Decision Date:  July 12, 2013

Panel:  Alan Andison

Keywords: Oil and Gas Activities Act – s. 72(3); preliminary decision; stay; pipeline; permit; RJR-MacDonald Inc. v. Canada (Attorney General) (1994), 111 D.L.R. (4th) 385 (S.C.C.)

Shallan Hauber appealed a decision of the Oil and Gas Commission (“Commission”) to amend a permit that authorizes Murphy Oil Company Ltd. (“Murphy Oil”) to construct and operate a pipeline.

In October 2011, the Commission issued a pipeline permit to Murphy Oil. The pipeline was constructed in late 2011, and consists of three flow lines within a 15-metre right of way.

In September 2012, Murphy Oil notified the Commission that the pipeline had been bored under part of Ms. Hauber’s land, instead of under the adjacent Crown land. The error involves 0.01 hectares, and resulted in no disturbance to the surface of Ms. Hauber’s land.

In October 2012, the Commission ordered Murphy Oil to comply with its pipeline permit, or apply for an amendment to the permit. The Commission later issued two further orders to Murphy Oil in relation to the misplacement of the pipeline.

Meanwhile, Murphy Oil applied for an amendment of its pipeline permit. As part of the statutory requirements for its application for the amendment, Murphy Oil conducted notification and consultation with Ms. Hauber. In response, she provided written submissions on three occasions expressing concerns about Murphy Oil’s conduct and its trespass onto her land.

In May 2013, the Commission issued the amendment, which identifies that correct location of the pipeline in relation to Ms. Hauber’s land, and adds a number of conditions that pertain to Ms. Hauber’s land.

On or about June 3, 2013, the Surface Rights Board decided to issue an order that gives Murphy Oil a right of entry to, and access across, Ms. Hauber’s land, subject to certain conditions. One of those conditions is that Murphy Oil must pay Ms. Hauber $1,000 as “partial compensation.”

On June 3, 2013, Ms. Hauber appealed the amendment to the Commission on the basis that: the Commission did not consider that Murphy Oil was trespassing on Ms. Hauber’s land, as stated in Ms. Hauber’s written submissions before the amendment was issued; the Surface Rights Board ignored the fact that Murphy Oil was trespassing; and, the amendment issued by the Commission and the order issued by the Surface Rights Board allow Murphy Oil to contravene the law and disregard Ms. Hauber’s rights as a land owner.

As a preliminary matter, Ms. Hauber requested a stay of the amendment under section 72(3) of the Oil and Gas Activities Act, pending the Tribunal’s decision on the merits of her appeal.

Murphy Oil opposed the application for a stay.

The Commission took no position on the application.

In determining whether a stay ought to be granted, the Tribunal applied the three-part test set out in the Tribunal’s Rules of Practice and Procedure. That three-part test is based on the Supreme Court of Canada’s decision in RJR-MacDonald Inc. v. Canada (Attorney General).

With respect to the first part of the test, the Tribunal found that the appeal raised serious issues to be decided. The Tribunal noted that the issues raised by Ms. Hauber regarding the Surface Rights Board are outside of the Tribunal’s jurisdiction. However, the Tribunal found that her appeal raised issues related to the permit amendment, which are within the Tribunal’s jurisdiction and are not frivolous, vexatious or pure questions of law.

Regarding the second part of the test, the Tribunal found that Ms. Hauber, as the applicant for a stay, has the onus of establishing that her interests would likely suffer irreparable harm unless a stay was granted. However, Ms. Hauber conceded that she did not meet the tests for either irreparable harm, or the balance of convenience. In addition, the Tribunal noted that a stay of the amendment would not result in the removal of the pipeline from Ms. Hauber’s land, and Murphy Oil acknowledges that Ms. Hauber is entitled to compensation for the pipeline ebing under her land. The Tribunal found, therefore, that any harm to Ms. Hauber’s interests, if a stay was denied, would be compensable and not “irreparable” in nature, according to the test set out in RJR-MacDonald.

Turning to the third part of the test, the Tribunal concluded that the balance of convenience weighed in favour is denying a stay. The Tribunal noted that a stay is an extraordinary remedy. Murphy Oil obtained the amendment through the process established in the legislation, and therefore, the amendment is valid on its face. Consequently, Murphy Oil should not be prevented from exercising its rights under the amended permit unless it will lead to irreparable harm to Ms. Hauber, which she did not establish.

Accordingly, the application for a stay was denied.