PDF version: The Supreme Court of the United Kingdom (fka the House of Lords) decides an oil and gas case 

Case considered: Star Energy Weald Basin Limited v Bocardo SA, [2010] UKSC 35

It is not every day, or even every year, that the highest court in the United Kingdom passes judgement in an oil and gas case. But the Supreme Court of the United Kingdom did so at the end of July and while much of the Court’s reasoning turns on the details of the UK’s petroleum legislation, and in particular on the terms of the Crown vesting legislation in that jurisdiction, the Court also had something to say about the common law ownership rights of the surface owner. These comments merit carefully scrutiny in the context of the ongoing debate in Alberta and elsewhere about ownership rights in relation to pore space, an important issue in the context of carbon capture and storage (CCS).

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PDF version: Mutatis Mutandis: The ERCB speaks (in Latin) on the subject of carbon capture and storage

Considered: ERCB Bulletin 2010 - 22, ERCB Processes Related to Carbon Capture and Storage (CCS) Projects, June 29, 2010

After a long period of cogitation the chief energy regulator in the province has finally provided a statement of how it proposes to approach the regulation of carbon capture and storage (CCS) projects. The message is simple: apply the current rules, so far as they are applicable to CCS (the basic idea of mutatis mutandis). The issue is important: several task forces and many commentators have emphasised that the proponents of CCS projects need regulatory certainty if they are to plan and implement commercial scale CCS operations. Whether this ERCB Bulletin provides sufficient guidance to industry and sufficient comfort to the citizens of the province that CCS projects will be handled safely remains to be seen.

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PDF version: Estoppel arguments fail once again in an oil and gas lease case 

Case considered: Desoto Resources Limited v. Encana Corporation, 2010 ABQB 448

In this case Justice William Tilleman dismissed an appeal from Master Jodi Mason’s decision in chambers in which she had granted summary judgement in favour of the defendant in the action, Encana. Desoto had been seeking a declaration that it had a number of valid leases notwithstanding that the primary term of the leases had expired in the 1970s and that there had been no production on the leases for a period beginning in the late 1990s. This was apparently, at least at the outset, as a result of the properties being shut-in by order of the Energy Resources Conservation Board because of the failure of the then lessee to pay well abandonment deposits.

I blogged on Master Mason’s decision - see Successful application for summary dismissal in an oil and gas lease validity case.

On appeal, Desoto focused on estoppel arguments urging that the leases should survive on the basis of promissory estoppel, estoppel by acquiescence, or estoppel by deed.

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PDF version: Fraud and Concealment of Contaminated Land: Do Your Due Diligence, Purchaser

Cases considered: Motkoski Holdings Ltd. v. Yellowhead (County), 2008 ABQB 454 (Q.B.), Motkoski Holdings Ltd. v. Yellowhead (County), 2010 ABCA 72 (C.A.)

As both environmental standards and the demand for strategically located land increase, there is a greater likelihood that contaminated land will come on the market. What is clear from the case of Motkoski Holdings Ltd. v. Yellowhead (County) is that the burden of thoroughly investigating a site remains firmly on the purchaser’s shoulders, despite the sometimes inequitable difference in bargaining power between a vendor and a purchaser. Standard real estate contractual terms will often transfer land “as is” and exclude representations and warranties outside the four corners of the contract as well as exclude any collateral agreements. A contractual term that excludes any warranty as to the soil conditions, particularly in light of an engineering report that recommends further investigation, should put the purchaser on notice that further investigation may be necessary. If there are any concerns raised from preliminary investigation of the site, the purchaser neglects to follow up or investigate at its own peril.

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PDF version: No Dower Act Consent? Is the Transaction Void or Voidable?

Case considered: Charanek v. Khosla, 2010 ABQB 202

The question of whether failure to comply with the Dower Act’s requirements results in the transaction being void or voidable occurs with some frequency in Alberta (and not simply on our December Property Law examinations). This is odd because the relevant provisions of the Act have not changed since 1948 and the courts have addressed the consequences of the failure to comply with its requirements for consent quite often. Nevertheless, when Master in Chambers Jody L. Mason conducted a thorough review of the relevant legislation and case law in Charanek v. Khosla and concluded (at para. 61) that “the consequence of noncompliance with the consent requirements of the Dower Act remains an open question,” she was correct. She was also echoing a conclusion reached 50 years ago by Wilber Fee Bowker (former U of A Faculty of Law Dean and first Director of the Alberta Law Reform Institute), in “Reform of the Law of Dower in Alberta” (1960) 1 Alta. Law Rev. 501 at 502 where he observed:

From 1917 until today the courts and legislature and the legal profession too have wrestled with the question - what is the effect of the disposition of the homestead made without consent, properly given and executed?

Thirty-four years later, that very question continues to be with us. . . .

The crux of the problem is that the Supreme Court of Canada said in Meduk and Meduk v. Soja and Soja, [1958] S.C.R. 167 that the transaction was void and the Alberta Court of Appeal, in Schwormstede v. Green Drop Ltd. (1994), 22 Alta. L.R. (3d) 89, 116 D.L.R. (4th) 622, held that the transaction was voidable, but without mentioning the Supreme Court of Canada case.

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PDF version: There is Rarely Compensation for the Wrongful Filing of Caveats

Case considered: Singh v. 862500 Alberta Ltd., 2010 ABCA 117

This case may be of interest to some because judgments considering claims for compensation for wrongly filed or maintained caveats under section 144 of the Land Titles Act, R.S.A. 2000, c. L-4, are not common in Alberta - only a handful seem to have been reported over the years. This case would have been more interesting had the claim succeeded, as successful lawsuits for compensation for wrongly filed or maintained caveats appear to be even rarer. The reason for the rarity of success appears to be the test for compensation in the Land Titles Act and the courts’ interpretation of that test. Section 144 requires that, in order for compensation to be awarded for the wrongful filing or maintaining of a caveat, the caveat must be filed or continued “without reasonable cause.” In Singh v. 862500 Alberta Ltd., the Court of Appeal determined that, because the appellant’s position regarding the interpretation of his purchase agreement was not “entirely unreasonable,” no compensation should be awarded for what did turn out to be a wrongful filing of a caveat. Granted, the test in section 144 is not whether the caveat is upheld but whether the caveator had reasonable cause to file a caveat. Nevertheless, in Singh v. 862500 Alberta Ltd., the bar seems to be set quite low, with “no reasonable cause” being equated to “not entirely unreasonable.”

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Case considered: Nelson v. 1153696 Alberta Ltd., 2010 ABQB 164

PDF version: Locating Road Boundaries under the Doctrine of Dedication

What is the proper basis for fixing the physical boundaries of a road dedicated to public use under the common law doctrine of dedication? In an earlier decision, Justice Andrea Moen had determined that the road known as the Rabbit Hill Road, which passes through private land owned by the respondents, the Nelsons, and the appellant, 1153696 Alberta Ltd., had been “dedicated” as a public road by a previous owner of the land: see Nelson v.1153696 Alberta Ltd., 2009 ABQB 732. As a result of that 2009 judgment, the Nelsons hired a land surveyor so the precise geographic location and physical dimensions of Rabbit Hill Road could be determined. The surveyor provided for a 66 foot wide road. The appellant took issue with that width and the amount of private property that it thereby lost to the public road. The width of the driving surface of Rabbit Hill Road was usually only 45 feet, which meant that the 66 foot width included more than the road itself. Is a public road dedication confined to the actual driving surface of the road or does it include roadside ditches and slopes? It seems that this issue about the scope of a dedication has never been specifically addressed by a Canadian court. English courts have addressed the issue, but Justice Moen refused to follow those precedents.

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Case Considered: O & M Investments Ltd. v. Edmonton (City), 2010 ABQB 146

PDF version:  Defining Art in the Commons: The Case of Building Owners and Graffiti in Edmonton

Graffiti, or street art, is hardly new and neither is the debate around whether it is a public nuisance or art in the commons, as was shown in O & M Investments Ltd. v. Edmonton (City). Graffiti is likely one of the world’s most contentious art forms, perhaps in part due to the subjective nature of art appreciation but also due to the renegade qualities of the installation of a piece. In O & M, a building owner contested an order issued by the City of Edmonton’s Community Standards Branch to “[r]emove all graffiti on any structures on the property that are visible to any surrounding property” (at para. 3). The order referred to graffiti that had been applied to a large wall facing a vacant lot in what can best be described as a mixed-use neighbourhood (see map here and in “street view”, move around to the west side of the building to observe the graffiti).

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Case considered: Community Credit Union Ltd. v. Transamerica Life Canada, 2009 ABQB 704

PDF version:   The Availability of Relief from Forfeiture for Non-Payment of a Life Insurance Premium

This is a well-researched and clearly written decision by Justice Keith Yamauchi on an unresolved issue in insurance law. The question is whether relief from forfeiture is available when a life insurance policy lapses for non-payment of premiums. Since 1994, the usual approach of the courts confronted by this question has been to merely assume relief from forfeiture was available and decide on the easier basis that, even if it was available, it was not appropriate to grant it on the facts of the case before them. In this decision, however, Justice Yamauchi decided the legal point and determined that relief from forfeiture was not available. This decision has several points of interest from a property law perspective, which is the perspective I am adopting for these comments. The aspects of this decision that interest me the most are two. The first is the perceived tension between statutorily regulated life insurance contracts and the body of law known as equity, also known as the classic tension between certainty and justice in the individual case. The second is the sharp line drawn, obliterated, and then re-drawn between property and contract.

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Case considered: Rachar v. Litvak, 2009 ABQB 441

PDF version: The Animal Keepers Act: Perennial Problems of Priority

This is the first case to consider the Animal Keepers Act, S.A. 2005, c. A-40.5, a piece of legislation which came into force in November of 2005. It replaced a 101-year-old statute, the Livery Stable Keepers Act, R.S.A. 2000, c.L-14, which was originally enacted in 1884 as an ordinance of the North-West Territories and applied to the area that would become Alberta. According to the Alberta Ministry of Agriculture and Rural Development, the Animal Keepers Act “provides a person who boards or cares for an animal a means of collecting outstanding bills owed by the owner of such animals with priority over all other liens, bills of sales, etc. without the use of costly, complicated legal processes.” The new Act seems to live up to this description. While extensively used by the cattle industry and other keepers of livestock, neither this Act nor its predecessor have been the subject of much judicial consideration. Those rare disputes that have been taken to court tend to involve issues of priority among creditors, as does this case.

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