With legislation, regulation, jurisprudence and practice evolving continually and rapidly, the need to stay current is more pressing than ever.
As we moved into the new year, we prepared a summary of the main trends in Canadian litigation, grouped into three categories:
- cannabis-related,
- class action, and
- energy sector litigation.
The first two will be felt nationally; the last is more focused on Alberta.
Cannabis-related Litigation
The Ontario Court of Appeal determines when it is appropriate to vest out a royalty interest as part of an insolvency proceeding
The Importance of the Decision
Background:
For more than 70 years, the energy industry has been one of Alberta's primary economic engines. It is no secret, however, that large scale oil and natural gas development can have a detrimental impact on the environment if it is not properly managed. This interplay between risk and benefit creates complicated policy and regulatory tensions as exploration and production (E&P) companies become financially distressed. Most stakeholders benefit from responsible resource development, but their interests diverge when a company becomes insolvent.
The Alberta Court of Queen's Bench has issued several conflicting decisions on whether a stay of proceedings in an insolvency matter should be temporarily lifted to allow enforcement of a contractual right to immediately replace an operator of oil and gas assets in the event of the operator's insolvency.
In a decision handed down on January 31, 2019, the Supreme Court ordered that a bankrupt oil and gas company fulfil its obligation to reclaim abandoned oil wells before paying any creditors. This decision has since sparked conflicting reactions across the country: first, because it gives clear precedence to environmental protection in the event of bankruptcy, and second, because of the influence it will likely have over business decisions in industries where environmental risks are involved.
Dans un arrêt du 31 janvier 2019, la Cour suprême ordonne qu’une société pétrolière faillie s'acquitte d’abord de ses obligations de remise en état des puits de pétrole abandonnés, avant de procéder à tout paiement en faveur de ses créanciers. Une décision qui suscite des réactions opposées d’un bout à l’autre du pays, puisque, d’une part, elle donne clairement préséance à la protection de l’environnement en cas de faillite, mais que, d’autre part, elle risque d’influencer les décisions d’affaires dans des industries où des risques environnementaux sont en jeu.
Le 31 janvier 2019, dans l’affaire Orphan Well Association c. Grant Thornton ltée., la Cour suprême du Canada (« CSC ») a décidé qu’un organisme de réglementation provinciale, en l’espèce l’Alberta Energy Regulator (« AER »), peut exiger le respect des obligations de fin de vie de puits, pipelines et autres installations assujetties aux règlements provinciaux d’une société en faillite ou de son syndic, même si les ordonnances de l’AER causent un préjudice à l’actif du créancier ou aux créanciers garantis.
On January 31, 2019, the Supreme Court of Canada released its decision in Orphan Well Association v. Grant Thornton Ltd., popularly known as Redwater. In a 5-2 split decision, a majority of the Supreme Court allowed the appeal and held that the Alberta Energy Regulator’s (AER/Regulator) assertion of its statutory enforcement powers over an insolvent licensee’s assets does not create a conflict with the federal Bankruptcy and Insolvency Act (BIA) as to trigger the constitutional doctrine of federal paramountcy.