Oil and Gas Appeal Tribunal Fourth Floor, 747 Fort Street Victoria, British Columbia Telephone: (250) 387-3464 Facsimile: (250) 356-9923 Mailing Address: PO Box 9425 Stn Prov Govt Victoria BC V8W 9V1 DECISION NO. 2013-OGA-005(a) In the matter of an appeal under section 72 of the Oil and Gas Activities Act, S.B.C. 2008, c. 36. BETWEEN: Shallan Hauber APPLICANT AND: Oil and Gas Commission RESPONDENT AND: Murphy Oil Company Ltd. THIRD PARTY BEFORE: DATE: APPEARING: A Panel of the Oil and Gas Appeal Tribunal Alan Andison, Chair Conducted by way of written submissions concluding on July 3, 2013 For the Appellant: For the Respondent: For the Third Party: Shallan Hauber Sara Gregory, Counsel Rick Williams, Counsel STAY APPLICATION [1] This decision addresses an application by Shallan Hauber for a stay of the Oil and Gas Commission s (the OGC ) decision to amend a pipeline permit held by Murphy Oil Company Ltd. ( Murphy Oil ). [2] The OGC s decision was issued on May 21, 2013. On June 3, 2013, Ms. Hauber appealed the OGC s decision to the Oil and Gas Appeal Tribunal (the Tribunal ), and requested a stay of the OGC s decision pending the Tribunal s decision on the merits of the appeal. [3] The hearing of the stay application was conducted by way of written submissions. BACKGROUND [4] Ms. Hauber owns land that is identified in documents before the Tribunal as the SE ¼, Sec 17, Tp 78, R17, W6M except Plans 23873 and PGP 36854. Ms. Hauber s land is crossed by Highway 97. [5] On October 24, 2011, the OGC issued a permit authorizing Murphy Oil to construct and operate a pipeline, subject to certain conditions. The pipeline consists of three flow lines situated within a fifteen metre right of way. The plans attached to the permit indicate that the pipeline was not intended to cross Ms. Hauber s land. [6] The pipeline was constructed and brought into service in late 2011.
DECISION NO. 2013-OGA-005(a) 2 [7] In September 2012, Murphy Oil notified the OGC that part of the pipeline had been bored under Ms. Hauber s land, instead of under Crown land located to the west of Ms. Hauber s land. The error did not result in any disturbance of the surface of Ms. Hauber s land. According to a revised survey, the error involves 0.01 hectares. [8] On October 23, 2012, the OGC issued an order requiring Murphy Oil to comply with the pipeline permit, or submit an application to amend the permit by no later than November 15, 2012. [9] Subsequently, Murphy Oil applied to the OGC for an amendment to its pipeline permit. Murphy Oil conducted notification and consultation with affected land owners. Murphy Oil conducted further notification and consultation in March 2013. [10] In response, Ms. Hauber provided written submissions expressing her concern that Murphy Oil failed to consult with her before constructing the pipeline beneath her land, contravened the applicable legislation, and was trespassing on her land. [11] Meanwhile, on November 2, 2012, the OGC issued a second order to Murphy Oil. The order required Murphy Oil to cease flowing fluids and gas through the pipeline until Murphy Oil received written approval from the OGC to do so. [12] On January 8, 2013, the OGC issued a third order to Murphy Oil, requiring Murphy Oil to cease flowing fluids and gas through the pipeline until: (1) Murphy Oil received written approval from the OGC to do so; and, (2) Murphy Oil either entered into an agreement with Ms. Hauber, or received a right of entry order from the Surface Rights Board (which has a different mandate from the Tribunal). [13] On May 21, 2013, the OGC issued a determination amending the pipeline permit. With regard to Ms. Hauber s land, the amendment identified the correct location of the pipeline right of way, and the correct boundary of her land in relation to the pipeline and right of way. The amendment also added some conditions that relate to Ms. Hauber s land. [14] In its submissions to the Tribunal, the OGC advised that it is continuing to investigate the matter of Murphy Oil boring under Ms. Hauber s land. [15] On or about June 3, 2013, the Surface Rights Board decided to issue a right of entry order to allow Murphy Oil a right of entry to, and access across, Ms. Hauber s land, subject to certain conditions. The third condition in the right of entry order, dated June 4, 2013, states that Murphy Oil shall pay Ms. Hauber as partial compensation the total amount of $1,000. [16] On June 3, 2013, Ms. Hauber filed an appeal with the Tribunal against the OGC s issuance of the permit amendment. The grounds for appeal have been summarized by the Tribunal as flows: the OGC did not consider that Murphy Oil is in a state of trespass, as was stated in the written submissions Ms. Hauber provided to the OGC before the amendment was issued;
DECISION NO. 2013-OGA-005(a) 3 the Surface Rights Board has ignored the fact that Murphy Oil is in a state of trespass; and the amended permit issued by the OGC, and the order issued by the Surface Rights Board, allow Murphy Oil to contravene the laws and disregard Ms. Hauber s rights as a land owner. [17] In her Notice of Appeal, Ms. Hauber requested that the OGC (and the Surface Rights Board) function within their governing authorities, and that agents of the government make certain that all oil and gas activities in BC are carried out within the confines of the laws. She requested assurance that Murphy Oil s actions would not set a precedent for future developments, and that oil and gas activities are carried out ethically and that they not harm land owners rights. [18] Ms. Hauber also requested a stay of the amended permit on the grounds that Murphy Oil has contravened relevant legislation, the OGC is investigating the matter, and Murphy Oil should not be able to operate the pipeline until the investigation concludes and the matter of the trespass is resolved. [19] In a letter to the Tribunal, dated June 13, 2013, Ms. Hauber states, in part, as follows: [20] [21] ISSUE At this time, I concede my request for a stay of Amendment to Pipeline Permit does not meet the criteria of irreparable harm or balance of convenience. The request for a stay does, however, raise a serious issue of contravention of acts and violation of rights by means of flouting the trespass by Murphy Oil Company Ltd; in which the stay could be decided by the Tribunal. The OGC takes no position on the application for a stay. Murphy Oil opposes the application. [22] The sole issue arising from this application is whether the Tribunal should grant a stay of the amended permit. APPLICABLE LEGISLATION AND TRIBUNAL RULES [23] Section 72(3) of the Oil and Gas Activities Act grants the Tribunal the authority to order a stay: 72(3) Subject to subsection (4), the commencement of an appeal does not operate as a stay or suspend the operation of the determination or decision being appealed, unless the appeal tribunal orders otherwise. [24] The Tribunal has made Rules of Practice and Procedure under section 11(1) of the Administrative Tribunals Act. Rule 22 states as follows:
DECISION NO. 2013-OGA-005(a) 4 Rule 22 Stay (Suspend) the Determination or Review Decision 1. To apply for a stay pending a decision on the merits of an appeal, a party must deliver a written request to the Tribunal that explains: a. the reason(s) why a stay of the determination or review decision being appealed is required; and b. whether other parties agree to the stay (if known). 2. If the other parties do not agree, or this is not known, in addition to (1) above, the party applying for a stay must explain as follows: a. whether the appeal concerns a serious issue; b. whether the party applying for the stay will suffer irreparable harm if the stay order is denied; and c. whether the balance of convenience favours granting the application. [25] The onus is on Ms. Hauber, as the Applicant, to demonstrate good and sufficient reasons why a stay should be granted. [26] The Tribunal will address each aspect of the three-part test in Rule 22(2) as it applies to this application. DISCUSSION AND ANALYSIS Serious Issue [27] The test adopted by the Tribunal in Rule 22(2) is based on the three-part test set out in RJR-Macdonald Inc. v. Canada (Attorney General) (1994), 111 D.L.R. (4th) 385 (S.C.C.) ( RJR-Macdonald ). [28] In RJR MacDonald, the Court stated as follows: What then are the indicators of a serious question to be tried? There are no specific requirements which must be met in order to satisfy this test. The threshold is a low one. [29] The Court also stated that, as a general rule, unless the case is frivolous or vexatious or is a pure question of law, the inquiry as to whether a stay should be granted should proceed to the next stage of the test. [30] Ms. Hauber submits that the appeal raises serious issues. Further to her grounds for appeal, she submits that the OGC was not duly diligent in considering Murphy Oil s permit application. She submits that Murphy Oil provided the OGC with consultation documents indicating that the pipeline would not be built on Ms. Hauber s land, but later, Murphy Oil provided the OGC with a plan map indicating that the pipeline would be constructed on her land. She submits that the OGC
DECISION NO. 2013-OGA-005(a) 5 failed to cross-reference the plan map with the consultation documents to ensure that the required notification was provided before the OGC issued the permit. She also submits that the OGC failed to uphold a permit condition that required Murphy Oil to submit as-built drawings of the pipeline to the OGC within three months of constructing the pipeline. She argues that, if that condition had been upheld, the OGC and Murphy Oil would have discovered the error by the end of March 2012, rather than in August 2012. [31] Ms. Hauber also submits that she had her land surveyed in September 2012 with the intention of proceeding with developments on her land. She submits that the construction of the pipeline without due diligence could have endangered lives, the environment, and the pipelines themselves, as the developments she had planned could have struck one or more of the pipes. [32] Further, Ms. Hauber submits that Murphy Oil constructed the pipeline under her land without first obtaining either an agreement with her or an order from the Surface Rights Board, contrary to the Petroleum and Natural Gas Act. She submits that the OGC s issuance of the permit amendment, and the Surface Rights Board s issuance of the right of entry order, enabled Murphy Oil to eradicate the state of trespass that it was in. [33] Murphy Oil did not expressly address whether the appeal raises a serious issue to be decided by the Tribunal. [34] The Tribunal notes that section 72(2) of the Oil and Gas Activities Act limits the grounds on which a landowner may appeal a decision of the OGC. It states as follows: (2) A land owner of land on which an oil and gas activity is permitted to be carried out under this Act may appeal a determination under this section only on the basis that the determination was made without due regard to (a) a submission previously made by the land owner under section 22 (5) or 31 (2) of this Act, or (b) a written report submitted under section 24 (1) (c) or 31 (6). [underlining added] [35] The Tribunal has reviewed Ms. Hauber s Notice of Appeal and stay submissions. The Tribunal notes that the issues she raises with regard to the Surface Rights Board, and the right of entry order issued by that Board, are not within the Tribunal s jurisdiction. However, the Tribunal finds that the appeal raises other serious issues that are within the Tribunal s jurisdiction. For example, Ms. Hauber s Notice of Appeal indicates that, on three occasions, she provided written submissions expressing concerns about Murphy Oil s application for a permit amendment, and Murphy Oil s misplacement of the pipeline. She raises issues regarding whether the OGC gave due regard to her written submissions. In addition, she raises issues regarding the fairness of the OGC s decision-making processes in the circumstances. The Tribunal finds that these issues are not frivolous, vexatious or pure questions of law.
DECISION NO. 2013-OGA-005(a) 6 Irreparable Harm [36] The second factor to be considered is whether the applicant for a stay will suffer irreparable harm if the stay is denied. As stated in RJR-MacDonald, at page 405: At this stage the only issue to be decided is whether a refusal to grant relief could so adversely affect the applicants own interest that the harm could not be remedied if the eventual decision on the merits does not accord with the result of the interlocutory application. [37] In assessing the question of irreparable harm, the Tribunal is guided by this statement from RJR-MacDonald: Irreparable refers to the nature of the harm suffered rather than its magnitude. It is harm which either cannot be quantified in monetary terms or which cannot be cured, usually because one party cannot collect damages from the other. Examples of the former include instances where one party will be put out of business by the court's decision (R.L. Crain Inc. v. Hendry (1988), 48 D.L.R. (4th) 228 (Sask. Q.B.)); where one party will suffer permanent market loss or irrevocable damage to its business reputation (American Cyanamid, supra); or where a permanent loss of natural resources will be the result when a challenged activity is not enjoined (MacMillan Bloedel Ltd. v. Mullin, [1985] 3 W.W.R. 577 (B.C.C.A.)). [underlining added] [38] Ms. Hauber concedes that her stay application does not establish that her interests will suffer irreparable harm if a stay is denied. [39] Murphy Oil submits that there will be no irreparable harm if a stay is denied. Murphy Oil notes that the pipeline was constructed in 2011, and no surface access to Ms. Hauber s land was required. Murphy Oil notes that the right of entry order issued by the Surface Rights Board states that the order does not authorize any access to the surface of [Ms. Hauber s] Lands, except to respond to an emergency. [40] In addition, Murphy Oil submits that Ms. Hauber is entitled to be compensated for the pipeline being on her land, and the Surface Rights Board will determine the amount of compensation if the parties cannot come to an agreement on the amount. The Tribunal s Findings [41] Ms. Hauber concedes that her interests will not suffer irreparable harm if a stay is denied. [42] The Tribunal finds that a stay of the permit amendment would not result in removal of the pipeline from Ms. Hauber s land. Rather, it would result in Murphy Oil returning to being out of compliance with its original permit. [43] In addition, the Tribunal notes that irreparable harm refers to the nature of the harm suffered, rather than its magnitude. It is harm which either cannot be
DECISION NO. 2013-OGA-005(a) 7 quantified in monetary terms or which cannot be cured, usually because one party cannot collect damages from the other. In this case, the pipeline appears to have had some effect on Ms. Hauber s plans to construct a development at that location on her property, but the pipeline has not resulted in disturbance to the surface of Ms. Hauber s land, nor does the permit, as amended, entitle Murphy Oil to access over Ms. Hauber s land. Moreover, Murphy Oil acknowledges that Ms. Hauber is entitled to be compensated for the pipeline being under the surface of her land. The Tribunal notes that the right of entry order issued by the Surface Rights Board states that it provides Ms. Hauber with partial compensation from Murphy Oil for its entry onto her land. The Surface Rights Board will determine the total amount of compensation if the parties cannot come to an agreement on the amount. [44] In conclusion, if a stay is denied, and if Murphy Oil s activities under the amended permit continue (i.e.; the pipeline continues to operate), the Tribunal finds that any harm to Ms. Hauber s interests as a land owner would not be irreparable. Rather, it appears that any harm claimed by Ms. Hauber is compensable. [45] For these reasons, the Tribunal finds that Ms. Hauber has not established a likelihood of irreparable harm to her interests if a stay is denied. However, the Tribunal cautions that these findings are limited to this preliminary application, and have no bearing on the merits of the appeal. Balance of Conv enience [46] The balance of convenience portion of the test requires the Tribunal to determine which of the parties will suffer greater harm from the granting of, or refusal to grant, the stay pending a determination on the merits of the appeal. [47] Ms. Hauber concedes that her stay application does not establish that the balance of convenience favours granting a stay. [48] Murphy Oil submits that Ms. Hauber has conceded that the balance of convenience does not favour granting a stay. The Tribunal s Findings [49] The Tribunal has already found that Ms. Hauber failed to establish that her interests as a land owner will suffer irreparable harm if a stay is denied. [50] Although Murphy Oil did not address whether granting a stay would cause its interests to suffer harm, the Tribunal finds that the onus is on the Applicant for a stay, in this case Ms. Hauber, to establish that a stay should be granted. A stay is an extraordinary remedy. Murphy Oil obtained the amended permit through the process established under the legislation, and on its face, the amended permit is valid. Consequently, Murphy Oil cannot be prevented from exercising its rights under the amended permit unless it will lead to irreparable harm to Ms. Hauber. Ms. Hauber has not satisfied this test. Accordingly, the balance of convenience weighs in favour of denying a stay.
DECISION NO. 2013-OGA-005(a) 8 DECISION [51] In making this decision, the Tribunal has considered all of the relevant documents and evidence, whether or not specifically reiterated herein. [52] For the reasons provided above, the application for a stay of the amended permit is denied. Alan Andison Alan Andison, Chair Oil and Gas Appeal Tribunal July 12, 2013