Decision Date: July 23, 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.)

Olaf Jorgensen (the “Applicant”) appealed a permit issued by the Oil and Gas Commission (“Commission”) to Encana Corporation (“Encana”). The permit authorized Encana to construct and operate a pipeline that would be partially located on the Applicant’s land, located northwest of Dawson Creek, BC. The Applicant uses the land for farming.

As a preliminary matter, the Applicant applied for a stay of the permit, pending the Tribunal’s decision on the merits of the appeal. The Applicant submitted that the permitted activities may cause irreparable harm to soil on his land, which would reduce the land’s productive capability. He also argued that Encana could use an existing pipeline that was not in use, instead of building a new pipeline in a new area.

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 Applicant had to establish that his interests would likely suffer irreparable harm if a stay was denied. The Tribunal concluded that the Applicant provided no information or evidence to support a finding that there was a reasonable likelihood of irreparable harm to his interests if a stay was denied. In addition, the Tribunal found that any damage to the Applicant’s land as a result of the permitted activities, if it occurred, and any temporary loss of use of his land, would be compensable. As such, any harm to the Applicant’s interests, if it occurred, would not be irreparable in nature.

Turning to the third part of the test, the Tribunal found that granting a stay would delay the construction and/or operation of the pipeline, if the appeal was ultimately unsuccessful and the permitted activities proceeded. Encana provided evidence that such a delay would cause it to incur added costs of approximately $430,000 to truck water to well sites that were intended to utilize the pipeline. The Tribunal held that those costs would amount to unrecoverable harm to Encana’s financial interests, although there was no evidence that those costs would put Encana out of business or permanently harm its business reputation. However, given that the potential harm alleged by the Applicant would be compensable if a stay was denied and such harm occurred, whereas at least some of the financial harm to Encana would not be compensable if a stay is granted, the Tribunal concluded that the balance of convenience favoured denying a stay.

Accordingly, the Tribunal denied the stay application.