Decision Date: June 5, 2019

Panel: Alan Andison

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

Blane and Maryann Meek (the “Applicants”) appealed a permit issued by the Oil and Gas Commission (“Commission”) to Primavera Resources Corp (“Primavera”). The permit authorized Primavera to extend an existing well pad and construct, drill, complete, and flare an oil and gas well (the “Well”). The well pad is located on the Applicants’ land, west of the City of Fort St. John, BC, and approximately 150 metres from the Applicants’ home.

As a preliminary matter, the Applicants applied for a stay of the permit, pending the Tribunal’s decision on the merits of the appeal. The Applicants submitted that the permitted activities may cause irreparable harm to their land, the environment, and public safety. The Applicants argued that the well pad is on land that is unstable. A Stability Impact Line for the Site C dam’s reservoir is located approximately 100 metres south of the Well pad. The Applicants maintained that if hydraulic fracturing at the Well triggered a catastrophic landslide, the Applicants’ property would be lost forever.

In determining whether the stay application ought to be granted, the Tribunal applied the three-part test set out in the Tribunal’s Rules of Practice and Procedure, which 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 that were not frivolous, vexatious or pure questions of law. Therefore, the Tribunal proceeded to consider the next part of the test.

In the second part of the test, the Applicants had to establish that their interests would likely suffer irreparable harm if a stay was denied. The Applicants provided a letter from an engineering consultant stating that the Ministry of Transportation and Infrastructure required a geotechnical engineer to assess the landslide risk on their land before any further residential development could occur. The Tribunal found that this risk applied equally (if not more so) to the construction, drilling and completion of the Well that land. There was no evidence that Primavera or the Commission had conducted a slope stability assessment or a landslide risk assessment before the Permit was issued. Furthermore, the Permit contained no conditions addressing slope stability or landslide risks. In addition, it was unclear how any harm to the Applicants would be remedied if a landslide occurred. While the Applicants may receive financial compensation for damage to their property, there was no information regarding the possibility of compensation for harm to public safety or a loss of life arising from oil and gas activities on a person’s land.

Even if the likelihood of such events occurring was very low, the Tribunal noted that “irreparable” harm includes cases where a permanent loss of natural resources will be the result when a challenged activity is not enjoined. The Tribunal concluded that if a landslide occurred the Applicants’ land as a result of the permitted oil and gas activities, it would constitute irreparable harm to the Applicants’ interests.

Turning to the third part of the test, the Tribunal found that the balance of convenience weighed in favour of granting a stay. The Tribunal found that Primavera would suffer a temporary loss of revenues if a stay was granted, whereas the Applicants may suffer irreparable harm if a stay was denied. In addition, the Tribunal held that it could not be assumed that the Permit, on its face, provided adequate protection for the public interest in the environment and public safety, consistent with the public interest objectives of the Oil and Gas Activities Act. Denying a stay would result in Primavera proceeding with the permitted activities despite the apparent uncertainties regarding potential effects of those activities on the Applicants’ land, environmental values, and public safety.

Accordingly, the Tribunal granted the stay application.