Remington Development Corporation v. Enmax Power Corporation, 2011 ABQB 694

Court of Queen ’ s Bench of Alberta Citation: Remington Development Corporation v. Enmax Power Corporation, 2011 ABQB 694 Date: 20111110 Docket: 0801 14506 Registry: Calgary Between: Remington Development Corporation Plaintiff - and - Enmax Power Corporation, Enmax Corporation, and the City of Calgary Defendants _______________________________________________________ Reasons for Judgment of the Honourable Mr. Justice A. G. Park _______________________________________________________ [ 1 ] Behind this Special Application lies a Consent Order of November 29, 2010 in this Court signed by both parties.

In it, Clark, J. ordered in part: 2. Pursuant to Rule 7.1 of the Alberta Rules of Court , it is directed that the following Stated Issues shall be determined as provided for herein: (

a) is the purported assignment of any of the relevant Transmission Agreements from CP to Remington valid, binding and enforceable as against ENMAX?;

(

b) was Remington entitled to issue a notice terminating ENMAX's rights, benefits and privileges under and pursuant to one, some or all of the relevant Transmission Agreements? 3. The balance of the within action is stayed pending: (

a) disposition of the Stated Issues and any related or incidental matters in connection thereto referred above, including any appeals, and (

b) any subsequent determination by the Alberta Utilities Commission (“AUC”) as to whether one, some or all of the Transmission Lines should be relocated from the Interlink Lands. 5. In the event that the Stated Issues are resolved in favour of Remington (whether on the Special Application or on Appeal), ENMAX shall be directed to make an application before the AUC pursuant to the Hydro and Electric Energy Act, R.S.A. 2000, c.H-16 (the "Act") and its associated regulations to remove the Transmission Lines from the Interlink Lands.

In the event that ENMAX appeals any such decision, the obligation to make the application before the AUC shall be stayed pending the disposition of any and all appeals. 6. In the event the Stated Issues are resolved in favour of Remington, any resulting Order shall expressly provide that the AUC retains its jurisdiction under the Act and none of the Transmission Lines shall be removed or relocated in the absence of an Order by the AUC to do so.

Facts [ 2 ] On March 1, 1948 the Canadian Pacific Railway Company (CPR) and Calgary Power Ltd. (Calgary Power) reached an Agreement wherein CPR granted Calgary Power the right to place 3 towers and string wires carrying an electrical current of 120,000 volts on and over CPR’s property (the Interlink lands). The Interlink lands abut the north side of 10 th Avenue S.E. between Olympic Way S.E. and 6 th Street S.E., in the City of Calgary.

The Agreement required Calgary Power to provide strong and suitable towers and wires for their intended purposes and to maintain the towers and wires in a substantial manner to the satisfaction and approval of CPR. Calgary Power had the obligation to move the towers and wires to another location, if so required, by CPR. Calgary Power was further obliged to place and maintain the towers and wires at its sole cost and was further obliged to place and maintain the towers and wires so as not to interfere in any way with the CPR telegraph lines or their operations.

Finally, Calgary Power had an obligation to place and maintain the towers and lines so as not to interfere with the train services of CPR. There were other clauses dealing with Calgary Power’s assumption of risk of loss and damage of any kind, howsoever caused to the works of CPR, and dealing with Calgary Power’s indemnification of CPR for any loss or damages suffered by CPR as a result of the presence of the towers and lines on the property. Calgary Power agreed not to assign the Agreement or its rights and privileges contained therein without the written consent of CPR.

Two other specific clauses are important and must be set out: 9. That this Agreement may be terminated at any time by either party giving to the other party three (3) months notice in writing, and on the day so named in such notice, this Agreement shall terminate, and all rights, obligations and privileges thereunder shall come to an end, except the obligation of the Applicant to remove the said towers and wires and the right of the Railway Company to do so in the event of the failure of the Applicant to remove said towers and wires as hereinafter provided. 10.

And that upon the termination of this Agreement, the Applicant shall remove the said towers and wires from the property of the Railway Company at its own expense, and shall make good any damage caused to the property of the Railway Company by such removal.

Provided that if the said towers and wires are not removed by the Applicant within the period of one month from the date of such termination, then the Railway Company may remove them at the expense of the Applicant, or permit them to remain, in which latter case, the Applicant shall be deemed to have abandoned them, and the said towers and wires shall then become the property of the Railway Company. [ 3 ] For the privilege granted under the Agreement Calgary Power agreed to pay CPR an annual rental of $40.00 per year.

[ 4 ] On October 2, 1970, CPR and the City of Calgary (C of C), (successor to Calgary Power) executed a Power Transmission Line Agreement in substitution and in lieu of the March 1, 1948 Power Transmission Line Agreement.

This new Agreement provided for a substitution of prints which allowed additional towers to be placed by the C of C on the Interlink Lands. [ 5 ] On December 1, 1970, CPR and the C of C executed a further Agreement as a result of the application by the C of C for permission to place and maintain 4 poles and to string 6 wires containing 138,000 volts on, upon, over and along CPR’s Interlink Lands. As in the 1948 Agreement the C of C had the obligation to place and maintain strong and suitable poles, wires and works for the intended purpose to the satisfaction and approval of CPR.

The C of C had the obligation to move the poles, wires and works to another location as directed by CPR. Again the C of C had obligations to place and maintain the poles, wires and works at its cost so as not to interfere with CPR’s telegraph, telephones or other lines and further not to interfere with CPR train services. The C of C further was required to have its poles, wires or works placed so as to limit their inductive effects to a condition which will not interfere with CPR’s normal operation of its telegraph, telephone, and other communication and signal services.

If there was such interference the C of C had the responsibility to take all reasonable and proper steps to remedy such condition. As in the 1948 Agreement there was a clause dealing with the C of C’s assumption of risk of loss and damage of any kind, howsoever caused to the operations of CPR, and a subsequent indemnification by the C of C to CPR as a result of the presence of the poles, wires or works. There was a clause dealing with the assumption of risk and any loss or damage to persons entering CPR’s property for the purpose of constructing, maintaining, repairing or moving the poles, wires and works.

The C of C was required to pay all taxes, dues and fees imposed by any authority as a result of the poles, wires and works. The C of C was required to pay an annual rental to CPR of $4.00. Three further specific clauses are most relevant to this application and must be set out in their entirety: 10. That the Applicant shall not assign or sublet or dispose of this Agreement, or the rights and privileges hereby granted or any part thereof, without the written consent of the Railway Company first had and obtained. 11.

That this Agreement shall become effective on the date hereof and shall remain in force until terminated by either party hereto as hereinafter provided. Either party hereto may at any time terminate this Agreement by giving to the other party notice in writing of its intention so to do and naming in such notice a day, at least three (3) months after the giving of such notice upon which this Agreement shall terminate, and upon the day so named in such notice this Agreement shall terminate.

Provided, however, that should the Applicant make default at any time in the payment of the rent hereby reserved or fail or neglect at any time to fully observe, perform and keep all of the covenants, terms and conditions on its part herein contained, then the Railway Company may forthwith terminate this Agreement by notifying the Applicant in writing accordingly.

Provided further, that notwithstanding the termination of this Agreement in any manner herein provided for, that the Applicant shall be and remain liable to the Railway Company for all payments due and obligations and liabilities incurred hereunder up to the date of such termination and for the fulfilment of all obligations herein contained on the part of the Applicant to be observed or performed upon or after such termination. 12.

And that upon the termination of this Agreement, the Applicant shall remove the said poles, wires and works of the Applicant from the lands and property of the Railway Company at its own expense, and shall make good any damage caused to the lands and property of the Railway Company by such remova1.

Provided that if the said poles, wires or works are not removed by the Applicant within the period of one month from the date of such termination, then the Railway Company may remove them at the expense of the Applicant, or permit them to remain, in which latter case, the Applicant shall be deemed to have abandoned them, and the said poles, wires and works shall then become the property of the Railway Company. [ 6 ] On December 31, 1997 the C of C assigned to Enmax Corporation (Enmax) the 1948 Agreement and the 1970 Agreement with the consent of CPR under an Assignment and Novation Agreement. [ 7 ] As a result of these various Agreements Enmax operates a double circuit electrical transmission line and 6 electrical steel- lattice transmission towers on and over the Interlink Lands.

The towers are partially buried approximately 8 feet in the soil for support purposes. The two 138,000 kilovolt lines have been in continuous operation since 1948. The transmission towers run parallel to the CPR right of way and support approximately 475 metres of overhead electrical transmission lines. They represent 2 of the main feeds for supplying electricity to downtown Calgary. They feed into an Enmax electrical substation located at 302 - 10 th Avenue S.E. in Calgary. The electricity flowing into the substation feeds many thousands of users in the core of downtown Calgary.

The users include homes, businesses, medical facilities, fire stations, police headquarters and educational facilities. Enmax operates the transmission lines pursuant to 2 permits issued by the Alberta Utilities Commission (AUC) under the Hydro and Electrical Energy Act , R.S.A. 2000, c. H-16 (the Hydro Electric Act ).

[ 8 ] Neither the 1948 or the 1970 Agreements have any specific wording requiring Enmax’s consent for CPR to assign the Agreements. [ 9 ] Enmax has paid in full all annual rental fees owing to CPR under 1948 and 1970 Agreements. It continues to pay the annual rental fees to CPR under an Agreement between the parties until the issues under this Application have been finally determined. [ 10 ] Remington Development Corporation (Remington) is an Alberta corporation which specializes in commercial development. In 2002 Remington entered into an Offer to Purchase with CPR for 3 pieces of property.

The 3 pieces of property included: lands owned by CPR adjoining 9 th Avenue S.E. in the C of C; lands owned by CPR adjoining 10 th Avenue S.E. and included in the southern portion of the CPR right of way; and the Interlink Lands. It was the intention of Remington to develop these 3 properties into a site, called “Railtown” containing office, retail, entertainment and residential buildings. The Enmax electrical towers and transmission lines run across the Interlink Lands.

At the time of the purchase Remington was aware the Enmax Agreements revealed a need for it to terminate the Agreements to allow Remington to complete this development. Although Remington knew of the need to terminate the Enmax Agreements, it did not consider a need to apply to the AUC to relocate the transmission lines. [ 11 ] Before the property sale closed between CPR and Remington, CPR provided Remington with a document entitled “Former Interlink Site Property Information”. It referenced the 1948 Agreement between Calgary Power and CPR.

In this reference Remington was advised by CPR that the 1948 Agreement contained a 3 month termination provision. [ 12 ] Before the sale closed Remington and CPR agreed on December 10, 2002, through their respective solicitors acting on the sale, that there would be no permitted encumbrances registered against title to the Interlink Lands. Rather Remington would assume the unregistered leases and utility crossings (the 1948 and 1970 Agreements).

At no time did Calgary Power, the C of C or Enmax register as an encumbrance against title to the Interlink Lands, the 1948 and 1970 Agreements. [ 13 ] The sale of the Interlink Lands closed on or about December 17, 2002. Under the closing and pursuant to the December 10, 2002 Agreement, CPR assigned the Enmax 1948 and 1970 Agreements respecting the Interlink Lands to Remington under a document entitled “Assignment of Unregistered Permitted Encumbrances”. [ 14 ] Enmax received no advance notice from either CPR or Remington of the sale of the Interlink Lands.

Enmax learned of the sale after Remington acquired the Interlink Lands. Further Enmax received no advance notice of the Assignment of the 1948 and 1970 Agreements by the CPR to Remington.

It flows from that Enmax at no time consented to the Assignment of the Agreements. [ 15 ] On November 24, 2004 Remington caused to be submitted a Tentative Plan Application to the C of C for the purpose of subdivision and development of what its survey firm termed surplus railway lands for use with Remington’s adjacent lands. [ 16 ] On January 4, 2005 Enmax sent correspondence to the C of C advising it had reviewed the Tentative Plan Application and advised Remington would be required to obtain Enmax’s approval before proceeding with changes which could affect Enmax’s installations.

The letter indicated if Enmax provided its approval, Remington would be required to provide a 20 metre utility right-of-way for the transmission lines and would be responsible for maintaining clearance of buildings from the transmission lines. Enmax noted Remington would bear all costs involving any changes, including converting the overhead transmission lines to underground transmission lines.

Enmax did disclose there were existing 13 kilovolts underground power lines installed in a duct along the south side of 10 th Avenue S.E. outside the south limit of the subject area. [ 17 ] In accordance with its position advanced in this Special Application Remington disagreed with Enmax’s correspondence and on March 31, 2005 by notice in writing, Remington terminated the Agreements respecting the Interlink Lands. This notice of termination was provided in accordance with the 3 month termination clause in each Agreement.

The notice set out that the unregistered Utility Crossings in each Agreement was terminated and Enmax was directed to vacate the Remington Interlink Lands on or before June 30, 2005. [ 18 ] Prior to March 31, 2005 CPR had never requested Enmax or its predecessors to alter, remove or modify the transmission towers and lines on the Interlink Lands.

[ 19 ] Despite the notice of termination Enmax has refused to remove the transmission towers and lines from the Interlink Lands. The transmission towers and lines remain in operation without Remington’s permission. [ 20 ] Remington now wishes to develop the Interlink Lands. However it notes its development will be severely compromised with the continued presence of the high voltage transmission towers and lines.

It believes such a continued presence will acutely influence potential purchasers or tenants in its intended mixed use residential/commercial development. [ 21 ] Enmax relied in this application on the Affidavit of Wesley Kadonaga, its Vice-President Transmission. Remington objected in the application to certain paras. in the Affidavit as containing inadmissible evidence. However, there is evidence contained in other paras. to which no objection was made. Two such non-contested paras. state: 26.

The estimated cost of removing the transmission lines from the Interlink Lands and burying them is approximately $10 million per kilometre. Moreover, burying the Transmission Lines underground would: (

a) involve burying all portions of the transmission lines that are currently above-ground; (

b) be logistically difficult and expensive; (

c) involve having to reroute the underground transmission lines in a non-direct fashion which would involve more time, effort and costs; and (

d) involve road closures and traffic congestion to bury the transmission lines under the street lanes. 27. Taking into account the foregoing, the total estimated cost to bury and reroute the transmission lines would be approximately $11.8 million, excluding overhead costs and interest incurred during construction. [ 22 ] In addition Enmax noted, at present, Remington is missing one piece of property required to develop “Railtown”. Remington currently is the registered owner of a block of lands on 9 th Avenue S.E. in addition to the Interlink Lands.

However on April 9, 2007 CPR sold a third block of lands, the 10 th Avenue S.E. lands, to the Province of Alberta. Remington’s development of Railtown contemplated combining all 3 parcels of land. As a result of the sale to the Province of Alberta Remington in 2008 initiated litigation against CPR and the Province of Alberta. Remington sought damages over $150 million dollars from CPR and the Province of Alberta due to its allegation the sale prevented it from developing Railtown. That litigation is presently proceeding. In the interim Remington has no immediate plans for the vacant Interlink Lands.

Enmax noted further that Remington presently lacks subdivision and development approval from the C of C respecting the 9 th Avenue land block and the Interlink Land block.

As a result Enmax submitted not only is Remington not entitled to issue a notice terminating Enmax’s rights, benefits and privileges under the Agreements, but Remington but has no need to have the transmission towers and lines removed from the vacant Interlink Lands due to Remington’s present inability to develop the 3 parcels of land to create the “Railtown” project. [ 23 ] Kadonaga’s Affidavit provided it is the responsibility of the AUC to allow any alteration to an electrical transmission line.

The Affidavit further set out the present placement of the transmission lines is the most direct and economically feasible route available with the least impact on the surrounding commercial and residential area. It is an efficient, stable and reliable route. [ 24 ] Remington objected to Kadonaga’s evidence contained in paras. 12, 13 and 17 of the Affidavit. These paras. state: 12. Based on my experience, position and expertise together with my review of the relevant business records in this matter, ENMAX and

its predecessors in interest considered the identity, nature and character of CP as a federally regulated railway to be a material ingredient and of significant importance in entering into the Transmission Agreements and having constructed, modified and maintained the transmission lines and transmission towers. 13.

Moreover, again based on my experience, position and expertise together with my review of the relevant business records and legislation in this matter, given CP's status as a federally regulated railway company and the largely unchanged and stable nature of railway operations in Canada since the 19th century, ENMAX and its predecessors in interest, expected that it was unlikely that CP would seek or that the regulatory body would order the removal or any significant alteration or modification of the transmission towers or the transmission lines. 17.

Based again on my experience, position and expertise together with my review of the relevant business records in this matter, I also understand that CP has, at all material times, used and occupied the Interlink Lands solely for the purposes of railway operations. At the time of the construction of the transmission lines and transmission towers, CP's railway activities on the Interlink Lands were even more expansive in nature than today and included spur lines, a storage repair shop and a rail yard.

Even with that more expansive use of the Interlink Lands, ENMAX has no evidence that CP ever requested ENMAX's predecessors in interest to move or alter the transmission lines or transmission towers.

The granting of permission to construct transmission lines and transmission towers in the midst of expansive railway operations reinforced ENMAX's expectation that there would be little or no interference from CP or another federally regulated railway to move or alter the transmission lines and transmission towers. [ 25 ] Remington placed into evidence an Affidavit of Peter Merchant, who is the General Manager of the Real Estate Department of CPR. He advised the Real Estate Department’s duties includes specifying, marketing and selling CPR’s lands which have become surplus for railway operations.

He noted CPR has in Alberta approximate 800 similar Agreements to the March 1, 1948 Agreement and the December 1, 1970 Agreement at issue in this application. Merchant further noted in the 4 western Canadian provinces there exists approximately 2900 similar Agreements to the March 1, 1948 and the December 1, 1970 Agreements.

Finally he expressed in his Affidavit that in Western Canada in 2008 and 2009 CPR participated in approximately 20 land transactions in which CPR requested the purchaser to execute an assignment of unregistered encumbrances like the assignment executed by Remington in its purchase of the Interlink Lands. Remington ’s Position [ 26 ] Remington maintained CPR validly assigned the 2 Agreements to it. Remington noted the Agreements are not contracts of a personal nature. Accordingly the assignment made the Agreements enforceable and binding upon Enmax.

Remington further maintained, as an assignee, it was entitled to terminate and did terminate validly the Agreements under the termination clauses. In accordance with the Agreements Remington provided notice in writing to Enmax to remove the transmission towers and lines at Enmax’s expense from the Remington lands. Finally Remington argued in exercising its contractual right to terminate the Agreements, it did not place an uncontemplated burden on Enmax. Enmax ’s Position [ 27 ] Enmax argued the 2 Agreements were personal contracts involving a relationship between a railway company and a utility company.

Enmax noted its predecessors built and maintained the transmission lines and towers based upon the personal characteristics of CPR as a railway whose operations remained largely unchanged since its beginning. Enmax argued it is self-evident that it was of paramount importance to its predecessors that the towers and lines would be placed on land owned by CPR and the use of the land would be confined to placing a railway for the transportation of goods and passengers over it. Enmax maintained it made a great deal of difference to its predecessors that they were entering into contracts with CPR.

Enmax noted it was a factor of paramount importance to its predecessors that the contracts were executed with CPR, which would maintain and use the lands for the running of long term and stable railway operations. Enmax pointed to the identity and character of Remington as a commercial real estate developer which would develop the lands for commercial profit. Enmax observed Remington’s business is fundamentally different then the business of CPR. [ 28 ] As a result Enmax submitted the Agreements are personal contracts between CPR and Enmax’s predecessors and cannot be assigned without consent.

Enmax further noted the Agreements could not be assigned as any assignment would throw uncontemplated burdens on it. Enmax argued those two categories of contracts are unassignable. Enmax noted it never provided its consent to any assignments and as a consequence the purported assignment of the Agreements are not valid, not binding and not enforceable as against it. Thus Remington was not entitled to issue a notice terminating Enmax’s rights, benefits and privileges under the Agreements.

Reasons [29] As noted earlier, much of Enmax’s evidence in this application rests on the Affidavit evidence of Kadonaga. (paras. 12, 13 &17). Remington submitted 3 paras. of the Affidavit contained inadmissible evidence in that he speculated after the fact respecting theinterpretation of the Agreements. Remington noted Kadonaga provided evidence on what he believed Calgary Power and the C of Cactually intended before and at the time of execution of each Agreement.

Remington noted in the absence of any ambiguity, evidence onthe commercial nature and context of contracts after execution is inadmissible. [30] It is clear that Kadonaga identified the importance to Enmax and its predecessors of the personal identity, nature and characterof CPR as a party to the Agreements. He proffered that evidence on the basis of his experience, position, expertise and review ofhistorical records. Enmax argued Kadonaga’s evidence does not attempt to provide evidence on what the contracts meant and furtherdoes not attempt to provide evidence of commercial context after the fact.

Finally Enmax contended Kadonaga did not offer evidencewhich contradicted the words of the Agreements. [31] I agree with Enmax’s submission that corporations can supply evidence through its corporate representative who can acquirepersonal knowledge and information by reviewing relevant and reliable corporate records. Enmax cited the decision of Mason, J. inAlberta Treasury Branches v. Leahy (1999), 1999 ABQB 185 , 234 A.R. 201 (Q.B.).

At paras. 56-60 Mason, J. stated in part: To the extent that activities of a corporation are recorded in reliable documents, an authorized person may obtain the requisite personalknowledge by reviewing these and then speak to those activities, subject to compliance with the other rules of evidence. The deponentneed not be the most senior officer of the corporation, but someone whose background experience and employment responsibilitiesallows him or her to review and describe the corporation’s documents with sufficient scope in which to set out the corporation’s positionbased on those documents.

As noted above, Hiebert has deposed that she is principally responsible for the management of the WEM Loans. She states that she hasreviewed ATB’s files relating to the WEM Loans. She does not purport to have been personally involved in the transactions relating tothe WEM Applicants; she deposes that she did not join ATB until April 1997, which postdates the transactions in question. In manyparas. of the Hiebert Affidavit, Hiebert specifically identifies the ATB file documents she has reviewed to make her sworn statement.

Inother paras., it is obvious that her statements have been gleaned from ATB records and para. 7 of the Hiebert Affidavit establishes thatone of the sources of her knowledge is those records. I am satisfied that such evidence is admissible as personal knowledge... I question how else a corporation can give evidence under these circumstances, other than through a representative such as Hiebert whohas the requisite position and authority and who has reviewed the records of the corporation; a corporation is incapable of personallycomprehending facts.

Hiebert is in a suitable position to put ATB’s records of these transactions before the court and provide descriptions of those records toassist the court, provided this is done to provide a narrative as to the position of the corporation based on its records and does not gofurther into opinion and argument. [32] There is little doubt that Kadonaga as the corporation representative can provide evidence through his review of Enmax’shistorical and present corporate records.

In paras. 12 and 13 he sets out Enmax’s and its predecessors’ positions, in their consideration ofthe identity, nature and character of the CPR as a federally regulated railway to be a material ingredient and of significant importance inentering the Agreements, and subsequently constructing the towers and lines.

Kadonaga further set out his conclusion based on hisreview of the business records and legislation that Enmax and its predecessors expected it unlikely that CPR as a federally regulatedrailway running stable and unchanging railway operations, would seek the removal or significant alteration or modification of the towersand lines. [33] In assessing his evidence I note, despite the employment of the word “expertise” in the 3 questioned paras., Kadonaga was notproffered as an expert. As a result his evidence is restricted to his own personal knowledge obtained from the various business records.

What corporate records did he review? His Affidavit in the 3 paras. specifically referenced and set out the 3 Agreements of 1948, 1968and 1970. Other documents in his Affidavit were referenced such as permits and licenses issued by the Alberta Energy and UtilitiesBoard and the Assignment and Novation Agreement between the C of C, Enmax and CPR, but in my view those documents could notrelate to his evidence as contained in the specific 3 referenced paras. relating to Enmax’s consideration or expectations relating to theidentity, nature, character or status of CPR.

There were no other business records produced or attached to his Affidavit relating to the 3paras. despite his reference to his review of the relevant business records in the matter. Consequently it must be inferred that he was onlyspecifically referencing in those 3 paras. the Agreements. From my examination of the Agreements at no point in the Agreements isthere a specific reference to Enmax and its predecessors considering the identity, nature and character of CPR.

Nor do the Agreementsrefer to the expectations of Enmax and its predecessors’ ordering the removal or significant alteration or modification of the towers or thelines. Finally the Agreements do not reference Enmax or its predecessors expectations of little interference from CPR respecting themovement or alteration of the towers and lines. Not can it be inferred from the 2 Agreements that Enmax and its predecessors wereconsidering such points. [34] If there were other business records which Kadonaga examined, they were not produced for me to examine.

Consequently Ihave no ability to reach the same opinions as Kadonaga did in the those 3 questioned paras.. As an aside if Kadonaga had been qualifiedas an expert and had provided an expert opinion, the facts on which he is basing his conclusions must be proven, if his testimony is tohave probative value. See R. v. Abbey, (SCC), [1982] 2 S.C.R. 24 e.p.p. 42, 44 - 46. The expert’s opinion must be linkedto the facts disclosed by the evidence, otherwise it is a useless conjecture. See R. v. Bernshaw, (SCC), [1995] 1 S.C.R.254.

Finally, if the facts upon which the opinion is based are not found to exist, no weight can be given to the expert’s opinion. See R. v.Lavallee, (SCC), [1990] 1 S.C.R. 852. [35] Kadonaga did not provide evidence in the 3 questioned paras. as to which specific documents he referenced and provided inhis Affidavit. [other than the Agreements] for him to reach the conclusions he sets out in those 3 paras.

Those conclusions are foundedon what he believed Enmax and its predecessors considered and expected. [36] I find the evidence of Kadonaga is admissible in that it purports to be evidence about the identity, nature and character ofCPR, considered by the Enmax predecessors, as a material factor and of importance in entering into the Agreements.

Similarly hisevidence is admissible where it purports to set out the expectations of the Enmax predecessors that CPR as a stable railway operatorwould not seek to order the removal or order any significant alteration or modification of the towers and lines. [37] However due to the lack of provision of specific reference to the historical documents and business records reviewed byKadonaga and which would allow me to accept or reject his conclusions based on any facts contained in those documents I cannot findany facts to exist as set out in the historical documents or business records as they were not set out specifically in the Affidavit.

Therewere no historical documents or business records in existence prior to the execution of the 3 Agreements attached to Kadonaga’sAffidavit.

As a result, although his evidence is admissible, I pay little attention and attach no weight to his evidence as to what Enmaxand its predecessors considered or expected as set out in the 3 questioned paras. [38] The best inference which could be attributed to his evidence is that prior to signing the Agreements the Enmax predecessorspossessed a mere hope that CPR, as a federal railway, would be a stable and reputable party as the grantor under the Agreements.Similarly there could be a mere hope possessed by the Enmax predecessors that the towers or lines would not have to be moved oraltered at CPR’s behest and a further mere hope the CPR would not terminate the Agreements.

Nature of the Railway Transmission Agreements [39] Remington submitted each Agreement provides a utility right-of-way which was not registered on title. Despite this non-registration Remington pointed out

section 61 of the Land Titles Act, c.L-4, RSA 2000 specifically recognizes a right of way. It states inpart: The land mentioned in any certificate of title granted under this Act is, by implication, and without any special mention in the certificateof title, subject to (

f) any right of way or other easement granted or acquired under any Act or law in force in Alberta. [40] Enmax countered that position by submitting the Agreements are licences which are personal in nature.

[41] On their face the Agreements do not exhibit many of the characteristics associated with an easement. The Agreements do notmention an easement is created. Rather the Agreements limit Enmax’s use of the land from any interference with CPR’s use of the lands.Enmax and its predecessors are not granted exclusive possession of the land. [42] Enmax argued the termination clause in the Agreements is indicative of a licence and not an easement. In this connectionEnmax cited the decisions of Toronto (City) v. Jarvis (1895), 1895 CanLII 37 (SCC), 25 S.C.R., 237 and Forestburg (Village) v. James,[1998] A.J.

No. 1011 [Q.B.]. Enmax additionally referred to the decision of Erb, J. in this Court in Devon Canada Corp. V. CanadianPacific Railway, 2009 ABQB 143. Enmax submitted Erb, J. in determining the nature of crossing Agreements entered into by CPR witha number of companies permitting pipelines to cross under its tracks the following finding at para. 35: “I find that the Crossing Agreement is a license, given the fact that it does not purport to grant exclusive possession of the Land to theApplicants thereby according a true interest in land: Johnson v. British Canadian Insurance Co., (SCC), [1932] S.C.R.680 (S.C.C.).

Further, the fact that the Agreement can be terminated by either party upon three months notice is contrary to therequirements for an easement, which do not apply where rights granted are temporary: Canadian Pacific Ltd. v. Paul, (SCC), [1988] 2 S.C.R. 654 (S.C.C.) at paras. 19 to 22.” [43] Finally, Enmax referenced this definitive passage found in para 9 of the case of Wiener v. Elgin (County), [1974] O.W.N. 360 where the difference between an easement and a licence was provided. It stated in quoting from Gale on Easements, 11th ed. 1932, p.1: Again, an easement differs from a license.

When once an easement is validly created it is annexed to land. The benefit of its passes withthe dominant tenement and the burden of it passes with the servient tenement to every person into whose occupation the dominant andservient tenements respectively come. A license, on the other hand, unless coupled with a grant, is personal to both grantor and grantee,and neither binding on the assignee of the licensor nor generally assignable by the licensee.

A dispensation of license properly passes nointerest, nor alters or transfer property in anything, but only makes an action lawful which without it had been unlawful. [44] Consequently Enmax submitted the Agreements grant a mere personal licence which cannot be transferred or assigned. [45] In his text book, Principles of Property Law [5th ed.] Professor Ziff at ps. 327-380 set out 4 doctrinal characteristics whichtend to define easements. They are: 1. The presence of a dominant tenement (which enjoys the benefit of the easement) and a servient tenement [which is burdened]; 2.

The easement must accommodate the dominant land; 3. The dominant and servient tenements cannot both be in the hands of the same person; 4. The easement must be capable of forming the subject-matter of a grantor. [46] These Agreements do not strictly adhere to these doctrinal characteristics. Yet Professor Ziff noted at p. 377 and p. 379 theProvince of Alberta has created a statutory exception to the first and third doctrinal characteristics. That statutory exception is found insection 68 and

section 69 of the Land Titles Act, supra. It provides for the creation of various utility rights-of- way without beingattached only to a dominant tenement. [47] Professor Ziff provided a further recognition of a departure from the common law respecting the third doctrinal characteristic.He observed some jurisdictions, including the Province of Alberta, permit the registration of easements over lands owned and occupiedby one entity [i.e. CPR].

Section 68 of Alberta’s Land Titles Act specifically allow such registration. Those sections state:

Grant of easement, etc. by owner to himself or herself 68(1) An owner may grant to himself or herself an easement or restrictive covenant for the benefit of land that the owner owns andagainst land that the owner owns and the easement or restrictive covenant may be registered under this Act.

(2) When the dominant and servient tenements are registered in the name of the same person, an easement under subsection (1) is notmerged by reason of the common ownership. Utility right-of-way 69(1) If the registered owner of land grants to the Crown or a corporation a right on, over or under the land for (

a) carrying, laying, constructing, maintaining or using conduits, cables, wires, poles or transmission lines, [48] I am satisfied th at the Land Titles Act expressly provides a statutory exception to the common law requirements necessary foran easement by its creation of utility rights-of-way. The Agreements are standard form CPR Agreements which CPR uses to deal withoverhead power transmission lines running parallel to, or across its property. Here the Agreements granted Enmax and its predecessorspermission to place power poles and power lines on CPR property under certain conditions.

Those conditions mainly favour CPR and toa lesser extent favour Enmax and its predecessors. The Agreements primarily benefit CPR. That benefit is to be seen in the clausesdealing with non-interference, assumption of risk and damage, indemnification, and non-assignability without CPR’s consent. Above allelse the right to terminate the Agreements and to require the removal of the power poles and power lines at Enmax’s and itspredecessors’ expense demonstrate the bias contained in the Agreements towards CPR’s enjoyment of favourable conditions andbenefits.

Indeed the Supreme Court of Canada affirmed rights-of-way granted to power companies on railway lands are privileges. SeeCanadian Electrical Assn. v. Canadian National Railways, (SCC), [1932] S.C.R. 451 para. 3, aff’d [1934] J.C.J. No. 1. [49] These Agreements expressly defined the limitations placed on Enmax and its predecessors and expressly defined the expressright to terminate. Enmax and its predecessors executed the Agreements knowing full well of the limitations placed on access to CPR’slands and of the right to terminate on 3 months notice.

The Agreements as utility rights-of-way do not allow Enmax or its predecessorsthe ability to stand in the way of CPR’s right to sell its lands or CPR’s right to terminate the Agreements. If the assignment to Remingtonwas valid [to be determined later in these Reasons] Remington purchased the lands knowing of the provisions of the Agreements. Underthese Agreements providing utility rights-of-way Remington has the right to terminate the Agreements and has the current right to haveEnmax remove the power poles and power lines from the property at the expense of Enmax.

It follows that if Enmax wishes to place thelines underground, it will be at Enmax’s expense [subject to any rulings made by AUC]. [50] However if I am incorrect in my finding these Agreements are utility rights-of-way, I intend on dealing alternatively withEnmax’s argument that the Agreements are personal licences which cannot be transferred or assigned. [51] Initially it must be recognized the Agreements are not leases. Enmax does not enjoy exclusive possession of the land. A leaseis a grant of exclusive possession. A lease creates an interest in land.

A licence does not provide exclusive possession and licenceswithout more, do not create an estate or an interest in the land. Professor Ziff at p. 292 defines a licence as merely a permission to do thatwhich would otherwise amount to a trespass. The decision of Vaughan C.J. in Thomas v. Sorrell, [1673] Vaugh 330e p. 351, 134 E.R.1098 defined a licence in these words: A dispensation or licence properly posseth no interest, nor alters or transfers property in any thing, but only makes an action lawful,which without it had been unlawful. [52] In Gale on Easement 18th edition at p. 80 it is stated in part:

. . .A licence may be granted as part of a contractual arrangement. The relationship of the parties is then governed by the law of contractas to the

interpretation of its express terms and as to the implication of terms and as to the termination of the contract. There may be alicence coupled with a grant, for example, the grant of profit à prendre. Such a licence will last for the time that the profit endures. If thelicensor acts contrary to the terms of a contractual licence or a licence coupled with a grant, the court has available to it its usualremedies for breach of contract, including the remedies of injunctions and damages. Whether or not the benefit of the licence istransmissible depends upon the nature of the licence.

The benefit of a personal licence will not be assignable. The benefit of a barelicence will generally not be assignable or at any rate, the question may be largely academic if it is capable of being revoked at any time.The benefit of a contractual licence which is not a personal licence will be assignable. A licence coupled with a grant will generally beassigned upon an assignment of the right granted. The burden of a contractual licence does not pass to a successor in title of the licensor.This is because the licence does not create an interest in land.

If the licensor transfers the land in question to a successor who is notbound by the licence at a time when the licensor was not entitled to determine the licence, the licensor will be in breach of contract. Ifthe successor in title knowingly induced the breach of contract by the licensor, he may be liable in tort in accordance with generalprinciples. A licence coupled with a grant will bind a successor in title of the grantor if the right granted binds such successor.

There aremany cases where the courts have held that the licensee had not only the rights of a licensee but had greater rights acquired in accordancewith the principles relating to proprietary estoppel or constructive trusts. [53] In the case at bar if the Agreements are licences, they would be contractual licences containing a right of termination. Thetermination clause in each Agreement demonstrates the executing parties intended the Agreements could be terminated on 3 monthsnotice in writing. On the named termination date the Agreement comes to an end.

On that basis the Agreements are not permanent. [54] In this application Enmax argued each Agreement created a licence which is highly personal in nature and which cannot betransferred or assigned. [55] In addition Enmax argued any assignment of contractual rights is governed by the general rule which permits the assignmentof contractual “benefits” but prohibits the assignment of contractual “burdens”. [56] Enmax referenced the following statement by the Supreme Court of Canada in International Trust Co. v.

Mead, (SCC), [1990] 2 S.C.R. 410 per Wilson , J. [for the Court] at para. 35: The common law has long recognized that while one may be free to assign contractual benefits to a third party, the same cannot be saidof contractual obligations. This principle results from the fusion of two fundamental principles of contract law: 1) that parties are able tomake bargains with the parties of their own choice (freedom of contract); and 2) that parties do not have to discharge contractualobligations that they had no

part in creating (privity of contract). [57] In addition Enmax submitted a para. found in Chitty on Contracts, Vol. 1 (13 th; 2008) at paras. 19-077: Consent of other party required for release of contracting party. Everybody has a right to choose with whom he will contract and no-one is obliged without his consent to accept the liability of a person other than him with whom he made his contract. Consequently, theburden of a contract cannot in principle be transferred without the consent of the other party, so as to discharge the original contractor.As Sir R. Collins M.R. said in Tolhurst v.

Associated Portland Cement Manufacturers Ltd. “Neither at law nor in equity could the burden of a contract be shifted off the shoulders of a contractor on to those of another without theconsent of the contractee.” [58] As a result Enmax submitted that contractual obligations cannot be assigned without the consent of the other contractingparty. It pointed to the Assignment Agreement executed between CPR and Remington. Under that Agreement CPR assigned its benefitsand burdens to Remington. It further set out that Remington agreed to perform and assume all of CPR’s obligations under the originalAgreements.

In this connection Enmax submitted the evidence demonstrated at no time did it consent to the assignment of the originalAgreement [or licences as argued by Enmax] from CPR to Remington. Accordingly Enmax argued the purported assignment ofcontractual obligations from CPR to Remington without its requisite consent rendered the Assignments not enforceable as against itself. [59] Both parties referenced the more current Canadian decision of McLachlin J.A. [as she then was] in the BCCA in Fredricksonv. Insurance Corporation of British Columbia, (BC CA), 28 D.L.R. (4th) 414 at paras. 43 - 50 inclusive and para.

53. McLachlin, J. A. in those paras. recognized today there are six categories of contracts which are considered to be unassignable. They are: 1. Contracts which expressly by their terms exclude assignment; 2. Mere rights of action (assignments savouring of maintenance and champerty); 3. Contracts which by their assignment throw uncontemplated burdens on the debtor; 4. Personal contracts; 5. Assignments void by public policy (public officers’ wages or salary and alimony or maintenance agreements); and 6.

Assignments prohibited by statutory provisions. [ 60 ] Categories 3 and 4 possibly fall within the purview of this application. [ 61 ] Under the ambit of personal contracts Enmax submitted that the Agreements [licences as argued by Enmax] were personal in nature between Enmax’s predecessors and CPR. Enmax cited 2 cases in support of its position the Agreements [licences] were personal and consequently non-assignable. The first case was Black Hawk Mining Inc. v.

Provincial Assessor (Manitoba) 2002 MBCA 51 . [ 62 ] In that case Sherritt Gordon Mines Limited [Sherritt] entered into an industrial townsite Agreement with the Province of Manitoba and the Local Government District of Lynn Lake in northern Manitoba. The townsite Agreement permitted Sherritt to construct a mining enterprise at Lynn Lake and to create a townsite [Lynn Lake] with accompanying infrastructure. In return the properties of Sherritt, except houses used for private residences in the townsite, were to be assessed for tax purposes by Lynn Lake.

Rather than paying taxes Sherritt paid Lynn Lake grants under a devised formula. The Agreement was to remain in place until such time as Sherritt determined it would close down and permanently discontinue and abandon its mining operations. Sherritt with consent transferred ownership of the mining operation to LynnGold. Eventually LynnGold discontinued the mining operation and filed an assignment in bankruptcy. Black Hawk Mining Inc. [Black Hawk] eventually acquired the mine by assignment as a secured creditor. Black Hawk took the position it was not liable to pay a 1998 tax assessment by Lynn Lake.

Black Hawk claimed the townsite Agreement was still in effect and as the assignee of the Agreement, it was entitled to the benefit of the assessment which had been granted to Sherritt and later LynnGold. [ 63 ] Scott, C.J.M. for the Manitoba Court of Appeal succinctly set out the applicable law as follows at paras. 90 - 94: In my opinion, the question this court must answer is whether, looking at the facts objectively, the relationship between the parties to the contract was such that reliance upon the personal skill and knowledge of the assignor was of such a nature as to prohibit the assignment of the contract.

Looking at the facts and circumstances before this court, in particular the role and place of the mine in the community and its economy, it obviously mattered a great deal to the Town of Lynn Lake and the province what mining company was (or was not) working the mine. The mine was the lifeblood of the town. It was the essential reason for the town’s existence as evidenced by the provisions of the original townsite Agreement itself. The Agreement to make an annual payment in lieu of municipal taxes (in this case its local government district equivalent) if not unique, was certainly tailor made for this occasion.

Given the payment formula ($120 for each employee of the mining company for the operative year), the province and the town had a real stake in the mining activity and financial success of the mining company.

I can do no better than to adopt the following passage from Manitoba’s factum: The LynnGold Agreement involved a relationship of a personal nature and any unilateral assignment of said Agreement by LynnGold to a creditor would be apt to throw uncontemplated burdens on both Manitoba and Lynn Lake.

In this regard, it is self evident that it would matter a great deal to Manitoba whom it was dealing with when it entered into the Townsite Agreement (i.e., whether it was contracting with a reputable mining company that intended to work the Mine and to employ a good many residents to do so (the basis for calculating grants in lieu of taxes) or whether it was dealing with a creditor who intended to sit on the Mine until a suitable purchaser could be found and, in the interim, attempt to avoid any tax liabilities under the Townsite Agreement).

The stability of Lynn Lake’s tax base and the community’s very viability depended almost exclusively on who was occupying the Mine and what it intended to do there. Similarly, Manitoba’s exposure to financially support Lynn Lake depended upon who was occupying the Mine and what it intended to do there. In the end, whether the government’s or the town’s formal consent to the assignment was needed or not (and as noted earlier it is my conclusion that it was not required to create a valid assignment), is beside the point.

The nature of the relationship between the three parties to the townsite Agreement was such that reliance was placed on the personal reputation, ability and solvency of the mining company. In such circumstances, the Agreement was not assignable in law without the consent of the other parties to it. In the result, I conclude that while assignment of the townsite Agreement was permissible in law, consent of all parties was required due to the personal nature of the relationship between the contractual parties. [ 64 ] Enmax quoted an additional case in which it was found the contract was personal and not assignable.

This was a decision of MacLeod, J. in this Court in Lee v. Pointe of View Developments (Encore) Inc. , [2010] A.W.L.D. 5034 . A receiver manager was appointed for the original developer who had executed contracts for the construction of condominium units with various purchasers. The condominium project was sold to Pointe of View Marketing and Management Inc. It advised each purchaser that it had assumed each purchase contract and it intended to continue with the construction of the condominium project. None of the purchasers had been advised of the assignments of the purchase contracts.

All the purchasers, once having learned of the assignment, took the position they would not have consented to another developer completing their condominiums. MacLeod, J. ruled as follows at p. 7: This case involves the sale of yet unbuilt condominiums. One would reasonably expect prospective buyers to canvass a number of show suites and evaluate the products of competing builders. The process may include a discussion with representatives of the builder and an assessment of the workmanship and quality of finishings in show suites which have been put together by the builder.

While it is generally understood that much of the work will be sub-contracted, it is the builder or developer upon whom the purchaser relies to produce the finished product in accordance with the expectations which have been created in the mind of the purchaser. Moreover, the purchase of a home is a major decision and a personal one because it is probably going to be the purchaser’s home for several years and we spend a lot of time in our homes. Purchasers want to know that the home, when built, will be to their taste.

To suggest to a purchaser that if his chosen builder goes into receivership the responsibility for building her home can be passed on to an unknown builder would undoubtedly meet with the response given by the Applicants here, which is to say, that we chose Resiance. Now that Resiance has gone into receivership we do not want to accept POV as our developer. I agree with the Applicants’ position that contracts of the nature of those at issue in this case are entered into by purchasers who rely upon the skill, reputation and the ability of the builder to deliver a suitable product.

The case law is clear that those contracts are not assignable without the purchaser’s consent. ( Black Hawk Mining Inc. v. Manitoba (Provincial Assessor) , 2002 MBCA 51 , [2002] 7 W.W.R. 104 (Man. C.A.). Furthermore, this is not a case where one party to the contract is delegating performance of the contract to someone else and remaining liable to the purchaser. Here, the builder has gone into receivership and no longer has any possession or control over the project. In no meaningful way is it in a position to either ensure performance or be responsible for performance of its obligations.

I am of the view that the contracts at issue here are not assignable without the consent of the purchasers. The purchasers have not consented and they have not acquiesced. No order of this Court has effected such an assignment without their consent.

[ 65 ] In accordance with those cases Enmax submitted Agreements are personal contracts. Enmax asked me to find the nature and character of CPR makes a difference to it. It noted the Agreements were assigned to Remington which is not another railway but instead is a company in a completely different industry and whose character and nature makes a difference to it. Enmax pointed out an assessment on a objective basis would demonstrate a major difference to it in performing its obligations owed to CPR under the Agreements compared to performing those same obligations to a commercial real estate developer.

Enmax pointed to the evidence found in Kadonaga’s Affidavit and particularly in paras. 12, 13 and 17. It further pointed out CPR provided it a quiet enjoyment of the Interlink Lands since 1948 in that CPR has never requested any modification, alteration or removal of the lines and towers. Indeed Enmax noticed CPR never terminated the Agreements.

This continuous use of the Interlink Lands was evidence in Enmax’s submission demonstrating unique characteristic of CPR as a stable and non-changing party to a personal contract. [ 66 ] Finally Enmax argued the presence of indemnity provisions in the Agreements signified an insurance contract which is highly personal [See Fredrikson supra, ] in nature. [ 67 ] In addition to its argument referencing the personal nature of the Agreements, Enmax noted another form of assignment that is not permitted at law is any assignment which increases the burden on the other party to the Agreement.

In this vein Enmax submitted the assignment to Remington increased and changed its burden as fixed under the Agreement. This increase in burden is attributed by Enmax to the higher probability that Remington would give notice to modify or remove the towers and lines as opposed to CPR. Further Enmax proposed its obligations not to interfere with Remington’s operations as a commercial real estate developer are increased compared to its obligations not to interfere with the operation of a railway.

Enmax submitted the evidence demonstrates it now has an obligation to expend funds to remove the towers and lines as a result of Remington’s request whereas that obligation never existed with CPR since the Agreements came into effect. [ 68 ] Additionally Enmax noted the assignment to Remington is prohibited because it is contrary to public policy and the provisions of the Hydro and Electric Energy Act , R.S.A. 2000, c. H-16. That statute prevents a significant extension or alteration of a transmission lines unless the AUC has amended its issued permit or issued a new permit to cover the extension or alteration.

As a result Enmax declared in argument the termination provisions in the Agreement conflict with the statute without the prior approval of the AUC to alter the transmission lines. Further Enmax expressed its belief that to have it assume the burden and cost of moving the towers and lines for Remington’s private benefit does not match the benefit to the public if the towers and lines remain unchanged. [ 69 ] Enmax made its final submission by observing the silence of the Agreements on CPR’s assignment rights should not lead to an inference or an implication that the Agreements can be assigned by CPR.

This silence should be construed against the CPR, as the draftsman of the Agreement, using the contra proferentum rule. Accordingly Enmax argued if CPR wished to have a right of assignment, it could have placed an express right of assignment clause in the Agreements. Further Reasons [ 70 ] In my opinion the contract between CPR and Enmax’s predecessors dealt with the use of land. CPR did not possess any special skill, knowledge, character or other personal characteristics in allowing the lines and towers to be placed on its bare land.

CPR was not required to demonstrate any special skill or knowledge in allowing Enmax’s predecessors the right to situate the lines and towers there. The argument advanced by Enmax that CPR as a stable railway land owner will be less likely to ask the lines and towers be removed does not go to the personal nature of the contract but rather it looks and goes to the possible motives and intentions of CPR. Whether a person or a legal entity is more likely to enforce its legal rights is not relevant.

Such a likelihood does not turn the contract into one of a personal nature. [ 71 ] I do not find any reliance placed on the personal reputation, ability or solvency of CPR by Enmax’s predecessors. The Agreements executed are standard forms in nature and wording. The Agreements are used by CPR with many parties. The restrictions on Enmax and its predecessors are to string the towers and wires in a strong and suitable manner; maintain the towers and wires in a thoroughly satisfactory manner to CPR; and finally not to interfere with the telegraph or train services of CPR.

In that Remington is not a railway or a telegraph entity Enmax has no obligation of non-interference with any telegraph or railway services. Rather its obligations remain to keep its towers and lines strung in a strong and suitable manner and to maintain its towers and lines in a satisfactory manner. Enmax currently has those same obligations now as it did when CPR held title. It does not matter to Enmax on whose land those towers and poles must be maintained in a satisfactory manner respecting those obligations. Those obligations were restricted to CPR in its railway and telegraph operations.

Now that Remington is the legal title holder, Enmax no longer has the contractual requirement of non- interference with CPR’s operations. Indeed Enmax’s obligations or restrictions have been lessened now that Remington is the legal

owner. [ 72 ] Looking at the facts objectively, the relationship between CPR and Enmax’s predecessors was such that no reliance was placed upon the personal skill or knowledge of CPR. The stability of CPR and the certainty of its operations and the location of the CPR Interlink lands no doubt played a factor in the decision of the Enmax predecessors to enter into a contract to establish the tower and lines on the land.

Enmax’s predecessors placed its infrastructure on the lands hoping CPR would not cause the towers or lines to be moved at CPR’s discretion due to interference with CPR’s train or telegraph operations. But the Enmax predecessors had to know at the time of the entry into the Agreements and throughout the Agreements (as did Enmax) of the existence of CPR’s trump card. That card was CPR’s right to terminate the Agreements without cause upon 3 months notice.

While Enmax’s predecessors, and later Enmax, believed CPR posed a low risk to cause the towers and lines to be moved at CPR’s discretion or due to interference with the train or telegraph operations, Enmax and its predecessors always bore the risk of termination without cause on 3 months notice. The facts and circumstances looked at objectively do not make it a personal contract with CPR any more than it is a personal contract with Remington. At best it is a land use Agreement with either CPR or Remington having the right to terminate without cause on 3 months notice.

The ability of CPR and later Remington to terminate the Agreements was a risk that Enmax and its predecessors constantly bore throughout the duration of the Agreements. [ 73 ] Flowing from that it follows the assignment to Remington of the Agreements from CPR did not increase the burdens on Enmax. Enmax consistently has and had the burdens under the Agreements as set out in clauses 2 to 9 inclusive. [ 74 ] Not only have Enmax’s burdens lessened with the assignment to Remington due to Remington’s lack of train and telegraph operations, but in fact the assignment has turned out to be an advantage for Enmax.

The assignment occurred in late 2002. Enmax has received almost 9 additional years of use of the land for its towers and lines at what can best be described as a nominal rent. CPR, once it knew it intended to sell the land, could have terminated the Agreements under the termination clause and required Enmax to remove the towers and lines in order that Remington receive the lands free and clear of the towers and lines. [ 75 ] The risk of incurring costs by Enmax and its predecessors to erect, string and maintain the towers and lines always faced the looming threat of termination in the background.

Enmax and its predecessors believed it was a low risk due CPR being a railway company. The risk of termination is higher with Remington, a real estate development company. But that risk factor does not present as an increased burden for Enmax. The burden requiring Enmax to pay the costs in moving the towers and lines on termination always existed. It was the elephant in the room. The burden imposed by termination to move the towers and lines remained a constant threat. [ 76 ] Enmax can still bury the lines. The lines can still pass through the Interlink lands.

Remington is not requiring the lines to be eliminated. Remington is advising Enmax under the termination clause that Enmax will suffer the cost of removing the overhead towers and lines and burying them. Burying the lines under the Interlink lands merely represents a different mode of electrical transmission. [ 77 ] In this application Enmax argued the assignments to Remington are contrary to public policy and are prohibited by statute.

It pointed out public policy and statutory obligations prevail over private interests. [ 78 ] It is agreed by the parties my decision must be followed by a joint application to the AUC. That body will make the final decision whether the transmission towers and lines can be altered. That body will be the arbiter respecting public policy. [ 79 ] Further, while it is evident the transmission towers and lines are of critical importance to the public in serving the electrical needs of many downtown Calgary consumers, there is no evidence the assignment to Remington is against public policy.

If the transmission lines are buried under the Interlink lands or relocated to cross other lands, Enmax will be faced with that decision and will be required to carry out such steps without any interruption to its customers. Enmax cannot be allowed to keep the transmission towers and lines on the Interlink lands in perpetuity while it hides behind an argument that to move the lines would be against public policy.

Enmax must bear the attendant cost to bury or move the transmission towers and lines. [ 80 ] It follows from the previous para., that in my opinion, the assignment of the Agreements from CPR to Remington was valid and did not require the written or verbal consent of Enmax. The Agreements, while stipulating, that Enmax and its predecessors could not assign those Agreements without the written consent of CPR, were silent on CPR’s right to assign the Agreements. There was a unilateral prohibition against Enmax or its predecessors assigning the Agreements without the consent of CPR. But there was no express

prohibition against CPR assigning the Agreements. Had the predecessors of Enmax wished to negotiate the right of CPR to assign without consent, such negotiations could have lead to the inclusion of a clause prohibiting the CPR from any assignment without the consent of the Enmax predecessors and Enmax. But the evidence does not disclose any negotiations or any concern displayed by the Enmax predecessors to include such a prohibition clause in the Agreements.

Conversely it was negotiated and included in the Agreements by the parties that CPR must provide its consent before the Enmax predecessors or Enmax could make an assignment. I agree with the analysis of Farley, J. in Tru-Wall Group Ltd. v. Stadium Corp of Ontario Ltd. , [1995] O.J. No. 2610 (Ct.J.) where he stated at para. 20 in part: “However, there does appear to me to be any prohibition against “assignments” in the contract itself in regard to an assignment by Stadco.

Para.10 of the License Agreement is a limitation against Tru-Wall as licensee assigning, not a prohibition against Stadco assigning; this certainly implies that there is otherwise a right of assignment as, if contrary, the limitation would be unnecessary.” As a result I will imply from the silence in the Agreements that CPR had a right of assignment without consent. This implied term in the Agreements arises as a result of the presumed intention of the parties.

That presumed intention arises as a result of the contractual language of the Agreements, being an express prohibition against assignment without consent as applied to Enmax and its predecessors and a silence on the right of CPR respecting its assignment rights. In a similar vein it must be borne in mind CPR could unconditionally terminate the Agreements. That right of termination would effectively end any lack of consent by Enmax and its predecessors to a proposed assignment.

However rather than CPR employing such a draconian step in terminating the Agreements, it makes much more sense to imply its right to assign without the consent by Enmax and its predecessors in order that Enmax could continue to enjoy the benefits of the Agreements for a possible further time with CPR’s assignee. The Agreements would remain in place at the pleasure of an assignee until an assignee terminated the Agreements. Such reasoning provides a business efficacy to the Agreements.

Conclusion [ 81 ] It must be said that I find the purported assignment of the Agreements from CPR to Remington to be valid, binding and enforceable as against Enmax.

Further I find Remington was entitled to issue a notice terminating Enmax’s rights, benefits and privileges under and pursuant to one, some or all of the Agreements. [ 82 ] Enmax is directed to make an application before the AUC under the Hydro and Electric Energy Act and its associated regulations to remove the Transmission lines from the Interlink lands. [ 83 ] The AUC retains its jurisdiction under the Act and none of the Transmission lines shall be removed or relocated in the absence of an Order by the AUC. [ 84 ] Counsel may make an appointment with me to speak to costs, if necessary.

Heard on the 12 th day of April, 2011. Dated at the City of Calgary, Alberta this 10 th day of November, 2011. A. G. Park J.C.Q.B.A. Appearances:

Grant Vogeli and Sonya A. Morgan of Burnet, Duckworth & Palmer LLP for the Plaintiff Dalton W. McGrath, Q.C. and Michael O’Brien of Blake Cassels & Graydon LLP for the Defendants