Federal Court Decisions

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Decision Content

Date: 20020913

Docket: T-54-01

Neutral citation: 2002 FCT 976

Ottawa, Ontario, September 13, 2002

Present:    The Honourable Madam Justice Danièle Tremblay-Lamer

BETWEEN:

TERRY BALISKY, MARCIA BALISKY, BEV COLLIN

HOLDINGS LTD., BYRON BUE, RAYMOND BUE, PETER

EGGERS, LEVKE EGGERS, BRYAN ELLINGSON,

CHARLES EVASKEVICH, NORA EVASKEVICH, BRIAN

FAST, TERESA FAST, DOUG GABERT, RAYMOND

GILKYSON, VICKI GILKYSON, JAMES GLASMAN,

ELAINE GLASMAN, STIRLING HANSON, LAURA

HANSON, ROGER JONES, FERN JONES, DON LILAND,

LINDA LILAND, MARIO MAROUELLI, JAMIE

MAROUELLI, DONALD MEADOR, MONA MIDDLETON,

GLENDA HAUGHIAN, BRIAN MOE, JANICE MOE,

RANDY MOE, KRIS MOE, FRANKLIN MOLLER, LLOYD

OLLEY, KATHERINE OLLEY, DON PEDERSEN, KANE

PIPER, ROBERT RICHARDS, ADA RICHARDS, CORNIE

SCHMIDT, PRISCILLA SCMIDT, ALBERT SLATER,

KEN SLATER, DALE SMITH, GWEN SMITH, GORDON

STRATE, FRANK THEDERAHN, IRMA THEDERAHN and

ED WELSH

                                                               Applicants

                                   and

THE HONOURABLE RALPH GOODALE,

MINISTER OF NATURAL RESOURCES and

ALLIANCE PIPELINE LTD.

                                                              Respondents


                         REASONS FOR ORDER AND ORDER

[1]                 This is an application for judicial review commenced on January 15, 2001 and amended on August 8, 2001. The applicants seek judicial review "... in respect of the Minister of Natural Resources and his refusal and failure to appoint an Arbitration Committee or Committees to deal with the Notices of Arbitration served on the Minister by the applicants with respect to right of entry orders issued to Alliance Pipeline Ltd. by the National Energy Board and the Minister's request asking the Arbitration Committees not to consider the issue of the controlled area."

1.         BACKGROUND

[2]                 Alliance Pipeline Ltd. ("Alliance") and its U.S. affiliate own and operate natural gas mainline and lateral facilities extending from the northeast region of British Columbia to a point near Chicago, Illinois ("the pipeline").

[3]                 Alliance applied to the National Energy Board ("the Board") pursuant to Part III of the National Energy Board Act, R.S.C. 1085, c. N-7 ("the Act") on July 3, 1997 for approval to construct and operate the Canadian portion of the Pipeline. It received Board approval on November 26, 1998 pursuant to Board certificate GC-98. This certificate was approved by the Governor-in-Council by Order in Council, P.C. 1998-2176 dated December 3, 1998.


[4]                 Alliance acquired the required lands for the pipeline primarily by agreement. In those limited instances where Alliance was unable to acquire the land rights required from landowners by agreement, it applied and was granted right of entry orders by the Board pursuant to section 104 of the Act.

[5]                 Where a pipeline company and a landowner have not agreed to the compensation payable under the Act for the acquisition of lands, or for damages suffered as a result of the operations of the company, the Act provides for negotiation or arbitration proceedings to determine such compensation.

[6]                 Pursuant to section 90 of the Act, each of the applicants served Notices of Arbitration upon the Minister of Natural Resources ("the Minister") which requested, among other things, compensation for the lands within the "controlled area" created by section 112 of the Act on the same basis as for the acquisition of permanent rights of way.


[7]                 The Minister, by letter dated January 10, 2001, advised the parties that Arbitration Committees would be appointed under the Act to consider the matters referred to the Minister for arbitration, subject to the restriction that the Arbitration Committees would be prohibited from considering compensation for the "controlled area" on the basis that he was not satisfied that it was a matter to which Part V of the Act applied. The Minister reiterated that decision in letters dated February 7, 2001 and May 3, 2001.

[8]                 On January 15, 2001, the applicants commenced an application for judicial review of the Minister's decision. This application was struck by Dawson J. on July 25, 2001 on the basis that it was moot and requested relief that mandamus could not provide. However, she granted leave to the applicants to amend their original Notice of Application. The Amended Notice of Application was filed on August 8, 2001. It is this application which is now before the Court.

2.         SUBMISSIONS OF THE PARTIES

The Applicants' submissions

[9]                 The applicants submit that the Minister did not understand the nature of their claim when he said that "... I am not satisfied that the compensation sought in relation to the controlled area is directly related to the compensation for damages caused by a pipeline company when constructing, maintaining or repairing the pipeline."

[10]            The applicants argue that they were not seeking compensation in relation to the controlled area as "damages caused by a pipeline company when constructing, maintaining or repairing the pipeline". Rather, they were seeking damages for the acquisition of lands.


[11]            Pursuant to paragraph 97(1)(d) of the Act, an Arbitration Committee shall determine all compensation matters referred to in a notice of arbitration and shall, where applicable, consider the adverse effect of the taking of the lands by the company on the remaining lands of an owner.

[12]            The applicants argue that their lands outside the areas covered by the right of entry orders will be subject to the "controlled area" provisions of section 112 of the Act. This is a result of the taking of the lands and ought to be considered by an Arbitration Committee.

[13]            The applicants further argue that the list of factors that an Arbitration Committee shall consider pursuant to subsection 97(1) of the Act is not exhaustive, as paragraph 97(1)(i) states that the Committee shall consider such other factors that it considers proper in the circumstances.

The Respondents


[14]            Alliance explains that in order for the negotiation and arbitration provisions of the Act to apply to a determination of compensation in respect of the "controlled area" created by section112 of the Act, the "controlled area" must be characterized as damage caused by the pipeline company that is directly related to either the acquisition of lands for a pipeline, or the construction, or maintenance, inspection or repair of the pipeline.

[15]            Alliance submits that the word "directly" in section 84 of the Act requires the direct participation of Alliance in the creation of the "controlled area" in order for the negotiation and arbitration provisions of the Act to apply. The establishment of a "controlled area" is not a power exercised by Alliance, but a requirement of Parliament. This area is not related, in any direct manner, to the acquisition of the pipeline right-of-way itself.

  

[16]            The Minister further adds that a restriction of use in a "controlled area" does not constitute an acquisition of lands by a pipeline company and thus, the Minister properly exercised his discretion in refusing to refer the matter of the "controlled areas" to the Arbitration Committees.

3.         ISSUE

[17]            Whether the Minister erred in appointing an Arbitration Committee subject to the restriction that the Arbitration Committee not consider compensation for the "controlled area" created by section 112 of the Act?


4.         RELEVANT STATUTORY PROVISIONS

[18]            Part V of the Act (sections 73 to 115) deals with the powers of pipeline companies. The relevant provisions to the case at bar follow:



Powers of company

73. A company may, for the purposes of its undertaking, subject to this Act and to any Special Act applicable to it,

(a) enter into and on any Crown land without previous licence therefor, or into or on the land of any person, lying in the intended route of its pipeline, and make surveys, examinations or other necessary arrangements on the land for fixing the site of the pipeline, and set out and ascertain such parts of the land as are necessary and proper for the pipeline;

(b) purchase, take and hold of and from any person any land or other property necessary for the construction, maintenance and operation of its pipeline and alienate, sell or dispose of any of its land or property that for any reason has become unnecessary for the purpose of the pipeline;

(c) construct, lay, carry or place its pipeline across, on or under the land of any person on the located line of the pipeline;

(d) join its pipeline with the transmission facilities of any other person at any point on its route;

(e) construct, erect and maintain all necessary and convenient roads, buildings, houses, stations, depots, wharves, docks and other structures, and construct, purchase and acquire machinery and other apparatus necessary for the construction, maintenance and operation of its pipeline;

(f) construct, maintain and operate branch lines, and for that purpose exercise all the powers, privileges and authority necessary therefor, in as full and ample a manner as for a pipeline;

(g) alter, repair or discontinue the works mentioned in this section, or any of them, and substitute others in their stead;

       (h) transmit hydrocarbons by pipeline and regulate the time and manner in which hydrocarbons shall be transmitted, and the tolls to be charged therefor; and

(i) do all other acts necessary for the construction, maintenance and operation of its pipeline.

Damages and compensation

75. A company shall, in the exercise of the powers granted by this Act or a Special Act, do as little damage as possible, and shall make full compensation in the manner provided in this Act and in a Special Act, to all persons interested, for all damage sustained by them by reason of the exercise of those powers.

Application restricted

84. The provisions of this Part that provide negotiation and arbitration procedures to determine compensation matters apply in respect of all damage caused by the pipeline of a company or anything carried by the pipeline but do not apply to

(a) claims against a company arising out of activities of the company unless those activities are directly related to

       (i) the acquisition of lands for a pipeline,

(ii) the construction of the pipeline, or

(iii) the inspection, maintenance or repair of the pipeline;

(b) claims against a company for loss of life or injury to the person; or

(c) awards of compensation or agreements respecting compensation made or entered into prior to March 1, 1983.

Definition of "owner"

85. In sections 86 to 107, "owner" means any person who is entitled to compensation under section 75.

Methods of acquisition

86. (1) Subject to subsection (2), a company may acquire lands for a pipeline under a land acquisition agreement entered into between the company and the owner of the lands or, in the absence of such an agreement, in accordance with this Part.

[...]

Request for negotiations

88. (1) Where a company and an owner of lands have not agreed on the amount of compensation payable under this Act for the acquisition of lands or for damages suffered as a result of the operations of the company or on any issue related to that compensation, the company or the owner may serve notice of negotiation on the other of them and on the Minister requesting that the matter be negotiated under subsection (3).

[...]

Request for arbitration

90. (1) Where a company or an owner of lands wishes to dispense with negotiation proceedings under this Part or where negotiation proceedings conducted under this Part do not result in settlement of any compensation matter referred to in subsection 88(1), the company or the owner may serve notice of arbitration on the other of them and on the Minister requesting that the matter be determined by arbitration.

[...]

Duties of Minister

91. (1) Where the Minister is served with a notice of arbitration under this Part, the Minister shall,

(a) if an Arbitration Committee exists to deal with the matter referred to in the notice, forthwith serve the notice on that Committee; or

(b) if no Arbitration Committee exists to deal with the matter, forthwith appoint an Arbitration Committee and serve the notice on that Committee.

Exception

(2) The Minister shall not take any action under subsection (1) where the Minister is satisfied that the matter referred to in a notice of arbitration served on the Minister is a matter

(a) solely related to the amount of compensation that has been previously awarded by an Arbitration Committee and that, under the award, the amount is not subject to a review at the time the notice is served; or

(b) to which the arbitration procedures set out in this Part do not apply.

[...]

Determination of compensation

97. (1) An Arbitration Committee shall determine all compensation matters referred to in a notice of arbitration served on it and in doing so shall consider the following factors where applicable:

(a) the market value of the lands taken by the company;

(b) where annual or periodic payments are being made pursuant to an agreement or an arbitration decision, changes in the market value referred to in paragraph (a) since the agreement or decision or since the last review and adjustment of those payments, as the case may be;

(c) the loss of use to the owner of the lands taken by the company;

(d) the adverse effect of the taking of the lands by the company on the remaining lands of an owner;

(e) the nuisance, inconvenience and noise that may reasonably be expected to be caused by or arise from or in connection with the operations of the company;

(f) the damage to lands in the area of the lands taken by the company that might reasonably be expected to be caused by the operations of the company;

(g) loss of or damage to livestock or other personal property affected by the operations of the company;

(h) any special difficulties in relocation of an owner or his property; and

(i) such other factors as the Committee considers proper in the circumstances.

[...]

Immediate right of entry

104. (1) Subject to subsection (2), the Board may, on application in writing by a company, if the Board considers it proper to do so, issue an order to the company granting it an immediate right to enter any lands on such terms and conditions, if any, as the Board may specify in the order.

Where immediate right of entry prohibited

(2) An order under subsection (1) shall not be issued in respect of any lands unless the company making the application for the order satisfies the Board that the owner of the lands has, not less than thirty days and not more than sixty days prior to the date of the application, been served with a notice setting out

(a) the date the company intends to make its application to the Board under subsection (1);

(b) the date the company wishes to enter the lands;

(c) the address of the Board to which any objection in writing that the owner might wish to make concerning the issuance of the order may be sent; and

(d) a description of the right of the owner to an advance of compensation under section 105 if the order is issued and the amount of the advance that the company is prepared to make.

Construction of facilities across pipelines

112. (1) Subject to subsection (5), no person shall, unless leave is first obtained from the Board, construct a facility across, on, along or under a pipeline or excavate using power-operated equipment or explosives within thirty metres of a pipeline.

[...]

Pouvoirs

73. Sous réserve des autres dispositions de la présente loi et de toute loi spéciale la concernant, la compagnie peut, dans le cadre de son entreprise:

a) pénétrer sans autorisation sur tout terrain, appartenant ou non à la Couronne et situé sur le tracé de son pipeline, et y faire les levés, examens ou autres préparatifs requis pour fixer l'emplacement de celui-ci et marquer et déterminer les parties de terrain qui y seront appropriées;

b) acquérir et détenir les terrains ou autres biens-fonds nécessaires à la construction, à l'entretien et à l'exploitation de son pipeline, et aliéner, notamment par vente, toute partie des terrains ou biens-fonds devenue, pour quelque raison, inutile aux fins de la canalisation;

c) construire, poser, transporter ou placer son pipeline sur, à travers ou sous les terrains situés le long du tracé du pipeline;

d) raccorder son pipeline, à un point quelconque de son tracé, aux installations de transport appartenant à d'autres personnes;

e) construire et entretenir les chemins, bâtiments, maisons, gares et stations, dépôts, quais, docks et autres ouvrages utiles à ses besoins, et construire ou acquérir des machines et autres appareils nécessaires à la construction, à l'entretien et à l'exploitation de son pipeline;

f) construire, entretenir et exploiter des branchements et exercer à cette fin les attributions qu'elle a à l'égard du pipeline;

g) modifier, réparer ou cesser d'utiliser tout ou partie des ouvrages mentionnés au présent article et les remplacer par d'autres;

h) transporter des hydrocarbures par pipeline et fixer les moments où se fait le transport, la manière dont il se fait, ainsi que les droits à percevoir en l'espèce;

i) prendre toutes les autres mesures nécessaires à la construction, à l'entretien et à l'exploitation de sa canalisation.

Indemnisation

75. Dans l'exercice des pouvoirs qui lui sont conférés par la présente loi ou une loi spéciale, la compagnie doit veiller à causer le moins de dommages possibles et, selon les modalités prévues à la présente loi et à une loi spéciale, indemniser pleinement tous les intéressés des dommages qu'ils ont subis en raison de l'exercice de ces pouvoirs.

Application et exceptions

84. Les procédures de négociation et d'arbitrage prévues par la présente partie pour le règlement des questions d'indemnité s'appliquent en matière de dommages causés par un pipeline ou ce qu'il transporte, mais ne s'appliquent pas:

a) aux demandes relatives aux activités de la compagnie qui ne sont pas directement rattachées à l'une ou l'autre des opérations suivantes:

(i) acquisition de terrains pour la construction d'un pipeline,

(ii) construction de celui-ci,

(iii) inspection, entretien ou réparation de celui-ci;

b) aux demandes dirigées contre la compagnie pour dommages à la personne ou décès;

c) aux décisions et aux accords d'indemnisation intervenus avant le 1er mars 1983.

Définition de « propriétaire »

85. Pour l'application des articles 86 à 107, « propriétaire » désigne toute personne qui a droit à une indemnité aux termes de l'article 75.

Modes d'acquisition

86. (1) Sous réserve du paragraphe (2), la compagnie peut acquérir des terrains par un accord d'acquisition conclu avec leur propriétaire ou, à défaut d'un tel accord, conformément à la présente partie.

[...]

Demande de négociation

88. (1) À défaut d'entente entre la compagnie et le propriétaire sur toute question touchant l'indemnité, notamment son montant, à payer en vertu de la présente loi pour l'achat de terrains ou pour les dommages causés par les activités de la compagnie, la compagnie ou le propriétaire peut signifier à l'autre partie et au ministre un avis demandant que la question fasse l'objet de la négociation prévue au paragraphe (3).

[...]

Demande d'arbitrage

90. (1) Pour passer outre à la procédure de négociation ou en cas d'échec de celle-ci sur toute question visée au paragraphe 88(1), la compagnie ou le propriétaire peut signifier à l'autre partie et au ministre un avis d'arbitrage.

[...]

Obligations du ministre

91. (1) Dès qu'un avis d'arbitrage lui est signifié, le ministre:

a) si un comité d'arbitrage a déjà été constitué pour régler la question mentionnée dans l'avis, signifie à celui-ci l'avis d'arbitrage;

b) dans le cas contraire, nomme un comité d'arbitrage et signifie l'avis à celui-ci.

Exception

(2) Le paragraphe (1) ne s'applique pas dans les cas où le ministre est convaincu que la question mentionnée dans l'avis d'arbitrage qui lui a été signifié:

a) soit ne porte que sur le montant de l'indemnité accordé antérieurement par un comité d'arbitrage, lequel montant n'était pas, aux termes de la décision, susceptible de révision à la date de signification de l'avis;

b) soit est exclue de la procédure d'arbitrage.

[...]

Détermination de l'indemnité

97. (1) Le comité d'arbitrage doit régler les questions d'indemnité mentionnées dans l'avis qui lui a été signifié, et tenir compte, le cas échéant, des éléments suivants:

a) la valeur marchande des terrains pris par la compagnie;

b) dans le cas de versements périodiques prévus par contrat ou décision arbitrale, les changements survenus dans la valeur marchande mentionnée à l'alinéa a) depuis la date de ceux-ci ou depuis leurs derniers révision et rajustement, selon le cas;

c) la perte, pour leur propriétaire, de la jouissance des terrains pris par la compagnie;

d) l'incidence nuisible que la prise des terrains peut avoir sur le reste des terrains du propriétaire;

e) les désagréments, la gêne et le bruit qui risquent de résulter directement ou indirectement des activités de la compagnie;

f) les dommages que les activités de la compagnie risquent de causer aux terrains de la région;

g) les dommages aux biens meubles, notamment au bétail, résultant des activités de la compagnie;

h) les difficultés particulières que le déménagement du propriétaire ou de ses biens pourrait entraîner;

i) les autres éléments dont il estime devoir tenir compte en l'espèce.

[...]

Droit d'accès immédiat

104. (1) Sous réserve du paragraphe (2), l'Office peut, sur demande écrite d'une compagnie et s'il le juge utile, rendre une ordonnance accordant à celle-ci un droit d'accès immédiat à des terrains aux conditions qui y sont éventuellement précisées.

Conditions

(2) L'Office ne peut rendre l'ordonnance visée au paragraphe (1) que si la compagnie qui la demande le convainc que le propriétaire des terrains a, au moins trente jours et au plus soixante jours avant cette date, reçu signification d'un avis indiquant_:

a) la date de présentation de la demande;

b) la date à laquelle la compagnie entend pénétrer sur les terrains;

c) l'adresse du bureau de l'Office où il peut adresser ses observations écrites;

d) son droit à une avance sur le montant de l'indemnité visée à l'article 105 si l'ordonnance est accordée, ainsi que la somme que la compagnie est prête à verser à ce titre.

Interdiction de construire ou d'excaver

112. (1) Sous réserve du paragraphe (5), il est interdit, sans l'autorisation de l'Office, soit de construire une installation au-dessus, au-dessous ou le long d'un pipeline, soit de se livrer à des travaux d'excavation, avec de l'équipement motorisé ou des explosifs, dans un périmètre de trente mètres autour d'un pipeline.

[...]


5.    ANALYSIS

[19]            In order for the negotiation and arbitration provisions to apply to a determination of compensation in respect of the "controlled area" created by section 112 of the Act, the "controlled area" must be characterized as damage caused by the pipeline company that is directly related to either

            i)          the acquisition of lands for a pipeline,

            ii)         the construction of the pipeline, or


            iii)         the inspection, maintenance or repair of the pipeline (see section 84 of the Act).

[20]            The adverb "directly", as it is found in section 84 of the Act, is not defined in the Act, and I have found no jurisprudence interpreting section 84. The use of the dictionary definitions will be of assistance in giving its plain and ordinary meaning, keeping in mind Elmer Driedger's modern approach to statutory interpretation. This approach has become the preferred approach to statutory interpretation:

Today there is only one principle or approach, namely, the words of an Act are to be read in their entire context and in their grammatical and ordinary sense harmoniously with the scheme of the Act, the object of the Act, and the intention of Parliament.

E. Driedger, Construction of Statutes, 2nd., (Toronto: Butterworths, 1983), at 87.

  

[21]            Among the many definitions provided by The Oxford English Dictionary, 2nd ed., Vol. IV for "directly", I find the following one to be on point: "Without the intervention of a medium or agent; immediately; by a direct process or mode".

[22]            Black's Law Dictionary, 7th ed., defines "directly " as meaning "1. In a straightforward manner; 2. In a straight line or course; 3. Immediately".


[23]            In light of these definitions, the use of the word directly in section 84 of the Act will require the immediate participation of the pipeline company. As pointed out by the respondent Alliance, the "controlled area" established pursuant to section 112 of the Act is not related in any direct manner to the acquisition of the pipeline right-of-way itself. It is a statutory public safety requirement imposed on land owners by Parliament through the Act.

[24]            In a recent decision, the National Energy Board explained the purpose of section 112 of the Act and more particularly, outlined the difference between the 30 m safety zone and the right-of-way acquired by the pipeline company for the construction, operation, and maintenance of the pipeline. The Board stated:

[...] The 30m zone is a statutory requirement to protect the pipeline from third party damage which may harm the environment or place the public at risk. These provisions do not create an interest in land; nor do they prevent landowners from carrying out most activities on their properties.

[...]

The 30m safety zone should not be confused with the right-of-way acquired by the pipeline company for the construction, operation and maintenance of its pipeline [...] [I]n the 30m zone, the pipeline company holds no property interest and landowners may continue to carry out usual activities subject to the provisions of section 112 of the NEB Act and the related Pipeline Crossing Regulations.

Trans Quebec & Maritimes Pipeline Inc. GH-1-97 (April 1998), at 32.

[25]            I find this interpretation to be convincing. In my opinion, the claim for compensation for acquisition of lands by Alliance in relation to the "controlled area" is too remote to satisfy the direct connection prescribed by section 84 of the Act.


[26]            To summarize, section 84 specifically requires that the negotiation and arbitration procedures will apply to "claims against a company arising out of activities of the company..." if those activities are directly related to "the acquisition of lands for a pipeline ..." As I have mentioned previously, the "controlled area" is not the result of an activity of the company. Alliance did not acquire lands in the "controlled area". The damages alleged by the applicants with regards to the controlled area result from a statutory requirement.

[27]            Having concluded that the damages claimed are not directly related to the activities of Alliance, there is no need to look at paragraph 97(1)(d) of the Act, as it is part of the negotiation and arbitration procedures of the Act, and I have found that these procedures do not apply in respect of the "controlled area".

[28]            For these reasons, the application for judicial review is dismissed.

                                                  ORDER

THIS COURT ORDERS THAT

The application for judicial review is dismissed.

     

                                                                      "Danièle Tremblay-Lamer"

J.F.C.C.


                          FEDERAL COURT OF CANADA

                                       TRIAL DIVISION

    NAMES OF COUNSEL AND SOLICITORS OF RECORD

   

DOCKET:             T-54-01

STYLE OF CAUSE:                                        TERRY BALISKY ET AL v. THE HONOURABLE RALPH GOODALE, MINISTER OF NATURAL RESOURCES and ALLIANCE PIPELINE LTD.

PLACE OF HEARING:                                   Edmonton, Alberta

DATE OF HEARING:                                     September 10, 2002

REASONS FOR: The Honourable Madam Justice Danièle Tremblay-Lamer

DATED:                 September 13, 2002

   

APPEARANCES:

Mr. Darryl Carter    FOR APPLICANTS

Ms. Rolinda Mack FOR RESPONDENT (Minister)

Mr. Lars Olthafer    FOR RESPONDENT (Alliance Pipeline)

   

SOLICITORS OF RECORD:

Carter, Lock & Horrigan                                     FOR APPLICANTS

Grande Prairie, Alberta

Morris Rosenberg    FOR RESPONDENT (Minister)

Deputy Attorney General

of Canada

Fraser Milner Casgrain LLP                                 FOR RESPONDENT (Alliance Pipeline)

Calgary, Alberta

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