Executive Summary: Key Legal and Evidentiary Issues

• The litigation traces back to a pipeline failure on July 15, 2015, which has generated years of case-managed applications before Associate Chief Justice D.B. Nixon.
   
• Costs disputes arising from earlier interlocutory applications produced split results, with Wood Group awarded costs on one application and denied costs on another.
   
• Discovery disputes required the court to decide which undertakings CNOOC Canada had to answer, often turning on whether related corporate entities dealt at arm's length.
   
• Questioning of a former CNOOC representative was permitted on a narrow topic after new information emerged following the close of primary questioning.
   
• Expert report challenges tested the sequencing rules in Rule 5.35, and the court declined to strike any of the contested reports.
   
• Surrebuttal deadlines were extended to resolve the expert report dispute while preserving the October 13, 2026 trial date.
   

Facts of the case

The underlying action arises from a pipeline failure on July 15, 2015. CNOOC Petroleum North America ULC ("CNOOC") sued ITP SA, Sunstone Projects Ltd, and Wood Group Canada, Inc [also rendered "Wood Group Canada Inc," without a comma, in 2026 ABKB 90] (collectively "Wood Group"), with Surerus Pipeline Inc, Stresstech Engineering Inc, and Thurber Engineering Ltd [rendered "Thurber Engineering," without "Ltd," in 2026 ABKB 202; omitted entirely from the third-party caption in 2026 ABKB 582] named as third parties in various proceedings. Associate Chief Justice D.B. Nixon has case-managed the matter for several years under docket 1701 07427, and the trial, previously adjourned, is scheduled to begin October 13, 2026. Five decisions from this file are addressed together here. In 2026 ABKB 90, the court ruled on costs arising from a privilege application, denying Wood Group's request for costs tied to the cross-examination of former CNOOC general counsel Marianne "Chuck" Davies. In 2026 ABKB 101, Wood Group sought to question Dean Kovacs, CNOOC's former chief inspector, about an amended undertaking response concerning CNOOC's pipeline integrity maintenance practices. In 2026 ABKB 164, Wood Group applied to compel CNOOC to answer a series of refused undertakings tied to corporate decision-making around the CNOOC Research Institute and COOEC Canada. In 2026 ABKB 202, the court ruled on costs following an earlier adjournment application in which Wood Group had sought a trial delay. Finally, in 2026 ABKB 582, Wood Group and CNOOC brought cross-applications to strike each other's expert reports, disputing whether certain reports exceeded the bounds of permissible rebuttal or surrebuttal evidence under the complex case litigation plan ("CCLP").

Policy and legislative provisions at issue

Several provisions of the Alberta Rules of Court, Alta Reg 124/2010, framed these decisions. Costs awards were governed by Rule 10.29(1), which entitles a successful party to costs payable forthwith, subject to the court's discretion under Rules 10.31 and 10.33. Discovery obligations were assessed under Part 5, including Rule 5.1's statement of purpose, Rule 5.2's relevance-and-materiality test, Rule 5.17's scope of who may be questioned, Rule 5.25's grounds for objection, and Rule 5.30's undertaking obligations. The Kovacs questioning application also engaged Rule 4.14(1), which allowed the court to amend litigation-plan deadlines. The expert report dispute centred on Rule 5.35, which sets a sequential exchange of primary, rebuttal, and surrebuttal reports, and on Rule 8.16, which generally limits a party to one expert per subject unless the court orders otherwise.

Reasoning and analysis

On costs, the court applied the principles in McAllister v Calgary (City), 2021 ABCA 25, and Barkwell v McDonald, 2023 ABCA 87, which frame costs awards as partial indemnification guided by proportionality and reasonableness rather than a mandatory Schedule C default. In 2026 ABKB 90, the judge found mixed success between the parties and declined to award Wood Group costs for the Davies cross-examination, noting that a prior costs decision in a related judicial review proceeding had already dismissed a similar claim. In 2026 ABKB 202, by contrast, the judge found Wood Group substantively successful in the adjournment application despite not obtaining the sine die adjournment it sought, and awarded costs at Column 5 of Schedule C on a multiple of four. Turning to discovery, the undertakings decision in 2026 ABKB 164 repeatedly asked whether entities affiliated with CNOOC operated at arm's length. Requests directed at CPPCo, a genuine third party, were refused, but requests concerning CNOOC Limited, CNOOC Research Institute, and COOEC Canada were largely compelled because common ownership through China Ocean Oil Group Co, Ltd meant those transactions were not at arm's length and warranted closer scrutiny, consistent with Swiss Bank Corp v MNR and Canada v McLarty, 2008 SCC 26. Undertakings touching on competitive bidding and mitigation efforts were also ordered answered as relevant to CNOOC's damages claim. In 2026 ABKB 101, the court permitted Wood Group to question Mr. Kovacs, but only on the amended Undertaking Response 708, reasoning that the amendment surfaced new information after primary questioning had already closed, distinguishing the case from a strict reading of Rule 5.30(2). Finally, in 2026 ABKB 582, the court dismissed both applications to strike expert reports. It held that the Lamberson Report properly rebutted the Hylton Report and did not violate Rule 8.16's limit on duplicate experts, since Mr. Lamberson's project-management expertise differed from that of CNOOC's other witnesses. It likewise found the Wood Group Rebuttal Reports were proper rebuttal evidence rather than disguised primary reports, since the primary onus for contributory negligence was not clearly established. The court extended the CCLP surrebuttal deadline to September 21, 2026, and offered guidance, drawing on Signalta Resources Limited v Canadian Natural Resources Limited, 2018 ABQB 904, on how "new issues" should be understood under Rule 5.35(2)(c).

Ruling and overall outcome

Across the five decisions, outcomes were mixed rather than uniformly favouring either side. Wood Group succeeded in obtaining costs for the adjournment application in 2026 ABKB 202, quantified at Column 5 of Schedule C on a multiple of four, though the exact dollar figure was not specified in the decision. Wood Group was unsuccessful in 2026 ABKB 90, where the court found mixed success overall and ordered each party to bear its own costs, resulting in no monetary award. In the discovery dispute, 2026 ABKB 164, success was similarly divided: CNOOC was ordered to respond to several undertakings while others were upheld as properly refused, with no monetary award made. Wood Group prevailed procedurally in 2026 ABKB 101, securing limited leave to question Mr. Kovacs, again without any monetary award. In 2026 ABKB 582, neither party succeeded in striking the other's expert reports, and the court instead extended procedural deadlines, with costs for those applications left to be borne by each party. No decision among the five resulted in a quantified damages award; all monetary references were confined to costs, and where costs were ordered, the amount was left to be calculated under the agreed Schedule C tariff rather than fixed as a specific sum.