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OIL AND GAS - Exploration - Pre-trial procedures - Preliminary determinations - Question of law

Monday, September 18, 2017 @ 2:28 PM  

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Appeal by Northrup from a pre-trial determination of a question of law. The respondent Windsor Energy Inc. (Windsor) conducted seismic testing along a provincial highway right-of-way within a municipal boundary. The testing was conducted without prior written consent of the municipality. The appellant, the former Minister of Natural Resources, issued a press release stating the respondent's conduct violated the Oil and Natural Gas Act (Act) and the Geophysical Exploration Regulation thereunder. The appellant also filed a complaint with the RCMP. The corporate respondent and its CEO, the respondent Amin, sued the appellant, alleging, among other things, misfeasance in public office and injurious falsehood. The appellant filed a motion for a pre-trial determination of a question of law asking whether the Act and Regulation were violated where geophysical exploration was conducted within municipal boundaries without prior written consent of the municipality. The motion was determined in favour of the respondents. The appellant appealed, seeking judgment dismissing the underlying action based on the respondents' admissions of fact regarding the carrying out of the testing within the municipal boundary without prior consent. The respondents moved to withdraw the admissions and introduce new evidence regarding the municipality's territorial boundaries.

HELD: Motion dismissed; appeal allowed. The proffered new evidence was not suitable for reception by the Court and was accordingly ruled inadmissible. The criteria for withdrawal of admissions were not met, as there was no evidence the admissions were inadvertent given their maintenance by the respondents throughout the litigation. The appellant relied on the admissions throughout preparation of pleadings and strategies for defence of the respondents' action. To permit withdrawal at present would cause undue prejudice to the appellant. An application of the proper principles of statutory interpretation to s. 17(1)(a) of the Regulation confirmed that conducting seismic testing within the highway right-of-way, within the boundaries of the municipality, and without prior consent, was a violation of the Act and Regulation. The fact that the land in question was owned by the province within that municipal boundary was not determinative of the matter. Accordingly, the appellant’s characterization of the respondents’ conduct as being unlawful was accurate and could not form the basis of a tort claim. Judgment was therefore granted in the appellant’s favour, dismissing the action.

Windsor Energy Inc. v. Northrup, [2017] N.B.J. No. 219, New Brunswick Court of Appeal, M.E.L. Larlee, J.C.M. Richard and K.A. Quigg JJ.A., September 7, 2017. Digest No. TLD-Sept182017002