Enbridge Gas Distribution loses appeal over cost to relocate pipelines

In August, 2014, I posted about a decision from the Ontario Superior Court involving Enbridge Gas Distribution Inc. ("EGDI") and Metrolinx.  Metrolinx was awarded $2.3 million that it had previously paid to EGDI for the relocation of 6 pipelines.  The Court ruled that it was EGDI that was responsible for the cost.

The Court of Appeal has now dismissed EGDI's appeal of the lower court decision.  EGDI raised two issues: 1) CN, the predecessor in title to Metrolink, had a contractual right to require EGDI to pay to relocate pipelines only on CN-owned lands, not municipal road allowances; and, 2) even if Metrolinx had those rights, they were not conveyed by CN to Metrolinx.

The Court of Appeal did not agree with EGDI's interpretation of the agreement, finding that the obligation to pay to relocate pipelines included relocation for the purposes of alteration in the railway property, facilities or operations.  Those purposes were not restricted to railway-owned lands.  The Court also ruled that CN did transfer to Metrolinx the right to require EGDI to remove its pipelines at EGDI's expense.

Read the decision at: Metrolinx v. Enbridge Gas Distribution Inc.

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.