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Memorandum of Argument of Perpetual Energy Inc. Et. Al. Filed

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Memorandum of Argument of Perpetual Energy Inc. Et. Al. Filed 1901-0255AC TRIAL COURT FILE NUMBER 180140960 REGISTRY OFFICE CALGARY . ------------- ^ . APPLICANT as the TRUSTEE IN BANKRUPTCY OF SEQuSuff^^^' RESOURCES CORP, and not in its personal capacity STATUS ON AFPEAL APPELLANT RESPONDENTS PERPETUAL ENERGY INC., PERPETUAL OPERATING TRUST, PERPETUAL OPERATING CORP., and SUSAN RIDDELL ROSE STATUS ON APPEAL RESPONDENTS DOCUMENT MEMORANDUM OF ARGUMENT OF PERPETUAL ENERGY INC., PERPETUAL OPERATING TRUST, and PERPETUAL OPERATING CORP. FEBRUARY 14,2020 TO HAVE ITS APPLICATION TO VARY THE ORDER REFERRED TO A PANEL ADDRESS FOR SERVICE AND Burnet, Duckworth & Palmer LLP CONTACT INFORMATION OF 2400,525 - 8 Avenue SW PARTY FILING THIS DOCUMENT: Calgaty, Alberta T2P 101 Lawyers: D.J. McDonald, Q.C./Paui G .Chiswell Phone: (403) 260-S724/G2G1 Fax: (403)260-0332 Email: [email protected]/[email protected] File No. 59140-43 and Perpetual Operating Corp. De Waal Law CONTACT INFORMATION OF ALL 1010, 505-3rd Street SW OTHER PARTIES: Calgary, AB T2P3E6 Lawyers: Rinus de Waal/Luke Rasmussen Phone: (403) 266-0013/0014 Fax: (403)266-2632 Email: [email protected] lrasmussen@dewaal law.com Counsel for PriceWaterhouseCoopers Inc., LIT, in its capacity as the Trustee in Bankruptcy of Sequoia Resources Corp. and not in its personal capacity Norton Rose Fulbright Canada LLP 3700, 400 Third Ave SW Calgary, Alberta T2P4H2 Lawyers: Steven H. Leitl/Gunnar Benediktsson Phone: (403)267-8140/8256 Fax: (403)264-5973 Email: [email protected] [email protected] Counsel for Susan Riddell Rose TABLE OF CONTENTS I. Introduction............................................................................................................................................ 1 II. Argument.................................... ............................................................................................................ 1 A. The test for reasonable apprehension of bias is not met.................................................. 1 B. Rules 9.16 and 14.5(2) require Veldhuis J.A. to determine the application............... 2 C. No cogent evidence to create a reasonable apprehension of bias..................................3 1. The Court's comments regarding Mr. Darby’s behaviour were warranted.................3 2. Decisions to deny intervenor status in concluded litigation were proper...................3 3. Appeal judges have jurisdiction to manage the filing of applications.........................4 III. Relief Sought.............................................................................................................. ....... .................5 1 I. INTRODUCTION 1. PricewaterhouseCoopers LIT, in its capacity as the Trustee in Bankruptcy of Sequoia Resources Corp. and not in its personal capacity (PwC or the Trustee), having already applied to vary the Order arising from the Reasons for Decision*5 (the2 3 4 Reasons) and to change the Reasons, or alternatively to grant permission to appeal, now seeks to have Veldhuis J.A. refer that application to a panel of the Court of Appeal on the unsupported allegation that Veldhuis J.A. "consciously or unconsciously, is less likely to decide the Trustee's Application fairly."2 2. The application has no merit. There is no impediment to Veldhuis J.A. hearing the matter. II. ARGUMENT A. The test for reasonable apprehension of bias is not met 3. A person who alleges that a j udge is biased must establish on a balance of probabilities that a reasonable, right-minded and informed person would conclude that the judge could not decide the case impartially.3 4. A judge is presumed to act in a manner consistent with their oath to deliver justice impartially.4 This Court has held that the test to assert reasonable apprehension of bias is "stringent5, "an onerous undertaking",6 and has a "high"7 threshold owing to this "presumption of judicial integrity; therefore substantial grounds and cogent evidence are required to lead to the conclusion that an apprehension of bias is reasonable."8 5. This Court has held that there are "dangers associated with the adoption of modest disqualifying standards which...considerably increase the risk legitimate interests associated with the administration of justice will be compromised," including "an undesirable prospect of ! PricewaterhouseCoopers Inc v Perpetual Energy Inc, 2020 ABCA 36. 2 Trustee Application filed February 14,2020 at para. 3. 3 Bizon v. Bizon, 2014 ABCA 174 at para. 62 (Bizon) [Tab lj. 4 Bizon at paras. 34 [Tab 1]. 5 Skolney v. Nisha, 2018 ABCA 364 at para. 33 (Skolney) [Tab 2}. 6 Bizon at para. 62 [Tab 1]. 7 Bizon at para. 62 [Tab 1]. 8 Skolney at para. 33 [Tab 2]. 2 complicated and time-consuming recusal motions that introduce delay and uncertainty into the process and distorts judicial workloads."9 B. Rules 9.16 and 14.5(2) require Veldhuis J.A. to determine the application 6. Rule 9.16 requires an application under Rule 9.13 to be decided by the judge who granted the original order.10 Rule 14.5(2) requires a party to apply for permission to appeal "from the same judge who made the decision that is being appealed."11 7. The Trustee cites several decisions of Berger J. A. sitting alone in chambers for the opposite proposition, including Prefontaine}2 In Vysek v. Nova Gas International Ltd., Fruman J.A. disagreed with Prefontaine. She held that the predecessor to Rule 14.5(2) did not lead to a reasonable apprehension of bias: "the better way to honour the legislature’s chosen procedure is to do what countless other judges have done in similar circumstances: consider a leave application from one's own order, applying a carefully selected constitutional test for leave that does not offend the rules of natural justice."13 8. The matter is now settled. A three member panel followed Fruman J.A.'s approach in Roman Catholic Bishop of the Diocese of Calgary v. Canada (Attorney General), in holding that there is no institutional bias under the predecessor to Rule 14.5(2). Justice Papemy stated for the Court that Fruman J.A.'s interpretation "is the only tenable one and accords with the presumption of judicial impartiality."14 15It is also the practice of current members of this Court to decide applications for permission to appeal from their own decision.35 9. The policy rationale behind Rules 9.16 and 14.5(2) is self-evident. In a world of finite Court resources, the judge already familiar with the original application, evidence, written and oral submissions, and the reasons is in the best position to assess whether an order needs to be varied 9 Bison at para. 61 [Tab 1]. 10 Alberta Rules of Court, Alta Reg 124/2010, Rule 9.16 [Tab 3]. 11 Alberta Rules of Court, Rule 14.5(2) [Tab 3]. 12 See e.g. Trustee's memorandum of argument filed February 14,2020 at paras. 5-6.3. 13 Vysek v. Nova Gas International Ltd,2002 ABCA 112 at para. 30; see also para. 26 (Vysek) [Tab 4]. 14 Roman Catholic Bishop of the Diocese of Calgary v. Canada (Attorney General), 2010 ABCA 202 at para. 13 (Roman Catholic Diocese) [Tab 5], leave to appeal to the SCC denied by (2010), 510 AR400 (note) (SCC). 15 See e.g. Martinez v. Chaffin, 2018 ABCA 276 (Veldhuis J.A. in Chambers) [Tab 6]; Ha)>den v. Hayden, 2020 ABCA 37 (Rowbotham J.A. in Chambers) (Hayden) [Tab 7]; SRG Takamiya Co Ltd. v. 58376 Alberta Ltd., 2019 ABCA 301 (Rowbotham J.A. in Chambers) [Tab 8], 3 or the test for permission to appeal has been met. Conversely, it is inefficient to refer an application to vary an interlocutory order or to change the reasons of an interlocutory decision, or for permission to appeal, to a panel of three judges, given the associated delay and costs to the parties and the public.16 C. No cogent evidence to create a reasonable apprehension of bias 10. There is no evidence, and certainly no cogent evidence, on which a right-minded and informed person would conclude that Veldhuis J.A. cannot fairly decide the Trustee's application to set aside the Order, change the Reasons, or grant permission to appeal. The Trustee's arguments supporting the claim relate to Mr. Darby, not the Trustee. 1. The Court's comments regarding Mr. Darby's behaviour were warranted 11. Justice Veldhuis' comments regarding Mr. Darby's behaviour were measured and objective—they were tied directly to evidence in his affidavit and his answers (or refusals to answer) on cross-examination. 12. The test for reasonable apprehension of bias is not met because a judge has ruled "against one party... even when a judge does so impatiently or adversely to the objecting party."17 13. There is no requirement that a judge give a witness notice or an opportunity to intervene or otherwise address reasons if those reasons may be critical of the witness' testimony. Such a proposition (for which the Trustee provides no authority) would create endless collateral litigation that would also "introduce delay and uncertainty into the process and distort judicial workloads."18 2. Decisions to deny intervenor status in concluded litigation were proper 14. There was nothing improper about the decisions to deny Mr. Darby's personal application to intervene in a matter that had already been decided. 16 See Roman Catholic Diocese at para. 11 [Tab 5], quoting Vysek at para. 17 [Tab 4]; Hayden at para. 19(Rowbotham J.A. in Chambers) [Tab 7]. !7 Al-Ghamdi v. Alberta, 2016 ABCA 403 at para. 18 [Tab 9]; Bizon at para. 46 [Tab 1], 18 Bizon at para. 61 [Tab 1]. See also United Pacific Capital Ltd. v. Piche, 2005 BCSC 1018 at paras. 7-9 (United Pacific) [Tab 10]. 4 15. Non-parties do not have standing to apply to vary reasons, even if the reasons include findings that criticize their conduct.19 That is consistent with Veldhuis J.A.'s reason for denying Mr. Darby permission to file the application to intervene: "A decision has been made and the matter is concluded."20 16. Even the test for granting permission to intervene is discretionary.21 Factors militating against intervention include that it will unduly delay and prejudice the determination of the rights of the parties to the proceeding 22 The security for costs application had already been decided and an intervention would unduly delay the matter and prejudice the parties.
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