LAND AND PROPERTY RIGHTS TRIBUNAL
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Citation: |
Stankievech v Ember Resources Inc., 2024 ABLPRT 906688 |
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Date: |
2024-12-17 |
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File No: |
RC2021.1211 |
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Order No.: |
LPRT906688/2024 |
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Municipality: |
Kneehill County |
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In the matter of a proceeding commenced under section 36 of the Surface Rights Act, RSA |
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2000, c S-24 (the “Act”) |
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And in the matter of land in the Province of Alberta within the: |
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NW 1/4-16-32-22-W4M (L.S. 11) as described in Certificate of Title No. 081 178 927 (the “Land”). |
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Between: |
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Harvey L Stankievech and Edna Stankievech, |
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Applicants, - and - Ember Resources Inc., Operator, - and - Bonavista Energy Corporation, Lee Bay Petroleum Ltd. and Signalta Resources Limited, Other Parties. |
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Before: |
Romeo A. Rojas (“the Panel”) |
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Appearances by written submissions:
For the Applicants: Harvey and Edna Stankievech
For the Operator: Tara M. Rout, Owen Law, for Ember Resources Inc.
Kari Swennumson, Surface Land Coordinator, Ember Resources Inc.
For the Other Parties: Kim Reid, Signalta Resources Limited
Bonavista Energy Corporation and Lee Bay Petroleum Ltd. were notified of the Application, but made no submissions.
DIRECTION TO PAY PURSUANT TO
SECTION 36(6) OF THE ACT
The Tribunal directs the Minister to pay out of the General Revenue Fund the sum of NINE THOUSAND ONE HUNDRED THIRTY-FIVE and 00/100 DOLLARS ($9,135.00) (the “Compensation”) jointly to Harvey L Stankievech and Edna Stankievech, both of Three Hills in the Province of Alberta for compensation that became due in the years 2020, 2021 and 2022.
DECISION AND REASONS
[1] The Applicants filed an application dated April 13, 2021, under section 36 of the Act (the “Application”) seeking recovery of unpaid compensation due under a surface lease agreement dated February 2, 2007, for a wellsite and access road in L.S. 11 (the “Right-of-Entry Instrument”). The Applicant claimed $3,045.00 annually, for a total amount of $3,045.00 under the Application for 2020. On June 29, 2022, the Applicants filed an updated Application claiming $3,045.00 annually for a total amount of $9,135.00 for the years 2020, 2021 and 2022.
ISSUES
1. Who is an Operator for the purpose of section 36 of the Act?
2. Is there money past due and unpaid by the Operator to the Applicants under a Right of Entry Instrument?
3. Should the Tribunal direct the Minister to pay the Applicants any of the money past due under section 36(6) of the Act?
4. Should the Tribunal suspend and terminate the Operator’s rights?
5. Should the Tribunal award costs under section 39 of the Act?
DECISION
1. For the purposes of section 36 of the Act, the Operator is Ember Resources Inc.
2. The written evidence proves compensation in the amount of $9,135.00 is payable to the Applicants by the Operator.
3. Without further notice, the Tribunal directs the Minister to pay the Applicants Compensation in the amount of $9,135.00 from the General Revenue Fund.
4. The decision to suspend or terminate the Operator’s rights is reserved.
5. The Panel declines to award costs.
ANALYSIS
[2] The Tribunal gave notice pursuant to s. 36(4) to Ember Resources Inc. (“Ember”), Bonavista Energy Corporation (“Bonavista”), Lee Bay Petroleum Ltd. (“Lee Bay”) and Signalta Resources Limited (“Signalta”) based on AER OneStop and Well Summary Reports generated in May 2021 for AER Well Licence No. 0374176, with a surface location of NW 1/4-16-32-22-W4M (L.S. 14).
[3] In response to the Notice and Demand for Payment:
a. On June 9, 2021, Signalta submitted that it was not a Operator for the years claimed because it merely had a working interest in the site; and
b. On August 3, 2021, Ember submitted that it had already paid the Applicants the compensation for the site in the case of 2020, and that compensation was not yet due for 2021. It sought costs against the Applicants for “act[ing] with impunity” and filing “incomplete and inaccurate applications with the Tribunal”.
c. Bonavista and Lee Bay made no submissions.
[4] On June 29, 2022, the Applicants advised the Tribunal that their application was not for NW 1/4-16-32-22-W4M (L.S. 14), which the Applicants acknowledged had been paid, but rather for NW 1/4-16-32-22-W4M (L.S. 11).
[5] In response to this new information:
a. Signalta submitted on February 28, 2023, that it had sold its working interest in the Lands to Ember effective September 1, 2016, and therefore was not an Operator on the 2020, 2021, and 2022 compensation due dates. In support, Signalta provided a copy of the purchase and sale agreement by which it sold its interest in the Lands (along with other lands) to Ember.
b. Ember submitted on March 3, 2023, that a well had not been drilled in L.S. 11 and that, although there was a riser on site at one time, Ember had removed the riser and terminated the Right-of-Entry Instrument. In support, it provided a copy of the cancellation letter that it provided to the Applicants dated May 10, 2020 (the “Termination Letter”).
c. Bonavista and Lee Bay made no submissions.
1. Who is an operator for the purpose of section 36 of the Act?
[6] Section 36(1) and (2) expands the definition of operator so that it has a broader meaning than in the rest of the Act.
Section 36(1)(c) – Alberta Energy Regulator (“AER”) Licence Holder
[7] The Panel has reviewed an updated AER Well Licence Report dated August 14, 2024, which states that there are no well licences issued on NW 1/4-16-32-22-W4M (L.S. 11). The Panel therefore finds that there is no AER License in place for the Site and that no well was drilled on the Site.
Section 36(1)(d) – Working Interest Participants
[8] Under s. 36(1)(d) working interest participants and successors are Operators. The Tribunal gave notice to Signalta, Bonavista and Lee Bay because they were listed as WIPs for the site at L.S. 14.
[9] As there is no AER licence for L.S. 11, there is no evidence to identify WIPs in L.S. 11. The Panel therefore finds that Bonavista and Lee Bay are not Operators under s. 36(1)(d).
[10] In response to the Applicants’ clarification, Signalta acknowledged that it had been a WIP for the Site. However, it submitted that it disposed of its interest in the Site to Ember in 2016. In support, Signalta provided a copy of the Purchase and Sale Agreement between it and Ember dated November 24, 2016, in relation to the Land (the “PSA”). The Panel has reviewed the PSA and finds that Signalta was not an Operator under s. 31(1)(d) for the years claimed, having disposed of its interest in the Land prior to the period claimed.
Section 36(1)(e) – Holder of a surface lease or right of entry order
[11] Under section 36(1)(e) the holder of the surface lease or right of entry order for the Site and its successors, is an Operator. The Panel finds Ember is an Operator for the purpose of section 36(1)(e) on the due dates in 2020, 2021 and 2022 because it acknowledged in its March 3, 2023, submissions that it was party to the Right-of-Entry Instrument for the Site.
Submissions
[12] Ember submits that it is not an Operator under section 36(1)(e) of the Act as its Termination Letter to the Applicants terminated the Right of Entry Instrument on May 10, 2020 .
[13] The Termination Letter states, in part:
Ember Resources Inc. has verified with our field staff that the above noted wellsite was never drilled & access road was not constructed therefore, a reclamation certificate will not be required. The lease will be cancelled upon the abandonment of natural gas pipeline 11-16-23-22 W4M WS TO 12-16-32-22 W4M P/L (57352-43) and removal of riser, for which you received notification. We hereby advise you that we will be terminating the lease and no further rentals will be paid on this location.
Please amend your records accordingly and note that the registered caveat on the title will be removed in due course.
[14] The Panel notes the following:
a. The Right-of-Entry Instrument is a 20-year lease. The copy provided to the Tribunal – which appears to be missing some pages – does not contain an early termination provision or a provision that allows for the unilateral termination of the Right-of-Entry Instrument.
b. Ember’s Termination Letter is a unilateral declaration of Ember’s intent to terminate the Right-of-Entry Instrument in the future. It is written in the future tense, stating that the Right-of-Entry Instrument “will be cancelled” upon the abandonment of a natural gas pipeline and removal of a riser. It informs the Applicants that Ember “will be terminating” the Right-of-Entry Instrument.
[15] Ember did not provide any evidence of when the riser was subsequently removed or that it sent a notice of termination of the Right-of-Entry Instrument once the riser was removed. It provided only a generic statement in its 2023 submission to the Tribunal that the riser “has been removed” without providing a date on which that task had been completed. In contrast, the Applicants provided evidence that the riser remained in place in 2020 and 2021, and was not removed until 2022. The Applicants also provided evidence that the Site had not been levelled after the riser had been removed. The Panel prefers the Applicant’s specific evidence, as they are in the best position to know when events took place on their land. The Panel therefore finds that the riser was in place in 2022, was removed sometime in 2022, and that after its removal the land was not returned to a level condition.
[16] The Panel therefore finds that even if one were to accept that Ember was contractually entitled to unilaterally terminate the Right-of-Entry Instrument (on which the Tribunal makes no findings), Ember did not satisfy its own pre-conditions to termination of the Right-of-Entry Instrument until at least some point in 2022.
[17] More importantly, the Right-of-Entry Instrument in place for the “exploration, development and production of oil, gas, related hydrocarbons or substances produced in association therewith, remediation and reclamation”. Ember admits in its Termination Letter that it is a party to the Right-of-Entry Instrument and takes responsibility for the removal of the pipeline riser. Section 144 of the Environmental Protection and Enhancement Act (“EPEA”) sets out the requirements for termination of a surface lease:
144(1) Notwithstanding anything in any other Act or any surface lease or right of entry order,
(a) no surrender of a surface lease is effective or binding on any person, and
(b) no expropriation board shall order the termination of a right of entry order
insofar as the surrender or termination relates to any interest of the registered owner, until a reclamation certificate has been issued in respect of the specified land affected by the surrender or termination.
[18] Ember has not alleged that it has reclaimed the Site, nor has it provided a reclamation certificate for the Site. Section 114 of the EPEA prohibits termination of the Right-of-Entry Instrument until a reclamation certificate has been issued for the Site. Thus, regardless of Ember’s assertions in the Termination Letter, it cannot terminate the Right-of-Entry Instrument until it obtains a reclamation certificate for the Site.
[19] The Panel therefore finds that the Right-of-Entry Instrument had not been terminated on the 2020, 2021 and 2022 anniversary dates of the Right-of-Entry Instrument and that Ember was an Operator for 2020, 2021 and 2022.
2. Is there money past due and unpaid by the Operator to the Applicants under a Right-of-Entry Instrument?
[20] The Certificate of Title confirms the Applicants are the owners; therefore, the Panel finds the Applicants are entitled to receive the money. The Applicants provided evidence of a Right-of-Entry Instrument and the compensation is supported by the Application and supporting documentation. The Applicants declared in writing that the Compensation has not been paid for the years claimed.
[21] The Panel is satisfied that compensation is owed to the Applicants for annual payment due under the Right-of-Entry Instrument. This amount is calculated as three payments of $3,045.00 due for 2020, 2021 and 2022 for a total amount owing of $9,135.00. The Right-of-Entry Instrument remained in effect as of the 2022 compensation due date. The Panel finds that at the time the Compensation became due, the Operator is liable for the Compensation due to the Applicants.
3. Should the Tribunal direct the Minister to pay the Applicants any of the money past due from the General Revenue Fund under section 36(6) of the Act?
[22] Bateman v Alberta (Surface Rights Board), 2023 ABKB 640 specified that under s. 36 of the Act, the Applicants need only prove there is a right-of-entry instrument and there is default on the payment; therefore, the Panel directs the Minister to pay the full amount owing. The Panel determined there is a right of entry instrument and money is owing, accordingly the Minister is directed to pay the Applicants $9,135.00 from the General Revenue Fund.
4. Should the Tribunal suspend and terminate the Operator’s rights?
[23] The Tribunal can suspend and terminate an operator’s rights to access the Site when appropriate. The Panel reserves its decision to suspend and terminate at this time to avoid delay in payment to the Applicants, however, if the Operator attempts to access the Site but still does not pay compensation, the Tribunal may issue a suspension/termination order.
5. Should the Tribunal award costs under section 39 of the Act?
[24] The Landowners did not seek costs. Ember’s August 3, 2021, submission sought costs against the Landowners for “act[ing] with impunity” and filing “incomplete and inaccurate applications with the Tribunal”. Ember did not state the amount of costs it was seeking. Further, Ember did not repeat its claim for costs in its March 3, 2023, submission. However, to the extent that Ember is still seeking costs, the Panel denies its application on the grounds that follow.
[25] First, the Panel finds that the Applicants did not act in the manner described by Ember. While the Application could have been clearer that it was in relation to L.S. 11, Ember was in a position to ascertain that fact by reference to the anniversary date of the Right-of-Entry Instrument. Nevertheless, Ember asserted in its August 3, 2021, submission that:
The Notice states the lease date as February 2, 2007. This is incorrect. Ember has no lease on that date on NW-16-032-22-W4M (the “Location”) with the stated applicants (the “Landowners”). [emphasis added]
[26] In fact, it was Ember’s assertion that was incorrect, as evidenced by the purported Termination Letter of May 10, 2020, that Ember provided with its submission of March 3, 2023.
[27] Second, Ember has not provided evidence of the costs that it is seeking, as required by Rule 31(1). Thus, even if Ember had established a case for costs, it has not provided the information that the Panel would require to determine the amount of a costs order. Ember’s request for costs is therefore denied.
Dated at the City of Edmonton in the Province of Alberta this 17 day of December, 2024.
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LAND AND PROPERTY RIGHTS TRIBUNAL |
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Susan McRory, Chair Authorized to sign for Romeo A. Rojas, Member (s. 14 of the Land and Property Rights Tribunal Act) |