Canada: Alberta Court Protects Regulatory Approvals From Collateral Attack But Allows Trespass Claim Founded On Aboriginal Title To Proceed (For Now…)

On June 5, 2015, the Alberta Court of Queen's Bench issued its decision in Ominayak v Penn West Petroleum Ltd., 2015 ABQB 342 (found here). On application by Penn West, the Court refused to strike a Statement of Claim in its entirety based on it being a duplicative of a similar claim against the Crown and an abuse of process. However, the Court ordered that the Claim must be amended to remove all allegations and relief sought which amounted to a collateral attack on regulatory approvals that had been previously obtained by Penn West.

The decision is a clear confirmation that Alberta courts will not allow claims, even when they are based on claims of aboriginal title, where they collaterally attack regulatory approvals when available steps were not taken to challenge those approvals directly.  On the other hand, the decision did allow a claim for trespass, founded on aboriginal title claims, to proceed to the next stage of the litigation notwithstanding the regulatory approvals that were in place. If this matter proceeds to trial, and if aboriginal title is ultimately established, an Alberta court may have to resolve the competing claim of aboriginal title against the right of the oil and gas industry to carry on oil and gas operations in good faith reliance on valid and unchallenged regulatory approvals.

Background Facts

In Ominayak, Justice Simpson of the Alberta Court of Queen's Bench considered an application by Penn West Petroleum Ltd. and Penn West Exploration (collectively, "Penn West") to strike a Statement of Claim (the "Claim") filed on November 29, 2013 (amended December 9, 2013) by the Lubicon Lake Nation (the "LLN"), in relation to lands in the vicinity of Sawn Lake and Haig Lake, Alberta (the "Lands"). The Claim asserted aboriginal title and rights on lands described as "traditional lands", and sought a declaration that all approvals that had been previously issued to Penn West for the production of oil on the Lands, were illegal and void. The Claim also included an allegation of trespass founded on the same claim of aboriginal title.

On June 7, 2013, the LLN had previously commenced an action against the provincial and federal governments, which also asserted aboriginal title and rights, and which sought a declaration that the approvals previously issued were either illegal and of no effect, or burdened and encumbered by the LLN's aboriginal rights (the "Crown Claim").  

Prior to conducting any activities related to the Sawn Lake Program, Penn West had obtained a number of regulatory approvals between April 2011 and December 2013 (the "Approvals"). During the course of its consultation with the LLN, Penn West had been advised by the Chief of the LLN that he had received a package of consultation materials from Penn West, and that he did not have any concerns with the Sawn Lake Program. Following this, Alberta Sustainable Resources and Development advised Penn West that consultation with respect to the Lands was adequate. Thereafter, the LLN apparently changed its position and, in May, June and August 2012, filed letters of objection with the ERCB. The objections were considered by the ERCB and rejected on the basis that the approvals did not directly and adversely affect the LLN. The LLN took no steps to challenge the ERCB's decision, including filing an application for judicial review.

Penn West sought to strike the Claim on the basis that it was an abuse of process since it virtually duplicated the Crown Claim, and since it constituted a collateral attack on regulatory approvals previously granted.

The Decision

After canvassing the applicable law, Justice Simpson held that while the Penn West action was identical to the Crown action in many respects, the causes of action were distinct, since the actions had been commenced against different defendants and involved different claims – private claims, in the case of the Claim against Penn West, and public claims, in the case of the Crown Claim. Accordingly, he concluded that duplication between the two actions did not constitute an abuse of process. Additionally, it was held that the LLN had to plead its right to possession in order to support its cause of action in trespass and as such, the duplication between the pleadings in the two actions in terms of the LLN's assertion of aboriginal title and rights, did not constitute an abuse of process. It was held that these issues were, at best, procedural in nature and, to the extent the assertion of aboriginal title and rights overlapped, concerns about inconsistent verdicts could be dealt with by way of consolidation of the two actions or an adjournment of one action until the other was concluded.

However, on the issue of collateral attack, it was found that the portions of the Claim attacking the validity of the Approvals were invalid, constituting a collateral attack. The Court ordered that the Claim be amended to remove those allegations. Citing the Supreme Court of Canada decision in Behn v Moulton Contract Ltd. (found here) and the British Columbia Court of Appeal decision in Canadian Forest Products Ltd. v Sam (found here), both 2013 decisions, it was held that there was a process in place with respect to a tribunal providing decisions subject to judicial review and appellate review, and that this was the process which must be followed until aboriginal title is established, neither of which, to date, had been done by the LLN. It was noted that since no issue was taken during consultation and, indeed, since Penn  West was advised by the LLN that there was no problem with the Project, "it is even a stronger case of a repudiation of the duties of mutual good faith that animates the discharge to [sic] the Crown's constitutional duty to consult First Nations."

Interestingly, the Court went on to state that "[t]o allow a collateral attack on the open and transparent tribunal process with the additional protection of judicial review and appellate review, would give rise to a high degree of risk for corruption", in that "[i]f the process can be collaterally attacked, it would create great temptation for corporations to offer payoffs to claimants or provide contracts to them for little or no service so as to avoid collateral attacks".

Industry Implications

The allegations in the Claim attacking the validity of the regulatory approvals were ordered struck. On this point, the Court made the following comments:

Further, it creates legal and economic uncertainty if the tribunal process is not followed and the authorization process highjacked by later aboriginal rights claims. How can a corporation proceed with authorized development if some time later it might face legal action despite its best efforts to follow the law?

In this sense, despite mixed success by Penn West on its motion to strike the Claim in its entirety, the court's application of the collateral attack doctrine may be viewed by industry as a positive step in terms of adding some degree of certainty and predictability to the Province's regulatory approval process. A party will be precluded from challenging the validity of regulatory approvals previously obtained, outside of the procedure specifically established for a challenge of this nature.

That said, this may have little practical effect in this particular case, given that the LLN has been left to establish its right of possession by way of aboriginal title and rights, and to pursue its claim in trespass.

The Court noted that at some point in the action, Penn West may wish to raise the validity of the Approvals as a defence, and that the issue of "statutory authority" may in turn be raised by the LLN in response, although these were "matters to wait for another day".  This is a critical component of the case, as it will bring directly into issue the question of whether the Alberta oil and gas industry is entitled to rely on the defence of statutory authority in response to a claim of trespass based on aboriginal title where oil and gas operations are conducted in good faith reliance on valid and unchallenged regulatory approvals.  It seems that were a court to find otherwise, it would significantly impact regulatory certainty and the settled expectations of the oil and gas industry.

We also note that the decision raises the fact that it is the Lubicon Lake Band led by Chief Billy Joe Laboucan, and not the claimant LLN led by Chief Bernard Ominayak, which is recognized by the provincial and federal governments as the elected representatives of the Lubicon Cree.  We expect that at some point in this litigation, and in the related Crown Claim, the question will have to be addressed as to whether the LLN has the authority to make the aboriginal title claim.

We intend to continue following this litigation and to report any further developments, including any judicial dispositions following a possible amendment of pleadings by Penn West to claim a defence on the basis of the validity of the approvals previously issued.

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
Similar Articles
Relevancy Powered by MondaqAI
 
In association with
Related Topics
 
Similar Articles
Relevancy Powered by MondaqAI
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