Schedule and the Standard Purchase Order Terms & Conditions (see page 4) will govern the responsibilities assignedto this Subcontract. The Purchase Order for this Subcontract will not be issued (or be valid) prior to APM receiving [a list of several items from DCR,including a “Detailed breakdown of contract amounts, an itemized list of all Sub-Contractors, and an itemized list of all labour andequipment rates (to Project Manager)]. [...] All Work is to be completed according to the Drawings, Specifications, Addendums and the Project Schedule.

This Letter of Acceptance forms the basis of your contract with APM and supersedes any submitted quotes. [...] [113] Under Scope of Work, the LOA provided: General The Scope of Work is defined by the Bid Documents including all Drawings, Specifications, Addenda, Supplemental Conditions, etc.that were issued for tender. The following “Additional Items” provide supplementary information and clarification of the Scope of Work under this contract, and insome cases may add to, but shall not limit, the Subcontractor’s responsibilities as defined in the Bid Documents.

Additional Items • Supply and install all earthworks as per all drawings, specifications, and all addendums. The work shall include but not be limitedto: [...] o Excavation and backfill of all structural foundations, pads, footings o Sub grade preparation of entire building area prior to placing gravels

[...] • Coordinate and

schedule all work with the APM Site Supervisor [...] • All work to be installed as per specs, drawings and specifications. Any deviations from project detailed must be approved by the consultants in writing. [ 114 ] In oral argument, the parties confirmed that the “Drawings, Specifications and Addenda” that were issued for tender are not in the record before me. Further, many of the documents in the attached “Document List” are not before me (including the Site Plan, Site Details, Foundation

Section and Details, the overall plans for deep services, surface improvements and plan grading, eight different Addenda, and the Site Specifications). [ 115 ] The Standard Purchase Order Terms & Conditions attached to the LOA provide, among other things: 1. Compliance with Contracts and Rules. All labour, materials and services shall be in strict accordance with the general contract and contract documents which include, but are not limited to, plans, specifications, general conditions, special conditions, addenda to any and all of the foregoing, and APM’s contract, if any

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