Altagas Marketing Inc. et al. v. Canada, (2004) 268 F.T.R. 9 (FC)

• Court: Federal Court (Canada)
• Case Date: November 10, 2004
• Jurisdiction: Canada (Federal)
• Citations: (2004), 268 F.T.R. 9 (FC);2004 FC 1682

Altagas Marketing Inc. v. Can. (2004), 268 F.T.R. 9 (FC)

MLB headnote and full text

Temp. Cite: [2004] F.T.R. TBEd. DE.026

Altagas Marketing Inc., Gyrfalcon Holdings Ltd., Inuvialuit Petroleum Corporation and IPL Holds Inc. (plaintiffs) v. Her Majesty the Queen (defendant)

(T-85-03; 2004 FC 1682)

Indexed As: Altagas Marketing Inc. et al. v. Canada

Federal Court

Hargrave, Prothonotary

November 30, 2004.

Summary:

The Crown assessed royalties under the Canada Oil and Gas Act on natural gas extracted pursuant to a production licence. The plaintiffs, by way of statement of claim, asserted that the royalties should have been assessed at a lower rate under the Canada Petroleum Resources Act. The Crown pleaded rectification and requested dismissal of the action. The Crown moved for a more complete affidavit of documents which included the production of documents concerning the plaintiffs' knowledge as to the rate at which they would have to pay royalties.

A Prothonotary of the Federal Court, in a decision reported at 256 F.T.R. 103, dismissed the motion. The Crown amended its defence by withdrawing the plea of rectification and by adding a request for rescission for unilateral mistake. Based on the amendments, the Crown again moved for production of documents dealing with the plaintiffs' knowledge or expectations as to the royalty rate.

A Prothonotary of the Federal Court allowed the motion and awarded the Crown costs.

Practice - Topic 4573

Discovery - What documents must be produced - Documents related to or relevant and material to matters in issue - The Crown assessed royalties under the Canada Oil and Gas Act on natural gas extracted pursuant to a production licence - The plaintiffs asserted that the royalties should have been assessed at a lower rate under the Canada Petroleum Resources Act - The Crown, by way of statement of defence, sought rescission based on a unilateral mistake - The Crown moved for production of documents dealing with the plaintiffs' knowledge or expectations as to the rate - The Federal Court allowed the motion - The Crown's pleadings requested rescission based on the plaintiffs' alleged reasonable expectation by way of constructive knowledge that the Crown intended a higher rate under the Canada Petroleum Resource Act - The knowledge aspect was clearly defined as a factor leading to rescission - Thus, the documents requested might, directly or indirectly, allow the Crown to advance its case for recision or lead to a train of enquiry to that effect - Such documents, assessed in the light of the issues raised in the pleadings, were relevant - See paragraphs 6 to 24.

Practice - Topic 7262

Costs - Party and party costs - Entitlement to - Particular proceedings - Discovery - The plaintiffs asserted that the defendant Crown applied the wrong statute in assessing royalties on natural gas extracted pursuant to a production licence - The Crown unsuccessfully moved for production of documents concerning the plaintiffs' knowledge as to the rate that they would have to pay - The Crown amended its defence to plead rescission for a unilateral mistake - Based on the amendments, the Crown successfully moved for production of documents respecting the plaintiffs' knowledge or expectations as to the rate - With respect to costs, the plaintiffs asserted that the Crown's failure to initially plead its case fully resulted in additional work and delay and complicated a straightforward issue - The Federal Court awarded the Crown costs, stating that "It is generally appropriate to award costs to the successful party on the motion, keeping in mind the purposes of costs on a motion, which include the expedition of the litigation and the focusing of the minds of the litigants on the cost of litigation" - See paragraphs 27 to 30.

Cases Noticed:

Peruvian Guano Co., Re (1882), 11 Q.B.D. 55 (C.A.), refd to. [para. 6].

Reading & Bates Construction Co. v. Baker Energy Resources Co. et al. (1988), 25 F.T.R. 226 (T.D.), refd to. [para. 6].

Owen Holdings Ltd. v. Minister of National Revenue (1997), 216 N.R. 381 (F.C.A.), refd to. [para. 6].

Smith Kline and French Laboratories Ltd. et al. v. Canada (Attorney General) (1982), 67 C.P.R.(2d) 103 (F.C.T.D.), refd to. [para. 11].

Sylvan Lake Golf & Tennis Club Ltd. v. Performance Industries Ltd. and O'Connor (No. 2), [2002] 1 S.C.R. 678; 283 N.R. 233; 299 A.R. 201; 266 W.A.C. 201, refd to. [para. 11].

Comeau's Sea Foods Ltd. v. Canada (Minister of Fisheries and Oceans) (1992), 54 F.T.R. 20 (T.D.), refd to. [para. 13].

256593 B.C. Ltd. v. 456795 B.C. Ltd. (1999), 119 B.C.A.C. 246; 194 W.A.C. 246; 171 D.L.R.(4th) 470 (C.A.), refd to. [para. 14].

Can-Dive Services Ltd. et al. v. Pacific Coast Energy Corp. et al., [2000] 5 W.W.R. 683; 134 B.C.A.C. 19; 219 W.A.C. 19 (C.A.), refd to. [para. 15].

Jackson v. Belzberg, [1981] 6 W.W.R. 273 (B.C.C.A.), refd to. [para. 23].

AIC Ltd. v. Infinity Investment Counsel Ltd. et al. (1998), 148 F.T.R. 240 (T.D.), refd to. [para. 29].

Singer et al. v. Enterprise Rent-A-Car Co. et al., [1999] N.R. Uned. 102 (F.C.A.), refd to. [para. 29].

Authors and Works Noticed:

Cass, Fred D., Atkinson, P.Y., and Longo, John J., Discovery: Law, Practice and Procedure in Ontario (1993), p. 11 [para. 22].

Fridman, Gerald Henry Louis, The Law of Contract in Canada (4th Ed. 1999), pp. 481, 482 [para. 18].

Halsbury's Laws of England (4th Ed.), vol. 9(1), para. 981 [para. 13].

Odgers, Blake W., High Court Pleading and Practice (22nd Ed. 1981), pp. 164, 165 [para. 9].

Treitel, G.H., Law of Contract (10th Ed. 1999), p. 178 [para. 17].

Waddams, Stephen M., The Law of Contracts (4th Ed. 1999), p. 240 [para. 20].

Counsel:

Laurie A. Goldbach, for the plaintiffs;

David E. Venour, for the defendant.

Solicitors of Record:

Bennett Jones LLP, Calgary, Alberta, for the plaintiffs;

Morris Rosenberg, Deputy Attorney General of Canada, Calgary, Alberta, for the defendant.

This motion was heard on November 10, 2004, by way of teleconference, by Hargrave, Prothonotary, of the Federal Court, who delivered the following reasons for order on November 30, 2004.