5.36: Objection to expert’s report
6.7: Questioning on affidavit in support, response and reply to application
10.33: Court considerations in making costs award

Case Summary

The Defendant, SysGen Solutions Group Ltd (“SysGen”), provided IT services to the Plaintiff, Serinus Energy Plc (“Serinus”). SysGen used its continued access to Serinus’ information systems to remove Serinus’ administrative access to its own systems at a time when Serinus was transitioning away from SysGen to a new IT service provider. SysGen changed Serinus’ passwords, which locked Serinus out from administrative control of its system, without notice to Serinus and immediately after Serinus disputed a SysGen invoice for services during the transition period. SysGen asserted that it did this to investigate a security threat to Serinus’ system. SysGen failed to return administrative access, and instead made a settlement offer using Serinus’ administrative access as part of a settlement of the billing dispute. Serinus took matters into its own hands and managed to break into its own system to regain control.

Serinus filed a Statement of Claim alleging that SysGen acted with the intent to ransom Serinus for disputed invoices, and claimed breach of contract, breach of fiduciary duty, conversion, and intrusion upon seclusion. SysGen filed a Statement of Defence and Counterclaim for unjust enrichment stemming from unpaid invoices.

The matter proceeded by Summary Trial. The parties relied on a jointly filed Compendium of Pleadings and Evidence (the “Compendium”), which included evidence from 13 witnesses, including two experts. Eight of the civilian witnesses were questioned on their Affidavits pursuant to Rule 6.7. The parties agreed that the evidence in the Compendium, other than the expert reports which were objected to pursuant to Rule 5.36, was admissible evidence. No viva voce evidence was heard, and the matter proceeded directly to two days of final argument.

The Court noted that Part 7, Division 3 of the Rules govern Summary Trial, and that the well-established test for whether a Summary Trial is appropriate, pursuant to the Decision in JN v Kozens, 2004 ABCA 394, is (1) can the Court decide disputed questions of fact on Affidavits or by other proceedings authorized by the Rules for a Summary Trial? And (2) would it be unjust to decide the issues in such a way? The Court found the first branch of the test was met as there was an extensive documentary record that the parties had organized, and that both parties agreed there was not a significant dispute on the facts, but rather disputes about the legal effects of what happened. The Court, in considering the second branch of the test, held that while the Court of Appeal has warned that Courts should not give unreasonable weight to the agreement of parties as to the suitability of the Summary Trial process, “I interpret this only to mean that the parties’ agreement is not determinative but is one factor to consider.” It is, however, an important factor to consider because it respects that counsel will have the best understanding of the issues at play. After considering the non-exhaustive list of factors as to whether it would be unjust to proceed by Summary Trial, as laid out in Shaufert v Calgary Co-Operative Association Limited, 2021 ABQB 579, and noting the parties agreement, the Court held that the matter was appropriate for Summary Trial. 

After qualifying both parties experts, and considering the evidence set out in the Compendium, Marion J. held that Serinus was entitled to $5,000 in personnel costs that salaried employees spent responding to the system lockdown, $42,012.50 in amounts paid to iON Work for services in response to the system lockdown, and $50,000 in punitive damages based on SysGen’s conduct, totalling $97,012.50. However, Serinus was entitled to judgment of $53,137.89 for unpaid services. After set-off, Serinus was granted Judgment against SysGen for $43,874.61.

The Court held that if the parties were unable to agree on Costs, they could provide written submissions addressing the Rule 10.33 factors, any Formal Offer of settlement they wished the Court to consider, a draft proposed Bill of Costs pursuant to Schedule C, and a summary of their proposed reasonable and proper Costs that the party incurred in respect of the Action.

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