OPA plans to offer over 1,000 MW of energy contracts under Bruce-to-Milton transmission project

Allocating capacity and offering FIT contracts for Bruce-to-Milton enabled projects

From the OPA News Online:

As outlined in the province’s Long-Term Energy Plan, the recently completed Bruce-to-Milton transmission project will allow the OPA to offer contracts for renewable energy projects under the Feed-in Tariff Program. And earlier this month, the OPA outlined the process to offer over 1,000 megawatts of renewable energy contracts.

Contracts will be offered for up to 750 megawatts in the Bruce transmission area and up to 300 megawatts in the west of London transmission area.  Eligible proponents were given five business days – between June 6 and June 10 – to change their connection points.  Contracts will be offered based on transmission capacity availability and the priority project ranking in both of the eligible transmission areas.

The OPA held a web-enabled teleconference in June to provide information and answer questions on the assessment and the contract offer process. An archive of the session’s audio and presentation files are available on the FIT website as well as a Q&A document that addresses technical and frequently asked questions.

Click here for more information and to access the teleconference archive.

Court finds tenant who didn't pay rent cannot claim termination payments under leases

The Provincial Court of Saskatchewan has dismissed a claim brought by Mylyn Chamberlin against his former landlords for payment of termination fees under various leases.  Chamberlin had leased four quarter-sections of farm land from a group of brothers under separate, but virtually identical agreemnents.  The agreements each provided that rent was to be paid for the farm land, and that if the landlord terminated the agreement, a payment of up to $40.00 per acre would be owing to Chamberlin.  The four quarter-sections together comprised 520 acres and Chamberlin claimed $20,400.  From this amount, he deducted $8,000, which was the amount of rent he had failed to pay for the land.

The brothers wanted to sell the land and terminated the leases.  However, the Court ruled that Chamberlin had repudiated the agreements by failing to pay rent.  It was determined that Chamberlin could not rely on the termination clauses in the agreements.  The Court also dismissed a claim made by Chamberlin for input costs he had allegedly invested in the land, finding that there was no evidence produced that would allow an assessment of these costs to be made.  The Court did, however, acknowledge that costs had been incurred and on that basis declined to award court costs against Chamberlin.

Read the decision at: Chamberlin v Larson.

Interesting debate about the NEB and regulatory capture from Andrew Nikiforuk

Click on the following link to read an opinion piece by Andrew Nikiforuk on the regulatory capture of the National Energy Board, followed by an in-depth line of comments and responses between Nikiforuk, Andrew Leach (an Alberta-based regulatory economist), and Dave Core (of the Canadian Association of Energy and Pipeline Landowners Associations - CAEPLA): National Energy Board: Captured Regulator?

Enbridge's latest update on the Norman Wells spill

Here is the latest from Enbridge on its spill of between 700 and 1,500 barrels of oil near Wrigley, NWT:

On May 9, Enbridge Inc. reported that it had confirmed at approximately 12:40 MT that day a crude oil leak from a pipeline on its Norman Wells System (Line 21) approximately 50 km south of the community of Wrigley, NWT. On May 20th Enbridge returned the Norman Wells line to service after completing the necessary repairs.

Enbridge is working to minimize helicopter traffic in the Willowlake River area. A 25-person camp is being established near the incident site to house crews while they continue cleanup and reclamation work. The camp is expected to be open this week. There has been an increase in truck traffic on the Mackenzie Highway between Fort Simpson and Wrigley due to the incident. We want to ensure the safety of our crews and the people in the community and ask that everyone use caution when travelling on the highway.

The oil remains contained and there are no impacts to moving water. Our original four barrel estimate was based on oil collected at the surface and did not take into account the subsurface impacts, which were believed to be not significantly different. The increase in subsurface oil was discovered during the ongoing environmental site assessment, which includes subsurface analysis and is standard practice for all releases. Based on current estimates provided by the third party experts on site, Enbridge anticipates the release volume could range from a minimum of 700 barrels to a maximum of 1,500 barrels. Based on its current analysis, Enbridge anticipates the probability that the maximum volume would be exceeded to be low.

Enbridge continues to regularly engage with First Nations, government officials and the public and we are committed to having open dialogue and transparent communications. The community information line remains operational and the phone number is 867-695-3158. People are encouraged to call if they have any questions regarding the incident.

The safety of people and the protection of the environment are our highest priorities and the Company is doing its best to ensure there is no impact to the land, wildlife and waterways. We are committed to regaining the community’s confidence in Enbridge as a reliable operator and safe transporter of energy.

[emphasis added]

Appeal Tribunal allows partial transfer of dairy quota from son back to father

Steven Baes is a dairy farmer.  Adjacent to his dairy operation is another dairy farm owned by a corporation called Baeverdale Farms Ltd. The owners of the farm corporation are Steven's father and mother, Leon and Bernadette Baes, and his brother and sister-in-law, Michael and Melissa Baes.  In 1994, Leon Baes transferred approximately 11 kgs of quota to his son Steven in an effort to get him started in dairy farming. The elder Mr. Baes' transfer arrangement was that in the event of any changes in Steven's circumstances, the quota would be returned to the father for his own dairy operation which is now Baeverdale Farms Ltd. (Baeverdale).

Steven subsequently purchased additional quota for his own dairy farm operation.  According to Baeverdale, a similar verbal agreement was made to transfer such additional quota to the family held operation should Steven ever run into problems in the future or decide to leave the dairy business.  Over the years some quota was returned to the father.  Steven Baes requested an exemption from DFO's policy to allow him to transfer all of his remaining quota to Baeverdale, and to allow the merger of the quota under one licence.  The Dairy Farmers of Ontario (DFO) denied the request to transfer the quota.  Baes appealed to the Agriculture, Food and Rural Affairs Appeal Tribunal.

DFO contended that the proposed transfer was not permitted under the current quota transfer policy, saying that this type of transfer has not been allowed since 2006.  The DFO witness outlined three alternative options for the transfer of quota:

1.  Baes could sell his quota on the exchange, and Baeverdale could buy quota from the exchange, recognizing this would be a slow accumulative process.

2.  Baes could transfer his quota to Baeverdale and Baeverdale could continue to operate two different barns with two different licences. This would prevent the merger of the quota to operate under one licence.

3.  Baes could sell his quota and Baeverdale could sell their dairy farm and buy a dairy farm with more quota if they wanted a larger dairy operation.

The Tribunal ruled that two different amounts of quota were in play in this case.  First, there was quota initially bought by the father and transferred to the son in 1994.  Second, there was quota purchased by the son directly from the exchange and not part of the original transfer from the father. 

The Tribunal found that the son had actually begun to transfer back quota to his father beginning in 2003 pursuant to their agreement, prior to the DFO policy changes that now prohibit the transfer of quota.  Of 11 kg in total first transferred by the father, 7 kg had already been returned.  The Tribunal determined:

The uniqueness as it applies to this situation is that it involved a transfer back agreement made in 1994, which DFO accepts; and it is shown to have been an ongoing transfer back since 2003 only interrupted by DFO's policy change in 2006. Such a transfer back between the parties would have been allowed under policies prior to 2006, and the appellant and his father anticipated that this policy would continue. To the Tribunal Panel's knowledge, there have been no cases before the DFO Board that involved a son to father transfer that had its original transfer agreement prior to 2006 and had been in the process of being completed.  The uniqueness and extenuating aspect in this case is that it involved a verbal agreement between the father and son that predates the limiting policy change by 12 years, and was in the ongoing process of completion.

On this basis, the Tribunal permitted the completion of the transfer back to the father that was contemplated in the original 1994 agreement.  This transfer back was limited to the quota that was originally transferred from father to son.  It cannot include the quota that was purchased by the son on the exchange.
Read the decision: Steven Baes vs. Dairy Farmers of Ontario (DFO).

Saskatchewan Court of Appeal awards farm to son

In a recent decision, the Saskatchewan Court of Appeal has ordered that parents, Barbara and Alfred Raymond transfer their one-quarter interests in a quarter section of land to their son, Barry.  The trial judge in the proceeding had instead ordered the payment of damages as opposed to specific performance of a transfer agreement that was found to have been in place between parents and son.

Barbara and Alfred are deceased, but their estates were respondents in the appeal.  The action by Barry arose out of a broader dispute between him and his brother, Alan, as to their succession to the farm land owned by their parents.  The trial judge found that a valid sale agreement for one-half of one quarter section of land had been in place between the parents and Barry and should be enforced.  Barry already owned another one-quarter interest in the property.  However, the judge declined to award specific performance of the agreement (i.e. the transfer of the land) because it was found that the land involved was not "unique or irreplaceable in the sense that it cannot be compensated by damages."  Instead, the trial judge awarded $70,500, which was one-half of the appraised value of the property.

The Court of Appeal decided differently and awarded the land to Barry.  The Court commented on the change in the law that took place in 1996 following a Supreme Court of Canada decision:

Until 1996 it had long been a tenet of our law that each parcel of real property was inherently unique. Given this inherent uniqueness, our courts made the equitable remedy of specific performance readily available to a plaintiff purchaser who claimed the vendor had breached a contract for the sale of real property. In 1996, Sopinka J.’s majority decision in Semelhago v. Paramadevan, 1996 CanLII 209 (SCC), [1996] 2 S.C.R. 415 (“Semelhago”), questioned these longstanding, rudimentary elements of our law of real property. His comments, although obiter, were thereafter generally accepted as law. However, Sopinka J. did not so much make new law as remind us that a basic legal rationale based on the presumed inadequacy of expectation damages has always underpinned the availability of specific performance as a remedy in cases involving real property. Unfortunately, post-Semelhago there has been some confusion as to when the remedy of specific performance will be made available to an aggrieved prospective purchaser of land. For this reason, Semelhago has been criticized for founding legal uncertainty in once settled law. This appeal results in part from that uncertainty.

The Saskatchewan Court of Appeal says that the SCC decision in Semelhago does not stand for the proposition that the presumption of uniqueness has been supplanted by a presumption of replaceability.  Judges must not longer presume the inadequacy of damages (i.e. a monetary payment rather than the land itself) as a remedy whenever real property is involved, but instead a judge must decide whether, in the cirucmstances, damages would be an inadequate remedy.  The Court of Appeal described the inquiry as follows:

In practical terms, this means the prospective purchaser bears the burden of adducing evidence that the subject property is specially suited to the purchaser and that a comparable substitute property is not readily available. These evidentiary points are necessarily intertwined because, on the basis of the evidence, the prospective purchaser must discharge the overall burden of persuading the judge that the subject property is so different from others that damages is an inadequate remedy and that justice dictates the purchaser should have the subject property. The judge, in turn, must conduct a critical inquiry on the evidence as to the nature and function of the subject property in relation to the prospective purchaser. The evidence and analyses will necessarily overlap, but the overall question the judge must answer is whether the justice of the matter calls for an award of specific performance because damages would be inadequate.

In the circumstances of this case, the Court of Appeal found that the land held unique value for Barry and was not simply a commodity.  It commented on Barry's specific case and on the unique value of family farm land in general:

It cannot be said that the Land is, or that Barry treated the Land as, more akin to a commodity than a tract of land having special attributes not found in any other farm land. The Land is immediately across the road from Barry’s home quarter. Barry already owns an undivided one-quarter interest in the Land. The Land once belonged to his grandfather and is home to his parents’ yard-site. Barry used the Land for over 40 years, with his parents, his brother, and his deceased son. These factors or attributes are cogent and impossible to value precisely. On this basis, I would find that an award of damages cannot restore Barry to the position that he would have been in had the Parents’ Estates performed under the agreement for sale of the Parents’ Interests. Furthermore, Barry’s evidence was also that there are no “reasonable yard-sites” located in close proximity to his home quarter. Whether or not reasonable yard-sites are available, no other yard-site could have the attributes of the Land. In other words, there is no comparable substitute property, let alone one that is readily available. If there is any farm land in respect of which compensatory damages is inadequate, it is typically that farm land which sits directly across the road from a farmer’s home quarter. This is especially so where the farmer has an existing legal interest in it, strong emotional and familial ties to it, and sound economic reasons for making it part of his farming operations. Whether pre- or post-Semelhago, such farmland is “unique” and the appropriate remedy in such a case is an order for specific performance.

Read the decision at: Raymond v Anderson.

Saskatchewan farmer loses appeal over Roundup Ready canola that wasn't Roundup Ready

The Court of Appeal for Saskatchewan has dismissed the appeal of Lawrence Scraba of a decision dismissing his claim for damages over canola seed.  In 2005, Scraba had purchased from Sharpe's Soil Services Ltd. (the defendant in the action and the respondent on the appeal) about 270 acres' worth of Nexera 828 IP canola seed.  Scraba was of the understanding that the seed was Roundup Ready, but it was not.  Scraba spayed the crop with Roundup "with the inevitable result that the herbicide killed all of the Nexera 828 canola plants". 

Scraba sued Sharpe's claiming that the canola seed was not fit for purpose or not of merchantable quality, or both, and, in the alternative, that his loss of crop was the result of Sharpe's Soil Services Ltd.'s negligence or breach of duty, or both, in selling canola seed that was not Roundup Ready.  The trial judge dismissed all of these claims and granted Sharpe's judgment in respect of a debt owing for the purchase of the seed.  The trial judge concluded, and the Court of Appeal agreed, that Scraba had received what seed he had asked for (what was required to fulfill a grower's contract he had in place) and, in the circumstances, Sharpe's did not have a duty to warn Scraba that the seed was not Roundup Ready.  The trial judge had found that Scraba had never communicated to Sharpe's that he wanted Roundup Ready seed (only the seed identified in the IP grower's contract).

Read the trial decision at: Scraba v Sharpe's Soil Services Ltd. Trial.

Read the appeal decision at: Scraba v Sharpe's Soil Services Ltd. Appeal.

Ontario Expropriation Association - New Information Page for Expropriated Landowners

I am a member of the Ontario Expropriation Association (OEA), a group made up of lawyers, appraisers and other professionals whose work involves the expropriation of land in Ontario.  The OEA has recently created a new page on its website directed at landowners who are facing expropriation: Information for Expropriated Landowners.  Landowners can also search the listing of OEA members on the website to find professionals to assist them with the expropriation process.