EOG Resources Canada Inc. v. Saskitoba Date:, 2013 MBCA 99

Citation: EOG Resources Canada Inc. v. Saskitoba Date: 20131031 Farms Ltd. et al., 2013 MBCA 99 Dockets: AI 13-30-08046/47/48/ 49/50/51/52/53/54 IN THE COURT OF APPEAL OF MANITOBA BETWEEN : ) EOG Resources Canada Inc. ) A. Ludwig ) for the Applicants (Operator) (Applicant) Respondent ) ) R. J. M. Adkins and - and - ) C. M. Hamilton ) for the Respondent Saskitoba Farms Ltd., Sylvia ) Maxine Holmes, Troy Laverne ) S. D.

Boyd Mayes, Mayes Family Holdings ) for The Surface Rights Board Inc., Mayes Farms Ltd., David ) of Manitoba Todd Daniels and Heather Joy ) Daniels, Kenneth Brian Lee, R.H. ) Chambers motion heard: White Farms Ltd., Gerry Lane ) October 24, 2013 Enger and Bonnie Marie Enger ) ) Decision pronounced: (Landowners) (Respondents) Applicants ) October 31, 2013 ) CAMERON J.A. [ 1 ] This is a motion filed by a number of landowner applicants to adjourn their respective applications for leave to appeal a decision of The Surface Rights Board of Manitoba (the Board) made pursuant to The Surface Rights Act , C.C.S.M., c.

S235 (the Act ) pending a decision from the Court of Queen’s Bench regarding a judicial review of the decision of the Minister of Innovation, Energy and Mines (the Minister) to issue a permit to the respondent EOG Resources Canada Inc. (EOG) to construct a pipeline pursuant to The Oil and Gas Act , C.C.S.M., c. O34. The landowner Saskitoba Farms Ltd. initiated this motion and made representations on behalf of all of the landowners (the landowners).

For the reasons that follow, I would allow the adjournment as requested. [ 2 ] Briefly, the facts are that EOG wishes to construct a pipeline in Manitoba that would cross through the property of the landowners. The intended purpose of the EOG pipeline is to link up with another proposed pipeline to be constructed and operated by Many Islands Pipe Lines (Canada) Ltd. (MIPL). The plan is that the MIPL pipeline would cross the Manitoba-Saskatchewan border.

The pipeline proposed by MIPL is an interprovincial pipeline, therefore, MIPL filed a notice with the National Energy Board (NEB), the federal body with responsibility for such undertakings. [ 3 ] Despite the fact that the pipeline proposed by MIPL is interprovincial, EOG maintains that its portion of the proposed pipeline is intended to be wholly in Manitoba. Therefore, it contends that provincial laws and regulations apply and that it has proceeded with the necessary applications accordingly.

On the other hand, the landowners contend that, in consideration of the fact that the EOG pipeline will be connected to an interprovincial pipeline, an expansive view of the project leads to the conclusion that it should not be considered a provincial undertaking, but rather an interprovincial undertaking. Therefore, they argue that the NEB governs the proposed EOG pipeline. [ 4 ] The above issue has been raised in a number of proceedings involving the parties. First, in furtherance of its plan, EOG applied for a permit to construct the pipeline to the provincial Minister.

In response to the application for a permit, the landowners objected to the jurisdiction of the Minister. Their objection was denied, resulting in a permit being issued to EOG on May 7, 2013. Next, alleging that the proposed pipeline was interprovincial, the landowners applied to the NEB asking it to assume jurisdiction over all matters relating to the proposed pipeline. That application was dismissed without prejudice on June 13, 2013. On June 7, 2013, the landowners filed an application for judicial review of the decision of the Minister to issue the permit to EOG to construct the pipeline.

That action (file number CI13-02-02890) is scheduled to be heard in the Court of Queen’s Bench on December 10, 2013. [ 5 ] This motion finds its roots in an application made by EOG to the Board pursuant to the Act for an order granting it the

right to enter the landowners’ properties for the purpose of constructing the pipeline and for setting compensation for that right. The landowners opposed the application resulting in a multiple-day hearing before the Board. During the course of the hearing, the issue of whether the undertaking was interprovincial was front and centre, thereby resulting in the Board ordering the landowners to file a notice of constitutional question. After hearing from the parties, including the Attorney General, the Board found that it had constitutional jurisdiction to determine the matter.

Ultimately, on September 10, 2013, the Board made an order allowing EOG a right of entry to the landowners’ properties with conditions and ordered compensation to the landowners. [ 6 ] On October 4, 2013 the landowners filed a notice of motion for leave to appeal the decision of the Board to this court.

On October 17, 2013 they filed the motion to adjourn the application for leave that is the subject of this proceeding. [ 7 ] All parties agree that the constitutional issue that is the subject of this proceeding is the same as the issue that will be before the Court of Queen’s Bench in the judicial review of the decision of the Minister to issue a construction permit to EOG.

All parties also agree that the most appropriate forum for hearing the constitutional question at this stage of the proceedings is the Court of Queen’s Bench, especially because the parties contemplate that further evidence may be adduced in that hearing. [ 8 ] The position of the landowners is that the application should be adjourned pending the outcome of the judicial review hearing scheduled in the Court of Queen’s Bench. They state that, if they are successful in that proceeding, the application for leave to appeal will be moot.

Thus, they assert that to argue their motion for leave to appeal at this time would constitute an unnecessary expenditure of time and expense. Next, they maintain that EOG will not suffer prejudice as a result of the delay because EOG is unable to proceed with the project at this time for other practical reasons. Finally, they claim that they have just received further disclosure from EOG in the judicial review proceedings in the Court of Queen’s Bench, which is germane to the constitutional issue.

They maintain that to hear that evidence in the judicial review proceeding is preferable to bringing a motion for fresh evidence to this court. [ 9 ] EOG asserts that a delay in the appeal process will result in prejudice. It points out that it first began the process to obtain all the necessary approvals for the proposed pipeline in December 2012. Aside from the general prejudice that results from delay, it points to s. 50 of the Act which provides that all proceedings shall be stayed upon the filing of an appeal until the appeal is finally determined.

In support of its concern, EOG states that even if it is successful in the judicial review proceedings, the issue of compensation, which is also the subject of the application for leave to appeal, will still need to be dealt with. Therefore, it disputes the landowners’ contention that the proceedings in the Court of Queen’s Bench will render any appeal of the Board decision moot. Finally, EOG maintains that the application for leave to appeal has no merit, and it would like that determination as soon as possible. [ 10 ] In my view, the adjournment should be granted for a number of reasons.

First, judicial economy favours granting the adjournment. Even at the leave stage, it is not a practical use of judicial resources to have two courts determining the merits of the same issue at the same time in what is essentially the same proceeding. Second, because the constitutional issue in this court and the Court of Queen’s Bench is the same, there arises the detrimental risk of inconsistent rulings. Additionally, the possibility of further evidence being presented in the judicial review proceeding militates in favour of it being heard in the Court of Queen’s Bench rather than this court.

A court of appeal generally reviews for error on the record of the lower court. In matters involving constitutional determinations, it is preferable to have a full factual foundation upon which to base such a review. Consideration of all of the above outweighs any potential prejudice to EOG in the circumstances of this case. [ 11 ] Therefore, I would allow the landowners’ motion to adjourn their motion for leave to appeal the decision of the Board until after a decision is rendered in the judicial review proceedings, scheduled to be heard in the Court of Queen’s Bench on December 10, 2013. J.A.