Weatherford Canada Partnership v. Addie et al., 2009 ABQB 39

• Judge: Veit, J.
• Court: Court of Queen's Bench of Alberta (Canada)
• Case Date: December 15, 2008
• Citations: 2009 ABQB 39;(2009), 461 A.R. 132 (QB)

Weatherford Can. Partnership v. Addie (2009), 461 A.R. 132 (QB)

MLB headnote and full text

Temp. Cite: [2009] A.R. TBEd. FE.046

Weatherford Canada Partnership (plaintiff) v. Dave Addie, David Anderson, Glen Kinnee, Ted Harland, Dan Endersby, Midfield Supply ULC, Midfield Supply International Ltd., Dale Denny, Douglas Golledge, John Letwinetz, Rick Endersby, Jakob Ambrosius, Artemis Kautschuk-und-Kunstsoff-Technik GmbH, Wilhelm Kaechele GmbH, West Met Tools & Machinery Ltd., John Doe 1 to 10 and Europump Systems Inc. (defendants)

(0603 04628; 2009 ABQB 39)

Indexed As: Weatherford Canada Partnership v. Addie et al.

Alberta Court of Queen's Bench

Judicial District of Edmonton

Veit, J.

January 22, 2009.

Summary:

A case management judge issued an ex parte order allowing the plaintiff to make service in Germany of its statement of claim against two German manufacturers. The plaintiff claimed that the manufacturers converted to their own use and benefit proprietary information from the plaintiff which had been provided to them to manufacture stators for the plaintiff's PC downhole pumps. The German manufacturers applied to set aside the order.

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

Equity - Topic 3901

Fiduciary or confidential relationships - Breach of confidence - General - A case management judge issued an ex parte order allowing the plaintiff to make service in Germany of its statement of claim against two German manufacturers - The plaintiff claimed that the manufacturers converted to their own use and benefit proprietary information which had been provided to them to manufacture stators for the plaintiff's pumps - The manufacturers asserted that, inter alia, there was no equitable or contractual bar to their reverse engineering of the stators - The Alberta Court of Queen's Bench agreed - Absent a contractual commitment, there was no prohibition against a person, who received proprietary information connected to a product, from reverse engineering the product provided that they did not use the proprietary information to assist in the reverse engineering - At trial, if the plaintiff established that the manufacturers had received proprietary information, there would be an evidentiary shift to the manufacturers to establish that the proprietary information was not used in the reverse engineering - The evidence concerning the reverse engineering process would be examined critically - However, at this stage, the manufacturers did not have to prove that the reverse engineering had been successful and the court did not have to make a final determination on the issue - Since no contract existed between the plaintiff and the manufacturers, there was no prohibition against the reverse engineering - See paragraphs 30 to 34.

Evidence - Topic 7000.4

Opinion evidence - Expert evidence - General - Admissibility - General - A case management judge issued an ex parte order allowing the plaintiff to make service in Germany of its statement of claim against two German companies - The companies applied to set aside the order - The companies asserted that opinion evidence was not admissible on the issue of service outside Canada - The Alberta Court of Queen's Bench rejected the assertion - The term "opinion evidence" was equivocal - When it was used as a substitute for "expert" evidence, then it could be used on applications of this type - See paragraphs 41 to 45.

Evidence - Topic 7002

Opinion evidence - Expert evidence - General - Acceptance, rejection and weight to be given to expert opinion - A case management judge issued an ex parte order allowing the plaintiff to make service in Germany of its statement of claim against two German companies - The companies applied to set aside the order - The issue arose as to whether an expert who was not independent (the plaintiff's employee) could be considered an expert and therefore be allowed to express an opinion - The Alberta Court of Queen's Bench concluded that, for the purposes of this application, it had to answer the question in the affirmative but that the weight of the evidence was a matter for the court - See paragraphs 46 to 50.

Evidence - Topic 7016

Opinion evidence - Expert evidence - General - Admissibility v. weight - [See Evidence - Topic 7002 ].

Practice - Topic 2562

Service - Service of notice, writ or statement of claim out of jurisdiction - Requirement of good cause of action against named defendant - A case management judge issued an ex parte order allowing the plaintiff to make service in Germany of its statement of claim against two German manufacturers - The plaintiff claimed that the manufacturers converted to their own use and benefit proprietary information which had been provided to them to manufacture stators for the plaintiff's pumps - The Alberta Court of Queen's Bench set aside the order - The plaintiff's core claim was that its pitch specification for stators could not be reverse engineered - The plaintiff had not made out a "good and arguable case" on that claim - The plaintiff had not provided evidence that was acceptable until rebutted, or prima facie evidence, that the stators could not be reverse engineered - Although the plaintiff was entitled to use expert evidence from its own senior employee, in the circumstances that evidence could not be given any weight and therefore did not rise to the requisite level of prima facie proof - Indeed, that evidence was disputed by other evidence emanating from the plaintiff's own staff - No evidence and no law supported the plaintiff's other claims against the manufacturers for various kinds of economic torts - In the absence of any fiduciary or contractual obligation not to reverse engineer and not to compete, the manufacturers were entitled to compete against the plaintiff - To become a tort, competition had to be unlawful - Absent some evidence that Weatherford's proprietary information was abused by the manufacturers, the plaintiff's economic tort allegations could not succeed - See paragraphs 1 to 5.

Practice - Topic 2566.1

Service - Service of notice, writ or statement of claim out of jurisdiction - Setting aside service or order for service ex juris - Evidence and proof - [See Equity - Topic 3901 , Evidence - Topic 7000.4 , Evidence - Topic 7002 and Practice - Topic 2562 ].

Practice - Topic 2566.1

Service - Service of notice, writ or statement of claim out of jurisdiction - Setting aside service or order for service ex juris - Evidence and proof - A case management judge issued an ex parte order allowing the plaintiff to make service in Germany of its statement of claim against two German companies - The plaintiff claimed that the manufacturers converted to their own use and benefit proprietary information which had been provided to them to manufacture stators for the plaintiff's pumps - The companies applied to set aside the order - The Alberta Court of Queen's Bench stated that "I begin by noting that the manner of hearing this motion, the German companies having addressed the court first, did not, of course, change the onus. Although it is the German companies' motion, because this is a de novo, or new, hearing the onus is on [the plaintiff] to prove that it has a good arguable case against the German companies. In specific terms relative to this case, the court must not reverse the onus and require the German companies to demonstrate that pitch could be reverse engineered, but must put on [the plaintiff] the onus of advancing some evidence that the pitch of stators cannot be reverse engineered. ... In this same context, the issue is not, with respect, as suggested by the [the plaintiff] in its brief whether the case management judge erred in issuing the order allowing service outside of Canada, but is rather whether, on this application, [the plaintiff] has satisfied the required standard for such an order. Indeed, because this is a new hearing, all parties are entitled to lead evidence that was not tendered on the ex parte application." - See paragraphs 52 and 53.

Torts - Topic 5125

Interference with economic relations - Unfair competition - General - Use of proprietary information (incl. reverse engineering) - [See Equity - Topic 3901 and Practice - Topic 2562 ].

Cases Noticed:

United States Broadcasting Co. v. WIC Premium Television - see WIC Premium Television Ltd. v. General Instrument Corp. et al.

WIC Premium Television Ltd. v. General Instrument Corp. et al. (2000), 266 A.R. 142; 228 W.A.C. 142; 2000 ABCA 233, refd to. [para. 6].

Wheeler v. 1000128 Alberta Ltd. et al. (2008), 431 A.R. 209 (Q.B.), refd to. [para. 6].

Murray et al. v. Canada (Attorney General) et al. (2003), 340 A.R. 215 (Q.B.), refd to. [para. 6].

Alberta (Treasury Branches) v. Leahy et al. (1999), 234 A.R. 201 (Q.B.), refd to. [para. 6].

Alberta Human Rights Commission v. Alberta Blue Cross Plan (1983), 48 A.R. 192 (C.A.), refd to. [para. 6].

Guccione v. Bell et al., [2004] A.R. Uned. 640; 2004 ABQB 729, refd to. [para. 6].

Hovsepian et al. v. Westfair Foods Ltd. et al. (2003), 341 A.R. 1; 2003 ABQB 641, refd to. [para. 6].

Hansraj v. Ao et al. (2004), 354 A.R. 91; 329 W.A.C. 91 (C.A.), refd to. [para. 6].

Magazine Inc. v. Vue Weekly - see Peat Marwick Thorne Inc. v. Vue Weekly et al.

Peat Marwick Thorne Inc. v. Vue Weekly et al. (1995), 174 A.R. 277; 102 W.A.C. 277 (C.A.), refd to. [para. 6].

Teichgraber v. Gallant, 2003 ABQB 58, refd to. [para. 6].

Deuruneft Deutsche-Russische Mineralol Handelsgesellschaft GmbH v. Bullen - see Deuruneft GmbH v. Bullen et al.

Deuruneft GmbH v. Bullen et al. (2003), 349 A.R. 221; 2003 ABQB 743, refd to. [para. 6].

Amchem Products Inc. et al. v. Workers' Compensation Board (B.C.), [1993] 1 S.C.R. 897; 150 N.R. 321; 23 B.C.A.C. 1; 39 W.A.C. 1, refd to. [para. 6].

Paterson (N.M.) and Sons Ltd. v. Mannix Ltd., [1966] S.C.R. 180, refd to. [para. 7].

Hancor Inc. et al. v. Systèmes de Drainage Modernes Inc. (1991), 45 F.T.R. 266; 38 C.P.R.(3d) 62 (T.D.), refd to. [para. 7].

Northwest Mettech Corp. v. Metcon Services Ltd. et al., [1997] B.C.T.C. Uned. 986; 74 C.P.R.(3d) 464 (S.C. Master), refd to. [para. 7].

Lameman et al. v. Canada (Attorney General) et al. (2006), 404 A.R. 349; 394 W.A.C. 349; 2006 ABCA 392; 2007 ABCA 180, appld. [para. 7].

Simard (Emmanuel) & Fils (1983) Inc. v. Raydan Manufacturing Ltd. (2005), 276 F.T.R. 164; 2005 FC 973, refd to. [para. 7].

National Justice Compania S.A. v. Prudential Assurance Co.; Ship Ikarian Reefer, Re, [1995] 1 Lloyd's Rep. 455 (C.A.), refd to. [para. 7].

National Justice Compania S.A. v. Prudential Assurance Co.; Ship Ikarian Reefer, Re, [1993] 1 Lloyd's Rep. 68 (Q.B.), refd to. [para. 7].

Petroasia Energy Inc. et al. v. Samek LLP et al. (2008), 440 A.R. 1; 438 W.A.C. 1; 2008 ABCA 323, refd to. [para. 7].

Balm v. 3512061 Canada Ltd. et al. (2003), 327 A.R. 149; 296 W.A.C. 149; 2003 ABCA 98, refd to. [para. 7].

Global Internet Management Ltd. et al. v. McLeod et al., [2003] B.C.T.C. 652; 121 A.C.W.S.(3d) 946; 2003 BCSC 652, refd to. [para. 8].

Unitech Energy Corp. v. International Datashare Corp., [2003] A.R. Uned. 136; 121 A.C.W.S.(3d) 457; 2003 ABQB 203, refd to. [para. 8].

Dell Chemical & Marketing Ltd. et al. v. Aquasol International Inc. et al. (2000), 273 A.R. 216; 2000 ABQB 587, refd to. [para. 8].

Longyear Canada ULC et al. v. 897173 Ontario Inc. et al., [2007] O.T.C. Uned. P92; 162 A.C.W.S.(3d) 671 (Sup. Ct.), refd to. [para. 8].

Hague v. Liberty Mutual Insurance Co. (2004), 21 C.C.L.I.(4th) 264 (Ont. Sup. Ct.), refd to. [para. 8].

PricewaterhouseCoopers, LLP v. Canada (Minister of Canadian Heritage) (2001), 211 F.T.R. 206; 2001 FCT 1040, affd. (2002), 299 N.R. 224; 2002 FCA 406, refd to. [para. 8].

CCI Thermal Technologies Inc. v. Lewis et al., [2005] A.R. Uned. 600; 141 A.C.W.S.(3d) 639; 2005 ABQB 579, refd to. [para. 8].

R. v. J.-L.J., [2000] 2 S.C.R. 600; 261 N.R. 111, refd to. [para. 8].

Frazer et al. v. Haukioja, [2008] O.T.C. Uned. G92 (Sup. Ct.), refd to. [para. 8].

Dreco Energy Services Ltd. et al. v. Wenzel Downhole Tools Ltd. (2008), 440 A.R. 351; 438 W.A.C. 351 (C.A.), refd to. [para. 20].

Authors and Works Noticed:

Mitchell and Mandhane, The uncertain duty of the expert witness (2005), 42 Alta. L. Rev. 635, pp. 635 to 675 [para. 7].

Counsel:

Kenneth W. Fitz (McLennan Ross LLP), for the defendant, Artemis Kautschuk-und-Kunstsoff-Technik GmbH;

W. Paul Sharek, Q.C. and Wendy Young (Emery Jamieson LLP), for the defendant, Wilhelm Kaechele GmbH;

Fausto Franceschi, Joseph Rosselli and Shayna J. Staniloff (Fraser Milner Casgrain LLP), for Weatherford Canada Partnership.

This application was heard on November 28 and December 15, 2008, by Veit, J., of the Alberta Court of Queen's Bench, Judicial District of Edmonton, who delivered the following decision on January 22, 2009.