Category Archives: Property

Severing a joint tenancy in Alberta

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Case Commented On: Dobransky v Roteliuk, 2018 ABQB 660 and Smilley v McMillan, 2018 ABQB 988.

Co-owners in Alberta may choose to hold an estate in land as joint tenants or as tenants in common: Law of Property Act, RSA 2000, c L-7, sections 4 and 5 (LPA). A joint tenancy carries with it the incident of survivorship – that is, the right of the surviving joint tenant to the entire estate. Despite the fact that there is a presumption in favour of a tenancy in common and that therefore co-owners must indicate expressly that they wish to own as joint tenants and not as tenants in common (LPA, section 8), there is general agreement (and this was certainly the position of courts of equity) that it should be easy to destroy or sever the joint tenancy thereby avoiding the incident of survivorship. This post sets out the law of severance and then comments on two recent decisions in each of which the plaintiff sought to get the Court’s assistance to complete a severance.

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Saskatchewan Land Titles Decision Calls Out for Appellate Review

By: Nigel Bankes and Jonnette Watson Hamilton

PDF Version: Saskatchewan Land Titles Decision Calls Out for Appellate Review

Case Commented On: Registrar of Titles and Great West Life Assurance Company and Primrose Drilling Ventures Ltd, 2018 SKQB 290.

This decision deals with the power of the registrar to correct an error made back in the chain of title, the effect of a registrar’s caveat, and the status of a purchaser where a title is encumbered by a registrar’s caveat. Unfortunately, Justice Kovach has, in our view, reached incorrect conclusions on each of these issues. We hope that the Saskatchewan Court of Appeal has the opportunity to correct these errors.

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Responsibility for Undisclosed Defects in Pre-Owned Real Property

By: Jonnette Watson Hamilton

PDF Version: Responsibility for Undisclosed Defects in Pre-Owned Real Property

Case Commented On: Smiley v Salat, 2018 ABPC 178 (CanLII)

The freely available “virtual library of Canadian legal information” that is CanLII does not allow Google or other internet search engines to index its text or case names and display them in search results (except for Supreme Court of Canada decisions). As a result, CanLII’s million-plus Canadian court decisions and other documents usually do not turn up on a web search, which provides individuals with some privacy, as explained in the CanLII Privacy Policy. However, when a third party links to a CanLII decision, as I have done in this post, the text can be indexed by search engines. Some decisions should be widely available through a Google or similar search. I think this decision by Provincial Court Judge Don Higa is a good example of a decision that should be easily accessible to both lawyers and non-lawyers. It is a good summary of the law that determines when a seller is liable for defects in a just-purchased home and other properties, when those defects were not disclosed by the seller or were not noticed during an inspection. Accessible, understandable law is important to purchasers, especially first-time home owners, faced with unexpected problems and their potential financial and emotional consequences. It is also important to sellers who need to know whether or not settling is their best option.

Judge Higa conveniently divided the issue in this case of who was liable for the 2016 repairs to the sewer line into six questions. It is these six questions – adapted below to be more generic – that sellers or buyers experiencing a dispute about a defect need to consider. The facts of this particular case – the fairly common problem of a sewer backing-up due to intrusive tree roots –illustrate the type of evidence required in order to answer the six questions.

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A Vesting Order Cannot Create Title

By: Nigel Bankes

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Case Commented On: Quicksilver Resources Canada Inc (Re), 2018 ABQB 653

Quicksilver Resources (QRCI) owned oil and gas assets and associated infrastructure in the Horn River basin. In 2011, QRCI joined the Fortune Creek Partnership (FCP) and agreed, by way of a Contribution Agreement, to contribute certain infrastructure assets to the FCP. Those assets were described as follows:

The “Assets” are set forth on Exhibit 1 (Maxhamish Pipeline), Exhibit 2 (Compression Assets) and shall include the following:

(a) all permits, licenses, authorizations, surface rights (including easements, licenses of occupation and rights-of-way), and buildings, structures, appurtenances and tangible depreciable property situate thereon that are used or useful in connection with the operation of the Maxhamish Pipeline; but

(b) specifically exclude any rights or interests in or relating to petroleum or natural gas or the production thereof, or in wells or wellsite facilities, or in the operation of the foregoing. [The emphasis is supplied by Justice Jones.]

The FCP became insolvent in 2016 and MNP was appointed as Trustee in Bankruptcy. QRCI and its subsidiaries followed FCP into insolvency and obtained protection under the Companies Creditors Arrangement Act, R.S.C. 1985, c C-36 (“CCAA”) and a stay of proceedings. FTI Consulting was appointed as the Monitor of QRCI.

In March 2016 QRCI entered into an Asset Purchase Agreement (APA) with Rockyview Resources Inc (RRI). Under the CCAA, the APA required the approval of the Court and that approval was granted in the ordinary course in April 2016 in the form of an Approval and Vesting Order.

A dispute then arose as to whether certain infrastructure assets were included in the APA. These “disputed assets” are described as follows:

a metering station and building (the “Metering Station”) located at the downstream or outlet end of the Maxhamish Pipeline, the location being legally described as a-59-A/094-O-14 in the Province of British Columbia;
a pig receiving station (the “Pig Receiver”) at the same location; and,
a BC Oil and Gas Commission (“OGC”) Facility License for the Metering Station (the “Metering Station License”).

QRCI sought a declaration to the effect that RRI had no interest in the disputed assets.

There were three issues to resolve: (1) were the disputed assets covered by the partnership Contribution Agreement such that QRCI could not have sold them to RRI; (2) were the disputed assets included in the APA, and (3) did the Approval and Vesting Order give title of the disputed assets to RRI notwithstanding the conclusions to the first two questions.

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Specific Performance of a Right of First Refusal in the Context of a Facilities Agreement

By: Nigel Bankes

PDF Version: Specific Performance of a Right of First Refusal in the Context of a Facilities Agreement

Decision Commented On: Canlin Resources Partnership v Husky Oil Operations Limited, 2018 ABQB 24 (CanLII)

Canlin and Husky are successors in interest to a Construction, Ownership and Operation (CO & O) Agreement for the Erith Dehydration and Flow Splitter Facility (Facility Agreement). The agreement was based on the standard form CO & O Agreement (1999) developed by the Petroleum Joint Venture Association (PJVA). The Facility Agreement provides both parties with mutual rights of first refusal (ROFR) in the event that either decides to sell the facility but also provides a number of exceptions. In particular, the Agreement provided that the ROFR would not be triggered in the event of (at para 3) “(a) disposition made by an Owner of all or substantially all … of its petroleum and natural gas rights in wells producing to the Facility …”. Husky was disposing of its interests in the area (the Ikkuma transaction) but the challenge was that there had been no wells producing into the facility since 2016 when Husky installed a “jumper” pipeline. This pipeline served to by-pass the Erith Facility with the result that gas previously processed at Erith was now processed at the Blackstone Facility. The question therefore was whether Husky could rely on the exception, there being no wells producing into the facility. Husky took the view that the exception was triggered since the wells in question were still associated with the Erith Facility in the sense of being tied-in to the Facility. Justice Romaine concluded that the exception was not triggered and accordingly declared that Canlin could exercise the ROFR; furthermore she concluded that Canlin was entitled to an order of specific performance. Continue reading →