Surface Rights Act – Electricity – Appeal – Granted (in part)
In this decision, the Alberta Court of Appeal (“ABCA”):
(a) granted an appeal by Enmax Power Corporation (“Enmax”) of a direction of the Alberta Court of Queen’s Bench (“ABQB”) directing Enmax to withdraw an application before the Surface Rights Board (“SRB”); and
(b) dismissed Enmax’s appeal from the ABQB decision to refuse to stay the court action.
History of Dispute
This appeal arose out of a long-standing dispute between Enmax and Remington Development Corporation (“Remington”). The dispute began with Remington’s acquisition of land in downtown Calgary (the “Interlink Lands”), on which operating power transmission lines were located, and Remington wanted those transmission lines removed.
Enmax’s predecessor obtained access to the Interlink Lands through a series of right-of-way agreements with the Canadian Pacific Railway Company, executed in 1948 (the “ROW Agreements”). The ROW Agreements contained a clause permitting termination by either party on three months’ notice.
Remington acquired the Interlink Lands in 2002, at which time the ROW Agreements were assigned to it. Remington gave Enmax notice to terminate the ROW Agreements in 2005. Enmax objected, both to the validity of the assignment of the ROW Agreements to Remington and to Remington’s termination notice. Remington commenced an action against Enmax in the ABQB in 2008 for breach of contract and trespass (the “Action”).
In 2010, the parties agreed (the “Letter Agreement”) to make a special application to the ABQB for a determination of whether the ROW Agreements could be assigned to, and terminated by, Remington (the “Special Application”). The Letter Agreement provided that, if Remington was successful on the Special Application, Enmax would apply to the AUC for approval to relocate the transmission lines from the Interlink Lands. The Special Application was decided in Remington’s favour, and Enmax then applied to the AUC to relocate the transmission lines.
Application to AUC to Relocate Transmission Lines
Enmax applied to the AUC to relocate the transmission lines. However, the AUC denied the application on the basis that relocating the transmission lines was not in the public interest (AUC Decision 3360-D01-2015). Remington’s application to have the AUC review its decision was refused (AUC Decision 20612-D01-2015). The ABCA denied Remington’s application for leave to appeal the AUC’s decision.
In 2017, after the AUC proceedings were exhausted, Enmax applied to the SRB for Right of Entry Orders (“ROEs”), to permit Enmax to access the Interlink Lands.
On May 17, 2018, the SRB granted Enmax the requested ROEs. No application for judicial review of that SRB decision was brought within the requisite time period.
Remington applied to the ABQB for an order compelling Enmax to withdraw its ROE application to the SRB.
The chambers judge concluded that she was not able to determine, based on the evidence before her, whether the parties’ Letter Agreement precluded Enmax from going to the SRB. She viewed the heart of the dispute as determining which forum – the court or the SRB – should determine compensation payable to Remington for Enmax’s use of the Interlink Lands. The chambers judge concluded that the balance of convenience favoured having the dispute decided by the court. She dismissed Enmax’s appeal from the master’s refusal to stay the Action, and also “directed Enmax to withdraw the SRB Compensation Application.”
The chambers judge found that the compensation issue should not be determined by the SRB.
Grounds of Appeal
Enmax appealed both the refusal to stay the Action and the direction to withdraw the “SRB Compensation Application.” Enmax advanced multiple grounds of appeal, which were essentially that the chambers judge erred in law by:
(a) ignoring and failing to address the provisions of the Surface Rights Act, which provide that the SRB “shall” set compensation after it has issued an ROE and thereby usurping the exclusive jurisdiction of the SRB;
(b) failing to afford deference to the SRB in determining its own jurisdiction;
(c) granting a mandatory injunction without addressing and applying the applicable legal test; and
(d) dismissing the stay without applying the applicable legal test.
Standard of Review
The ABCA found that both applications before the chambers judge involved discretionary orders for interim injunctive relief. An appellate court will not generally interfere with such orders unless they are unreasonable or founded on an error in principle. Questions regarding the jurisdiction of the SRB, based on an interpretation of the Surface Rights Act, are reviewable for correctness.
ABQB Decision Regarding Appropriate Forum
The ABCA found that the chambers judge erred in principle when she identified the task before her as determining whether the SRB or the ABQB was the most appropriate forum to determine the amount of compensation payable to Remington.
The ABCA noted that the SRB proceedings and the Action addressed different issues. In the Action, Remington sought compensation for Enmax’s alleged breach of the ROW Agreements, trespass, and unjust enrichment. Absent agreement of the parties, these claims, and any associated damages would be determined in the ABQB. The SRB, on the other hand, is a statutory tribunal which has only those powers expressly or implicitly conferred on it by its enabling legislation. The SRB does not have the mandate or jurisdiction to determine the civil claims advanced in the Action. The ABCA found that the court would ultimately consider whether, and to what extent, compensation awarded by the SRB (including retroactive compensation if the SRB was found to have that authority) affected any damage award in the Action.
The ABCA further found that Remington did not demonstrate any irreparable harm that it would suffer as a result of the SRB proceedings, or that the balance of convenience of more streamlined proceedings outweighed the public interest of having the SRB determine compensation for the ROEs. The ABCA concluded that there was no principled basis to prevent the SRB from exercising its mandate in this case.
The ABCA also found that the chambers judge erred in principle in directing that “Enmax withdraw the SRB Compensation Application.” This was because there was no SRB Compensation Application by Enmax that was distinct from the applications for the ROEs, which were finally determined. The SRB, as a statutory tribunal, is required by its enabling legislation to hold hearings to determine the amount of compensation payable after a ROE has been issued (section 25 of the Surface Rights Act). The SRB is an expert tribunal charged with that mandate. The determination of compensation was a statutory requirement under the Surface Rights Act imposed on the SRB after it makes a ROE order. The ABCA found that there was no application by Enmax for compensation which could be withdrawn. Rather, there was an existing statutory obligation on the SRB to determine compensation that flows from the ROEs granted by it.
ABQB Decision Denying Stay of Action
The ABCA found that the chambers judge’s dismissal of Enmax’s application to stay the Action was based on the balance of convenience, flowing from her conclusion that the court was the appropriate forum to decide compensation. The ABCA found that the SRB should proceed to determine compensation for the ROEs, that the court was the appropriate forum to decide the issues in the Action, and that the amount of compensation determined by the SRB may not be coextensive with the damages determined in the Action. Accordingly, there was no good reason to stay the Action at this time.
The ABCA found that both the SRB compensation proceedings and the Action could proceed.
The ABCA granted the appeal of the ABQB’s direction that Enmax withdraw the SRB Compensation Application. The appeal of the dismissal of Enmax’s application for a stay of the Action was dismissed.