Lawsuits challenge railroad's authority to OK oil pipeline

Here is an interesting article from AP business writer, Josh Funk, about growing conflicts between railways and neighbouring landowners in the US over pipelines and pipelines royalties: Click here to read the article at PennEnergy.com.  Not all railways hold full ownership over the land beneath their tracks; so who has the authority to grant permission for a pipeline, and to whom is compensation payable?

Trial ordered for pipeline right-of-way abandonment case

Calgary landowner Genstar Development Company applied to the Alberta Court of Queen's Bench remove a right of way held by Plains Midstream Canada ULC from title to its property.  Plains Midstream opposed proceeding on the basis of an application with written materials, arguing that a trial was necessary.

In the 1950's, Cremona Pipe Lines Ltd. constructed the Cremona Pipeline stretching 444 km between Calgary and Sundre.  Cremona had an Easement Agreement with one of Genstar's predecessors in title.  The Agreement provided that it would be binding on all future owners of the land and would remain in effect from May 19, 1956 and "for so long thereafter as [Cremona] may desire to exercise" its rights and privileges.

While the northernmost 314 km of the pipeline remains in operation, operation of the southernmost 130 km was suspended by Pembina Pipeline Corporation (a Genstar predecessor) in 1997; the pipeline under the lands owned by Genstar was removed from the ground.  In 2009, Plains Midstream purchased the line from Pembina, including the rights of way under all lands along the Cremona Pipeline.

In 2010 and subsequently, Genstar asked Plains Midstream to discharge the right of way on its lands.  Plains Midstream responded with an offer to re-route its right of way, but Genstar eventually commenced the court application. 

In reviewing the application materials, the Court concluded that a trial would be necessary in order to have all of the evidence required to answer the legal issues in play: "Given the complex and unsettled legal issues identified above, it is my view that any decision in this case should be founded on complete and nuanced findings of fact resulting from a trial, rather than on a paper record resulting from an originating application."

Read the decision at: Genstar Development Company v. Plains Midstream Canada ULC.

Alberta Court of Appeal upholds landowner's right to terminate easement

In January of this year, I posted a blog about an interesting case in Alberta concerning the right of a landowner to terminate a utility easement agreement (Alberta Court Rules in Favour of Landowner).  The land in question had been owned originally by the CPR, which had a right to terminate the right of way of the utility.  The lands were transferred to the current owner, who then gave notice of termination to the utility.  The Alberta Court of Queen's Bench decided that the right to terminate could be assigned to the new landowner and that the right could be exercised.

In a recent decision, the Alberta Court of Appeal has agreed.  The Court of Appeal agreed that the agreements were not personal contracts, and were validly assigned to the new owner (Remington Development) including the right to terminate.  The Court rejected the utility's argument that the easements were actually only licenses that could not be assigned; it found that even if the agreements were licenses, they could be assigned. 

With the decision, the utility has no land rights to maintain its power transmission operation on the lands in question.  It will either have to obtain a further agreement from the landowner or attempt to expropriate the rights through the applicable regulatory process.

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

NB Court tells landowners to allow access to power line right-of-way

NB Power and Bell Aliant brought an application before the New Brunswick Court of Queen's Bench asking the Court to interpret a Right of Way Agreement after a family in Fredricton denied access to their property for utility work.  Beginning in May 2011, various employees of the two utility companies attempted to access a right of way on the property.  The utilities said they have a right to enter the property, and to remove trees and brush within a distance of five feet of their lines.  They said they have these rights under the Agreement and under s.84 of the Electricity Act.

In response to the application, the Fredricton family suggested that a trial was necessary to determine the issues, saying that there were "materials issues in dispute".  However, the Court disagreed.  It found that the language of the Right of Way Agreement is unambiguous and grants the rights of access being denied by the property owner and her son.  Also, the Court found that the rights in the Electricity Act are even broader.

The Court concluded that it could decide the case as an application and ruled in favour of the utilities.  It granted an injunction restraining the respondents from preventing access to their property.

Read the decision at: NB Power et al. v. Kinsella.