PRECISION DRILLING CANADA LTD v YANGARRA RESOURCES LTD, 2013 ABQB 492
1.2: Purpose and intention of these rules
5.17: People who may be questioned
6.20: Form of questioning and transcript
6.8: Questioning witness before hearing
7.3: Summary Judgment (Application and decision)
This was an Appeal from a Master within the context of a Summary Judgment Application. Yangarra Resources Ltd. (“Yangarra”) contracted with Precision Drilling Canada Limited Partnership (“Precision”) to drill wells. Precision employees allegedly used inappropriate drilling chemicals, resulting in a well and some equipment being lost. Precision sued for payment of its services on the basis that the contract required that it be paid regardless of errors. Precision applied for Summary Judgment on this basis. Yangarra argued that it was not obligated to pay since the original well was lost due to Precision’s negligence.
Yangarra sought to inquire into whether Precision field personnel communicated the drilling mistake to offsite Precision personnel prior to the well being lost. Yangarra wanted to issue Notices of Appointment for Questioning to four offsite personnel, pursuant to Rule 6.8. Transcripts of the Questioning would then be put into evidence in the Summary Judgment Application. Master Prowse held that, while Yangarra was entitled to question the witnesses under Rule 6.8, it would be limited to examinations in chief, as opposed to cross-examination. The key issue on Appeal was whether Rule 6.8 permitted Yangarra to cross-examine the employees of Precision or whether, consistent with former Rule 266, the examination was to be done only in chief. A related secondary issue was whether Precision’s employees were adverse in interest to Yangarra, such that they could be cross-examined.
Rule 6.8 relates to the Questioning of witnesses with respect to Applications. Rule 6.20 is incorporated into Rule 6.8 and addresses Questioning on Affidavits and Questioning a witness. Tilleman J. held that Rule 6.8, on its face, does not provide that a witness may be cross-examined. However, the wording of Rule 6.8 differs from former Rule 266, including the addition of Questioning in the nature of cross-examination as contemplated by Rule 6.20. Tilleman J. held that the intent of the changes to the Rules was to streamline proceedings and promote efficiency. The Foundational Rules, such as Rule 1.2, also supported a streamlined and efficient process. In the circumstances, Tilleman J. held that he was required to interpret Rule 6.8 in a manner that best promoted the fair, timely and efficient resolution of disputes.
With these interpretive principles in mind, Tilleman J. held that Rule 6.8 was broad enough to permit cross-examination of a witness. Moreover, Tilleman J. held that such a cross-examination did not require an intervening declaration of hostility. If it were not so, a party seeking to cross-examine a witness in such circumstances would have to apply to a Master for permission to call the witness and then make a separate Application to a Justice for a declaration that the witness was hostile. Such an approach would be antithetical to the efficiency sought to be promoted by the Rules.
Further, the new Rules permit broader access to cross-examination. While the former Rules drew a distinction between an Examination on an Affidavit and an Examination of a person called as a witness, Rule 6.20 does not draw such a distinction in terms of the form of Examination. As such, Rule 6.8 permits cross-examination of a witness by a party who has called the witness, and Yangarra was entitled to cross-examine the four Precision employees.
Tilleman J. further held that the four Precision employees were adverse in interest to Yangarra. Although the employees were not named Parties, they were not neutral. The principles underlying the new Rules required a nuanced approach with respect to considering a witness adverse in interest. The new Rules allow for a broader scope of Questioning, not only of an adverse party, but also of a witness directly linked to an adverse party. Adversity in interest is a determination of fact which requires an examination of the particular circumstances. Tilleman J. held that Courts must not be blind to the reality of the relationship between parties and witnesses and should be cautious in taking a categorization approach. Tilleman J. held that, for predictably unfriendly witnesses, there was no need to seek a declaration of hostility with additional Applications before allowing a cross-examination.
Tilleman J. also noted that a broad interpretation of Rule 6.8, which allowed for cross-examination of a presumably unfriendly witness with sufficient commonality with the adverse party, enhanced the information-gathering function of that Rule.
Yangarra’s Appeal was allowed.View CanLII Details