Decision Date: August 1, 2018

Panel: Alan Andison

Keywords: Administrative Tribunals Act – ss. 31(a), (c), (f); preliminary decision; summary dismissal; pipeline; permit amendment; jurisdiction; abuse of process; no reasonable prospect of success

Brian and Carolyn Derfler appealed the amendment of a pipeline permit held by Encana Corporation (“Encana”). The amendment was issued by the Oil and Gas Commission (“Commission”), and authorized Encana to make certain changes to a pipeline that crossed the Derflers’ land. Specifically, the amendment allowed two segments of the pipeline to be split, and the installation of two risers on leased sites.

The original permit was issued in 2015, and authorized Encana to construct and operate a five segment pipeline. After the permit was issued, it was amended twice in 2017 to allow an increase in the concentration of sour gas (hydrogen sulphide) allowed in two pipeline segments, but the Derflers did not appeal those amendments.

In October 2017, Encana notified the Derflers of its intention to apply for the amendment that was the subject of this appeal. Also in October 2017, Encana notified the Derflers of a new proposal involving nine pipeline segments (the “New Pipeline Project”), some of which would traverse the Derflers’ land.

In response, Mr. Derfler filed a written submission that raised concerns about Encana’s survey access to their land, soil handling and reclamation, pipeline failure, contamination, and pipeline abandonment.

In December 2017, Encana applied to the Commission for the permit amendment. The Commission issued the amendment in March 2018.

The Derflers appealed the amendment. In their Notice of Appeal, they submitted that the Commission did not properly address the concerns in their written submission. They requested the pipeline be relocated, because the pipelines on their property affected their farming operation, quality of life, and ability to sell their land.

In their Notice of Appeal, the Derflers also applied for a stay. On May 16, 2018, the Tribunal issued a decision denying their stay application (Decision No. 2018-OGA-001(a)). In that decision, the Tribunal concluded that none of the Derflers’ grounds for appeal related to the amendment; rather, their concerns related to the 2015 permit, previous amendments to the permit, the New Pipeline Project, and pipelines generally.

Encana requested that the appeal be summarily dismissed pursuant to sections 31(1)(a), (c), and (f) of the Administrative Tribunals Act (the “ATA”), on the basis that the appeal was not within the Tribunal’s jurisdiction, was vexatious and an abuse of process, and had no reasonable prospect of success.

The Tribunal found that none of the issues raised by the Derflers related to the subject matter of the amendment. The amendment had no effect on the matters that the Derflers were concerned about, including the sour gas content in the pipeline, the direction of flow in the pipeline, the emergency planning zone for the pipeline, or the regulatory standards for pipeline construction and operation. As such, the issues raised by the appeal were clearly outside of the Tribunal’s jurisdiction. Accordingly, the Tribunal found that the application for summary dismissal should be granted pursuant to section 31(1)(a) of the ATA.

In addition, the Tribunal found that the appeal likely had no reasonable prospect of success, given that the Derflers had raised no issues that were within the Tribunal’s jurisdiction. Accordingly, the Tribunal found that the application for summary dismissal should be granted pursuant to section 31(1)(f) of the ATA.

Finally, the Tribunal held that, in order for the appeal to be vexatious, there would need to be evidence that the appeal was being pursued purely to cause annoyance to the Commission and/or Encana. There is no such evidence. However, in the circumstances, the Tribunal found that it would be a waste of time and resources to proceed with a full hearing of the appeal, and would amount to an abuse of process. Accordingly, the Tribunal concluded that the application for summary dismissal should also be granted pursuant to section 31(1)(c) of the ATA.

Accordingly, Encana’s application for summary dismissal was granted, and the appeal was dismissed.