EMM ENERGY INC v CANADIAN NATURAL RESOURCES LIMITED

The Plaintiffs, EMM Energy Inc and Ener-T Corporation, alleged that the Defendant, Canadian Natural Resources Limited (“CNRL”), caused damage to an oil and gas producing zone in Alberta, for which it had an interest. The Plaintiffs commenced an Action in 2009, claiming that certain water injections were unauthorized and impaired their ability to recover oil and gas, seeking $10 million in damages.

On January 3, 2023, Applications Judge Farrington issued an Endorsement, granting CNRL’s dismissal Application for long delay under Rule 4.31. The Plaintiffs appealed, arguing that the delay was excusable because CNRL contributed significantly to it. One of the main issues was whether CNRL was entitled to wait until it had received a “complete document production” from the Plaintiffs before conducting its own Questioning for discovery.

Justice Simard found that while a party need not proceed with Questioning when the opposing side’s document production has clear, significant gaps, this principle has limits. Parties cannot insist on delaying Questioning until the other side’s production is perfectly complete, as neither the Rules nor case law support such a rigid standard. Civil litigants must strive to produce all relevant records promptly, but perfection is unrealistic; at some point, practical efficiency and the obligation to advance the litigation under Rule 1.2 outweigh demands for complete production.

Justice Simard noted that the Rules expressly and implicitly recognize that document production is often an ongoing, evolving process.  For example: (i) Rule 5.10 requires parties who, after they have delivered their Affidavit of Records, find, create or obtain control of relevant and material records, to notify the other parties, provide copies and then serve a subsequent Affidavit of Records including the additional records before scheduling a Trial date; and (ii) Rule 5.11 allows parties to apply to the court for a production order where they believe a relevant and material record has been omitted from an Affidavit of Records. 

Here, CNRL was justified in postponing its Questioning of the Plaintiffs until October 2015, when it received most of the additional records it had sought. After that point, however, further delay based on incomplete production was no longer reasonable. CNRL was ready to question on March 17, 2016, but such Questioning did not actually take place until March 27, 2018, over two years later. There was no evidence before the Court explaining why. That two-year delay was found to be caused by CNRL. Additionally, CNRL failed to establish significant prejudice resulting from the delay, as the case primarily relied on documentary evidence rather than witness testimony. Therefore, the test for dismissal under Rule 4.31 was not met.