Orphan Well Association v. Grant Thornton Ltd.

Orphan Well Association v. Grant Thornton Ltd.
Collection
Supreme Court Judgments
Date
2019-01-31
Neutral citation
2019 SCC 5
Report
[2019] 1 SCR 150
Case number
37627
Judges
Wagner, Richard; Abella, Rosalie Silberman; Moldaver, Michael J.; Karakatsanis, Andromache; Gascon, Clément; Côté, Suzanne; Brown, Russell
On appeal from
Alberta
Notes
Case in Brief SCC Case Information
Decision Content
SUPREME COURT OF CANADA
Citation: Orphan Well Association v. Grant Thornton Ltd., 2019 SCC 5, [2019] 1 S.C.R. 150
Appeal Heard: February 15, 2018 Judgment Rendered: January 31, 2019 Docket: 37627
Between:
Orphan Well Association and Alberta Energy Regulator
Appellants
and
Grant Thornton Limited and ATB Financial (formerly known as Alberta Treasury Branches)
Respondents
- and -
Attorney General of Ontario, Attorney General of British Columbia, Attorney General of Saskatchewan, Attorney General of Alberta, Ecojustice Canada Society, Canadian Association of Petroleum Producers, Greenpeace Canada, Action Surface Rights Association, Canadian Association of Insolvency and Restructuring Professionals and Canadian Bankers’ Association
Interveners
Coram: Wagner C.J. and Abella, Moldaver, Karakatsanis, Gascon, Côté and Brown JJ.
Reasons for Judgment: (paras. 1 to 164)
Wagner C.J. (Abella, Karakatsanis, Gascon and Brown JJ. concurring)
Dissenting Reasons: (paras. 165 to 292)
Côté J. (Moldaver J. concurring)
Orphan Well Association v. Grant Thornton Ltd., 2019 SCC 5, [2019] 1 S.C.R. 150
Orphan Well Association and
Alberta Energy Regulator Appellants
v.
Grant Thornton Limited and
ATB Financial (formerly known as
Alberta Treasury Branches) Respondents
and
Attorney General of Ontario,
Attorney General of British Columbia,
Attorney General of Saskatchewan,
Attorney General of Alberta,
Ecojustice Canada Society,
Canadian Association of Petroleum Producers,
Greenpeace Canada,
Action Surface Rights Association,
Canadian Association of Insolvency
and Restructuring Professionals and
Canadian Bankers’ Association Interveners
Indexed as: Orphan Well Association v. Grant Thornton Ltd.
2019 SCC 5
File No.: 37627.
2018: February 15; 2019: January 31.
Present: Wagner C.J. and Abella, Moldaver, Karakatsanis, Gascon, Côté and Brown JJ.
on appeal from the court of appeal for alberta
Constitutional law — Division of powers — Federal paramountcy — Bankruptcy and insolvency — Environmental law — Oil and gas — Oil and gas companies in Alberta required by provincial comprehensive licensing regime to assume end‑of‑life responsibilities with respect to oil wells, pipelines, and facilities — Provincial regulator administering licensing regime and enforcing end‑of‑life obligations pursuant to statutory powers — Trustee in bankruptcy of oil and gas company not taking responsibility for company’s unproductive oil and gas assets and seeking to walk away from environmental liabilities associated with them or to satisfy secured creditors’ claims ahead of company’s environmental liabilities — Whether regulator’s use of powers under provincial legislation to enforce bankrupt company’s compliance with end‑of‑life obligations conflicts with trustee’s powers under federal bankruptcy legislation or with the order of priorities under such legislation — If so, whether provincial regulatory regime inoperative to extent of conflict by virtue of doctrine of federal paramountcy — Bankruptcy and Insolvency Act, R.S.C. 1985, c. B‑3, s. 14.06 — Oil and Gas Conservation Act, R.S.A. 2000, c. O‑6, s. 1(1)(cc) — Environmental Protection and Enhancement Act, R.S.A. 2000, c. E‑12, s. 134(b)(vi) — Pipeline Act, R.S.A. 2000, c. P‑15, s. 1(1)(n).
In order to exploit oil and gas resources in Alberta, a company needs a property interest in the oil or gas (typically, a mineral lease with the Crown, which Canadian courts classify as a profit à prendre), surface rights and a licence issued by the Alberta Energy Regulator (“Regulator”). Under provincial legislation, the Regulator will not grant a licence to extract, process or transport oil and gas in Alberta unless the licensee assumes end‑of‑life responsibilities for plugging and capping oil wells to prevent leaks, dismantling surface structures and restoring the surface to its previous condition. These end‑of‑life obligations are known as “abandonment” and “reclamation”.
The Licensee Liability Rating Program is one means by which the Regulator seeks to ensure that end‑of‑life obligations will be satisfied by licensees. As part of this program, the Regulator assigns each company a Liability Management Rating (“LMR”), which is the ratio between the aggregate value attributed by the Regulator to a company’s licensed assets and the aggregate liability attributed by the Regulator to the eventual cost of abandoning and reclaiming those assets. For the purpose of calculating the LMR, all the licences held by a given company are treated as a package. A licensee’s LMR is calculated on a monthly basis and, where it dips below the prescribed ratio, the licensee is required to bring its LMR back up to the prescribed level by paying a security deposit, performing end‑of‑life obligations, or transferring licences with the Regulator’s approval. If either the transferor or the transferee would have a post‑transfer LMR below 1.0, the Regulator will normally refuse to approve the licence transfer.
The insolvency of an oil and gas company licensed to operate in Alberta engages Alberta’s comprehensive licensing regime, which is binding on companies active in the oil and gas industry, and the Bankruptcy and Insolvency Act (“BIA ”), federal legislation that governs the administration of a bankrupt’s estate and the orderly and equitable distribution of property among its creditors. Alberta’s Environmental Protection and Enhancement Act (“EPEA”) ensures that a licensee’s regulatory obligations will continue to be fulfilled when it is subject to insolvency proceedings by including the trustee of a licensee in the definition of “operator” for the purposes of the duty to reclaim and by providing that an order to perform reclamation work may be issued to a trustee. However, it expressly limits a trustee’s liability in relation to such an order to the value of the assets in the bankrupt estate, absent gross negligence or wilful misconduct. The Oil and Gas Conservation Act (“OGCA”) and the Pipeline Act take a more generic approach: they simply include trustees in the definition of “licensee”. As a result, every power which these Acts give the Regulator against a licensee can theoretically also be exercised against a trustee. The Regulator has delegated the authority to abandon and reclaim “orphans” — oil and gas assets and their sites left behind in an improperly abandoned or unreclaimed state by defunct companies at the close of their insolvency proceedings — to the Orphan Well Association (“OWA”), an independent non‑profit entity. The OWA has no power to seek reimbursement of its costs, but it may be reimbursed up to the value of any security deposit held by the Regulator to the credit of the licensee of the orphans once it has completed its environmental work.
Redwater, a publicly traded oil and gas company, was first granted licences by the Regulator in 2009. Its principal assets are 127 oil and gas assets — wells, pipelines and facilities — and their corresponding licences. A few of its licensed wells are still producing and profitable, but the majority are spent and burdened with abandonment and reclamation liabilities that exceed their value. In 2013, ATB Financial, which had full knowledge of the end‑of‑life obligations associated with Redwater’s assets, advanced funds to Redwater and, in return, was granted a security interest in Redwater’s present and after‑acquired property. In mid‑2014, Redwater began to experience financial difficulties. Grant Thornton Limited (“GTL”) was appointed as its receiver in 2015. At that time, Redwater owed ATB approximately $5.1 million and had 84 wells, 7 facilities and 36 pipelines, 72 of which were inactive or spent, but, since Redwater’s LMR did not drop below the prescribed ratio until after it went into receivership, it never paid any security deposits to the Regulator.
Upon being advised of Redwater’s receivership, the Regulator notified GTL that it was legally obligated to fulfill abandonment obligations for all licensed assets prior to distributing any funds or finalizing any proposal to creditors. The Regulator warned that it would not approve the transfer of any of Redwater’s licences unless it was satisfied that both the transferee and the transferor would be in a position to fulfill all regulatory obligations, and that the transfer would not cause a deterioration in Redwater’s LMR. GTL concluded that it could not meet the Regulator’s requirements because the cost of the end‑of‑life obligations for the spent wells would likely exceed the sale proceeds for the productive wells. Based on this assessment, GTL informed the Regulator that it was taking possession and control only of Redwater’s 17 most productive wells, 3 associated facilities and 12 associated pipelines (“Retained Assets”), and that it was not taking possession or control of any of Redwater’s other licensed assets (“Renounced Assets”). GTL’s position was that it had no obligation to fulfill any regulatory requirements associated with the Renounced Assets. In response, the Regulator issued orders under the OGCA and the Pipeline Act requiring Redwater to suspend and abandon the Renounced Assets (“Abandonment Orders”). The Regulator imposed short deadlines, as it considered the Renounced Assets an environmental and safety hazard.
The Regulator and the OWA then filed an application for a declaration that GTL’s renunciation of the Renounced Assets was void, and for orders requiring GTL to comply with the Abandonment Orders and to fulfill the end‑of‑life obligations associated with Redwater’s licensed properties. The Regulator did not seek to hold GTL liable for these obligations beyond the assets remaining in the Redwater estate. GTL brought a cross‑application seeking approval to pursue a sales process excluding the Renounced Assets and an order directing that the Regulator could not prevent the transfer of the licences associated with the Retained Assets on the basis of, inter alia, the LMR requirements, failure to comply with the Abandonment Orders, refusal to take possession of the Renounced Assets or Redwater’s outstanding debts to the Regulator. A bankruptcy order was issued for Redwater and GTL was appointed as trustee. GTL invoked s. 14.06(4) (a)(ii) of the BIA in relation to the Renounced Assets.
The chambers judge and a majority of the Court of Appeal agreed with GTL and held that the Regulator’s proposed use of its statutory powers to enforce Redwater’s compliance with abandonment and reclamation obligations during bankruptcy conflicted with the BIA in two ways: (1) it imposed on GTL the obligations of a licensee in relation to the Redwater assets disclaimed by GTL, contrary to s. 14.06(4) of the BIA ; and (2) it upended the priority scheme for the distribution of a bankrupt’s assets established by the BIA by requiring that the provable claims of the Regulator, an unsecured creditor, be paid ahead of the claims of Redwater’s secured creditors. The dissenting judge in the Court of Appeal would have allowed the Regulator’s appeal on the basis that there was no conflict between Alberta’s environmental legislation and the BIA .
Held (Moldaver and Côté JJ. dissenting): The appeal should be allowed.
Per Wagner C.J. and Abella, Karakatsanis, Gascon and Brown JJ.: The Regulator’s use of its statutory powers does not create a conflict with the BIA so as to trigger the doctrine of federal paramountcy. Section 14.06(4) of the BIA is concerned with the personal liability of trustees, and does not empower a trustee to walk away from the environmental liabilities of the estate it is administering. Furthermore, the Regulator is not asserting any claims provable in the bankruptcy, and the priority scheme in the BIA is not upended. Thus, no conflict is caused by GTL’s status as a licensee under Alberta legislation. Alberta’s regulatory regime can coexist with and apply alongside the BIA .
Bankruptcy is not a licence to ignore rules, and insolvency professionals are bound by and must comply with valid provincial laws during bankruptcy. They must, for example, comply with non‑monetary obligations that are binding on the bankrupt estate, that cannot be reduced to provable claims, and the effects of which do not conflict with the BIA , notwithstanding the consequences this may have for the bankrupt’s secured creditors. Given the procedural nature of the BIA , the bankruptcy regime relies heavily on the continued operation of provincial laws but, where there is a genuine conflict between provincial laws concerning property and civil rights and federal bankruptcy legislation, the BIA prevails. The BIA as a whole is intended to further two purposes: the equitable distribution of the bankrupt’s assets among his or her creditors and the bankrupt’s financial rehabilitation. As Redwater is a corporation that will never emerge from bankruptcy, only the former purpose is relevant here.
The Abandonment Orders and the LMR requirements are based on valid provincial laws of general application — exactly the kind of valid provincial laws upon which the BIA is built. There is no conflict between the Alberta regulatory scheme and s. 14.06 of the BIA , because, under s. 14.06(4) , a trustee’s disclaimer of real property when there is an order to remedy any environmental condition or damage affecting that property protects the trustee from personal liability, while the ongoing liability of the bankrupt estate is unaffected. This interpretation is supported by the plain language of the section, the Hansard evidence, a previous decision of this Court and the French version of the section. The same concept is also found in both s. 14.06(1.2) and s. 14.06(2) , which also specifically state that the trustee is not personally liable — it is impossible to coherently read s. 14.06(2) as referring to personal liability and yet read s. 14.06(4) as somehow referring to the liability of the bankrupt estate.
Even assuming that GTL had successfully disclaimed in this case, no operational conflict or frustration of purpose would result from the fact that the Regulator requires GTL, as a licensee, to expend estate assets on abandoning the Renounced Assets. Furthermore, no conflict would be caused by continuing to include the Renounced Assets in the calculation of Redwater’s LMR. Finally, given the restraint with which the doctrine of paramountcy must be applied, and given that the Regulator has not attempted to hold GTL personally liable as a licensee for the costs of abandonment, no conflict with s. 14.06(2) or s. 14.06(4) of the BIA is caused by the mere theoretical possibility of personal liability under the OGCA or the Pipeline Act.
The end‑of‑life obligations binding on GTL are not claims provable in the Redwater bankruptcy. Not all environmental obligations enforced by a regulator will be claims provable in bankruptcy. The test set out by the Court in Newfoundland and Labrador v. AbitibiBowater Inc., 2012 SCC 67, [2012] 3 S.C.R. 443 (“Abitibi”), must be applied to determine whether a particular regulatory obligation amounts to a claim provable in bankruptcy: (1) there must be a debt, a liability or an obligation to a creditor; (2) the debt, liability or obligation must be incurred before the debtor becomes bankrupt; and (3) it must be possible to attach a monetary value to the debt, liability or obligation. Only the first and third parts of the test are at issue in the instant case.
With respect to the first part of the test, Abitibi should not be taken as standing for the proposition that a regulator is always a creditor when it exercises its statutory enforcement powers against a debtor. A regulator exercising a power to enforce a public duty is not a creditor of the individual or corporation subject to that duty. Here, it is not disputed that, in seeking to enforce Redwater’s end‑of‑life obligations, the Regulator is acting in a bona fide regulatory capacity and does not stand to benefit financially. It is clear that the Regulator acted in the public interest and for the public good in issuing the Abandonment Orders and enforcing the LMR requirements and that it is, therefore, not a creditor of Redwater. The public is the beneficiary of those environmental obligations; the province does not stand to gain financially from them. Strictly speaking, this is sufficient to dispose of this aspect of the appeal.
As it may prove helpful in future cases, under the third part of the test, a court must determine whether there are sufficient facts indicating the existence of an environmental duty that will ripen into a financial liability owed to a regulator. In determining whether a non‑monetary regulatory obligation of a bankrupt is too remote or too speculative to be included in the bankruptcy proceeding, the court must apply the general rules that apply to future or contingent claims. It must be sufficiently certain that the contingency will come to pass — in other words, that the regulator will enforce the obligation by performing the environmental work and seeking reimbursement. In the instant case, the Abandonment Orders and the LMR requirements fail to satisfy this part of the test. It is not established by the evidence that it is sufficiently certain that the Regulator will perform the abandonments and advance a claim for reimbursement. This claim is too remote and speculative to be included in the bankruptcy process. Furthermore, the Regulator’s refusal to approve licence transfers unless and until the LMR requirements have been satisfied does not give it a monetary claim against Redwater.
In crafting the priority scheme of the BIA , Parliament intended to permit regulators to place a first charge on real property of a bankrupt affected by an environmental condition or damage in order to fund remediation. Thus, the BIA explicitly contemplates that environmental regulators will extract value from the bankrupt’s real property if that property is affected by an environmental condition or damage. Although the nature of property ownership in the Alberta oil and gas industry meant that s. 14.06(7) was unavailable to the Regulator, the Abandonment Orders and the LMR replicate the effect of s. 14.06(7) in this case. Furthermore, Redwater’s only substantial assets were affected by environmental conditions or damage. Accordingly, the Abandonment Orders and LMR requirements did not seek to force Redwater to fulfill end‑of‑life obligations with assets unrelated to the environmental condition or damage. In other words, recognizing that the Abandonment Orders and LMR requirements are not provable claims in this case does not interfere with the aims of the BIA — rather, it facilitates them.
Per Moldaver and Côté JJ. (dissenting): GTL and ATB have satisfied their burden of demonstrating a genuine inconsistency between federal and provincial law under both branches of the paramountcy test, namely operational conflict and frustration of purpose. Accordingly, the appeal should be dismissed.
Because Alberta’s statutory regime does not recognize the disclaimers by trustees of assets encumbered by environmental liabilities as lawful by virtue of the fact that receivers and trustees are regulated as licensees who cannot disclaim assets, there is an unavoidable conflict between federal and provincial law. Alberta’s legislation governing the oil and gas sector should therefore be held inoperative to the extent that it does not recognize the legal effect of GTL’s disclaimers. An operational conflict arises where it is impossible to comply with both laws. An operational conflict analysis is an exercise in statutory interpretation: the Court must ascertain the meaning of each competing enactment in order to determine whether dual compliance is possible. This interpretation exercise takes place within the guiding confines of cooperative federalism, which operates as a straightforward interpretive presumption — one that supports, rather than supplants, the modern approach to statutory interpretation. Courts should favour an interpretation of the federal legislation that allows the concurrent operation of both laws; however, where the proper meaning of the provision cannot support a harmonious interpretation, it is beyond a court’s power to create harmony where Parliament did not intend it.
In the instant case, reliance on cooperative federalism must not result in an interpretation of s. 14.06(4) of the BIA that is inconsistent with its language, context and purpose. The natural meaning which appears when s. 14.06(4) is simply read through is that it assumes and incorporates a pre‑existing common law right to disclaim property in the context of bankruptcy and insolvency. This right is in keeping with the fundamental objective of trustees, which is the maximization of recovery for creditors as a whole by realizing the estate’s valuable assets. It enables trustees to administer the estate in the most efficient manner and to avoid significant costs of administration that would reduce creditor recovery. Section 14.06(4) expresses the disclaimer right in unqualified terms and emphasizes that a trustee may not be held liable whenever that right is exercised. Parliament did not intend to condition the right to disclaim property on the actual existence of a risk of personal liability. Although the opening words of s. 14.06(4) refer to the personal liability of the trustee, when the words of the provision are read in their entire context and in their grammatical and ordinary sense harmoniously with the scheme of the Act, the object of the Act and the intention of Parliament, their meaning becomes apparent. Avoiding personal liability is not the only effect of the appropriate exercise of this power. By properly disclaiming certain properties, the trustee is relieved of any liabilities associated with the disclaimed property and loses the ability to sell it for the benefit of the estate. The disclaimer right allows the trustee not to realize assets that would provide no value to the estate’s creditors and whose realization would therefore undermine the trustee’s objective of maximizing recovery. However, s. 14.06(4) does not relieve the estate of its liabilities or environmental obligations once a trustee exercises the disclaimer power. The disclaimed property ultimately reverts to the estate at the conclusion of the bankruptcy proceedings, as is the case with unrealized assets. Whether the estate has sufficient assets capable of satisfying those liabilities at that point in time is a separate question that is unrelated to the underlying fact of ongoing liability.
In accordance with the predominant and well‑established modern approach to statutory interpretation, courts must read statutory provisions in their entire context, as parts of a coherent whole. In s. 14.06(4) of the BIA , Parliament has expressly referred to this disclaimer power and spelled out the particular effects flowing from its proper exercise. By doing so, it has purposefully incorporated the disclaimer power into its statutory scheme to achieve its desired purpose. Courts must read statutory provisions in their entire context, and Parliament is presumed to craft sections and subsections of legislation as parts of a coherent whole. The immediate statutory context surrounding s. 14.06(4) , specifically, ss. 14.06(2) , (5) , (6) and (7) , as well as the Hansard evidence, confirms that a trustee’s right to disclaim property is not limited to protecting itself from personal liability.
The power to disclaim assets provided to trustees by s. 14.06(4) of the BIA was available to GTL on the facts of this case. The statutory conditions to the exercise of this power were met: the Abandonment Orders clearly relate to the remediation of an environmental condition. Additionally, the right of disclaimer is applicable in the context of the statutory regime governing the oil and gas industry. In delineating what interests may be disclaimed by a trustee under s. 14.06(4) , Parliament used exceptionally broad language: the trustee is permitted to disclaim “any interest” in “any real property”. GTL sought to disclaim profits à prendre and surface leases, which can be characterized as real property interests.
The requirement by the Regulator that GTL satisfy Redwater’s environmental liabilities ahead of the estate’s other debts contravenes the BIA ’s priority scheme. The Province’s licensing scheme therefore should be held inoperative under the second prong of the paramountcy test, frustration of purpose. Even where dual compliance with both federal and provincial law is, strictly speaking, possible, provincial legislation or provisions will be rendered inoperative to the extent that they have the effect of frustrating a valid federal legislative purpose. The focus of the analysis is on the effect of the provincial legislation or provision, not its purpose. In the instant case, if the environmental claims asserted by the Regulator (i.e., the Abandonment Orders) are provable in bankruptcy, the Regulator will not be permitted to assert those claims outside the bankruptcy process and ahead of Redwater’s secured creditors because this would frustrate the purpose of the federal priority scheme.
In Abitibi, the Court established a three‑part test, rooted in the language of the BIA , to determine whether a claim is provable in bankruptcy. The first prong of the Abitibi test asks whether the debt, liability or obligation at issue is owed by a bankrupt entity to a creditor. The language of Abitibi admits of no ambiguity, uncertainty or doubt: the only determination that has to be made is whether the regulatory body has exercised its enforcement power against a debtor. Most environmental regulatory bodies can be creditors, and government entities cannot systematically evade the priority requirements of federal bankruptcy legislation under the guise of enforcing public duties. In the instant case, the first prong is satisfied. There is no doubt that the Regulator exercised its enforcement power against a debtor when it issued orders requiring Redwater to perform the environmental work on the non‑producing properties. It is neither appropriate nor necessary in this case to attempt to redefine the first prong of the Abitibi test by narrowing the broad definition of “creditor” as the majority does.
There is no dispute that the second prong of the Abitibi test, which requires that the debt, liability or obligation be incurred before the debtor becomes bankrupt, is satisfied. The third prong asks whether it is sufficiently certain that the regulator will perform the work and make a claim for reimbursement. In this case, it is sufficiently certain that either the Regulator or its delegate, the OWA, will ultimately perform the abandonment and reclamation work and assert a monetary claim for reimbursement. Therefore, the final prong of the Abitibi test is satisfied. The chambers judge made three critical findings of fact that easily support this conclusion. First, he found that GTL was not in possession of the disclaimed properties and, in any event, had no ability to perform any kind of work on these assets because the environmental liabilities exceeded the value of the estate itself and Redwater had no working interest participants that would step in to perform the work. As a result, he concluded that there was no other party who could be compelled to carry out the work. Second, in light of the fact that neither GTL nor Redwater’s working interest participants would (or could) undertake this work, the chambers judge found as a fact that the Regulator will ultimately be responsible for the abandonment costs, since it has the power to seek recovery of abandonment costs and has actually performed the work on occasion, and has expressly stated an intention to seek reimbursement for the costs of abandoning the renounced assets. Third, the chambers judge found that the Regulator’s only realistic alternative to performing the remediation work itself was to deem the renounced assets to be orphan wells. In this circumstance, he found that the legislation and evidence shows that if the Regulator deems a well an orphan, then the OWA will perform the work. In light of these factual determinations, the chambers judge rightly concluded that the sufficient certainty standard of Abitibi was satisfied because at a minimum, either the Regulator or the OWA will complete the abandonment work.
The majority elevates form over substance in concluding that the sufficient certainty standard is not satisfied when a regulatory body’s delegate, as opposed to the regulatory body itself, performs the work. Considering the salient features of the OWA and its relationship with the Regulator, one must conclude that they are inextricably intertwined. When the Regulator exercises its statutory powers to declare a property an “orphan” under s. 70(2) of Alberta’s Oil and Gas Conservation Act, it effectively delegates the abandonment work to the OWA. The majority’s alternative conclusion that it is not sufficiently certain that even the OWA will perform the abandonment work would permit the Regulator to benefit from strategic gamesmanship by manipulating the timing of its intervention in order to escape the insolvency regime and strip Redwater of its assets.
Since it is sufficiently certain that the Regulator (or the OWA, as its delegate) will complete the abandonment and reclamation work, all three prongs of the Abitibi test are satisfied. The Regulator’s Abandonment Orders constitute “claims provable in bankruptcy”. It would undermine the BIA ’s priority scheme and therefore frustrate an essential purpose of the BIA if the Regulator could assert those claims outside the bankruptcy process — and ahead of the estate’s secured creditors — whether by compelling GTL to carry out those orders or by making the sale of Redwater’s valuable assets conditional on the fulfillment of those obligations.
Cases Cited
By Wagner C.J.
Applied: Panamericana de Bienes y Servicios S.A. v. Northern Badger Oil & Gas Ltd., 1991 ABCA 181, 81 Alta. L.R. (2d) 45; Newfoundland and Labrador v. AbitibiBowater Inc., 2012 SCC 67, [2012] 3 S.C.R. 443; approved: Nortel Networks Corp., Re, 2013 ONCA 599, 368 D.L.R. (4th) 122; Strathcona (County) v. Fantasy Construction Ltd. (Trustee of), 2005 ABQB 559, 256 D.L.R. (4th) 536; distinguished: Alberta (Attorney General) v. Moloney, 2015 SCC 51, [2015] 3 S.C.R. 327; Northstar Aerospace Inc., Re, 2013 ONCA 600, 8 C.B.R. (6th) 154; referred to: Berkheiser v. Berkheiser, [1957] S.C.R. 387; Imperial Oil Ltd. v. Quebec (Minister of the Environment), 2003 SCC 58, [2003] 2 S.C.R. 624; Peters v. Remington, 2004 ABCA 5, 49 C.B.R. (4th) 273; Garner v. Newton (1916), 29 D.L.R. 276; Nortel Networks Corp., Re, 2012 ONSC 1213, 88 C.B.R. (5th) 111; Husky Oil Operations Ltd. v. Minister of National Revenue, [1995] 3 S.C.R. 453; Saskatchewan (Attorney General) v. Lemare Lake Logging Ltd., 2015 SCC 53, [2015] 3 S.C.R. 419; Multiple Access Ltd. v. McCutcheon, [1982] 2 S.C.R. 161; Canadian Western Bank v. Alberta, 2007 SCC 22, [2007] 2 S.C.R. 3; Quebec (Attorney General) v. Canadian Owners and Pilots Association, 2010 SCC 39, [2010] 2 S.C.R. 536; GMAC Commercial Credit Corp. — Canada v. T.C.T. Logistics Inc., 2006 SCC 35, [2006] 2 S.C.R. 123; Canada Trustco Mortgage Co. v. Canada, 2005 SCC 54, [2005] 2 S.C.R. 601; New Skeena Forest Products Inc. v. Don Hull & Sons Contracting Ltd., 2005 BCCA 154, 251 D.L.R. (4th) 328; Ocean Port Hotel Ltd. v. British Columbia (General Manager, Liquor Control and Licensing Branch), 2001 SCC 52, [2001] 2 S.C.R. 781; M. v. H., [1999] 2 S.C.R. 3; R. v. Sappier, 2006 SCC 54, [2006] 2 S.C.R. 686; R. v. Elshaw, [1991] 3 S.C.R. 24; AbitibiBowater Inc., Re, 2010 QCCS 1261, 68 C.B.R. (5th) 1; Strathcona (County) v. Fantasy Construction Ltd. (Trustee of), 2005 ABQB 794, 261 D.L.R. (4th) 221; Lamford Forest Products Ltd. (Re) (1991), 86 D.L.R. (4th) 534; Daishowa‑Marubeni International Ltd. v. Canada, 2013 SCC 29, [2013] 2 S.C.R. 336; Alberta Energy Regulator v. Grant Thornton Limited, 2017 ABCA 278, 57 Alta. L.R. (6th) 37.
By Côté J. (dissenting)
Newfoundland and Labrador v. AbitibiBowater Inc., 2012 SCC 67, [2012] 3 S.C.R. 443; Alberta (Attorney General) v. Moloney, 2015 SCC 51, [2015] 3 S.C.R. 327; Husky Oil Operations Ltd. v. Minister of National Revenue, [1995] 3 S.C.R. 453; Saskatchewan (Attorney General) v. Lemare Lake Logging Ltd., 2015 SCC 53, [2015] 3 S.C.R. 419; Canadian Western Bank v. Alberta, 2007 SCC 22, [2007] 2 S.C.R. 3; Multiple Access Ltd. v. McCutcheon, [1982] 2 S.C.R. 161; Reference re Pan‑Canadian Securities Regulation, 2018 SCC 48, [2018] 3 S.C.R. 189; Canadian Pacific Air Lines Ltd. v. Canadian Air Line Pilots Assn., [1993] 3 S.C.R. 724; New Skeena Forest Products Inc. v. Don Hull & Sons Contracting Ltd., 2005 BCCA 154, 251 D.L.R. (4th) 328; Re Thompson Knitting Co., Ltd., [1925] 2 D.L.R. 1007; Bell ExpressVu Limited Partnership v. Rex, 2002 SCC 42, [2002] 2 S.C.R. 559; Attorney General of Quebec v. Carrières Ste‑Thérèse Ltée, [1985] 1 S.C.R. 831; Mitchell v. Peguis Indian Band, [1990] 2 S.C.R. 85; GMAC Commercial Credit Corp. — Canada v. T.C.T. Logistics Inc., 2006 SCC 35, [2006] 2 S.C.R. 123; Rizzo & Rizzo Shoes Ltd. (Re), [1998] 1 S.C.R. 27; Panamericana de Bienes y Servicios S.A. v. Northern Badger Oil & Gas Ltd., 1991 ABCA 181, 81 D.L.R. (4th) 280; Canada (Attorney General) v. JTI‑Macdonald Corp., 2007 SCC 30, [2007] 2 S.C.R. 610; Morgentaler v. The Queen, [1976] 1 S.C.R. 616; R. v. L.T.H., 2008 SCC 49, [2008] 2 S.C.R. 739; Bank of Montreal v. Hall, [1990] 1 S.C.R. 121; Century Services Inc. v. Canada (Attorney General), 2010 SCC 60, [2010] 3 S.C.R. 379; Teva Canada Ltd. v. TD Canada Trust, 2017 SCC 51, [2017] 2 S.C.R. 317; Canada v. Craig, 2012 SCC 43, [2012] 2 S.C.R. 489; Housen v. Nikolaisen, 2002 SCC 33, [2002] 2 S.C.R. 235; Nortel Networks Corp., Re, 2013 ONCA 599, 6 C.B.R. (6th) 159; Northstar Aerospace Inc., Re, 2013 ONCA 600, 8 C.B.R. (6th) 154; Sydco Energy Inc. (Re), 2018 ABQB 75, 64 Alta. L.R. (6th) 156.
Statutes and Regulations Cited
Alberta Energy Regulator Administration Fees Rules, Alta. Reg. 98/2013.
Bankruptcy and Insolvency Act, R.S.C. 1985, c. B‑3, ss. 2 “claim provable in bankruptcy, provable claim or claim provable”, “creditor”, 14.06, (2), (4) [am. 1997, c. 12, s. 15(1)], 16 to 38, 40, 69.3(1), (2), 72(1), 80, 121 to 154, 169(4), 197(3).
Companies’ Creditors Arrangement Act, R.S.C. 1985, c. C‑36, s. 11.8(8) .
Conservation and Reclamation Regulation, Alta. Reg. 115/93.
Constitution Act, 1867, ss. 91(21) , 92(13) , 92A(1) (c).
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APPEAL from a judgment of the Alberta Court of Appeal (Slatter, Schutz and Martin JJ.A.), 2017 ABCA 124, 47 C.B.R. (6th) 171, [2017] 6 W.W.R. 301, 8 C.E.L.R. (4th) 1, 50 Alta. L.R. (6th) 1, [2017] A.J. No. 402 (QL), 2017 CarswellAlta 695 (WL Can.), affirming a decision of Wittmann C.J., 2016 ABQB 278, 37 C.B.R. (6th) 88, [2016] 11 W.W.R. 716, 33 Alta. L.R. (6th) 221, [2016] A.J. No. 541 (QL), 2016 CarswellAlta 994 (WL Can.). Appeal allowed, Moldaver and Côté JJ. dissenting.
Ken Lenz, Q.C., Patricia Johnston, Q.C., Keely R. Cameron, Brad Gilmour and Michael W. Selnes, for the appellants.
Kelly J. Bourassa, Jeffrey Oliver, Tom Cumming, Ryan Zahara, Danielle Maréchal, Brendan MacArthur‑Stevens and Chris Nyberg, for the respondents.
Josh Hunter and Hayley Pitcher, for the intervener the Attorney General of Ontario.
Gareth Morley, Aaron Welch and Barbara Thomson, for the intervener the Attorney General of British Columbia.
Richard James Fyfe, for the intervener the Attorney General of Saskatchewan.
Robert Normey and Vivienne Ball, for the intervener the Attorney General of Alberta.
Adrian Scotchmer, for the intervener Ecojustice Canada Society.
Lewis Manning and Toby Kruger, for the intervener the Canadian Association of Petroleum Producers.
Nader R. Hasan and Lindsay Board, for the intervener Greenpeace Canada.
Christine Laing and Shaun Fluker, for the intervener Action Surface Rights Association.
Caireen E. Hanert and Adam Maerov, for the intervener the Canadian Association of Insolvency and Restructuring Professionals.
Howard A. Gorman, Q.C., and D. Aaron Stephenson, for the intervener the Canadian Bankers’ Association.
The judgment of Wagner C.J. and Abella, Karakatsanis, Gasc