Remington Development Corporation v. ENMAX Power Corporation, 2017 ABQB 467

Court of Queen’s Bench of Alberta Citation: Remington Development Corporation v. ENMAX Power Corporation, 2017 ABQB 467 Date: 20170725 Docket: 0801 14506 Registry: Calgary Between: Remington Development Corporation Plaintiff - and - ENMAX Power Corporation Defendant _______________________________________________________ Reasons for Decision of J. Farrington , Master in Chambers _______________________________________________________ The Application [ 1 ] This is an application by ENMAX Power Corporation (“Enmax”) to stay this action.

It has commenced proceedings before the Surface Rights Board and it argues that the proceedings before the Surface Rights Board are the appropriate forum for dealing with the issues between the parties. Most recently in this action, Remington Development Corporation (“Remington) filed an application on July 19, 2016 seeking to compel witnesses for questioning and the answering of questions and documentation regarding compensation issues for the trespass that it alleges in this action.

Enmax says that application and this action should now be stayed. [ 2 ] Remington claims compensation from Enmax for power transmission lines traversing its property near downtown Calgary (“the Interlink lands”). The action has taken many turns, and the parties made various tactical choices along the way. [ 3 ] Remington acquired the Interlink lands in 2002. The lands were associated with agreements that Enmax had with a prior

owner (Canadian Pacific Railway) under which the towers and transmission lines were permitted for nominal ongoing consideration.That part of the prior arrangement was a positive one for Enmax. The agreements had termination clauses under which the owner couldgive Enmax three months’ notice that permission to pass across the lands was at an end. That part of the arrangement was a negative onefor Enmax. Remington gave notice of termination in 2005 and Enmax took issue with Remington’s right to do so.

Interesting propertylaw issues were raised and adjudicated upon in other proceedings. [4] As part of the litigation process the parties entered into a letter agreement as to how they would resolve their issues. The textof the letter agreement is included as

Schedule A to these reasons. Prior Proceedings [5] The letter agreement contemplated that the validity and status of the original arrangements for passage over the Interlinklands, including the terminations by Remington, would be determined in proceedings which ultimately came before Mr. Justice Park.

Italso contemplated that Remington would amend its Statement of Claim to remove its general damages claim of $200 million for aclaimed inability to develop the Interlink lands to substitute a more particularized and defined claim which is now described in theAmended Statement of Claim as follows: A judgment against Enmax in an amount to compensate for unauthorized use of the Interlink Lands, based on market rates but in theamount estimated at 8 per cent of the value of the land, per annum until the Transmission Line is removed. [6] Remington executed a release for the original damage claim.

The release expressly preserved the revised claim forcompensation. [7] Notwithstanding that

Schedule A sets out the letter agreement in its entirety, for ease of reference I set out

article c(vi) of theletter agreement: Other than exercising its right to appeal the Court’s decision on the Special Application, ENMAX will not take steps to circumvent theCourt’s decision on the Special Application or attempt to require any right of way or right of entry through Remington- owned landspursuant to governmental or regulatory order or otherwise. [8] In proceedings before Park, J. (Remington Development Corporation v. Enmax Power Corporation, 2011 ABQB 694) hefound that Remington had the right to terminate the agreements.

Enmax appealed and that conclusion was upheld (RemingtonDevelopment Corporation v. Enmax Power Corporation, 2012 ABCA 196). Enmax sought leave to appeal the matter further to theSupreme Court of Canada and its application was dismissed (Enmax Power Corporation v. Remington Development Corporation, (SCC)). [9] Remington was accordingly successful on the issues before Mr. Justice Park and at all levels on appeal. The result was thatEnmax no longer had consent to passage over the lands.

The Alberta Utilities Commission [10] The Alberta Utilities Commission (the “AUC”) is the authority for dealing with power line routing and location in Alberta.After its position in the Courts was unsuccessful, Enmax applied for permission to move the lines before the AUC, as it was obliged todo under its agreement with Remington. Remington did not participate in the application, or seek to be added as an intervenor,notwithstanding that it had the right to do so pursuant to the letter agreement. Permission to move the lines was denied by the AUC(Decision 3368-D01-2015).

It cited the public interest in maintaining the current location of the lines and the lack of any specific plansby Remington that conflicted with the current routing.

Remington sought review or reconsideration of the AUC decision but thatapplication was unsuccessful (Decision 20612-D01-2015). [11] Remington sought leave to appeal that decision to the Alberta Court of Appeal and McDonald, JA denied Remington’s leaveto appeal application (Remington Development Corporation v ENMAX Power Corporation, 2016 ABCA 6). [12] The letter agreement did not contemplate what would happen if permission to move the lines was denied. The situationbecame that Enmax had no contractual right to be on the lands, nor did it have a right of entry order under the Surface Rights Act RSA2000, c.

S-24, but it did have a permit to operate the power lines from the AUC. Enmax says that the permit is enough to make itspresence on the lands “legal”. Remington says that is not sufficient, and that the presence of Enmax on the Interlink lands is a trespass. [13]

Section 40 of the Hydro and Electric Energy Act, RSA 2000, c H-16, also has some bearing on the issues: 40 An approval or permit granted pursuant to this Act does not relieve the owner or operator of a hydro development, power plant,transmission line or electric distribution system from the necessity of obtaining any order, permit, licence, consent or authorization thatthe owner or operator is required to obtain under any other Act or regulation under any other Act.

Moving Forward [14] Enmax now seeks to regularize issues pertaining to its presence on the Interlink lands with an application for a right of entryorder pursuant to the Surface Rights Act which it filed on July 5, 2017 in the face of Remington’s application to move its litigationforward. Remington’s application had been booked as a “special” for months. [15] Enmax says that now that it has applied for a right of entry order, the action in this Court should be stayed because theappropriate and only place for determining compensation is before the Surface Rights Board.

Further complicating the matter is that insome of the previous decisions between these parties, comment has been made upon the role of the Surface Rights Board and Enmaxargues that those comments are conclusive and mandate that matters proceed before the Surface Rights Board.

[16] In the leave to appeal application before Mr.

Justice McDonald he commented at paragraph 19: Early in the hearing, ENMAX confirmed to the Commission that if the Commission did not approve ENMAX’s application to relocatethe transmission lines, ENMAX would have no option but to either negotiate a right-of-way agreement with Remington or apply to theSurface Rights Board for a right of entry order under the Surface Rights Act, RSA 2000, c S-24. [17] He further stated at paragraphs 25 to 27: Nowhere in Decision 3360-D01-2015 nor in Decision 20612-D01-2015 did the Commission indicate that the effect of its ruling was toexpropriate the lands (or a portion thereof) without compensation.

To the contrary, it explicitly acknowledged, as indicated in paragraph19 above, that if the transmission lines were to remain, and barring agreement between the parties, compensation for Remingtonwould be set by Surface Rights Board. That the Surface Rights Board’s jurisdiction is ancillary to the Commission’s is clear.

The legislative intent in having the two bodies (inthis instance, the Commission and the Surface Rights Board) is not that they duplicate each other’s work, but that they work together:Windrift Ranches v Alberta Surface Rights Board, 1986 ABCA 158 , 57 Alta LR (2d) 36 at para 5, Togstad v Alta (SurfaceRights Board), 2014 ABQB 485 , 2015 ABCA 192 at para 7. In rejecting ENMAX’s application for relocation, the Commission in effect confirmed that the present siting of the transmission lineswas in the public interest.

Given the interplay between the Hydro and Electrical Energy Act on the one hand and the Surface Rights Acton the other, the next step in the proceedings would be for Remington and ENMAX to negotiate a satisfactory settlement, failing whichthe matter would proceed to the Surface Rights Board for a right of entry order and a compensation order. (Emphasis added) The Surface Rights Board [18] In considering the stay application of Enmax and the role of the Surface Rights Board, several subsections of the SurfaceRights Act are important starting points. Section 12(1)(

d) provides: 12(1) No operator has a right of entry in respect of the surface of any land … (

d) for or incidental to the construction, operation or removal of a power transmission line, or until the operator has obtained the consent of the owner and the occupant of the surface of the land or has become entitled to right ofentry by reason of an order of the Board pursuant to this Act. [19] Thus, there are only two ways to obtain a right of entry- either by agreement with an owner or by way of a right of entry orderunder the Act. [20]

Section 23 of the Act provides that upon making a right of entry order, the Board must then determine compensation: 23 On making a right of entry order, the Board shall, in accordance with its rules, hold proceedings to determine the amount ofcompensation payable and the persons to whom it is payable. [21] An operator that is unable to obtain landowner consent can force the issue through right of entry and compensationproceedings under the Surface Rights Act.

Nothing prevents an operator, however, from dealing with a matter by consent. [22] In this case, the construction and effect of the letter agreement between the parties is important. Neither lawyer who wasinvolved in the letter agreement provided affidavit evidence regarding the context and assumptions pertaining to the letter agreement.

Indealing with this application, the Court must simply interpret the letter agreement and attempt to give it effect in accordance with itsterms without any additional explanatory context other than that which it already has, which is normally the first choice in interpretingdocuments in any event. [23] While one might speculate that both parties assumed that if Remington was successful before Mr. Justice Park the removal ofthe power lines would follow, and that

article c(vi) was simply included to make certain that Enmax did not attempt to do an “end run”around the Court’s decision by applying for a right of entry order, the reality was that even though Remington was successful, the AUCdid not permit removal of the power lines. [24] Notwithstanding that result,

article c(vi) by its wording precludes an application by Enmax to acquire a right of entry. Theresult argued by Remington would be a perpetual trespass. Leaving aside the desirability or legality of that for another day and setting,Remington argues that it has a contractual right to have its compensation claim determined in this Court and that it is simply participatingin a process that was agreed to by the parties. Nothing would seem to preclude its right to make that argument in this action. [25]

Section 38 of the Surface Rights Act provides: 38 Notwithstanding the Petty Trespass Act, a person who, in the exercise of a right of entry, enters on, uses or takes any of the surfaceof land in contravention of this Act (

a) is deemed to have committed a trespass, and (

b) is liable in damages or otherwise for the trespass to any person who is the owner or the occupant entitled to the possession of thesurface of the land.

[26] Accordingly, there is also some legislative support for Remington’s trespass argument, at least for the time period prior to theobtaining of a right of entry order (if one is eventually granted). [27] The Surface Rights Act proceedings are at a very early stage. They were only filed days ago. No objection has been filed byRemington as of yet, and the Surface Rights Board may at some point decide on the effect of

article c(vi) of the letter agreement inconsidering the right of entry application. The Court here does not in any way attempt to predetermine or influence its consideration ofthose issues as to whether a right of entry order ought to be granted. [28] In my view, what is clear is that the right to compensation under the Surface Rights Act only applies on the making of a rightof entry order.

At least two decisions of the Surface Rights Board confirm that its jurisdiction is prospective. [29] In ATCO Electric Ltd. v Pacific Investments GP Ltd., 2017 ABSRB 265 (a power line right of entry case) the Board held: Furthermore, the Panel accepts Pacific’s position that the Board’s jurisdiction is prospective and that it may not, through aRight of Entry Order retroactively endorse or authorize what was conceded to be an unauthorized construction entry.

Section12(1) states that “No operator has a right of entry in respect of the surface of any land… until the operator has obtained the consent of theowner and the occupant of the surface of the land or has become entitled to right of entry by reason of an order of the Board pursuant tothis Act.” The Panel cannot remedy the Operator’s past failure to comply with Section 12(1).

In the circumstances, the Panel is satisfied that it is appropriate to grant a Right of Entry limited to operation or removal of thetransmission line. [30] It further held: Certainly, it would have been preferable for the Operator to have obtained the consent of the owner or a Right of Entry in advance ofconstructing the transmission line. However, as acknowledged by Pacific in its January 31, 2017 submission, the Board must view thematter prospectively.

Pacific may well have a remedy elsewhere for the unauthorized construction and the failure of ATCO toaccommodate Pacific’s concerns within the parameters of the AUC permit and licence, but this is not for the Panel todetermine.[4] The Panel cannot just ignore the fact that the transmission line has been completed, and the powerline has now beenoperating for over four years. (Emphasis added) [31] In Burlington Resources Canada Ltd v Whitelock, (ABSRB), (a compensation case), the Board held atparagraph 61 to 63: The parties agree that the Applicant has been in trespass.

Counsel for the Landowners argues that the Board has jurisdiction to order“punitive” compensation. The Board disagrees with this assertion. There is no provision in the Act for punitive compensation. Rather,provisions in the Act relate to compensating affected parties for their losses only.

Section 38 applies only in respect of operators who are acting “in the exercise of a right of entry.” As shown by the Applicant’s currentapplication for a Right of Entry Order, its previous actions were not carried out in the course of exercising a Right of Entry Order. Assuch, the Landowners have no recourse under

section 38 of the Surface Rights Act. Any issues regarding past road use are moreappropriately dealt with in another forum. The Board will not grant the Landowners’ request of compensation for trespass. [32] Mr.

Justice McDonald specifically held on the leave to appeal application in relation to the AUC reconsideration at paragraph25 that “…barring agreement between the parties (emphasis added), compensation for Remington would be set by the Surface RightsBoard.” [33] Enmax argues that the potential inability of the Surface Rights Board to retroactively award compensation was before Mr.Justice McDonald in the written submissions of Remington, and thus it was necessarily considered by Mr. Justice McDonald and foundto be irrelevant. Remington asserts that the letter agreement, and in particular

article c(vi) were not before Mr. Justice McDonald. [34] There would not have been a complete appeal record because the matter was a leave to appeal application rather than ahearing of an appeal itself. In any event, while there is no clear evidence as to what was or was not before Mr. Justice McDonald, he didhold that the matter of compensation is subject always to an agreement between the parties. [35] Here, there has been no right of entry order. Under normal circumstances, the ability of the Surface Rights Board to awardcompensation is forward speaking from the right of entry order. The reported decisions say that to be the case and the wording of the Actsupports that

interpretation. The Surface Rights Board is a statutory tribunal. It derives its jurisdiction from its enabling statute. It doesnot have inherent jurisdiction and it can only do what the Surface Rights Act permits it to do. [36] In this case, there was an agreement to specifically amend the pleading of Remington to a more concise and limited form ofcompensation (although Remington still called it “damages” during argument) than the wording used in the original pleading. Remingtonspecifically signed a release of the more generally framed damages claim.

There was consideration for the release as part of the letteragreement. The parties agreed upon a method for hearing and consideration of their differences and determination of compensation inthis Court by way of an agreed form of Amended Statement of Claim. [37] The issues in the Amended Statement of Claim are best determined in this Court. That conclusion is supported by the inabilityof the Surface Rights Board to grant retroactive compensation pre-dating a right of entry order and by the agreement between the partiesin any event.

Accordingly, this Court is the appropriate forum to determine whether or not there has been a trespass, and to deal with therelief sought by Remington. That is certainly the case with respect to all pre-right of entry matters. If the Board finds it appropriate to

grant a right of entry order in due course, different considerations may then apply depending upon what is ordered. [ 38 ] I note in closing that Enmax argued that s. 2(2) of the Surface Rights Act requires that this matter be dealt with by the Surface Rights Board. It provides:

(2) If there is a conflict between this Act and anything contained in any grant, conveyance, lease, licence or other instrument, whether made before or after the coming into force of this Act, with respect to right of entry in respect of the surface of any land incidental to any operations concerning mining, drilling, pipelines, power transmission lines or telephone lines, this Act prevails. [ 39 ] There is no conflict between the Act and the letter agreement for the two primary reasons discussed earlier. The first is that at this stage the dispute is entirely about pre-right of entry order issues.

The second is that resolution by consent is always an integral part of the legislative scheme under the Act in any event. Disposition [ 40 ] I find that there is not a sufficient sufficiently compelling case for a stay of this action given the present circumstances.

In traditional “tri-partite test” stay terms, there is not an arguable case that the pre-right of entry damages claim should be adjudicated upon by the Surface Rights Board, irreparable harm has not been shown that is not otherwise compensable in damages, and the balance of convenience would favour the continuation of this action after these many years in any event. [ 41 ] Accordingly, the stay application is dismissed.

I had indicated at the close of argument that I would need to reserve my decision, but that following issuance of my reasons, I would endeavor to find an early date for the hearing of Remington’s application regarding questioning and disclosure of information if the application remained as one that needed to be heard. Remington is at liberty to contact the Masters’ chambers office for available dates for me to hear that application.

The parties may address the costs of this stay application at that time if they cannot otherwise agree. [ 42 ] Thank you very much to counsel for their submissions, both oral and written. They were most helpful. Heard on the 12 th day of July, 2017. Dated at the City of Calgary, Alberta this 25 th day of July, 2017. J. Farrington M.C.Q.B.A. Appearances: Burnet, Duckworth & Palmer LLP Grant Vogeli, Q.C. Paul G. Chiswell for the Plaintiff Blake, Cassels & Graydon LLP Michael O'Brien for the Defendant

SCHEDULE A TO THE REASONS FOR DECISION OF MASTER J. FARRINGTON ISSUED JULY 25, 2017 IN ACTION 0801-14506

September 1, 2010 Remington Development Corporation ("Remington") v. ENMAX Power Corporation (“ENMAX"): Bifurcation of action Taking into account ENMAX's assurances that it wishes to move this matter forward in good faith, Remington proposes the following: (

a) The parties agree to bifurcate and have the liability issue determined in a

summary fashion as provided in a Consent Order in the form we have agreed upon. (

b) Remington will drop its claims for damages-other than its claim rent for unauthorized use of the Interlink Lands, calculated at 8 per cent of the value of the land, per annum - and execute the proposed Release upon ENMAX signing the Consent Order and delivering it to counsel for Remington and upon Remington obtaining approval of the Consent Order from the Alberta Court of Queen's Bench. (

c) if Remington is successful on the Special Application (or after any appeal), ENMAX shall make application to the AUC for approval to remove any existing portions of the Transmission Line (as defined in Remington's Statement of Claim and including the underground portion, if any, that is the subject of the 1968 Transmission Agreement) from the Interlink Lands, subject to AUC approval, under the fo11owing conditions: (

i) ENMAX will make all reasonable efforts and take all reasonable steps to do or cause to be done, all things necessary, under applicable laws, to obtain any permits, approvals, licences or waivers required to remove the Transmission Line from the Interlink Lands in a timely fashion. (ii) At the request of Remington, ENMAX will provide prior notice of any communications with the AUC and will take no steps to prevent Remington from making submissions or, if deemed necessary by Remington, to prevent Remington itself from obtaining any permits, approvals, licences or waivers required to remove the Transmission Line from the Interlink Lands in a timely fashion. (iii) At its option, Remington will apply for jntervener status on the AUC application.

ENMAX will not oppose any such application. If the AUC refuses any permit, Approval, license or waiver necessary to remove the Transmission Line from the Interlink Lands, Remington may choose to exercise its right to seek leave to appear, and appeal, the AUC's decision. ENMAX will not oppose any such application for

leave to appeal or appeal. Remington will bear its own costs in any application for intervener status or Court of Appeal proceedings. (iv) Remington shall not be responsible for any costs and expenses incurred by ENMAX to obtain any permits, approvals, licences or any costs and expenses to remove the Transmission Line from the Interlink Lands nor will ENMAX seek costs against Remington in any related AUC hearing. Remington shall be responsible to pay all of its internal costs associated with the AUC application including any legal fees and disbursements it incurs on its own behalf. · (

v) In the event that ENMAX seeks to recover any costs related to the removal of the Transmission Line from the Interlink Lands and any replacement facilities through its TFO tariff pursuant to

section 37 of the Electric Utilities .Act , Remington agrees that it will not take any steps to oppose that recovery. (vi) Other than exercising its right to appeal the Court’s decision on the Special Application, ENMAX will not take steps to circumvent the Court’s decision on the Special Application or attempt to reaquire any right of way or right of entry through Remington-owned lands pursuant to governmental or regulatory order or otherwise. (

d) Remington's claim for rent for unauthorized use of the Interlink Lands, calculated at 8 per cent of the value of the land, per annum is stayed pending determination of the liability issue. If the above is acceptable please execute below on ENMAX's behalf. The parties agree this Letter Agreement can be executed in counterpart by facsimile or electronically. Yours truly, “EXECUTED BY COUNSEL FOR REMINGTON” Accepted this 7 th day of September, 2010 “EXECUTED BY COUNSEL FOR ENMAX”