ABLawg

Terminating a Long Term Gas Sales Contract on Account of a Material Adverse Change: The Continuing Fallout from the Collapse of the Enron Empire

On January 31, 2009

In Contracts, Natural Resources, Oil & Gas

Cases Considered: Marathon Canada Ltd v. Enron Canada Ltd, 2008 ABQB 408;
Marathon Canada Ltd v. Enron Canada Ltd, 2009 ABCA 31.

PDF Version: Terminating a long term gas sales contract on account of a material adverse change: the continuing fallout from the collapse of the Enron Empire

The Court of Appeal, in a memorandum of judgement authored by Justices Ellen Picard, Peter Costigan and Jack Watson, has affirmed the decision at trial of Justice Terence McMahon of the Alberta Court of Queen’s Bench. Justice McMahon held that Marathon Canada had lawfully terminated a natural gas purchase contract with Enron Canada. Marathon chose to terminate when Enron Canada’s US parent (Enron Corp) fell into serious financial difficulties. Both courts also held that: (1) Marathon was entitled to recover $560,000 damages for natural gas that it had delivered prior to contract termination, but that, (2) Enron Canada was not entitled to recover liquidated damages of some $126 million based on a counter-claim of wrongful termination and the estimated\guesstimated present value of Marathon’s future deliveries at the contract price.

Disability Discrimination in the Workplace

By Linda McKay-Panos

On January 28, 2009

In Human Rights, Labour/Employment

Cases Considered: Brewer v. Fraser Milner Casgrain LLP, 2008 ABCA 435;
Baum v. Calgary (City), 2008 ABQB 791

PDF Version: Disability Discrimination in the Workplace

Two recent Alberta decisions (one from the Court of Queen’s Bench and one from the Court of Appeal) illustrate the significance of the process followed by decision-makers when analyzing whether, under the Human Rights, Citizenship and Multiculturalism Act, R.S.A. 2000, c. H-14 (“HRCMA“), a person has been discriminated against, and, if so, whether the employer has accommodated the person to the point of undue hardship. As noted by Madam Justice Eidsvik in Baum v. Calgary (City), 2008 ABQB 791 (“Baum“): “Accordingly, the law on the duty to accommodate has become quite well developed however, the initial test [see #1 below] has been sparsely discussed until recently” (at para. 29). These two cases illustrate this observation.

A Welcome Primer on Interpreting Covenants in Leases

By Jonnette Watson Hamilton

On January 28, 2009

In Contracts, Property

Cases Considered: Orbus Pharma Inc. v. Kung Man Lee Properties Inc., 2008 ABQB 754.

PDF Version: A Welcome Primer on Interpreting Covenants in Leases

This case is about the proper interpretation of a term in a commercial lease concerning the ability of the tenant to assign or sublet the premises. The provision appeared to say that when the tenant asked for the landlord’s consent to an assignment or sublease, the landlord could either consent or refuse consent or – and this was the controversial point – cancel the lease altogether. Although this clearly reasoned and well-written decision turns on the exact wording of the relevant provision in the lease, there is nevertheless a great deal of precedential value in this decision because of the principles of law used by Justice Scott Brooker in his approach to the interpretative task. Characterizing the provision as “astute bargaining” on the part of the landlord that allowed it to terminate a lease with a rent substantially below market rates (at para. 68), this judgment is also a marked contrast with the decision in 550 Capital Corp. v. David S. Cheetham Architect Ltd., 2008 ABQB 370. In that earlier case, the tenant’s contorted efforts to evade the consequences of a similar clause in its lease were rewarded: see the critique of this decision written by Nick Rafferty and myself in “What’s Wrong with Landlord’s Rights?”

“Litigation by installments”: Further Developments in the Black Bear Crossing Dispute

By Jennifer Koshan

On January 26, 2009

In Aboriginal, Constitutional, Remedies

Cases Considered: Tsuu T’ina Nation v. Frasier, 2009 ABCA 23.

PDF Version: “Litigation by installments”: Further Developments in the Black Bear Crossing Dispute

As noted in a previous post, a February 2008 decision of the Alberta Court of Appeal effectively prevented the Tsuu T’ina Nation from enforcing an eviction notice against residents of Black Bear Crossing whose band membership was disputed until such time as the membership of the residents was resolved (see 2008 ABCA 74). The Tsuu T’ina’s application for leave to appeal to the Supreme Court of Canada was denied on October 30, 2008 (see 2008 CanLII 55966). Meanwhile, the parties were before the Alberta courts again when the Tsuu T’ina Nation cut off the water and utilities for the three remaining residents of Black Bear Crossing (BBC). The Tsuu T’ina Nation was held in civil contempt by Justice Jo’Anne Strekaf of the Court of Queen’s Bench for refusing to supply the residents with these services after being ordered to do so. Those orders had been made as conditions of an adjournment granted to the Tsuu T’ina in respect of its underlying action pursuing eviction of all remaining residents of BBC on October 20, 2008. The Court of Appeal had left such an action open to the Tsuu T’ina if it did not discriminate between member and non-member residents. On January 15, 2009, Justice Patricia Rowbotham of the Alberta Court of Appeal granted the Tsuu T’ina leave to appeal Justice Strekaf’s October 20, 2008 order (2009 ABCA 23). In a strange twist, however, the previous day Justice Strekaf granted the Tsuu T’ina an eviction order in respect of the one remaining resident of BBC, the other two having moved out after accepting the Nation’s offer of a year’s accommodation off-reserve (see here).

Medical Marihuana Suppliers and the Charter

By Jennifer Koshan

On January 20, 2009

In Constitutional, Criminal

Cases Considered: R. v. Krieger, 2008 ABCA 394

PDF Version: Medical Marihuana Suppliers and the Charter

There have been several cases before the courts raising issues concerning the right to access medical marihuana as a defence to criminal charges under the Controlled Drugs and Substances Act, S.C. 1996, c. 19. Grant Krieger, a well known Calgary-based supporter of the legalization of marihuana and its use for medical purposes, and someone who suffers from multiple sclerosis himself, has brought several such claims. His attempts to raise the defence of necessity in criminal law have not been particularly successful (see R. v. Krieger, 2003 ABCA 85; R. v. Krieger, 2005 ABCA 202). Arguments based on Krieger’s right to use and produce marihuana as an aspect of his security of the person under s.7 of the Canadian Charter of Rights and Freedoms have met with more success (see R. v. Krieger (2000), 225 D.L.R. (4th) 164, 2000 ABQB 1012, aff’d 2003 ABCA 85, leave to appeal refused, [2003] S.C.C.A. No. 114). More recently, Krieger tried to push the limits of the jurisprudence by claiming a Charter defence to charges of trafficking marihuana for medical purposes in circumstances where he was supplying others with the drug.