University of Calgary Faculty of Law ABLawg.ca logo over mountains

The Independent Operation Of The Shut-in Clause Of An Oil And Gas Lease

Cases Considered: Kensington Energy Ltd v. B & G Energy Ltd 2008 ABCA 151

PDF Version:  The Independent Operation Of The Shut-in Clause Of An Oil And Gas Lease

In this important decision (hereafter “Kensington”) the majority of the Alberta Court of Appeal (Hunt and Slatter JJA; Romaine JA dissenting) concluded that the third proviso to the habendum of an oil and gas lease does not establish a set of conditions precedent that the lessee must fulfill before it can rely upon the shut-in wells clause and shut-in well payment to deem production, thereby continuing the lease – at least, and this is an important caveat – where the language of the shut-in wells clause does not track that of the third proviso. In reaching this conclusion the Court effectively distinguished its earlier decision in Freyberg v. Fletcher Challenge Oil and Gas Inc, 2005 ABCA 46 (“Lady Freyberg”).

The relationship between the well licence jurisdiction of the Energy Resources Conservation Board and the jurisdiction of the Surface Rights Board

Cases Considered: EnCana Corporation v. Campbell, [2008] ABQB 234

PDF Version: The relationship between the well licence jurisdiction of the Energy Resources Conservation Board and the jurisdiction of the Surface Rights Board

Justice Crighton’s decision in EnCana v. Campbell suggests that land owners may be able to use the Surface Rights Board (SRB) to require an oil and gas operator to follow more stringent conditions in relation to surface access and related matters such as weed control and water quality protection and testing than may be prescribed in the terms of a well licence or the Energy Resources Conservation Board (ERCB)’s Oil and Gas Conservation Regulations. Given the potential surface impacts of coal bed methane (CBM) development in the province and the uncertainties associated with the effect of CBM operations on ground water quality this is an important development. But while it offers additional protection for surface owners it also has the potential for a patchwork of environmental requirements etc. which may vary from property to property. This may well be a case where the re-born ERCB needs to be more proactive and precautionary so as to reflect the concerns of and uncertainties faced by landowners especially with respect to such an important matter as water quality.

An Equity Rationale for the Enforcement of the Corporate Veil?: The Alberta Court of Appeal Considers a Joint Venture Agreement in the Shadow of Corporate Reorganization

Cases Considered: Apex Corporation v Ceco Developments Ltd., 2008 ABCA 125

PDF Version:  An Equity Rationale for the Enforcement of the Corporate Veil?: The Alberta Court of Appeal Considers a Joint Venture Agreement in the Shadow of Corporate Reorganization 

Common law courts have demonstrated a willingness to ‘pierce the corporate veil’ in circumstances when upholding the assumption of separate corporate legal identity would, for example: endorse an instrument that appears simply a sham; would permit for behaviour “akin to fraud”(Gilford Motor Company Ltd. v. Horne, [1933] Ch. 935 (C.A.)); or lead to a result “too flagrantly opposed to justice”(Kosmopolous v. Constitution Insurance Co. of Canada [1987] 1 S.C.R. 2). This latter language of justice, authored by Madame Justice Bertha Wilson, in particular signals a potential equitable limit to the invocation of separate corporate legal identity. And so while there are rare, if established, instances for piercing the corporate veil based upon justice concerns, the instances of an equitable enforcement of corporate personality are rarer still, and indeed may be difficult to conceive of. Involved would be a court enforcement of separate legal entity despite the claims of a corporation’s ownership. Yet, just such a curious result occurred in the Alberta Court of Appeal’s recent decision in Apex Corporation v. Ceco Developments Ltd. (per Justice Jean Côté, Justices Ellen Picard and Peter Martin concurring).

Dunsmuir v. New Brunswick: Standards of Review and Employment Contracts

Cases Considered: Dunsmuir v. New Brunswick, 2008 SCC 9

PDF Version: Dunsmuir v. New Brunswick: Standards of Review and Employment Contracts

Dunsmuir was employed by the Province of New Brunswick as an office holder “at pleasure”. His probationary period was extended twice and the employer reprimanded him three times during the course of employment. Finally, a formal letter of reprimand was sent to Dunsmuir warning him that failure to improve his performance would result in further disciplinary action up to and including dismissal. The employer concluded that Dunsmuir was not right for the job, and a formal letter of termination was delivered to Dunsmuir’s lawyer the next day. A grievance was denied and then referred to adjudication under New Brunswick’s Public Service Labour Relations Act (“PSLRA”), R.S.N.B. 1973, c. P 25. A preliminary issue of statutory interpretation arose as to whether, where dismissal was with notice or pay in lieu thereof, the adjudicator was authorized to determine the reasons underlying the province’s decision to terminate. Ultimately, the adjudicator made no finding as to whether the discharge was or was not for cause. As Dunsmuir’s employment was hybrid in character, the adjudicator held that he was entitled to and did not receive procedural fairness in the employer’s decision to terminate his employment. He declared that the termination was void ab initio and ordered Dunsmuir reinstated as of the date of dismissal, adding that in the event that his reinstatement order was quashed on judicial review, he would find the appropriate notice period to be eight months.

The Metaphysical Court: Dunsmuir v. New Brunswick and the Standard of Review

Cases Considered: Dunsmuir v. New Brunswick, 2008 SCC 9

PDF Version: The Metaphysical Court: Dunsmuir v. New Brunswick and the Standard of Review

Introduction
The standard used by courts to review administrative decision-making is of central importance to energy and resource development law. Key decisions about regulation of utilities, supervision of energy markets, development of energy projects and facilities, and environmental obligations imposed on resource development, are authorized by legislation, and made and implemented by regulatory authorities. While for the most part, most of the time, the focus of everyone involved is simply on the making and implementing of those regulatory decisions, the courts retain the constitutional power to review and ultimately control this exercise of regulatory authority. Thus, the question of how the courts will exercise that power – the level of deference they will employ and how willing they will be to override regulatory decision-makers – is the fundamental backdrop against which these decisions are made.

Page 428 of 439

Powered by WordPress & Theme by Anders Norén