Digest: T & C Arndt Minerals Ltd. v Silver Spur Resources Ltd., 2018 SKQB 337

• Date: December 03, 2018

Reported as: 2018 SKQB 337

Docket Number: QBG 463/16 JCR , QB18314

Court: Court of Queen's Bench

Date: 2018-12-03

Judges:

• Megaw

Subjects:

• Civil Procedure � Queen�s Bench Rules, Rule 3-72, Rule 7-2, Rule 7-5, Rule 7-9, Rule 13-9

Digest: The plaintiffs, a number of the investors in Drilling and Completion Joint Venture agreements (DCJVs) and a Mineral Lease Joint Venture agreement (MLJV) brought an action against the defendant, Silver Spur Resources Ltd. (Silver Spur), the operator and manager of the DCJVs and the MLJV and against the defendant, R.M., the sole shareholder of Silver Spur and the managing mind of the joint venture operations. In 2010, Silver Spur entered into the MLJV with 49 participants, of which the plaintiffs comprised 12. The purpose of the MLJV was to purchase mineral leases. Silver Spur then entered into four DCJVs and their purpose was to drill and complete oil and gas wells at the location of the mineral leases arranged by the MJLV. The wells were not financially successful in some cases because of flooding, which resulted in costs in excess of the budgeted amount, and in others because of the drop in the price of crude oil. �The defendants sought to charge back costs to the participants. The plaintiffs asserted they should not be responsible for the additional costs as the defendants were responsible for the failure of these investments. In their statement of claim, issued in 2016, the plaintiffs alleged the defendants had breached their fiduciary duty in various ways and had made misrepresentations and also claimed they had acted improperly in their set-up and operation of the joint ventures. The plaintiffs were unable to pinpoint how that occurred. The defendants denied impropriety in their statement of defence and filed a counterclaim in which they sought to recover the plaintiffs� share of costs incurred in the joint ventures pursuant to the terms of the DCJVs. Eventually they brought this summary judgment application to determine a number of the plaintiffs� claims on the basis that certain claims disclosed no reasonable cause of action and other claims should attract summary judgment. However, as a result of information they obtained prior to and during the application, the plaintiffs applied to amend their statement of claim. In their proposed amendment they abandoned certain previous claims and asserted that it was the defendants� negligence, malfeasance and perhaps fraud that...