Baytex Energy Ltd. v. Enron Canada Corp., (2002) 329 A.R. 302 (QB)

• Judge: Hart, J.
• Court: Court of Queen's Bench of Alberta (Canada)
• Case Date: December 12, 2002
• Citations: (2002), 329 A.R. 302 (QB);2002 ABQB 1087

Baytex Energy Ltd. v. Enron Can. Corp. (2002), 329 A.R. 302 (QB)

MLB headnote and full text

Temp. Cite: [2003] A.R. TBEd. JA.034

Baytex Energy Ltd. (plaintiff) v. Enron Canada Corp. (defendant)

(0201-01132)

Bonavista Petroleum Corp. (plaintiff) v. Enron Canada Corp. (defendant)

(0201-01133)

Burlington Resources Canada Ltd. (plaintiff) v. Enron Canada Ltd. (defendant)

(0201-06449)

Calpine Canada Natural Gas Partnership (plaintiff) v. Enron Canada Corp. (defendant)

(0201-02256)

Dominion Exploration Partnership (plaintiff) v. Enron Canada Corp. (defendant)

(0201-01117)

Murphy Oil Company Ltd. and Murphy Canada Exploration Company (plaintiffs) Enron Canada Corp. (defendant)

(0201-03790)

Paramount Resources Ltd. (plaintiff) v. Enron Canada Corp. (defendant)

(0201-07015)

Talisman Energy Inc. (plaintiff) v. Enron Canada Corp. (defendant)

(0201-02627; 2002 ABQB 1087)

Indexed As: Baytex Energy Ltd. v. Enron Canada Corp.

Alberta Court of Queen's Bench

Judicial District of Calgary

Hart, J.

December 12, 2002.

Summary:

The plaintiffs entered gas purchase and sale contracts with the defendant. The plaintiffs alleged that triggering events entitled them to terminate the various contracts. The plaintiffs brought separate actions to recover monies allegedly owing by the defendant for supplied gas. The defendant counterclaimed, alleging, inter alia, that the terminations were unlawful. The defendant claimed set-off, deficiency damages, early termination damages, restitution for unjust enrichment and relief from forfeiture. The plaintiffs applied under rule 221 for leave to have various issues determined on a preliminary basis.

The Alberta Court of Queen's Bench dismissed the application.

Practice - Topic 5260

Trials - General - Trial of preliminary issues - General principles (incl. when available or appropriate) - The plaintiffs alleged a right to terminate gas supply contracts with the defendant and brought separate actions for monies owing by the defendant - The defendant counterclaimed on the basis of, inter alia, unlawful termination - The plaintiffs sought a preliminary determination of issues under rule 221 - The Alberta Court of Queen's Bench dismissed the application - A preliminary determination would not end or substantially end the actions and would not save time or costs - In fact, given the duplication of evidence and likelihood of an appeal, the time and cost would likely increase - There was potential for prejudice to the defendant - The complexity and difficulty of the issues favoured not splitting the trial - This was not a case of uncontested facts, neat questions of law or the interpretation of a single document - Finally, the trial of preliminary issues would likely delay the main trial.

Cases Noticed:

Esso Resources Canada Ltd. et al. v. Stearns Catalytic Ltd. et al. (1991), 114 A.R. 27; 79 Alta. L.R.(2d) 1 (C.A.), appld. [para. 18].

Sware v. Welda Estate (1999), 244 A.R. 397; 209 W.A.C. 397 (C.A.), refd to. [para. 21].

Lim v. Home Insurance Co. (1995), 168 A.R. 308; 28 Alta. L.R.(3d) 420 (Q.B.), varied (1996), 43 Alta. L.R.(3d) 301 (C.A.), refd to. [para. 23].

Vandevelde v. Smith et al. (1997), 203 A.R. 279; 50 Alta. L.R.(3d) 361 (Q.B.), refd to. [para. 24].

Sware v. Welda Estate (1999), 240 A.R. 112 (Q.B.), affd. (1999), 244 A.R. 397; 209 W.A.C. 397 (C.A.), refd to. [para. 25].

Jen-Col Construction Ltd. v. Parkland No. 31 (County) et al. (2000), 269 A.R. 352 (Q.B.), refd to. [para. 26].

Progas Ltd. v. AEC West Ltd. (2001), 295 A.R. 127 (Q.B.), refd to. [para. 26].

Madill v. Alexander Consulting Group Ltd. et al. (1999), 237 A.R. 307; 197 W.A.C. 307; 176 D.L.R.(4th) 309 (C.A.), refd to. [para. 32].

Murphy Oil Co. et al. v. Predator Corp. et al. (2002), 319 A.R. 328 (Q.B.), refd to. [para. 33].

Fern Investments Ltd. et al. v. Golden Nugget Restaurant (1987) Ltd. et al. (1994), 149 A.R. 303; 63 W.A.C. 303; 19 Alta. L.R.(3d) 442 (C.A.), refd to. [para. 44].

Dimensional Investments Ltd. v. R. (1967), 64 D.L.R.(2d) 632 (S.C.C.), refd to. [para. 44].

Peel (Regional Municipality) v. Canada - see Peel (Regional Municipality) v. Ontario.

Peel (Regional Municipality) v. Ontario, [1992] 3 S.C.R. 762; 144 N.R. 1; 59 O.A.C. 81; 98 D.L.R.(4th) 140, refd to. [para. 44].

Thermidaire Corp. v. Clarke (H.F.) Ltd., [1976] 1 S.C.R. 319; 3 N.R. 133, refd to. [para. 47].

Sorochan v. Sorochan, [1986] 2 S.C.R. 38; 69 N.R. 81; 74 A.R. 67, refd to. [para. 48].

Tanguay et al. v. Vincent, [1999] A.R. Uned. 510; 75 Alta. L.R.(3d) 90 (Q.B.), refd to. [para. 52].

Royal Bank v. Kilmer van Nostrand Co. (1994), 29 C.P.C.(3d) 191 (Ont. Gen. Div.), refd to. [para. 53].

Mesa Operating Limited Partnership v. Amoco Canada Resources Ltd. (1994), 149 A.R. 187; 63 W.A.C. 187; 19 Alta. L.R.(3d) 38 (C.A.), refd to. [para. 55].

Bow Helicopters Ltd. v. Bell Helicopter Textron and Avco Lycoming Engine Group (1980), 31 A.R. 60 (Q.B.), affd. (1981), 31 A.R. 49 (C.A.), refd to. [para. 59].

Killips v. Leroda Management Ltd., [1984] A.J. No. 774 (Q.B.), refd to. [para. 59].

Weldwood of Canada Ltd. et al. v. Gisborne Construction (Alberta) Ltd. et al. (1995), 171 A.R. 45 (Q.B.), refd to. [para. 59].

Graham Construction and Engineering (1985) Ltd. v. Gerling Global General Insurance Co. et al. (1995), 164 A.R. 376 (Q.B.), refd to. [para. 59].

Grinnell Fire Protection Systems Co. v. Gowe Schultz Contractors Ltd., [1981] A.J. No. 226 (Q.B. Master), affd. [1982] A.J. No. 257 (Q.B.), refd to. [para. 59].

688560 Alberta Ltd. et al. v. Genesis Land Developers Ltd. et al., [2000] A.R. Uned. 103; 82 Alta. L.R.(3d) 236 (Q.B.), refd to. [para. 59].

Blue Range Resource Corp., Re (2000), 266 A.R. 98; 228 W.A.C. 98; 87 Alta. L.R(3d) 329 (C.A.), refd to. [para. 61].

NESI Energy Marketing Canada Ltd. (Bankrupt), Re (1999), 240 A.R. 28 (Q.B.), revd. (2001), 281 A.R. 229; 248 W.A.C. 229 (C.A.), refd to. [para. 62].

Statutes Noticed:

Rules of Court (Alta.), rule 221 [para. 17].

Authors and Works Noticed:

Harding, P.C., Mastering the ISDA Master Agreement (2002), p. 79 [para. 9].

Henderson, S.K., Should Swap Termination Payments be one way or two way?, [1990] Int. Fin. Law Rev. 27, generally [para. 9].

Luinenberg, G., and Soda, F., The Enforceability of Over-the-Counter Derivative Contracts under Canadian Insolvency Regimes (1995), 12 B.F.L.R. 41, generally [para. 9].

Schetman, R.M., Legal Aspects of "Netting", in Respect of Insolvent Derivative Product Counterparties (Jan. 1999), ALI-ABA Course of Study Materials, Broker-Dealer Regulation, generally [para. 9].

Stevenson, W.A., and Côté, J.E., Alberta Civil Procedure Handbook 2002 (2002), p. 186 [para. 20].

Counsel:

H.A. Gorman and C. Gillespie (Macleod Dixon LLP), for the plaintiffs, Talisman Energy Inc. and Calpine Canada Natural Gas Partnership;

B.P. O'Leary, Q.C., D. Nishimura and C. Murray (Burnet, Duckworth & Palmer LLP), for the plaintiffs, Bonvista Petroleum Ltd., Baytex Energy Ltd., Burlington Resources Canada Ltd., Dominion Exploration Partnership, Murphy Oil Co., Murphy Canada Exploration Co. and Paramount Resources Ltd.;

A.R. Anderson and D.W. McGrath (Blake, Cassels & Graydon LLP), for the defendant Enron Canada Corp., in Action Nos. 0201-06449, 0201-07015, 0201-02627;

M.W. McCachen and R.B. Camp (Duncan McCachen), for the defendant Enron Canada Corp., in Action Nos. 0201-01132, 0201-01133, 0201-02256, 0201-01117, 0201-03790.

These applications were heard on November 19-20, 2002, before Hart, J., of the Alberta Court of Queen's Bench, Judicial District of Calgary, who delivered the following judgment on December 12, 2002.