Dreco Energy Services Ltd. et al. v. Wenzel et al., 2006 ABQB 356

• Judge: Greckol, J.
• Court: Court of Queen's Bench of Alberta (Canada)
• Case Date: February 06, 2006
• Citations: 2006 ABQB 356;(2006), 399 A.R. 166 (QB)

Dreco Energy Services Ltd. v. Wenzel (2006), 399 A.R. 166 (QB)

MLB headnote and full text

Temp. Cite: [2006] A.R. TBEd. MY.088

Dreco Energy Services Ltd. and Vector Oil Tool Ltd. (plaintiffs) v. Kenneth Hugo Wenzel, Kenneth H. Wenzel Oilfield Consulting Inc. and KW Downhole Tools Inc. (defendants)

(0203 12910; 2006 ABQB 356)

Indexed As: Dreco Energy Services Ltd. et al. v. Wenzel et al.

Alberta Court of Queen's Bench

Judicial District of Edmonton

Greckol, J.

May 12, 2006.

Summary:

The plaintiffs applied to have the defendants held in civil contempt of court for failure to comply with undertaking and examination requirements contained in a consent case management court order.

The Alberta Court of Queen's Bench, in a decision reported at 365 A.R. 344, found the defendants in contempt. The plaintiffs sought a $20,000 costs award. The court awarded $5,000. The defendants were given the opportunity to purge their contempt. The matter of remedy was to be revisited. The plaintiffs appealed, arguing that the sanction imposed was too lenient.

The Alberta Court of Appeal, in a decision reported 371 A.R. 11; 354 W.A.C. 11, allowed the appeal. The court remitted the matter to the judge below for reconsideration of sanction.

The Alberta Court of Queen's Bench ordered the defendants to pay the plaintiffs' thrown-away costs of $136,146.27 by July 1, 2006, failing which the plaintiffs could request that the defendants' counterclaim be struck. The court also ordered the defendants to take all available steps to retrieve the deleted computer information that should have been provided under the above mentioned undertaking and examination requirements. If the information could not be retrieved, the defendants were to pay a fine of $75,000 for which they would be jointly and severally liable.

Contempt - Topic 3302

Punishment - Dismissal of pleadings, action or appeal or bar to further proceedings - [See Contempt - Topic 5115 ].

Contempt - Topic 3315

Punishment - Fines - [See Contempt - Topic 3336 ].

Contempt - Topic 3315.1

Punishment - Monetary orders - [See Contempt - Topic 5115 ].

Contempt - Topic 3336

Punishment - Retrieval of deleted computer information - In a "large corporate commercial and intellectual property law suit" that proceeded "by court application and by case management order, rather than in a civil and cooperative fashion", the defendants failed to comply with undertaking and examination requirements contained in a consent case management court order - More particularly, computer information that should have been provided under the undertaking and examination requirement, was deleted - The defendants were found in contempt - The Alberta Court of Queen's Bench ordered the defendants to take all available steps to retrieve the deleted computer information - If the information could not be retrieved, the defendants were to pay a fine of $75,000 for which they would be jointly and severally liable - The court held that the deletion was intentional and deliberate and that its purpose was to destroy evidence which would have been relevant and admissible - See paragraphs 1 to 11, 14 to 54.

Contempt - Topic 3337

Punishment - Adverse inference from destruction of evidence - In a "large corporate commercial and intellectual property law suit" that proceeded "by court application and by case management order, rather than in a civil and cooperative fashion", the defendants failed to comply with undertaking and examination requirements contained in a consent case management court order - More particularly, computer information that should have been provided under the undertaking and examination requirement, was deleted - The defendants were found in contempt - The plaintiffs asked that an adverse inference be drawn against the defendants that the deleted evidence would have been harmful to the defendants' case - The Alberta Court of Queen's Bench declined the request because it did not have a full picture of the defendants' operations in the pertinent time period, nor the scope of the missing evidence - The entire picture was to be painted at trial and the trial judge would be in a much better position to assess whether and to what extent an adverse inference was warranted - See paragraphs 42, 43, 50.

Contempt - Topic 5115

Practice - Hearing - Costs - In a "large corporate commercial and intellectual property law suit" that proceeded "by court application and by case management order, rather than in a civil and cooperative fashion", the defendants failed to comply with undertaking and examination requirements contained in a consent case management court order - They were found in contempt - The Alberta Court of Queen's Bench ordered the defendants to pay the plaintiffs' thrown-away costs of $136,146.27 by July 1, 2006, failing which the plaintiffs could request that the defendants' counterclaim be struck - See paragraphs 1 to 13, 49 to 53.

Cases Noticed:

United Nurses of Alberta v. Alberta (Attorney General), [1992] 1 S.C.R. 901; 135 N.R. 321; 125 A.R. 241; 14 W.A.C. 241, refd to. [para. 47].

Metropolitan Life Insurance Co. v. Hover (1999), 237 A.R. 30; 197 W.A.C. 30; 1999 ABCA 123, refd to. [para. 49].

Serhan Estate v. Bjornson et al. (2001), 303 A.R. 17; 273 W.A.C. 17; 2001 ABCA 294, consd. [para. 49].

Counsel:

Terry J. Williams and Kevin Feehan (Fraser Milner Casgrain LLP), for the plaintiffs;

Bradley J. Willis (Willis Bokenfohr Thorsrud), for the defendants.

Greckol, J., of the Alberta Court of Queen's Bench, Judicial District of Edmonton, heard this matter on February 6, 2006, and delivered the following memorandum of decision on May 12, 2006.