Federal Court Decisions

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Date: 20040705

Docket: T-760-04

Citation: 2004 FC 960


                                                    ALLIANCE PIPELINES LTD.




                                                DALE SMITH AND GWEN SMITH


                                                        REASONS FOR ORDER


[1]                 This application is an appeal by Alliance Pipelines Ltd. ("Alliance"), the owner of a natural gas pipeline which runs from northeastern British Columbia to near Chicago, Illinois, by way of British Columbia, Alberta and Saskatchewan, of an award, dated 5 September 2003 and released 15 March 2004, of a pipeline arbitration committee (the "Arbitrators") who were appointed by the Minister of Natural Resources.

[2]                 The Respondents in this proceeding, Dale Smith and Gwen Smith (the "Smiths") lease certain Crown land in Alberta for grazing cattle.

[3]                 The issue which Alliance appeals is narrow: the Arbitrators are said to have failed to take into account that the interest of the Smiths, in contrast with all of the other claims dealt with by the Arbitrators, was lease hold, not freehold. I shall refer to the leased land, used by the Smiths under their Crown grazing lease and the subject of this proceeding, as the "leased property".

[4]                 In deciding the present motion, as to the contents of the appeal book, I am handicapped: on the one hand Alliance has provided ample affidavit evidence, which I accept, together with exhibits, in support of the motion; on the other hand counsel for the Smiths has provided only brief bare assertions in argument, but no evidence. The Smiths have thus created a difficulty for themselves, similar to that commented upon by the Court of Appeal in Pfeiffer & Pfeiffer Inc. v. Alain Lafontaine, an unreported 22 October 2003 decision, 2003 FCA 391. There the Court of Appeal pointed out that on a motion a party must set out in an affidavit the necessary facts which do not appear in the Court record.    Any contradiction of, or opposition to a motion, must be by affidavit and while cross-examination might assist, that procedure did not detract from the obligation to provide an affidavit. Here there has been no cross-examination and, as I say, no affidavit evidence on behalf of the Smiths.

[5]                 The result of this motion is that Alliance succeeds: the appeal book shall contain the material proposed by Alliance, being only that sufficient to decide the appeal of Alliance against the award granted by the Arbitrators in favour of the Smiths as to the leased property. I now consider this in more detail, beginning with some further relevant background.


[6]                 Pursuant to the National Energy Board Act, approval to construct the pipeline and a certificate of public convenience and necessity authorizing in the pipeline, Alliance assembled easements. About 3,030 of the easements were by agreement and about 70 were by National Energy Board Right of Entry Orders. The latter can result in either further negotiation or arbitration proceedings. The Smiths served a notice of arbitration in connection with the leased property, the present matter and also a notice of arbitration in respect of adjacent lands which they own as freehold lands, in fee simple. That fee simple land is the subject of other court proceedings, but not the subject of either this action or this motion.

[7]                 In due course arbitrations took place, including as to the leased property. Each challenge by way of arbitration resulted in a separate decision from the arbitrators including separate decisions in the case of the leased property used by the Smiths and their adjacent freehold land.

[8]                 As I already said, all of the decisions, except that relating to the leased property, were released by September 2003 and, from the exhibits to the affidavit in support of this motion, the decision of the Arbitrators as to the leased property, was also made in September of 2003 but, through oversight, was not released by the arbitrator until 15 March 2004.

[9]                 I have examined the notice of appeal filed by Alliance in connection with the leased property used by the Smiths. I have also examined two specimen notices of appeal, being the notice of appeal filed by the Smiths in connection with their freehold land and notices of appeal, as to freehold property, filed in the Federal Court in action T-1817-03, a joint notice of appeal by a number of land owners. I have considered the Order of Mr Justice Rouleau of 10 December 2003 in proceeding T-1817-03, requiring separate and distinct appeals be filed by each party and a sample of one of those resulting appeals filed in action T-2393-03. It is clear from that material that the parties treated the awards as if they were final awards as to payments made in connection with the easements. I accept, from representations made by the Smiths in their response on the present motion and by Alliance in their reply, that the Arbitrators finalize their awards for compensation as to land utilised for the easements, that is the quantum of the award, leaving open costs and accrued interest. Thus I reject the position of the Smiths that the Arbitrators are engaging in some form of review of their decisions: this assertion is not supported by any evidence.

[10]            Returning to the notice of appeal filed as to the leased property it is, in contrast with the other notices of appeal as to the freehold property, an example of simplicity: at issue in the view of Alliance is a failure of the Arbitrators to differentiate leased land from freehold land when determining compensation, Alliance submits that once the Smiths had been compensated for temporary loss of use, they were made whole and should not be compensated for use of easements, on a market value basis, as would a freehold owner.

[11]            With this leased property issue in mind, together with the broader issues in mind concerning the freehold land claims being litigated in the Federal Court and Mr Justice Rouleau's Order of 10 December 2003, that a joint notice of appeal was "... not satisfactory and the Appellants are hereby ordered to file a separate and distinct appeal for each party within 20 days of the date of this Order.", counsel for Alliance proposed appeal book contents, in this proceeding, relating only to the leased property held by the Smiths. This proposal was rejected, counsel for the Smiths wishing a joint appeal book for all of those disputing the arbitration awards in this Court. Such joint appeal books would draw on some 16 volumes of material and in excess of 2,200 pages of transcripts, together with voluminous exhibits filed in the arbitration. In contrast the appeal book as proposed on behalf of Alliance contains 16 items.


[12]            Rule 344 sets out contents of an appeal book, which includes a notice of appeal, the order appealed from, any pleadings which define the issues, exhibits, transcripts and any other documents, with the limitation, as set out in Montana Band v. Canada, 2001 FCA 176, an unreported decision of the Federal Court of Appeal, at paragraph 8, that evidence not before the tribunal will not be considered on appeal, unless by court order whereby, under Rule 351, a court may in special circumstances grant leave to present new evidence. This concept of a need for leave in order to bring in additional material is founded on Rule 343(2) which limits the material in an appeal book to "... such documents, exhibits and transcripts as are required to dispose of the issues on appeal.".

[13]            Rule 343(3) provides that if the parties cannot reach agreement as to what ought to be included in the appeal book, they may seek assistance by way of a motion in writing, to have the court determine the contents of the appeal book.

[14]            The task for the court, in determining what ought to be in the appeal book is not easy, an observation made by the Justice of Appeal Letourneau in Canada (Minister of Environment) v. Canada (Information Commissioner) (2001), 14 C.P.R. (4th) 574 at 576. However among the points that Mr Justice of Appeal Letourneau made are two which have bearing, and here I paraphrase:

(a)                first, one ought to err on the safe side when it comes to including material; and

(b)                second, what is not required to disposed of the issues on appeal ought to be eliminated.

[1]                 In the present instance the issue is narrow, being the principles to apply in the reimbursement of a tenant who now has been compensated by the Arbitrators for lost grazing, under their Crown grazing lease and was, in the view of Alliance, improperly compensated for loss of land as if they were owners. The difference in the size of the modest appeal book proposed by the Appellant, Alliance and that proposed by the Smiths, as part of the massive appeal by many owners of land in fee simple, is very great. To adopt the large common appeal book applicable to fee simple owners, would be to consolidate all of the proceedings again: Mr Justice Rouleau has already, by his Order of 10 December 2003, broken the appeals from the Arbitrators down into separate and distinct appeals. Any re-consolidation by way of a common appeal book is not only improper, but indeed represents a collateral attack on Mr Justice Rouleau's determination.

[2]                 This appeal, between Alliance and the Smiths, involving not a fee simple ownership interest, but a Crown grazing lease, is clearly wholly distinct and different from all of the other appeals. It does not require a massive common appeal book and this would be so even were the same judge to hear all of the appeals arising out of a pipeline right-of-way, for surely the judge would wish to deal with Alliance's separate and distinct appeal, involving leased property, in isolation from the balance of the appeals, involving fee simple property.

[3]                 The Smiths had the opportunity to deal logically with the appeal book contents, in the context of this action, namely that of leased property; the opportunity to negotiate a relevant appeal book containing material reasonably required to dispose of the present appeal seems to have been squandered; and the opportunity to provide evidence in opposition to this motion was foregone.

[4]                 The appeal book shall be as proposed by Alliance. Alliance shall have its costs in any event, set mid-range in column III in the lump sum of $550.00.

(Sgd.) "John A. Hargrave"


Vancouver, British Columbia

5 July 2004

                                                            FEDERAL COURT



DOCKET:                                         T-760-04

STYLE OF CAUSE:                       Alliance Pipeline Ltd. v. Dale Smith and Gwen Smith

REASONS FOR ORDER OF:      Hargrave P.

DATED:                                             5 July 2004

WRITTEN REPRESENTATIONS BY:                            

Lars H Olthafer                                                                       FOR APPLICANT (APPELLANT)

J Darryl Carter, QC                                                                FOR RESPONDENTS


Fraser Milner Casgrain LLP                                                 FOR APPLICANT (APPELLANT)

Barristers & Solicitors

Calgary, Alberta

Darryl Carter & Company                                                     FOR RESPONDENTS

Barristers & Solicitors

Grande Prairie, Alberta

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