Paramount Resources Ltd v Grey Owl Engineering Ltd, 2024 ABCA 60

In the Court of Appeal of Alberta Citation: Paramount Resources Ltd v Grey Owl Engineering Ltd, 2024 ABCA 60 Date: 20240221 Docket: 2203-0114AC Registry: Edmonton Between: Paramount Resources Ltd Appellant/Cross-Respondent - and - Grey Owl Engineering Ltd, Keith Osmond Respondents/Cross-Appellants - and - WF Holdings Ltd, Chad Sletten, 2088752 Alberta Ltd carrying on business as Custom Fiberglass Contractors Ltd, P.G.T.

Holdings Ltd carrying on business as Chief Pipeline Contractors Limited Respondents _______________________________________________________ The Court: The Honourable Justice Jo'Anne Strekaf The Honourable Justice April Grosse The Honourable Justice Alice Woolley _______________________________________________________ Memorandum of Judgment Appeal from the Order of The Honourable Justice S.L. Kachur

Dated the 9th day of May, 2022 Filed on the 12th day of October, 2022 ( 2022 ABQB 333 , Docket: 1909 00014) _______________________________________________________ Memorandum of Judgment _______________________________________________________ The Court: Introduction [ 1 ] Paramount Resources Ltd (Paramount) owns a pipeline near Zama City, Alberta, located on Crown lands. In April 2018, Paramount discovered a leak in the pipeline. Paramount paid to remediate and restore the lands at a cost of approximately $20,000,000.

Paramount seeks to recover part of that cost from the respondents, who it says breached legal duties to it in relation to the installation of a fibreglass liner in the pipeline in 2004. [ 2 ] On May 9, 2022, the chambers judge summarily dismissed Paramount’s claim. She held that the claim was barred by operation of the Limitations Act , RSA 2000, c L-12 and declined to extend the limitation period pursuant to s 218 of the Environmental Protection and Enhancement Act , RSA 2000, c E-12 ( EPEA ). [ 3 ] Paramount appeals that decision.

It submits that its claim against the respondents is for contribution, such that either or both of s 3(3)(

e) and s 3(1.1) of the Limitations Act applies, meaning that its claim has been brought within time. It submits in the alternative that the chambers judge improperly constrained her discretion in applying s 218 and, as well, that a proper application of that

section results in an extension of the limitation period. [ 4 ] The chambers judge also considered, and rejected, the respondents’ application for

summary dismissal of Paramount’s claim on its merits; Grey Owl Engineering Ltd and Keith Osmond (the Grey Owl Respondents) cross-appeal that decision. [ 5 ] For the reasons that follow, we dismiss Paramount’s appeal. Having done so, it is unnecessary for us to consider the cross- appeal of the Grey Owl Respondents. Background [ 6 ] In 2001, Paramount, then known as Apache, installed a 1.59 km long 6” steel pipeline on Crown land near Zama City, Alberta.

In 2004, it decided to convert the pipeline into a carrier pipe through the installation of a 4” fibreglass liner. [ 7 ] The Grey Owl Respondents prepared a regulatory application related to the installation of the liner on Paramount’s behalf, work for which they say they billed Paramount $1673.68. The other respondents were involved in supplying and installing the fibreglass liner. [ 8 ] Paramount alleges that the pipeline was not at a depth appropriate for the addition of a fibreglass liner. A pipeline with a fibreglass liner must be installed below the frost line.

Otherwise, damage can be caused by water freezing between the liner and the outer carrier pipe. According to Paramount’s expert, the frost line was more than a metre deep. The pipeline was shallower, in some places as little as 0.4 m deep. [ 9 ] Nonetheless, from 2004 through 2015, when Paramount discontinued its operation, the pipeline did not experience any emulsion leaks. [ 10 ] In 2017, Paramount took steps to reactivate the pipeline and, in January 2018, the Alberta Energy Regulator approved its reactivation.

The pipeline came back online with production on approximately March 20, 2018. [ 11 ] On April 3, 2018, a fly over of the pipeline was completed and no leaks were detected. On April 11, 2018, a leak was discovered. On investigation, the field crew estimated that 290 m 3 of emulsion was released impacting 20,000 m 2 of land; it later discovered a further emulsion stain of 85 m 3 impacting 1,000 m 2 of land.

[ 12 ] A failure analysis completed by Paramount after the incident concluded that the pipeline failure occurred due to ingress of water into the annulus between the liner and the carrier pipe, which froze in the cold weather due to the frost line being deeper than the pipeline's depth of cover. [ 13 ] Paramount paid to remediate the damage caused by the pipeline leak, which it estimates to have cost in the range of $20,000,000.

Paramount remediated the damage pursuant to its understanding of its obligations under the EPEA ; however, no order was made or legal proceeding initiated to require it to undertake the remediation. [ 14 ] On February 6, 2019, Paramount filed its Statement of Claim against the respondents, making claims in both tort and contract related to what it alleges was the respondents’ failure in 2004 to ensure that the steel carrier pipe and fibreglass liner were installed below the frost line. [ 15 ] The respondents brought applications to summarily dismiss Paramount’s claim based on the expiry of limitation periods and on its merits; Paramount brought an application seeking an extension of the limitation periods pursuant to s 218 of the EPEA .

Decision Below [ 16 ] Section 3(1) (

b) of the Limitations Act grants a defendant immunity from liability “10 years after the claim arose”. Paramount submitted, however, that its claim only arose in 2018, when it remediated the leak, because its claim is a “claim for contribution” within the meaning of s 3(3)(e): 3(3) For the purposes of subsections (1)(

b) and (1.1)(b), … (

e) a claim for contribution arises when the claimant for contribution is made a defendant in respect of, or incurs a liability through the settlement of, a claim seeking to impose a liability on which the claim for contribution can be based, whichever first occurs; [ 17 ] Relying on the decision of this Court in Addison & Leyen Ltd v Fraser Milner Casgrain LLP , 2014 ABCA 230 , the chambers judge held that Paramount’s claim did not fall within the scope of s 3(3)(e). In particular, she held that to be a claim for contribution within the scope of s 3(3)(

e) Paramount would have to demonstrate that the respondents could have been directly liable to the Director for the environmental damage. She found that Paramount had not done so – that it was not possible to include the respondents within the definition of “persons responsible” under the EPEA : On the facts before me, I cannot accept Paramount’s position. To suggest that “person responsible” includes everyone who was ever involved in construction of a pipeline is not, in my view, what the EPEA contemplates.

I am not persuaded that, having been contracted to build a pipeline to carry a potentially polluting substance, the Defendants ever had “charge” of the substances transported within the pipeline. In my view, only Paramount ever had charge of the substances. [ 18 ] She concluded that Paramount’s claim was one of “simple negligence, not contribution, and section 3(3)(

e) therefore does not apply”. As such, the claim arose in 2004 and is barred by the passage of the 10-year ultimate limitation period, per s 3(1)(

b) of the Limitations Act . [ 19 ] The chambers judge did not discuss the potential application of s 3(1.1) of the Limitations Act . [ 20 ] The chambers judge declined to extend the limitation period pursuant to s 218 of the EPEA which provides: 218(1) A judge of the Court of King’s Bench may, on application, extend a limitation period provided by a law in force in Alberta for the commencement of a civil proceeding where the basis for the proceeding is an alleged adverse effect resulting from the alleged release of a substance into the environment.

(2) An application under subsection (1) may be made before or after the expiry of the limitation period.

(3) In considering an application under subsection (1), the judge shall consider the following factors, where information is available: (

a) when the alleged adverse effect occurred; (

b) whether the alleged adverse effect ought to have been discovered by the claimant had the claimant exercised due diligence in ascertaining the presence of the alleged adverse effect, and whether the claimant exercised such due diligence; (

c) whether extending the limitation period would prejudice the proposed defendant’s ability to maintain a defence to the claim on the merits; (

d) any other criteria the court considers to be relevant. [ 21 ] She noted the policy objectives of the Limitations Act and of the EPEA , with the Limitations Act favouring finality, while the EPEA “places primacy on the societal benefit of having a polluter to pay for cleanup, and recognizes the practical reality that environmental damage can sometimes go undetected for many years”. [ 22 ] She acknowledged that Paramount’s requested extension was quite small in the context of the s 218 jurisprudence; however, the key aspects of Paramount’s request were that it was a polluter seeking to make claims against another alleged polluter, and that this was not a case of a “long-undetected emission that became a problem for an innocent party many years later”.

Paramount had detected the leak after only a few days. She concluded:

If the leak truly was caused [by] the Defendants’ negligence, then dismissing the claim on the basis of the Limitations Act will result inunfairness. This is a necessary side effect of limitations legislation, counterbalanced by other policy considerations as discussed above.But

section 218 does not exist as a remedy to the inherent unfairness that can result from claims being limitation-barred. Rather, theEPEA intervenes to balance this against the societal injustice that can result when polluters escape expensive environmental remediationbills which, by their very nature, often go undetected for long periods of time: Lakeview Village at para 7. In sum, it is not clear to me that granting an extension on these facts would accord whatsoever with the purposes of

section 218. Therewas no long-undetected leak, and there is no question that a “person responsible” is available to pay. Absent these factors, and bearing inmind that

section 218 applications are about balancing the competing objectives of the EPEA and the Limitations Act, I can find no pathto granting an extension. On this basis, I decline to grant an extension under

section 218 of the EPEA. [23] She concluded Paramount’s claim against the respondents was time-barred and granted their application for

summarydismissal. [24] The chambers judge also, in the alternative, rejected the respondents’ claim for

summary dismissal on the merits because therecord left her with too much uncertainty to permit

summary resolution. She noted that the uncertainty arose in part from the passage oftime, observing that one of the respondents’ key witnesses had died and documents which might have explained the issues had been lost.She said that those problems “further support my decision that the policy considerations of the Limitations Act indicate against anextension under the EPEA”. Issues on Appeal [25] Paramount submits that the chambers judge erred by: (

a) Not characterizing Paramount’s claim as one for contribution and subject to s 3(3)(

e) of the Limitations Act; (

b) Not characterizing Paramount’s claim as one for contribution under the Tort-Feasors Act, RSA 2000, c T-5 and subject to s3(1.1) of the Limitations Act; and (

c) Not extending the limitation period pursuant to s 218 of the EPEA. Standard of Review [26] The chambers judge’s characterization of Paramount’s claim is primarily a question of law. It turns on the legal requirementsfor contribution either at common law or pursuant to statute, and on the proper

interpretation of s 3(3)(

e) and s 3(1.1) of the LimitationsAct. The chambers judge needed to identify those requirements and interpret those provisions correctly: Housen v Nikolaisen, 2002 SCC33 at para 8; Weir-Jones Technical Services Incorporated v Purolator Courier Ltd, 2019 ABCA 49 at para 10. [27] With respect to s 218 of the EPEA, the chambers judge’s

interpretation of the extent and scope of that provision must bereviewed on a standard of correctness. The ultimate decision on whether to extend the limitation period includes an element of discretion.Such discretionary decisions should not be disturbed unless they are based on an error of principle, they consider irrelevant factors, orthey are clearly unreasonable: Brookfield Residential (Alberta) LP (Carma Developers LP) v Imperial Oil Limited, 2019 ABCA 35 atpara 18. Analysis Section 3(3)(

e) of the Limitations Act [28] To fall within s 3(3)(

e) of the Limitations Act, Paramount’s claim must be for contribution, such that its claim only arosewhen it incurred liability in relation to the remediation of the spill – i.e., in 2018 – rather than in 2004 when the fibreglass lining wasinstalled: 3(3) For the purposes of subsections (1)(

b) and (1.1)(b), … (

e) a claim for contribution arises when the claimant for contribution is made a defendant in respect of, or incurs a liability through thesettlement of, a claim seeking to impose a liability on which the claim for contribution can be based, whichever first occurs; [29] The Supreme Court recognized the possibility of a common law claim for contribution between tortfeasors in 1997 – “theright of a tortfeasor who pays more than its share of the plaintiff’s damages to recover the excess amount paid from other tortfeasors”:Bow Valley Husky (Bermuda) Ltd v Saint John Shipbuilding Ltd, (SCC), [1997] 3 SCR 1210 at para 101, 153 DLR(4th) 385.

It has affirmed the availability of such claims in subsequent cases, while emphasizing that a claim for contribution exists “onlyif the third party is directly liable to the plaintiff”: R v Imperial Tobacco Canada Ltd, 2011 SCC 42 at para 139. [30] This Court has held that a claim for contribution may sound in tort or in contract, that regardless “of whether or not therespondent’s liability arises out of tort or breach of contract, the parties ought to be required to contribute their fair share of the judgment

commensurate with their share of fault”: Swift v Tomecek Roney Little & Associates Ltd , 2014 ABCA 49 at para 63 , leave to appeal ref’d, [2014] SCCA No 135; Petersen Pontiac Buick GMC (Alta) Ltd v Campbell , 2013 ABCA 251 at para 52 . [ 31 ] Consistent with the direction of the Supreme Court, subsequent cases confirm the need for the party against whom contribution is sought to be liable to the plaintiff to whom the claimant is potentially liable.

That is, case law confirms that a claim for contribution is distinct from a claim in negligence or breach of contract where part of the damages sought by the plaintiff arise from that plaintiff’s liability to another. In a claim for contribution, the claimant and the claimee must share potential liability to another.

If, for example, the claimee’s liability to the other is precluded by contract, then no claim for contribution can be made: Whitecourt Power Limited Partnership v Elliott Turbomachinery Canada Inc , 2015 ABCA 252 at paras 14-15 . [ 32 ] While “contribution and indemnity” are frequently referred to collectively, they are different concepts.

As summarized by the Newfoundland Court of Appeal in Ryan v Dew Enterprises Ltd , 2014 NLCA 11 at paras 54-55 : A claim for indemnity is a claim that another party save the indemnity-claimant harmless against loss or damage which the indemnity- claimant has incurred or suffered or will incur or suffer at the hands of another, and to reimburse the claimant in respect of such loss or damage. The claim may arise from an express contract, by implication of law or from statute. An example of a claim to indemnity arising from implication of law is where

an act is done at the request of another, the act turns out to be injurious to a third party and in consequence of doing the act the doer incurs liability to the third party … . … While the circumstances where an obligation to indemnify arises by implication of law are diverse, they are not open-ended. The obligation cannot be imposed simply by the exercise of ad hoc discretion.

As noted by Goodridge J. in Collavino , at paragraphs 18-21, just because a party may have a claim for damages over against a third party does not entitle him or her to a claim in indemnity or contribution. … A claim for contribution, on the other hand, is in one sense a claim to a partial indemnity. However, the basis of the right is different. As noted by Goodridge J. in Collavino at paragraph 18, the right to contribution is based on general principles of justice involving the equitable sharing of responsibility among persons who are jointly responsible for a claimed loss .

It usually arises as between joint debtors, contractors, trustees, sureties or tortfeasors. [Emphasis added] [ 33 ] As this quotation makes clear, contribution finds its foundations and justification in equitable principles related to fairness and the prevention of unjust enrichment. Those principles similarly require that “the claimant and the defendant were both liable to the third party” for a claim in contribution to arise: Petersen Pontiac at para 54.

See also, Swift at para 63 ; Architecture 2000 Inc et al v Moncton, a municipal body corporate et al , 2023 NBCA 50 at paras 30-31 ; Toronto Hydro v Gonte and City of Toronto , 2018 ONSC 4315 at para 85 ; RBC Life Insurance Company v Heritage Insurance & Consulting Ltd , 2014 ABQB 130 at para 11 , aff’d, 2014 ABQB 595 . [ 34 ] Paramount does fairly question the chambers judge’s reliance on the decision of this Court in Addison & Leyen . While referring collectively to “contribution and indemnity” in a number of instances, that case deals with the law of indemnity not contribution.

That reliance did not, however, result in a legal error. The chambers judge correctly identified the requirement that the respondents be potentially liable for the environmental damage to the party to whom Paramount is liable in order for Paramount to seek contribution from them. [ 35 ] Paramount submits that a claim for contribution can arise where the third party has liability to the claimant that relates to the claimant’s liability to a plaintiff, regardless of whether the third party is itself liable to the plaintiff.

It relies on the decision of Canadian Natural Resources Limited v Arcelormittal Tubular Products Roman SA (Mittal Steel Roman SA) , 2012 ABQB 679 , var’d, 2013 ABCA 279 , leave to appeal ref’d, [2013] S.C.C.A. No. 403.

That decision suggested that a claim for contribution requires only that the “ third party’s breach of duty to the defendant caused the defendant to suffer damage that is related to the damage that the plaintiff claims it suffered as a result of the defendant’s breach of duty to the plaintiff”: Arcelormittal at para 251 [emphasis in original]. [ 36 ] The decision in Arcelormittal does not, however, discuss the requirements of contribution set out in Imperial Tobacco at para 139.

Arcelormittal related primarily to the validity of a third-party claim; whether something can be properly advanced as a third-party claim is legally distinct from whether something is properly characterized as a “claim for contribution”.

In our view, Arcelormittal does not qualify the principle that a true claim for contribution arises from shared liability to a third party. [ 37 ] Paramount submits in the alternative that, if direct liability is required for a claim to contribution, then the respondents could be directly liable for the environmental damage, either to the Director under the EPEA or in negligence to the Crown as landowner. [ 38 ] It suggests the respondents could have been liable under s 107(1)(

c) of the EPEA as a “person responsible for the contaminated site” which includes “a person responsible for the substance” and “any other person who the Director considers caused or contributed to the release of the substance into the environment”. The chambers judge properly rejected Paramount’s submission that the respondents were “persons responsible for the substance”, because the evidence did not support the claim that they had charge or control of the substance at issue. There is no evidence the Director at any time considered the respondents to be persons who caused or contributed to the release.

As such, the respondents were never alleged to be liable under the EPEA as persons “responsible for the contaminated site” within the meaning of s 107(1)(c). Paramount’s statement of claim does not suggest the respondents had or breached duties owed under the EPEA . [ 39 ] As to the suggestion that the respondents could have been liable to the Crown as landowner in negligence, Paramount is not seeking contribution for liability to the Crown as landowner. Paramount seeks contribution for the amounts it paid to remediate the harm as required by the EPEA .

That the respondents could theoretically have liability a to a distinct counterparty (the EPEA liability is to the Director not to the Crown landowner) based on a different and at this point speculative legal basis (liability in tort to the Crown as landowner) does not make Paramount and the respondents “jointly responsible for a claimed loss” so as to give rise to a claim in contribution: Ryan at para 55 . [ 40 ] In sum, the chambers judge did not err when she determined that Paramount’s claim against the respondents fell outside the scope of s 3(3)(

e) of the Limitations Act in relation to common law contribution.

Section 3(1.1) of the Limitations Act [ 41 ] The chambers judge did not consider s 3(1.1) of the Limitations Act , which Paramount submits was in error given that Paramount relied on that section, albeit not primarily. Section 3(1.1) and the Tort-Feasors Act do not, however, assist Paramount. [ 42 ] Section 3(1) (

c) of the Tort-Feasors Act states: When damage is suffered by any person as a result of a tort, whether a crime or not, … (

c) any tort-feasor liable in respect of that damage may recover contribution from any other tort-feasor who is or would, if sued, have been liable in respect of the same damage whether as a joint tort-feasor or otherwise…. [ 43 ] Section 3(1.1) and (1.2) of the Limitations Act provide:

(1.1) If a claimant who is liable as a tort-feasor in respect of injury does not seek a remedial order to recover contribution under section 3(1) (

c) of the Tort-feasors Act against a defendant, whether as a joint tort-feasor or otherwise, within … (b) 10 years after the claim for contribution arose, … the defendant, on pleading this Act as a defence, is entitled to immunity from liability in respect of the claim for contribution.

(1.2) For greater certainty, no claim for contribution against a defendant in respect of damage referred to in section 3(1) (

c) of the Tort-feasors Act is barred by the expiry of a limitation period within which the person who suffered that damage could seek a remedial order. [ 44 ] Paramount cannot rely on the Tort-Feasors Act ; the amounts for which it claims contribution arose as a result of its obligations under the EPEA , not in tort. [ 45 ] Given Paramount cannot rely on the Tort-Feasors Act , it cannot rely on s 3(1.1) or, in this respect, s 3(3)(e).

Section 218 of the EPEA [ 46 ]

Section 218 of the EPEA grants a judge discretion to extend a limitation period “where the basis for the proceeding is an alleged adverse effect resulting from the alleged release of a substance into the environment”.

The judge must consider when the alleged adverse effect occurred, whether it ought to have been discovered by the claimant had the claimant exercised due diligence, potential prejudice to the defendant and, as well, “any other criteria the court considers to be relevant”. [ 47 ] In Brookfield at paras 11-13, this Court held that a decision pursuant to s 218 should take into account the purposes of both the Limitations Act and of the EPEA , and specified the relevant objectives of those statutory enactments: …A decision to extend the limitation period should have regard to the policy considerations behind both the Limitations Act and the Environmental Protection and Enhancement Act .

As noted, statutes of limitation are statutes of repose and finality. Actions must be commenced within set periods because: (

a) it is in the public interest that defendants be protected from ancient obligations, and that they be allowed to order their affairs going forward on the basis that those obligations will no longer be enforced; (

b) disputes should be resolved while evidence is still available, when the memories of witnesses are still fresh, and when (if necessary) pertinent expert evidence can be obtained; (

c) it is not unreasonable to require claimants to act in a timely manner, and to put defendants on notice of claims against them; (

d) claims should be adjudicated based on the standards of conduct and liability in place at the time, and not by applying the standards of today with hindsight. These objectives are considered to be important elements of public policy: Canadian Imperial Bank of Commerce v Green , 2015 SCC 60 at para. 207 , [2015] 3 SCR 801; Canada (A. G.) v Lameman , 2008 SCC 14 at para. 13 , [2008] 1 SCR 372; Bowes v Edmonton (City) , 2007 ABCA 347 at paras. 119-28 , 86 Alta LR (4th) 47, 425 AR 123. The discretion to extend limitation periods found in the Environmental Protection and Enhancement Act reflects competing policy objectives: (

a) the objective of much environmental legislation is that the “polluter pays”, and in some circumstances a polluter should not escape responsibility by the mere passage of time; and (

b) environmental contamination may be difficult to detect, meaning that the strict application of the “discoverability” rule to environmental claims may be unreasonable or unfair in some situations. It is noteworthy that the Environmental Protection and Enhancement Act implicitly recognizes the policy objectives behind limitation

statutes. It does not abolish limitation periods for environmental claims (as s. 3.1 of the Limitations Act does for sexual assaults), but merely provides a judicial discretion to extend them.

A balancing is therefore required of the competing policy objectives in the two statutes . [Emphasis added] [ 48 ] Relatively few cases have applied or analyzed s 218, and the provision does not have counterparts in other Canadian provinces, although some other provinces and Canada have addressed the issue of limitation periods in the environmental context: Lakeview Village Professional Centre Corporation v Suncor Energy Inc , 2016 ABQB 288 at para 11 ; The Environmental Management and Protection Act, 2010 , SS 2010, c E-10.22 , s 97; Limitations Act, 2002 , SO 2002, c 24, Sched B , s 17; Canadian Environmental Protection Act, 1999 , SC 1999, c 33 , ss 23, 98(7), 170(7), 180(7), 203(7), 215(2) and 240(7). [ 49 ] On the facts of Brookfield , the chambers judge declined to extend the limitation period where an environmental claim was discovered in 2010 and appeared to have arisen from events beginning many decades earlier; his decision in that respect was upheld by this Court, which noted that it was “amply supported” on the record: Brookfield at para 18. [ 50 ] In United Inc v Canadian National Railway Company , 2020 ABQB 413 , United had acquired land from the Canada Lands Company in 1999; Canada Lands had acquired the lands from Canadian National Railway Company (CNR) in 1995.

United had requested, but been refused, an environmental indemnification from Canada Lands. Between 2000 and 2004 it found and worked to address contamination on the land, and in 2005 it commenced an action against various defendants. In 2008, an application for

summary dismissal and for a s 218 extension had been considered but had been deferred to trial. Following this Court’s decision in Brookfield , which held that s 218 ought to be addressed prior to trial, the parties came back to court for assessment of s 218. [ 51 ] United’s position was that the claim arose in 1991-1992, which would fall outside the 10-year limitation period given the action was not commenced until 2005. The chambers judge granted United’s application for an extension under s 218.

He noted the modest extension requested (3-4 years), satisfied himself that the defendants were not materially prejudiced by the extension and found that the deficiencies in United’s due diligence were not fatal.

He also rejected CNR’s argument that United had voluntarily assumed the risk when it acquired the property, emphasizing the paramountcy of the polluter pays principle: United at para 139. [ 52 ] In Lakeview , the chambers judge held that s 218 was not limited to parties who contribute to pollution, and found that an extension could be granted in relation to a claim against a prior landowner, as well as against the polluter, noting that the “wording of the

section is broad” and that a landowner could be a person responsible pursuant to s 107 of the EPEA : Lakeview at para 53. She also suggested the factors under s 218 exist to ensure that the system for extending limitation periods is not open to abuse.

She concluded, on the facts before her, that “the time frame involved here is not so long ago that it would be unfair to allow the action to proceed against either party”: Lakeview at para 40. [ 53 ] In Wainwright Equipment Rentals Ltd v Imperial Oil Limited , 2003 ABQB 898 , the court considered the factors set out in s 218, but also that the plaintiff had not commenced an action within time, or discovered the environmental damage, in part because Imperial Oil had represented that it had removed underground gasoline and waste oil storage tanks from lands even though it had not in fact done so.

The court said that in addition to the factors set out in the legislation, it was also appropriate to consider the conduct of the parties: “I am satisfied that it would not be equitable to allow Imperial Oil to succeed with its arguments that there is insufficient or unknown evidence or facts to warrant an extension of any limitation period.

The insufficient evidence or missing information is, at least in part, due to the actions or non-actions of Imperial Oil”: Wainwright at para 14. [ 54 ] Paramount submits that the chambers judge erred by treating s 218 as confined to circumstances where no one has paid for the environmental damage, or to circumstances where there has been a long-undetected emission that became a problem many years later. It submits that, on its face, the provision can apply to claims by one responsible party against another and can apply where a leak arises from long-undetected risks, such as existed in this case.

Further, it submits that the chambers judge overstated the prejudice arising from the passage of time, particularly given the length of the extension requested here as compared to the length of extension at issue in prior s 218 cases. [ 55 ] We agree with Paramount that, to the extent her reasons could be understood as holding that s 218 cannot apply where the claim is by one responsible party against another, or where emissions are detected quickly, the chambers judge would be in error.

Section 218 does not create categories of permitted and unpermitted claims for which an extension can (or cannot) be granted. Instead, s 218 empowers a King’s Bench justice to exercise their discretion as to whether to extend a limitation period based on the listed factors as well as “any other criteria the court considers relevant” to the particular case. [ 56 ] We are not, however, persuaded that the chambers judge intended to constrain the operation of s 218 through statutory

interpretation or otherwise fettered her discretion. While she refers to the statutory objectives, she describes herself as “ applying

section 218 ” (emphasis added) and does not refer to any law related to statutory

interpretation. Her discussion of the timing of the leak, and the nature of Paramount’s claim, occurs in relation to the specific facts of this case, noting that “it is not the length of the requested extension but rather the facts of this case that distinguish Paramount’s request from the jurisprudence on

section 218 ” (emphasis added). In our view, the chambers judge was applying s 218 to the facts of this case, not interpreting it or constraining its application generally or categorically. [ 57 ] We are not satisfied that there are grounds for interfering with the chambers judge’s exercise of discretion in the application of s 218. She did not fail to consider any of the listed criteria in the provision, including the existence of prejudice, when the adverse effect arose and when it was detected.

Further, in balancing the policy objectives of the Limitations Act with the EPEA she was following the explicit direction of this Court in Brookfield . The policy objectives she emphasized in relation to the EPEA – the “polluter pays” principle and avoiding unfairness in applying the discoverability principle given the challenge of detecting environmental harm – were those expressly identified by this Court in Brookfield . [ 58 ] The fact that a party can pay to fix environmental damage does not preclude that party from seeking an extension of a limitation period under s 218.

The applicant in Lakeview , for example, had paid to remediate the environmental damage but was granted an extension pursuant to s 218. That the environmental harm has been remediated can, however, be considered by the chambers judge in

assessing the balance between the competing policy objectives of the Limitations Act and the EPEA on the facts of a particular case. [ 59 ] Read in the context of her review of the statutory objectives, that is what the chambers judge did here in distinguishing Paramount’s claim from those of other parties who have sought and obtained extensions pursuant to s 218. Paramount was a party responsible under the EPEA . It had discharged those obligations and had the means to do so.

That was not determinative of whether Paramount ought to receive an extension under s 218, particularly given that s 218 exists at least in part to ensure that a person responsible under the EPEA can obtain recovery from parties at fault at common law.

But it is nonetheless a factor a judge could turn their mind to in balancing the policy objectives of the EPEA and those of the Limitations Act to decide whether a s 218 extension ought to be granted. [ 60 ] Similarly, that a claimant seeking an extension under s 218 bears some responsibility for the pollution does not categorically preclude an extension from being granted. Nonetheless, a chambers judge may consider the relationship between the claimant, the pollution and the land on which the pollution occurred, in deciding whether to grant an extension pursuant to s 218.

In this case, Paramount owned the pipeline continuously from its construction in 2001 to the emulsion leak that gave rise to Paramount’s obligations under the EPEA . It had the ability to assess the depth of the pipeline when it was constructed, prior to its modification in 2004, at the time of its modification in 2004 and prior to resuming operation of the pipeline in 2018.

The relevance of this being a leak that was quickly discovered, rather than being a leak that occurred gradually over time, is that Paramount was positioned to manage the environmental risks arising from the depth of a pipeline that it had constructed, it had modified and that it had owned throughout.

In considering Paramount’s circumstances – its relationship to this pipeline and this pollution – the chambers judge considered a fact she was permitted to consider. [ 61 ] Finally, the chambers judge may properly consider the relationship between the claimant and the party against whom its claim is brought, along with the facts related to the pollution – its magnitude and the events leading up to it.

While the fact that the claim for contribution is from one polluter to another also does not categorically preclude a s 218 extension from being granted, the relationship between the claimant, the claimee and the pollution is a factor that can properly be considered in exercising the chamber judge’s discretion under s 218. [ 62 ] Read holistically, the chambers judge’s emphasis on Paramount as a person responsible for the pollution making a claim against an alleged polluter can be understood as taking into account these considerations.

As noted, the pipeline belonged to Paramount, and had since its construction in 2001, and Paramount had legal responsibility to remediate the leak from that pipeline. Until Paramount raised it in the context of these applications, there was no suggestion that the defendants were considered responsible under the EPEA (as opposed to those in Lakeview ). The defendants had a historical and limited role in the modification of the pipeline (the Grey Owl Defendants, for example, say they were paid some $1600 for filing a regulatory application).

While in some of the other s 218 cases the passage of time was much greater, so too was the role of the defendants in causing the pollution relative to the plaintiff seeking the extension.

This case is distinguishable from Wainwright , for example, less because the passage of time was much shorter, than because the defendant in Wainwright had apparent sole responsibility for the source of the environmental pollution and had misrepresented to the plaintiff more than once that it had removed the underground storage tanks. [ 63 ] The responsibility of the chambers judge here was to decide whether an extension ought to be granted given the respective objectives of the Limitations Act and the EPEA ; the chambers judge did not commit a reviewable error on the record before her in finding that the balancing of those objectives meant no extension ought to be granted.

Conclusion [ 64 ] The appeal is dismissed. Given that result, we do not consider the cross-appeal of the Grey Owl Respondents. Appeal heard on November 3, 2023 Memorandum filed at Edmonton, Alberta this 21st day of February, 2024 Strekaf J.A. Grosse J.A. Authorized to sign for: Woolley J.A.

Appearances: R. Datt M. Nadeau for the Appellant/Cross-Respondent, Paramount Resources Ltd G.A.E. Duckworth for the Respondents/Cross-Appellants, Grey Owl Engineering Ltd and Keith Osmond D. Pick (no appearance) D.J. Wilson for the Respondent, 2088752 Alberta Ltd carrying on business as Custom Fibreglass Contractors Ltd D.W. Dear, KC for the Respondents, WF Holdings Ltd and Chad Sletten D.M. Stults for the Respondent, P.G.T. Holdings Ltd carrying on business as Chief Pipeline Contractors Limited