Category Archives: Oil & Gas

Note to Canada on the Northern Gateway Project: This is NOT What Deep Consultation With Aboriginal People Looks Like

By: Sharon Mascher

PDF Version: Note to Canada on the Northern Gateway Project: This is NOT What Deep Consultation With Aboriginal People Looks Like

Case Commented On: Gitxaala Nation v. Canada, 2016 FCA 187 (CanLII)

On June 20, 2016, the majority of the Federal Court of Appeal (FCA) quashed Order in Council P.C. 2014-809 requiring the National Energy Board (NEB) to issue Certificates of Public Convenience and Necessity to Northern Gateway on the basis that Canada had not fulfilled the duty to consult it owed to Aboriginal peoples affected by the Project. Concluding that “Canada offered only a brief, hurried, and inadequate opportunity in Phase IV – a critical part of Canada’s consultation framework – to exchange and discuss information and dialogue” (at para 325), the Court identifies several ways in which the consultation process fell “well short of the mark”. Marking a crucial step in the “Northern Gateway legal saga” (for a list of previous ABlawg posts, going as far back as 2012, see here), the FCA has remitted the matter to the Governor in Council for redetermination. While entitled to make a fresh decision, the FCA has made clear that should it decide to do so the Governor in Council may only issue Certificates for the Project after Canada has fulfilled its duty to consult with Aboriginal peoples (at para 335).

Needless to say, the substantive guidance provided by the majority’s decision will be important whenever the duty to consult is engaged going forward. In the immediate future, attention will be focused on what this means for the Northern Gateway Project and the Trans Mountain Expansion Project consultations currently underway in accordance with the Federal Government’s interim measures. Continue reading →

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

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. Continue reading →

Change of Operator: Norcen v Oakwood of no Application in the Case of a Bankruptcy

By: Nigel Bankes

PDF Version: Change of Operator: Norcen v Oakwood of no Application in the Case of a Bankruptcy

Case Commented On: Bank of Montreal v Bumper Development Corporation Ltd, 2016 ABQB 363 (CanLII)

This case involves the 2007 version of the CAPL Operating Agreement as well as a construction, ownership and operation agreement for a battery (COO Agreement). In his judgment Justice Alan Macleod enforced the immediate replacement provisions of the operating agreement in favour of a co-owner (Eagle Energy Inc.) and against the purchaser of the assets (Forent Energy Ltd.) from the receiver\manager appointed under under s 243 of the Bankruptcy and Insolvency Act, RSC 1985, c B-3. Continue reading →

From Telecoms to Pipelines: Good News from the Supreme Court of Canada for Pipeline Builders

By: Nigel Bankes

PDF Version: From Telecoms to Pipelines: Good News from the Supreme Court of Canada for Pipeline Builders

Case commented on: Rogers Communications Inc v Châteauguay (City), 2016 SCC 23 (CanLII)

In this decision the Supreme Court of Canada (unanimous in the result) concluded that the actions of the City of Châteauguay in creating a reserve as to certain real property were directed at frustrating Rogers’ efforts to install an antenna system on property located within the City and were therefore unconstitutional as a measure dealing with the siting of telecommunications infrastructure. The majority found that Châteauguay’s notice of reserve was ultra vires (but also went on to offer an analysis that would have rendered the reserve inapplicable on the basis of the doctrine of interjurisdictional immunity (IJI)). The minority (Justice Gascon) preferred to find for Rogers solely on the basis of IJI.

While this is no doubt an important decision for the telecommunications industry it will almost certainly prove to be more important for the more tightly networked elements of the energy sector and in particular oil and gas pipelines given the highly contentious nature of current proposals to construct new pipelines or expand existing pipelines. Continue reading →

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

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). Continue reading →