Canada: Alberta Court Of Appeal Protects Confidentiality Of Alberta Energy Regulator's ADR Process And Clarifies What Evidence Can Be Relied On When Seeking Permission To Appeal

The Alberta Court of Appeal's decision in Bokenfohr v Pembina Pipeline Corporation, 2016 ABCA 382 provides an important reflection on admissibility of evidence in the permission stage of an appeal in the oil and gas context. The decision was a result of an application by the respondent, Pembina Pipeline Corporation to strike from the record a number of affidavits filed in support of an application to appeal from a decision of the Alberta Energy Regulator (AER) to approve a pipeline. In considering the precise wording of section 45(7) of the Responsible Energy Development Act, SA 2012, c. R-17.3 (Act), the Court of Appeal held that evidence, including evidence that was not before the Regulator at the time of the decision, may be admissible at the permission stage of the appeal process so long as it is relevant to the determination. However, the admissibility of such evidence at the permission stage of the appeal process should not be interpreted as admissibility of the same evidence in the appeal itself.

Background

There is no appeal of a decision of the AER as of right. Appeals to the Court of Appeal are contemplated by s. 45(1) of the Act and are limited to "a question of jurisdiction or on a question of law". The application to appeal in this decision was brought by a number of landowners who had opposed Pembina's application to build a pipeline from Fox Creek to Namao Junction. The AER, who approved the application, held a 13 day hearing, involving 41 witnesses and substantial documentary evidence. In seeking leave to appeal, a number of landowners filed affidavits in support of that application.

The respondent, Pembina, argued that section 45(7) prevented the admission of certain information included in the landowners affidavits.  Pursuant to section 45(7) of the Act, on hearing of an appeal, no evidence may be admitted other than the evidence that was submitted to the Regulator on the making of the decision being appealed. The evidence in the challenged affidavits was characterized as follows:

(a) information that is duplicitous because it is already on the record;

(b) information that postdates the hearing, and accordingly could not have been known by the Regulator when it made the decision;

(c) information about the confidential alternative dispute resolution process used by the Regulator;

(d) information about decisions made by the Regulator and the Surface Rights Board after the decision presently being challenged, for which there are other avenues of relief; and

(e) information which is irrelevant to the application for permission to appeal.(para 4)

Section 45(7)

The Court of Appeal drew a distinction between the "application for permission to appeal" and the appeal itself, noting that the issues in each would be different.  If an appeal is granted, the issue will be whether there is an "error in law or jurisdiction". An application for permission to appeal, on the other hand, is based on different considerations such as:

(a) Is the issue of general importance?

(b) Is the point raised of significance to the decision itself?

(c) Does the appeal have arguable merit?

(d) What standard of review is likely to be applied?

(e) Will the appeal unduly hinder the progress of the proceedings? (para 5).

The Court of Appeal held that, based on the precise wording of section 45(7), it did not apply to the  permission stage of the appeal process, rather, its application was limited to the evidence considered in the appeal itself. Accordingly, the Court of Appeal held that evidence can be introduced on an application for permission to appeal, so long as it is relevant. However, because evidence is permitted or introduced in the application for permission to appeal stage does not by extension make such evidence part of the appeal record. A separate application made under Rule 14.45 will still be required to overcome the prohibition of section 45(7) of the Act to have the evidence introduced in the appeal itself.

Arguments as to relevance and admissibility, according to the Court of Appeal, will be deferred to the duty judge who hears the application for permission to appeal, with two exceptions: (1) affidavits which reproduce information already on the record; and (2) affidavits that refer to the Alternative Dispute Resolution process authorized by section 46 of the Act.

With respect to the first exception, Pembina argued that the only way to bring evidence from the Regulator's record into the appeal is under section 45(4) of the Act. Section 45(4) of the Act provides that the Court of Appeal may, on application or motion or on its own, if satisfied that a transcript or other materials are necessary for the purpose of determining the application for permission to appeal, direct the Regulator to provide the same within a specific timeframe. Accordingly, Pembina argued, that the landowners were not entitled to attach to their affidavits any documents that formed part of the hearing before the Regulator. The Court of Appeal reminded parties that they are expected to identify and bring forward evidence that is relevant to the application and held that affidavits containing relevant evidence that was before the Regulator at the hearing are unobjectionable.

Process of Alternative Dispute Resolution

With respect to information contained in the affidavits which related to the ADR procedure used by the Regulator, the Court of Appeal noted that it specifically provides that the process be considered confidential and privileged: Alberta Energy Regulator Rules of Practice, rule 7.7 and Manual 004: Alternative Dispute Resolution Program and Guidelines for Energy Industry Disputes. Although the landowners signed acknowledgements of that, they argued that the Regulator had blurred the line between consultation and mediation, and between its decision making and ADR process, and that accordingly, there was a point where privilege was compromised. The Court of Appeal agreed that the references in the affidavits to the ADR process related to the actual hearing, however, they went on to confirm that any evidence about the ADR process is confidential (and in the circumstances, irrelevant). The Court of Appeal, in upholding the confidential nature of the ADR process, ordered that the whole of any affidavit that refers to that process be struck from record.

Implications

The Court of Appeal's confirmation of the sanctity of the privileged and confidential nature of the ADR process under AER Rule 7.7 and Manual 004 will put many at ease.  However, perhaps of more import is the Court of Appeals commentary with respect to the admissibility of evidence.  Going forward, it would appear that the Court of Appeal will accept evidence that was not before the Regulator at the permission stage of the appeal process so long as the evidence is considered relevant, however, the same will not be permissible at the appeal itself absent an application pursuant to rule 14.45. Therefore, while additional evidence may be adduced to meet the "permission to appeal" test, for example to show why the issue is of general importance, it cannot be used to bolster evidence for the appeal or to fill gaps in the evidence at the appeal hearing.  

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