Intervener Standing – Doctrine of Federal Paramountcy – Oil and Gas Conservation Act – Pipelines Act – Bankruptcy and Insolvency Act – Licensee
The Canadian Association of Petroleum Producers (“CAPP”), the Canadian Association of Insolvency and Restructuring Professionals (“CAIRP”), the Attorney General for Saskatchewan (“Saskatchewan”), Her Majesty the Queen in Right of the Province of British Columbia as represented by the Ministry of Natural Gas Development and the British Columbia (“BC”) Oil and Gas Commission (the “BC Applicants”) (collectively, the “Intervener Applicants”), sought leave from the Alberta Court of Appeal (“ABCA”) to participate as interveners in a Constitutional appeal concerning division of powers and the doctrine of paramountcy.
In this decision, Martin J.A. granted all four entities permission to participate in the ABCA proceedings, subject to certain conditions.
ABQB Decision
The ABCA proceedings considered the decision of Alberta Court of Queen’s Bench (“ABQB”) Chief Justice Wittmann in Redwater Energy Corporation (Re), 2016 ABQB 278 (the “ABQB Redwater Decision”). In the ABQB Redwater Decision, Redwater Energy Corporation (“Redwater”)’s trustee and receiver in bankruptcy sought to disclaim certain of Redwater’s non-producing wells pursuant to section 14.06 of the federally enacted Bankruptcy and Insolvency Act (the “BIA”). Section 14.06 of the BIA permits a trustee in bankruptcy to renounce unprofitable assets without the responsibility for environmental abandonment and remediation work.
The AER and the Orphan Wells Association (the “OWA”) jointly applied for a declaration from the court that the receiver’s renouncement of well assets was void and unenforceable, due to the environmental remediation work necessitated as a result of the well abandonment.
The AER and OWA sought an order compelling the Receiver to fulfill its obligations as a licensee under the Oil and Gas Conservation Act (“OGCA”) and the Pipeline Act (“PA”) in relation to abandonment, reclamation, and remediation of Redwater’s licensed properties.
In the ABQB decision, Wittman C.J. found that compliance with both the provincial legislation (i.e. the PA and OGCA) and the federal BIA was impossible. Therefore, the Chief Justice held that the doctrine of federal paramountcy was triggered. He declared the definitions of licensee under the PA and OGCA to be inoperable to the extent that those definitions frustrated the purpose of the BIA. It followed that the remedies sought by the AER and OWA were denied.
The AER and OWA appealed, and on June 29, 2016, the ABCA granted leave to appeal. The Intervener Applicants subsequently applied to the ABCA for permission to participate as intervenors in the proceedings.
Test for Permission to Intervene
In this ABCA procedural decision, Martin J.A. summarized the two-part intervener test as set out in Pedersen v Van Thournout, 2008 ABCA 192 (the “Pedersen Test”). Under the Pedersen Test, a court must first consider the subject matter of the appeal and then determine the proposed intervener’s interest in it.
In determining the proposed intervener’s interest, the court must examine whether the proposed intervener:
(a) will be directly and significantly affected by the appeal’s outcome; and
(b) will provide some expertise or fresh perspective on the subject matter that will be helpful in resolving the appeal, (the “Pedersen Test”).
A proposed intervener must satisfy both parts of the Pederson Test in order to satisfy the test and be granted permission to participate in an appeal as an intervener.
The BC Applicants
Justice Martin held that the BC Applicants met the criteria for permission to intervene.
While the BC Applicants played no part in the lower court proceedings, they sought leave to appeal submitting that Alberta receivership orders directly affect the BC regulator when an Alberta insolvent has assets in BC. Additionally, the outcome of the appeal regarding the interpretation of section 14.06 of the BIA could affect the interpretation and application of BC provincial legislation, directly impact the regulatory regime in BC, the BC orphan fund, and BC taxpayers.
Justice Martin held that the BC Applicants would be directly and significantly affected of by the outcome of the appeals. In addition, he found that the BC Applicants would bring an extra-provincial perspective and discuss additional case authorities that would be helpful to the ABCA in its interpretation of the BIA.
CAPP
Justice Martin held that CAPP satisfied the Pederson Test and granted leave to CAPP to participate in the appeal as an intervener and make submissions in support of the appellants (the AER and OWA). CAPP did make submissions in the court below.
Martin J.A. explained that CAPP members are the primary source of funding for both the orphan fund and the AER. As a result, the appeal directly affects the members of CAPP.
With respect to the second part of the Pedersen Test, Justice Martin stated that in using its “broad voice of industry,” CAPP would bring a different and broader perspective regarding the issues that differ from the appellants, or which the appellants might be restrained in making.
Saskatchewan
Saskatchewan was granted leave to participate in the appeal as an intervener on behalf of the appellants.
Saskatchewan did not participate in the lower court proceedings. Justice Martin held that Saskatchewan’s orphan well program, its oil and gas industry, and taxpayers would be negatively affected if the ABQB Redwater Decision were upheld on the appeal.
Justice Martin also accepted Saskatchewan’s submissions that by focusing on common law bankruptcy and broader principles regarding co-operative federalism, Saskatchewan would bring fresh perspectives on arguments helpful to the ABCA. It followed that Saskatchewan met the criteria for permission to participate as an intervener in the appeal.
CAIRP
CAIRP was granted leave to participate in the ABCA proceedings and make submissions in support of the respondent (the Receiver).
CAIPR is a national professional association representing receivers, trustees, agents, monitors, and consultants working in the insolvency field. CAIRP is designed to advance the practice of insolvency administration in Canada as well as the public interest in connection with insolvency matters. CAIRP had made submission in the proceedings in the lower court.
Justice Martin held that CAIRP had an interest that would be directly and significantly affected by the outcome of the appeal. He held further that CAIRP – with its expertise in insolvency administration – would bring a broader policy perspective to the appeal that would be helpful to the court, and therefore met the criteria for permission to intervene.
Conditions
As conditions to the leave to participate granted by the ABCA, each intervener is restricted to submitting a factum of no more than 15 pages and oral submissions no longer than 10 minutes.
Further, the Intervener Applicants are not permitted to supplement the record (adduce new evidence) or add new issues to those identified in the ABQB proceedings.
