INTERRA ENERGY SERVICES CANADA LTD v YANGARRA RESOURCES LTD

By way of Applications before an Applications Judge, Interra Energy Services Canada Ltd. (“Interra”) applied for and obtained Summary Judgment of its claim against Yangarra Resources Inc. (“Yangarra”) for unpaid invoices in relation to fracking products and services it provided to Yangarra. Interra also applied for and obtained Summary Dismissal of the Counterclaim commenced by Yangarra based on contractual limitations of liability. Yangarra appealed the decision.

On Appeal, Yangarra relied on Rule 6.14 to file four additional Affidavits, including expert evidence, and two cross-examination transcripts. Yangarra argued that genuine issues remained regarding Interra’s alleged defective products and services, as supported by new expert evidence, and the enforceability of contractual limitation of liability provisions that were not brought to its attention at the time of signing.

Justice Feasby held that Rule 6.14 permitted the admission of the additional evidence, notwithstanding his criticism of the Rule as a “dispiritingly dysfunctional” mechanism that effectively allowed appeals from Applications Judges’ decisions to proceed on a substantially expanded record.

Applying the Summary Judgment framework, pursuant to Rule 7.3, the Court found a genuine issue for Trial regarding whether the limitation of liability clauses had been sufficiently brought to Yangarra’s attention to form part of the contract. Feasby J. reviewed the law governing standard form contracts and concluded that the issue could not be resolved summarily.

The Court set aside the Applications Judge’s decision. As the enforceability of the limitation clauses remained in dispute, the counterclaim could not be summarily dismissed and Interra’s claim could not be separated from the Counterclaim. As such, both claims were directed to proceed to Trial.