Nixon J

1.3: General authority of the Court to provide remedies
3.62: Amending pleading
3.65: Permission of Court to amendment before or after close of pleadings
5.2: When something is relevant and material
5.3: Modification or waiver of this Part
5.5: When affidavit of records must be served
5.6: Form and contents of affidavit of records
13.6: Pleadings: general requirements
13.7: Pleadings: other requirements

Case Summary

In a dispute related to an oil sands project, the Plaintiffs, (“Devon”) applied for permission to amend their Statement of Claim and to compel the Defendants, (“CNRL”) to produce certain records.

CNRL consented to some of the amendments sought by Devon which were allowed pursuant to Rule 3.62. Nixon J. considered whether the remainder of the amendments could be granted pursuant to Rule 3.65, and noted that the general rule is that any pleading may be amended, no matter how careless or late, subject to four exceptions: (1) the amendment would cause serious prejudice not compensable in costs; (2) the amendment is hopeless and would have been struck; (3) the amendment seeks to add a party or cause of action outside a limitation period; and (4) there is an element of bad faith in the failure to plead the amendment in the first place. Nixon J. noted that the evidentiary burden in seeking to amend is low, but the amendments must have some foundation in fact. Justice Nixon considered each amendment, and held that most could be allowed with the exception of several paragraphs which were hopeless as they alleged that CNRL’s conduct in the litigation amounted to bad faith. Nixon J. stated that there is no fiduciary duty owed between parties to litigation, nor a contractual duty to act in good faith. Misconduct during the litigation gives rise to a remedy of Costs only, not punitive damages.

Some of the amendments alleged bad faith in respect of CNRL’s pre-litigation conduct. The parties and the Court agreed that amendments alleging fraud or bad faith were subject to a higher threshold of proof. However, where the amendments particularize an existing cause of action, this requirement is relaxed. Nixon J. noted that this exception was consistent with the technical requirements for Pleadings in Rules 13.6 and 13.7: parties must plead those causes of action which may take the other party by surprise. The amendments related to bad faith were allowed. CNRL objected to other proposed amendments on the grounds that they added remedies which were not initially pleaded. Nixon J. allowed the amendments on the basis that Rule 1.3 gives the Court discretion to grant remedies whether pleaded or not, and this discretion extended to allowing amendments to plead new remedies. Justice Nixon held that the remainder of the amendments did not cause serious prejudice which could not be compensated with costs, were not barred by the Limitations Act, RSA 2000, c L-12, and were not hopeless or proposed in bad faith. These amendments were allowed pursuant to Rule 3.65.

Devon also sought production of a number of electronic records related to the oil sands project. CNRL resisted production on the grounds that: (1) the records were not relevant and material, (2) that the records had already been produced in a different format, (3) that the records were not readily available and a request to produce 3,516 native spreadsheets would cause an undue burden disproportionate to the probative value of the records, and (4) that Devon had enough records to accomplish their objective of reconstructing the joint account without further production. The parties agreed that Rule 5.2 governed relevance and materiality. Nixon J. noted that the starting point for assessments of relevance and materiality was the amended Pleadings. Her Ladyship noted that Devon’s expert witness had sworn that the requested documents were necessary for his analysis, and no independent witness had suggested otherwise. As such, the test under Rule 5.2 was met, and the records were producible.

Justice Nixon also found that for very large spreadsheets, the TIFF format was effectively unusable. Production of electronic records in an unusable format undermined procedural fairness and failed to meet CNRL’s disclosure obligations. Nixon J. declined to exercise discretion under Rule 5.3 to relieve hardship on CNRL in producing these records, and held that, while proportionality is a consideration in production, this case involved damages in the hundreds of millions of dollars and proportionality did not “figure prominently”. Nixon J. ordered the production of all requested records.

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Related to 1.3

Related to 3.62

Related to 3.65

Related to 5.2

Related to 5.3

Related to 5.5

Related to 5.6

Related to 13.6

Related to 13.7