2014 02 18 Application to Strike Alberta Environment's Brief Ernst vs Encana lawsuit

vz/ia/zum j.b:bb 14838236073 02-18- '14 15:40 FROM-ALBERTA JUSTICE

DRUMHELLER COURTS •7804271230

PAGE 02/04 T-138 FklldldZ/004b f-'Sfi

Form [Rule:

COURT FILE NUMBER

COURT

JUDICIAL CENTRE

PLAINTIFF

DEFENDANTS

DOCUMENT

0702-00120

COURT OF QUEEN'S BENCH OF ALBERTA

DRUMHELLER

JESSICA ERNST

ENCANA CORPORATION, ENERGY RESOURCES CONSERVATION BOARD, and HER MAJESTY THE QUEEN IN RIGHT OF ALBERTA

BRIEF OF THE DEFENDANT HER MAJESTY THE QUEEN IN RIGHT OF ALBERTA

TO BE HEARD BY THE HONOURABLE CHIEF JUSTICE N.C. WITTMANN ON APRIL 16, 2014

ADDRESS FOR SERVICE AND CONTACT INFORMATION OF PARTY FILING THIS DOCUMENT

ALBERTA JUSTICE Civil Litigation 9th Floor, Peace Hills Trust Tower 10011-109 Street Edmonton, Alberta T5J 3S8 Solicitor: Neil Boyle / Nancy McCurdy Telephone: (780) 427-2543 Fax: (780)427-1230

CONTENTS

I. NATURE OF RELIEF SOUGHT 2

II. BACKGROUND 2

III. FACTS 5

IV. ISSUES 6

V. APPLICABLE LAW 6

a. Striking the Entire Claim 7

b. Summary Judgment 9

VI. ARGUMENT 12

a. Public v. Private Duty of Care / Lack of Proximity: 13

b. Statutory Immunity 22

c. Applying Case Law - Allegations in the Fresh Statement of Claim... 27

VI. RELIEF SOUGHT 39

VIII. LIST OF AUTHORITIES 40

I NATURE OF RELIEF SOUGHT

1. The Applicant, Her Majesty the Queen in right of Alberta ("the Province"),

respectfully submits that paragraphs 59 to 84 inclusive and paragraph 88 of the

Fresh Statement of Claim be struck as against the Province for failing to disclose

a reasonable cause of action.

2. In the alternative, the Province respectfully submits that Summary

Judgment should be granted dismissing this action as against the Province. It is

plain and obvious that there is no merit to any of the Plaintiff's claims against the

Province.

3. The Province seeks its costs of this application paid forthwith, and, if the

action is dismissed in its entirety, the costs of the action to be paid forthwith.

4. Such further and other Order as this Court may deem proper.

II BACKGROUND

5. On December 3, 2007, the Plaintiff filed a 79 paragraph, 19 page

Statement of Claim against Encana Corporation ("Encana"), Alberta Energy and

Utilities Board, Neil McCrank, Jim Reid, Alberta Environment, Kevin Pilger,

Alberta Health and Wellness and Her Majesty the Queen in right of Alberta

alleging among other things that:

a. Encana's coal bed methane activities negatively affected the

Plaintiff's groundwater and land; and

b. The Government of Alberta, specifically the Energy and Utilities

Board, Alberta Environment and Alberta Health and Wellness failed

to properly monitor and regulate Encana's activities.

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6. On April 21 , 2011, the Plaintiff filed a 257 paragraph, 73 page Amended

Statement of Claim removing Neil McCrank, Jim Reid, Kevin Pilger, Alberta

Environment and Alberta Health and Wellness as Defendants and substituting

Energy Resources Conservation Board ("ERCB") for the Alberta Utilities Board.

The Amended Statement of Claim's "Table of Contents" summarizes the

Plaintiff's allegations against the Defendants which include but are not limited to:

a. Encana's drilling activities contaminated the Plaintiff's well water;

b. The failure of Alberta Energy and Utilities Board to properly monitor

and regulate Encana's activities; and

c. The failure of Alberta Environment to properly monitor and regulate

Encana's activities.

7. On February 7, 2012, the Plaintiff filed a 69 page Second Amended

Statement of Claim which removed paragraphs 13, 15, 18, 30, 32, 37, 39-41, 53-

55, 57, 59, 60, 61, 63, 65, 66, 75, 212, 214 and 221, and revised paragraphs 17,

31, 58, 64, 94, 95, 98, 99, 165, 167, 213, 215, 219, 222 and 223.

8. The Province and other Defendants applied to strike several paragraphs

of the Second Amended Statement of Claim, and the ERCB also applied for

Summary Judgment. These applications proceeded on April 26, 2012 and at that

hearing Madam Justice Veldhuis suggested that the Plaintiff consider redrafting

the Statement of Claim in a manner that complied with the Alberta Rules of

Court. Counsel agreed and this resulted in a Fresh Statement of Claim (the

"Fresh Claim"). The Fresh Claim was filed on June 25, 2012.

Fresh Statement of Claim TAB1

9. The Province applied to strike certain paragraphs of the Statement of

Claim, paragraphs that the Province argued were akin to class action allegations,

and relied upon rules 3.68(2)(c) and (d). The Province did not seek to have the

claim dismissed against it, either by way of rule 3.68(2)(b), nor by way of

Summary Judgment.

10. The ERCB applied to strike all paragraphs in the claim pertaining to itself,

or, in the alternative, granting Summary Judgment in favour of the ERCB. These

applications were argued before Madam Justice Veldhuis on January 18, 2013

and she reserved her decision. Madam Justice Veldhuis was then appointed to

the Court of Appeal and the parties agreed that The Honourable Chief Justice

Neil Wittmann would become the Case Management Judge and render a

decision on these applications, based on a transcript of the oral arguments made

and the written materials that had been filed.

11. Chief Justice Wittmann rendered his decision on September 16, 2013 (the

"Wittmann Decision"). In that decision, the Province's application to strike only

some of the paragraphs against it was denied by Chief Justice Wittmann. In that

same decision all paragraphs relating to the ERCB in negligence were struck, as

the duties owed by the ERCB were public duties, not private duties. Further, it

was held that there was a lack of proximity between the Plaintiff and the ERCB,

so that none of the public duties were elevated to a private duty owed by the

ERCB to the Plaintiff. Chief Justice Wittmann also held that the Plaintiff's claims

against the ERCB were, in any event, barred by the statutory immunity afforded

by section 43 of the Energy Resources Conservation Act, RSA 2000, c. E-10 (the UERCA").

Ernst v EnCana Corporation, 2013 ABQB 537, CarswellAlta 1836. TAB 5

12. The Province now brings an application similar to that brought by the

ERCB, to have the action against the Province dismissed, either by way of a lack

of private duty of care owed by the Province to the Plaintiff, or by the operation of

statutory immunity provisions set out in both the Environmental Protection and

Enhancement Act, RSA 2000, c. E-12 ("EPEA"), and the Water Act, RSA 2000,

c. W-3 (Water Acf).

Ill FACTS

13. The Province, through its Ministry of Environment and Sustainable

Resource Development ("ESRD") (formerly Alberta Environment or AENV),

oversees development and its environmental impact pertaining to land, air, and

water. Although AENV was the entity operating at material times, for the sake of

clarity, we will refer to the current Ministry, ESRD.

14. One of the key components of ESRD's oversight of the environment is the

statutory oversight and enforcement mechanisms set out in the EPEA. All

allegations against the Province in the Fresh Statement of Claim, are related to

activity carried out by ESRD pursuant to the EPEA. A further statutory regime

relating to the oversight of water specifically is the Water Act.

15. The Plaintiff makes allegations of negligence as against the Province.

These allegations are contained in paragraphs 69-80 of the Fresh Statement of

Claim. Summarized and paraphrased, these allegations are as follows:

a. The timeliness of the response by the Province

to complaints by a "number of landowners", including

the Plaintiff, of suspected contamination caused by oil

and gas development;

b. That tests conducted by the Province on

"numerous water wells in the Rosebud region"

showed the presence of hazardous chemicals and

pollutants, including a high concentration of methane.

One of these water wells was situated on the

Plaintiff's property;

c. That the Province knew that contamination

found on the Plaintiff's property, and "elsewhere in the

Rosebud Aquifer", was related to and indicative of

contamination caused by oil and gas development.

d. That the Province's investigations were

conducted negligently and in bad faith;

e. The Province contracted the Alberta Research

Council to complete a study of information gathered

but restricted the scope of this study, and negligently

and unreasonably relied upon the results of this study;

f. Subsequent to the Alberta Research Council

report, the Province closed its investigation and

discontinued the supply of fresh water to the Plaintiff;

g. Failed to report breaches of the Water Act and

the EPEA to the Compliance Manager; and,

h. Failed to take any enforcement steps against

the Defendant EnCana.

16. The Plaintiff claims damages against the Province as set out in

paragraphs 81, 82, 83, 84 and 88 of the Fresh Statement of Claim.

IV ISSUES

17. Should paragraphs 59-84 and 88 of the Fresh Statement be struck, as

against the Province, pursuant to rules 3.68(1)(a) and 3.68(2)(b), because they

fail to disclose a reasonable cause of action against the Province?

18. In the alternative, should Summary Judgment, pursuant to rules 7.2 and

7.3, be granted in favour of the Province, because it is plain and obvious that

there is no merit to any of the Plaintiff's claims against the Province?

V APPLICABLE LAW

a. Striking the Entire Claim

19. If the circumstances warrant, the Court may order that all of a claim be

struck out. One of the conditions which allow a claim to be struck is that it

discloses no reasonable claim.

Alberta Rules of Court, AR 124/2010, r 3.68(1)(a), r 3.68(2)(b). TAB 4

20. No evidence is to be considered on an application made on the basis that

the pleading discloses no reasonable claim.

Alberta Rules of Court, r 3.68(3). TAB 4

21 . Rule 3.68 replaces the former rule 129, and both the new and former rules

have the same effect and are to be applied in a similar manner. As such, the test

for striking the entire claim is whether it is plain and obvious or beyond

reasonable doubt that the claim cannot succeed.

Donaldson v. Farrell, 2011 ABQB 11 at para 30. TAB 6

22. The "plain and obvious" test has been stated as follows.

1. It is well settled that the impugned pleadings must be read generously. 2. The pleading will not be struck out if the flaws in it are capable of amendment. 3. A pleading will not be struck out for want of a cause of action unless the flaw is plain and obvious and beyond doubt. 4. The claim advanced must be hopeless to be struck out. 5. The Statement of Claim should be struck out on a question of law only if it is a pure question of law requiring no evidence or no further pleadings.

Care must be exercised in striking out part of a Statement of Claim only. 7. Facts pleaded must be taken to be true.

The Court should consider allowing an amendment before an order for striking.

Roasting v Lee, 1998 CarswellAlta 536, at para 6. TAB 7

23. However, rule 3.68 of the Alberta Rules of Court must be viewed and

applied through the lens of the foundational rule, rule 1.2. It is respectfully

submitted that one of the purposes of rule 1.2 is to ensure that a Defendant is not

subjected to needless litigation, where an expedited process exists to make that

determination. Rule 1.2 provides:

1.2(1) The purpose of these rules is to provide a means by which claims can be fairly and justly resolved in or by a court process in a timely and cost-effective way.

(3) To achieve the purpose and intention of these rules the parties must, jointly and individually during an action:

(a) identify or make an application to identify the real issues in dispute and facilitate the quickest means of resolving the claim at the least expense.

Donaldson v. Farrell, supra at para 10. TAB 6

Alberta Rules of Court, r 1.2(1), r 1 2(3)(a). TAB 4

24. If the claim alleges a breach of duty where no such duty exists, or where

there are no facts alleged to support such a duty, then there is no need to wait for

evidence, either by way of questioning or on a summary judgment application, in

order to determine that the claim ought to be struck. Although pleadings should

be liberally interpreted, if the alleged facts do not disclose a cause of action, then

the claim should be struck. Needless litigation should be avoided.

Tottrup v Alberta (Minister of Environment), 2000 CarswellAlta 365 at paras 9-12.

TAB 8

25. The Court must ask itself whether the claim has any reasonable prospect

of success. The Supreme Court of Canada articulated the framework of the test

as follows:

The judge on a motion to strike asks if the claim has any reasonable prospect of success. In the world of abstract speculation, there is a mathematical chance that any number of things might happen. That is not what the test on a motion to strike seeks to determine. Rather, it operates on the assumption that the claim will proceed through the court system in the usual way—in an adversarial system where judges are under a duty to apply the law as set out in (and may develop from) statutes and precedent. The question is whether, considered in the context of the law and the litigation process, the claim has no reasonable chance of succeeding.

Knight v. Imperial Tobacco Canada Ltd, 2011 SCC 42, 2011 CarswellBC 1968 at para 25 [cited to Carswell].

TAB 23

b. Summary Judgment

26. On application, the Court may at any time in an action give judgment or an

order to which the applicant is entitled when admissions of fact are made in a

pleading.

Alberta Rules of Court, r 7.2(a). TAB 4

27. Rule 7.2 allows this application to proceed in advance of the Province

filing its Statement of Defence, "at any time", and this is consistent with the

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foundational rule 1.2 and an effort to resolve important legal issues in dispute on

an expedited and cost efficient basis.

28. A party may apply to the Court for summary judgment in respect of all or

part of the claim on the grounds that there is no merit to the claim or part of it.

Alberta Rules of Court, r 7.3(1)(b). TAB 4

29. An application for summary judgment must be supported by an affidavit or

by other evidence to the effect that the grounds have been met. In this case,

the Province is relying on the facts set forth in the Fresh Statement of Claim, and

legislation under which the facts alleged occurred, as "other evidence" that there

is no merit to the claim.

Alberta Rules of Court, r 7.3(2). TAB 4

30. It is respectfully submitted that rule 7.3(2) is of the effect that an affidavit is

not mandatory. Further, that a Court may look to legislation, and the pleading, in

determining whether or not to grant summary judgment. The key is whether on

the materials presented, there is a basis for finding that the claim is without merit.

31. Where a party is relying only on legal arguments, and there is sufficient

factual basis in the record to decide those legal arguments, then the Court may

proceed with a summary judgment application.

Gauchierv Cunningham, 2013 CarswellAlta 1584 at para 25. TAB 9

32. The application of new rule 7.3 is in its relative infancy, yet there are a

number of decisions that have proceeded with such applications in the absence

of a sworn affidavit in support. The rationale is that the Courts had enough

materials on the record to make a determination as to whether or not summary

judgment ought to be granted.

Terrigno v Kretschner, 2012 CarswellAlta 2283 at paras 13-22. TAB 10

Environmental Metal Works Ltd v Murray, Faber & Associates Inc, 2013 CarswellAlta 1579 at paras 32-40.

TAB 11

CCS Corp v Secure Energy Services Inc, 2013 CarswellAlta 1997 at paras 49-51.

TAB 12

33. Our Court of Appeal has commented on the new summary dismissal rules

and the 'evidentiary controversy' as to what is required of an applicant to support

the onus on establishing that a claim ought to be dismissed summarily. The

Court commented that where the central controversy is with respect to the

interpretation of a statute, and not with any contested material facts, then the

process of discovery is not required and there are no issues of material fact that

require a trial. Again, so long as on the record before it the court can make this

determination, then summary dismissal is available.

Jackson v Canadian National Railway, 2013 CarswellAlta 2549 at paras 29 and 30.

TAB 29

34. The Supreme Court of Canada has articulated the importance of summary

judgment applications on more than one occasion. Our highest Court has

recognized that summary judgment rules serve an important purpose in the civil

litigation system by preventing claims that have no chance of success of

proceeding to trial. Such trials impose a heavy price in time and costs on parties

to litigation, and it is beneficial to all parties to have unmeritorious claims weeded

out at the earliest opportunity.

Papaschase Indian Band No 136 v Canada (Attorney General), 2008 SCC 14 at para 10.

TAB 13

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35. Very recently the Supreme Court of Canada has called for an expanded

access to the summary judgment regime, with an increased focus on the

principles of proportionality, timeliness, and affordability. The Court underscored

the need for summary judgment and directed that there be a "culture shift" away

from relying too heavily on the potential for further evidence being brought forth

at a trial. There will be no genuine issue for trial where the applications judge

can reach a "fair and just determination on the merits."

Combined Air Mechanical Services Inc v Flesch, 2014 CarswellOnt 640. TAB 14

36. The following principles govern the determination to be made on a

summary judgment application:

a. A party bringing a motion for summary judgment bears the legal onus of showing no genuine issue for trial. b. There is no onus on the responding party to prove a genuine issue for trial. c. If the applicant discharges their onus on the material filed, the respondent who does not resist through admissible evidence risks judgment against them. That is an evidentiary burden. d. There is no obligation on the respondent to file material. They can accept the risk and if the applicant fails to discharge their onus, the application will fail. e. More commonly a respondent will provide admissible evidence opposing the motion. In that event the court will consider all the evidence to determine whether the applicant has shown that there is no genuine issue for trial.

Murphy Oil Co v Predator Corp, 2004 CarswellAlta 1210 at para 17; aff'd by 2006 ABCA 69.

TAB 15

VI ARGUMENT

37. The Province advances two primary grounds in favour of either the striking

of all paragraphs that make allegations against it, or, alternatively, summary

13

judgment dismissing the action as against the Province. First, that the statutory

regimes that govern all actions or inactions by the Province, with respect to the

allegations made against it by the Plaintiff, set up duties owed to the public at

large and not to individuals such as the Plaintiff. Second, that the statutory

immunity provisions contained in both the EPEA and the Water Act shield the

Province from any liability in the nature alleged by the Plaintiff.

a. Public v. Private Duty of Care / Lack of Proximity:

38. The starting point in the analysis of whether a government, in carrying out

its business as a regulator of private enterprise, pursuant to a statutory regime,

owes any private law duty of care to one of its citizens is to recognize that in

Canada there is no tort of breach of statutory duty. Breach of statute, where it

has an effect upon civil liability, should be considered in the context of the

general law of negligence.

R v Saskatchewan Wheat Pool, 1983 CarswellNat 92 at para 37. TAB 16

39. Therefore, in order for the Plaintiff to attach liability to the Province in this

action, she must do so in accordance with the general law of negligence, and in

keeping with established common law duties of care. It is respectfully submitted

that in the absence of a common law relationship of duty, a statute that is silent

on the point cannot create a private law duty of care.

40. In determining whether a duty exists, the Supreme Court of Canada has

mandated a two-stage test, as cited in City of Kamloops v. Nielsen:

a. Is there a relationship of sufficient proximity between the plaintiff

and defendant such that in the reasonable contemplation of the

defendant, carelessness on his part may be likely to cause damage

to the plaintiff? If so, a prima facie duty of care arises.

14

b. If there is a prima facie duty of care, are there policy considerations

which ought to negative, or reduce or limit, the scope of the duty,

the persons to whom it is owed, or the damages to which it might

give rise?

Anns v Merton London Borough Council, 1977 2 All ER 492, as cited in City of Kamloops v Nielsen, 1984 CarswellBC 476 at paras 15 and 16.

TAB 17

41. The Supreme Court of Canada, within its decision in Kamloops v. Nielsen,

also commented on the 'Welbridge' principles, in stating that a government or

public body, vested with enforcement discretion, may not be required by the court

to exercise that power in a certain way and is not under a private law duty to do

so.

City of Kamloops v Nielsen at paras 18-20. TAB 17

42. The two-stage test for whether a duty exists was further refined by the

Supreme Court of Canada in two companion decisions that were issued in 2001.

The Court added the notion of 'proximity' to the first stage of the test, making it a

concept that was in addition to and distinct from 'foreseeability'. It was held that

both concepts together create a prima facie duty of care. In actions against

statutory authorities, such as the Province in this action, it is no longer sufficient

to prove that harm was foreseeable. There must also be proximity between the

parties, and this proximity must be found in the governing statute. The following,

taken from Cooper v. Hobart, sets out the fundamental test to be met by the

Plaintiff to meet the first stage of the Anns test:

"...factors giving rise to proximity, if they exist, must arise from the statute under which the Registrar is appointed. The statute is the only source of his duties, private or public...if a duty to investors with regulated mortgage brokers is to be found, it must be in the statute.

15

In this case, the statute does not impose a duty of care on the Registrar to investors with mortgage brokers regulated by the Act. The Registrar's duty is rather to the public as a whole. Indeed a duty to individual investors would potentially conflict with the Registrar's overarching duty to the public."

Cooper v Hobart, 2001 CarswellBC 2502 at paras 43 and 44. TAB 18

43. At this first stage of the Anns test, it must be determined whether the

allegations in the claim fall within any category of cases in which a duty of care

has previously been recognized. If not, then it must be determined whether it is

an appropriate situation in which a new duty of care ought to be created. The

Plaintiff must show both sufficient foreseeability and proximity in order to justify

the imposition of a new duty of care. The governing statute is the sole basis for

all of a statutory regulator's duties. Where the duties of an authority or regulator

are geared for the protection of the public as a whole, it does not mean that this

authority or regulator owes a private duty of care to a particular member of the

public. This is so where discretion is exercised that involves a myriad of

objectives consistent with public rather than private law duties.

Edwards v Law Society of Upper Canada, 2001 SCC 80 at paras 8-16. TAB 19

44. Statutes, examined by the judiciary post-Cooper and post-Edwards, have

been interpreted as having been enacted in order to protect the public at large,

not individuals such as the Plaintiff. This creates a strong presumption against

proximity on the part of statutory authorities. In addition, there is the common

law principle that generally there is no duty imposed on one person to confer a

benefit on another, by preventing harm from sources unconnected to the

defendant.

45. The Ontario Court of Appeal in comparing its health legislation to

legislation examined in both the Cooper and Edwards cases, found that those

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two cases involved legislation that provided a duty of care owed to a narrow

class of individuals whose specific interests were vulnerable to the very agents

that the public authorities were statutorily mandated to protect, yet in neither case

was a private duty owed to any one individual. In so finding, the Court

commented that if no proximity existed in those two cases, then it was

'impossible' to conclude there was proximity in the Ontario health legislation

being examined. That legislation created a general public law duty that required

the Minister to endeavor to promote, safeguard and protect the health of Ontario

residents and prevent the spread of infectious diseases and this general duty

was held not to give rise to a private law duty sufficient to ground an action in

negligence.

Eliopoulos Estate v Ontario, 2006 CarswellOnt 6777 at paras 17-20 leave to appeal to SCC denied at 2007 CarswellOnt 3256

TAB 20

46. There are several cases that have followed the line of reasoning set forth

in the Eliopoulos case. Our Court of Appeal, for example, held that provincial

building codes set minimum standards for construction to meet the public interest

and could not be construed to impose a duty of care to individual consumers of

building products.

Holstag v Alberta, 2006 CarswellAlta 164. TAB 21

47. The Supreme Court of Canada has made the public interest versus private

duty of care dichotomy even clearer in more recent decisions. Our highest Court

has indicated that, generally, statutes aimed at pursuing public interests will not

give rise to a private duty of care to an individual citizen. This can create an

almost impossible situation for a Plaintiff to establish the required proximity to a

statutory authority, but it is difficult to infer that a legislature intended to create

private law tort duties to such claimants. This is even more difficult if the private

law duty would conflict with the public authority's duty to the public.

Fullowka v Royal Oak Ventures Inc, 2010 CarswellNWT 9, 2010 SCC 5.

TAB 22

Knight v Imperial Tobacco Canada Ltd, 2011 CarswellBC 1968, 2011 SCC 42 TAB 23

48. Aside from the statutory scheme, a Plaintiff can try to make out a private

duty of care owed by a statutory body by showing specific interactions with that

body, provided a duty so found is not negated by statute, or that this would

conflict with the public purpose set forth in that statute. If a finding of proximity,

grounded in specific interactions, would conflict with the government's general

public duty established by the statute, the court may still find that no proximity

exists.

Knight v Imperial Tobacco Canada Ltd, at para 45. TAB 23

49. The Plaintiff's Statement of Claim alleges direct interaction with the

Province, as she did with the ERCB, in an attempt to argue that there is thereby

sufficient proximity with both the ERCB and the Province to satisfy the first part of

the Anns test. This position was rejected with respect to the ERCB in the

Wittmann Decision.

50. The fact that a Plaintiff has direct dealings with a government agency does

not necessarily give rise to sufficient proximity between that Plaintiff and the

government in order to meet the first part of the Anns test. This may even be the

case in a situation where the Plaintiff is the sole target of that agency's

investigation, the Plaintiff is compelled to rely upon that investigation, and the

Plaintiff alleges that it was a negligent investigation that caused the Plaintiff

damages to his property. The Ontario Court of Appeal held that this is so when a

statute is the only source of the agency's duties, and that legislation discloses

intent to exclude a private law duty.

River Valley Poultry Farm Ltd v Canada (A-G), 2009 CarswellOnt 2053, [2009] SCCA 259, 2009 CarswellOnt 6909 (leave to appeal Supreme Court denied).

TAB 24

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51. As the Court held in River Valley Poultry, something more than a

government targeting a particular individual or enterprise is necessary to

establish proximity. This is so where the government agency at play is

responsible for overseeing an element of the public interest, in that case the

prevention of the spread of disease in the interest of animal and public health. In

our action, the Province is responsible, under the EPEA, with preventing the

escape or spread of contaminants released into the environment in the interest of

the public at large. The rationale from River Valley Poultry is on all fours with the

facts as alleged in the Fresh Statement of Claim.

River Valley Poultry Farm Ltd v Canada (A-G) at paras 57-60 TAB 24

52. In examining the legislation at issue in the within action, it is obvious that it

is the public interest of all Alberta residents which is being protected, not the

rights or interests of specific individuals. Equally clear, is that there is an overall

balancing between economic and environmental needs and that one does not

necessarily trump the other. This balancing of interests occurs at the highest

public level, and a private right asserted within this context is not appropriate,

and as stated in the Cooper decision, would conflict with the Province's overall

obligations to look after these public interests and the balancing of such interests.

The stated purposes (section 2) of the EPEA are as follows:

The purpose of this Act is to support and promote the protection, enhancement and wise use of the environment while recognizing the following: a) the protection of the environment is essential to the integrity of ecosystems and human health and to the well-being of society; b) the need for Alberta's economic growth and prosperity in an environmentally responsible manner and the need to integrate environmental protection and economic decisions in the earliest stages of planning; c) the principle of sustainable development, which ensures that the use of resources and the

I1)

environment today does not impair prospects for their use by future generations; d) the importance of preventing and mitigating the environmental impact of development and of government policies, programs and decisions; e) the need for Government leadership in areas of environmental research, technology and protection standards; f) the shared responsibility of all Alberta citizens for ensuring the protection, enhancement and wise use of the environment through individual actions; g) the opportunities made available through this Act for citizens to provide advice on decisions affecting their environment; h) the responsibility to work co-operatively with governments of other jurisdictions to prevent and minimize transboundary environmental impacts; i) the responsibility of polluters to pay for the costs of their actions; j) the important role of comprehensive and responsive action in administering this Act.

Environmental Protection and Enhancement Act, RSA 2000 c E12 at s 2. TAB 2

53. The EPEA's overall tone is permissive, providing the Province with the

discretion of when and how to take action or no action as it sees fit in a particular

situation. For example, there is the potential for use of environmental protection

orders where, in the Province's Director's opinion there is an adverse effect, at

which point the Director 'may' issue such an order. Similarly, remediation

certificates, which can issue once a contaminant is identified as released from a

specific source. The entity that caused such contamination can then establish

that sufficient remediation of land has occurred, and at that point 'may' be issued

a remediation certificate by the Director, or the Director 'may refuse' to issue

such a certificate, as the Director considers appropriate.

EPEA, ss 113, 117. TAB 2

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54. The Water Act, cited by the Plaintiff, is very similar to the EPEA, in terms

of its public interest purpose:

The purpose of this Act is to support and promote the conservation and management of water, including the wise allocation and use of water, while recognizing a) the need to manage and conserve water resources to sustain our environment and to ensure a healthy environment and high quality of life in the present and the future; b) the need for Alberta's economic growth and prosperity; c) the need for an integrated approach and comprehensive, flexible administration and management systems based on sound planning, regulatory actions and market forces; d) the shared responsibility of all residents of Alberta for the conservation and wise use of water and their role in providing advice with respect to water management planning and decision-making; e) the importance of working co-operatively with the governments of other jurisdictions with respect to trans-boundary water management; f) the important role of comprehensive and responsive action in administering this Act.

Water Act, RSA 2000 c W3 at s 2. TAB 3

55. The Water Act is about balancing of interests in water, including that of a

landowner. The Act also sets up a mechanism for mediating disputes and

providing for compensation, if certain steps are taken in accordance with that Act.

56. The purposes of both the EPEA and the Water Act are to deal with the

protection of water and other aspects of the environment, for the benefit of all

Albertans, and while doing so to also factor in competing economic and other

interests.

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57. Neither the EPEA nor the Water Act indicates, either expressly or by

implication, that a private duty of care is imposed on the Province with respect to

any particular individual. The Province has a public duty of care in administering

these statutes, a duty to the public as a whole.

58. Just as the statutory scheme governing the public duties of the ERCB

(the ERCA) is analogous to the public duties imposed on the Registrar of

mortgage brokers in Cooper, or the Law Society in Edwards, so goes for the

Province's duties under the EPEA. They are not private duties, they are public

duties. The necessary proximity between the Plaintiff and the Province is absent.

Ernst v EnCana Corporation, at paras 24-27.

TAB 5

59. Should a Plaintiff overcome the hurdle in part one of the Anns test, then

part two must be considered. If the finding of a private law duty of care is made,

then if that raises the prospect of indeterminate liability on the part of

government, then this is also fatal to the Plaintiff's claim.

Knight v Imperial Tobacco Canada Ltd at paras 97-101. TAB 23

60. In both Edwards and in Cooper, as cited in Knight, in finding that an

indeterminate liability meant a failure by a Plaintiff to meet the second part of the

Anns test, the factors cited were an inability on the part of the government to

control the number of persons potentially affected by the legislation, as the

legislation itself imposed no limits, or the amount of money that may be involved

in the impact of that legislation. In our case, as in Knight, if the Province is held

to owe a duty to the Plaintiff, then all individuals within Alberta affected by

potential escape of contaminants into the environment become a potential class

of plaintiffs and the amount of liability would be indeterminate. The Province

would have no control over the extent of its potential liability.

22

Knight v Imperial Tobacco Canada Ltd at paras 97-101 TAB 23

b. Statutory Immunity:

61 . If the Plaintiff can overcome the argument that no private law duty is owed

to her, then and only then should reference be had to the statutory immunity

provisions afforded the Province under both the EPEA and the Water Act.

62. While administering the EPEA and the Water Act, there is discretion

afforded to the Province, and the protection from civil liability of the Province's

employees, agents, and others while doing so.

63. The protection afforded to the Province from being sued in the

performance of its public duties under these Acts is critical, as to allow for private

law duties and concurrent lawsuits by individuals, affected by the administration

of the legislation, would conflict with the public duties owed by the Province to the

public as a whole.

64. Further evidence that both the EPEA and the Water Act are designed to

exclude a private duty of care is the fact that both contain clear and strong

immunity clauses as follows:

Protection from liability 220 No action for damages may be commenced against

a) a person who is an employee or agent of or is under contract to the Government or is an employee or agent of or is under contract to a Government agency, b) a person who is designated as an inspector, investigator or analyst under section 25(3)(b),(c) or (d),

c) a person to whom the Minister has, under section 9 of the Government Organization Act, delegated a power, duty or function under this Act, d) any person, including any employee of the Government, a Government agency, a local authority or the Government of Canada or an agency of that Government, to whom a power or duty has been delegated under section 17, d.1) any person, including any employee of the Government, a Government agency, a local authority or the Government of Canada or an agency of that Government, to whom the administration of a provision of this Act has been transferred under section 18, e) a member of the Environmental Appeals Board, or f) a member, employee or agent of, or a person under contract to, a delegated authority referred to in section 37(d),

for anything done or not done by that person in good faith while carrying out that person's duties or exercising that person's powers under this Act including, without limitation, any failure to do something when that person has discretionary authority to do something but does not do it.

EPEA, s 220 TAB 2

65. A statutory immunity clause, such as s. 220 of the EPEA, is a clear

indication by the legislature that it did not intend to create a private duty of care,

in fact that it intended to exclude a private law duty. In the Edwards decision, the

Supreme Court examined a similar immunity clause and held that such a clause

precluded any inference of an intention to provide compensation outside of

insurance coverage and an established compensation fund. The EPEA builds in

a mechanism for compensation to a landowner, by a party that is found to have

caused the release of a contaminant onto the landowner's property. However,

this is only the case when an investigation and findings warrant that

compensation. Again, the Province is granted legal discretion in making all

24

decisions in this regard. The statutory immunity clause specifically excludes any

other form of compensation as against the Province itself.

Edwards, supra at paras 16-17. TAB 19

66. Several decisions have focused on the existence or absence of an

immunity clause as the basis for whether or not a private law duty exists. Our

own Queen's Bench held that such a clause is, "strong evidence that the

Legislature was not creating private law duties of care."

Nette v Stiles, 2010 CarswellAlta 44 at para 29. TAB 25

Smorag v Nadeau Estate (Trustee of), 2008 CarswellAlta 1829 at paras 28-29. TAB 26

Swinamer v Nova Scotia (A-G), 1 SCR 445, 1994 CarswellNS 3 at para 24 [cited to Carswell].

TAB 27

67. The Water Act specifically excludes a private law duty against the

Province through the use of an immunity clause. In fact, the Water Act clearly

delineates between a landowners rights to pursue civil remedies, including

injunctions, against a person engaged in conduct that is alleged to be causing

damage, as distinct from the Province for whom liability is exempted

Liability Exemption

157 No action for damages may be commenced against a) a person who is an employee or agent or is under contract to the Government or a Government agency, b) an inspector, investigator or Director, c) a person authorized in writing by the Director under section 95 or 119 or a person authorized by a Director or investigator under section 128,

25

d) a person to whom a delegation of a power, duty or function under this Act has been made by the Minister under section 9 of the Government Organization Act, or e) a member of the Environmental Appeals Board,

for anything done or not done by that inspector, investigator, Director, person or members in good faith while carrying out that inspector's, investigator's Director's, person's or member's duties or exercising powers under this Act including, without limitation, any failure to do something when that inspector, investigator, Director, person or member has discretionary authority to do something but does not doit.

Water Act, s 157. TAB 3

68. Both s. 220 of the EPEA and s. 157 of the Water Act pertain to, "anything

done or not done", and specifically include immunity for any failure to do

something which there was discretion to do under either statute. As such, any

argument that the immunity is not provided for 'sins of omission', as was argued

by the Plaintiff with respect to the ERCB, is negated. In any event, it was held

that with respect to the ERCB, the key is that immunity is granted to a regulator

for choosing amongst certain alternatives, in either acting or not acting, which

inherently involves a decision to act or not to act, or to act in another way than

the Plaintiff would have preferred. The immunity clauses bar any actions or

proceedings, in terms of both decisions to act and acts done pursuant to those

decisions, and decisions not to act.

Ernst v EnCana Corporation at paras 51-58. TAB 5

69. The immunity clauses in the EPEA and Water Act contain the phrase, "in

good faith", in qualifying the actions or inactions of the persons protected by the

clauses. This differs from the ERCB which did not have this qualifying wording in

the immunity clause contained in the ERCA.

26

70. However, you do not get to the point of analyzing whether an action was in

good faith or not, until you have established that a duty of care is owed in the first

place. The Supreme Court of Canada, in clarifying the Anns test, indicated that a

statutory immunity clause that does contain a qualifying 'in good faith'

component, is nonetheless indicative of the fact that no private law duty of care

exists with respect to matters that are clearly meant to be conducted for the

interests of the public at large, for matters where there is no proximity between

the authority and a particular member of the public. Even with the wording, 'in

good faith' included in a statutory immunity clause, such a clause, "precludes any

inference of an intention to provide compensation in circumstances that fall

outside" the ambit of the public law duties stipulated within the legislation as a

whole.

Edwards v Law Society of Upper Canada at paras 16 and 17. TAB 19

71. First, a duty of care must be established and if so, then the second part is

determining whether that duty was carried out in good faith or not. This

determination is not met by allegations that amount to negligence. It must be

something more, it must be an intentional act, or an act so irrational that it does

not accord with the purposes of the legislation under which the actions were

taken.

Condominium Corp No 9813678 v Statesman Corp, 2009 CarswellAlta 1751 at paras 239 and 282-283

TAB 28

72. Decisions that have determined no duty of care is owed, in part because

of immunity clauses, have not been deterred in so finding because the immunity

clause includes 'in good faith'. Such clauses are still strong indication that the

Legislature was not creating private law duties of care. Pleading bad faith is not

enough to create a duty of care that otherwise does not exist.

27

Nette v Stiles at paras 29-31. TAB 25

c. Applying Case Law - Allegations in the Fresh Statement of Claim (TAB 1):

73. The allegations that are specific to the Province are set out in paragraphs

59 through 80, inclusive, of the Fresh Statement of Claim. In addition, the

Province is named with the other Defendants in paragraphs 81, 82, 83 and 84.

The remedies sought against the Province specifically are contained in

paragraph 88. The Province seeks to have the totality of these paragraphs, with

respect to the Province, struck pursuant to rule 3.68 of the Alberta Rules of Court

or, in the alternative, to have the claim dismissed as against the Province

pursuant to rules 7.2 and 7.3.

74. The overall tenor of the EPEA does not create a responsibility owed by the

Province to those who suffer the consequences of escape, but rather to try and

ascertain who caused escape, and where it can be shown that an entity or

person caused escape, to ensure that the person or entity responsible for the

cause of the escape remediates the effects of that escape. The cost of such

remediation rests with the person or entity that caused the escape. In this

context, the immunity provided to the Province in s. 220 reflects the fact that it is

not the Province that is ultimately liable for any impact on the environment from

third parties.

75. With respect to the allegations contained in the Fresh Statement of Claim,

as against the Province, they are entirely without merit, and fail to raise a

genuine issue for trial. It is clear that the EPEA and the Water Act are meant to

provide for the interests of the public at large, and a balancing of often competing

interests. Ultimate redress for any alleged damages or injury from environmental

impact rests with the entities responsible for such impact. In the course of its

investigations, the Province is shielded from immunity so that it can properly

ensure the public interest is taken care of, without the worry that private interests

will attempt to seek recourse in conflict with that public mandate.

76. There is no private law duty of care owed by the Province, as

environmental regulator, to private citizens such as the Plaintiff. Any contact that

the Province had with the Plaintiff was in the context of responding to a complaint

under the EPEA with respect to possible escape of contaminants due to oil and

gas activity in the surrounding area. Even if the Plaintiff can somehow prove, on

a balance of probabilities that a particular person or entity caused escape, and

that this escape contaminated land owned by her, then her recourse is against

the entity or person that caused the escape. She does not have recourse for any

damages as against the Province. The Province is not liable or responsible to

those who sustain the consequences of a released substance.

77. The introductory paragraphs in the Fresh Statement of Claim set out the

scope of the within action, one that is clearly geared to asking the Court to

embark on an enquiry into a large region, and activity at over 190 gas wells, in an

effort to determine whether damage occurred in that region due to contaminants

escaping from oil and gas activity at numerous sites within that region. Again,

this is clearly a matter of public interest. This public interest can be clearly seen

in the following paragraphs of the Fresh Statement of Claim:

6. Between 2001 and 2006, EnCana engaged in a program of shallow drilling for the extraction of methane gas from coalbeds and other formations from the Horseshoe Canyon geological formation located underneath Wheatland County, Alberta. As part of this drilling program, EnCana engaged in various activities including construction, drilling, perforation, hydraulic fracturing, operating, servicing as well as reclamation and remediation activities (hereforth "CBM Activities") at dozens of gas wells located adjacent to the Ernst Property.

29

Between 2001 and 2006, EnCana hydraulically fractured coal seems and other underground formations which were located above the Base of Groundwater Protection, as defined in the Water Act, at over 190 gas wells within an approximately 6 mile radius of the Ernst Property...

78. The scope of the Province's investigation is set out in the Fresh Statement

of Claim. Paragraph 66 states that, "...a number of landowners had made

complaints regarding suspected contamination of the Rosebud Acquifer

potentially caused by oil and gas development." Further, paragraph 69 admits

that the Province did investigate possible contamination. It is not alleged that the

Province did nothing, in fact it is clear from the claim itself that the Province did

investigate not only the Plaintiff's property, but an entire region that

encompassed the Plaintiff's property. The Plaintiff, in paragraph 69 states that,

"...Alberta Environment began an investigation into possible contamination of

numerous water wells in the Rosebud region, including the Ernst Well."

79. Many of the allegations against the Province are very similar, if not

identical, to those made against the ERCB, which have been struck in the

Wittmann Decision, on the basis that no private duty of care was owed or, in any

event, was barred by statutory immunity provisions. As such, the corresponding

paragraphs that allege against the Province ought to be struck on the same

basis.

80. The rationale that any private duty of care arising from any alleged specific

interactions between the Plaintiff and the ERCB is negated by the ERCB's

governing statute applies equally to any specific interactions alleged between the

Plaintiff and the Province, being negated by the Province's governing statute, the

EPEA. Any alleged negligence on the part of the Province is negated by the lack

of a private law duty of care, which includes the statutory immunity afforded the

Province by s. 220 of the EPEA.

30

81. The flaw in the Fresh Statement of Claim is plain, obvious and beyond

doubt, and the claim is hopeless. There is no amendment that can correct the

flaw, as the fundamental fact is that the Province does not owe the Plaintiff the

duty of care that is necessary at first instance to support the remainder of the

claim for damages against the Province. If you cannot establish the duty, then

the rest of the claim fails. Whether the claim is struck in its entirety on this basis,

or whether Summary Judgment is granted on the basis that the claim is without

merit as against the Province, the end result ought to be the same, the action is

dismissed in its entirety as against the Province.

82. The Plaintiff's allegations against the Province are encapsulated in the

headings of the Fresh Statement of Claim that precede the allegations made

against the Province. These are the only headings covering the entirety of

allegations made against the Province:

C. Claims against the Defendant Alberta Environment i. Negligent administration of a regulatory regime

83. Paragraphs 59 through 64 of the Fresh Statement of Claim, containing

allegations as against the Province, are similar if not identical to paragraphs 24

through 28 that were struck as against the ERCB in the Wittmann Decision.

84. Paragraph 59 sets out the Province's duties, which are in the nature of a

public duty of care, not a private law duty of care.

85. None of the legislative and regulatory provisions enumerated in

paragraphs 60 and 61 of the Fresh Statement of Claim in any way deviate from

or compromise the public duty of care owed by the Province, as opposed to a

private law duty, as reflected in the primary legislation, the EPEA or the Water

Act. None of these sources can give rise to a finding that the Province owed a

private duty of care to the Plaintiff, in ensuring compliance with environmental

laws and legal requirements. No such private duty is set out in any of these

31

sources. Any private duty alleged by the Plaintiff is negated by the governing

statutes. The documents referenced in the claim are attached within the

Province's Book of Authorities as follows:

• Groundwater Evaluation Guideline (February 5, 2003) TAB 30

• AENV Guidelines for Groundwater Diversion (April 2004) TAB 31

• AENV Compliance Assurance (2005) TAB 32

• Water (Ministerial) Regulation, AR 205/98 (as consolidated) TAB 33

86. Paragraphs 62, 63, and 64 are similar in content and intent, to

paragraphs 27 and 28 that were struck as against the ERCB in the Wittmann

Decision. All deal with alleged representations made either to the public at large,

or specifically to the Plaintiff. There is nothing in these representations that

creates a private law duty of care. All alleged representations are merely steps

taken under the auspices of the statutory regime that creates public interest

duties. None of these representations, even ones alleged to have been made

directly to the Plaintiff, supports that the Province owed any private law duty to

the Plaintiff.

87. Paragraphs 65 through 72 of the Fresh Statement of Claim, containing

allegations as against the Province, are similar if not identical to paragraphs 29

through 37 that were struck as against the ERCB in the Wittmann Decision.

88. Paragraphs 65 through 72 pertain to the administration by the Province of

the EPEA and the Water Act. The Province is empowered to undertake

investigations and as a result, if warranted after investigation, to undertake

enforcement measures designed to remediate the impact of any escape of

substances into water and the environment at large. In so doing, the Province is

not beholden to a complainant or reporter of potential contamination. The

Province does not owe a duty to such private citizens. The Province is not liable

to private citizens for the impact of such contamination.

32

89. Paragraphs 65 through 69 relate solely to the timing of the Province's

investigation. The decision whether or not to investigate is within the discretion

of the Province's employees and agents and in making those decisions they are

immune from liability in accordance with s. 220 of the EPEA. Further, such

decisions do not give rise to a private law duty of care to the Plaintiff. By the

Plaintiff's own allegations, the Province commenced an investigation within

months of receiving complaints.

90. Paragraphs 70-72 make allegations about testing results and do not raise

any issues of liability. Paragraphs 71 and 72 speak further of the Province's

knowledge with respect to these test results and are not substantively different

than paragraphs 34, 35, and 36, all of which were struck or dismissed as against

the ERCB. The fact that the Plaintiff would like the Province to do something

different than it did with respect to these test results is not a proper basis to

maintain this action. Were the Province held to owe a duty to all landowners to

conduct tests only in the form they desired and to take action as the landowners

saw fit, to have those actions mandated by the landowners via the court system,

would seriously injure the Province's ability to carry out the discretion legally

afforded to it under the EPEA.

91. Paragraphs 73, 75, 76, 77, 78, 79, and 80, are similar to paragraphs 38,

39, 40 and 41 which were struck or dismissed as against the ERCB. These

paragraphs particularize allegations of both negligence and bad faith with respect

to the Province. The allegations contained therein, in our respectful submission,

relate solely to particulars of negligence and not to bad faith. The allegations are

with respect to the details of the Province's investigation under the EPEA, and

the precise steps the Province took as part of that investigation. Much of it is in

the form of a scientific debate about what sampling should have looked like, what

precise locations ought to have been investigated, and what documentation

ought to have been gathered. In essence, the Plaintiff is asking the courts to

step into the shoes of an investigator and somehow re-do this investigation. The

33

Plaintiff disagrees with the manner in which the Province's investigators applied

their discretion under the EPEA. However, these allegations are doomed to fail

as they do not give rise to a duty of care owed by the Province to the Plaintiff.

92. Further, with respect to paragraphs 73, 75, 76, 77, 78, 79, and 80, the

Province is authorized to conduct investigations under Part 10 (Enforcement) of

the EPEA. Section 197 of the Act provides the Director with the power to

investigate, "all matters that the Director considers necessary for a determination

of facts..." but also provides the Director with the discretion, we submit unfettered

discretion, to, "...discontinue an investigation if the Director is of the opinion that

the alleged offence does not require further investigation." Section 210 provides

for enforcement orders, "Where in the Director's opinion a person has

contravened this Act...". Section 212 provides the Director with the discretion to

("may") amend an enforcement order, add or remove a term from such an order.

The Province may recover the costs of such an investigation (s. 216). Civil

remedies and civil causes of action are not suspended or affected only by reason

of enforcement under the EPEA, but the Province is given immunity from civil suit

under s. 220.

EPEA, ss 197, 210, 212 and 216. TAB 2

93. Section 195 of the EPEA provides that the Province may establish

programs to promote the reporting of offences. Nowhere does the Act stipulate

the types or forms of investigation that the Province will undertake, and that is left

to the unfettered discretion of the Province's investigators and Director. The

Plaintiff's allegations contained in paragraph 73 would read into the Act elements

not so contained in that Act and not intended by the Legislature to be so

included.

EPEA, s 195. TAB 2

34

94. There is no basis within the EPEA to support the allegations contained in

paragraphs 73, 75, 76, 77, 78, 79, and 80 of the Fresh Statement of Claim.

There is no basis to impose a private duty of care, and absent such a duty, these

allegations are not supported in law. The Legislature excluded the imposition of

such a private duty of care.

95. The processes and investigations iterated in paragraphs 73, 75, 76, 77,

78, 79, and 80 of the claim are all discretionary processes. As such, even if the

Province did make some objective errors or did not do things in the manner

suggested by the Plaintiff as proper or appropriate, the Province did exercise

legally authorized discretion in so doing. Such an exercise of discretion is

covered by the immunity afforded in s. 220 of the EPEA. No private law duty of

care is owed to the Plaintiff with respect to any of these allegations. Moreover,

the Plaintiff's role in the Province's investigation, as a complainant, does not

grant her private law rights with respect to that investigation. Any such rights or

duty on the part of the Province is negated by the EPEA. The claim is without

merit, and it is plain and obvious there is no issue for trial.

96. Paragraph 74 is the only paragraph in the Fresh Statement of Claim that is

unique to the Province and not similar or identical to allegations made against the

ERCB. This paragraph makes allegations that are characterized exclusively as

"bad faith". Paragraphs 74 d. and e. relate to the sharing of information. This is

discretionary on the part of the Province, in the course of an investigation, the

Province does not typically share information. In any event these allegations do

not support any claim for damages.

97. Paragraphs 74 a., b., and c, all pertain to the actions of investigator,

Kevin Pilger. They all go to state of mind prior to, or at the outset of, the

investigation. As indicated in the Fresh Statement of Claim, at paragraph 75, the

Province ultimately contracted out testing to an independent entity, the Alberta

Research Council, and relied upon its conclusions, not those of Kevin Pilger, in

35

determining what enforcement steps to take or not to take. All of these

allegations bear back to the fact that the Plaintiff simply does not agree with the

form of the Province's investigation nor its outcome. Again, these issues are not

capable of supporting a claim in damages as against the Province as there is no

private law duty of care owed.

98. The Alberta Research Council report was provided to the Plaintiff by letter

dated January 16, 2008. The Council used a variety of evidence, including

evidence relating not only to the Ernst Well, but also to some 35 other water

wells in the region, in reaching the conclusion that the methane in the Ernst well

was biogenic and that energy development projects in the area had most likely

not adversely affected the Plaintiff's water supply. The Council was aware of

sampling contamination issues and errors, these issues being raised in the Fresh

Statement of Claim. The Council factored this into its independent analysis.

Based on the independent findings of the Alberta Research Council, the Province

closed its investigation, exercising its discretion pursuant to the EPEA.

Allegations pertaining to this report are contained in the Fresh Statement of

Claim at paragraphs 75, 76 and 77. The exercise of this discretion is not the

proper basis for an action by the Plaintiff, as it does not raise a private law duty of

care, and the decisions made were reasonable and protected by the immunity

afforded by s. 220 of the EPEA.

Alberta Research Council Inc, "Ernst Water Well Complaint Review", (December 31, 2007)

TAB 34

99. With respect to allegations of 'bad faith', the Plaintiff will likely argue that

given the fact that s. 220 contains the phrase 'in good faith' as a qualifier to the

immunity afforded the Province, that these allegations raise a triable issue or

have potential merit. The Province submits this is not the case. As stated in

paragraph 70 of this Brief, as garnered from the Supreme Court of Canada in

Edwards:

36

'...you do not get to the point of analyzing whether an action was in good faith or not, until you have established that a duty of care is owed in the first place. The Supreme Court of Canada, in clarifying the Anns test, indicated that a statutory immunity clause that does contain a qualifying 'in good faith' component, is nonetheless indicative of the fact that no private law duty of care exists with respect to matters that are clearly meant to be conducted for the interests of the public at large, for matters where there is no proximity between the authority and a particular member of the public. Even with the wording, 'in good faith' included in a statutory immunity clause, such a clause, "precludes any inference of an intention to provide compensation in circumstances that fall outside" the ambit of the public law duties stipulated within the legislation as a whole.'

100. Pleading bad faith in a situation that does not give rise to a private law

duty of care, especially when such a duty would conflict with the public interest

inherent in legislation such as the EPEA, is not enough to create a private

interest appropriate for compensation by the public body. Such a result would fly

in the face of the purpose and intent of the EPEA, and the framework under

which its investigations are carried out.

101. The allegations contained in the Plaintiff's Fresh Statement of Claim, with

respect to the Province, is in the form of an attack on decisions that

encompassed the Province's form of investigation into the Rosebud region, and

the resultant decisions it made whether or not to take enforcement steps based

on the results of these investigations. Much of the Plaintiff's allegations against

the Province are in the nature of a scientific debate about test results, the

meaning of those results, and what those results ought to dictate in terms of

enforcement under the EPEA. In this regard, the Province is entitled to rely on

expert opinion and advice and in so doing is immune from liability for resultant

decisions it makes, pursuant to s. 220 of the EPEA. This Court should be loath

to comply with the Plaintiff's request, which is to ask this Court to somehow step

into the shoes of an environmental investigator, and determine complex issues

37

such as analysis of testing results, and the identification of contaminant sources

with respect to underground substances. These issues are highly complex.

Further, these issues are not properly brought in the form of an action as against

the Province. It has discretion to determine the form of testing it conducts and

how it analyzes those results, and the actions that it feels it is then empowered to

take or not to take in accordance with the EPEA. The Plaintiff's claim, in its

totality, is of a nature that would give her personal private law interests

supremacy over the public interest set out in the EPEA, and oblige the Province

to accept her opinions on complex subject matter, otherwise face liability. That

cannot be the intent of the Act as made clear in the sections providing the

Province the discretion to carry out its duties, and in the immunity it is afforded in

so doing.

102. Landowners and oil and gas entities may at times disagree with the steps

taken by the Province under the EPEA, and such disagreement does not give

rise to an actionable claim. Were it otherwise the case, this system of

environmental checks, studies, and enforcement could grind to a halt under the

stresses placed on limited resources. To hold that this gives rise to individual

private law duties owed to each person or entity affected by decisions made

under the EPEA would no doubt create a chilling effect on those tasked the job of

undertaking what are often complex and time-consuming investigations.

103. The EPEA sets out the parties who by law are responsible for the release

of substances, of the type alleged in the Fresh Statement of Claim. In section

1(tt), "person responsible", when used in reference to released substances is

defined and as importantly persons who are NOT to be considered as

responsible are also defined. These definitions do not include the Province and,

in fact, exclude the Province's investigators pursuant to subclause 1(tt)(vi). The

definition within 1(tt), as to who is responsible is as follows:

38

i. The owner and a previous owner of the substance or thing,

ii. Every person who has or has had charge, management or control of the substance or thing, including, without limitation, the manufacture, treatment, sale, handling, use, storage, disposal, transportation, display or method of application of the substance or think,

iii. Any successor, assignee, executor, administrator, receiver, receiver-manager or trustee of a person referred to in subclause (i) or (ii), and

iv. A person who acts as the principal or agent of a person referred to in subclause (i), (ii) or (iii),

But does not include:

v. A municipality (and goes on at length to particularize what that means in v. (A) and (B),

vi. A person who investigates or tests a parcel of land for the purpose of determining the environmental condition of that parcel, unless the investigation or test releases on that parcel a new or additional substance into the environment that may cause, is causing or has caused an adverse effect or aggravates the adverse effect of the release of a substance into the environment on that parcel, or

vii. The Minister responsible for the Unclaimed Personal Property and Vested Property Act, ...

104. The claim against the Province, whether in negligence or in bad faith, asks

this Court to somehow replicate a complex environmental investigation and draw

its own findings as to what the findings of such an investigation ought to entail.

In the end result, it is not legally supportable to look to the Province for any

compensation in damages for any of the allegations made against it. Any

recourse would be restricted to the parties listed in s. 1(tt) of the EPEA.

105. Alternatively, if this Court finds that any of the allegations against the

Province merit further examination at trial, then the Province submits that those

allegations be restricted to 'bad faith' allegations and that the Plaintiff be

estopped from any claims founded only in negligence.

39

VI RELIEF SOUGHT

106. The Province submits that the entirety of the claim, as against the

Province, be struck in accordance with rule 3.68 of the Alberta Rules of Court.

107. In the alternative, the Province requests that Summary Judgment be

granted in favour of the Province, in accordance with rules 7.2 and 7.3 of the

Alberta Rules of Court, thereby dismissing the action as against the Province.

108. Such further and other order as to this Honourable Court seems fit.

109. The Province further requests costs of this application payable in any

event of the cause.

ALL OF WHICH IS RESPECTFULLY SUBMITTED this

February, 2014.

ALBERTA JUSTICE

Per:

LIST OF AUTHORITIES

TAB

1. Fresh Statement of Claim

2. Environmental Protection and Enhancement Act, RSA 2000 c E12

3. Water Act, RSA 2000 c W3

4. Alberta Rules of Court, AR 124/2010, 3.68(1 )(a), 3.68(2)(b), 3.68(3), 1.2(1), 1.2(3)(a), 7.2(a), 7.3(1)(b), 7.3(2)

5. Ernst v EnCana Corp, 2013 ABQB 537, CarswellAlta 1836

6. Donaldson v Farell, 2011 ABQB 11

7. Roasting v Lee, 1998 CarswellAlta 536

8. Tottrup v Alberta (Minister of Environment), 2000 CarswellAlta 365

9. Gauchier v Cunningham, 2013 CarswellAlta 1584

10. Terringo v Kretschmer, 2012 CarswellAlta 2283

11. Environmental Metal Works v Murray, Faber & Associates Inc, 2013 CarswellAlta 1579

12. CCS Corp v Secure Energy Services Inc, 2013 CarswellAlta 1997

13. Papaschase Indian Band No 136 v Canada (Attorney General), 2008 SCC 14

14. Combined Air Mechanical Services Inc v Flesch, 2014 CarswellOnt 640 (SCC)

15. Murphy Oil Co v Predator Corp, 2004 CarswellAlta 1210 aff'd at 2006 ABCA 69

16. The Queen v Saskatchewan Wheat Pool, 1983 CarswellNat 21

17. Nielsen v Kamploos (City), 1984 CarswellBC 476

18. Cooper v Hobart, 2001 CarswellBC 2502 (SCC)

19. Edwards v Law Society of Upper Canada, 2001 SCC 80

20. Eliopoulos v Ontario (Minister of Health & Long Term Care), 2006 CarswellOnt 6777 (CA), leave to appeal to SCC denied at 2007 CarswellOnt 3256 (SCC)

21. Holtslag v Alberta, 2006 CarswellAlta 164

22. Fullowka v Royal Oak Ventures Inc, 2010 CarswellNWT 9 2010 SCC5

23. Knight v Imperial Tabacco Canada Ltd, 2011 SCC 42, 2011 CarswellBC 1968, [cited to Carswell],

24. River Valley Poultry Farm Ltd v Canada (A-G), 2009 CarswellOnt 2053, [2009] SCCA 259, 2009 CarswellOnt 6909 (leave to appeal Supreme Court denied)

25. Nette v Stiles, 2010 CarswellAlta 44 (Q.B.)

26. Smorag v Nadeau Estate (Trustee of), 2008 CarswellAlta 1829

27. Swinamer v Nova Scotia (Attorney General), 1 SCR 445, 1994 CarswellNS 3 [cited to Carswell]

28. Condominium Corp No 9813878 v Statesman Corp, 2009 CarswellAlta 1751

29. Jackson v Canadian National Railway, 2013 CarswellAlta 2549

30. Groundwater Evaluation Guideline (February 5, 2003)

31. Alberta Environment Guidelines For Groundwater Diversion (April 2004)

32. Alberta Environment Compliance Assurance (2005)

33. Water (Ministerial) Regulation, AR 205/98, as consolidated

34. Alberta Research Council Inc., "Ernst Water Well Complaint Review", (December 31,2007)

u " J . U / i o m I D ; 00 I4U38236073 02-18- '14 15:45 FROM-ALBERTA JUSTICE

DRUMHELLER COURTS •YHIMZY'lZcSlfl ,_,«« PAGE 83/04

Form 27

10.52(1)]

COURT FILE NUMBER

COURT

JUDICIAL CENTRE

PLAINTIFF

DEFENDANTS

DOCUMENT

ADDRESS FOR SERVICE AND CONTACT INFORMATION OF PARTY FILING THIS DOCUMENT

0702-00120

COURT OF QUEEN'S BENCH OF( z ALBERTA

DRUMHELLER

JESSICA ERNST

ENCANA CORPORATION, ENERGY RESOURCES CONSERVATION BOARD and HER MAJESTY THE QUEEN IN RIGHT OF ALBERTA

BOOK OF AUTHORITIES OF THE DEFENDANT, HER MAJESTY THE QUEEN IN RIGHT OF ALBERTA

TO BE HEARD BY THE HONOURABLE CHIEF JUSTICE N.C. WITTMANN ON APRIL 16, 2014

VOLUME 1 OF 2- TABS 1-14

ALBERTA JUSTICE Civil Litigation 9th 1100-109 Street Calgary, Alberta T2P0M9 Solicitor: Neil R. Boyle / Nancy A. McCurdy Telephone: (403) 297-3790 Fax: (403)662-3824

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u i f i o / z o m I D : D D 14038236073 02-18- '14 15:45 FROM-ALBERTA JUSTICE

DRUMHELLER COURTS , , _ PAGE 04/04

1052(1)]

COURT FILE NUMBER

COURT

JUDICIAL CENTRE

PLAINTIFF

DEFENDANTS

Form 27 [Rul

DOCUMENT

ADDRESS FOR SERVICE AND CONTACT INFORMATION OF PARTY FILING THIS DOCUMENT

0702-00120

COURT OF QUEEN'S BENCH OF $> ALBERTA \ f

DRUMHELLER

JESSICA ERNST

ENCANA CORPORATION, ENERGY RESOURCES CONSERVATION BOARD and HER MAJESTY THE QUEEN IN RIGHT OF ALBERTA

BOOK OF AUTHORITIES OF THE DEFENDANT, HER MAJESTY THE QUEEN IN RIGHT OF ALBERTA

TO BE HEARD BY THE HONOURABLE CHIEF JUSTICE N.C. WITTMANN ON APRIL 16, 2014

VOLUME 2 OF 2- TABS 15-34

ALBERTA JUSTICE Civil Litigation 9** 1100-109 Street Calgary, Alberta T2P0M9 Solicitor; Neil R. Boyle / Nancy A. McCurdy Telephone: (403) 297-3790 Fax: (403)662-3824