Executive Summary: Key Legal and Evidentiary Issues

• Three former employees of Questor Technology Inc. were found in civil contempt for intentionally providing false evidence and withholding records during pre-trial proceedings in a breach-of-duty lawsuit.

• The Court of Appeal confirmed that the mental element for civil contempt does not require proof of "contumacious intent" or an intention to mislead, only that the impugned conduct was knowingly and intentionally done.

• Evidentiary corrections submitted by the defendants were found to be motivated by self-interest following a production order, rather than good-faith compliance with the rules of court.

• Corporate defendant Emission Rx Ltd. was not found in contempt because the applicant failed to make submissions on the directing mind doctrine at the contempt hearing.

• Both appeals — the individual defendants' appeal of the contempt finding and Questor's appeal of the decision not to find Emission in contempt — were dismissed by the Alberta Court of Appeal.

• On costs, the individual defendants were ordered to pay Questor's reasonable solicitor and client costs of their unsuccessful appeal, while Emission was awarded its taxable costs of Questor's unsuccessful appeal under column 5.

The underlying dispute and the parties involved

Questor Technology Inc. is an environmental technology company in the waste gas combustion business. In August 2018, Questor sued three of its former employees — Richard Stagg, Jeffrey Nelson, and Justin Bouchard (the Individual Defendants) — along with Emission Rx Ltd., a corporation established by them. Questor alleged that the Individual Defendants breached duties owed to Questor by developing a competing low-pressure burner technology for Emission while they were still employed by Questor. The Individual Defendants denied the allegations, maintaining that their work for Emission did not involve any confidential or proprietary information belonging to Questor.

Pre-trial applications and the discovery of false evidence

During the pre-trial phase, Questor brought several applications, including for an interlocutory injunction to prevent Emission from competing against Questor, a preservation order requiring Emission to pay its profits into trust pending trial, and an order compelling further production of documents. The Individual Defendants filed affidavits opposing these applications and were extensively cross-examined. The case management justice initially dismissed Questor's application for an interlocutory injunction and later denied its request to preserve Emission's profits. However, on September 8, 2022, the case management justice granted a production order requiring the defendants to produce additional records, including design information, correspondence, and financial records, and mandated that Questor's independent experts have access to the defendants' personal email accounts.

The admissions and the contempt application

Shortly after the production order, on November 7, 2022, counsel for the defendants sent a letter to the court and to Questor advising of errors in evidence already given, attaching a 16-page chart identifying corrections to sworn evidence given by each of the Individual Defendants. The defendants also provided supplemental affidavits of records and, in July 2023, filed correcting affidavits swearing to the truth of the corrections. That same month, Questor applied to have the Individual Defendants and Emission cited in contempt of court, alleging that during the lawsuit, the defendants knowingly provided false evidence, knowingly withheld evidence, and knowingly misled the court and Questor.

The chambers justice's contempt finding

A chambers justice (not the case management justice) heard the contempt application and found the Individual Defendants in civil contempt of court. The chambers justice rejected the defendants' argument that the corrections were merely routine compliance with the rules, finding instead that the errors were admitted only after the Individual Defendants concluded they would soon be discovered as a consequence of the production order. He was satisfied beyond a reasonable doubt that the Individual Defendants collectively persisted in a "scheme to mislead, conceal and falsify", designed to downplay evidence of their actions and statements prior to their departure from their employment with Questor. Importantly, the chambers justice rejected the submission that civil contempt for giving false evidence under oath requires proof of "intent to mislead" equivalent to the mens rea for perjury, concluding that the mental element only requires proof that the impugned conduct was volitional — knowingly and intentionally done. The corporate defendant, Emission, was not found in contempt, as the chambers justice exercised his discretion not to hold the corporation in contempt for the actions of its human representatives.

The appeal to the Alberta Court of Appeal

Two related appeals were brought before the Court of Appeal of Alberta. The Individual Defendants appealed the contempt finding, arguing primarily that the chambers justice erred in identifying the mental element for civil contempt and that intent to mislead the court should be required where false evidence under oath is at issue. Questor appealed the decision not to find Emission in contempt.

The Court of Appeal's analysis of the mental element for civil contempt

The Court of Appeal confirmed that the chambers justice was correct in his statement of the law. Relying on the Supreme Court of Canada's decision in Carey v Laiken, 2015 SCC 17, the Court of Appeal held that contumacious intent — the intent to interfere with the administration of justice — is not an element of civil contempt, whether the alleged contempt involves breaching a court order or giving false evidence under oath. The court declined to import into Canadian law any English requirement of establishing contumacious intent for false statements. The Court of Appeal found ample evidence in the record supporting the chambers justice's conclusion that the Individual Defendants acted intentionally in giving evidence under oath that they knew to be false.

Additional grounds of appeal and the exercise of discretion

The Individual Defendants also argued that a mere breach of the Alberta Rules of Court was insufficient to ground a contempt finding and that the impugned conduct was not "before the court." The Court of Appeal dismissed both arguments, noting that the contempt finding was based on intentionally giving false evidence under oath rather than a simple failure to comply with procedural rules, and that the argument about conduct being "before the court" was raised for the first time on appeal without any resulting prejudice. On the issue of discretion, the Court of Appeal acknowledged that civil contempt is a power to be used sparingly and cautiously, but held that the chambers justice's decision to exercise his discretion to find contempt was reasonable given the egregious nature of the conduct — a "scheme to mislead, conceal and falsify."

The decision on Emission's contempt status

With respect to Questor's appeal, the Court of Appeal dismissed Questor's argument that Emission should have been found in contempt. While a corporation can be held in civil contempt under the directing mind doctrine, Questor had made no submissions at the contempt hearing as to the basis on which Emission should be held in contempt for the acts of the Individual Defendants. There was therefore no issue to be addressed, beyond the bare allegation in the contempt application.

Costs and the penalty imposed

Following the contempt finding, the chambers justice ordered the Individual Defendants, jointly and severally, to pay Questor a penalty of $150,000 and Questor's reasonable solicitor and client costs. No costs were awarded to or against Emission at the lower court level. On appeal, the Court of Appeal addressed costs in a separate memorandum dated March 31, 2026. Questor was awarded its reasonable solicitor and client costs of Appeal 0190 (the Individual Defendants' unsuccessful appeal of the contempt finding), payable by the Individual Defendants jointly and severally. Emission was awarded its taxable costs of Appeal 0249 (Questor's unsuccessful appeal regarding Emission's contempt) under column 5, including a fee for one second counsel, payable by Questor. No exact total amount for the solicitor and client costs was specified, as these were left subject to taxation if not otherwise agreed between the parties.