National Energy Board surveying pipeline landowners again

The National Energy Board (NEB) is once again conducting a telephone survey of pipeline landowners and tenants to seek their views on "their experiences with companies that operate pipelines which cross their property" and "their experiences with the NEB".  The NEB hopes to compare the 2011 results with those of surveys done in 2001 and 2004 to "determine how key indicators have changed over time".  The choice of landowners is to be random, says the NEB:

Ipsos Reid, a nationally-recognized research firm, will conduct the telephone survey on behalf of the NEB. It is important to note that not all landowners will be contacted for the survey. Ipsos Reid will select a random sample of landowners, using landowner lists provided to it by NEB-regulated pipeline companies. The randomly-selected landowners will be contacted by telephone in late summer 2011.

A letter was sent by the NEB to all of its regulated pipeline companies on May 17, 2011 asking the companies to submit landowner contact information to Ipsos Reid.  The NEB noted in the letter that the Office of Privacy Commissioner indicated that the companies "should obtain" landowner consent before releasing their contact information to the Board for purposes of conducting the survey.  This privacy issue and the need to seek landowner consent in order to conduct the survey would tend to diminish the randomness of the survey group selection.  Any landowner who chooses not to allow the release of his or her personal information would not be eligible to take part in the survey.

Enbridge spill into Kalamazoo River showing added risks of tar sands oil

One year ago on July 26, 2010, Enbridge Pipelines Inc. spilled more than 3.8 million litres of oil in Michigan after one of its pipelines ruptured.  More than 1.5 million litres ended up in Michigan waterways, including the Kalamazoo River.  Enbridge says that 3.48 million litres have been recovered.  News stories in the past couple of days are revealing the difficulties faced by clean up crews in recovering the last few hundred thousand litres.  The problem is the nature of the product spilled - bitumen from the Alberta tar sands mixed with "light hydrocarbons" refined in the U.S.  The heavy bitumen component is proving difficult to collect. 

The spill affected a 65-kilometre stretch of the Kalamazoo River.  The river has been closed off to recreational paddlers, fishermen and any other users since the spill.

Read the Financial Post article "Enbridge cleanup: Aftermath of a spill" by Sheldon Alberts at this link.

Meanwhile, Enbridge's latest newsletter called "eBridge", Volume 70, doesn't mention the Michigan spill (or the Norman Wells spill for that matter), but does celebrate Enbridge's ranking as #10 out of the Best 50 Corporate Citizens in Canada by "Corporation Knights" ("The Magazine for Clean Capitalism").

Appeal Tribunal rules Ontario vet resigned, not suspended

Dr. Ken Allan, of Perth, Ontario, was a licensed practising veterinarian from 1963 until September 19, 2009. In early January 2010, he applied for a Class 1 Licence under the Livestock Medicines Act (the Act) and was issued a licence on January 8, 2010. On May 14, 2010, the Director appointed under the Act issued a letter to Dr. Allan provisionally suspending his Class 1 Licence and advising that a hearing would be scheduled to determine whether his licence would be further suspended or revoked. On July 7, 2010, the Director appointed under the Act held a hearing to consider whether to further suspend or revoke Dr. Allan's licence.  Following a hearing in Dr. Allan's absence, the Director made various findings including a finding that Dr. Allan had sold livestock medicines other than from his place of business and had obstructed Ministry inspectors in the performance of their duties.

On the basis of those findings, the Director revoked Dr. Allan's licence under the Act.  He appealed to the Agriculture, Food and Rural Affairs Appeal Tribunal, which held a hearing de novo (meaning that the Appeal Tribunal heard all of the evidence as if it were the Director hearing the case fresh).  The Tribunal found that Dr. Allan had actually given up his licence before he received notice of it having been revoked by the Director.  Further, the Tribunal found that the Ministry had failed to provide Dr. Allan with a warning letter in accordance with its policy in advance of seeking the revocation of his licence.  For that and other related reasons, the Tribunal ruled that the original hearing by the Director should not have taken place and the findings made there must be overruled.

After considering the evidence before it, the Tribunal ruled as follows:

1. That Tribunal accepts the evidence of Dr. Allan's voluntary resignation from the licensing system, therefore the Tribunal will not order the reinstatement of his licence.
2. That all prescription and livestock medicines seized shall be returned to Dr. Allan; and, if they are expired, have been destroyed, or disposed of, then he shall be compensated for all said livestock medicines and prescription medicines.
3. That Dr. Allan's personal items and written records removed during the execution of the search warrant be returned forthwith.
4. That the Tribunal accepts the evidence that Dr. Allan voluntarily resigned from the licensing system before his licence was suspended or revoked, and therefore the Ministry shall not consider Dr. Allan's voluntary resignation from the licensing
   system negatively, should he reapply for a licence under the Act.

Read the decision at: Ken Allan vs. Director.

Want to know what safety standards apply to the pipelines through your property? - The new CSA standard is yours for only $765!

The Canadian Standards Association (CSA) is releasing its updated Z662 Standard for Oil and Gas Pipeline Systems.  The National Energy Board (NEB) incorporates these standards by reference into its regulations, meaning that the CSA standards are the rules by which federally-regulated pipeline companies must operate.  The catch is that the standards themselves are protected by copyright.  The NEB doesn't reproduce the standards in its regulations.  If a landowner wants to know exactly what the rules are that apply to the pipelines on his or her land, it's a matter of purchasing the Standard directly from CSA at a cost of $765. 

The NEB sent a letter out to the pipeline industry on July 14, 2011 putting it on notice of the coming changes.  Of course, the information bulletin enclosed with the letter advises that the CSA changes took place as of July 8, 2011 - "the date of publication and release to the general public".  The NEB must have meant "release to the general public at a cost of $765". 

Assessed landowners argued they could have done drainage work for less

Two Southwest Middlesex landowners appealed a drainage assessment to the Ontario Agriculture, Food and Rural Affairs Tribunal on the basis that they could have done the required maintenance work themselves at a lower cost.  The Municipality of Southwest Middlesex had been petitioned by the County of Middlesex Road Authority under Section 4 of the Drainage Act to carry out various maintenance work, including the creation of an open drain.  The estimated cost of the work was $22,540.

Two affected landowners appealed the assessment of their shares of this cost.  One argued that from the beginning he had told the Municipality that he was willing to do the work required without the cost of the engineering report.  However, neither landowner appealed the work ordered itself.  The Tribunal found that the Municipality was compelled by the County's petition to have an engineer's report prepared and the work completed.  Given that the work was required, the assessment of costs could not be challenged on the basis that the work was unnecessary (or could have been done differently at a lower cost).  The appeals were dismissed.

Read the decision at: Proctor Drain.

Farm divorce case prompts SCC to suggest changes to bankruptcy laws

The Supreme Court of Canada has released a decision upholding a Manitoba Court of Appeal ruling about an alleged loophole in Canada's bankruptcy laws.  The case involved former spouses who filed for divorce in 2000.  The husband lived on the family farm and was the sole registered owner of the farm.  Manitoba, like Ontario, has a system of equalization of family assets rather than a division of the family property.  That meant that the husband could keep the farm but would owe his ex-wife her share of the value of the farm (or the increase in the value of the farm during the marriage).

In this case, the spouses consented to a valuation of the property to be done by the Court.  However, before a valuation of the family property by a Court Master could be undertaken, the husband made an assignment in bankruptcy.  The Master subsequently found that the wife was entitled to an equalization payment of about $41,000, but she was not able to collect.  The Manitoba Court of Appeal determined that the wife's claim was "provable" in bankruptcy and had been extinguished when the husband's bankruptcy was discharged in 2002.

As a result of the "loophole", not only was the husband discharged from his duty to pay the equalization payment, but he kept the farm.  Under Manitoba law, the farm was exempt from the bankruptcy proceeding.  The wife attempted through the appeal process to persuade the Court that she should receive her equalization payment since it was, at least in part, based on the value of the farm which was not part of the bankruptcy at all.  Both the Court of Appeal and the Supreme Court disagreed.  The Court of Appeal noted that the wife had taken no steps over several years to attack the bankruptcy discharge (note that the wife had not been given notice of the bankruptcy in the first place and only discovered it after her ex-husband had been discharged).

Justice Lebel of the Supreme Court commented on the apparent unfairness created by inconsistencies between family law and bankruptcy law in various jurisdictions and suggested that changes may be necessary:

It seems to me that this matter is ripe for legislative attention so as to ensure that the principles of bankruptcy law and family law are compatible rather than being at cross-purposes.  However, until such legislative changes are made, creditor spouses should be alive not only to the pitfalls of the BIA, but also to the importance of the remedies available under it in such situations.

Read the Manitoba Court of Appeal decision at: Schreyer v. Schreyer - Man CA.

Read the Supreme Court of Canada decision at: Schreyer v. Schreyer - SCC.

Read the CBC News Story at: Top court rules bankruptcy can break divorce deal - Canada - CBC News.

National Energy Board says it's shifting from "reactive" to "proactive"

The National Energy Board (NEB) says it has decided to increase the number of pipeline performance measures beyond those currently collected by the Board through incident reporting requirements in the Onshore Pipeline Regulations, 1999.  The NEB claims this initiative will supplement existing measures such as spills and injuries with performance measures of activities that require planning and ongoing monitoring. This is anticipated to bring a predictive dimension to how a company manages its programs. The measurement of performance is intended to promote a shift from reactive to proactive management. Companies will be able to use the resulting data to trend and compare performance, and to encourage continual improvement. The NEB will also use the data to assist in compliance verification planning.

The NEB's Background Information enclosure describes deficiencies in its current overview of security and the environment:

The Board currently requires companies to report on incidents, such as releases of substances and serious injuries. These measures are "lagging indicators" because the information provides a historic view. The Board is taking action to promote safety, security and environmental protection by proposing that all Board-regulated companies also report on "leading" performance measures. "Leading" measures are predictive and forward looking, measuring aspects of processes and activities that are likely to contribute to a desired outcome. A mix of leading, lagging and qualitative measures can provide an overview of the effectiveness of a company in meeting program objectives.

Read the NEB's letter to Oil and Gas companies at: July 11, 2011 letter.

Court says neither party to cow-calf lease agreement conducted himself appropriately

Between 2004 and 2006, a cow-calf lease agreement was in place between Terry Pogson and Claude Martin.  Pogson owned about 76 cows, but took a job in the city and decided to lease out the cows to another operator.  Martin took the cows on the basis of an oral agreement that was later reduced to writing.  Pogson leased the cows and provided some pasture at his farm.  He was to receive 1/3 of the calves and would pay 1/3 of the expenses.

Problems arose as calving began and Martin realized that there were a number of open cows (that would not calf).  As a result, Pogson and Martin agreed that Martin would not be charged for the pasture use and would not be charged for 76 bales for which he had previously agreed to pay $20 each.  Martin was also concerned when he discovered that Pogson's cows had been vaccinated against Bovine Viral Diarrhea (BVD) in or about 2001 when a cow purchased from a neighbour tested positive for the illness.  The Court accepted the evidence of Pogson that the vaccinated cows were free of BVD given that any infected cow would have died as a result of being given the live vaccine.

At some point later in the contract, Martin sold some of the cattle that had been leased to him.  The overall result of the problems was a lawsuit in which both parties claimed various damages from the other.  The trial judge concluded the following about the parties and their agreement:

It is very easy to draw the conclusion that the plaintiff was a very disinterested owner-lessor. He did not look in on his herd as often as he should have. He never demanded an annual accounting. When the lease was terminated, he could only guess at the number of calves which should have been coming to him. Given the nature of this type of agreement which gives the lessee total authority over the cows, which remain the property of the lessor, the plaintiff should have been more diligent in ensuring that his investment was protected. It is impossible for him to complain when a dispute arose that the number of calves he is entitled to should be higher than the numbers put forward by the defendant.

Respecting the defendant's evidence, I must say I was very unfavourably impressed by it.

The defendant testified that he was treating the agreement as “null and void” within three months from the time he took the cattle. This is prior to the written agreement which the defendant himself prepared on his farm letterhead. The written agreement reflected the terms of the oral agreement. This spoke volumes to me as to the defendant’s attitude. Based on this testimony and the defendant’s later actions (as outlined below), it was clear to me that the defendant never had any intention of living up to his part of the agreement. He wanted all the benefits due to him and more but expected to pay little or nothing to the plaintiff.

In the end, the Court credited Pogson certain amounts for pasture used and cows sold and credited Martin for the value of some calves, transport costs and vaccine costs.  The end result was a judgment in favour of Pogson in the amount of $3,736.00.

Read the decision at: Pogson v Martin.

B.C. Tribunal rules propane cannons a "normal farm practice" for blueberry grower

The British Columbia Farm Industry Review Board has declined a request to order a Langley, B.C. blueberry operation to cease its use of two propane cannons on the farm.  The cannons are used to manage bird predation.  A neighbour of the operation complained about the continuous firing of the timer-activated cannons, at one time daily between 6:30 a.m. and noon and from 3 p.m. to 8 p.m.  The Board found that the farm used the cannons in accordance with the 2009 "Ministry Guidelines for the use of Audible Bird Scare Devices for South Coastal BC" and, therefore, such use constituted a protected "normal farm practice".

Read the decision at: Mitchell v. Bhullar Farm Produce.

B.C. landowners lose bid for judicial review of Mediation and Arbitration Board decision

The B.C. Supreme Court has refused a request for judicial review by landowners Kenneth and Loretta Vause of a decision of the Mediation and Arbitration Board (now the Surface Rights Board).  The Board had made various orders regarding flow lines to be constructed by Spectra Energy Midstream Corporation.  During the course of proceedings before a mediator and then an arbitrator pursuant to the Petroleum and Natural Gas Act, the landowners and Spectra had come to an agreement over the proposed routing for the lines.  However, the revised routing would require the inclusion of an additional parcel of land owned by the Vauses. 

The Board eventually made an order permitting the flow lines using the agreed revised route and awarding compensation to the landowners.  The landowners made several attempts to challenge the Board's decision, all of which were dismissed by the Board and by the B.C. Supreme Court.  In a decision released this week, the Supreme Court again declined a request by the landowners for judicial review, this time on the basis that the earlier decisions of the Board could not affect the additional parcel of land because it was not named in the style of case (the case's name).  In other words, they argued that the Board was without jurisdiction to add that parcel of land to the order because it did not form part of the original application by Spectra.

Read the decision at: Vause v. British Columbia (Mediation and Arbitration Board).

Ontario Court orders landowners to stop blocking drainage ditch on their property

Justice Quigley of the Ontario Superior Court of Justice has ordered Steven and Joan Morrow to stop blocking the flow of water through a drainage ditch on their property in Lanark County.  The County applied to the Court for the injunctive relief after neighbours complained of flooding caused by the damming of a local drainage ditch. 

The County took the position in the case that it was a proper party (even though it was not one of the neighbouring landowners) because the blockage of the ditch created a public nuisance.  Quigley J. agreed.  He found that the attempt to distinguish between a private and public drainage ditch was irrelevant in the circumstances and that the actions of the landowners in blocking the flow of water (with result of flooding of neighbouring lands) "would be actionable even if there were no ditch". 

The Court granted a temporary and permanent injunction prohibiting the obstruction of or interference with the ditch, and made an order allowing the County to enter the property to remove the obstruction and to grade the ditch.  There was also an order for payment of $1,000 in damages contingent on the costs of the County's work.

Read the decision at: Lanark v. Morrow.

Ontario Court of Appeal overturns Antrim Truck Stop expropriation compensation decision

In February, 2010, I wrote about a much anticipated decision of the Ontario Divisional Court on appeal from the Ontario Municipal Board: Antrim Truck Centre Ltd. v. Ontario (Ministry of Transportation).  The facts of the original OMB case were as follows:

• Antrim owned a truck stop in the Hamlet of Antrim on Highway 17, formerly part of the Trans-Canada Highway;
• In September, 2004, a new section of Highway 417 was finished and re-routed the former Trans-Canada Highway (away from the truck stop);
• The Antrim property comprised 13.66 acres and included 947 feet fronting on Highway 17;
• Antrim alleged that the closure of Highway 17 substantially interfered with its use and enjoyment of its property and made a claim for injurious affection - the change in the Highway basically put Antrim out of business (Antrim took steps to mitigate its loss and relocated);
• The business had been generating gross annual revenues of more than $15 million and had employed about 100 people;
• The claim for injurious affection was for over $8.2 million, including the cost of relocation and construction of new business premises;
• The OMB awarded Antrim $393,000 - the MTO appealed the decision - Antrim cross-appealed seeking the additional $7.6 million or so it had originally claimed.

No lands were taken from Antrim.  The Divisional Court agreed with the decision of the OMB and upheld the award of compensation on the basis that the diversion of the highway constituted an actionable nuisance in the form of interference with access. 

 

The Ontario Court of Appeal disagreed with both the OMB and the Divisional Court.  In its June, 2011 decision, the Court found errors in the Divisional Court's analysis of the tort of nuisance.  The Court of Appeal said that the OMB was required to consider two elements of the test for nuisance: was the interference with Antrim's property (access) substantial and, if so, was the interference unreasonable?  The Court of Appeal agreed with the OMB's finding (upheld by the Divisional Court) that the interference was substantial.  However, it found that the interference was also reasonable.  In its view, the Divisional Court had failed to analyze this issue.  The Court of Appeal concluded:

When the board’s factual findings are properly applied to the various elements of the reasonableness analysis, I would conclude, based on the observations made above, that the interference caused by the MTO’s conduct was not unreasonable. As the board reasonably concluded, the interference amounted to a “serious impairment in nuisance”. However, the interference was such that it fell within the boundaries of what the reasonable property owner in the area should be expected to tolerate and was the result of a project that served the public interest – more, was actually essential to public safety. Simply put, the highway was built to save lives. In the light of the substantial weight to be given to this factor in the circumstances, it is difficult to see how this change in the access to the Antrim property, particularly given the fact that it actually brought the Antrim truck stop in line with the access typical of Ontario truck stops, can be viewed as unreasonable.

In failing to properly carry out the reasonableness analysis, the board failed to give effect to the fundamental purpose of the law of nuisance: balancing the competing rights of property owners to use their land as they wish.

On this basis, the Court of Appeal found there was no nuisance and, therefore, no basis for an award of compensation.  Based on agreement between the parties, the Court awarded the MTO its costs of the appeal in the amount of $20,000 and its costs of the unsuccessful cross-appeal by Antrim (seeking higher compensation) in the amount of $20,000.

Read the decision at: Antrim Truck Centre Ltd. v. Ontario (Transportation).