Renewable Energy Approval Requirements for Off-shore Wind Facilities - An Overview of the Proposed Approach

From the Ontario Environmental Bill of Rights Registry:

The Green Energy and Green Economy Act, 2009 was passed in the Legislature on May 14, 2009. The Act places priority on expanding Ontario’s use of clean and renewable sources of energy including wind, water, solar, biomass and biogas power. Developing these renewable resources is a cornerstone of Ontario’s future prosperity and the government’s plan to combat climate change and phase out coal. As a key pillar in supporting the development of Ontario’s green economy, the Ontario government introduced O. Reg. 359/09 (Renewable Energy Approvals under Part V.0.1) made under the Environmental Protection Act, on September 24, 2009. This regulation offers an approach to regulating renewable energy generation facilities that is based on transparency and clear, up-front provincial rules, while ensuring that the environment and human health are protected.

Off-shore wind facilities are classified as Class 5 wind projects and are subject to the Renewable Energy Approval (REA) regulation. Partner ministries are working together to provide greater certainty and clarity on off-shore wind requirements. The Ontario government is proposing an approach and is seeking input from interested members of the public, early in the process, to inform the work that will be completed to finalize the approach and the off-shore wind specific requirements under the REA regulation. This approach will also be supplemented by the outcome of research underway by the Ministry of the Environment, Ministry of Natural Resources (MNR), and Ministry of Tourism and Culture and will be the subject of subsequent Environmental Registry postings that will outline requirements for off-shore wind development as proposed amendments to O. Reg. 359/09 and the REA process.

In addition to this approach to off-shore wind projects, the MNR is undertaking a phased review of Ontario’s current process for making Crown land available for renewable energy projects. The Crown Land Renewable Energy Policy review, Phase 1 was posted on the Environmental Registry on December 22, 2009 for a period of 45 days and proposed procedural alignment changes to ensure that the site release process better supports the green energy initiative. The second phase of this review will include consideration of where, when and how the Government makes Crown land available for off-shore wind projects. Once developed, the Crown Land Renewable Energy Policy review, Phase 2 will be made available for review and comment on the Environmental Registry. For information on the Crown Land Renewable Energy Policy review, Phase 1, see the Environmental Registry posting #010-7895.
 
More information on the Renewable Energy Approval can be found at business/green-energy.
 
Public Consultation:
This proposal has been posted for a 60 day public review and comment period starting June 25, 2010. If you have any questions, or would like to submit your comments, please do so by August 24, 2010 to the individual listed under "Contact". Additionally, you may submit your comments on-line.

All comments received prior to August 24, 2010 will be considered as part of the decision-making process by the Ministry of the Environment if they are submitted in writing or electronically using the form provided in this notice and reference EBR Registry number 011-0089.

Please Note: All comments and submissions received will become part of the public record. You will not receive a formal response to your comment, however, relevant comments received as part of the public participation process for this proposal will be considered by the decision maker for this proposal.

Saskatchewan father and son fined $30K and $10K, respectively

In March, I reported on the convictions of a Saskatchewan father and son for having altered the shoreline of Round Lake next to the son's property (click here).  On June 14, the Provincial Court released its decision on sentencing, imposing a $30,000 fine on the father and a $10,000 fine on the son.  The judge wrote:

In my opinion, this was a massive case of shoreline destruction occasioned in large part by Mr. Kuzub Sr. who felt it was easier to beg forgiveness from SERM than it was to ask for permission and request the appropriate permissions and permits in which to facilitate the work. He knew from his previous experience with SERM that it was a long complicated process that would not likely have been granted in the form in which he wanted it. In my opinion, he took the law into his own hands, decided that the shore needed “cleaning up” if they were ever going to sell these lots and started out with the intention of removing a few old docks and got carried away with the skid steer. I do not accept the fact that he did not have a future subdivision in mind when he started this project. Anyone in Saskatchewan who owns lakefront property now knows that with the increasing demand for lots from purchasers from other provinces, that they are sitting on property that is extremely valuable. This was his attempt to make that land more valuable, more saleable and no doubt to help his son out, as parents are inclined to do. So he cleaned out the old docks and just kept on going and re-contoured the whole beach, taking out bullrushes, natural vegetation and entering the lake bed with his equipment. It is hard to imagine a more reckless approach to a shoreline especially in this day and age when everyone in this province has been sensitized to environmental interests such as spills, clean ups and on a local basis, the removal of old gas stations and underground storage facilities. In my opinion, the Accused had to have known how difficult it would have been, if not impossible, to get the requisite permits so he decided to proceed without them.

I do have more sympathy for Mr. Kuzub Jr. who was out of province when the whole shoreline was altered by his father. I am satisfied that he was indeed shocked and horrified when he returned to Saskatchewan and discovered what his father had accomplished in his absence. He set out to repair the damage himself, knowing full well that if SERM got involved there would be an extensive investigation. That however in my opinion, compounded his involvement. If he had gone to SERM then and told them what had happened, perhaps this prosecution could have been avoided but he instead sought to remedy the situation himself in the vain hope perhaps that no one would notice.  He has paid a significant price for this issue in terms of legal fees, public embarrassment and the costs of the remediation but this does not absolve him from some responsibility in terms of the shoreline destruction. Additionally he does stand to benefit handsomely once these lots are finally sold.

Read the decision at: R. v. Kuzub. (Note: the spelling of the last name of the father and son changed between the release of the trial decision and this sentencing decision)

Ontario Power Authority reports on boom in green energy project applications

The Ontario Power Authority (OPA) is reporting that, as of June 14, 2010, it has received 2,200 applications for large Feed-in Tariff (FIT) projects and more than 15,000 applications for smaller microFIT projects.  Of the 15,000 microFIT applications, 3,518 conditional offers have been made by OPA to applicants.  These smaller projects include solar panel installations being made on Ontario farms.

In response to the large volume of microFIT applications, OPA is advising:

Due to the very high volume of microFIT applications, we expect it will take until the fall to process all of them. If your application was submitted before March 31, 2010, you can expect to hear back from us by August. If you submitted your application by May 31, it will be processed by September.

More information on the FIT program (including large area solar installations and large wind turbines) is available at: OPA Feed-in Tariff Program.

More information on the microFIT program is available at: OPA microFIT Program.

Quebec poultry producer's appeal of quota penalties goes to Court of Appeal

Ferme Avicole Rodier Bombardier Inc. and Rock Bombardier are taking their appeal of quota penalties imposed by the "Éleveurs de volailles du Québec" (the poultry marketing board in Quebec) to the Quebec Court of Appeal.  Bombardier was charged penalties for having exceeded chicken quota production levels by producing chickens for export from Quebec without a purchase contract in place.  In other words, with no contract in place, all of the production was counted against the quota and resulted in over-production in the eyes of the marketing board.

Bombardier contested the allegations on the basis that there was an export contract in place with a company called Volaille Giannone Inc.  Before the marketing tribunal in Quebec, Bombardier sought to have Giannone added to the case (interpleaded) to exercise a "recourse in warranty" against Giannone.  The Tribunal rejected this request and rejected a request by Bombardier to have the penalties dismissed on the basis that they were imposed outside of the applicable limitation period.  Bombardier argued that the penalty imposed falls under the authority of the Penal Code of Procedure in Quebec (rather than the Civil Code of Procedure) so that the limitation period is one year.

Bombardier then asked the Quebec Superior Court to undertake a judicial review of the Tribunal decision and overturn it.  The Superior Court rejected this application.  Bombardier then went and obtained leave to appeal that decision from the Court of Appeal.  Bombardier's appeal was being heard June 9, 2010 before the Quebec Court of Appeal (coincidentally, the day before Guy Lafleur's appeal on a charge of perjury was to be heard in the same courtroom).

Read the Tribunal decision rejecting the request to add Giannone as a party at: Ferme avicole Rodier Bombardier inc. (French-language only).

Read the original Quebec Superior Court decision dismissing the application for judicial review at: Bombardier c. Régie des marchés agricoles et alimentaires du Québec (French-language only).

Manitoba introducing provincial surcharge on transfer of marketing quota

A reader of this blog has brought to my attention a budgetary measure being introduced in Manitoba which will see a 2% provincial surcharge imposed on the transfer of dairy, egg and poultry quota in the province.  I have reported on several cases involving the Dairy Farmers of Ontario quota transfer assessment (15%), but the Manitoba plan differs in that the levy is a provincial surcharge on top of any other assessment that may be imposed by the marketing board itself.  Is this a new tax?  Will other provinces follow Manitoba's lead?

The levy was announced as part of Manitoba's provincial budget earlier this year.  Read the AgCanada article on producer response to the levy at: AgCanada.

Read the response of the Canadian Federation of Independent Business (CFIB) at: Letter to Hon. Stan Struthers.

Syncrude guilty in Alberta duck deaths

Oilsands giant Syncrude was found guilty Friday on both environmental charges it faced in connection with the deaths of 1,600 ducks in April 2008 at a tailings pond in northern Alberta. The provincial court judge hearing the case rejected Syncrude's "due diligence" defence.

Click here to read CBC's story on the verdict: CBC Edmonton.

Apache Canada Ltd. responds to NEB about its plan to "re-"abandon its pipeline in place

In May, I reported on a plan by Apache Canada Ltd. ("Apache") to abandon a pipeline in place in agricultural land in Alberta (click here).  In fact, the pipeline had already been abandoned for several years without authorization and without consultation with the affected landowners.  Apache has now responded to information requests from the National Energy Board ("NEB") about its plans.  It says that the line will be patrolled annually, signs will be posted, and that the line does not pose a risk as a water conduit (or a conduit for contamination) since it does not cross streams or water bodies. 

A land agent on behalf of Apache obtained signed statements from landowners saying that they have no objection to the abandonment.  It appears that the statements were completed by the land agent and then signed by the individual landowners on a form prepared by Apache.  It is not known whether any additional compensation has been paid to landowners for the right to abandon the line in place or whether any indemnity has been provided. 

Read Apache's submission to the NEB at: Letter dated June 23, 2010.

N.B. Court quashes Minister's attempt to require that all chickens produced in province be processed in province

Nadeau Poultry Farm Limited ("Nadeau") owns and operates the only federally licensed chicken processing plant in New Brunswick.  Westco is a consortium that produces live chickens for processing and owns approximately 51% of New Brunswick's chicken production quota.  Westco holds a federal licence to market chicken interprovincially and in 2007 entered into a partnership with a Quebec company to build a new processing plant in New Brunswick (having failed to secure the purchase of the Nadeau plant).  In 2008, Westco notified Nadeau that it would no longer be supplying chickens to Nadeau's plant. 

Nadeau, facing the loss of its entire supply of chickens for processing, launched several administrative and court processes aimed at blocking the Westco plan.  An appeal to the Federal Competition Bureau failed, but an appeal of that decision is still pending before the Federal Court of Appeal.  Court challenges in New Brunswick also failed.

That was when the Minister of Agriculture and Aquaculture in New Brunswick stepped in.  On June 3, 2008, the Minister introduced Bill 81, An Act to Amend the Natural Products Act, (“Amendment”). The object of Bill 81 was to add a provision to the NPA which would authorize the Minister to designate the plants where chicken may be processed in New Brunswick.  On January 19, 2010, the Minister issued a Ministerial Order which decreed as follows:

SUBJECT: Ministerial Order to Designate Chicken Processing Plant

Pursuant to subsection 41.1(2) of the Natural Products Act, chapter N-1.2 of the Acts of New Brunswick, 1999, the following plant is designated as the federal inspected abattoir where chicken grown in New Brunswick shall be processed : 

Nadeau Poultry Farm Limited
222 Commercial Street
Saint-François-de-Madawaska,
New Brunswick E7A 1B6

This Order is effective January 31, 2010.

The Ministerial Order designated a single plant as the federal inspected abattoir for the processing of chicken grown in New Brunswick. The legal effect of the Ministerial Order was to require producers of chicken in New Brunswick to process their entire product at that plant only. Unless it was the intention of a producer to stop processing chicken, the result of the Ministerial Order was that the only option presently available for processing of chicken grown in New Brunswick would be the single plant designated by the Minister. The practical effect of the Ministerial Order was to restrict the ability of chicken producers in New Brunswick to sell their live chickens to processors outside of the Province. In the present case the intent was to prevent Westco from exporting their chicken to Olymel’s processing plant in the Province of Quebec.

In both purpose and effect, the Ministerial Order was directed towards interprovincial trade. The legal effect to producers of chicken in the Province was a prohibition to export their chicken outside the Province of New Brunswick. The Ministerial Order, therefore, was not within the authority granted to the Minister by the Amendment.  On this basis, the Court of Queen's Bench in New Brunswick quashed the order.

Read the decision at: Westco v. New Brunswick.

Sentencing Principles for Corporations in Environmental Spill Cases

From the judgment of Gorman, P.C.J. in R. v. Corner Brook Pulp and Paper Limited, 2010 CanLII 33018 (NL P.C.):

THE PRINCIPLES TO BE APPLIED

The principles to be applied have been considered in many cases (see for instance, R. v. United Keno Hill Mines Ltd. (1980), 1 Y.R. 299 (T.C.) and R. v. Domtar, [1998] O.J. No. 6408 (C.J.)). I would summarize them as follows:

(1) The Nature of the Harm Inflicted: Serious environmental damage will be considered as a significant aggravating factor. However, the Court must also consider the potential damage which might have occurred as it does not have to wait for environmental degradation to occur before imposing a sentence designed to prevent it from occurring;

(2) The Size of the Corporation: This is a factor which is designed to ensure that any financial penalty imposed is a meaningful one, but a disproportionate fine cannot be imposed solely based upon the size of the offender;

(3) The Degree of Culpability of the Corporation: Under this heading the Court must consider the nature of the offence which occurred and why it occurred. Purposely committing an environmental offence will normally be seen as being more serious than the commission of one through negligence or a lack of care. However, this distinction must not be taken too far. For instance, the accidental spilling of a deleterious substance in to water frequented by fish will have the same degrading impact upon the environment as will doing so purposefully. In addition, these are regulatory offences which demand that reasonable care be taken with potentially dangerous substances. These are offences involving a high degree of moral culpability no matter how they are committed;

(4) Attempts to Alleviate Harm: The Court must consider whether the corporation immediately reported the offence having occurred and what steps they took to; for instance, contain a spill of a deleterious substance;

(5) Was a Safety Plan in Place: The Court must consider whether the corporation was ready to respond to; for instance, the spill of a deleterious substance by having a plan in place or whether there was a lack of means to limit the spill once it was discovered;

(6) Any Previous Convictions: The Court must consider whether the corporation has any previous convictions, particularly for related offences; and

(7) The Plea: A plea of guilty can have the same mitigating impact when entered by a corporation as when entered by an individual.


Read the decision at: R. v. Corner Brook Pulp and Paper.

NEB: Fatigue Crack Failure Associated with Shallow Dents on Pipelines

The National Energy Board (NEB) has issued a safety advisory related to shallow dents on pipelines that can lead to fatigue crack failure.  Currently, CSA Standard Z662-07 provides requirements for inspection of dents only when they are greater in size than 6% of the outside diameter of the pipeline.  It has been found, however, that fatigue cracking and pipeline rupture can occur as a result of much smaller dents.  It is easy to imagine that small dents may be caused in pipelines during the construction process, especially where the line is installed in rocky soils. 

This is a safety advisory from the NEB that suggests that integrity management programs implemented by pipeline companies should be updated.  It remains to be seen whether the NEB will impose any new conditions on companies or actually direct the update of programs.  This is a good example of "goal-oriented regulation" in action.

Read the full NEB safety advisory at: National Energy Board Safety Advisory 2010-01.

Changing boundaries - B.C. company appeals administrative penalty of $132,897.40

The British Columbia Court of Appeal has granted leave to appeal a decision of the B.C. Supreme Court that upheld an administrative penalty of $132,897.40 against a logging company.  Originally, the Forest Appeals Commission imposed the penalty because it was alleged that Ronald Edward Hegel and 449970 B.C. Ltd. had harvested, or caused to be harvested, timber that was on Crown land and not on property owned by the Company. 

The property owned by the Company is bounded on the east by the North Thompson River. It is said on the Crown grant to contain 130 acres, more or less, particularly described on the map or plan annexed. The accompanying field notes describe the distances of the three non-river boundaries. The length of the west side of the property, north to south, was said by the field notes to be 50.22 chains, or 1010.26 metres.  Over time, posts have been lost, the river has moved somewhat westward, a railway and highway have been built, a pipeline has traversed the land, and hydro and telephone service lines have also been installed, passing over the property. Each of these amenities has been preceded by surveys, with the result that a plethora of survey information has accreted to the original survey and field notes.

On appeal to the Court of Appeal, Hegel and his company will challenge the location of the north boundary of their property as relied upon by the Commission in ordering the penalty. 

Read the decision at: Hegel v. British Columbia (Ministry of Forests).

Property owners discover that neighbour has been taking their metered water for free

In this case before the B.C. Supreme Court, the plaintiffs' water bills were unusually high.  The amounts of water being consumed by Patricia Martin and Barry Bergh were so high that staff from the City of Salmon Arm attended at their home in order to investigate.  This investigation led to the discovery of a standpipe offshoot from the water pipeline servicing the plaintiffs' property that was providing water free of charge to a neighbour, the defendant in the case, primarily to water her garden.  The neighbour claimed that her free use of the water was guaranteed by the terms of an easement agreement that allowed for the pipeline to the plaintiffs' property.  The easement crossed the neighbouring property.

Although the defendant asserted, "I believe that I am being bullied and will not give up my garden hydrant just because Mr. Bergh could not be bothered to read the easement agreement before he bought his property", the Court found that the agreement did not provide the defendant with a right to take water from the plaintiffs' pipeline.  On that basis, the Court required that the offending standpipe be removed and ordered that a payment be made by the defendant to the plaintiffs in respect of the water already consumed for free.  Justice Meiklem also commented: "The defendants' approach to this matter has been stubborn and legally wrong and they certainly should be liable for costs of this proceeding".

Read the decision at: Martin v. Ambrose.

A Guide to the Occupational Health and Safety Act for Farming Operations - Ontario

Ontario's Ministry of Labour has published a guide on the Occupational Health and Safety Act for farming operations (click here).  The Occupational Health and Safety Act has been in force since 1979. Prior to June 30, 2006, all farming operations were exempt from the application of the Act. Since June 30, 2006, the Act applies, with some limitations and exceptions, to all farming operations that have paid workers. 

According to the Guide, the Act does not apply to farming operations that involve only self-employed farmers.  However, it applies at least in part wherever there are paid workers, including a spouse and children.

Appeal over costs for new access culvert over municipal drain proceeding

The Ontario Agriculture, Food and Rural Affairs Tribunal has decided to hear an appeal related to the installation of an access culvert over the McCain Sideroad Drain in the Town of Kingsville.  The issues that will go forward to a full hearing on appeal are:

Drainage Act, Section 48(1): Whether the Engineer's report should be modified as follows:

• relocation of hydro pole guy wire to be included as part of the works;
• driveway to be extended approximately 20 ft beyond the top of the culvert to match existing driveway; and,
• reference to the culvert being for Lots 117 and 118 should be corrected to Lot 117 only.

Drainage Act, Section 54(1): Whether the assessment for the entire cost of the drainage works should be to the Town of Kingsville.

It is the second issue of assessment of costs that is the most interesting in the case.  The appellants, Giselle Labelle and Roger Banar, had applied for and obtained from the Town of Kingsville in 1995 a first access culvert to their property over the drain.  The first culvert was treated as a private work and not as part of the municipal drain system.  For various reasons, however, that culvert did not satisfy the appellants'  requirements and they applied for a second culvert, which was installed. 
The main issue in their appeal to the Tribunal is whether or not they should be obligated to pay for the cost of the second culvert at all given that they already paid for the first culvert.  They allege that the second culvert is only required because the first culvert was not installed in the correct location.  Therefore, they submit, they should not have to pay twice.


Read the pre-hearing decision at: McCain Sideroad Drain Culvert.

Alberta Court of Appeal denies leave to pipeline landowners in compensation case

Back in February, I reported on a decision of the Alberta Court of Queen's Bench in which a decision of the Surface Rights Board awarding annual compensation to landowners was overturned and the "Pattern of Dealings" approach to compensation was again imposed (see: February 23, 2010).  The landowners involved sought leave to appeal the Court decision, but leave has now been denied by the Alberta Court of Appeal. 

In its decision, the Alberta Court of Appeal determined that the findings of the Court of Queen's Bench judge were reasonable and again upheld the "Pattern of Dealings" approach to compensation (i.e. the compensation to be awarded to a landowner may be determined by looking at the pattern of compensation paid by a company to other landowners in similar circumstances).  However, importantly, the Court did leave open the possibility for annual compensation in the right case - a "real" case for ongoing compensation rather than a "conjectural" one:

The principles providing for the determination of compensation for pipeline rights of way based on established patterns of dealings are well established in the industry and before the Board. In essence, the applicants believed they had established a novel basis for compensation by persuading this Board to invent a compromise position for compensation that allowed for an annual component in lieu of a larger lump sum payment. Macklin J. was not persuaded, on the record before him, that it was reasonable to include an annual component for future potential adverse effects to the applicants’ use of their land within the meaning of s. 25(1)(c) and 25(1)(d) of the Act because (a) the basis for doing so was conjectural and/or redundant to the rationale for the lump sum payment and (b) the procedural difficulty and cost of validating and reviewing an annual payment component every five years for each claimant would be unnecessarily burdensome having regard to the fact that there would again be a need to predict on an arbitrary basis the future from that point.

In deciding whether leave to appeal should be granted or denied in this case, it is not necessary for me to say, nor would I suggest, that an annual payment component cannot be considered to be a valid part of a compensation package for a subsurface pipeline. It is also unnecessary for me to say whether procedural cost and difficulty arising from five year reviews of annual payment components would be a valid reason to refuse an annual payment component if the basis for such were lifted from the conjectural to the real. It is, however, sufficient to say that, on the record before Macklin J. and the Board, it was reasonable for Macklin J. to conclude that an arguable justification for departing from the established PoD to include an annual payment component was not lifted from the conjectural or redundant and it was unreasonable for the Board to conclude otherwise. To disturb Macklin J.’s conclusions in those respects, having regard to the standard of review, would require a clear ground of appeal of arguable substance which does not exist here. [emphasis added]

Read the decision at: Enbridge Pipelines (Athabasca) Inc. v. Karpetz.

ABlawg.ca Case Comment: A Century of Liability for an Abandoned Well

Professor Nigel Bankes of the University of Calgary has posted a commentary on a recent decision of the ERCB which confirmed that the current owner of a non-producing oil well was responsible for "re-abandonment" costs.  The well in question had not produced oil since the 1920's.
Read the case comment at: A Century of Liability for an Abandoned Well.

Read the ERCB decision at: Dalhousie Oil Company Limited.

Wind Farm vs. Wind Farm in Alberta

The Alberta Court of Appeal has refused to grant leave to a wind farm developer to appeal a decision of the Pincher Creek Subdivision and Development Appeal Board made in favour of a competitor.  Heritage Wind Farm Development Inc. wanted to challenge development permits granted to Oldman 2 Wind Farm Ltd.  The Municipal District of Pincher Creek had allowed a land use by-law variance for several of Oldman's proposed wind turbines on the basis that the development would not "unduly interfere with the amenities of the neighbourhood" or, "materially interfere with or affect the use, enjoyment or value of neighbouring parcels of land".  Heritage had plans to install its own wind farm on properties adjacent to the Oldman properties. 

Heritage submitted to the Board a report by Garrad Hassan Canada Inc. (Report). The Report identified two possible adverse effects on Heritage from the proximity of OM2's turbines to adjoining land Heritage leased for the purposes of its own wind farm: the proximity could cause increased fatigue loads and mechanical wear to the Heritage’s turbines and reduce their energy generating capacity. The Board’s minutes outlined the extensive evidence it heard, noting that OM2's decision about where to place its turbines was affected by many matters, including the location of raptor nests and irrigation pivots.

After hearing the arguments made by Heritage, the Court of Appeal found that the test for leave to appeal the Board's decision had not been met.  Leave could be granted on a question of law or jurisdiction if it was of sufficient importance and if the proposed appeal had a reasonable chance of success. 



Read the decision at: Heritage Wind Farm v. Pincher Creek.

BC Residents oppose Enbridge Northern Gateway tankers, poll indicates

Kitimat Sentinel - Residents oppose tankers, poll indicates

An opinion poll commissioned by two groups opposing Enbridge’s planned Northern Gateway pipeline suggests the project isn’t being accepted...

Click on the link above to read the Kitimat Sentinel article.

Utility Corridor Regulation in Canada: Shifting Jurisdictions

Read my article published in the Spring 2010 Newsletter of the Ontario Expropriation Association about the effect of shifting regulatory jurisdictions on easement agreements and landowners at: OEA Spring 2010 Newsletter.

A battle of wills - testamentary capacity and holographic wills

In Maronda v. Colliton, the Alberta Court of Queen's Bench was faced with deciding which of a competing set of wills executed by the late Elsie Colliton would be submitted for probate.  One one side of the case was one daughter of Elsie; on the other, the other daughter and son of Elsie. 

Mrs. Elsie Colliton executed a holograph (handwritten) will on May 21, 2006. In that will, she left her remaining farm lands to her son Patrick Colliton, $15,000.00 each to Patrick’s children, $50,000.00 to her daughter Irene Colliton, and the residue to her daughter Karen Maronda.  Elsie died on August 15, 2006 without having executed another will. Pat and Irene alleged that the May 21 will was made while Elsie lacked the necessary testamentary capacity. Alternatively, they argued that Elsie was unduly and improperly influenced by Karen Maronda. They sought an order declaring the May 21 will to be invalid and requested that an earlier will dated December 20, 2005 be submitted for probate. That would give the farm land to Pat and divide the residue equally among Pat, Irene and Karen.
In the end, the judge determined that the last will executed on May 21, 2006 was valid and that Mrs. Colliton had the necessary capacity to execute it.  Of the conflict between the sibilings, the judge noted:

It is sad that Irene Colliton blames her sister for “poisoning her well”. It is sad that her brother has turned against her, not because of what his mother did, but because Karen Maronda would not destroy her mother’s last will and testament, because he did not like it or think that it was fair. There is no evidence whatsoever that Karen Maronda attempted to influence her mother’s disposition of her estate, other than to benefit to a small extent, Pat’s children. There is nothing but an ugly suspicion based upon feelings for which there is no foundation.

Read the decision at: Maronda v. Colliton.

New CAEPLA website for energy and pipeline landowners up and running

Click here to visit the new website of the Canadian Association of Energy and Pipeline Landowner Associations (CAEPLA): http://www.landownerassociation.ca/

ABlawg.ca comment on Tribute v. McKinley Farms decision

Professor Nigel Bankes of the University of Calgary has posted a comment on the recent Ontario Court of Appeal decision in Tribute Resources v. McKinley Farms (see my post yesterday for the decision).  Read Professor Bankes' comment at: Ontario Court of Appeal holds that oil and gas lease continued by virtue of (late) payments under a unitization agreement.

Ontario Court of Appeal rules against oil and gas landowner

Tribute Resources Inc. has won a partial victory in its appeal from a decision of Justice David Little that declared an oil and gas production lease (PNG lease) and a gas storage lease (storage lease) terminated. The Court found that the storage lease has terminated, but the PNG lease is still valid and subsisting.


With respect to the PNG lease, the Court of Appeal disagreed that the termination of production from oil and gas wells, although rent was still being paid under the lease, meant termination of the lease. The Court also found that late rental payments did not cause the agreement to terminate:

The Oil and Gas Lease, as I read it, does not stipulate that failure to make the rental payments on time should operate to automatically terminate the contract. Such a construction is inconsistent with the provision of the Oil and Gas Lease that provides:

In the event of default on the part of the Operator in making any payments hereunder or in complying with any of the conditions herein contained, the Land Owner shall notify the Operator by registered mail of his intention to cancel this lease. The Operator shall have 30 days from the receipt of such notice in which to remedy such default failing which the Land Owner may proceed to cancel this lease according to law.

McKinley never gave Tribute notice of default and intention to cancel the lease but accepted the late payments.

As for the storage lease, the Court agreed with Justice Little's findings:

Turning to those questions, I begin with the Gas Storage Lease. I agree with the analysis of the applications judge that the automatic termination clause of Schedule B is a true condition precedent. It provides that the Gas Storage Lease will terminate on the tenth anniversary date “if and only if” Tribute or “some other person” has not made an application to the OEB. The words of the clause and the contract read as a whole do not indicate that the automatic termination provision was for the benefit of one party or the other. Rather, the parties chose a particular event, the non-occurrence of which would terminate the contract. The clause does not place any obligation of performance on Tribute that McKinley could waive. The applications judge was correct to find that the initial acceptance of the rental payment for the ensuing year could not constitute a waiver or estoppel by conduct on the part of McKinley. The applications judge was correct to grant the declaration that the Gas Storage Lease terminated on September 24, 2008.

Also of note in the case is the Court's comment on the applicability of the recent Snopko v. Union Gas decision (also from the Court of Appeal), which confirmed the Ontario Energy Board's exclusive jurisdiction over gas storage agreements. In this decision, the Court clarified that the OEB's exclusive jurisdiction commences only when it has designated a storage area under the OEB Act. In this case, where no designation order had been made (and no storage of gas was taking place), the Court's jurisdiction to determine questions about the termination of the storage agreement was not affected by the OEB Act.

Read the Court of Appeal decision at: Tribute Resources Inc. v. McKinley Farms Ltd., 2010 ONCA 392 (CanLII)

Read Justice Little's original decision at: Tribute Resources Inc. v. McKinley Farms Inc., 2009 CanLII 33043 (ON S.C.)

Energy Pipeline News - Wisconsin county drops charges against landowner in Enbridge case

Noel Griese of Energy Pipeline News reports:

SUPERIOR, Wis. - A northwestern Wisconsin man who was arrested for trespassing on his own property no longer faces charges.


During a pretrial hearing in Douglas County on May 24, 27-year-old Jeremy Engelking learned prosecutors will not pursue a disorderly conduct charge against him. A trespassing charge was dropped earlier.

Engelking wound up in jail after confronting an Enbridge work crew building a pipeline across his property in 2009. He told the workers they had no right to be on his property because he hadn't been compensated by the pipeline builder, Enbridge Energy Partners, for an easement. The Enbridge crew called in the local police who arrested and charged Engelking.

Engelking is reportedly considering a civil lawsuit now that the criminal charges against him have been dropped.

Kinder Morgan challenges whether NEB should entertain the Enbridge Northern Gateway application

Kinder Morgan Canada (KMC) says that Enbridge's recently-filed Northern Gateway Application lacks the necessary evidence of commercial support for the project, meaning that Enbridge has not demonstrated the need for the project.  KMC's lawyer writes to the National Energy Board in his June 1, 2010 letter:

KMC respectfully submits the filed Northern Gateway application is incomplete and does not comply with the requirements of section 52 of the National Energy Board Act ("NEB Act") or the filing requirements.  Notably, the application is not supported by a successful open season process, nor is the application supported with any level of binding commercial support to demonstrate the need and necessity of the applied-for facilities.  In fact, in late 2005 Northern Gateway held open seasons for both the oil pipeline and condensate pipeline, respectively, and although Northern Gateway received "expressions of interest", this did not result in any binding shipping commitments.  In KMC's view, these shortfalls represent serious deficiencies and do not meet the Board's test for economic feasibility set out in the Alliance Pipeline decision.  Without at least some real and substantial evidence of need and necessity, the application appears to be intended to provide the applicant some type of competitive advantage so that it may pursue commercial support that it has not been able to achieve to date.  It appears to KMC that Enbridge is pursuing approval in advance of a demonstrated need for the project in order to create an "option to build" and use that option as part of its marketing process.

For these and other reasons, KMC has requested that the NEB defer further consideration of the Enbridge application until sufficient evidence of need for the project has been presented.

Saskatchewan farmers win dispute over hay

On March 15, 2002, Ralph and Beverly Austin sold their farm land and assigned a land lease to the defendant, 101013354 Saskatchewan Ltd.  Lyla Cowan is the sole officer and shareholder of 101013354 Saskatchewan Ltd.  The sale included buildings, some sheds and bushel bins located on the land.  The purchase price was allocated amongst the land sold, the buildings, sheds and bushel bins and leasehold improvements on the leased lands.  This agreement for the sale of land and assignment of lease was in writing and signed by the parties on March 12, 2002.

Prior to March 15, 2002, the Austins had a stack of bales located on the land.  In March 2002, the Austins agreed to sell the bales to Cowan and she agreed to pay them for the hay.

Prior to possession date the Austins came to a verbal agreement in the farm yard with Lyla Cowan to sell her the 182 alfalfa hay bales at $120.00 per ton, 83 slough hay bales at $100.00 per ton and 30 straw hay bales at $20.00 per ton located on the land.  The total purchase price was $21,800.00.  They sent Lyla Cowan a bill of sale for the bales in the sum of $21,800.00 about a year later on March 10, 2003, as they did not want to receive any income from the bales in the taxation year 2002.  Lyla Cowan paid the plaintiffs the sum of $10,000.00 on August 3, 2003.  No other payments have been received.

The Austins sued Cowan in the Provincial Court of Saskatchewan for the balance of the purchase price they claimed was still owing.  The judge found in favour of the Austins, and awarded $9,360 plus costs of $250.  This was slightly less than what had been claimed by the Austins because the judge did not find that there had been a "meeting of the minds" between the parties as to the weight of the bales sold.  The judge ruled the weight per bale to be somewhat less than the Austins had estimated.

Read the decision at: Austin v. Cowan.