Executive Summary: Key Legal and Evidentiary Issues

• The Court granted PGS permission to amend its Amended Statement of Claim to add Pembina Pipeline Corporation (PPC) as a plaintiff and to make related pleading changes, subject to conditions.

• Justice Carruthers held that PPC’s proposed claim for lost Transportation Fees is related to the 2012 gearbox failure events already described in the original pleading and falls within the losses previously claimed, including business interruption and consequential loss.

• Applying section 6(3) of the Limitations Act, the Court found that the added claim is related to the same conduct and events, DPH had sufficient knowledge of the underlying facts within the limitation period plus time for service, and adding PPC is necessary or desirable to ensure effective enforcement of the originally intended claims.

• The Court concluded that DPH had not proven actual prejudice that could not be remedied by costs or conditions; potential additional steps (such as amended pleadings, further questioning, or expert work) and the passage of time were not sufficient to bar the amendments.

• The Court also allowed amendments particularizing allegations about the Human Machine Interface (HMI), including that alarms, warnings and safeguards should have been programmed into the HMI when the compressor train was operated with speed control in manual mode.

• As conditions of the amendments, the plaintiffs must provide particulars of each plaintiff’s respective claims (including the amount attributable to PPC’s loss of Transportation Fees) within 45 days, and PPC is to be bound by the settlement agreements PGS entered into with defendants other than DPH; costs were reserved to the trial judge.

Factual background and original claim

PGS is the owner of the Musreau gas plant. The matter is set for a 40-day trial beginning in Fall 2026. PGS filed a Statement of Claim in March 2014, seeking $15 million in damages arising from events that occurred between March and September 2012. It alleged that three defendants—DPH, Compressor Controls Corporation (CCC), and Voith Canada Inc. (Voith)—were jointly and severally liable for damages arising from a gearbox failure that led to a complete shutdown of the compressor train at the Musreau gas plant.

To expand the plant, PGS entered into contracts with each defendant. Voith was contracted to refurbish the gearbox. CCC was contracted to conduct a systems engineering review of the compressor train. DPH, as the engineering contractor, was responsible for, among other things, the design, installation and commissioning of the compressor train control systems and the gearbox, and for working and consulting with Voith and CCC.

The original Statement of Claim alleged a March 29, 2012 gearbox failure (the First Loss Event), a second gearbox failure (the Second Loss Event), and the shutdown of the compressor train from March 22 to September 2, 2012 due to the gearbox failures. After the First Loss Event, Voith was contracted to conduct an overhaul of the gearbox, which allegedly resulted in further damage (the Second Loss Event), preventing the compressor train from returning to full operation until September 2, 2012 instead of July 24, 2012. The original Statement of Claim alleged that Voith and its subcontractor were liable in negligence and breach of duty for the Second Loss Event.

Paragraph 26 of the original Statement of Claim (later renumbered as paragraph 25) particularized PGS’s claimed losses as including damage to property, equipment, inventory and leased property, extra expenses, fees and investigation costs, potential liabilities to third parties, and various forms of consequential loss, including loss of use, loss of capital, loss of interest on investments, loss of profit, lost opportunities, and business interruption losses, with total damages estimated to meet or exceed $15,000,000.00 CAD and full particulars to be provided before trial.

Over time, procedural steps included filing of statements of defence, exchange of affidavits of records, and questioning of representatives and witnesses for Voith, DPH, CCC and PGS. DPH filed a notice of claim for contribution or indemnity against CCC and Voith in April 2016 and an Amended Statement of Defence in June 2018. PGS later entered a Pierringer settlement agreement with Voith in February 2021 and discontinued the action against Voith in April 2021. On consent of all parties, an order in July 2021 dismissed DPH and CCC’s contribution and indemnity claims against Voith and granted PGS permission to amend its claim in accordance with the Pierringer settlement.

On July 19, 2021, PGS amended its Statement of Claim by deleting reference to the Second Loss Event and adding reference to the Pierringer settlement agreement (the Amended Statement of Claim). In January 2023, PGS entered into a settlement agreement with CCC, agreeing not to sue CCC without prejudice to PGS’s right to claim against DPH, and in March 2023 discontinued the action as against CCC. PGS applied in July 2023 to set the matter down for trial, and a May 28, 2024 court order directed expert report exchange in late 2024, mediation in February 2025, and setting the matter down for a 40-day trial. PGS served its expert report (the Copeland Report) on April 30, 2024; DPH served its expert report (the Das Report) on October 15, 2024. The parties attended mediation in February 2025. On August 19, 2025, PGS filed the application now under consideration, seeking to amend the Amended Statement of Claim.

The proposed addition of Pembina Pipeline Corporation and related losses

PGS’s application sought to add a closely related corporate affiliate, Pembina Pipeline Corporation (PPC), as a plaintiff, asserting that PPC suffered damages from the First and Second Loss Events. The proposed amendments change the definition of “Pembina” and “the Plaintiff” to include both PGS and PPC, and they particularize the losses incurred by PPC.

The amendments set out that PGS, through its limited partnership Pembina Gas Services Limited Partnership, and PPC entered into a Pipeline Transportation Service Agreement dated November 4, 2011 (the Transportation Service Agreement). Under this agreement, all natural gas liquids recovered by or through the Musreau Plant’s Deep Cut Facility were delivered to PPC for transportation to delivery points by way of PPC’s pipeline system. Pursuant to the Transportation Service Agreement, PPC earned a Transportation Fee of $15.50 per cubic metre of natural gas liquids received from the Musreau Deep Cut Facility for delivery.

The proposed pleadings further state that during the time when the Musreau Deep Cut Facility was not operating because of the gearbox failure and its subsequent repair, PPC lost revenue it would otherwise have earned from the Transportation Fee. The total relief sought in the action remains $15 million, and paragraph 26 of the original Statement of Claim (renumbered as paragraph 25) remains substantively unchanged.

In support of the application, PGS relied on affidavits from its corporate representative, Dave Esau, and from its counsel, Kyle Dionisi. DPH cross-examined both. DPH argued that the Court should disregard Mr. Dionisi’s affidavit entirely; the Court declined to rely on portions containing argument, speculation, or going beyond formalities, but accepted that there was a factual foundation that PPC is an Alberta corporation, that PPC and PGS are distinct but related entities, and that PPC owns and operates certain facilities at the Musreau gas plant. The Transportation Service Agreement, appended to Mr. Dionisi’s affidavit and long produced in the litigation, was accepted as modest evidence that PPC earned a $15.50 per cubic metre Transportation Fee under the agreement and did not earn it while the plant was not operating due to the gearbox failure.

The Copeland Report, served by PGS, estimated the total quantum of PGS’s losses as a result of the First and Second Loss Events during the period March 29 to September 3, 2012 at just over $9 million, including an estimated $2.7 million in losses for “Shipper Tariffs” defined as lost C2+ delivery volumes at a tariff of $15.50 per cubic metre. The Das Report, served by DPH, stated that the Copeland Report overstated the losses and that the “Shipper Tariffs” losses should be $0, asserting that the Copeland Report failed to consider that PGS is a separate entity from PPC and did not properly consider incremental expenses and mitigation, including under a force majeure clause in the pipeline agreement.

The Human Machine Interface (HMI) amendments

The proposed amendments also particularize aspects of DPH’s alleged responsibilities regarding the compressor train control system by adding explicit reference to the Human Machine Interface (HMI). One amendment adds that DPH was to integrate the compressor train at the plant, “including necessary modifications to the Human Machine Interface (‘HMI’) upon which plant operators relied to monitor and control the operation of the Compressor Train, including the Gearbox.”

Another amendment alleges that PGS personnel were aware that running the compressor train with speed control in manual mode would allow the gearbox to be operated outside its pre-programmed operating range, but that they were not aware of, and did not reasonably anticipate or expect, that with the speed controller bypassed there was no longer any form of alarm, warning or safeguard to prevent the gearbox from sustaining a critical failure from overspeed/overtorque exposure, except for an over-current shutdown for the electric motor. The proposed pleading states that such alarms, warnings and safeguards should have been programmed into the HMI. Consequential amendments add reference to the HMI wherever the control system is referenced in the Statement of Claim.

DPH argued that the HMI amendments were too late and unnecessary and that PGS had known about the HMI since at least March 2019, and could have added these amendments in 2021. PGS pointed to questioning that had already taken place regarding the HMI in 2019. The Court accepted that through the course of the litigation PGS had discovered new information and now intended to include allegations about DPH’s failure to properly program alarms, warnings and safeguards into the HMI. The Court found that, while late, these amendments were not a surprise and were a particularization of claims already alleged and related to the work that is the subject matter of the litigation.

Legal framework on amendments, limitation issues, and prejudice

Justice Carruthers set out that Rule 3.62(1)(b) of the Alberta Rules of Court allows a party to amend its pleadings after close of pleadings in accordance with Rule 3.74 (for adding, removing or substituting parties) and Rule 3.65 (for all other amendments). Rule 3.74(2) governs adding a plaintiff after close of pleadings, and the Court may not make an order if prejudice would result that cannot be remedied by costs, an adjournment, or terms. Under Rule 3.65, all other amendments may be made with permission of the Court; there is a strong presumption in favour of allowing amendments unless the responding party demonstrates a compelling reason not to.

Citing authorities including Attila Dogan Construction and Installation Co Inc v AMEC Americas Limited, Foda v Capital Health Region, Dow Chemical Canada Inc v Nova Chemicals Corp, Domenic Construction Ltd v Primewest Capital Corp, and others, the Court reiterated that amendments after close of pleadings are “relatively easy to get” and should generally be allowed regardless of lateness or carelessness, subject to four exceptions: serious prejudice not compensable in costs, hopeless amendments, attempts (not permitted by statute) to add a new party or cause of action after expiry of a limitation period, and bad faith. If no exception applies, amendments can generally be made.

PGS conceded that the amendments were sought after expiry of the limitation period and that section 6 of the Limitations Act applied. Section 6 permits adding claims or claimants after expiry if statutory requirements are met. For added claimants under section 6(3), the added claim must be related to the conduct, transaction or events described in the original pleading; the defendant must have received, within the applicable limitation period plus time for service, sufficient knowledge of the added claim such that it will not be prejudiced in maintaining a defence on the merits; and the Court must be satisfied that the added claim is necessary or desirable to ensure effective enforcement of the original or intended claims. The claimant bears the burden on relatedness and necessity or desirability, and the defendant bears the burden on lack of sufficient knowledge.

The Court described the evidentiary threshold for amending pleadings as low: only a modest degree of evidence with some foundation in fact is needed to support new substantive facts, and documents can satisfy this requirement. The amending party need not show proof on a balance of probabilities or meet a summary judgment standard; amendments may be justified even in the face of contradictory evidence, and admissible evidence, including hearsay, can suffice.

On the first requirement under section 6(3)(a), the Court relied on case law stating that “related to” has a broad meaning and a low threshold. It held that PPC’s alleged loss of the Transportation Fee “because of the Gearbox failure and its subsequent repair” falls within the category of losses allegedly incurred in 2012 described in paragraph 26 of the original Statement of Claim. The Court found that adding PPC would not change the substance of the claim, which continues to relate to losses arising from the 2012 gearbox failure, and that the amendments did not allege different causes of action or new heads of damage but further particulars of losses and damages already claimed.

On section 6(3)(b), DPH argued that the limitation period began to run at the latest on September 1, 2012, and that it needed to receive knowledge of PPC’s claim by September 1, 2015. It submitted that it was not served with the Transportation Service Agreement until PGS’s first affidavit of records in September 2017 and therefore lacked knowledge of PPC’s claim within the limitation period. The Court noted that “claim” in section 6 refers to knowledge of the added facts and that the section does not require knowledge of the identity of a specific claimant within the defined period. The Court held that notice of the action as constituted in the original Statement of Claim, including pleaded gearbox failure facts and several heads of damages such as consequential loss and business interruption, was sufficient to alert DPH to the possibility that it might be liable for loss of the Transportation Fee due to the gearbox failure and outage. The Court also observed that the expert reports showed that PGS was claiming amounts calculated as a shipping tariff and that the Das Report addressed that component, indicating that the basis of the claim had been clear during the litigation.

Regarding prejudice, DPH argued that allowing PPC to be added at a late stage would prejudice it because its strategy, including settlement decisions, record production, expert retention, and discovery, would have been different had it known PPC was a party; that it would need new expert work, pleadings, and discovery; and that over 13 years had passed since the events, affecting the availability and quality of evidence. The Court held that potential additional pleadings, questioning and expert work of this kind can be remedied by costs and that DPH had provided no evidence that trial dates were at risk or that anything done to date would be “thrown away.”

The Court found no evidence that documentary evidence had been destroyed or lost, and concluded that DPH’s argument about deterioration of evidence was speculative, particularly given the nature of the claims and the existence of expert reports. The Court also found that a bare assertion that strategy would have been different did not establish actual prejudice. While the Court recognized an example of prejudice in another case where amendments were sought on the last day of trial, it distinguished the present case, in which trial was still a year away.

DPH further argued that the amendments effectively sought to revive Second Loss Event claims and add new causes of action, and that prior settlements with Voith and CCC created prejudice. The Court noted that the proposed amended Statement of Claim no longer referenced a Second Loss Event, and that the pleadings—not the application—determine the issues. It held that even if there were no contracts, indemnities, or duties of care between DPH and PPC, DPH could advance such defences at trial without particular difficulty, and that PGS did not need to prove ultimate success at this stage.

On the impact of settlements, the Court accepted that PPC was not a party to the Pierringer agreement with Voith but held that paragraph 45 of the proposed amended claim has the effect of including PPC in that agreement, so PPC, like PGS, could only seek damages from DPH reflecting its own causal negligence, if any. The Court stated that, if PPC’s losses were being claimed from the beginning, PPC should not be able to recover from DPH any amounts attributable to the fault of Voith. Regarding CCC, the Court understood the CCC settlement as a covenant not to sue and held that such an agreement does not prevent one defendant from seeking contribution from another. The Court concluded that DPH had had the right to seek contribution from CCC and that adding PPC did not cause prejudice in that regard.

DPH also argued that PPC’s claim was a “standalone” claim barred by the ultimate 10-year limitation period. The Court rejected this, having already found that section 6 was satisfied and that DPH was not entitled to immunity from liability due to expiration of the limitation period.

On laches and acquiescence, DPH argued that PGS’s litigation conduct and timing reflected a strategy to delay adding PPC until many steps were taken to advance the litigation, including setting the matter down for trial and attending mediation. The Court stated that laches requires more than delay; it requires acquiescence to the point of waiver or prejudice or other potential injustice caused by delay. Relying on evidence before it, the Court rejected DPH’s argument, finding no evidence of a strategic decision to delay and concluding that any carelessness did not amount to laches or acquiescence.

Court’s decision, conditions, and procedural outcome

Justice Carruthers concluded that the proposed amendments are allowed because the plaintiffs satisfied the requirements under the Rules of Court and the Limitations Act, and DPH failed to establish prejudice or a limitation defence that would bar the action. The Court exercised its discretion to allow the amendment adding PPC as a plaintiff and to permit the HMI-related amendments.

The Court imposed two conditions. First, the plaintiffs must provide the defendants with particulars regarding the respective claims of the plaintiffs within 45 days, including in particular the amount of the claim attributable to the loss of PPC’s Transportation Fee. The Court stated that trial is less than a year away and that timely disclosure of particulars is required to enable questioning and expert report preparation. Second, it directed that PPC will be bound by the terms of the settlement agreements that PGS has entered with defendants other than DPH, noting that this appears to be contemplated in the proposed amendment but should be confirmed.

The Court invited the parties to seek a case management order if they require deadlines and reserved the matter of costs for the trial judge, stating that it was not possible at this stage to determine what future costs will result from the amendments. The judgment does not contain any final ruling on liability or an award of damages; no specific amount is ordered or granted in favour of any party in this decision.