Bellatrix Exploration Ltd. v. Penn West Petroleum Ltd.,

• Judge: Hanebury
• Neutral Citation: 2011 ABQB 551
• Citation: (2011), 523 A.R. 388 (QBM),2011 ABQB 551,523 AR 388,(2011), 523 AR 388 (QBM),523 A.R. 388
• Date: 05 July 2011
• Court: Court of Queen's Bench of Alberta (Canada)

Bellatrix Exploration v. Penn West (2011), 523 A.R. 388 (QBM)

MLB headnote and full text

Temp. Cite: [2011] A.R. TBEd. SE.098

Bellatrix Exploration Ltd. (plaintiff/defendant by counterclaim) v. Penn West Petroleum Ltd. (defendant/plaintiff by counterclaim)

(1001 05556; 2011 ABQB 551)

Indexed As: Bellatrix Exploration Ltd. v. Penn West Petroleum Ltd.

Alberta Court of Queen's Bench

Judicial District of Calgary

Hanebury, Master

September 8, 2011.

Summary:

The parties were involved in commercial litigation. In these cross-applications, there were two issues to be addressed: (1) was the documentation exchanged between the parties between May 21, 2009, and August 7, 2009 privileged; and, (2) if it was, could and should that privilege be waived to allow the plaintiff to respond to the argument that its claim was statute barred.

A Master of the Alberta Court of Queen's Bench held that the documents were protected by settlement privilege. However, they were producible for the limited extent of allowing the plaintiff to respond to the limitations defence.

Practice - Topic 4580

Discovery - What documents must be produced - Privileged documents - Documents prepared for purpose of settlement - The parties were involved in commercial litigation with respect to a debt - Between May 21, 2009, and August 7, 2009, the parties exchanged email, the first two which were marked "Without Prejudice" in an effort to determine the amounts owing - The parties failed to reach an agreement and litigation ensued - The plaintiff included in its affidavit of documents the emails and documentation exchanged between May 21, 2009, and August 7, 2009 - The defendant argued that these documents were protected by settlement privilege and should be removed from the plaintiff's production - A Master of the Alberta Court of Queen's Bench held that the documents were protected by settlement privilege - The documents met the tripartite test for settlement privilege: a litigious dispute was within contemplation; the communications were made with the express or implied intention that it would not be disclosed to the court in the event negotiations failed; and, the purpose of the communications was to attempt to effect a settlement - See paragraphs 27 to 42.

Practice - Topic 4585

Discovery - What documents must be produced - Privileged documents - Waiver - The parties were involved in commercial litigation with respect to a debt - Between May 21, 2009, and August 7, 2009, the parties exchanged email, the first two which were marked "Without Prejudice" in an effort to determine the amounts owing - The parties failed to reach an agreement and litigation eventually ensued - The plaintiff included in its affidavit of documents the emails and documentation exchanged between May 21, 2009, and August 7, 2009 - The defendant argued that these documents were protected by settlement privilege and should be removed from the plaintiff's production - A Master of the Alberta Court of Queen's Bench held that the documents were protected by settlement privilege - However, they were producible for the limited extent of allowing the plaintiff to respond to the limitations defence - Permitting the documentation to be considered for this limited purpose would not eviscerate the public policy foundation underpinning settlement privilege - In this case, discussions had been dragging on for several years and the threat of litigation was used to try to motivate the defendant to deal with the matter more expeditiously - It seemed manifestly unfair that any subsequent acknowledgment of the possible existence of the claim could not be used for the limited purpose of responding to an argument that the claim was statutorily barred - It was in the overall public interest to permit the correspondence to be used for the limited purpose of responding to the limitations defence - See paragraphs 43 to 61.

Cases Noticed:

Hansraj v. Ao et al. (2002), 314 A.R. 262; 2002 ABQB 385, revd. in part (2004), 354 A.R. 91; 329 W.A.C. 91; 2004 ABCA 223, refd to. [para. 27].

Histed v. Law Society of Manitoba (2005), 195 Man.R.(2d) 224; 351 W.A.C. 224; 2005 MBCA 106, refd to. [para. 27].

Meyers v. Dunphy (2007), 262 Nfld. & P.E.I.R. 173; 794 A.P.R. 173; 2007 NLCA 1, refd to. [para. 29].

Costello and Dickhoff v. Calgary (City) (1994), 153 A.R. 161; 19 Alta. L.R.(3d) 74 (Q.B.), refd to. [para. 30].

Blue Line Hockey Acquisition Co. et al. v. Orca Bay Hockey Limited Partnership et al., [2007] B.C.T.C. Uned. C74; 2007 BCSC 143, refd to. [para. 34].

Cytrynbaum v. Gineaut Holdings Ltd. et al., [2006] B.C.T.C. 468; 2006 BCSC 468, refd to. [para. 34].

Ross River Dena Council v. Canada (Attorney General), 2009 YKSC 4, refd to. [para. 35].

Keefer Laundry Ltd. v. Pellerin Milnor Corp. et al., [2006] B.C.T.C. Uned. B56; 2006 BCSC 1180, refd to. [para. 35].

Phillips v. Rodgers (1988), 92 A.R. 253; 62 Alta. L.R.(2d) 156 (Q.B.), refd to. [para. 38].

Dos Santos Estate v. Sun Life Assurance Co. of Canada (2005), 207 B.C.A.C. 54; 341 W.A.C. 54; 2005 BCCA 4, refd to. [para. 44].

Middelkamp et al. v. Fraser Valley Real Estate Board et al. (1992), 17 B.C.A.C. 134; 29 W.A.C. 134; 71 B.C.L.R.(2d) 276 (C.A.), refd to. [para. 44].

Berry v. Cypost Corp. et al., [2003] B.C.T.C. 1827; 2003 BCSC 1827, refd to. [para. 47].

Belanger v. Gilbert, [1984] 6 W.W.R. 474 (B.C.C.A.), refd to. [para. 47].

Carfra v. Rader, [1994] B.C.T.C. Uned. F35; 99 B.C.L.R.(2d) 311 (S.C. Master), refd to. [para. 47].

Low v. Petro-Canada Ltd., [2001] B.C.T.C. 251 (S.C.), refd to. [para. 47].

Unger v. Fortin et al., [1997] B.C.T.C. Uned. 532; 33 B.C.L.R.(3d) 97 (S.C.), refd to. [para. 47].

Saan Stores Ltd. v. 328995 Alberta Ltd. (2006), 55 C.L.R. (3d) 298 (Y.T.S.C.), refd to. [para. 48].

Meyers v. Dunphy (2007), 262 Nfld. & P.E.I.R. 173; 794 A.P.R. 173; 2007 NLCA 1, refd to. [para. 49].

Ignition Energy Ltd. et al. v. Direct Energy Marketing Ltd., [2009] A.R. Uned. 711; 2009 ABQB 605, refd to. [para. 53].

Authors and Works Noticed:

Sopinka, Lederman & Bryant, The Law of Evidence in Canada (3rd Ed. 2009), p. 198 [para. 38]; p. 1033 [para. 30]; para. 14.316 [para. 29].

Counsel:

Eugene J. Bondar and Gillian Barnett (MacLeod Dixon LLP), for the plaintiff/defendant by counterclaim;

Michael P. Theroux and Laurel Lui (Bennett Jones LLP), for the defendant/plaintiff by counterclaim.

These cross-applications were heard on June 21 and July 5, 2011, by Hanebury, Master, of the Alberta Court of Queen's Bench, Judicial District of Calgary, who delivered the following reasons for judgment on September 8, 2011.