Category: Contracts Page 7 of 12

By: Nigel Bankes

PDF Version: Knock-for-Knock Decision Affirmed by Court of Queen’s Bench

Case Commented On: Precision Drilling Canada Limited Partnership v Yangarra Resources Ltd, 2016 ABQB 365 (CanLII)

This matter, involving the interpretation of a standard form drilling contract, originally came on before Master Prowse as an application for summary judgement by Precision, the drilling contractor. My post on the Master Prowse’ decision, 2015 ABQB 433, is here and my post on Master Prowse’s further judgement, 2015 ABQB 649, on the “interest clause as penalty” issue is here. Both decisions favoured Precision, and Yangarra appealed both. In this decision Justice E.C. Wilson dismissed both appeals and affirmed Master Prowse’s decisions largely by quoting extensively from the learned Master’s reasons.

Of Busted Butterflies and the Duty of Good Faith – A Saskatchewan Right of First Refusal Case

By Nigel Bankes

On June 22, 2016

In Contracts, Oil & Gas, Torts

By: Nigel Bankes

PDF Version: Of Busted Butterflies and the Duty of Good Faith – A Saskatchewan Right of First Refusal Case

Case commented on: Northrock Resources v ExxonMobil Canada Energy, 2016 SKQB 188

What is the legal position if N has a right of first refusal (ROFR) in the event that E agrees to sell its interest, unless E’s sale is to an affiliate; E transfers the interest to its wholly owned affiliate, NSCo and C then buys the shares of NSCo. Does the second transaction or the two transactions taken together (known in tax parlance – for reasons that, as with much of tax law, entirely escape me – as a “busted butterfly” trigger N’s ROFR entitlement (perhaps on the basis that E should not be able to do indirectly what it cannot do directly)? Justice Currie of the Saskatchewan Court of Queen’s Bench answered in the negative and as a result dismissed Northrock’s (N’s) claims which sounded in both contract and in tort (inducing breach of contract and conspiracy).

Stewart Estate: Finalizing The Judgment Roll and Costs

By Nigel Bankes

On May 17, 2016

In Contracts, Oil & Gas

By: Nigel Bankes

PDF Version: Stewart Estate: Finalizing The Judgment Roll and Costs

Decisions commented on: Stewart Estate v TAQA North Ltd, 2016 ABCA 143 and Stewart Estate v TAQA North Ltd, 2016 ABCA 144

The Court of Appeal handed down its main decision in Stewart Estate v TAQA North Ltd, 2015 ABCA 357 (hereafter the main decision) in November 2015. In my post on the main decision I suggested that “while Stewart Estate is certainly a significant decision (which grapples with important issues including, the standard of review applicable to lease interpretation questions, the rules surrounding the termination of oil and gas leases and the question of remedies for wrongful production), it is ultimately a disappointing decision because, in the end, with three separate judgments, this three person panel of the Court agrees on very little.”

We now have two further decisions from the panel of the Court that heard the case, one decision settling the judgement roll (hereafter the judgment roll decision) and the second dealing with the costs award (the costs decision). The judgment roll decision expressly describes itself (at para 1) as providing supplementary reasons to the main decision. This post not does provide a systematic account of either of these decisions but it does aim to identify where these decisions have added to the reasoning in the main decision or have provided dicta that may be of interest beyond this case.

When is a Contract between Family Members Enforceable?

By Evaristus Oshionebo

On March 17, 2016

In Contracts, Corporate / Commercial

By: Evaristus Oshionebo

PDF Version: When is a Contract between Family Members Enforceable?

Case Commented On: Hole v Hole, 2016 ABCA 34

At common law a contract is not enforceable unless the parties intended the contract to create legal relations. Whether or not the parties intended to create legal relations is determined objectively by examining the circumstances existing at the time of execution of the contract. However, there is a general presumption that contracts between family members are not intended to create legal relations. This presumption “derives from experience of life and human nature which shows that in such circumstances men and women usually do not intend to create legal rights and obligations, but intend to rely solely on family ties of mutual trust and affection” (Jones v Padavatton, [1969] 2 All ER 616 at 621 (CA)). The presumption is equally based on the reality that agreements between family members are usually not bargained or negotiated. However, the presumption is rebuttable by evidence. Thus, a contract between family members is enforceable where there is evidence that the parties intended the contract to create legal relations. The presumption could be rebutted by evidence showing that, although the parties are family members, the contract was reached or executed in commercial circumstances. As Professor John McCamus puts it, “[c]ommercial arrangements between family members may obviously be intended to create enforceable agreements” (John D. McCamus, The Law of Contracts, 2^nd ed at 133).

Unpaid AFE Amounts Constitute Liquidated Demands With No Right of Set-Off Under the 1990 CAPL Operating Procedure

By Nigel Bankes

On December 21, 2015

In Contracts, Oil & Gas

By: Nigel Bankes

PDF Version: Unpaid AFE Amounts Constitute Liquidated Demands With No Right of Set-Off Under the 1990 CAPL Operating Procedure

Case Commented On: Talisman Energy Inc v Questerre Energy Corporation, 2015 ABQB 775 (MC)

This decision of Master Prowse offers an interesting example of careful parsing of the pleadings, and the agreed and contested facts, with a view to identifying possible issues for which summary judgment may be granted – while leaving the factually contested issues for a later trial. As in SemCAMS ULC v Blaze Energy Ltd. 2015 ABQB 218, (and see my post on that decision here) contractual language deeming billings to be liquidated demands and the “no set-off” provisions commonly found in oil and gas and other commercial agreements were important elements in the decision.