Natural severance granted to two landowners by Superior Court

Owners of two different properties in the Hamilton, ON area brought applications to "clarify or determine title" to the bed of a waterway that traverses each of the properties.  If the waterway was determined to be navigable, then the bed of the waterway would remain the property of the Crown and would effect a severance of the properties involved.  Section 1 of the Beds of Navigable Waters Act provides: 

"Where land that borders on a navigable body of water or stream, or on which the whole or a part of a navigable body of water or stream is situate, or through which a navigable body of water or stream flows, has been or is granted by the Crown, it shall be deemed, in the absence of an express grant of it, that the bed of such body of water was not intended to pass and did not pass to the grantee."

The Crown Patent for both properties was issued on January 11, 1816 to a single owner.  The original Patent did not contain any express grant of the bed of the watercourse.  Therefore, if the watercourse was found to be navigable as of the date of the grant, then title to the bed of it would remain vested in the Crown.

On the basis of evidence presented by the parties, the Court concluded that it was probable that the waterway was navigable for significant periods of the year in 1816.  Title of the bed of the waterway remains in the Crown (resulting in the natural severance of the Applicants' properties).

Read the decision at: O’Donnell v. Ontario (Attorney General) and Obratoski v. Ontario (Attorney General).

NEB to introduce Administrative Monetary Penalties

The National Energy Board (NEB) has developed draft Administrative Monetary Penalties Regulations (AMP Regulations) and published them in the Canada Gazette, starting a 30-day public comment period. 

Under the proposed regulations, the NEB can issue a Notice of Violation to landowners who construct a facility or excavate without leave under Section 112(1) of the NEB Act or who fail to obtain leave of a pipeline company to drive vehicles or mobile equipment over a pipeline right-of-way under Section 112(2) of the NEB Act.  These violations are designated as Type-B violations and will result in a monetary penalty of between $4,000 and $100,000 for a corporation and between $1,000 and $25,000 for an individual.

NEB Abandonment Cost Estimates: Will there be enough money?

The National Energy Board released its decision in the Pipeline Abandonment Cost Estimates proceeding yesterday (click here).  An oral public hearing was held in Calgary last October and November.  For pipeline landowners, the key ruling by the NEB was its finding that basing cost estimates on an assumption of zero removal of pipelines in agricultural lands was unreasonable.  The NEB has already decided that companies must begin collecting tolls now to cover the future costs of pipeline abandonment; the question is how much is to be collected.  Companies argued that the amounts should be based on the assumption that nearly all pipelines in agricultural lands should be abandoned in place.  Not surprisingly, this was oppposed by pipeline landowners.

In an earlier hearing, the NEB had rejected the landowner proposal for a 100% removal assumption for all medium and large diameter pipelines in agricultural lands.  Instead, the NEB created a "base case" assumption calling for 20% removal and 80% perpetual maintenance, though giving companies the opportunity to provide justifications for a departure from this base case.  In its most recent decision, the NEB found that the companies had failed to justify their proposed departures from the base case and ordered that abandonment funding amounts be set based on the 80/20 split:

The Applicants have not successfully justified their deviation from the Base Case assumption for medium and large diameter pipe in these two land-use sub-categories. During the course of the MH-001-2012 hearing, all Applicants made submissions to the Board as to why the Base Case assumptions of 80 per cent abandonment-in-place and 20 per cent removal should not be imposed. The Board considered these comments but does not find them convincing. In addition, the Board also considered Applicants’ responses to a Board request made during the course of the hearing. Applicants were asked to provide recalculated cost estimates for three theoretical scenarios – 10, 20 and 30 per cent removal on "Agricultural, Cultivated" and "Agricultural, Cultivated and Non-Cultivated" sub-categories, using their own methodologies. Finally, the Board considered the issues described above regarding easement agreements, landowner surveys, and the lack of provision for any site-specific issues that may necessitate removal. The Board has exercised its judgment in determining a reasonable assumption for medium and large diameter pipelines in the "Agricultural, Cultivated" and "Agricultural, Non-Cultivated" sub-categories. In the Board’s view, 20 per cent removal for medium and large diameter pipe in these land-use sub-categories is a reasonable, prudent and adequate starting point for estimating purposes.

For the landowners and landowner groups who participated in the hearing process (at their own cost, given that there is no mechanism for cost recovery in the NEB hearing process and no participant funding available), this decision is a victory.  However, it remains to be seen whether the 80/20 split and the companies' actual estimates of abandonment costs will be sufficient to protect landowners from the costs of pipeline abandonment in the future.  The positions taken by the pipeline companies in the proceeding demonstrate that they will likely do everything in their power to avoid having to remove their abandoned pipelines from the ground. 

Federal Court denies Monsanto default judgment over patent infringement

Monsanto Canada Inc. and Monsanto Company have been denied an order for default judgment by the Federal Court of Canada in a patent infringement case.  The farmer involved did not file a defence.  Monsanto alleged that the farmer signed a licence with and obtained patented seeds from Monsanto; that the licence permitted the farmer to grow one crop, not to save seeds, and not to replant a new crop from those seeds; and that, notwithstanding the terms of the licence, the farmer saved seeds and planted a crop containing the patented gene. 

The rules required that Monsanto file affidavit evidence in support of its claim.  In other words, although there was no defence filed, the Court would not simply accept the allegations in the claim without some proof.  Monsanto attempted to circumvent this requirement by serving a "Request to Admit", a series of allegations put to the opposing party.  Where the opposing party fails to answer (either by admitting or denying the allegations), as in this case, that party is deemed to have admitted the allegations.

The Federal Court declined to accept this "evidence" as a sufficient basis for a default judgment order:

I am sceptical of such an attempt to “bootstrap” the requirement to provide the necessary evidence to support a default judgment by procedural manoeuvring. While it is true that, particularly in contested proceedings, the Request to Admit process is useful in eliminating the need to prove certain facts, I am satisfied that such a Request cannot be a substitute for affidavit evidence required on a motion for default judgment. Rule 210(3) states that a motion for default judgment shall be supported by affidavit evidence which evidence, in the context of the Rules, I take to be directed to the substance of the claim and not just an affidavit of service. I agree that the Court might even have discretion in respect of certain of the practice and procedural provisions of the Rules. In this case, because there is no affidavit evidence, whatsoever, to support the allegations in the Statement of Claim, I will not exercise any discretion, even if I have it, to accept the unanswered Request to Admit in lieu of such affidavit evidence.

Read the decision at: Monsanto Canada Inc. v. Verdegem.