Heartland Resources Inc. v. Sable Offshore Energy Inc. et al., (2007) 317 F.T.R. 155 (FC)

• Judge: Hansen, J.
• Court: Federal Court (Canada)
• Case Date: February 08, 2007
• Jurisdiction: Canada (Federal)
• Citations: (2007), 317 F.T.R. 155 (FC);2007 FC 1044

Heartland Resources v. Sable Offshore (2007), 317 F.T.R. 155 (FC)

MLB headnote and full text

Temp. Cite: [2007] F.T.R. TBEd. OC.020

Heartland Resources Inc. (applicant) v. Sable Offshore Energy Inc. and Maritimes & Northeast Pipeline Management Ltd. (respondents)

(T-955-05; 2007 FC 1044)

Indexed As: Heartland Resources Inc. v. Sable Offshore Energy Inc. et al.

Federal Court

Hansen, J.

October 10, 2007.

Summary:

Heartland Resources Ltd. held a mineral exploration licence issued under Nova Scotia's Mineral Resources Act, entitling Heartland to search and prospect for minerals and to extract minerals for test purposes. Sable Offshore Energy Inc. (SOEI) and Maritimes & Northeast Pipeline Management Ltd. (M&NP) (collectively, the respondents) were involved in the Sable Offshore Energy Project. The respondents served notices under s. 87(1) of the National Energy Board Act (NEB Act) on Heartland relating to the construction of a natural gas processing plant and other pipeline facilities. The National Energy Board approved the respondents' applications. SOEI acquired the title to the approximately 200 acres of land. Similarly, M&NP acquired the title to approximately 3.64 hectares of land and the necessary easements for its installations. These lands fell entirely within the area covered by Heartland's licence. Following an unsuccessful attempt at negotiation initiated by Heartland under s. 88(1) of the NEB Act, Heartland served a notice of arbitration on the Minister pursuant to s. 90(1) of the NEB Act. Heartland's request was for a determination of the compensation due for damage it sustained by reason of the respondents' exercise of the powers granted to them under the NEB Act. The Minister appointed an Arbitration Committee. The Arbitration Committee concluded that Heartland's claim was beyond its jurisdiction to award damages as provided in s. 97 of the NEB Act. The Committee found that Heartland had failed to establish that the damages it claimed were "caused by" the respondents as required by s. 84 of the NEB Act and that Heartland was not an "owner of lands" as contemplated by s. 90 of the NEB Act. The Arbitration Committee also considered the merits of the claim in the event that it had erred on the issue of jurisdiction. The Committee concluded that there was no convincing evidence to establish any diminution in the value of Heartland's mineral exploration licence or damages as a result of the respondents' activities. Heartland appealed under s. 101 of the NEB Act.

The Federal Court dismissed the appeal.

Mines and Minerals - Topic 8554

Oil and gas - Pipelines - Construction and operation of - Compensation to landowners (incl. advance compensation) - Heartland Resources Ltd. held a mineral exploration licence issued under Nova Scotia's Mineral Resources Act, entitling Heartland to search and prospect for minerals and to extract minerals for test purposes - Sable Offshore Energy Inc. (SOEI) and Maritimes & Northeast Pipeline Management Ltd. (M&NP) (collectively, the respondents) were involved in the Sable Offshore Energy Project - The respondents served notices under s. 87(1) of the National Energy Board Act (NEB Act) on Heartland relating to the construction of a natural gas processing plant and other pipeline facilities - The National Energy Board approved the respondents' applications - SOEI acquired the title to the approximately 200 acres of land - Similarly, M&NP acquired the title to approximately 3.64 hectares of land and the necessary easements - These lands fell entirely within the area covered by Heartland's licence - Heartland served a notice of arbitration on the Minister pursuant to s. 90(1) of the NEB Act - Heartland's request was for a determination of the compensation due for damage it sustained by reason of the respondents' exercise of the powers granted to them under the NEB Act - The Minister appointed an Arbitration Committee - The Arbitration Committee concluded that Heartland's claim was beyond its jurisdiction (NEB Act, s. 97) - Heartland appealed, asserting that the Committee erred in law in finding that it did not have jurisdiction and/or in refusing to exercise its jurisdiction - Heartland submitted that the Committee could not rule on its own jurisdiction - The Federal Court dismissed the appeal - Upon being served with a notice of arbitration under s. 91(1)(b) of the NEB Act, the Minister was obliged to appoint a Committee and to serve the Committee with the notice of arbitration - The Minister was not obliged to consider the Committee's jurisdiction - The Committee not only had the authority, but the obligation to rule on its contested competence - See paragraphs 27 to 32.

Mines and Minerals - Topic 8554

Oil and gas - Pipelines - Construction and operation of - Compensation to landowners (incl. advance compensation) - Heartland Resources Ltd. held a mineral exploration licence issued under Nova Scotia's Mineral Resources Act (MRA), entitling Heartland to search and prospect for minerals and to extract minerals for test purposes - Sable Offshore Energy Inc. (SOEI) and Maritimes & Northeast Pipeline Management Ltd. (M&NP) (collectively, the respondents) were involved in the Sable Offshore Energy Project - The respondents served notices under s. 87(1) of the National Energy Board Act (NEB Act) on Heartland relating to the construction of a natural gas processing plant and other pipeline facilities - The National Energy Board approved the respondents' applications - SOEI acquired the title to the approximately 200 acres of land - Similarly, M&NP acquired the title to approximately 3.64 hectares of land and the necessary easements - These lands fell entirely within the area covered by Heartland's licence - Heartland served a notice of arbitration on the Minister pursuant to s. 90(1) of the NEB Act - Heartland's request was for a determination of the compensation due for damage it sustained by reason of the respondents' exercise of the powers granted to them under the NEB Act - The Minister appointed an Arbitration Committee - The Arbitration Committee concluded that Heartland's claim was beyond its jurisdiction (NEB Act, s. 97) - The Committee found that Heartland had failed to establish that Heartland was an "owner of lands" (NEB Act, s. 90) - Heartland appealed - The Federal Court dismissed the appeal - The MRA only conferred on the holder of a licence the rights described in the MRA - There was nothing in the MRA from which it could be concluded that "the Legislature intended to confer proprietary right in the lands or minerals covered by the licence"- Consequently, Heartland did not have an interest in the land, and was, therefore, not an "owner of lands" for the purposes of the negotiation and arbitration provisions of the NEB Act - The Committee did not err in finding that it lacked jurisdiction - See paragraphs 33 to 44.

Cases Noticed:

Balisky et al. v. Canada (Minister of Natural Resources) et al. (2003), 301 N.R. 104; 2003 FCA 104, refd to. [para. 11].

Maritimes and Northeast Pipeline Limited Partnership v. Elliott et al. (2004), 251 F.T.R. 126; 2004 FC 553, affd. (2005), 339 N.R. 247; 2005 FCA 229, refd to. [para. 11].

Toronto (City) v. Canadian Union of Public Employees, Local 79 et al., [2003] 3 S.C.R. 77; 311 N.R. 201; 179 O.A.C. 291, refd to. [para. 22].

Pelletier et al. v. Gazoduc Trans-Quebec et Maritimes Inc. et al., [1999] F.T.R. Uned. 540; 68 L.C.R. 286 (T.D.), refd to. [para. 23].

Nova Scotia Business Capital Corp. v. Coxheath Gold Holdings Ltd. et al. (1994), 135 N.S.R.(2d) 259; 386 A.P.R. 259 (C.A.), refd to. [para. 40].

Counsel:

Kevin MacDonald, for the applicant;

William Moreira and David Henley, for the respondent, Sable Offshore Energy Ltd.;

Martin Kay, for the respondent, Maritimes & Northeast Pipeline Ltd.

Solicitors of Record:

Crowe Dillon Robinson, Halifax, Nova Scotia, for the applicant;

Stewart McKelvie, Halifax, Nova Scotia, for the respondent, Sable Offshore Energy Ltd.;

Bennett Jones, Calgary, Alberta, for the respondent, Maritimes & Northeast Pipeline Ltd.

This application was heard on February 8, 2007, at Halifax, Nova Scotia, by Hansen, J., of the Federal Court, who delivered the following judgment on October 10, 2007.