ABLawg

In a break from what seemed to be a growing trend, Mr. Justice Keith Ritter has refused leave to appeal to a group of landowners with respect to an Energy Resources Conservation Board (“ERCB”) decision. Perhaps because of the unfortunate result in Graff v. Alberta (Energy and Utilities Board), 2008 ABCA 119 (see my post on this decision ), Justice Ritter focused on one component of the test for leave – whether the appeal was prima facie meritorious – and dismissed the application. He looked at the facts and at the evidence and decided there was no merit to any of the proposed grounds of appeal. While it is hard to quarrel with all of Justice Ritter’s conclusions, ultimately his decision raises some troubling questions about procedural fairness and the ability of landowners to participate effectively in ERCB proceedings.

Arbitration is not Administrative Law

By Jonnette Watson Hamilton

On August 16, 2008

In Administrative Law, Arbitration

The reasons that arbitration is a legitimate way to resolve a dispute are not the same reasons that administrative decision-making is legitimate. Arbitration is normally a process voluntarily chosen by parties who want a dispute decided by an impartial judge of their own choosing, whose decision on the merits of the dispute will be final and binding. It is a private alternative to the courts (albeit governed by legislation and even mandated by legislation in some cases). The justification for legislative and judicial deference to arbitration rests on the principle of freedom of contract and the norm of party autonomy. Administrative law, on the other hand, is public law. Administrative agencies and tribunals are created by federal and provincial legislative bodies and given tasks to do on behalf of the citizens of the country or province. Administrative decision-makers do not just resolve disputes between parties; they are also responsible for fulfilling the goals of their agency. Judicial review of administrative decisions exists, in part, to control the exercise of power by the executive and administrative branches of the state. Nevertheless, courts have recently been conflating the two areas of law and the decision in Jamani v. Subway Franchise Systems of Canada Ltd. is an example of this trend.

Proof of Future Economic Losses in Tort Law

By Greg Hagen

On August 16, 2008

In Torts

Cases Considered: Chernetz v. Eagle Copters Maintenance Ltd., 2008 ABCA 265

PDF Version: Proof of Future Economic Losses in Tort Law

In 1999, Harry Chernetz was killed in a helicopter crash. In an action against the helicopter operator and its maintenance company, his estate, his wife and their three teenaged children were awarded damages exceeding $3 million under the Fatal Accidents Act, R.S.A. 2000, c. F-8. The plaintiffs appealed, submitting, amongst other things, that in assessing the loss of future income, the trial judge wrongly required the plaintiff to prove what Harry Chernetz would have earned had the tort not occurred on a balance of the probabilities. Instead, the appellants contended, the trial judge should have attached probabilities to what Harry Chernetz might have earned, as a real and substantial possibility, had the tort not occurred, and calculated the expected earnings. The Alberta Court of Appeal (per Justices Constance Hunt, Clifton O’Brien and Alan Macleod) found that the trial judge applied the wrong standard of proof to isolated issues only and, for reasons of economy of judicial time and resources as well as fairness, ordered the action to be remitted to the trial judge to remedy the isolated errors identified by the Court of Appeal. Unfortunately, given the nature of the principles involved in assessing future economic loss, where there is a lack of clarity in the application of such principles by the trial judge, it may not be possible in principle for the Court of Appeal to accurately identify the errors.

When Does a Royalty Owner not have to Pay for a Share of Processing Costs?

By Nigel Bankes

On August 14, 2008

In Natural Resources, Oil & Gas

Case Considered: 570495 Alberta Ltd. v. Hamilton Brothers Exploration Company, 2008 ABQB 413

PDF Version: When does a royalty owner not have to pay for a share of processing costs?

When does a royalty owner not have to pay for a share of processing costs? The answer of course should be that the royalty owner does not have to pay unless it is required to do so by the terms of the agreement that created the royalty. And that in fact is exactly what Justice Alan Macleod concludes in this judgement. Just as there is no rule of law that precludes an oil and gas lease from being kept in force beyond the end of its primary term by the mere existence of a shut-in well in “accordance with oil field practice” (see Kensington Energy Ltd v. B & G Energy Ltd 2008 ABCA 151 and my post on this decision), so too there is no rule of law that requires a royalty owner to pay a share of post-severance processing costs. This judgement confirms that processing costs are issues of contract between the parties and that the job of the court is to give effect to the terms of the agreement that the parties have negotiated.

The ERCB asserts its jurisdiction to determine the validity of an oil and gas lease

By Nigel Bankes

On August 9, 2008

In Administrative Law, Natural Resources, Oil & Gas

Cases Considered: In re Desoto Resources, Joffre Field, ERCB Decision 2008-47

PDF Version: The ERCB asserts its jurisdiction to determine the validity of an oil and gas lease

In an unusual decision the ERCB has asserted its jurisdiction to determine the validity of an oil and gas lease. While the Board has in recent years been forced to make rulings on complex questions of property law such as the competing rights of coal owners and natural gas owners to coal bed methane (In re Bearspaw Petroleum, EUB Decision 2007-24) as well as the competing interests of bitumen producers and natural gas producers (Alberta Energy Company Ltd. v. Goodwell Petroleum Corporation Ltd., 2003 ABCA 277, reviewing EUB Decision 2000-21) this is, so far as I am aware, the first reasoned decision of the Board in which it has passed on the validity of an oil and gas lease. Desoto’s application in the Court of Queen’s Bench for a declaration as to the validity of the leases was pending at the time of the Board’s decision.

Landowners, Procedural Fairness and Alberta’s Energy Resources Conservation Board

Arbitration is not Administrative Law

Proof of Future Economic Losses in Tort Law

When Does a Royalty Owner not have to Pay for a Share of Processing Costs?

The ERCB asserts its jurisdiction to determine the validity of an oil and gas lease