The Latest and Greatest in Organized Pseudolegal Commercial Arguments

AS PREVIOUSLY PUBLISHED IN THE RURAL VOICE:

In a previous article, I wrote about an “Organized Pseudolegal Commercial Argument” or “OPCA” that had made its way to the Ontario Court of Appeal.  In that particular case, the OPCA litigants claimed not to be subject to the Income Tax Act, the Excise Tax Act and the Ontario Business Corporations Act because the various legislation infringed their rights to life, liberty and security of the person as guaranteed by Section 7 of the Canadian Charter of Rights and Freedoms.  They argued that the Charter provided them with a right to choose whether to be subject to Federal and Provincial laws – without their consent, they said, the laws did not apply to them.  The Court of Appeal disagreed.

The latest OPCA to come before the Courts reaches beyond the Charter of Rights and Freedoms and beyond Canadian law altogether.  It reaches across the Atlantic Ocean to the United Kingdom and, in fact, back through history to the 13th Century.  In what Justice Robert Graesser has coined “Magna Carta Lawful Rebellion” or “MCLR”, litigants are swearing allegiance to a UK nobleperson pursuant to Article 61 of the Magna Carta of 1215 and claiming that they are thereby released from the application of legislation, courts, police or government actors who are guilty of “high treason”.  In a case recently before Justice Graesser in the Alberta Court of Queen’s Bench, the purported representative of a mother involved in a family dispute explained the position as follows in her covering letter:

This is to inform you that [the mother] is Lawfully standing under Article 61 of the 1215 Magna Carta which was Invoked on March 23^rd 2001 according to Constitutional Royal Protocol.  The Court of Queens Bench is an Unlawful Assembly with No Authority to deal with this matter since the Invocation of Article 61 thus All Judgments made by the Court of Queen’s Bench in this matter are Null and Void.  [The mother] and All of her Property are Protected by the Constitution and the People of the Commonwealth Realm.  We require the Immediate Restoration of Her Property see the enclosed Exhibit: G in the notice of Conditional Acceptance.

Failure to restore the Property of [the mother] within 7 Days of receiving this letter will constitute as High Treason, which still carries the Gallows.  I urge you to consider Eichmann v. the People “I was just doing my job” is no defence.  Nuremberg.

 Maxim in Law Ignorance of the Law is No Excuse

The “Property” shown in the photograph enclosed as “Exhibit: G” was, sadly, a four-year old girl, presumed by Justice Graesser to be the mother’s daughter.

The Magna Carta of 1215 was the result of negotiations between King John of England and rebel “baron” landowners to end an uprising by the landowners.  Article 61 of the Magna Carta authorized a counsel of 25 rebel barons to seize the “castles, lands, possession, or anything else” of King John if he did not adhere to the law’s terms.  The Article also provided that “[a]ny man who so desires may take an oath to obey the commands of the twenty-five barons…”. 

Flash forward to 2001, when a group of 28 new “rebel barons” sent a petition to Queen Elizabeth II asking that she withhold Royal Assent to any legislation that would ratify the European Union’s 2000 Treaty of Nice.  The Treaty, according to the petition, would lead to further “losses of national independence”, would “introduce an alien system of criminal justice”, would abolish habeas corpus and jury trials, would permit foreign “men at arms” into the UK, would undermine the chain of command of the UK military, and would make UK laws subject to an alien “Charter of Fundamental Rights”.  If Queen Elizabeth II were to assent to the ratification of the Treaty, she would breach her Coronation Oath, allegiances to her would be undone, and government would be by tyranny.

Nothing came of the 2001 “rebellion”, but MCLR litigants have since been swearing allegiance to Lord Craigmyle (one of the signatories of the petition sent to the Queen) and then claiming to have escaped the application of the law pursuant to Article 61 of the Magna Carta.  How does that relate to Canadian law?  The argument is that the Magna Carta was received in Canada as part of the Constitution.  It has been claimed to have “supraconstitutional” status as the “foundation of the rule of law itself”. 

In actual fact, the Magna Carta of 1215 does not have any legal effect in Canada or at all.  The Magna Carta of 1215 was repealed by the Magna Carta of 1216, made between the rebel barons and the regents of King John’s son, Henry III, following King John’s death in 1216.  The new Magna Carta did not include Article 61 or any other provision for a “lawful rebellion process”.  Subsequent versions of the Magna Carta were enacted over the years, of which only the 1297 Magna Carta has any remaining effect in UK law.  The immunity of the Church of England is recognized in Article 1.  “Ancient Liberties” are granted to the City of London in Article 9.  That the rights of “free-men” are not to be infringed except by legal processes is recognized in Article 29.

While those three sections of the 1297 Magna Carta (none of which relate to lawful rebellion) may continue to have some relevance in the UK, they have no effect in Canada.  When the UK Parliament passed the Canada Act 1982 (UK), c. 11, Justice Graesser writes, it cut the “jurisdictional linkage” between the UK and Canada.  Canada enacted its own constitutional legislation, The Constitution Act, 1982. 

What “pseduolaw” will they think of next?

Read the decision at: 2020 ABQB 790

Organized Pseudolegal Commercial Arguments. What?

AS PREVIOUSLY PUBLISHED IN THE RURAL VOICE:

If you think the title of this article is lawyer-speak or legalese, you’re right.  But the mental gymnastics required to understand the meaning of the term Organized Pseudolegal Commercial Argument (“OPCA”) pale in comparison to the effort required of Canadian judges to understand the OPCAs being advanced in cases before them.  Most often in an effort to avoid taxes or other financial obligations, OPCA litigants argue that they are a double or split person – one part being a physical human being and the other being a non-physical legal person or “juristic person”.  The physical human beings give notice to governments, creditors, and the Courts that they have relinquished and are separate from their non-physical legal persons and, therefore, are not responsible to follow government regulations, pay taxes, pay debts, etc.

In an oft-cited case called Meads v. Meads, Associate Chief Justice J.D. Rooke of the Alberta Court of Queen’s Bench took it upon himself in his reasons for decision to explore and challenge the OPCA movement, which he viewed as an abuse of Canada’s legal system.  Rooke A.C.J. explained:

This Court has developed a new awareness and understanding of a category of vexatious litigant. As we shall see, while there is often a lack of homogeneity, and some individuals or groups have no name or special identity, they (by their own admission or by descriptions given by others) often fall into the following descriptions: Detaxers; Freemen or Freemen-on-the-Land; Sovereign Men or Sovereign Citizens; Church of the Ecumenical Redemption International (CERI); Moorish Law; and other labels - there is no closed list. In the absence of a better moniker, I have collectively labelled them as Organized Pseudolegal Commercial Argument litigants [“OPCA litigants”], to functionally define them collectively for what they literally are. These persons employ a collection of techniques and arguments promoted and sold by ‘gurus’ (as hereafter defined) to disrupt court operations and to attempt to frustrate the legal rights of governments, corporations, and individuals.

Over a decade of reported cases have proven that the individual concepts advanced by OPCA litigants are invalid. What remains is to categorize these schemes and concepts, identify global defects to simplify future response to variations of identified and invalid OPCA themes, and develop court procedures and sanctions for persons who adopt and advance these vexatious litigation strategies.

One participant in this matter, the Respondent … appears to be a sophisticated and educated person, but is also an OPCA litigant. One of the purposes of these Reasons is, through this litigant, to uncover, expose, collate, and publish the tactics employed by the OPCA community, as a part of a process to eradicate the growing abuse that these litigants direct towards the justice and legal system we otherwise enjoy in Alberta and across Canada. I will respond on a point-by-point basis to the broad spectrum of OPCA schemes, concepts, and arguments advanced in this action by [the Respondent].

Meads v. Meads was decided in 2012; OPCA litigants hardly seem to have been deterred by the chastisement of Rooke A.C.J. and the consistent failure of their arguments in the years following.   In May of this year, the Court of Appeal for Ontario heard an appeal from the dismissal of an application by two individuals who maintained that various sections of the Income Tax Act, the Excise Tax Act, and the Ontario Business Corporations Act are of no force or effect because they infringe on the individuals’ rights to life, liberty and security of the person as guaranteed by Section 7 of the Canadian Charter of Rights and Freedoms.  The individuals sought repayment by the government of approximately $2.9 million in “withholdings”, $447,000 in HST, and $485,000 in accounting fees.  They also requested an award of “tort damages” of $1.925 million. 

In its reasons dismissing the appeal, the Court of Appeal summarized the OPCA relied upon by the applicants:

The appellants assert that while they are entitled to live in the geographic landmass known as Canada, they are not subject to any of the laws enacted by the Juristic Federal Unit Canada, or presumably provinces or municipalities that also enact laws, unless they consent. Arguably arbitrary designations or distinctions drawn by statutes, such as “residency,” or status as officers and directors of privately incorporated companies under provincial laws, do not apply to them without their consent. This, they say, flows from s. 7 of the Charter and also from their reading of Article 1 of the International Covenant on Civil and Political Rights, which binds the Juristic Federal Unit Canada. Consequently they are not subject to the provisions of the Income Tax Act, R.S.C. 1985, c. 1 (5th Supp.), the Excise Tax Act, R.S.C. 1985, c. E-15, or various other pieces of legislation such as Ontario’s Business Corporations Act, R.S.O. 1990, c. B.16.

In essence, the appellants claim the right to live in Canada, but to be free from the obligations and language of any laws they do not choose to accept. This they say is an implication of “[t]he right to choose as guaranteed by s.7 of the Charter”.

No doubt to the disappointment of OPCA litigants everywhere, the Court of Appeal concluded that: “At least as long as they continue to live in Canada, to reside here, the appellants are subject to federal and provincial laws that apply to residents of Canada, including the Income Tax Act.”  However, this decision and the many similar decisions that preceded it will likely do little to deter OPCA litigants from pushing on with the fight to live in Canada free of the burdens of law and government.

Seller's Family's remorse not grounds to set aside farm transaction, says Alberta Court

Several years ago, a young couple purchased farm land from an 86 year old man, a bachelor most of his life (the "Vendor").  The couple had leased the land for a number of years, and paid about $600,000 for two quarter sections (160 acres x 2).  The Vendor's youngest brother more recently commenced an action in the Alberta Court of Queen's Bench on behalf of the Vendor to set aside the land transaction based either on the exercise of undue influence by the purchasers or on the notion that the transaction was unconscionable.  At the time the case was heard, the Vendor was 93 years old and living in a care facility.  He died between the time of the hearing and the release of the Court's decision.

The Vendor's family was upset that the land purchased for $600,000 in 2010 was later appraised at a value of between $1.67 million and $3.9 million.  And, moreover, within two years of purchasing the two quarter sections, the young couple subdivided out a 43-acre parcel and a 79-acre parcel that they then listed for sale at $835,000 and $1.38 million, respectively.

On the issue of undue influence, the Court cited the test set out by the Supreme Court of Canada in the case of Geffen v. Goodman Estate:

What then must a plaintiff establish in order to trigger a presumption of undue influence? In my view, the inquiry should begin with an examination of the relationship between the parties. The first question to be addressed in all cases is whether the potential for domination inheres in the nature of the relationship itself. This test embraces those relationships which equity has already recognized as giving rise to the presumption, such as solicitor and client, parent and child, and guardian and ward, as well as other relationships of dependency which defy easy categorization.

Having established the requisite type of relationship to support the presumption, the next phase of the inquiry involves an examination of the nature of the transaction. When dealing with commercial transactions, I believe that the plaintiff should be obliged to show, in addition to the required relationship between the parties, that the contract worked unfairness either in the sense that he or she was unduly disadvantaged by it or that the defendant was unduly benefited by it. ...

Once the plaintiff has established that the circumstances are such as to trigger the application of the presumption, i.e., that apart from the details of the particular impugned transaction the nature of the relationship between the plaintiff and defendant was such that the potential for influence existed, the onus moves to the defendant to rebut it. As Lord Evershed M.R. stated in Zamet v. Hyman, supra, at p. 938, the plaintiff must be shown to have entered into the transaction as a result of his own "full, free and informed thought". Substantively, this may entail a showing that no actual influence was deployed in the particular transaction, that the plaintiff had independent advice, and so on. Additionally, I agree with those authors who suggest that the magnitude of the disadvantage or benefit is cogent evidence going to the issue of whether influence was exercised. [Emphasis added]

[Emphasis added]

The Court found that the relationship between the Vendor and the young couple was not one in which there was potential for domination of the Vendor by the young couple.  Their relationship was one of lessor and lessees, and of friends and neighbours.  The Vendor was not dependent on the young couple, they were not family, there was no position of trust, and the Vendor was not in a position where he had to sell his land for financial reasons.

And even if the Court had found the relationship to be one in which undue influence could be presumed, the Court would not have found that actual undue influence was exerted in this case.  Instead, the Court found that the Vendor was someone who was not coerced into selling his land.  He had no children of his own and had no family who wanted to purchase or farm his land.  He wanted to sell the land and for the land to remain in agricultural use.  He sold the land at what amounted to a discounted price in relation to the actual market value, but the Vendor had expressed his willingness to sell at a discount knowing that the land would remain agricultural.

Of course, very shortly after the young couple purchased the land, they proceeded to apply for consent from the municipality to subdivide the land.  It appears that the young couple had discussed the possibility of subdivision with the Vendor for the purpose of family planning.  The Vendor provided a letter in support of the application and mentioned that the purpose was for "future ranch planning" for the young couple and their three children.  The decision by the young couple to put two parcels up for sale outside their family at a price that far exceeded the original purchase price of the entire two quarters came as a disappointing surprise to the Vendor's family.

However, the Court did not find that this made the transaction between the Vendor and the young couple unconscionable and subject to being set aside.  The Court found that none of the following elements of the test for an unconscionable transaction were satisfied:

1. a grossly unfair and improvident transaction;

2. that the victim lacked independent legal advice or other suitable advice;

3. that there was an overwhelming imbalance in bargaining power caused by the victim's ignorance of business, illiteracy, ignorance of the language of the bargain, blindness, deafness, illness, senility, or similar disability; and

4. that the other party knowingly took advantage of this vulnerability.

Cain v Clarica Life Insurance Company, 2005 ABCA 437 (CanLII), 384 AR 11, at para 32.

The action to set aside the transaction was dismissed.  As the Court noted in conclusion: "seller's remorse, or seller's family's remorse, is not grounds to set aside the transaction".

Read the decision at: Burby v Ball.

Compensation for Injurious Affection: Impact on remaining land or impact on financial position of owners?

AltaLink expropriated a right-of-way over a strip of land from an Alberta couple for an electrical transmission line.  In a compensation hearing before the Alberta Surface Rights Board (the "Board"), the owners were denied compensation for injurious affection.  The injurious affection they claimed was a loss in value of the remainder of their property that was not taken by AltaLink.  The owners appealed the Board's decision to the Alberta Court of Queen's Bench and, on appeal, the Court reversed the decision of the Board and awarded the owners $125,780 in lost value plus interest.

The land in question consisted of two adjacent parcels containing approximately 230 acres, of which approximately 121 acres were cultivated.  The owners had purchased the land in February, 2013 for $511,500, and they were aware at that time that AltaLink had received approval from the Alberta Utilities Commission to construct and operate the transmission line across the property.  Prior to the purchase of the property, the new owners had rented the property for approximately 27 years, and it appears from the decision that they were able top purchase the property at below market value.  The Board found that the market value at the time of the expropriation in 2014 (the date of valuation for the purpose of calculating compensation) was somewhere between $902,000 and $930,000.

The owners argued that the taking of the right-of-way resulted in a loss of value to the balance of the property that was not taken as right-of-way related to the presence of the right-of-way and the transmission line.  They argued that their loss was not limited to the loss of value to the land as they were currently using it, but should be calculated based on their loss of ability to subdivide the property for new residential lots.  But for the AltaLink right-of-way, the owners could subdivide and sell the individual lots.  They put the value of their loss at 30% of the market value of the property.

The Court disagreed with the owners that the right-of-way would prevent the development of multiple residential lots, but accepted that the right-of-way would result in a loss in the value of the lots that could be created.  On that basis, the Court would have calculated the compensation to be paid to the owners based on  a market value loss of 15% (half of the 30% proposed by the owners), or approximately $131,000.  The Court then ended by making a finding that the $125,780 that would have been awarded by the minority dissenting member of the Board (in the original hearing) was therefore reasonable and set compensation at that amount.

Taken on its own, the Court's ruling on loss of value to the remainder of the property based on loss of value of prospective subdivision lots is not remarkable.  However, what is noteworthy is the Court's rejection of AltaLink's argument that no injurious affection compensation was payable at all because the market value of the property never fell below the amount the owners paid for the property.  AltaLink argued, and the majority of the Board had agreed, that an award of injurious affection would result in a windfall for the owners because they had paid substantially less than market value for the property.

But the Board had incorrectly "focused on the financial loss to the landowners and not the loss in value of the remaining land ... they were suspicious that the negative impact of the transmission line had already been factored into the sale price."  The Court ruled that "the fact that the Appellants purchased the land after the Respondent obtained a permit and license to build the line is of no consequence.  The payment for injurious affection is based on the impact on the value of the remaining land, not the impact on the financial position of the owners.  This does not result in a windfall or unjust enrichment to the Appellants because, until the line is removed, it will have a negative impact on the Land's value, which is an economic loss."

Read the decision at: Koch v Altalink Management Ltd.

Another Organized Pseudolegal Commercial Argument (OPCA) Case in Alberta

An Alberta man ("ACG") challenging the court process initiated by the company that holds a second mortgage on his property has been labelled an "OPCA" litigant for relying on "organized pseudolegal commercial arguments".  Although he admitted that he had stopped making payments on the second mortgage, ACG claimed that the terms of the mortgage were unfair and predatory, that there was lack of disclosure, that he was not aware of the terms of the mortgage when it was signed (constituting fraud), that the mortgage was unsupported by valuable consideration, etc.  He also made "advanced stereotypic and well known OPCA arguments and motifs, such as the double/split person "Strawman"."

The "Strawman" double/split person concept is used to attempt to avoid legal obligations through "the notice of treating a named individual as an "estate" that is somehow separate from the person who is subject to the law and that is free from governmental regulation".  ACG's sought to distinguish himself as a "individual human being" from his legal "person".  One part of his split person may have signed the mortgage, but the other part is not bound.  ACG swore the following in an affidavit:

1. I am a man and an individual human being with standing within the territory commonly known as Canada.
2. I am exercising my right NOT to take recognition as a person before the law.
3. I am not a person or any class of person.
4. I am the Beneficiary and Grantor of the account referred to as the juristic person [ADG].

ADG referred to his birth certificate and statement of live birth in connection with the last point.

In addition to the "Strawman" arguments, ADG also claimed that what was loaned to him by the mortgagee was nothing more than "book-entry credit created out of thin air", which constituted fraud.  The Court Master hearing this case did some research on the term "book-entry credit" and found that it had been discussed in a number of Australian court decisions.  The source of the "book-entry credit" argument appeared to be a book called "How to Screw 'Your' Bank".  The Master rejected this argument.

After granting the order sought by the mortgagee, the Master concluded her reasons with the following:

Beyond that, it would be a pity if ADG lost his home because he exercised poor discretion in his search for reliable sources of legal information. There are better alternatives than obsolete legal dictionaries, discounted texts like How to Screw ‘Your’ Bank, and Youtube videos of men scribbling on whiteboards. The decision is, of course, up to ADG, however, he should think carefully before he makes statements such as: 

I can find no law that authorizes book-entry credit and thus must conclude it is fraudulent criminal activity which I cannot take part in. ...

He cannot expect the courts to view him as a ‘fair dealer’. When he makes such statements the Court may be inclined to accept the alternative that ADG’s appearance in court is for an improper and ulterior purpose. If so, ADG can expect negative consequences.

Read the decision at: Crossroads-DMD Mortgage Investment Corporation v Gauthier.

Alberta Court upholds denial of crop insurance on basis of false or misleading reporting

The Alberta Court of Queen's Bench recently dismissed an application for judicial review of a decision by the appeal committee related to Alberta's crop insurance program.  The regulations that govern crop insurance provide that the decision of the appeal committee is final and binding on the parties; only a challenge to the decision by way of judicial review is possible.

In this case, crop insurance denied claims by a farmer for its 2009 canola crop, its 2009 Canadian Prairie Spring wheat crop and its 2010 Canadian Prairie Spring wheat crop.  Crop insurance declined to pay the benefit to the farmer on the basis that the farmer's post harvest assessments were incomplete and inconsistent with actual crop production.  On the appeal of this denial of coverage, the appeal committee decided that credibility was an issue.  The committee found that where there was a conflict in the evidence between the farmer and the crop insurance witnesses, the evidence of the crop insurance witnesses was to be preferred.  The committee cited examples where the farmer under-reported grain sales or was not forthright about grain sales until confronted with third-party documentation obtained during the crop insurance investigation.  The committee, which consisted of five farmer members, was left with the impression that the farmer "had not been honest and forthcoming in his dealings with AFSC during the claims process and subsequent contact with Program Cross Compliance and Investigation, despite several opportunities to make full and honest disclosure of the production and sales of crops."

The Court ruled that the standard of review applicable to this judicial review was a standard of reasonableness: if the Court found that the appeal committee's decision was "reasonable", then the decision would stand.  On review of the record from the appeal process, the Court concluded that the appeal committee's decision was, in fact, reasonable, and denied the judicial review application on that basis.  In particular, the Court found that it was abundantly clear that the committee had found evidence of false or misleading reporting from the farmer.  The Court could find nothing unreasonable about that conclusion and the denial of the crop insurance claims.

Read the decision at: F Prins Potatoes Ltd v Agriculture Financial Services Corporation.

Alberta conservation easement leads to fight over fence height restrictions, etc.

The Defendant in this case bought a large cattle ranch from the Nature Conservancy of Canada (NCC), the Plaintiff in the case.  The ranch lay on the eastern slopes of the Rockies within the migratory corridors of a wide array of species.  NCC thought that the ranch was strategically located for movement of wildlife in Alberta - the "North American Serengeti".  Before selling the ranch to the Defendant, the NCC registered a conservation easement against the title to the property to ensure, among other things, that the use of the property would not impede future wildlife migrations.

After purchasing the property, the Defendant landowner began to replace old fencing around the perimeter of the ranch.  He believed the new fencing would be more effective in restraining his bison, but still permit wildlife to migrate through the property.  NCC disagreed, saying that the Defendant had breached the terms of the conservation easement by building his fence higher than was allowed.  This would impede the migration of wildlife.

There were a large number of issues before the Alberta Court of Queen's Bench in this case (the written reasons comprise 605 paragraphs with 144 footnotes), including issues about the terms and applicability of the conservation easement.  On the issue of the alleged breach, the Court ruled that the parties had agreed on the following fence height restriction:

The Grantor may maintain, replace and repair the fences, roads, buildings, and other improvements located on the Property. If doing so with fences or roads, they are to be maintained, replaced or repaired at or near the existing ones. The Grantor may not build fences or roads in areas where none exists without the Grantee’s permission. The building of wildlife-proof fences is not permitted, except in localized areas as needed to control or prevent wildlife damage to haystacks, stored forage or domestic gardens. If any or all of the buildings are removed or destroyed, the Grantor may replace them with structures of a similar purpose at or near the same location within the existing 5 acre home site. Any building construction shall require the prior notice to the Grantee.

The Court found further that NCC failed to prove that the replacement fence that had been installed breached the agreed restrictions.  NCC failed to show that the Defendant placed the new fence in any new locations without permission and the evidence demonstrated that the fence was wildlife permeable.  In fact, the Court found that it was likely that the new fence restricted wildlife movement less than the old fence that it replaced.

Read the decision at: Nature Conservancy of Canada v Waterton Land Trust Ltd.

Oil and Gas Lease: Operate at a loss or nominal return or lose your lease?

This case involves five freehold petroleum and natural gas (PNG) leases that cover most of a section of land in Alberta.  The Plaintiffs are some of the current owners of the land plus a top-lessee, whose lease will only become effective if it is determined that the five existing leases have terminated.  The main issue in the case was whether those leases terminated as a result of the stoppage of operation and production from a well on the land between 1995 and 2001.  More specifically, the Court asked whether the Defendants (or their predecessors) were required to operate the well at a loss or nominal return during those years in order to preserve and continue the leases.

The Alberta Court of Queen's Bench heard evidence from a number of factual and expert witnesses about the decision made to shut-in the well in question for economic reasons.  In the end, the Court ruled that the well was shut-in for reasons permitted under the leases, and the leases did not terminate as a result of the cessation in operations and production.  The Plaintiffs' action was dismissed as a result.

Read the decision at: Stewart Estate v TAQA North Ltd.

Alta. Court rules lawyer negligent in drafting will meant to bequeath farmland

The Alberta Court of Queen's Bench has ruled that a solicitor was negligent in drafting a will for a client after the intended gift to a beneficiary failed.  The deceased owned land, including four quarter sections he wished to pass onto his brother through his will.  In drafting the deceased's will, the lawyer did include the bequest.  However, it was not actually the deceased who owned the four quarter sections.  Instead, the property was held by the deceased's company.  The intended gift failed and the brother sued the lawyer for negligence.

The Court found first that the lawyer owed the brother, as an intended beneficiary, a duty of care.  Next, the Court found that the lawyer had fallen below the standard of care required in failing to address the fact that the land was owned by the company: "A reasonably competent solicitor in those circumstances would, at a minimum, have asked who owned land to be gifted in the will or done a search to ascertain in ownership."

The Court awarded damages to the brother in an amount equal to the value of the land as of the date of the death of the deceased testator.  Added to that amount was some $11,200 which would have been earned by the brother as surface lease income had he received the properties.

Read the decision at: Meier v Rose.

Alberta Court rules in favour of landowner over crossing agreement

In 1948, CPR and Calgary Power Ltd. reached an agreement providing Calgary Power with the right to place three towers carrying power transmission wires on and over CPR property abutting the north side of 10th Avenue S.E. in the City of Calgary.  The agreement also provided that either party could terminate the agreement by giving three months' notice, and on termination Calgary Power would be obligated to remove the towers and wires and make good any damage caused to the property.  If the removal did not happen within one month of termination, CPR could undertake the work itself at the expense of Calgary Power or take ownership of the towers and wires.  Under the agreement, Calgary Power was to pay to CPR an annual rental of $40.00.

Flash forward to more recent times.  The power transmission facilities on the property have been expanded.  The original agreement and subsequent amending agreements have been assigned by Calgary Power to a company called Enmax.  CPR has sold its lands to a development company called Remington.  Remington wanted to develop the former CPR lands and advised Enmax of the plans.  Enmax told Remington that a 20 metre utility right-of-way would be required and that Remington would need to bear the cost of any changes, including the conversion of the overhead power lines to underground lines. 

Remington's response to Enmax was to provide a notice of termination under the existing agreements.  Enmax was directed to vacate the Remington lands (the former CPR lands) on or before June 30, 2005.   Despite that direction, Enmax has refused to remove the transmission towers and lines from the lands.  Remington says that its development will be severely compromised with the continued presence of high voltage transmission lines.  It believes such a continued presence will acutely influence potential purchasers or tenants in its intended mixed use residential/commercial development.

Remington applied to the Court of Queen's Bench for orders requiring Enmax to vacate the lands.  Enmax argued in response that the agreements between CPR and Calgary Power were personal contracts between a railway company and a utility company and could not be assigned to Remington without the consent of Enmax.  There were also questions raised about whether the agreements actually created true rights-of-way or whether the rights granted were simply a personal licence which could not be assigned or transferred.

The Court found that the agreements did create utility rights-of-way, which through legislation were not subject to all of the Common Law rules surrounding valid easements and rights-of-way.  Further, the Court ruled that if it was wrong about the nature of the agreements, and they did create mere licences, CPR still had the right to assign the agreements to Remington without the consent of Calgary Power or Enmax. 

For those reasons, the Court found that Remington was entitled under the agreements to terminate and require Enmax to remove its facilities.  Of course, that dealt only with the private relationship between the parties.  The transmission facilities are also subject to public regulation by the Alberta Utilities Commission (AUC).  The Court directed Enmax to make an application to the AUC to remove the transmission lines, and ruled that the lines could not be removed or relocated in the absence of an order from the AUC.

This decision is reminiscent of an earlier Alberta Court decision involving a landowner named Randolph Hill.  He purchased land from a railway company and was assigned an agreement that gave him the right to require a pipeline company to remove its pipeline.  The Court agreed that he had that right, but then the company simply went to the National Energy Board and obtained a Right of Entry Order.  The ROE Order now permits the pipeline to remain in place and, further, allows the company to abandon the line in place. 

Hill will no doubt be seeking compensation for this expropriation of his rights under the agreement.  It will be interesting to see how much those rights are worth.  What would someone pay for an agreement that would allow them to free their lands from the encumbrance of a pipeline corridor?  That has to be worth a lot on the open market.  Remington may very well find itself in a similar position.  The AUC may decline to order the removal of the transmission lines, in which case Remington's rights under the CPR agreements will have effectively been expropriated.

Read the decision at: Remington Development Corporation v. Enmax Power Corporation.

Alberta farm land tax assessment case sent back for re-hearing

Madam Justice J.M. Ross of the Alberta Court of Queen's Bench in Edmonton has allowed an appeal of a property tax assessment decision involving farm land.  She granted leave to appeal to the Applicant, Associated Developers (AD), from a 2010 decision of the Composite Assessment Review Board (CARB) assessing AD's land as industrial property rather than as farm land.  Justice Ross then heard the appeal, overturned the decision of the CARB and sent the case back to the Board for re-determination.

The Property in question, located in Edmonton, was assessed as industrial property at a value of $6,723,500 in the 2010 assessment year for the 2009 taxation year.  The relevant valuation period for the 2010 assessment was therefore 2009.  Had the Property been assessed as farm land, the assessed value would have been $863,000.   The Applicant complained to the CARB, asserting that the property should have been assessed as farm land.  The Applicant had filed with the CARB annual leases between AD and a farmer for the years 1999-2010.  The leases included terms that the lands would be used solely for agricultural purposes. 

The City of Edmonton (arguing for the industrial land assessment) argued that the crop of hay on the property had not been harvested in 2009.  The City's position was that if the crop was not cut, it could not be said to have been produced and, therefore, was not used for farming operations and could not be classified as farm land.  AD argued in response that the land could still be farm land even if not hayed in 2009, as there are many circumstances in which people leave land idle for a year for a variety of sound agricultural reasons.

Justice Ross allowed the appeal because the CARB failed to provide adequate reasons for its decision and failed to identify the appropriate legal tests in its reasons.  These were breaches of the principles of natural justice and the duty to be fair.  She cancelled the decision and sent the matter back to the CARB to be re-heard.

Read the decision at: Associated Developers Ltd. v. Edmonton (City).

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.

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.

Alberta Court of Appeal rules 2 to 1 against Imperial Oil appeal in pipeline contamination case

The Alberta Court of Appeal has dismissed the appeal by Imperial Oil of an award of damages to a rancher for injury to her cattle caused by leaking oil.  One of the three appellate judges, however, wrote a dissenting opinion that would have found Imperial Oil not liable for the damages alleged.  Agnes Ball, the rancher involved, leased grazing land from the Alberta government in the "School Section", and alleged that during Imperial's clean up of an oil leak from its pipeline, Imperial negligently allowed her cattle to ingest hydrocarbons.  The ingestion resulted in premature calving and loss of calves.  Ball had been away on vacation at the time of the leak and the trial judge found that, although Imperial attempted to communicate with Ball through her daughter, Imperial did not ask for permission to enter on the land (outside of its easement) or advise her of the type of work required or its urgency.

At trial, the Alberta Court of Queen's Bench judge found that Imperial Oil had a duty to give adequate prior notice of its intended repair work and to “adequately protect the Plaintiff’s livestock from exposure to Hydrocarbons and hydrocarbon contaminated soil and water”, (reasons at para. 116). He went on to find Imperial Oil had breached that duty by failing to give adequate notice of the repair work and by “pouring contaminated water on the ground and leaving contaminated soil unfenced”, (para. 116). He also found that Imperial Oil allowed the escape of a noxious substance and, thereby, created a nuisance. In light of these findings, he found it unnecessary to deal with the claim in trespass; nor did the parties make any submission on the appeal with respect to this alleged cause of action.

Two of the three Court of Appeal judges hearing the case rejected all of the grounds of appeal advanced by Imperial.  One judge, however, found that:

the trial judge committed an error of law in determining that the respondent was only required to prove some “exposure” to risk by the cattle. The respondent had to prove consumption of contaminated soil and water of sufficient quantities and toxicity to cause injuries on a balance of probabilities. The trial judge used the wrong legal test for causation. As a result, he failed to make the findings of fact needed to apply the correct “but for” test. The reasons at trial do not contain findings of fact on some of the key topics that are needed to resolve the causation issue. The only alternative available is to allow the appeal, and direct a new trial.

It remains to be seen whether Imperial will seek leave to appeal this decision to the Supreme Court of Canada.

Read the Court of Appeal decision at: Ball v. Imperial Oil Resources Limited.

Read the trial decision at: Ball v. Imperial - Court of Queen's Bench.

Canadian Natural Resources Limited appeal dismissed by Alberta Court of Appeal

The Alberta Court of Appeal has dismissed the appeal of Canadian Natural Resources Limited (CNRL) of a Court of Queen's Bench surface rights decision made in favour of landowners.  The most important ground of appeal revolved around criticisms which the Court of Queen’s Bench made of one of the CNRL’s witness’ expert evidence. There is case law which was not disputed on the appeal. It holds that if a pattern of dealings has been established, then compensation for compulsory imposition (or renewal) of a surface lease for an oil or gas well may be based on the negotiated amounts in those prior contracts between others. The Court of Queen’s Bench concluded that no such applicable pattern of dealings had been proved here (paras. 89, 118 and 155). That was a rejection of most of the evidence of this expert witness.

The Court of Queen's Bench had summarized the reasons for its rejection of the pattern of dealings evidence:

a) There was no definition, precise or general, of the area to which this pattern was said to apply.

b) There was no information with respect to how many sites, overall, are within the area.

c) There was no indication of how many sites were reviewed in order to ascertain the comparables, nor any indication of why other sites reviewed were not comparable.

d) There was no explanation of why this pattern was applicable to a certain area.

e) There was no information provided with respect to the number of parties, either operator or landowner, represented within the comparables.

f) There was no information with respect to the negotiation process.

g) With respect to the chart showing CNRL irrigation and dryland leases, almost half of the leases do not fit the compensation pattern.

h) There was no explanation of why leases that were presented as comparables but that did not fit the compensation pattern supported the pattern of dealings.

i) There was no explanation as to why initially only new agreements were considered appropriate comparables, but why later, rent reviews were also considered to be properly included.

The Court of Appeal found that the Court of Queen's Bench, as finder of fact, was entitled to reject the expert evidence of pattern of dealings.  There was no reversible error in the lower court decision.

Read the Alberta Court of Appeal decision at: 2010 ABCA 91 (CanLII).

Read the Alberta Court of Queen's Bench decision at: 88 Alta. L.R. (4th) 298

The Alberta Government's take on the no annual compensation decision

Court Decision Regarding Annual Compensation for Pipelines in Alberta

Click on the link above to read the report posted by Alberta's Department of Agriculture and Rural Development about last week's Court of Queen's Bench decision on annual compensation for pipeline landowners. The government's take on the decision:

What does this all mean?  Bottom line is that the arguments for annual compensation, were not supported at the court level.  This means that while landowners may continue to negotiate for annual compensation, there is now a greater requirement for cogent evidence to depart from the pattern.  Landowners continue to have a right to bring other arguments to regulatory proceedings and they may continue to pursue policy or legislative change if they wish.

What do farmers think of this response?