Category Archives: Property

The Effect of Well Abandonment and Reclamation Obligations for the Valuation of Matrimonial Property

By: Nigel Bankes

PDF Version: The Effect of Well Abandonment and Reclamation Obligations for the Valuation of Matrimonial Property

Case Commented On: Walker v Walker, 2017 SKQB 195 (CanLII)

Judicial decisions on the legal nature of abandonment and reclamation obligations may arise in the strangest of ways. Take this matrimonial property case, for example, in which Mr. Walker (Darcy) was seeking to argue that his assets should be discounted on the basis that a small oil and gas company (Outback) that he controlled had net abandonment and reclamation liabilities. Part of the challenge that he faced in making this argument was of course that the liabilities in question were the liabilities of the corporation. While a director or controlling mind of a corporation might ordinarily take some comfort from this state of affairs, in this case counsel for Darcy tried to suggest that his client would inevitably face personal liability under the terms of Saskatchewan’s The Environmental Management and Protection Act, 2010, SS 2010, c E-10.22 [EMPA] and The Oil and Gas Conservation Act, RSS 1978, c O-2 [OGCA] and s 59 of The Oil and Gas Conservation Regulations, 2012, RRS c O-2 Reg 6 [OGCR]. Actually the argument was even stranger insofar as Mrs. Walker (Becky) was also a director of the company (Outback) and thus might face the same liability should Darcy be correct. Continue reading →

Liens Against Minerals Do Not Have Super Priority: Saskatchewan Court of Appeal Overrules Cenex

By: Nigel Bankes

PDF Version: Liens Against Minerals Do Not Have Super Priority: Saskatchewan Court of Appeal Overrules Cenex

Case Commented On: National Bank of Canada v KNC Holdings Ltd., 2017 SKCA 57 (CanLII)

A unanimous five person panel of the Saskatchewan Court of Appeal has overruled the Court’s earlier decision in Canada Trust Co. v Cenex Ltd. (1982), 1982 CanLII 2651 (SK CA), 131 DLR (3d) 479 (Sask CA). Decided in 1982, Cenex concluded that s 12 of The Mechanics’ Lien Act, RSS 1978, c M-7, (then the relevant statute) created a super priority for mechanics’ liens filed against mineral interests and severed minerals on the basis that the lien was to attach to  “all the estates and interests in the mineral concerned, other than the estate in fee simple in the mines and minerals …” (at para 11). Justice Hall writing for the Court in Cenex concluded that this language bound even the equity of the Royal Bank which held prior security under s 88 of the Bank Act, RSC 1970, c B-1 and debenture security. The effect of Justice Hall’s conclusion was to afford the lien holders a super priority.  Continue reading →

The Impact of a Dower Act Life Estate on the Valuation and Distribution of Intestate Estates

By: Jonnette Watson Hamilton

PDF Version: The Impact of a Dower Act Life Estate on the Valuation and Distribution of Intestate Estates

Case Commented On: Estate of Johnson, Rick Allen (Re), 2017 ABQB 399 (CanLII)

The deceased, Rick Allen Johnson, died intestate–i.e., without a will–in February 2013. He was survived by a spouse and by two children of a previous marriage. The years of aggravation, frustration, hostilities and legal fees that is foretold by those two short sentences will be obvious to the many individuals who have found themselves in a similar situation. The particular issue in this case was how much of the deceased’s property his children inherited, if any, given the life estate in the deceased’s house granted to his surviving spouse by the Dower Act, RSA 2000, c D-15, and the preferential share of an intestate estate given to the surviving spouse by the Wills and Succession Act, SA 2010, c W-12.2.  Specifically, the question was: Should the present value of the wife’s Dower Act life estate be deducted from the value of the deceased’s house for the purpose of distributing his estate between his surviving spouse and his children? Justice John W. Hopkins answered that question with a “no”, holding that the value of the deceased’s house for the purposes of the distribution of his estate under the Wills and Succession Act was the full value of the house, with no deduction for the life estate. I think his answer is wrong. Continue reading →

Interim Measures in a Classic Church Property Dispute

By: Jonnette Watson Hamilton

PDF Version: Interim Measures in a Classic Church Property Dispute

Case Commented On: Bruderheim Community Church v Moravian Church in America (Canadian District), 2017 ABQB 355 (CanLII)

In this brief judgment, Justice Brian Burrows granted an interim injunction restraining the Board of Elders of the Moravian Church in America from interfering with the use of church land and buildings located in Bruderheim, Alberta by the local congregation, formerly known as the Bruderheim Moravian Church and now known as the Bruderheim Community Church. The application of the standard three-part test for an interim injunction is of interest for the “serious issue to be tried” that it discloses, as well as for the understanding of “irreparable harm” applied in the situation of a local congregation being evicted from its place of worship. In addition, this particular dispute appears to have all the elements of a classic church property dispute brought to the civil courts as a last resort as a result of an irreparable rift within a church over a matter of doctrine. The reason for the Bruderheim congregation’s disassociation was a decision by the Moravian Church, Northern Province that individuals were eligible to be clergy regardless of their sexual orientation or marital status.  Continue reading →

Party Principally Interested in Thermal Recovery Succeeds on Appeal

By: Nigel Bankes

PDF Version: Party Principally Interested in Thermal Recovery Succeeds on Appeal

Case Commented On: IFP Technologies (Canada) Inc v EnCana Midstream and Marketing, 2017 ABCA 157 (CanLII)

The Court of Appeal by a majority (Chief Justice Fraser, Justice Rowbotham concurring;  Justice Watson dissenting) has concluded that a party (IFP Technologies) who acquired from PanCanadian Resources (PCR, now Encana) a 20% undivided interest in a set of oil and gas properties under the terms of a conveyancing document (denominated here as the Asset Exchange Agreement, AEA), retains a working interest in those properties even where other contemporaneous documents executed by the parties, including a joint operating agreement (JOA), purported to limit IFP’s interest to an interest in the production that occurs as a result of thermal processes and not as a result of primary production. As a result of its interpretation of the AEA, the majority concluded that IFP was entitled to an accounting for its proportionate share of the net revenue realized from primary production from the relevant properties (now held by Wiser – and most recently Canadian Forest Oil – pursuant to a farmout from PCR to Wiser). The Court also held that IFP had reasonably withheld its consent to Wiser’s acquisition of PCR’s interest in the lands. In reaching these conclusions the majority overruled Chief Justice Wittmann’s decision at trial (2014 ABQB 470 (CanLII)) acting in place of the Trial Judge, Justice Ron Stevens who (at para 48) died in spring 2014 without having been able to render judgement based on a trial which took place between January and June 2011. Continue reading →