Contract Policy Committee et al. v. FortisAlberta Inc., 2012 ABQB 653

• Judge: Veldhuis, J.
• Court: Court of Queen's Bench of Alberta (Canada)
• Case Date: May 17, 2012
• Citations: 2012 ABQB 653;(2012), 552 A.R. 11 (QB)

Contract Policy Com. v. FortisAlta. Inc. (2012), 552 A.R. 11 (QB)

MLB headnote and full text

Temp. Cite: [2012] A.R. TBEd. NO.072

Contract Policy Committee (Representing Central Alberta Rural Electrification Association Ltd. and South Alta Rural Electrification Association Ltd.)

(applicant) v. FortisAlberta Inc. (respondent)

(1201 02003; 2012 ABQB 653)

Indexed As: Contract Policy Committee et al. v. FortisAlberta Inc.

Alberta Court of Queen's Bench

Judicial District of Calgary

Veldhuis, J.

October 31, 2012.

Summary:

The Contract Policy Committee (CPC) represented Central Alberta Rural Electrification Association Ltd. (CAREA) and South Alta Rural Electrification Association Ltd. (SAREA), collectively the REAs. CAREA and SAREA were rural electrification associations and provided electric distribution services to eligible persons within the geographic service areas prescribed to them by the Alberta Utilities Commission (AUC). The geographic service areas granted to CAREA and SAREA were co-extensive with the geographic service area of FortisAlberta Inc. (Fortis). In 1997, each of the REAs entered into identical "integrated operations agreements" with Fortis that addressed operational issues arising from the parties' systems being interconnected and how to allocate consumers. On November 24, 2010, the CPC issued a notice to begin arbitral proceedings to resolve a dispute under the 1997 Agreement. The CPC asserted that the REAs were entitled to serve five consumers. Fortis disputed this. In a parallel proceeding, CAREA brought a motion to the AUC seeking a declaration that it was entitled to serve any person in its service area wishing to obtain electricity and that Fortis was restricted to providing electric distribution service only to consumers not provided service by CAREA. The AUC dismissed the motion. The arbitration panel dismissed the CPC's claim. CPC applied for leave to appeal the arbitral award under s. 44 of the Arbitration Act.

The Alberta Court of Queen's Bench dismissed the application.

Arbitration - Topic 8230

Judicial review (incl. appeals) - Bars - Submission of questions of law to arbitrator - [See fourth Arbitration - Topic 8701 ].

Arbitration - Topic 8301.1

Judicial review (incl. appeals) - Grounds - General - Questions of law - The Contract Policy Committee (CPC) represented Central Alberta Rural Electrification Association Ltd. (CAREA) and South Alta Rural Electrification Association Ltd. (SAREA), collectively the REAs - CAREA and SAREA were rural electrification associations and provided electric distribution services to eligible persons within the geographic service areas prescribed to them by the Alberta Utilities Commission (AUC) - The geographic service areas granted to CAREA and SAREA were co-extensive with the geographic service area of FortisAlberta Inc. (Fortis) - In 1997, each of the REAs entered into identical "integrated operations agreements" with Fortis that addressed operational issues arising from the parties' systems being interconnected and how to allocate consumers - On November 24, 2010, the CPC issued a notice to begin arbitral proceedings to resolve a dispute under the 1997 Agreement - The CPC asserted that the REAs were entitled to serve five consumers - Fortis disputed this - The arbitration panel dismissed the CPC's claim - CPC applied for leave to appeal the arbitral award under s. 44 of the Arbitration Act - The issues were divided into four groups: Group 1 (the statutory and regulatory context including the interpretation of statutory enactments specific to the regulation of the electric industry and electric distribution along with regulatory approvals); Group 2 (the law applicable to the interpretation of contracts generally); Group 3 (the proper interpretation of the 1997 Agreement); and Group 4 (the use of an analogy) - The Alberta Court of Queen's Bench held that all questions other than question 4 were questions of law - "Broadly, the issues raised in this case revolve around the proper interpretation of enactments, approvals, or agreements. Each of these issues raises questions of law; it is clear that they do so as a legal principle could be enunciated independent of any facts. The findings of fact necessary to interpret each document are not in dispute. The question of law is what those words mean." - See paragraphs 38 to 48.

Arbitration - Topic 8701

Judicial review - Practice - Appeals - Leave to appeal or right to appeal - This was an application for leave to appeal an arbitral award pursuant to s. 44 of the Arbitration Act - At issue was, inter alia, whether s. 44(2) of the Act contained a public interest requirement - The Alberta Court of Queen's Bench held that it did not - Had the Legislature desired a requirement that a legal question impact the public interest before an appeal was allowed under s. 44(2), it could easily have included that requirement with those listed - A dominant purpose of the Act, limiting appeals from arbitral awards, could be addressed by a careful reading of s. 44(2) - The proper interpretation of s. 44(2) applied high standards to the listed requirements but also recognized a discretion to refuse leave even when those conditions were met - In exercising the discretion to refuse leave, it might be relevant that a question did or did not have a public interest component - This interpretation was both more workable and more true to the ordinary words of the statute than reading in a public interest requirement - See paragraphs 49 to 58.

Arbitration - Topic 8701

Judicial review - Practice - Appeals - Leave to appeal or right to appeal - The Contract Policy Committee (CPC) represented Central Alberta Rural Electrification Association Ltd. (CAREA) and South Alta Rural Electrification Association Ltd. (SAREA), collectively the REAs - CAREA and SAREA were rural electrification associations and provided electric distribution services to eligible persons within the geographic service areas prescribed to them by the Alberta Utilities Commission (AUC) - The geographic service areas granted to CAREA and SAREA were co-extensive with the geographic service area of FortisAlberta Inc. (Fortis) - In 1997, each of the REAs entered into identical "integrated operations agreements" with Fortis that addressed operational issues arising from the parties' systems being interconnected and how to allocate consumers - On November 24, 2010, the CPC issued a notice to begin arbitral proceedings to resolve a dispute under the 1997 Agreement - The CPC asserted that the REAs were entitled to serve five consumers - Fortis disputed this - The arbitration panel dismissed the CPC's claim - CPC applied for leave to appeal the arbitral award under s. 44 of the Arbitration Act - The issues were divided into four groups: Group 1 (the statutory and regulatory context including the interpretation of statutory enactments specific to the regulation of the electric industry and electric distribution along with regulatory approvals); Group 2 (the law applicable to the interpretation of contracts generally); Group 3 (the proper interpretation of the 1997 Agreement); and Group 4 (the use of an analogy) - At issue was, inter alia, whether the matters at stake in the arbitration were of sufficient importance to the parties to justify an appeal, as required under s. 44(2)(a) of the Act - The Alberta Court of Queen's Bench was convinced that the matters at stake in this arbitration had a substantial impact on the parties - The answers to these questions decided who was entitled to serve different clients - The resolution of these questions could have an enormous impact on the parties including the continued viability of rural electrification associations - The substance of the arbitration had a character that distinguished it from an "ordinary" arbitration - See paragraphs 59 to 66.

Arbitration - Topic 8701

Judicial review - Practice - Appeals - Leave to appeal or right to appeal - The Contract Policy Committee (CPC) represented Central Alberta Rural Electrification Association Ltd. (CAREA) and South Alta Rural Electrification Association Ltd. (SAREA), collectively the REAs - CAREA and SAREA were rural electrification associations and provided electric distribution services to eligible persons within the geographic service areas prescribed to them by the Alberta Utilities Commission (AUC) - The geographic service areas granted to CAREA and SAREA were co-extensive with the geographic service area of FortisAlberta Inc. (Fortis) - In 1997, each of the REAs entered into identical "integrated operations agreements" with Fortis that addressed operational issues arising from the parties' systems being interconnected and how to allocate consumers - On November 24, 2010, the CPC issued a notice to begin arbitral proceedings to resolve a dispute under the 1997 Agreement - The CPC asserted that the REAs were entitled to serve five consumers - Fortis disputed this - The arbitration panel dismissed the CPC's claim - CPC applied for leave to appeal the arbitral award under s. 44 of the Arbitration Act - The issues were divided into four groups: Group 1 (the statutory and regulatory context including the interpretation of statutory enactments specific to the regulation of the electric industry and electric distribution along with regulatory approvals); Group 2 (the law applicable to the interpretation of contracts generally); Group 3 (the proper interpretation of the 1997 Agreement); and Group 4 (the use of an analogy) - At issue was, inter alia, whether the determination of each question of law would significantly affect the rights of the parties - The Alberta Court of Queen's Bench held that all Group 1 and Group 3 questions met the standard of significantly affecting the rights of the parties, while those in Group 2 and 4 did not - See paragraphs 67 to 75.

Arbitration - Topic 8701

Judicial review - Practice - Appeals - Leave to appeal or right to appeal - The Contract Policy Committee (CPC) represented Central Alberta Rural Electrification Association Ltd. (CAREA) and South Alta Rural Electrification Association Ltd. (SAREA), collectively the REAs - CAREA and SAREA were rural electrification associations and provided electric distribution services to eligible persons within the geographic service areas prescribed to them by the Alberta Utilities Commission (AUC) - The geographic service areas granted to CAREA and SAREA were co-extensive with the geographic service area of FortisAlberta Inc. (Fortis) - In 1997, each of the REAs entered into identical "integrated operations agreements" with Fortis that addressed operational issues arising from the parties' systems being interconnected and how to allocate consumers - On November 24, 2010, the CPC issued a notice to begin arbitral proceedings to resolve a dispute under the 1997 Agreement - The CPC asserted that the REAs were entitled to serve five consumers - Fortis disputed this - The arbitration panel dismissed the CPC's claim - CPC applied for leave to appeal the arbitral award under s. 44 of the Arbitration Act - The issues were divided into four groups: Group 1 (the statutory and regulatory context including the interpretation of statutory enactments specific to the regulation of the electric industry and electric distribution along with regulatory approvals); Group 2 (the law applicable to the interpretation of contracts generally); Group 3 (the proper interpretation of the 1997 Agreement); and Group 4 (the use of an analogy) - At issue was, inter alia, whether the questions of law were expressly referred to the arbitrator - Section 44(2) was constricted by s. 44(3), which provided that "[n]otwithstanding subsections (1) and (2), a party may not appeal an award to the court on a question of law that the parties expressly referred to the arbitral tribunal for decision." - The Alberta Court of Queen's Bench found that the questions of interpretation of the 1997 Agreement had been expressly referred to the arbitral panel - Those questions which were subsidiary to the interpretation of the contract, but which had to be determined or understood correctly as a foundation for the correct interpretation of the contract, were not expressly referred to the arbitral panel - Only the Group 3 questions were expressly referred to the arbitrator - See paragraphs 76 to 96.

Arbitration - Topic 8701

Judicial review - Practice - Appeals - Leave to appeal or right to appeal - The Contract Policy Committee (CPC) represented Central Alberta Rural Electrification Association Ltd. (CAREA) and South Alta Rural Electrification Association Ltd. (SAREA), collectively the REAs - CAREA and SAREA were rural electrification associations and provided electric distribution services to eligible persons within the geographic service areas prescribed to them by the Alberta Utilities Commission (AUC) - The geographic service areas granted to CAREA and SAREA were co-extensive with the geographic service area of FortisAlberta Inc. (Fortis) - In 1997, each of the REAs entered into identical "integrated operations agreements" with Fortis that addressed operational issues arising from the parties' systems being interconnected and how to allocate consumers - On November 24, 2010, the CPC issued a notice to begin arbitral proceedings to resolve a dispute under the 1997 Agreement - The CPC asserted that the REAs were entitled to serve five consumers - Fortis disputed this - The arbitration panel dismissed the CPC's claim - CPC applied for leave to appeal the arbitral award under s. 44 of the Arbitration Act - The issues were divided into four groups: Group 1 (the statutory and regulatory context including the interpretation of statutory enactments specific to the regulation of the electric industry and electric distribution along with regulatory approvals); Group 2 (the law applicable to the interpretation of contracts generally); Group 3 (the proper interpretation of the 1997 Agreement); and Group 4 (the use of an analogy) - The Alberta Court of Queen's Bench held that the ordinary reading of the provision in the context of the Act and the balance of case law weighed heavily in favour of there being a judicial discretion to refuse leave to appeal - The court retained a discretion to refuse leave to appeal an arbitral award where it believed such an appeal would not be appropriate - Here, the court considered the following factors in denying leave to appeal - First, the expertise of the decision maker was relevant - The arbitral panel was composed of three highly experienced lawyers, each an expert in energy law - Second, the subject matter of the arbitration was two private contracts - Third, the arbitral award was not binding authority for future arbitrations and the CPC had not pointed to a series of arbitral decisions that were following a suspicious or incorrect statement of the law - Fourth, the Arbitration Act and the agreement to arbitrate both indicated that the court should avoid interfering with the arbitral award - Fifth, the arbitral panel had drafted high quality and extensive reasons - There were no indicia of errors that suggested the court should step in - Finally, the court was not well positioned to make determinations of law in this regulatory regime - The court denied leave to appeal on all questions raised - See paragraphs 97 to 125.

Arbitration - Topic 8705

Judicial review (incl. appeals) - Practice - Appeals - Standard of review - The Contract Policy Committee (CPC) represented Central Alberta Rural Electrification Association Ltd. (CAREA) and South Alta Rural Electrification Association Ltd. (SAREA), collectively the REAs - CAREA and SAREA were rural electrification associations and provided electric distribution services to eligible persons within the geographic service areas prescribed to them by the Alberta Utilities Commission (AUC) - The geographic service areas granted to CAREA and SAREA were co-extensive with the geographic service area of FortisAlberta Inc. (Fortis) - In 1997, each of the REAs entered into identical "integrated operations agreements" with Fortis that addressed operational issues arising from the parties' systems being interconnected and how to allocate consumers - On November 24, 2010, the CPC issued a notice to begin arbitral proceedings to resolve a dispute under the 1997 Agreement - The CPC asserted that the REAs were entitled to serve five consumers - Fortis disputed this - The arbitration panel dismissed the CPC's claim - CPC applied for leave to appeal the arbitral award under s. 44 of the Arbitration Act - The issues were divided into four groups: Group 1 (the statutory and regulatory context including the interpretation of statutory enactments specific to the regulation of the electric industry and electric distribution along with regulatory approvals); Group 2 (the law applicable to the interpretation of contracts generally); Group 3 (the proper interpretation of the 1997 Agreement); and Group 4 (the use of an analogy) - The Alberta Court of Queen's Bench denied leave to appeal - Alternatively, the court found that the questions of whether the arbitration panel erred in applying the principle of contracts being binding and the parol evidence rule attracted the standard of correctness - All other questions raised by CPC attracted the standard of reasonableness - See paragraphs 126 to 142.

Evidence - Topic 6729

Parol evidence rule - Interpretation of legal act - Evidence of intention of parties - Re meaning of words in a contract - The Contract Policy Committee (CPC) represented Central Alberta Rural Electrification Association Ltd. (CAREA) and South Alta Rural Electrification Association Ltd. (SAREA), collectively the REAs - CAREA and SAREA were rural electrification associations and provided electric distribution services to eligible persons within the geographic service areas prescribed to them by the Alberta Utilities Commission (AUC) - The geographic service areas granted to CAREA and SAREA were co-extensive with the geographic service area of FortisAlberta Inc. (Fortis) - In 1997, each of the REAs entered into identical "integrated operations agreements" with Fortis that addressed operational issues arising from the parties' systems being interconnected and how to allocate consumers - On November 24, 2010, the CPC issued a notice to begin arbitral proceedings to resolve a dispute under the 1997 Agreement - The CPC asserted that the REAs were entitled to serve five consumers - Fortis disputed this - The arbitration panel dismissed the CPC's claim - CPC applied for leave to appeal the arbitral award under s. 44 of the Arbitration Act - At issue was, inter alia, whether the arbitral panel took into consideration inadmissible parol evidence about why certain wording was included in the 1997 Agreement - The Alberta Court of Queen's Bench denied leave to appeal - Alternatively, the court would have dismissed the appeal - There was no evidence that the panel erroneously avoided the parol evidence rule - See paragraphs 179 to 181.

Public Utilities - Topic 8

General - General principles and definitions - Owner defined - The Contract Policy Committee (CPC) represented Central Alberta Rural Electrification Association Ltd. (CAREA) and South Alta Rural Electrification Association Ltd. (SAREA), collectively the REAs - CAREA and SAREA were rural electrification associations and provided electric distribution services to eligible persons within the geographic service areas prescribed to them by the Alberta Utilities Commission (AUC) - The geographic service areas granted to CAREA and SAREA were co-extensive with the geographic service area of FortisAlberta Inc. (Fortis) - In 1997, each of the REAs entered into identical "integrated operations agreements" with Fortis that addressed operational issues arising from the parties' systems being interconnected and how to allocate consumers - On November 24, 2010, the CPC issued a notice to begin arbitral proceedings to resolve a dispute under the 1997 Agreement - The CPC asserted that the REAs were entitled to serve five consumers - Fortis disputed this - The arbitration panel dismissed the CPC's claim - CPC applied for leave to appeal the arbitral award under s. 44 of the Arbitration Act - At issue was, inter alia, whether the service area approvals delineated the geographical boundaries of each party's respective electric distribution system - The Alberta Court of Queen's Bench denied leave to appeal - Alternatively, the court would have dismissed the appeal - There was nothing in the record to indicate that the arbitral panel failed to appreciate that the service area approvals delineated geographical boundaries - The wording of the award suggested that the panel had a clear appreciation of this legal reality - See paragraphs 153 and 154.

Public Utilities - Topic 8

General - General principles and definitions - Owner defined - The Contract Policy Committee (CPC) represented Central Alberta Rural Electrification Association Ltd. (CAREA) and South Alta Rural Electrification Association Ltd. (SAREA), collectively the REAs - CAREA and SAREA were rural electrification associations and provided electric distribution services to eligible persons within the geographic service areas prescribed to them by the Alberta Utilities Commission (AUC) - The geographic service areas granted to CAREA and SAREA were co-extensive with the geographic service area of FortisAlberta Inc. (Fortis) - In 1997, each of the REAs entered into identical "integrated operations agreements" with Fortis that addressed operational issues arising from the parties' systems being interconnected and how to allocate consumers - On November 24, 2010, the CPC issued a notice to begin arbitral proceedings to resolve a dispute under the 1997 Agreement - The CPC asserted that the REAs were entitled to serve five consumers - Fortis disputed this - The arbitration panel dismissed the CPC's claim - CPC applied for leave to appeal the arbitral award under s. 44 of the Arbitration Act - At issue was, inter alia, whether according to the service area approvals, the REAs did not share their service areas with Fortis - The Alberta Court of Queen's Bench denied leave to appeal - Alternatively, the court would have dismissed the appeal - The service area approvals did not support the alleged error of law that the CPC contended - See paragraphs 155 and 156.

Public Utilities - Topic 8

General - General principles and definitions - Owner defined - The Contract Policy Committee (CPC) represented Central Alberta Rural Electrification Association Ltd. (CAREA) and South Alta Rural Electrification Association Ltd. (SAREA), collectively the REAs - CAREA and SAREA were rural electrification associations and provided electric distribution services to eligible persons within the geographic service areas prescribed to them by the Alberta Utilities Commission (AUC) - The geographic service areas granted to CAREA and SAREA were co-extensive with the geographic service area of FortisAlberta Inc. (Fortis) - In 1997, each of the REAs entered into identical "integrated operations agreements" with Fortis that addressed operational issues arising from the parties' systems being interconnected and how to allocate consumers - On November 24, 2010, the CPC issued a notice to begin arbitral proceedings to resolve a dispute under the 1997 Agreement - The CPC asserted that the REAs were entitled to serve five consumers - Fortis disputed this - The arbitration panel dismissed the CPC's claim - CPC applied for leave to appeal the arbitral award under s. 44 of the Arbitration Act - It asserted that consumers in issue in this arbitration, who were located within and met the eligibility requirements of, the service areas of the REAs had no choice of electric distribution provider - The Alberta Court of Queen's Bench denied leave to appeal - Alternatively, the court would have dismissed the appeal - Consumers did not directly have a choice of electric distribution provider, but s. 2(1)(a) of the Cooperatives Act indicated membership in a cooperative was voluntary, to those who were "willing and able to accept the responsibilities of and abide by the terms of membership" - Likewise, the REAs were able to accept or reject members, which the panel correctly found - Once the decision to be or not be a member of the REA was made, there was then no choice of electric distributor - While the outcome of which organization provided electric distribution services might for the vast majority of cases flow automatically from the membership decision, the court was not convinced that the panel made a conclusion that consumers did have a choice of electric distribution provider - See paragraphs 159 to 161.

Public Utilities - Topic 8

General - General principles and definitions - Owner defined - The Contract Policy Committee (CPC) represented Central Alberta Rural Electrification Association Ltd. (CAREA) and South Alta Rural Electrification Association Ltd. (SAREA), collectively the REAs - CAREA and SAREA were rural electrification associations and provided electric distribution services to eligible persons within the geographic service areas prescribed to them by the Alberta Utilities Commission (AUC) - The geographic service areas granted to CAREA and SAREA were co-extensive with the geographic service area of FortisAlberta Inc. (Fortis) - In 1997, each of the REAs entered into identical "integrated operations agreements" with Fortis that addressed operational issues arising from the parties' systems being interconnected and how to allocate consumers - On November 24, 2010, the CPC issued a notice to begin arbitral proceedings to resolve a dispute under the 1997 Agreement - The CPC asserted that the REAs were entitled to serve five consumers - Fortis disputed this - The arbitration panel dismissed the CPC's claim - CPC applied for leave to appeal the arbitral award under s. 44 of the Arbitration Act - At issue was, inter alia, whether the arbitral panel erred by implying terms in the 1997 Agreement - The Alberta Court of Queen's Bench denied leave to appeal - Alternatively, the court would have dismissed the appeal - The court could find nothing in the award or on the record to suggest that the arbitral panel erred by implying terms in the 1997 Agreement - See paragraphs 165 to 174.

Public Utilities - Topic 13

General - General principles and definitions - Legislation - Interpretation - The Contract Policy Committee (CPC) represented Central Alberta Rural Electrification Association Ltd. (CAREA) and South Alta Rural Electrification Association Ltd. (SAREA), collectively the REAs - CAREA and SAREA were rural electrification associations and provided electric distribution services to eligible persons within the geographic service areas prescribed to them by the Alberta Utilities Commission (AUC) - The geographic service areas granted to CAREA and SAREA were co-extensive with the geographic service area of FortisAlberta Inc. (Fortis) - In 1997, each of the REAs entered into identical "integrated operations agreements" with Fortis that addressed operational issues arising from the parties' systems being interconnected and how to allocate consumers - On November 24, 2010, the CPC issued a notice to begin arbitral proceedings to resolve a dispute under the 1997 Agreement - The CPC asserted that the REAs were entitled to serve five consumers - Fortis disputed this - The arbitration panel dismissed the CPC's claim - CPC applied for leave to appeal the arbitral award under s. 44 of the Arbitration Act - At issue was, inter alia, whether the arbitral tribunal erred by failing to consider the legislative and regulatory context in which Fortis operated within the REAs' electric distribution systems - In particular, whether the arbitral tribunal erred by failing to consider and apply the following statutory and regulatory provisions: electric distribution consumers had no choice in the selection of their distribution providers, by virtue of s. 101(1) of the Electric Utilities Act and s. 25 of the Hydro and Electric Energy Act - The Alberta Court of Queen's Bench denied leave to appeal - Alternatively, the court would have dismissed the appeal - Section 101 of the Electric Utilities Act at first glance provided for an owner's monopoly right to distribute electricity - However, any rule was subject to exceptions, expressly or by necessary implication - The geographical service areas of the REAs and Fortis overlapped - In each of the regions served by the REAs there were two people who were an "owner of the electric distribution system" - Even if a service area was not defined by membership, the Interpretation Act provided that in enactments the singular includes the plural and vice versa - Thus, s. 101 of the Electric Utilities Act had to also be read as referencing multiple owners of electric distribution systems - There was no error on this question - See paragraphs 147 to 152.

Public Utilities - Topic 13

General - General principles and definitions - Legislation - Interpretation - The Contract Policy Committee (CPC) represented Central Alberta Rural Electrification Association Ltd. (CAREA) and South Alta Rural Electrification Association Ltd. (SAREA), collectively the REAs - CAREA and SAREA were rural electrification associations and provided electric distribution services to eligible persons within the geographic service areas prescribed to them by the Alberta Utilities Commission (AUC) - The geographic service areas granted to CAREA and SAREA were co-extensive with the geographic service area of FortisAlberta Inc. (Fortis) - In 1997, each of the REAs entered into identical "integrated operations agreements" with Fortis that addressed operational issues arising from the parties' systems being interconnected and how to allocate consumers - On November 24, 2010, the CPC issued a notice to begin arbitral proceedings to resolve a dispute under the 1997 Agreement - The CPC asserted that the REAs were entitled to serve five consumers - Fortis disputed this - The arbitration panel dismissed the CPC's claim - CPC applied for leave to appeal the arbitral award under s. 44 of the Arbitration Act - At issue was, inter alia, whether Fortis had a statutory obligation to serve consumers in the service areas of the REAs - The Alberta Court of Queen's Bench denied leave to appeal - Alternatively, the court would have dismissed the appeal - Section 105(1)(a) of the Electric Utilities Act provided that the owner of an electric distribution system had the duty "to provide electric distribution service that is not unduly discriminatory" - Fortis had a statutory obligation to serve consumers within its service area, although it might do so under certain conditions - There was no indication that the arbitral panel erred in law on this point - See paragraphs 157 and 158.

Public Utilities - Topic 13

General - General principles and definitions - Legislation - Interpretation - The Contract Policy Committee (CPC) represented Central Alberta Rural Electrification Association Ltd. (CAREA) and South Alta Rural Electrification Association Ltd. (SAREA), collectively the REAs - CAREA and SAREA were rural electrification associations and provided electric distribution services to eligible persons within the geographic service areas prescribed to them by the Alberta Utilities Commission (AUC) - The geographic service areas granted to CAREA and SAREA were co-extensive with the geographic service area of FortisAlberta Inc. (Fortis) - In 1997, each of the REAs entered into identical "integrated operations agreements" with Fortis that addressed operational issues arising from the parties' systems being interconnected and how to allocate consumers - On November 24, 2010, the CPC issued a notice to begin arbitral proceedings to resolve a dispute under the 1997 Agreement - The CPC asserted that the REAs were entitled to serve five consumers - Fortis disputed this - The arbitration panel dismissed the CPC's claim - CPC applied for leave to appeal the arbitral award under s. 44 of the Arbitration Act - At issue was, inter alia, whether the arbitral panel failed to take into consideration the Roles, Relationships and Responsibilities Regulation - The Alberta Court of Queen's Bench denied leave to appeal - Alternatively, the court would have dismissed the appeal - The arbitral panel took into consideration the Regulation - The CPC drew particular attention to s. 10 of the Regulation - Section 10(2) provided that the arbitrator could only interpret the agreement between the parties and apply the provisions of that agreement to the question to be decided - That was precisely what the arbitral panel had done - See paragraphs 175 and 176.

Public Utilities - Topic 13

General - General principles and definitions - Legislation - Interpretation - The Contract Policy Committee (CPC) represented Central Alberta Rural Electrification Association Ltd. (CAREA) and South Alta Rural Electrification Association Ltd. (SAREA), collectively the REAs - CAREA and SAREA were rural electrification associations and provided electric distribution services to eligible persons within the geographic service areas prescribed to them by the Alberta Utilities Commission (AUC) - The geographic service areas granted to CAREA and SAREA were co-extensive with the geographic service area of FortisAlberta Inc. (Fortis) - In 1997, each of the REAs entered into identical "integrated operations agreements" with Fortis that addressed operational issues arising from the parties' systems being interconnected and how to allocate consumers - On November 24, 2010, the CPC issued a notice to begin arbitral proceedings to resolve a dispute under the 1997 Agreement - The CPC asserted that the REAs were entitled to serve five consumers - Fortis disputed this - The arbitration panel dismissed the CPC's claim - CPC applied for leave to appeal the arbitral award under s. 44 of the Arbitration Act - At issue was, inter alia, whether the arbitral panel erroneously took into consideration the Rural Communities Act - The Alberta Court of Queen's Bench denied leave to appeal - Alternatively, the court would have dismissed the appeal - The court read the arbitral award as revealing the panel relied on the Rural Utilities Act to better understand what membership in an REA meant as part of a holistic reading of the 1997 Agreement in the context of the regulatory environment, so there was consistent and logical application of the law - This was exactly what the CPC asked the court to ensure the arbitral panel had done - The CPC had failed to point to an error of law in the consideration of the Rural Utilities Act - See paragraphs 177 and 178.

Public Utilities - Topic 13

General - General principles and definitions - Legislation - Interpretation - The Contract Policy Committee (CPC) represented Central Alberta Rural Electrification Association Ltd. (CAREA) and South Alta Rural Electrification Association Ltd. (SAREA), collectively the REAs - CAREA and SAREA were rural electrification associations and provided electric distribution services to eligible persons within the geographic service areas prescribed to them by the Alberta Utilities Commission (AUC) - The geographic service areas granted to CAREA and SAREA were co-extensive with the geographic service area of FortisAlberta Inc. (Fortis) - In 1997, each of the REAs entered into identical "integrated operations agreements" with Fortis that addressed operational issues arising from the parties' systems being interconnected and how to allocate consumers - On November 24, 2010, the CPC issued a notice to begin arbitral proceedings to resolve a dispute under the 1997 Agreement - The CPC asserted that the REAs were entitled to serve five consumers - Fortis disputed this - The arbitration panel dismissed the CPC's claim - CPC applied for leave to appeal the arbitral award under s. 44 of the Arbitration Act - At issue was, inter alia, whether the arbitral panel failed to recognize the binding nature of the contracts - The Alberta Court of Queen's Bench denied leave to appeal - Alternatively, the court would have dismissed the appeal - See paragraphs 182 to 187.

Cases Noticed:

MJS Recycling Inc. v. Shane Homes Ltd., [2010] A.R. Uned. 688; 2010 ABCA 376, refd to. [para. 29].

Sherwin-Williams Co. v. Walls Alive (Edmonton) Ltd. (2003), 327 A.R. 386; 296 W.A.C. 386; 2003 ABCA 191, affing. (2002), 331 A.R. 317; 2002 ABQB 999, refd to. [para. 29].

R. v. Hill (No. 2), [1977] 1 S.C.R. 827; 7 N.R. 373, refd to. [para. 31].

Warren v. Alberta Lawyers' Public Protection Association (1997), 208 A.R. 149 (Q.B.), agreed with [para. 32].

Epcor Power L.P. v. Petrobank Energy and Resources Ltd. (2010), 499 A.R. 193; 514 W.A.C. 193; 2010 ABCA 378, refd to. [para. 33].

Canadian National Railways Co. v. Bell Telephone Co. of Canada, [1939] S.C.R. 308, refd to. [para. 39].

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. 40].

Metcalfe v. Metcalfe (2006), 407 A.R. 103; 2006 ABQB 798, refd to. [para. 41].

Dow Chemical Canada Inc. v. Shell Chemicals Canada Ltd. et al. (2010), 477 A.R. 112; 483 W.A.C. 112; 2010 ABCA 126, refd to. [para. 42].

Ainsworth Lumber Co. v. Grant Forest Products Inc., [2007] A.R. Uned. 502; 2007 ABQB 556, refd to. [para. 43].

Rudiger Holdings Ltd. et al. v. Kellyvone Farms Ltd. et al. (2002), 321 A.R. 182; 2002 ABQB 601, refd to. [para. 52].

Fuhr Estate v. Husky Oil Marketing Co. (2010), 496 A.R. 232; 2010 ABQB 495, refd to. [para. 53].

Milner Power Inc. v. Coal Valley Resources Inc. et al., [2011] A.R. Uned. 190; 2011 ABQB 118, refd to. [para. 54].

Domtar Inc. v. Belkin Inc. (1989), 39 B.C.L.R.(2d) 257 (C.A.), refd to. [para. 60].

Willick v. Willick (1994), 158 A.R. 52 (Q.B.), refd to. [para. 78].

Seneviratne v. Seneviratne (1998), 222 A.R. 65; 1998 ABQB 289, refd to. [para. 80].

International Union, United Automobile, Aerospace and Agricultural Implement Workers of America (U.A.W.), Local 720 v. Volvo Canada Ltd., [1980] 1 S.C.R. 178; 27 N.R. 502; 18 N.S.R.(2d) 592; 20 A.P.R. 592, refd to. [para. 82].

Bell Canada v. Office and Professional Employees' International Union, Local 131, [1974] S.C.R. 335, refd to. [para. 86].

Metropolitan Toronto Board of Commissioners of Police v. Metropolitan Toronto Police Association, [1975] 1 S.C.R. 630; 2 N.R. 95, refd to. [para. 87].

Rea International Inc. v. Muntwyler et al. (2004), 190 O.A.C. 227 (Div. Ct.), refd to. [para. 103].

Loewen v. Manitoba Teachers' Society (2011), 263 Man.R.(2d) 242; 2011 MBQB 60, refd to. [para. 103].

Northern & Bluebird Amusement Co. v. 053857 NB Inc., [2001] N.B.R.(2d) (Supp.) No. 33 (T.D.), refd to. [para. 103].

Bank of Nova Scotia v. Span West Farms Ltd. (2003), 232 Sask.R. 279; 294 W.A.C. 279; 2003 SKCA 35, refd to. [para. 103].

Sharecare Homes Inc. v. Cormier (2010), 293 N.S.R.(2d) 62; 928 A.P.R. 62; 2010 NSSC 252, refd to. [para. 104].

Zaharko et al. v. Milton et al., [2012] A.R. Uned. 208; 2012 ABQB 141, refd to. [para. 105].

Student Association of the British Columbia Institute of Technology v. British Columbia Institute of Technology (2000), 142 B.C.A.C. 129; 233 W.A.C. 129; 80 B.C.L.R.(3d) 266; 2000 BCCA 496, leave to appeal refused (2001), 270 N.R. 200; 156 B.C.A.C. 198; 255 W.A.C. 198 (S.C.C.), refd to. [para. 107].

Pioneer Shipping Ltd. v. B.T.P. Tioxide Ltd., [1982] A.C. 724 (H.L.), refd to. [para. 108].

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. [para. 129].

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. 131].

Alberta Teachers' Association v. Information and Privacy Commissioner (Alta.) et al., [2011] 3 S.C.R. 654; 424 N.R. 70; 519 A.R. 1; 539 W.A.C. 1; 2011 SCC 61, refd to. [para. 134].

United Brotherhood of Carpenters and Joiners of America, Local 579 v. Bradco Construction Ltd., [1993] 2 S.C.R. 316; 153 N.R. 81; 106 Nfld. & P.E.I.R. 140; 334 A.P.R. 140, refd to. [para. 141].

M.N.P. v. Whitecourt General Hospital et al. (2006), 397 A.R. 333; 384 W.A.C. 333; 2006 ABCA 245, refd to. [para. 173].

Rodaro et al. v. Royal Bank of Canada et al. (2002), 157 O.A.C. 203; 59 O.R.(3d) 74 (C.A.), refd to. [para. 173].

Statutes Noticed:

Arbitration Act, R.S.A. 2000, c. A-43, sect. 44 [para. 27].

Authors and Works Noticed:

Alberta,  Institute  of  Law  Research  and  Reform, Arbitration Act: Stay and Appeal Issues, Report No. 24 (2012), paras. 75 [para. 97]; 84 [para. 77]; 99 [para. 37].

Hurlburt, William H., Case Comment on Willick v. Willick: Appeals from Awards Under the Arbitration Act (1994), 33 Alta. L. Rev. 178, p. 186 [para. 79].

Counsel:

James L. Lebo, Q.C., for the appellant;

Clarke Hunter, Q.C., and Scott Chimuk, for the respondent.

This application was heard on May 17, 2012, by Veldhuis, J., of the Alberta Court of Queen's Bench, Judicial District of Calgary, who delivered the following reasons for judgment on October 31, 2012.