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Friday, September 10, 2010

B.C. Court decision in Terasen v. Utzig (No. 2) released re landowner damage to pipeline

This litigation concerns whether a pipeline owned and operated by the plaintiff Terasen Gas Inc. (“Terasen”) that runs through a portion of Burns Bog in Delta, B.C. was damaged or put at risk by landfill operations on lands owned by the defendant Utzig Holdings (B.C.) Ltd. (“Utzig”). The landfill operations were conducted, with Utzig’s permission, by the other defendants Alpha Manufacturing Inc., Burns Developments Ltd. and Burns Developments (1993) Ltd. (“Alpha” and “Burns”).

In a judgment delivered on January 25, 2010, Terasen Gas Inc. v. Utzig Holdings (B.C.) Ltd., 2010 BCSC 90 (CanLII) [Terasen v. Utzig #1], the British Columbia Supreme Court held that Utzig (“the defendant”) had breached covenants in statutory right of way agreements in favour of Terasen and, in the alternative, that the defendant had committed the tort of nuisance in the period prior to October 1993. However, certain defences (consent, acquiescence, laches, estoppel and waiver) had been pleaded but were not addressed in submissions. After the delivery of judgment and further submissions from counsel, the defendant made submissions on those defences at a continuation of the trial, and the plaintiff made submissions in response. The defendant also wished to make submissions on causation, remoteness of damages and mitigation but the Court concluded that submissions on those matters should be heard at the damages phase of the trial (the issue of liability, whether someone is liable to pay damages, is often separated from the determination of the amount or quantum of damages).  Read my post on the earlier decision at: Terasen v. Utzig #1.

In the latest chapter of the case, the defendant landowner elected to make submissions only on estoppel and waiver, and abandoned the defences of consent, acquiescence and laches.  The questions for determination, relating to waiver and estoppel respectively, were as follows:

(1) Did Terasen, with full knowledge of its rights under the statutory right of way agreements, consciously and unequivocally abandon those rights?
(2) In the alternative, did Terasen do something beyond mere delay to encourage Utzig to believe that Terasen did not intend to rely on its strict rights, and did Utzig act to its prejudice in reliance on that belief, such that it would be unconscionable to grant relief to Terasen?
Based on the facts, the Court rejected both lines of defence and set down a case management conference to determine the next steps in the proceedings.

Read the decision at: Terasen Gas Inc. v. Utzig Holdings (B.C.) Ltd. (No. 2).