Canada: Alberta Energy Regulator Confirms That An Unsuccessful Applicant Cannot Seek A Regulatory Appeal Of Denied Application

Further to our publication of September 12, 2014 on "Vertical Compulsory Pooling of Oil and Gas Resources Appears to be Available in Alberta," ( found here) the AER, in a recent disposition letter (the "Disposition Letter"), has interpreted its enabling legislation as to what is a regulatory appeal, who can seek a regulatory appeal, and the test for regulatory appeal.

The Responsible Energy Development Act, ("REDA") fully came into force on March 29, 2014 establishing the Alberta Energy Regulator ("AER"). Part 2 Division 3 brought in the "Regulatory Appeal" process whereby certain of the decisions made by the Regulator may be appealed to the Regulator by "eligible persons". This procedure is new and neither the AER nor courts have had the opportunity to provide much guidance on it.2 In the recent Disposition Letter, in dismissing a request for a regulatory appeal, the AER confirmed that an unsuccessful applicant is not an "eligible person" having a right to request a regulatory appeal where no oral hearing was heard before the application was dismissed.  The AER's underlying rationale was likely that the decision is practical and prevents the regulatory appeal process from being abused by unsuccessful applicants.

Background

As we noted in our earlier blog post, in December 2013, the AER received an application for a vertical compulsory pooling.  That application was dismissed by the Authorizations Subsurface Oil and Gas Group ("ASOGG") of the AER without an oral hearing.  The unsuccessful applicant then filed a request for regulatory appeal of ASOGG's denial of its Application.

The Decision

Upon review of submissions by the parties and the ASOGG, the AER determined that the unsuccessful applicant was not an eligible person pursuant to section 38(1) of REDA. Pursuant to section 36(b)(ii) of REDA,  "eligible person" means a person who is directly and adversely affected by a decision of the Regulator that was made under an energy resource enactment, if that decision was made without a hearing. Therefore the issue considered by the AER was whether the unsuccessful applicant was directly and adversely affected by the AER's decision to deny its compulsory pooling application.  On its face, it would seem that an unsuccessful applicant would, in fact, be directly and adversely affected by the decision.  However, relying on the Alberta Court of Appeal decision in Windrift Ranches Limited v. Alberta Surface Rights Board, the AER held that an applicant whose application is denied is not a person who is directly affected by the denial decision.

In Windrift, a majority of the Court of Appeal was considering sections 28 and 42 to 44 of the 1980 ERCA. 3 Section 28 was a privative clause limiting judicial review of the Board's decisions subject to sections 43 (Review of order made without a hearing) and 44 (Appeal). While section 42 allowed the Board to review, rescind, change, alter or vary an order or direction made by it, or rehear an application before deciding it, section 43 permitted a person affected by an order or direction made by the Board without a hearing to apply to the Board for a hearing within 30 days of the date of the order or direction. The Court of Appeal held that a review without a hearing would entitle a person affected to invoke section 43 whereas a determination that no review was required would not be an "order or direction of the Board." The Court concluded that while section 42 empowered the Board to review, it did not give the appellant any right to a review. Since the Board did not conduct a review as contemplated by section 42, there was no right to a hearing under Section 43.

In the Disposition Letter, the AER equated section 56 of REDA to section 28 of the Energy Resources Conservation Act (ERCA). Section 56 of REDA similarly provides a privative clause limiting judicial review of the Board's decisions subject to sections 38, 42 and 45.4 The AER also equated section 38 of REDA (Request for regulatory appeal) to section 43 of the ERCA (Review of order made without a hearing) and, relying on Windrift, held that a person whose application to the AER is denied is not, by that fact, a person directly and adversely affected by the denial decision. According to the AER, to hold otherwise would put an unsuccessful applicant in a better position to demand a hearing than it has on the original application which the AER denied without a hearing pursuant to section 34 of REDA. The AER stated that this would frustrate the desire for finality in decision-making that is reflected in section 56 of REDA.

The AER also determined whether the factor for dismissal listed in section 39(4) of REDA applied to Applicant's request. The Applicant had argued that if it was found to be an "eligible person," section 4 of the Responsible Energy Development Act General Regulation [1] (the "General Regulation") requires the AER to grant it a regulatory appeal. The AER interpreted section 4 of the General Regulation to require the Regulator to hold a hearing only if it has decided to conduct a regulatory appeal and if an eligible person's concerns have not been addressed or resolved. The AER held that section 4 does not bear on the question whether a regulatory appeal request should be granted which must be decided in accordance with section 39(4) of REDA.

The Implications

The AER's Disposition Letter is important given the AER's interpretation of the new provisions in the REDA based on a case decided under different legislation. The AER relied on Windrift, which considered review and variance provisions in the 1980 version of the ERCA, and equated a regulatory appeal to a review and variance proceeding.  The AER had previously held, relying on the Responsible Energy Development Act Transition Regulation[2](the "Transition Regulation"), that review and variance proceedings, such as review hearing, became regulatory appeals when the REDA came into force.[3] However, given that REDA has separated review and variance into "regulatory appeal" and "reconsideration" in two different divisions, the validity of the AER's reliance on Windrift to interpret whether an applicant has standing to seek a regulatory appeal under REDA is yet to be confirmed. The AER is clearly attempting to uphold the principle of finality in the AER's decision-making as Applicants will be encouraged to put their best foot forward in the application stage and will not have recourse to a regulatory appeal when they are unsuccessful.  This may put the focus of the regulatory appeal back where the AER must believe it should be: on those who were not involved in the application process and who are directly and adversely impacted by a decision in which they did not participate.

BLG was counsel for the successful respondent in this application.

Footnotes

1 S.A. 2012, c. R-17.3.

2 It appears that there has only been one substantive reported regulatory appeal decision by the AER since REDA was enacted:  Prosper Petroleum Ltd. Regulatory Appeal of 24 Well Licences and a Letter of Authority Undefined Field, 2014 ABAER 013.

3 RSA 2000 c. E-10.

4 These sections provide for Request for regulatory appeal, Reconsideration of decisions, and Appeal on question of jurisdiction or law.

[1] Alta Reg 90/2013.

[2] Alta Reg 92/2013, section 2(3)(e). Note that pursuant to section 2(3)(d) every proceeding under section 39 or 40(2) of the Energy Resources Conservation Act, RSA 2000 cE-10 that has not been completed on the coming into force of REDA continues under Division 4 of Part 2 of the REDA (Reconsideration of decisions)

[3]Re Grizzly Resources Ltd.,2013 ABAER 19 at para. 4.

About BLG

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

To print this article, all you need is to be registered on Mondaq.com.

Click to Login as an existing user or Register so you can print this article.

Authors
 
In association with
Related Topics
 
Related Articles
 
Related Video
Up-coming Events Search
Tools
Print
Font Size:
Translation
Channels
Mondaq on Twitter
 
Register for Access and our Free Biweekly Alert for
This service is completely free. Access 250,000 archived articles from 100+ countries and get a personalised email twice a week covering developments (and yes, our lawyers like to think you’ve read our Disclaimer).
 
Email Address
Company Name
Password
Confirm Password
Position
Mondaq Topics -- Select your Interests
 Accounting
 Anti-trust
 Commercial
 Compliance
 Consumer
 Criminal
 Employment
 Energy
 Environment
 Family
 Finance
 Government
 Healthcare
 Immigration
 Insolvency
 Insurance
 International
 IP
 Law Performance
 Law Practice
 Litigation
 Media & IT
 Privacy
 Real Estate
 Strategy
 Tax
 Technology
 Transport
 Wealth Mgt
Regions
Africa
Asia
Asia Pacific
Australasia
Canada
Caribbean
Europe
European Union
Latin America
Middle East
U.K.
United States
Worldwide Updates
Registration (you must scroll down to set your data preferences)

Mondaq Ltd requires you to register and provide information that personally identifies you, including your content preferences, for three primary purposes (full details of Mondaq’s use of your personal data can be found in our Privacy and Cookies Notice):

  • To allow you to personalize the Mondaq websites you are visiting to show content ("Content") relevant to your interests.
  • To enable features such as password reminder, news alerts, email a colleague, and linking from Mondaq (and its affiliate sites) to your website.
  • To produce demographic feedback for our content providers ("Contributors") who contribute Content for free for your use.

Mondaq hopes that our registered users will support us in maintaining our free to view business model by consenting to our use of your personal data as described below.

Mondaq has a "free to view" business model. Our services are paid for by Contributors in exchange for Mondaq providing them with access to information about who accesses their content. Once personal data is transferred to our Contributors they become a data controller of this personal data. They use it to measure the response that their articles are receiving, as a form of market research. They may also use it to provide Mondaq users with information about their products and services.

Details of each Contributor to which your personal data will be transferred is clearly stated within the Content that you access. For full details of how this Contributor will use your personal data, you should review the Contributor’s own Privacy Notice.

Please indicate your preference below:

Yes, I am happy to support Mondaq in maintaining its free to view business model by agreeing to allow Mondaq to share my personal data with Contributors whose Content I access
No, I do not want Mondaq to share my personal data with Contributors

Also please let us know whether you are happy to receive communications promoting products and services offered by Mondaq:

Yes, I am happy to received promotional communications from Mondaq
No, please do not send me promotional communications from Mondaq
Terms & Conditions

Mondaq.com (the Website) is owned and managed by Mondaq Ltd (Mondaq). Mondaq grants you a non-exclusive, revocable licence to access the Website and associated services, such as the Mondaq News Alerts (Services), subject to and in consideration of your compliance with the following terms and conditions of use (Terms). Your use of the Website and/or Services constitutes your agreement to the Terms. Mondaq may terminate your use of the Website and Services if you are in breach of these Terms or if Mondaq decides to terminate the licence granted hereunder for any reason whatsoever.

Use of www.mondaq.com

To Use Mondaq.com you must be: eighteen (18) years old or over; legally capable of entering into binding contracts; and not in any way prohibited by the applicable law to enter into these Terms in the jurisdiction which you are currently located.

You may use the Website as an unregistered user, however, you are required to register as a user if you wish to read the full text of the Content or to receive the Services.

You may not modify, publish, transmit, transfer or sell, reproduce, create derivative works from, distribute, perform, link, display, or in any way exploit any of the Content, in whole or in part, except as expressly permitted in these Terms or with the prior written consent of Mondaq. You may not use electronic or other means to extract details or information from the Content. Nor shall you extract information about users or Contributors in order to offer them any services or products.

In your use of the Website and/or Services you shall: comply with all applicable laws, regulations, directives and legislations which apply to your Use of the Website and/or Services in whatever country you are physically located including without limitation any and all consumer law, export control laws and regulations; provide to us true, correct and accurate information and promptly inform us in the event that any information that you have provided to us changes or becomes inaccurate; notify Mondaq immediately of any circumstances where you have reason to believe that any Intellectual Property Rights or any other rights of any third party may have been infringed; co-operate with reasonable security or other checks or requests for information made by Mondaq from time to time; and at all times be fully liable for the breach of any of these Terms by a third party using your login details to access the Website and/or Services

however, you shall not: do anything likely to impair, interfere with or damage or cause harm or distress to any persons, or the network; do anything that will infringe any Intellectual Property Rights or other rights of Mondaq or any third party; or use the Website, Services and/or Content otherwise than in accordance with these Terms; use any trade marks or service marks of Mondaq or the Contributors, or do anything which may be seen to take unfair advantage of the reputation and goodwill of Mondaq or the Contributors, or the Website, Services and/or Content.

Mondaq reserves the right, in its sole discretion, to take any action that it deems necessary and appropriate in the event it considers that there is a breach or threatened breach of the Terms.

Mondaq’s Rights and Obligations

Unless otherwise expressly set out to the contrary, nothing in these Terms shall serve to transfer from Mondaq to you, any Intellectual Property Rights owned by and/or licensed to Mondaq and all rights, title and interest in and to such Intellectual Property Rights will remain exclusively with Mondaq and/or its licensors.

Mondaq shall use its reasonable endeavours to make the Website and Services available to you at all times, but we cannot guarantee an uninterrupted and fault free service.

Mondaq reserves the right to make changes to the services and/or the Website or part thereof, from time to time, and we may add, remove, modify and/or vary any elements of features and functionalities of the Website or the services.

Mondaq also reserves the right from time to time to monitor your Use of the Website and/or services.

Disclaimer

The Content is general information only. It is not intended to constitute legal advice or seek to be the complete and comprehensive statement of the law, nor is it intended to address your specific requirements or provide advice on which reliance should be placed. Mondaq and/or its Contributors and other suppliers make no representations about the suitability of the information contained in the Content for any purpose. All Content provided "as is" without warranty of any kind. Mondaq and/or its Contributors and other suppliers hereby exclude and disclaim all representations, warranties or guarantees with regard to the Content, including all implied warranties and conditions of merchantability, fitness for a particular purpose, title and non-infringement. To the maximum extent permitted by law, Mondaq expressly excludes all representations, warranties, obligations, and liabilities arising out of or in connection with all Content. In no event shall Mondaq and/or its respective suppliers be liable for any special, indirect or consequential damages or any damages whatsoever resulting from loss of use, data or profits, whether in an action of contract, negligence or other tortious action, arising out of or in connection with the use of the Content or performance of Mondaq’s Services.

General

Mondaq may alter or amend these Terms by amending them on the Website. By continuing to Use the Services and/or the Website after such amendment, you will be deemed to have accepted any amendment to these Terms.

These Terms shall be governed by and construed in accordance with the laws of England and Wales and you irrevocably submit to the exclusive jurisdiction of the courts of England and Wales to settle any dispute which may arise out of or in connection with these Terms. If you live outside the United Kingdom, English law shall apply only to the extent that English law shall not deprive you of any legal protection accorded in accordance with the law of the place where you are habitually resident ("Local Law"). In the event English law deprives you of any legal protection which is accorded to you under Local Law, then these terms shall be governed by Local Law and any dispute or claim arising out of or in connection with these Terms shall be subject to the non-exclusive jurisdiction of the courts where you are habitually resident.

You may print and keep a copy of these Terms, which form the entire agreement between you and Mondaq and supersede any other communications or advertising in respect of the Service and/or the Website.

No delay in exercising or non-exercise by you and/or Mondaq of any of its rights under or in connection with these Terms shall operate as a waiver or release of each of your or Mondaq’s right. Rather, any such waiver or release must be specifically granted in writing signed by the party granting it.

If any part of these Terms is held unenforceable, that part shall be enforced to the maximum extent permissible so as to give effect to the intent of the parties, and the Terms shall continue in full force and effect.

Mondaq shall not incur any liability to you on account of any loss or damage resulting from any delay or failure to perform all or any part of these Terms if such delay or failure is caused, in whole or in part, by events, occurrences, or causes beyond the control of Mondaq. Such events, occurrences or causes will include, without limitation, acts of God, strikes, lockouts, server and network failure, riots, acts of war, earthquakes, fire and explosions.

By clicking Register you state you have read and agree to our Terms and Conditions