Last week’s Court Rulings from the Alberta Court of King’s Bench, Court of Appeal and SCC.
Edited by Amanda Kostek and Christie Dewar
Prosser v Industrial Alliance Insurance, 2024 ABKB 87
Privilege Claims Over Investigation Materials | Privilege Generally
Paramount Resources Ltd v Grey Owl Engineering Ltd, 2024 ABCA 60
10 Year Ultimate Limitation Period | Contribution and Indemnity
Prosser v Industrial Alliance Insurance, 2024 ABKB 87
In a wrongful dismissal action, the court considered whether materials from an independent investigator investing workplace harassment were covered by litigation privilege or solicitor client privilege. The Court concluded that the investigation records, but not the final report, were producible because the insurer failed to establish that the dominant purpose of the investigation was in contemplation of litigation. The Court ultimately ordered the production of the following:
[155] The Defendant is ordered to (1) disclose to the Plaintiff the name of Complainant 2 and particulars of their allegations; (2) provide to the Plaintiff’s counsel of record, copies of the investigation materials (other than the investigation report) including a complete set of communications from both Complainants and interview transcripts and notes to the extent they are within the Defendant’s control; (3) provide the Plaintiff’s counsel of record an amended affidavit of records complying with its disclosure obligations for non-privileged records.
Paramount Resources Ltd v Grey Owl Engineering Ltd, 2024 ABCA 60
The Court considered whether a claim was brought outside the ultimate 10 year limitation period. In 2018 Paramount discovered a leak in a pipeline that cost $20 million to remediate. The pipe was installed in 2001 and then fitted with a liner in 2004. Paramount issue Third Party Claims against the parties involved in the 2004 regulatory application as well as the parties who installed and supplied the liner, alleging that the pipe liner was not appropriate as it was not below the frost line. The pipe leaked at some point between April 3, 2018 and April 11, 2018. The Plaintiff alleged that the correct limitation was 2018 on the basis that their claim was really one for contribution and indemnity, which did not arise until after they had incurred costs for remediating the loss. They relied on the following provisions in the Limitations Act:
3(3) For the purposes of subsections (1)(b) and (1.1)(b),
…
(e) a claim for contribution arises when the claimant for contribution is made a defendant in respect of, or incurs a liability through the settlement of, a claim seeking to impose a liability on which the claim for contribution can be based, whichever first occurs;
At the original hearing, the chambers Justice concluded that the claim was not one for contribution, and therefore the 10 year ultimate limitation applied:
[17] Relying on the decision of this Court in Addison & Leyen Ltd v Fraser Milner Casgrain LLP, 2014 ABCA 230, the chambers judge held that Paramount’s claim did not fall within the scope of s 3(3)(e). In particular, she held that to be a claim for contribution within the scope of s 3(3)(e) Paramount would have to demonstrate that the respondents could have been directly liable to the Directorfor the environmental damage. She found that Paramount had not done so – that it was not possible to include the respondents within the definition of “persons responsible” under the EPEA:
On the facts before me, I cannot accept Paramount’s position. To suggest that “person responsible” includes everyone who was ever involved in construction of a pipeline is not, in my view, what the EPEA contemplates. I am not persuaded that, having been contracted to build a pipeline to carry a potentially polluting substance, the Defendants ever had “charge” of the substances transported within the pipeline. In my view, only Paramount ever had charge of the substances.
[18] She concluded that Paramount’s claim was one of “simple negligence, not contribution, and section 3(3)(e) therefore does not apply”. As such, the claim arose in 2004 and is barred by the passage of the 10-year ultimate limitation period, per s 3(1)(b) of the Limitations Act.
The Alberta Court of Appeal confirmed that for a claim of contribution to arise, the party against whom contribution is sought must be liable to the party that sought damages against the Plaintiff for cleanup following the pipe line spill. The Court explained contribution generally as follows:
[31] Consistent with the direction of the Supreme Court, subsequent cases confirm the need for the party against whom contribution is sought to be liable to the plaintiff to whom the claimant is potentially liable. That is, case law confirms that a claim for contribution is distinct from a claim in negligence or breach of contract where part of the damages sought by the plaintiff arise from that plaintiff’s liability to another. In a claim for contribution, the claimant and the claimee must share potential liability to another. If, for example, the claimee’s liability to the other is precluded by contract, then no claim for contribution can be made: Whitecourt Power Limited Partnership v Elliott Turbomachinery Canada Inc, 2015 ABCA 252 at paras 14-15.
[32] While “contribution and indemnity” are frequently referred to collectively, they are different concepts. As summarized by the Newfoundland Court of Appeal in Ryan v Dew Enterprises Ltd, 2014 NLCA 11 at paras 54-55:
A claim for indemnity is a claim that another party save the indemnity-claimant harmless against loss or damage which the indemnity-claimant has incurred or suffered or will incur or suffer at the hands of another, and to reimburse the claimant in respect of such loss or damage. The claim may arise from an express contract, by implication of law or from statute. An example of a claim to indemnity arising from implication of law is where an act is done at the request of another, the act turns out to be injurious to a third party and in consequence of doing the act the doer incurs liability to the third party … . … While the circumstances where an obligation to indemnify arises by implication of law are diverse, they are not open-ended. The obligation cannot be imposed simply by the exercise of ad hoc discretion. As noted by Goodridge J. in Collavino, at paragraphs 18-21, just because a party may have a claim for damages over against a third party does not entitle him or her to a claim in indemnity or contribution. …
A claim for contribution, on the other hand, is in one sense a claim to a partial indemnity. However, the basis of the right is different. As noted by Goodridge J. in Collavino at paragraph 18, the right to contribution is based on general principles of justice involving the equitable sharing of responsibility among persons who are jointly responsible for a claimed loss. It usually arises as between joint debtors, contractors, trustees, sureties or tortfeasors. [Emphasis added]
The Court went further and explained why the Plaintiff’s argument in this case was rejected:
[38] It suggests the respondents could have been liable under s 107(1)(c) of the EPEA as a “person responsible for the contaminated site” which includes “a person responsible for the substance” and “any other person who the Director considers caused or contributed to the release of the substance into the environment”. The chambers judge properly rejected Paramount’s submission that the respondents were “persons responsible for the substance”, because the evidence did not support the claim that they had charge or control of the substance at issue. There is no evidence the Director at any time considered the respondents to be persons who caused or contributed to the release. As such, the respondents were never alleged to beliable under the EPEA aspersons “responsible for the contaminated site” within the meaning of s 107(1)(c). Paramount’s statement of claim does not suggest the respondents had or breached duties owed under the EPEA.
[39] As to the suggestion that the respondents could have been liable to the Crown as landowner in negligence, Paramount is not seeking contribution for liability to the Crown as landowner. Paramount seeks contribution for the amounts it paid to remediate the harm as required by the EPEA. That the respondents could theoretically have liability a to a distinct counterparty (the EPEA liability is to the Director not to the Crown landowner) based on a different and at this point speculative legal basis (liability in tort to the Crown as landowner) does not make Paramount and the respondents “jointly responsible for a claimed loss” so as to give rise to a claim in contribution: Ryan at para 55.
The appeal was dismissed.