Horizon Resource Management Ltd. et al. v. Blaze Energy Ltd. et al., 2011 ABQB 658

• Judge: Brooker, J.
• Court: Court of Queen's Bench of Alberta (Canada)
• Case Date: July 16, 2010
• Citations: 2011 ABQB 658;(2011), 526 A.R. 206 (QB)

Horizon Resource Mgt. v. Blaze Energy (2011), 526 A.R. 206 (QB)

MLB headnote and full text

Temp. Cite: [2011] A.R. TBEd. NO.069

Horizon Resource Management Ltd. and Roll'n Oilfield Industries Ltd. (plaintiffs) v. Blaze Energy Ltd., Canyon Oil & Gas Corporation, Detector Exploration Ltd. and Devon Canada Corporation (defendants)

Blaze Energy Ltd. (plaintiff by counterclaim) v. Horizon Resource Management Ltd. and Roll'n Oilfield Industries Ltd. (defendants by counterclaim)

(0601-02899; 2011 ABQB 658)

Indexed As: Horizon Resource Management Ltd. et al. v. Blaze Energy Ltd. et al.

Alberta Court of Queen's Bench

Judicial District of Calgary

Brooker, J.

October 31, 2011.

Summary:

Blaze had an interest under a farmin agreement in a shut-in sour gas well. To earn an interest in any future production, Blaze was required, within a short period of time, to commence operations to abandon the existing well and drill a new well into the target zone of the critical sour gas well. Blaze hired the defendant Roll'n to provide the equipment and crew to do the job. Blaze hired the defendant Horizon to provide supervisory services. The job, expected to take two weeks, lasted seven weeks and, although the existing well was shut-in, the new well had not yet been drilled when Blaze released Roll'n from the project. Both Horizon and Roll'n left the well site without the work being completed. Blaze refused to pay Horizon and Roll'n for their services, arguing that neither performed the work they were retained to do and, in fact, caused Blaze to suffer damages. Horizon and Roll'n sued Blaze in contract for their services. Blaze counterclaimed for damages it allegedly suffered by the work that was not completed. At issue was (1) whether Roll'n misrepresented its capability to do the work and whether it breached that contract to the extent that Blaze obtained no benefit and (2) whether Blaze or Horizon was responsible for directing the well operations and, if it was Horizon, whether Horizon breached its contract or duty of care by failing to act as a reasonably competent consulting firm.

The Alberta Court of Queen's Bench allowed Roll'n's action, allowed Horizon's action in part, and dismissed Blaze's counterclaim. Judgment was awarded to Horizon and Roll'n and the builders' liens that they had filed were declared valid.

Contracts - Topic 2051

Terms - Implied terms - General - Blaze had an interest under a farmin agreement in a shut-in sour gas well - To earn an interest in any future production, Blaze was required, within a short period of time, to commence operations to abandon the existing well and drill a new well into the target zone of the critical sour gas well - Blaze hired the defendant Roll'n to provide the equipment and crew to do the job - The job, expected to take two weeks, lasted seven weeks and, although the existing well was shut-in, the new well had not yet been drilled when Blaze released Roll'n from the project - Roll'n left the well site without the work being completed - Blaze refused to pay Roll'n for its services, arguing that it did not perform the work it was retained to do and, in fact, caused Blaze to suffer damages - Blaze argued that the terms and conditions of its Drilling Program were implied terms of its contract with Roll'n (the MWS Contract) - The contract required Roll'n to perform its obligations under the direction and supervision of Blaze and according to any written policies or guidelines agreed to between Blaze and Roll'n and attached to the Services Work Order - The contract did not specifically refer to the Drilling Program and it was not attached to the Services Work Order - The Alberta Court of Queen's Bench held that "neither the Blaze Drilling Program nor other pre-contractual representations or communications were incorporated into the MWS Contract. The conditions for implying such terms into the Contract are not present in this case." - See paragraphs 357 to 437.

Contracts - Topic 2054

Terms - Implied terms - From apparent intention - The Alberta Court of Queen's Bench stated that "even where the parties intend the written document to constitute the entire contract, it may nevertheless be necessary sometimes to imply terms. Terms may be implied into a contract to give business efficacy to the contract, where the implied term is the obvious intention of the parties, where the contract is incomplete (in the sense that the obligations of one of the parties are not specified), on the basis of previous dealings between the parties, on the basis of industry usage and custom, or as required by statute" - See paragraph 380.

Contracts - Topic 2056

Terms - Implied terms - Compensation for work, materials or services - Interest - [See Interest - Topic 2041 ].

Contracts - Topic 2059

Terms - Implied terms - Custom - [See Contracts - Topic 2054 ].

Contracts - Topic 2065

Terms - Implied terms - To achieve business efficacy - [See Contracts - Topic 2054 ].

Contracts - Topic 2120

Terms - Express terms - Exclusion clauses - General - [See Contracts - Topic 3735 ].

Contracts - Topic 2122

Terms - Express terms - Exclusions clauses - Bars - Unconscionability or overriding public policy - Blaze had an interest under a farmin agreement in a shut-in sour gas well - To earn an interest in any future production, Blaze was required, within a short period of time, to commence operations to abandon the existing well and drill a new well into the target zone of the critical sour gas well - Blaze hired the defendant Roll'n to provide the equipment and crew to do the job - Problems developed and Blaze released Roll'n from the project without the new well being drilled - Blaze refused to pay Roll'n for its services, alleging numerous breaches of the contract showing that the equipment and crew used by Roll'n were incapable of completing the contracted for work - Given a finding that Roll'n breached the contract in three respects, Roll'n relied on an exclusionary clause to exclude liability - Blaze argued that the exclusionary clause was unenforceable because it was unconscionable - The Alberta Court of Queen's Bench rejected the argument - The exclusionary clause was not unconscionable - Blaze and Roll'n were both sophisticated participants in the oil and gas industry - They were in equal bargaining positions - The exclusion clause was part of an industry standard form contract, which both parties were familiar with - There was no overriding public policy interest that outweighed interfering with the freedom to contract - See paragraphs 994 to 1024.

Contracts - Topic 3523

Performance or breach - Breach - What constitutes a breach - Blaze had an interest under a farmin agreement in a shut-in sour gas well - To earn an interest in any future production, Blaze was required, within a short period of time, to commence operations to abandon the existing well and drill a new well into the target zone of the critical sour gas well - Blaze hired the defendant Roll'n to provide the equipment and crew to do the job - Problems developed and Blaze released Roll'n from the project without the new well being drilled - Blaze refused to pay Roll'n for its services, citing 19 distinct breaches of the contract showing that the equipment and crew used by Roll'n were incapable of completing the contracted for work - The Alberta Court of Queen's Bench held that Roll'n breached the contract in the following respects: "1) failing to provide crew members with the required first and second-line BOP tickets; 2) by supplying mud pumps that had an excessive rate of mechanical breakdown; and 3) by contributing to the December AEUB shut-down by failing to provide a driller with a first line BOP ticket and a rig manager with a second line BOP ticket." - The contractual breaches constituted concurrent breaches of Roll'n's duty of care (negligence) - The standard of care (duty to complete the contract according to its terms) was the same in contract and tort - See paragraphs 533 to 992.

Contracts - Topic 3602

Performance or breach - Negligent breach - What constitutes - [See Contracts - Topic 3523 ].

Contracts - Topic 3735

Performance or breach - Fundamental breach - Effect of exclusionary clause - Blaze counterclaimed against Roll'n for breach of contract - Roll'n relied on contractual exclusionary clauses to argue that liability was excluded - Blaze argued that the exclusionary clause did not apply to fundamental breaches of contract - The Alberta Court of Queen's Bench rejected Blaze's argument, because the doctrine of "fundamental breach of contract" had been "laid to rest" in Tercon Contractors (SCC) - Whether an exclusionary clause excluded liability depended upon a three part test: (1) whether it was the parties' intention, as expressed in the contract, that the exclusionary clause applied in the circumstances before the court; (2) if so, whether the exclusionary clause was unconscionable at the time the contract was made (eg., unequal bargaining power); and 3) if the exclusionary clause was valid and enforceable, whether the court should enforce the exclusionary clause because of overriding public policy that outweighed the strong public interest in enforcing contracts - There no longer was a need to determine whether a contractual breach was fundamental or not - See paragraphs 1005 to 1008.

Contracts - Topic 6531

Illegal contracts - Violations of statute law - Statutes - General - [See Contracts - Topic 6539 ].

Contracts - Topic 6533

Illegal contracts - Violations of statute law - Violation of safety legislation - [See Contracts - Topic 6544 ].

Contracts - Topic 6539

Illegal contracts - Violations of statute law - Contract prohibited by law - The Alberta Court of Queen's Bench distinguished between a contract prohibited by statute and an otherwise legal contract performed in an illegal manner - The court stated that "1) If the very formation of the contract is obviously and expressly prohibited by statute, or the contract is for an unlawful purpose, then it is void ab initio, and only in exceptional circumstances will a party be entitled to relief. 2) If it seems that the formation of the contract may be impliedly prohibited by a statutory scheme (for example certain conduct is prohibited), then the court should engage in a policy-oriented analysis, considering the 'effect on the parties for whose protection the law making the bargain illegal exists'. If the policy underlying the legislation would not be advanced by treating the contract as void, then the court should hesitate to do so. 3) Where the purpose of the contract is not impugned, but the method of its performance is, the court should consider the good faith of the parties, the intention to perform the contract in a legal manner, and the relative importance of the infringement compared with the hardship that would be suffered by treating the contract as void. In performing this balancing, the court must remember the presumption of illegality." - See paragraph 522.

Contracts - Topic 6544

Illegal contracts - Violations of statute law - Oil and gas legislation - Blaze had an interest under a farmin agreement in a shut-in sour gas well - To earn an interest in any future production, Blaze was required, within a short period of time, to commence operations to abandon the existing well and drill a new well into the target zone of the critical sour gas well - Blaze hired the defendant Roll'n to provide the equipment and crew to do the job - Problems developed and Blaze released Roll'n from the project without the new well being drilled - Blaze refused to pay Roll'n for its services - Blaze argued, inter alia, that Roll'n wilfully or intentionally failed to comply with oil and gas regulatory requirements and occupational health and safety legislation, which rendered its contract with Blaze (the MWS Contract) unenforceable on the grounds of illegality - The Alberta Court of Queen's Bench rejected the submission, finding that "Roll'n's failure to provide a crew with the appropriate BOP tickets as required by the AEUB Guide 36 and any failure to follow OH&S provisions was not wilful or intentional in Roll'n's part and does not render the MWS Contract void for illegality" - See paragraphs 438 to 532.

Evidence - Topic 2401

Special modes of proof - Presumptions - Specific presumptions - Inference from failure to call or adduce available evidence - The plaintiffs sued the defendants in contract for monies owing for services performed - The defendants argued that an adverse inference should be drawn from the plaintiffs' failure to call certain witnesses - The Alberta Court of Queen's Bench stated that the court had a discretion to draw an adverse inference and should consider whether "(i) there is a legitimate explanation for the failure to call the witness; (ii) the witness has material evidence to provide; (iii) the witness is the only person or the best person who can provide the evidence; and (iv) the witness is within the exclusive control of the party, and is not equally available to both parties." - The court declined to draw an adverse inference - None of the witnesses that the defendants argued should have been called possessed particularly important information uniquely available to them - The evidence was available to the court through other witnesses and the witnesses could have been called by the defendants - See paragraphs 138 to 154.

Evidence - Topic 6202

Parol evidence rule - General principles - Exceptions - General - [See Evidence - Topic 6204 ].

Evidence - Topic 6204

Parol evidence rule - General principles - Evidence offered to contradict or explain written agreement - A defendant in the plaintiffs' breach of contract action sought to introduce extrinsic evidence to establish negligent misrepresentation by the plaintiffs - The plaintiffs sought to invoke the parol evidence rule - The Alberta Court of Queen's Bench held that the rule did not apply, stating that "it is settled law that extrinsic, pre-contractual evidence may be used to establish that the contract is invalid by reason of fraud or misrepresentation. From this reasoning it follows that extrinsic evidence is equally admissible where a plaintiff seeks to establish the tort of negligent misrepresentation. Again, since the evidence is not used in an attempt to vary or interpret the contract but rather to prove that the plaintiff was induced into entering the contract by inaccurate information, the parol evidence rule is not engaged" - See paragraphs 157 to 161.

Fraud and Misrepresentation - Topic 2508

Misrepresentation - General principles - Negligent misrepresentation - The Alberta Court of Queen's Bench stated that the requirements for negligent misrepresentation were: "(1) there must be a duty of care based on a 'special relationship' between the representor and the representee; (2) the representation in question must be untrue, inaccurate or misleading; (3) the representor must have acted negligently in making said misrepresentation; (4) the representee must have relied, in a reasonable manner, on said negligent misrepresentation; and (5) the reliance must have been detrimental to the representee in the sense that damages resulted." - See paragraph 167.

Fraud and Misrepresentation - Topic 2508

Misrepresentation - General principles - Negligent misrepresentation - Blaze had an interest under a farmin agreement in a shut-in sour gas well - To earn an interest in any future production, Blaze was required, within a short period of time, to commence operations to abandon the existing well and drill a new well into the target zone of the critical sour gas well - Blaze hired the defendant Roll'n to provide the equipment and crew to do the job - The job, expected to take two weeks, lasted seven weeks and, although the existing well was shut-in, the new well had not yet been drilled when Blaze released Roll'n from the project - Roll'n left the well site without the work being completed - Blaze refused to pay Roll'n for its services, arguing that it did not perform the work it was retained to do and, in fact, caused Blaze to suffer damages - Blaze claimed that Roll'n negligently misrepresented the ability of its equipment and crew to do the work - The Alberta Court of Queen's Bench held that there were no "inaccurate, untruthful or misleading representations to Blaze" - Had there been misrepresentations, the court opined that they would have been negligently made - Had there been negligent misrepresentations, Blaze's action would still be dismissed because there was no detrimental reliance and the "entire agreement" clause would have precluded liability for any pre-contractual representations - See paragraphs 173 to 356.

Fraud and Misrepresentation - Topic 2533

Misrepresentation - Elements - Special relationships - Blaze had an interest under a farmin agreement in a shut-in sour gas well - To earn an interest in any future production, Blaze was required, within a short period of time, to commence operations to abandon the existing well and drill a new well into the target zone of the critical sour gas well - Blaze hired the defendant Roll'n to provide the equipment and crew to do the job - The job, expected to take two weeks, lasted seven weeks and, although the existing well was shut-in, the new well had not yet been drilled when Blaze released Roll'n from the project - Roll'n left the well site without the work being completed - Blaze refused to pay Roll'n for its services, arguing that it did not perform the work it was retained to do and, in fact, caused Blaze to suffer damages - Blaze claimed that Roll'n negligently misrepresented its ability to do the work - The Alberta Court of Queen's Bench held that the requisite "special relationship" existed to fix Roll'n with a duty of care to Blaze - It was foreseeable that Blaze would rely on statements Roll'n would make respecting the experience and capabilities of its equipment and crew - The court stated that "it seems both reasonable and foreseeable for an operator to rely on the statements of a contractor during pre-contractual negotiations. In the result, Roll'n did owe Blaze a duty of care, at least with respect to any statements made that were within Roll'n's area of expertise (in particular regarding the general characteristics of its equipment and crew)." - See paragraphs 170 to 172.

Fraud and Misrepresentation - Topic 2824

Misrepresentation - Defences - Agreement excluding liability - The Alberta Court of Queen's Bench stated that "in the context of a contract, a finding of negligent misrepresentation may be precluded if the contract contains provisions stating that representations made outside of the contract to not bind the defendant (for example, in an 'entire agreement' clause), or if other contractual provisions otherwise exclude liability for negligence" - See paragraph 168.

Fraud and Misrepresentation - Topic 2824

Misrepresentation - Defences - Agreement excluding liability - [See second Fraud and Misrepresentation - Topic 2508 ].

Fraud and Misrepresentation - Topic 2825

Misrepresentation - Defences - Lack of reliance - [See second Fraud and Misrepresentation - Topic 2508 ].

Interest - Topic 2041

Agreement to pay interest - Implied agreement to pay - General - A contract provided that "any sum not paid within [blank] days after the date of the receipt of the invoice" was subject to 18% interest until paid - Blaze refused to pay Roll'n monies owed for work and services under the contract - Roll'n obtained judgment for the monies owing and sought 18% interest - The Alberta Court of Queen's Bench held that it was an implied term of the contract that invoices were payable within a "reasonable time", which the court fixed at 30 days - However, the court declined to award 18% interest commencing 30 days after receipt of an invoice - The court stated that "while one can readily infer that the parties agreed that the invoice should be paid within a reasonable time, it does not follow that they agreed that interest at 18 percent would run from that time. The fact that no date was inserted ... is entirely consistent with Blaze not having agreed to pay interest at 18 percent and I so find. In the result, I find that there is no agreement between the parties to pay interest on any amounts owing. Any interest awarded must therefore be governed by the Judgment Interest Act." - See paragraphs 1081 to 1101.

Mines and Minerals - Topic 8396

Oil and gas - Wells - Drilling of - Contractual liability of driller or operator - [See Contracts - Topic 2122 ].

Professional Occupations - Topic 3301.1

Engineers - Negligence - Duty of care - Blaze needed to abandon an existing well and drill a new well into the target zone of a critical sour gas well - Blaze hired Roll'n to provide the equipment and crew to do the job and Horizon to provide supervisory services - The job had not been completed when Blaze released Roll'n from the project - Both Horizon and Roll'n left the well site without the work being completed - Blaze refused to pay Horizon its services, arguing that Horizon was responsible for directing the well operations and breached its contract or duty of care by failing to act as a reasonably competent consulting firm - The Alberta Court of Queen's Bench dismissed the claim against Horizon - Horizon contracted to provide qualified well site supervisors to report to and take direction from Blaze - Those contractual duties were not breached - Horizon did not contract to provide technical expertise, supervision and direction - The court rejected Blaze's argument that "there is a freestanding duty on the part of engineers to inspect/supervise", even if the contract did not obligate them to do so - The court stated that "freedom of contract militates against implying a duty to inspect/supervise absent terms of the agreement, or surrounding context supported by evidence, that clearly supports such an obligation. ... In effect, to recognize this duty would change the allocation of risk in favour of the purchaser of engineering services without any corresponding commercial benefit flowing to the engineer. To the contrary, freedom of contract allows both parties to negotiate whatever consideration each is willing to accept in exchange for undertaking obligations they agree to be bound by within the framework of their contractual relationship. ... To impose a free-standing duty to inspect and supervise an entity that provides personnel who performs services under the direction and control of that entity's client would derogate from the efficacy of the underlying commercial relations." - See paragraphs 1171 to 1290.

Cases Noticed:

Levesque v. Comeau, [1970] S.C.R. 1010; 16 D.L.R.(3d) 425, refd to. [para. 146].

Ritchie v. Thompson (1994), 155 N.B.R.(2d) 35; 398 A.P.R. 35; 35 C.P.C.(3d) 333 (C.A.), refd to. [para. 146].

Spartan Developments Ltd. et al. v. 206559 Developments Ltd. et al. (2003), 346 A.R. 124; 320 W.A.C. 124 (C.A.), refd to. [para. 146].

Dabrowski v. Robertson (2007), 419 A.R. 359 (Q.B.), refd to. [para. 146].

C.A.H. v. M.W.S. (2008), 439 A.R. 379; 2008 ABQB 34, refd to. [para. 147].

Goss v. Nugent (1833), 5 B. & Ad. 58, refd to. [para. 157].

Shaw United Lease Ltd. v. Cantest Production Services Ltd. (Bankrupt) (1996), 178 A.R. 305; 110 W.A.C. 305; 37 Alta. L.R.(3d) 206 (C.A.), refd to. [para. 157].

1052276 Alberta Ltd. v. Consultant Feeds Ltd. et al. (2007), 430 A.R. 91; 2007 ABPC 269, refd to. [para. 159].

Esso Petroleum Co. v. Mardon, [1976] Q.B. 801; [1976] 2 All E.R. 5, refd to. [para. 166].

Central Trust Co. v. Rafuse and Cordon, [1986] 2 S.C.R. 147; 69 N.R. 321; 75 N.S.R.(2d) 109; 186 A.P.R. 109; 31 D.L.R.(4th) 481, refd to. [para. 166].

Queen (D.J.) v. Cognos Inc., [1993] 1 S.C.R. 87; 147 N.R. 169; 60 O.A.C. 1; 99 D.L.R.(4th) 626, refd to. [para. 167].

Gainers Inc. v. Pocklington Holdings Inc. (2000), 255 A.R. 373; 220 W.A.C. 373; 2000 ABCA 151, refd to. [para. 168].

TWT Enterprises Ltd. et al. v. Westgreen Developments (North) Ltd., [1991] 3 W.W.R. 80; 78 Alta. L.R.(2d) 62 (Q.B.), affd. (1992), 127 A.R. 353; 20 W.A.C. 353; 3 Alta. L.R.(3d) 124 (C.A.), refd to. [para. 169].

Mason (V.K.) Construction Ltd. v. Bank of Nova Scotia and Courtot Investments Ltd., [1985] 1 S.C.R. 271; 58 N.R. 195; 8 O.A.C. 381; 116 D.L.R.(4th) 598, refd to. [para. 169].

Nielsen v. Kamloops (City) and Hughes, [1984] 2 S.C.R. 2; 54 N.R. 1; 10 D.L.R.(4th) 641, refd to. [para. 170].

Hercules Management Ltd. et al. v. Ernst & Young et al., [1997] 2 S.C.R. 165; 211 N.R. 352; 115 Man.R.(2d) 241; 139 W.A.C. 241; 146 D.L.R.(4th) 577, refd to. [para. 170].

Faryna v. Chorny (1951), 4 W.W.R.(N.S.) 171 (B.C.C.A.), refd to. [para. 334].

Carman Construction Ltd. v. Canadian Pacific Railway Co. and C.P. Rail, [1982] 1 S.C.R. 958; 42 N.R. 147; 136 D.L.R.(3d) 193, refd to. [para. 353].

Intrawest Corp. v. No. 2002 Taurus Ventures Ltd. et al. (2007), 240 B.C.A.C. 112; 398 W.A.C. 112; 281 D.L.R.(4th) 420; 2007 BCCA 228, refd to. [para. 353].

McNeely v. Herbal Magic Inc. et al., [2011] O.T.C. Uned. 4237; 2011 ONSC 4237, refd to. [para. 353].

Turner v. Visscher Holdings Inc. (1996), 77 B.C.A.C. 48; 126 W.A.C. 48; 23 B.C.L.R.(3d) 304 (C.A.), refd to. [para. 353].

Hayward and Govier v. Mellick and Mellick (1984), 2 O.A.C. 161; 45 O.R.(2d) 110; 5 D.L.R.(4th) 740 (C.A.), refd to. [para. 353].

Power Consolidated (China) Pulp Inc. v. British Columbia Resources Investment Corp, [1989] B.C.J. No. 114 (S.C.), refd to. [para. 383].

Hawrish v. Bank of Montreal, [1969] S.C.R. 515; 66 W.W.R.(N.S.) 673, refd to. [para. 385].

The Moorcock (1889), 14 P.D. 64 (Eng. C.A.), refd to. [para. 388].

Sprague's Well Drilling Ltd. v. Mills (1990), 95 N.S.R.(2d) 53; 251 A.P.R. 53 (T.D.), refd to. [para. 505].

Commercial Life Assurance Co. v. Drever, [1948] S.C.R. 306; [1948] D.L.R. 241, refd to. [para. 507].

Little Britain Well Drilling Ltd. v. Spindler et al., [2000] O.T.C. 79; 2000 CarswellOnt 271 (Sup. Ct.), refd to. [para. 508].

Meyers v. Freeholders Oil Ltd., [1960] S.C.R. 761; 25 D.L.R.(2d) 81, refd to. [para. 510].

Sidmay Ltd. v. Wehttam Investments Ltd., [1967] 1 O.R. 508; 61 D.L.R.(2d) 358 (C.A.), refd to. [para. 512].

Still v. Minister of National Revenue, [1998] 1 F.C. 549; 221 N.R. 127; 154 D.L.R.(4th) 229 (F.C.A.), refd to. [para. 515].

Maschinenfabrik Seydelmann K-G v. Presswood Brothers Ltd., [1966] 1 O.R. 316; 53 D.L.R.(2d) 224 (C.A.), refd to. [para. 519].

Chung et al. v. Idan, [2006] O.T.C. Uned. 85; 49 C.L.R.(3d) 216 (Sup. Ct.), affd. (2007), 62 C.L.R.(3d) 168 (C.A.), refd to. [para. 521].

BG Checo International Ltd. v. British Columbia Hydro and Power Authority, [1993] 1 S.C.R. 12; 147 N.R. 81; 20 B.C.A.C. 241; 35 W.A.C. 241; 99 D.L.R.(4th) 577, refd to. [para. 982].

Hanke v. Resurfice Corp. et al., [2007] 1 S.C.R. 333; 357 N.R. 175; 404 A.R. 333; 394 W.A.C. 333; 2007 SCC 7, refd to. [para. 984].

McCulloch v. Murray, [1942] S.C.R. 141; [1942] 2 D.L.R. 179, refd to. [para. 989].

Adeco Exploration Co. et al. v. Hunt Oil Co. of Canada Inc. et al. (2008), 437 A.R. 33; 433 W.A.C. 33; 2008 ABCA214, refd to. [para. 991].

Tercon Contractors Ltd. v. British Columbia (Minister of Transportation and Highways), [2010] 1 S.C.R. 69; 397 N.R. 331; 281 B.C.A.C. 245; 475 W.A.C. 245; 2010 SCC 4, refd to. [para. 1006].

Brinkerhoff International Inc. v. Numac Energy Inc. (1997), 209 A.R. 195; 160 W.A.C. 195; 53 Alta. L.R.(3d) 4 (C.A.), refd to. [para. 1009].

Falcon Lumber Ltd. v. Canada Wood Specialty Co. (1978), 23 O.R.(2d) 345; 95 D.L.R.(3d) 503 (H.C.J.), refd to. [para. 1010].

Dennis et al. v. Ontario Lottery and Gaming Corp., [2010] O.T.C. Uned. 1332; 318 D.L.R.(4th) 110; 2010 ONSC 1332, refd to. [para. 1011].

Cain v. Clarica Life Insurance Co. (2005), 384 A.R. 11; 367 W.A.C. 11; 2005 ABCA 437, refd to. [para. 1015].

Morrison v. Coast Finance Ltd. (1965), 54 W.W.R.(N.S.) 257; 55 D.L.R.(2d) 710 (B.C.C.A.), refd to. [para. 1015].

Norberg v. Wynrib, [1992] 2 S.C.R. 226; 138 N.R. 81; 9 B.C.A.C. 1; 19 W.A.C. 1; 92 D.L.R.(4th) 449, refd to. [para. 1015].

Plas-Tex Canada Ltd. et al. v. Dow Chemical of Canada Ltd. et al. (2004), 357 A.R. 139; 334 W.A.C. 139; 2004 ABCA 309, refd to. [para. 1016].

Beller Carreau Lucyshyn Inc. v. Cenalta Oilwell Servicing Ltd. (1999), 244 A.R. 349; 209 W.A.C. 349 (C.A.), refd to. [para. 1095].

Homes by Jayman Ltd. v. Kellam Berg Engineering & Surveys Ltd. et al. (1995), 171 A.R. 1; 29 Alta. L.R.(3d) 1 (Q.B.), revsd. (1997), 209 A.R. 241; 160 W.A.C. 241; 54 Alta. L.R.(3d) 272; 1997 ABCA 308, dist. [para. 1277].

Viridian Inc. v. Dresser Canada Inc. et al. (2000), 274 A.R. 28; 2000 ABQB 707, refd to. [para. 1290].

Authors and Works Noticed:

Chitty on Contracts (29th Ed. 2004), §§ 12-097, 12-103, 12-113, 12-117 [para. 379]; 13-003 to 13.018 [para. 380].

Fridman, G.H.L. The Law of Torts in Canada (2nd Ed. 2002), pp. 316, 317 [para. 983]; 619, 620 [para. 159].

Fridman, G.H.L., The Law of Contract in Canada (5th Ed. 2006), pp. 296 to 301 [para. 162]; 339 to 341 [para. 503]; 345 [para. 511]; 346 [para. 512]; 352 [para. 503]; 477 [para. 433]; 579 to 581 [para. 976]; 706 [para. 982].

McLachlin, Wallace and Grant, The Canadian Law of Architecture and Engineering (2nd Ed. 1994), p. 126 [para. 1285].

Mewett, Alan W., and Sankoff, Peter J., Witnesses (2007), p. 2-23 [para. 147].

Prosser and Keeton, The Law of Torts (5th Ed. 1984), pp. 211, 212 [para. 989].

Counsel:

G.B. Davison, Q.C., for Horizon Resource Management and Roll'n Oilfied Industries Ltd.;

G.R. Vipond and R.J. Mueller, for Blaze Energy Ltd., Canyon Oil and Gas Corp. and Detector Exploration Ltd.

This action and counterclaim were heard on March 1 to April 7 and June 16 to July 16, 2010, before Brooker, J., of the Alberta Court of Queen's Bench, Judicial District of Calgary, who delivered the following judgment on October 31, 2011.