Weatherford Canada Partnership v. Addie et al., 2010 ABQB 477

• Judge: Shelley, J.
• Court: Court of Queen''s Bench of Alberta (Canada)
• Case Date: Tuesday May 04, 2010
• Citations: 2010 ABQB 477;(2010), 492 A.R. 307 (QB)

Weatherford Can. Partnership v. Addie (2010), 492 A.R. 307 (QB)

MLB headnote and full text

Temp. Cite: [2010] A.R. TBEd. JL.091

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

(0603 04628; 2010 ABQB 477)

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

Alberta Court of Queen's Bench

Judicial District of Edmonton

Shelley, J.

July 15, 2010.

Summary:

Weatherford Canada Partnership ran a business involved in the heavy oil industry. Weatherford sued former senior employees (including Golledge), the competing business that the employees had commenced (Europump Systems Inc.) and another competitor (Midfield Supply International Ltd.). Weatherford claimed that the employees breached their fiduciary duties and duties of confidence to Weatherford by, inter alia, inducing over 35 other employees to join them and making use of proprietary and confidential information with the complicity of Weatherford's key parts suppliers (Artemis and Kaechele). Weatherford added defendants to the action, including Artemis and Kaechele. The claim against Artemis and Kaechele was based on a breach of confidence/unauthorized use of confidential and proprietary information, interference with economic interests, including breach of contract, and conspiracy. Weatherford applied for the following relief: a declaration that the defendants Addie, Anderson, Kinnee and Harland (the respondents) had failed, without an excuse or explanation, to produce records and answer questions which were relevant and material; declaring that the respondents had interfered with the proper and efficient administration of justice; costs against the respondents; an order directing Golledge to answer certain questions and produce certain records in connection with his examination for discovery.

The Alberta Court of Queen's Bench allowed the application and awarded a cost penalty of $750 for which the respondents were jointly and severely liable.

Practice - Topic 4166

Discovery - General principles - Requirement for accurate, timely and ongoing disclosure - Weatherford Canada Partnership sued former senior employees, the competing business that the employees had commenced (Europump) and another competitor - Weatherford claimed that the employees breached their fiduciary duties and duties of confidence to Weatherford by, inter alia, inducing over 35 other employees to join them and making use of proprietary and confidential information with the complicity of Weatherford's key parts suppliers - Weatherford applied for, inter alia, a declaration that the defendants Addie, Anderson, Kinnee and Harland (the respondents) had failed, without an excuse or explanation, to produce records and answer questions which were relevant and material and that they had interfered with the proper and efficient administration of justice - The respondents asserted that they had been proactive in their disclosure and had acquiesced in providing documents even though they believed them to be irrelevant - The Alberta Court of Queen's Bench allowed the application - There had been a series of refusals to produce information concerning the shareholdings in, and the activities of, the defendant and non-defendant corporations that clearly were, or reasonably might be construed as being involved in the business established by the respondents which was the subject of the application - Parties to an action were obligated to produce all relevant and material records - Only a party knew what records it had - The respondents ought to have disclosed records respecting two corporations earlier - It was not an appropriate response to criticize Weatherford for not having raised the issue earlier - Weatherford should not have had to get the information through production by other defendants or through searches at public offices - Over the last three years, the respondents had repeatedly refused to produce relevant and material records and information; refused to answer relevant and material questions at examinations for discovery; and redacted relevant information from the records produced - The court awarded a costs penalty of $750 for which the respondents were jointly and severely liable - See paragraphs 42 to 48, 52 and 53.

Practice - Topic 4182

Discovery - Examination - General - Objection to questions - Remedies for refusal to answer - [See Practice - Topic 4166 ].

Practice - Topic 4252

Discovery - Examination - Range of - Questions related to or relevant and material to issues between the parties - Weatherford Canada Partnership sued former senior employees (including Golledge), the competing business that the employees had commenced (Europump) and another competitor - Weatherford claimed that the employees breached their fiduciary duties and duties of confidence to Weatherford by, inter alia, inducing over 35 other employees to join them and making use of proprietary and confidential information with the complicity of Weatherford's key parts suppliers - Weatherford applied for, inter alia, an order directing Golledge to answer certain questions and produce certain records respecting wages, investment return and rental income - Golledge asserted, inter alia, that his personal earnings were not relevant and material and that Weatherford had provided no authority requiring a former employee to account to his former employer for personal earnings realized in the course of employment with a competitor - The Alberta Court of Queen's Bench agreed that Golledge was not precluded from seeking employment with a competitor of a former employer, from making investments or from receiving revenue from leased properties owned by him - Even if he was ultimately found to be in breach of fiduciary duties, he might be entitled to retain some or all of his wages, investment return and rental income - However, the allegations involving him and his relationship to the other defendants involved allegations that he received unusual inducements to join the new enterprise in exchange for his agreement to solicit Weatherford's customers - If, in addition to the wages commensurate with his skills and experience, he received unusual inducements, then those inducements might be subject to disgorgement - The court directed Gollege to answer questions and produce records related to any dividends, lease payments, bonuses or payment of any kind other than his regular salary - See paragraphs 49 and 50.

Practice - Topic 4562

Discovery - Production and inspection of documents - General - Remedy for failure to produce - [See Practice - Topic 4166 ].

Practice - Topic 4573

Discovery - What documents must be produced - Documents related to or relevant and material to matters in issue - [See Practice - Topic 4166 and Practice - Topic 4252 ].

Practice - Topic 4612

Discovery - Production of documents by nonparties - Related companies - [See Practice - Topic 4166 ].

Practice - Topic 7262

Costs - Party and party costs - Entitlement to - Particular proceedings - Discovery - [See Practice - Topic 4166 ].

Cases Noticed:

CT Comm Edmonton Ltd. v. Shaw Communications Inc. et al. (2007), 423 A.R. 338 (Q.B.), refd to. [para. 9].

Liu v. West Edmonton Mall Property Inc. et al. (2000), 279 A.R. 305 (Q.B.), refd to. [para. 9].

Weatherill Estate v. Weatherill et al. (2003), 337 A.R. 180; 2003 ABQB 69, refd to. [para. 9].

Johnston v. Bryant et al. (2003), 327 A.R. 378; 296 W.A.C. 378 (C.A.), refd to. [para. 11].

Mustard v. Brache (2006), 397 A.R. 361; 384 W.A.C. 361; 2006 ABCA 265, refd to. [para. 11].

Lyons et al. v. Creason et al., [2008] A.R. Uned. 259; 2008 ABQB 216, refd to. [para. 12].

Nagtegaal v. Stad (1997), 215 A.R. 216 (Q.B.), refd to. [para. 12].

Pollock v. Liberty Technical Services Ltd. et al., [1997] A.R. Uned. 122 (Q.B. Master), refd to. [para. 13].

Baxter v. Darby, [2009] A.R. Uned. 668; 2009 ABQB 559 (Master), refd to. [para. 13].

NAC Constructors Ltd. v. Alberta Capital Region Wastewater Commission (2006), 412 A.R. 272; 404 W.A.C. 272; 2006 ABCA 246, refd to. [para. 33].

Torcana Valve Services Inc. v. Anderson et al. (2007), 421 A.R. 157; 2007 ABQB 356, refd to. [para. 37].

Firemaster Oilfield Services Ltd. v. Safety Boss (Canada) (1993) Ltd. et al., 2000 ABQB 929, refd to. [para. 37].

3464920 Canada Inc. v. Strother et al., [2007] 2 S.C.R. 177; 363 N.R. 123; 241 B.C.A.C. 108; 399 W.A.C. 108; 2007 SCC 24, refd to. [para. 38].

GasTOPS Ltd. v. Forsyth et al., [2009] O.T.C. Uned. M66 (Sup. Ct.), refd to. [para. 39].

Foley (D.) Pipeline Services Ltd. v. Foley et al. (1997), 209 A.R. 116; 160 W.A.C. 116 (C.A.), refd to. [para. 41].

Anderson, Smyth & Kelly Customs Brokers Ltd. v. World Wide Customs Brokers Ltd. et al. (1996), 184 A.R. 81; 122 W.A.C. 81; 39 Alta. L.R.(3d) 411 (C.A.), refd to. [para. 41].

Counsel:

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

Tim Mavko and Sean Ward (Reynolds Mirth, Richards & Farmer LLP), for the defendants, Dave Addie, David Anderson, Glen Kinnee, Ted Harlard and Europump Systems Inc.

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;

Dan Scott (Seveny Scott), for the defendants, Jakob Ambrosius and West Met Tools & Machinery Ltd.;

Predrag Anic (Fleming LLP), for the defendants, Midfield Supply International Ltd., Midfield Supply ULC, Dale Denney, Douglas Golledge, John Letwinetz, Rick Endersby and Dan Endersby.

This application was heard on May 4, 2010, by Shelley, J., of the Alberta Court of Queen's Bench, Judicial District of Edmonton, who delivered the following memorandum of decision on July 15, 2010.