Alliance Pipeline Ltd. v. Smith (2011), 412 N.R. 66 (SCC)
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[French language version follows English language version]
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Temp. Cite: [2011] N.R. TBEd. FE.027
Vernon Joseph Smith (appellant) v. Alliance Pipeline Ltd. (respondent) and Arbitration Committee, appointed pursuant to the National Energy Board Act, R.S.C. 1985, c. N-7, Part V (intervenor)
(33203; 2011 SCC 7; 2011 CSC 7)
Indexed As: Alliance Pipeline Ltd. v. Smith
Supreme Court of Canada
McLachlin, C.J.C., Binnie, LeBel, Deschamps, Fish, Abella, Charron, Rothstein and Cromwell, JJ.
February 11, 2011.
Summary:
Alliance Pipeline Ltd. constructed a pipeline route across a portion of Smith’s farmland. A dispute arose regarding the reclamation of a portion of the land used for the pipeline. Smith sought to have the issue of compensation for the reclamation work arbitrated. A hearing was held before a Pipeline Arbitration Committee (the first PAC), but no decision was rendered because of a quorum issue. In 2003, Alliance filed a statement of claim, seeking an injunction, declaratory relief and an order directing the first PAC not to render a decision until such time as a matter respecting releases could be determined. The injunction application was dismissed by the Alberta Court of Queen’s Bench ([2003] A.R. Uned. 633). Alliance eventually discontinued its action. A second PAC was appointed. Smith’s notice of arbitration asserted the same claims as were before the first PAC, but added a claim for costs of the first hearing and costs of its aborted action. The PAC awarded Smith $9,829 for reclamation work, $1,200 for trespass, $16,222.57 for his net legal fees, disbursements and GST relating to Alliance’s Queen’s Bench action and injunction application, and legal fees and disbursements of the arbitration proceedings, except for those directly related to attendance at the first hearing and subsequent correspondence regarding the status and effect of the first hearing after the loss of quorum. Alliance appealed, arguing that the second PAC erred in holding that it had jurisdiction to award costs and in the costs awarded.
The Federal Court, in a decision reported 318 F.T.R. 100, dismissed the appeal. Alliance appealed again.
The Federal Court of Appeal, in a decision reported 389 N.R. 363, allowed the appeal, set aside the judgment of the Federal Court, allowed Alliance’s appeal from the second PAC decision and quashed the awards of the second panel in regard to the costs claims. The court held that while the PAC had jurisdiction to award costs, it erred in doing so with regard to the Alberta litigation and the first PAC proceedings. Smith appealed.
The Supreme Court of Canada allowed the appeal, restored the decision of the second PAC, and pursuant to s. 47 of the Supreme Court Act, awarded Smith his costs, on a solicitor-client basis.
Expropriation – Topic 2321
Practice and procedure – Costs – Compensation under statute other than Expropriation Act (e.g., National Energy Board Act) – [See all
Mines and Minerals – Topic 8554
].
Expropriation – Topic 2328
Practice and procedure – Costs – Solicitor and client costs – [See second
Mines and Minerals – Topic 8554
].
Mines and Minerals – Topic 8554
Oil and gas – Pipelines – Construction and operation of – Compensation to landowners – Costs – Smith sought an arbitration under the National Energy Board Act (NEBA) regarding compensation for the reclamation of a portion of his farmland expropriated for use for a pipeline by Alliance Pipeline Ltd. – Proceedings before a Pipeline Arbitration Committee (the first PAC) were aborted – Alliance started court proceedings and sought injunctive relief – The Court of Queen’s Bench (Alta.) dismissed the injunction application – Alliance eventually discontinued its action – A second PAC held that Smith was entitled to compensation, including his costs before the first PAC and on the Queen’s Bench action – Alliance appealed, arguing that the PAC erred in holding that it had jurisdiction to award costs and in the costs awarded – The Federal Court dismissed the appeal – Alliance appealed again – The Federal Court of Appeal held that, regardless of the standard of review, the decision of the second PAC regarding costs had to be quashed – Smith appealed – The Supreme Court of Canada, reviewing the matter on the standard of reasonableness, held that the impugned decision of the second PAC satisfied that standard – The second PAC reasonably interpreted s. 99(1) of the NEBA as entitling it to make the impugned awards on costs – The court, therefore, allowed the appeal and restored the decision of the second PAC – Further, pursuant to s. 47 of the Supreme Court Act, the court awarded Smith his costs, on a solicitor-client basis.
Mines and Minerals – Topic 8554
Oil and gas – Pipelines – Construction and operation of – Compensation to landowners – Costs – Smith sought an arbitration under the National Energy Board Act (NEBA) regarding compensation for the reclamation of a portion of his farmland expropriated for use for a pipeline by Alliance Pipeline Ltd. – Proceedings before a Pipeline Arbitration Committee (the first PAC) were aborted – Alliance started court proceedings and sought injunctive relief – The Court of Queen’s Bench (Alta.) dismissed the injunction application – Alliance eventually discontinued its action – A second PAC held that Smith was entitled to compensation, including his costs before the first PAC and on the Queen’s Bench action – Alliance appealed – The Federal Court dismissed the appeal – Alliance appealed again – The Federal Court of Appeal allowed the appeal – Smith appealed – The Supreme Court of Canada allowed the appeal and restored the decision of the second PAC – Further, the court awarded Smith his costs on a solicitor-client basis (Supreme Court Act, s. 47) because: (1) in the context of modern expropriation law, where statutes authorize awards of “all legal, appraisal and other costs”, Canadian jurisprudence and doctrine demonstrate that costs on a solicitor-and-client basis should generally be given; (2) awarding costs on a solicitor-client basis accorded well with the object and purpose of the NEBA, as reflected in s. 75; (3) this was a case in which justice could only be done by a complete indemnification for costs; and (4) Smith should not be made to bear the costs of what was clearly a test case for the Alliance – See paragraphs 72 to 77.
Mines and Minerals – Topic 8554
Oil and gas – Pipelines – Construction and operation of – Compensation to landowners – Costs – Section 99(1) of the National Energy Board Act provided that “Where the amount of compensation awarded to a person by an Arbitration Committee exceeds eighty-five per cent of the amount of compensation offered by the company, the company shall pay all legal, appraisal and other costs determined by the Committee to have been reasonably incurred by that person in asserting that person’s claim for compensation” – The Supreme Court of Canada interpreted s. 99(1) accordingly – See paragraphs 41 to 58.
Cases Noticed:
New Brunswick (Board of Management) v. Dunsmuir, [2008] 1 S.C.R. 190; 372 N.R. 1; 329 N.B.R.(2d) 1; 844 A.P.R. 1; 2008 SCC 9, refd to. [paras. 23, 80].
Toronto (City) v. Canadian Union of Public Employees, Local 79 et al., [2003] 3 S.C.R. 77; 311 N.R. 201; 179 O.A.C. 291; 2003 SCC 63, refd to. [para. 26].
Celgene Corp. v. Canada (Attorney General) (2011), 410 N.R. 127; 2011 SCC 1, refd to. [paras. 28, 105].
Canadian Union of Public Employees, Local 963 v. New Brunswick Liquor Corp., [1979] 2 S.C.R. 227; 26 N.R. 341; 25 N.B.R.(2d) 237; 51 A.P.R. 237, refd to. [paras. 36, 94].
Conger Lehigh Coal Co. and Toronto (City), Re, [1934] O.R. 35 (H.C.), refd to. [para. 50].
Diggon-Hibben Ltd. v. R., [1949] S.C.R. 712, refd to. [para. 55].
Irving Oil Co. v. R., [1946] S.C.R. 551, refd to. [para. 55].
Toronto Area Transit Operating Authority v. Dell Holdings Ltd., [1997] 1 S.C.R. 32; 206 N.R. 321; 97 O.A.C. 81, refd to. [para. 56].
MacDonald (Ian) Library Services Ltd. v. P.Z. Resort Systems Inc. (1987), 14 B.C.L.R.(2d) 273 (C.A.), refd to. [para. 60].
Christian & Missionary Alliance v. Municipality of Metropolitan Toronto (1973), 3 O.R.(2d) 655 (S.C. Taxing Office), refd to. [para. 60].
ATCO Gas and Pipelines Ltd. v. Energy and Utilities Board (Alta.), [2006] 1 S.C.R. 140; 344 N.R. 293; 380 A.R. 1; 363 W.A.C. 1; 2006 SCC 4, refd to. [para. 62].
Danyluk v. Ainsworth Technologies Inc. et al., [2001] 2 S.C.R. 460; 272 N.R. 1; 149 O.A.C. 1; 2001 SCC 44, refd to. [para. 64].
Campbell River Woodworkers & Builders’ Supply (1966) Ltd. v. British Columbia (Minister of Transportation and Highways) (2004), 193 B.C.A.C. 29; 316 W.A.C. 29; 22 B.C.L.R.(4th) 210; 2004 BCCA 27, refd to. [para. 66].
Thoreson et al. v. Alberta (Minister of Alberta Infrastructure) (2007), 417 A.R. 173; 410 W.A.C. 173; 79 Alta. L.R.(4th) 75; 2007 ABCA 272, refd to. [para. 67].
Mahone Bay (Town) v. Lohnes, Younis and Lohnes’ Market Ltd. (1983), 59 N.S.R.(2d) 68; 125 A.P.R. 68 (T.D.), refd to. [para. 68].
Lohnes, Lohnes and Lohnes’ Market Ltd. v. Mahone Bay (Town) (1983), 60 N.S.R.(2d) 132; 128 A.P.R. 132; 28 L.C.R. 338 (Expropriation Comp. Bd.), refd to. [para. 69].
McKean v. Ontario (Ministry of Transportation) (2008), 94 L.C.R. 185 (O.M.B.), refd to. [para. 70].
Bayview Builder’s Supply (1972) Ltd. v. British Columbia (Minister of Transportation and Highways) (1999), 127 B.C.A.C. 225; 207 W.A.C. 225; 67 B.C.L.R.(3d) 312; 1999 BCCA 320, refd to. [para. 74].
Holdom v. British Columbia Transit (2006), 231 B.C.A.C. 315; 381 W.A.C. 315; 58 B.C.L.R.(4th) 207; 2006 BCCA 488, refd to. [para. 74].
Hill v. Nova Scotia (Attorney General) (1997), 206 N.R. 299; 157 N.S.R.(2d) 81; 462 A.P.R. 81; 155 D.L.R.(4th) 767 (S.C.C.), refd to. [para. 74].
Foulis v. Robinson (1978), 92 D.L.R.(3d) 134 (Ont. C.A.), refd to. [para. 76].
U.E.S., Local 298 v. Bibeault – see Union des employés de service.
Union des employés de service, local 298 v. Bibeault – see Syndicat national des employés de la Commission scolaire régionale de l’Outaouais (CSN) v. Union des employés de service, local 298 (FTQ).
Syndicat national des employés de la Commission scolaire régionale de l’Outaouais (CSN) v. Union des employés de service, local 298 (FTQ), [1988] 2 S.C.R. 1048; 95 N.R. 161; 24 Q.A.C. 244; 35 Admin. L.R. 153, refd to. [para. 96].
Director of Investigation and Research, Competition Act v. Southam Inc. et al., [1997] 1 S.C.R. 748; 209 N.R. 20, refd to. [para. 97].
Pushpanathan v. Canada (Minister of Citizenship and Immigration), [1998] 1 S.C.R. 982, addendum [1998] 1 S.C.R. 1222; 226 N.R. 201, refd to. [para. 97].
Barrie Public Utilities et al. v. Canadian Cable Television Association et al., [2003] 1 S.C.R. 476; 304 N.R. 1; 2003 SCC 28, refd to. [para. 99].
Dr. Q., Re, [2003] 1 S.C.R. 226; 302 N.R. 34; 179 B.C.A.C. 170; 295 W.A.C. 170; 2003 SCC 19, refd to. [para. 99].
Proprio Direct Inc. v. Association des courtiers et agents immobiliers du Québec et al., [2008] 2 S.C.R. 195; 375 N.R. 1; 2008 SCC 32, refd to. [para. 102].
Khosa v. Canada (Minister of Citizenship and Immigration), [2009] 1 S.C.R. 339; 385 N.R. 206; 2009 SCC 12, refd to. [para. 103].
Nolan v. Kerry (Canada) Inc. – see Nolan et al. v. Superintendent of Financial Services (Ont.) et al.
Nolan et al. v. Superintendent of Financial Services (Ont.) et al., [2009] 2 S.C.R. 678; 391 N.R. 234; 253 O.A.C. 256; 2009 SCC 39, refd to. [para. 104].
Statutes Noticed:
National Energy Board Act, R.S.C. 1985, c. N-7, sect. 99(1) [para. 42].
Authors and Works Noticed:
Boyd, Kenneth J., Expropriation in Canada: A Practitioner’s Guide (1988), pp. 144, 145 [para. 55].
Canada, Hansard, House of Commons Debates, vol. 7, 1st Sess., 32nd Parliament (March 6, 1981), p. 8006 [para. 51].
Dyzenhaus, David, The Politics of Deference: Judicial Review and Democracy, in Taggart, Michael, The Province of Administrative Law (1997), pp. 279, 298 [para. 92].
Jacobs, Laverne, Developments in Administrative Law: The 2007-2008 Term – The Impact of Dunsmuir (2008), 43 S.C.L.R.(2d) 1, p. 31 [para. 106].
Macaulay, Robert W., and Sprague, James L.H., Practice and Procedure Before Administrative Tribunals (2010 Looseleaf Update, Release 8), vol. 3, p. 28-40.48 [para. 86].
McLachlin, Beverley, The Roles of Administrative Tribunals and Courts in Maintaining the Rule of Law (1998), 12 C.J.A.L.P. 171, pp. 178, 179 [para. 94]; 180, 181 [para. 96].
Sullivan, Ruth, Sullivan on Construction of Statutes (5th Ed. 2008), pp. 280, 577, 578 [para. 49]; 579 to 582 [para. 54]; 587 to 589 [para. 49]; 599 to 603 [para. 49].
Taggart, Michael, The Province of Administrative Law (1997), pp. 279, 298 [para. 92].
Todd, Eric C.E., The Law of Expropriation and Compensation in Canada (2nd Ed. 1992), pp. 505, 506 [para. 71]; 526 [para. 74].
Counsel:
Richard C. Secord, Meaghan M. Conroy and Yuk-Sing Cheng, for the appellant;
Munaf Mohamed and Jillian Strugnell, for the respondent;
No one appeared for the intervenor, the Arbitration Committee, appointed pursuant to the National Energy Board Act, R.S.C. 1985, c. N-7, Part V.
Solicitors of Record:
Ackroyd, Edmonton, Alberta, for the appellant;
Bennett Jones, Calgary, Alberta, for the respondent.
This appeal was heard on October 5, 2010, before McLachlin, C.J.C., Binnie, LeBel, Deschamps, Fish, Abella, Charron, Rothstein and Cromwell, JJ., of the Supreme Court of Canada. The judgment of the court was delivered in both official languages on February 11, 2011 and the following opinions were filed:
Fish, J. (McLachlin, C.J.C., Binnie, LeBel, Abella, Charron, Rothstein and Cromwell, JJ., concurring) – see paragraphs 1 to 77;
Deschamps, J., concurring – see paragraphs 78 to 111.
