1 Recent Judicial Decisions of Interst to Energy Lawyers
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RECENT JUDICIAL DECISIONS OF INTERST TO ENERGY LAWYERS MATTI LEMMENS1 AND BRETT CARLSON2 The past year was a busy one for the energy industry, with many reported decisions of significance. Key decisions regarding constitutional jurisdiction, duty to consult and judicial review kept the industry in a pattern of optimism and hesitancy. This article summarizes a number of recent judicial decisions and provides commentary on their significance to Canada’s energy industry. In particular, decisions reviewed in this article cover subjects including constitutional division of powers, the Crown’s duty to consult, oil and gas leases and purchase and sale agreements, environmental remediation and liability, insolvency, intellectual property, tax, remedies and injunctive relief, class actions, conflict of laws, arbitration and judicial review. In each case, the facts, a summary of the decision, and commentary on the outcomes and future implications for energy lawyers and the industry are canvassed.3 With the past year of decisions finishing with COVID-19 restrictions, the energy industry saw some of the most drastic change in recent memory. The industry will need to exercise perseverance in these tumultuous times in order to adapt, withstand and recover from the changes of this past year. TABLE OF CONTENTS I. CONSTITUTIONAL ................................................................................................................ 2 Reference Re Greenhouse Gas Pollution Pricing Act (Saskatchewan, Ontario, and Alberta)........................ 3 Reference re Environmental Management Act (British Columbia) .................................................................. 5 Attorney General of Quebec v. IMTT-Quebec Inc. ............................................................................................ 6 II. ABORIGINAL ......................................................................................................................... 7 Coldwater Indian Band et al v Attorney General of Canada ............................................................................. 8 William v British Columbia (Attorney General) ................................................................................................. 9 Athabasca Chipewyan First Nation v Alberta ................................................................................................... 10 Fort McKay First Nation v Prosper Petroleum Ltd ......................................................................................... 11 III. ENVIRONMENTAL REMEDIATION AND LIABILITY ............................................. 13 ConocoPhillips Canada Resources Corp v Shell Canada Limited .................................................................. 13 R v Resolute Forest Products Canada Inc. ........................................................................................................ 15 ISH Energy Ltd. v. Weber Contract Services Inc. ............................................................................................ 16 Bamrah v. Waterton Precious Metals Bid Corp. .............................................................................................. 17 Brookfield Residential (Alberta) LP (Carma Developers LP) v Imperial Oil Limited .................................. 19 IV. OIL & GAS COMPENSATION ......................................................................................... 20 Whitecap Resources Inc v Canadian Natural Resources Limited ................................................................... 20 Canadian Natural Resources Limited v Lisafeld Royalties Ltd. ..................................................................... 22 Karve Energy Inc v Drylander Ranch Ltd ........................................................................................................ 23 Hudson King v. Lightstream Resources Ltd. .................................................................................................... 24 1 Partner, Borden Ladner Gervais LLP, Calgary, Alberta. 2 Associate, Borden Ladner Gervais LLP, Calgary, Alberta. 3 The authors wish to thank Jesse Vreeken, Emma Morgan, Patricia McGauley, and Brett Nguyen for their contribution to this article. 1 V. REMEDIES & INJUNCTIVE RELIEF .............................................................................. 26 Prosper Petroleum Ltd. v Her Majesty the Queen in Right of Alberta .......................................................... 26 Coastal GasLink Pipeline Ltd. v Huson ............................................................................................................. 27 Enerplus Corporation v Copyseis Ltd................................................................................................................ 29 VI. INSOLVENCY ..................................................................................................................... 30 PriceWaterhouseCoopers Inc. v Perpetual Energy Inc. ................................................................................... 30 Third Eye Capital Corporation v. Resources Dianor Inc./Dianor Resources Inc. ......................................... 32 VII. STANDARD OF REVIEW ................................................................................................ 33 Canada (Minister of Citizenship and Immigration) v Vavilov ............................................................................ 34 Bell Canada v Canada (Attorney General) ........................................................................................................ 36 ENMAX Energy Corporation v. Alberta Utilities Commission; Capital Power Corporation v Alberta Utilities Commission; Milner Power Inc. v Alberta Utilities Commission ...................................................... 38 VIII. CONFLICT OF LAWS..................................................................................................... 39 Nevsun Resources Ltd. v Araya .......................................................................................................................... 39 Rdx Technologies Corp v Appel (RDX) ............................................................................................................. 42 Fort Hills Energy LP v Jotun A/S ....................................................................................................................... 44 IX. CLASS ACTIONS ................................................................................................................ 45 Stevens v Ithaca Energy Inc. ............................................................................................................................... 45 Kirk v Executive Flight Centre Fuel Services ................................................................................................... 46 Environnement Jeunesse c Procureur général du Canada .............................................................................. 48 X. INTELLECTUAL PROPERTY ........................................................................................... 49 Aux Sable Liquid Products LP v. JL Energy Transportation Inc. .................................................................. 49 Packers Plus Energy Services Inc. v. Essential Energy Services Ltd. ............................................................. 50 Western Oil Field Equipment Rentals Ltd v M-I LLC .................................................................................... 51 XI. TAX ........................................................................................................................................ 52 Birchcliff Energy Ltd. v. Canada ....................................................................................................................... 53 Canada v Alta Energy Luxembourg SARL ....................................................................................................... 54 XII. ARBITRATION .................................................................................................................. 56 Uber Technologies Inc. v Heller .......................................................................................................................... 56 I. CONSTITUTIONAL Increasing interest by provincial and federal governments to regulate various aspects of the environment and climate change, including oil transportation, greenhouse gas (“GHG”) emissions regulation, and environmental assessments, has led to a proliferation of division of powers disputes. This past year, the Supreme Court of Canada (“SCC”) firmly rebuked British Columbia’s (“BC”) attempt to regulate the interprovincial transportation of heavy oil. Additionally, the Quebec Court of Appeal (“QCCA”) reaffirmed important principles related to the jurisdiction of environmental assessments while also adding some clarity to the often murky doctrine of interjurisdictional immunity (“IJI”). Finally, three appeal Courts rendered decisions on the carbon tax, with all but the Alberta Court of Appeal (“ABCA”) holding that the law is constitutional. The 2 SCC is expected to hear this matter in September, 2020. Reference Re Greenhouse Gas Pollution Pricing Act (Saskatchewan, Ontario, and Alberta)4 BACKGROUND In 2019 and 2020, the Saskatchewan Court of Appeal (“SKCA”), the Ontario Court of Appeal (“ONCA”) and the ABCA released their reference decisions on the constitutionality of the federal Greenhouse Gas Pollution Pricing Act (“GGPPA”).5 Both the ONCA and SKCA found that the GGPPA was a valid exercise of federal power under