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03/18/2014 13:07 14038236073 81/82 DRUMHELLER COURTS PAGE • COURT FILE NUMBER Court File No. 0702-00120
03/18/2014 13:07 14038236073 81/82 DRUMHELLER COURTS PAGE • COURT FILE NUMBER Court File No. 0702-00120
03/18/2014 13:07 14038236073 81/82 DRUMHELLER COURTS PAGE • COURT FILE NUMBER Court File No. 0702-00120
03/18/2014
13:07
14038236073
81/82
DRUMHELLER COURTS
PAGE
COURT FILE NUMBER
Court File No.
0702-00120
of
COURT
COURT OF QUEEN’S BENCH
OF ALBERTA.
JUDICIAL CENTRE
JUDICIAL CENTRE
PLAiNTIFF (RESPONDENT) DEFENDANTS (APPLICANTS)
PLAiNTIFF
(RESPONDENT)
DEFENDANTS
(APPLICANTS)

DOCUMENT

ADDRESS FOR SERVICE AND CONTACT iNFORMATION OF THE PARTY FILING THIS DOCUMENT
ADDRESS FOR SERVICE
AND CONTACT
iNFORMATION OF THE
PARTY FILING THIS
DOCUMENT
DRUMHELLER
DRUMHELLER
JESSICA ERNST
JESSICA ERNST
ENCANA CORPORATION, ENERGY RESOURCES CONSERVATION BOARD and HER MAJESTY THE QUEEN IN RIGHT OF ALBERTA
ENCANA
CORPORATION, ENERGY
RESOURCES CONSERVATION
BOARD
and HER MAJESTY THE QUEEN IN RIGHT
OF ALBERTA
BRIEF OF ARGVNENT OF TilE RESPONDENT JESSICA ERNST APPLICATION OF HER MAJESTY THE QUEEN IN
BRIEF OF ARGVNENT OF TilE
RESPONDENT JESSICA ERNST
APPLICATION OF HER MAJESTY THE
QUEEN IN RIGHT OF ALBERTA
TO BE HEARD ON APRIL
16,2014
KLIPPENSTEINS Barristers & Solicitors 160 John Street, Suite 300 Toronto, ON M5V 2E5 Tel.: (416)
KLIPPENSTEINS
Barristers & Solicitors
160 John Street,
Suite 300
Toronto, ON
M5V
2E5
Tel.:
(416) 598-0288
Fax:
(416) 598-9520
Murray Kiippenstein
W. Cory Wanless
murrav.k1ipenstein@jclippensteins.ca
cory.wanIess(klippensteins.ca
(416) 598-9520 Murray Kiippenstein W. Cory Wanless murrav.k1ipenstein@jclippensteins.ca cory.wanIess(klippensteins.ca

Table of Contents

PART I: INTRODUCTION

1

PART II: FACTS

1

The Action

Facts alleged regarding Alberta Environment

2

Cause of Action against Alberta Environment

6

PART III:

ISSUES RAISED BY THIS APPLICATION

6

PART IV: LAW AND ARGUMENT

7

ISSUE #1: Alberta Environment’s Application to Strike is an Abuse of Process

7

ISSUE #2: Alberta Environment mischaracterizes an Application to Strike as an Application for Summary Judgment

8

ISSUE #3: It is not “plain and obvious” that Alberta Environment cannot owe a duty of care to Ernst

10

ISSUE #4:

Alberta Environment is not protected from liability for acts taken in

“bad faith”

29

PART V: RELIEF SOUGHT

35

PART I: INTRODUCTION

1. Her Majesty the Queen in Right of Alberta (“Alberta Environment”) brings an

Application to strike the pleadings for failing to disclose a reasonable cause of action. In the

alternative, Alberta Environment seeks summary judgment on the grounds that it is plain and

obvious that there is no merit to the claims against Alberta Environment (the “Application”).

2. Alberta Environment’s Application must fail for the following reasons:

a. Alberta Environment’s application to strike, its third attack on the pleadings, is an

abuse of process;

b. it is not “plain and obvious” that Alberta Environment cannot owe a duty of care to

the Plaintiff Jessica Ernst; and

c. Alberta Environment is not protected from liability for acts taken in bad faith.

PART II: FACTS

The A ction

3. Jessica Ernst (“Ernst” or the “Plaintiff’) is a landowner who resides on an acreage near

Rosebud, Alberta.

from the Rosebud Aquifer.

Her rural property is supplied with fresh water by a private well that draws

Fresh Statement of Claim, dated June 25, 2012 at paras 1 & 5 (Statement of Claim”) [Book of Authorities of the Defendant Her Majesty In Right of Alberta (“AENV Authorities”), Tab 1].

4. Between 2001 and 2006, the defendant EnCana Corporation (EnCana) engaged in a

new and untested program of drilling for methane gas from shallow coal beds at over 190 gas

wells located adjacent to Ernst’s property. This program included a technique known as

hydraulic fracturing or “fraccing” at shallow depths underground, in some cases at less than 200

meters below the surface.

with hazardous and flammable levels of methane and other toxic chemicals.

Shortly thereafter, Ernst’s well water became severely contaminated

5. Ernst has brought claims against the defendants EnCana Corporation (“EnCana”), the

Energy Resources Conservation Board (ERCB), and Her Majesty the Queen in Right of

Alberta (Alberta Environment”) regarding the severe contamination of her well water and the

failure of the ERCB and Alberta Environment to properly investigate and remediate the harm.

The lawsuit claims against EnCana (for negligence, nuisance and other torts); the ERCB (for

breaches of Ms. Ernst’s fundamental freedoms under the Charter of Rights and Freedoms and

for the negligent failure to implement the ERCBs inspection scheme); and Alberta Environment

(for engaging in a faulty investigation that was conducted negligently and in bad faith, as

detailed below).

Statement of Claim [AENV Authorities, Tab 1].

6. The present Application is concerned solely with the negligence claim pleaded against

Alberta Environment.

Facts alleged regarding Alberta Environment

7. Alberta Environment is the government ministry responsible for environmental

protection, including the protection of groundwater supply for rural landowners. In particular,

Alberta Environment is mandated under both the Water Act, and the Environmental Protection

and Enhancement Act (EPEA) to conduct inspections and investigations, including

investigations into public complaints regarding water well contamination.

Statement of Claim at para 59 [AENV Authorities, Tab 1]. Water Act, RSA 2000, c W-3 (WaterAct), “Inspections” at ss 118-126, “Investigations” at ss 127-134 & “Emergencies” at ss 105-107 [AENV Authorities,

Tab3].

Environmental Protection and Enhancement Act, RSA 2000, c E- 12 (“EPEA”),

Investigations and Inspections at ss. 195 209 [AENV Authorities, Tab 2].

8. Alberta Environment has also established a Compliance Assurance Program to “provide

clarity and certainty to all Albertans about how compliance assurance will be achieved in

Alberta. Core responsibility for delivering the Compliance Assurance Program for the EPEA

and the Water Act rests with the Regional Services Division of Alberta Environment

Alberta Environment Compliance Assurance at 1 & 9 (“AENV Compliance

3

9. While a portion of Alberta Environment’s mandate does involve the setting of high

level” policies (which inevitably involve the balancing of competing interests) this is not true of

the Regional Services Division’s inspection and investigation activities. On the contrary, the

Regional Services Division’s inspection and investigation activities are entirely operational or

administrative in nature.

10. Importantly, investigations and inspections into water well complaints are performed by

on-the-ground staff from the local offices of the Regional Services Division of Alberta

Environment in accordance with a detailed set of mandated operational guidelines.

operational guidelines are included in, among other sources, the Compliance Assurance

Program”, the “Compliance Inspection and Monitoring Operational Guideline and the

These

“Compliance Inspection Operational Guideline”. Investigators, through the Water Act and the

EPEA, have broad powers to gather the information necessary to complete an effective

investigation.

Statement of Claim at para 61 {AENV Authorities, Tab 1]. AENV Compliance Assurance at 24-25 & 34-36 [AENV Authorities, Tab 32]. Water Act at ss 119-134 [AENV Authorities, Tab 3]. EPEA at ss 198 209 {AENV Authorities, Tab 2].

11. Between 2001 and 2006, EnCana conducted new and untested shallow fraccing

operations at dozens of EnCana Wells in close proximity to Ernst’s private property. By

February 2005, Alberta Environment was specifically aware that EnCana had directly targeted

and fracced the Rosbud Aquifer the aquifer that provided fresh water for Ernsts household

use. These shallow fraccing activities caused the severe contamination of Ernsts well water

with hazardous and flammable levels of methane and other toxic chemicals.

Statement of Claim at paras 6-16, 30 & 68 [AENV Authorities, Tab 1].

12. In late 2005, Ms. Ernst contacted Alberta Environment to report concerns regarding the

contamination of her well water. On March 3, 2006, Alberta Environment finally began an

investigation into the contamination of Ernst’s water well and several other wells nearby. The

key allegation in the lawsuit against Alberta Environment is that Alberta Environment conducted

a faulty, irrational and bad faith investigation into the severe contamination of Ernsts well.

4

Statement of Claim at paras 67-69 & 73-74 [AENV Authorities, Tab 1].

13. Alberta Environment’s investigation involved numerous site visits to sample and test

Ernst’s water, and included frequent personal interactions between Ernst and various

investigators and other employees of the Regional Services Division of Alberta Environment, including its lead investigator, Kevin Pilger (Pilger).

Statement of Claim at paras 67-70 & 73-74 [AENV Authorities, Tab 1].

14. Alberta Environment’s tests on Ernst’s water well showed that her water was

contaminated with very high and hazardous levels of methane. Alberta Environment tests also

indicated that Ernst’s water was contaminated with F-2 hydrocarbons, 2-Propanol 2-Methyl and

Bis (2-exyhexyl) phthalate; that levels of strontium, barium and potassium in her water had

doubled; and that her well water contained greatly elevated levels of chromium.

Statement of Claim at para 70 [AENV Authorities, Tab 1J.

15. Alberta Environment’s handling of Ernsts complaint has all of the hallmarks of bad

faith”. In particular, from the very start, Pilger, Alberta Environment’s lead investigator, showed

prejudice, bias and hostility towards Ms. Ernst. Notably, before any investigation had begun,

Pilger had concluded that Ms. Ernst’s water well was not impacted by CBM development. He

also repeatedly and without foundation accused Ernst of being responsible for the contamination of her own well.

Statement of Claim at para 74 [AENV Authorities, Tab 1].

16. The Alberta Environment investigation itself was ad hoc, irrational and beset by serious

errors. These errors were known to Alberta Environment.

Samples were contaminated. Alberta Environment lost or destroyed data its investigators had

There was no sampling protocol.

collected.

that had been fracced either directly into or near the Rosebud Aquifer.

obtain from EnCana a list of chemicals used in its fraccing operations, and correspondingly failed to test the water for possible “red flag” contaminants that would help identify the source of

the water contamination.

Investigators entirely failed to investigate specifically-identified EnCana gas wells

Investigators failed to

5

17. Despite knowing that the investigation of Ernsts contaminated well was inadequate and

negligently conducted, Alberta Environment nonetheless sent the limited data collected in this

investigation to the Alberta Research Council (ARC) for review and analysis (the ARC

Review”). Alberta Environment radically and improperly restricted the scope of the ARC

Review by improperly instructing the ARC only to review the limited and deficient information

provided by Alberta Environment, thereby ensuring that the ARC Review itself would be

deficient and unreliable.

Statement of Claim at paras 73 & 75 [AENV Authorities, Tab 1].

18. The ARC Review contained serious flaws.

For instance, the review failed to consider,

account for, or explain the presence of indicators of oil and gas industry contamination in Ernsts water including, for example, F-2 hydrocarbons, 2-Propanol 2-Methyl and Bis (2-exyhexyl)

phthalate. Moreover, in large part owing to Alberta Environments faulty investigation, and as a

result of Alberta Environment’s failure to investigate likely sources of contamination, the ARC Review did not include information or data from any of EnCanas 190 shallow coalbed methane

wells (including 60 in the area that were drilled less than 200m below the surface) that are the

subject of the lawsuit, and that are the likely causes of contamination. In other words, the ARC

Review entirely failed to consider the highly likely possibility that Ernsts water well was

impacted by EnCana’s shallow CBM wells. Finally, the ARC Review included and relied upon

factually incorrect information.

Statement of Claim at paras 8-9, 70 & 76 [AENV Authorities, Tab 1].

Alberta Research Council mc, Ernst Water Well Complaint Review [AENV

Authorities, Tab 34].

19. Alberta Environment knew that the ARC Review was faulty and unreliable. Nonetheless,

Alberta Environment unreasonably relied on the review to close its investigation into the

contamination of Ernst’s water and to justify stopping the delivery of safe, drinkable water to her

home in April 2008.

Alberta has included the ARC Review in its authorities, and seeks to rely on it in support of its general proposition

that Alberta Environment acted reasonably in the circumstances.

reliability and the independence of the ARC Review. It is a central premise of this lawsuit that the ARC Review is seriously flawed, and further that Alberta Fnvironrnent knew that it is was seriously flawed. The dispute regarding

the reliability and independence of the ARC Review, however, cannot and should not be determined on a preliminary application to strike without the benefit of any evidence. AENV Brief at para 98; Alberta Research Council Inc “Ernst Water Well Complaint Review” (December31, 2007) [AENV Authorities, Tab 34].

With respect, Ernst strongly challenges the

6

Statement of Claim at paras 76-77

{AENV Authorities, Tab

1].

Cause ofAction against Alberta Environment

20. The claim

against Alberta Environment is based

in negligence.

The Pleadings

state that

Alberta Environment negligently

enforcement scheme by,

implemented its own specified and published investigation

conducting

and

inter alia,

a negligent, irrational and bad faith investigation

and review

of the contamination of Ernst’s water.

 
 

Statement of Claim

at paras

59-80

[AENV Authorities, Tab

PART III:

ISSUES

RAISED

BY THIS

APPLICATION

 

1].

21. Alberta Environment’s Application raises the following

issues:

Issue #1:

Is

Alberta Environment’s current Application

to

pleadings) an abuse of process?

strike (its third attack on the

Issue #2:

Issue #3:

Has Alberta Environment mischaracterized

what is actually an Application

to

as an Application for Summary Judgment?

Is it plain,

obvious and without doubt that Alberta Environment

does not owe

of care regarding the manner in which it conducted

contamination of Ernst’s water well?

an investigation into the

Strike

a duty

Issue #4:

Dos.

220 of the EPEA and

s.

Environment for engaging in

157

of the Water Act provide immunity

to Alberta

a badfaith

investigation and review of the

contamination of Ernst’s water well?

7

PART IV: LAW AND ARGUMENT

ISSUE #1: Alberta Environment’s Application to Strike is an Abuse of Process

22. Alberta Environment’s current application to strike is the latest in a successive string of

applications attacking the pleadings.

application to strike the Fresh Statement of Claim dated June 25, 2012.

Alberta Environment unsuccessfully sought to strike particular sentences and paragraphs of the

claim.

strike the entire action against it.

Importantly, this is Alberta Environments second

In January 2013,

Having failed in its piecemeal attack, Alberta Environment now, belatedly, seeks to

Ernst v EnCana Corp, 2013 ABQB 537 at paras 99-130 [AENV Authorities, Tab 5].

23. The approach taken by Alberta Environment is an abuse of process; the present

Application should be dismissed, and further, Alberta Environment should be sanctioned with an

award of substantial indemnity costs. There is ample case law holding that, barring special

circumstances, a party should be allowed only one chance to attack an opponents pleadings.

This rule both a) reflects a desire to “avoid a multiplicity of proceedings which would unduly

strain economic resources and require valuable court time” and b) is based on the principle that

a litigant ought not to be faced with a continuing series of motions on similar subjects.

Grassick v. Calgary Power Co Ltd, [1948] 1 DLR 103 (QL) at para 15 [Plaintiffs Authorities, Tab 13].

Canada Post Corp. v. Goodfellas Delivery Inc., 2002 ABQB 585 (CanLil) at para

26 [Plaintiff’s Authorities, Tab 4]. Horii v. Canada, [2000] FCJ No. 1712 (QL) at paras 10-14 [Plaintiffs Authorities, Tab 16]

24. There are no special circumstances here. Alberta Environment has known that it is being

sued in negligence for its faulty investigation of the Ernst well from day one.

If it was Alberta

Environment’s position that the entire action was misconceived on the grounds that Alberta

cannot owe a private duty of care to the Plaintiff it makes little sense to attack particular

sentences and paragraphs, and only later attempt to strike the whole claim.

a waste of judicial resources, and violates the foundational rule that the Alberta Rules of Court be

Such an approach is

8

used to “identify the real issues in dispute” and to “facilitate

claim at the least expense”.

the quickest means of resolving a

Alberta Rules

of

Court, r

1.2(2)

[AENV Authorities,

Tab 4].

25. Multiple attacks on the very same pleading

should not be condoned.

They are a waste of

judicial resources, increase the costs of litigation,

and result in delay for all parties.

Accordingly,

Alberta Environment’s belated Application should

be dismissed and Alberta Environment should

be sanctioned through an award of substantial

indemnity costs.

ISSUE

#2: Alberta Environment mischaracterizes

Application for Summary Judgment

an Application to Strike as an

26. Alberta Environment’s Application purports to be both an application to strike out the

Statement of Claim on the grounds that it is plain and obvious that the pleading “fail[s] to

disclose a reasonable cause of action” as well as a motion for summary judgment

that there is “no merit to any of the Plaintiff’s

on the grounds

claims” against Alberta Environment.

Brief of the Defendant Her Majesty the Queen in Right of Alberta

at paras

1-2

(“AENV Brief’).

27. With respect, Alberta Environment has done little more than mischaracterize

what is

clearly an application to strike as an application

for summary judgment.

In other words,

Alberta

Environment’s

application for summary judgment is

simply an application to strike called by

another name.

In any event,

summary judgment is not available in

a case where there is no

evidentiary record.

28. The Rule for summary judgment

is as follows:

7.2

On application,

the Court may at any time in an action

which an applicant is entitled when

give judgment or

an

order to

(a)

admissions of fact are made in a pleading or

otherwise,

or;

(b)

the only evidence consists

of records and an affidavit

is

sufficient to prove the

authenticity of the records

in which the evidence is contained.

7.3 (1) A party may apply to the Court for summary

claim on one or more of the following

grounds:

(b) there is no merit to a claim

or part of it

judgment in respect of all or part of a

9

(2) The application must be supported by an affidavit swearing positively that one or more of the grounds described in subrule (1) have been met or by other evidence to the effect that the grounds have been met. [Emphasis added].

Alberta Rules of court, r 7.2 -7.3 [AENV Authorities, Tab 4].

29. Despite the clear requirement of evidence within r. 7.2, Alberta Environment has chosen

not to submit any evidence in support of its summary judgment application. Instead, Alberta

Environment states that “evidence” on which it seeks to rely are “the facts set forth in the Fresh

Statement of Claim” and “legislation”. Given that “legislation” is clearly not evidence, Alberta

Environment appears to be seeking summary judgment on the basis of the pleadings alone.

AENV Brief at para 29.

30. Given that all the Court has before it is the Statement of Claim, what Alberta

Environment appears to be asking the court to determine is simply whether the Statement of

Claim discloses a reasonable claim in law. With respect, this is identical to the question raised in

an application to strike the pleadings under r. 3.68(2)(b): is it plain and obvious that the

“commencement document or pleading [does not] disclose [a] reasonable claim or defence to a

claim”?

Alberta Rules of Court, if 3.68(2)(b) & 7.2 [AENV Authorities, Tab 4].

31. Rule 3.68 (application to strike) and rule 7.2 (summary judgment) are two distinct

procedures, aimed at addressing different issues and concerns. Albertas approach, which

improperly conflates these two distinct rules, does a disservice both to the intention of the Rules

and to the process of this Honourable Court.

32. It is worth pointing out that none of the cases relied upon by Alberta Environment

provide support for the proposition that a Court can and should grant summary judgment on the

basis of pleadings alone.

the idea that a court may grant summary judgment, but only if there is a sufficientfactual basis

on the record.

evidentiary records which included affidavits or other sworn testimony and which provided the

court with a sufficient factual basis to grant summary judgment.

Instead, all cases relied upon by Alberta Environment are premised on

Each one of the cases cited by Alberta Environment involved significant

Gauchier v Cunningham, 2013 CarswellAlta 1584 at para 10 [AENV Authorities, Tab 9]. Terrigno v Kretschner, 2012 CarswellAlta 2283 at paras 48-49.

10

Environmental Metal Works Ltd v Murray, Faber & Associates mc, 2013

CarswellAlta 1579 at paras 41-42 [AENV Authorities, Tab 11]

CCS Corp v Secure Energy Services mc, 2013 CarswellAlta 1997 at para 49

[AENV Authorities, Tab 12]

Jackson v Canadian National Railway, 2012 ABQB 652 (CanLil) at para 7.

33. Finally, it is useful to remember that Alberta Environments application for summary

judgment does not raise a discrete or limited legal issue.

It is not, for example, similar to a

limitation issue, where the key factual issue can be resolved by reference to the admission of a

key fact in a pleading.

issues in the lawsuit, this Court is simply not in a position to entertain a summary judgment

application.

In the absence of any evidence whatsoever regarding any of the many

ISSUE #3: It is not ‘plain and obvious” that Alberta Environment cannot owe a duty of care to Ernst

34. As noted above, Alberta Environment’s Application purports to be both an application to

strike out the Statement of Claim on the grounds that it is plain and obvious that the pleading

“fail[s] to disclose a reasonable cause of action as well as a motion for summary judgment on

the grounds that there is “no merit to any of the Plaintiff’s claims” against Alberta Environment. Alberta Environment cannot succeed on either ground.

AENVBrief paras 1-2.

The test on an Application to Strike is very difficult to meet

35. The test on an application to strike is a very difficult test to meet. Alberta Environment

bears the “extremely high” onus of “proving that the Plaintiffs action is bound to fail. Pursuant

to Rule 3.68, a court should only strike out a pleading if it is plain and obvious or beyond

reasonable doubt” that the facts, taken as proved, do not disclose a reasonable cause of action.

“The Supreme Court of Canada and all other courts in the country have said repeatedly that a pleading cannot be struck out if there is the faintest chance that it may succeed at trial. The

Plaintiff is entitled to a broad and generous reading of the pleadings. Neither the novelty of the

cause of action nor the potential for the defendant to mount a strong defence should prevent the

11

claim from proceeding. “Only if the action is certain to fail because it contains a radical defect

should the claim be struck out.

Court, r 3.68 [AENV Authorities, Tab 4].

v Carey Canada mc, [1990] 2 SCR 959 (QL) at paras 32-33 [Plaintiff’s Authorities, Tab 17].

-1lberta Adolescent Recovery Centre v Canadian Broadcasting Corporation, 2012

Alberta Rules

of

Hunt

ABQB 48 (QL) at paras 27 & 29 [Plaintiff’s Authorities, Tab 2].

Test on an Application

for

Summary

Judgment

is also

dfflcult

to meet

36. The bar on an application for summary judgment is also high.

Court of Appeal, “the test for summary judgment is that it must be ‘plain and obvious’, or ‘clear’

or ‘beyond real doubt’ that the action should be summarily dismissed. Moreover, the

“defendant who seeks summary dismissal bears the evidentiarv burden of showing that there is

According to the Alberta

‘no genuine issue of material fact requiring

trial”

[emphasis added].

Stobbe v

Paramount

In vestments Inc., 2013 ABCA 384 (CanLil) at para 9 [Plaintiff’s Authorities, Tab 23].

Canada (Attorney General) v Lameman, [2008] 1 SCR 372 (QL) at para 11

[Plaintiff’s Authorities, Tab 3].

37. Alberta Environment has not and cannot meet either

of

the above tests.

When can a government actor owe a

private

duty

of

care?

38. This Application deals with the question of when a government agency, such as Alberta

Environment, will be in a relationship

ground a private law duty of care.

of

sufficient proximity with a plaintiff, such as Ernst, to

39. Alberta Environment bases its Application on the premise that it is plain and obvious that

Alberta Environment cannot, as a matter of law, owe a duty of care to Ernst in the circumstances.

In particular, Alberta Environment relies heavily on the idea that Alberta Environment owes

public duties only, and these public duties preclude any possible duty of care owed specifically to

Ernst. With respect, Alberta’s argument is overbroad and ignores a substantial body

Court jurisprudence.

of

Supreme

12

40. As a starting point, it is important to recognize that there are a great many circumstances

in which courts have found that governments can and do owe private duties of care to

individuals this despite the fact that governments will generally always also owe wider duties

to the public at large.

v. Merton London Borough

Council, [1978] A. C. 728, and held that while the local authority is a public body whose powers

and duties are definable in terms of public rather than private

law could impose over and above, or perhaps alongside, these public law powers and duties a

Wilberforce considered just this question in the seminal case of Anns

Indeed, as the Supreme Court noted in Nielsen v Kamloops (Cliv), Lord

in some circumstances the

private law duty towards individuals enabling them to sue the authority for damages in a civil

suit”.

In that case, the court held that the government body did owe a private duty of care.

]Welsen vKamloops (City), [1984) 2 SCR 2 (WL) at paras 38 & 44, describing Anns v. Merton London Borough Council (“Kamloops”) [Plaintiff’s Authorities, Tab 20].

41. Examples of governments owing private law duties of care alongside their public duties

are replete in our common law. For example, in Hill v Hamilton Wentworth Regional Police

Services Board, the Supreme Court found that the police can owe a private duty of care to an

individual they are investigating, despite the fact that police obviously owe a wider duty of care

to the public at large to fight crime. Similarly, in Fullowka, the Supreme Court found that a

public mine inspector can owe a private duty of care to miners at a mine, even as they also owe a

wider duty of care to the public.

negligently implementing inspection schemes, despite the fact that they were exercising statutory

and public powers.

Hill v Hamilton Wentworth Regional Police Services Board, 2007 SCC 41 at paras 40-43 (“Hill”) [Plaintiff’s Authorities, Tab 15]. Fullowka v Pinkerton’s of Canada Ltd, 2010 SCC 5 (QL) at paras 46-51 & 55 (“Fullowka”) [Plaintiff’s Authorities, Tab 12].

Moreover, building inspectors have also been found liable for

42. In other words, it is never enough for a government to simply point to their public duties

as a complete answer to a claim against it. Instead, a court must look at the totality of the

circumstances of the particular case to determine whether a relationship between the plaintiff and

the defendant is sufficiently close and direct” to warrant imposing a private duty of care.

Hill at para 29 [Plaintiff’s Authorities, Tab 15]. Fullowka at para 40 [Plaintiff’s Authorities, Tab 12].

13

Alberta Environment

owes a duty

of care

to

Ernst

43. In this

Application, the relevant question is whether it is “plain and obvious” that Alberta

Environment cannot owe a duty of care to Ernst.

and therefore the action is

“bound to fail”.

Alberta Environment cannot and has not met this

stringent standard.

44. For the purposes of this Application, to determine whether a duty

of

care may exist in a

particular circumstance, the Court must first consider whether the duty

of

care pleaded

potentially belongs within an established or analogous category

of

negligence.

If it does, for the

purposes

of this Application, a

prima

facie

duty

of

care is established.

If

the duty

of

care alleged

does not belong within an established or analogous category

of

negligence (i.e. the duty alleged

is

“novel”) the Court must apply the full two-part Cooper/A

nns

test (described in more detail

below).

Adams v Borrel, 2008 NBCA 62 (QL) at para 36 (“Adams”)

[Plaintiff’s Authorities,

Tab

1]

There is a prima

facie

investigation”

duty of

care

based on the

pre-existing

legal category

of

“negligent

45. The cause of action pleaded by Ernst against Alberta Environment

clearly falls within the

previously-recognized category.

legal categories is established.

Accordingly, a prima facie duty

of

care based on pre-existing

46. In particular, the duty of care alleged here is precisely analogous to the duty

of

care found

in the Supreme Court’s numerous

“negligent investigation or negligent inspection” cases.

In

these cases, the Supreme Court has repeatedly

held that once a government agency,

such as

Alberta Environment, has established an investigation

or inspection mechanism at an operations

level, it will owe a duty of care to carry out that inspection

without negligence,

failing which the

authority can be held liable.

The Supreme Court has explained this concept in the following

terms:

[A] government agency in reaching a decision pertaining

reasonable manner which constitutes a bona

fide

to inspection must act in a

To do so

exercise of discretion.

they must specifically consider whether to inspect and if so, the system of

inspection must be a reasonable one in all the circumstances.

[Emphasis added]

14

Just v British Columbia, [1989]

2

SCR

1228

at para 21

(“Just”) [Plaintiff’s

Authorities, Tab

19].

47. The Supreme Court has repeatedly found a duty of care to reasonably implement an

established investigation and inspection scheme in circumstances

virtually identical to the case at

bar.

As

noted above, in Fullowka

v

Pinkerton

of Canada Ltd., the Supreme Court found

a

duty of care owed by the government regulator of

mines to mine workers to reasonably inspect

the mine pursuant to the statutory framework,

and to order cessation of work if unsafe.

Fullowka at para 55

[Plaintiff’s Authorities, Tab

12].

48. The cases

of Nielsen v Kamloops

(City),

Ingles v Tukaluk

1onstruction Ltd, and RothjIeld

v Manolakos deal with the regulatory

duties to inspect and enforce provisions

of a building code.

In these cases,

the Supreme Court found that when a government

had established a scheme for

inspecting construction, the municipality owes a duty of care to current property owners, future

property owners and to third parties to implement

that scheme reasonably and without

negligence.

Fuiowka at paras 46-51

explaining Kamloops,

Ingles and Rothfield [Plaintiff’s

Authorities, Tab

12].

Ingles v Tutkaluk Construction Ltd.

2000 SCC

12

(QL) at paras

18-21

(“Ingles”)

[Plaintiff’s Authorities, Tab

18].

49. Finally, in Adams v Borrel, the New Brunswick

Court of Appeal found that Agriculture

Canada owed a duty of care to farmers

court held that this case fell within the recognized

with respect to an investigation into a potato virus.

The

category of “negligent inspection” in which a

government agency will owe a duty of care once it has made the policy decision to establish an

investigation scheme.

Adams at paras 41-49

[Plaintiff’s Authorities, Tab

1].

50. The present Action is on all fours with the above negligent inspection/negligent

investigation cases.

As discussed above, Alberta Environment established

a system for

inspecting public complaints regarding water well contamination.

inspection and investigation scheme, Alberta Environment owes aprimafacie duty of care to

conduct investigations reasonably,

Having established an

and can be held liable for the failure to do so.

15

51. The Statement of Claim pleads that when Environment

Alberta received complaints that

Ernst’s water well was

contaminated with flammable levels

of methane and other chemical

contaminants, it engaged a lead investigator who was openly hostile

to Ernst,

engaged in an

irrational and faulty investigation of the Ernst Well that produced results

it knew to

be unreliable,

and then took active steps to ensure that the review

of the investigation was equally faulty.

Statement of Claim

at para 69-77

[AENV Authorities,

Tab

1].

52. For the purposes

of

an

application to strike, the pleadings clearly fit within the

established category of “negligent investigation!

inspection cases”, and accordingly

a prima facie

duty of care is established.

Alberta Environment cannot and has not met the high standard of

showing that it is “plain and obvious” that Ernst’s negligent

must fail, and accordingly its Application must be dismissed.

inspection and investigation claim

Alberta Environment does not and should not have “unfettered

of its investigation

discretion” in the conduct

53. Alberta Environment argues that its investigators

should have “unfettered discretion”

to

conduct investigations entirely as they see fit, without any recourse even if the investigation was

conducted negligently,

irrationally and in bad faith (as pleaded here).

In other words,

according

to Alberta Environment,

any investigation conducted by it should be sheltered from review by

the courts.

With respect this is not and cannot be the law.

AENV Brief

at paras 41

& 93.

54. As the Alberta Court of Appeal recently

found,

“while it is inappropriate for courts to

impose liability for the consequences of a particular policy decision,

‘a government actor may be

liable in negligence for the manner in which it carries out the policy.”

Elder Advocates ofAlberta Society

v. Alberta Health Services, 2012 ABCA 355

(CanLil) at paras

19-21

[Plaintiff’s Authorities, Tab 9].

55. Similarly, the Supreme Court has used the example of a policy of lighthouse

to illustrate the point:

inspections

For example,

at a high level there may be a policy decision

made concerning the

inspection of lighthouses

.

.

[Al decision either not to inspect at all or to reduce the

number of inspections may be an unassailable

policy decision.

This is so provided it

16

constitutes

a reasonable exercise of bona

availability of funds.

fide

discretion based, for example, upon the

On

the

other

hand,

if

a

decision

is

made

to

inspect lighthouse facilities

the system of

inspections must be reasonable and they must be made properly.

Thus once the

policy decision

to

inspect has been made,

the Court may review the scheme of

inspection to ensure it

is

reasonable and has been reasonably carried out

in light

of all the circumstances, including

the

availability of

funds, to

determine whether

the government agency has

citations omitted]

met

the requisite standard of

care.

[Emphasis added,

Just

at paras

22-23

[Plaintiff’s Authorities, Tab

19].

56. Moreover, the

Supreme Court has specifically considered

and rejected the idea that the

discretion that is sometimes inherent

in professional work should serve to preclude a duty of

care.

The discretion inherent

the proposed duty of

in

care.

police work

fails to

provide

a convincing reason to negate

It is

true

that police investigation involves significant

discretion and that police officers are professionals

trained

to

exercise

this

discretion

and investigate effectively.

However,

the

discretion inherent

into

account

in

formulating the standard of

care, not

whether

The discretionary nature of police work therefore provides

existence of

a

duty of care

in

negligence.

no

in

police work

is

taken

a duty of care arises.

reason

to

deny the

Police

practitioners exercise similar levels of discretion.

are

not unlike other professionals

in this

respect.

Many professional

law

The practices of

and medicine,

for example,

these fields

involve discretion, intuition

are

subject

in

to a

duty of care

and

in tort

occasionally

hunch.

Professionals

in

nonetheless, and the courts routinely

review their actions

negligence actions without apparent difficulty.

Hill

at paras

5

1-54

[Plaintiff’s Authorities, Tab

15].

57. Alberta Environment relies on the

dissenting opinion

in the case

of Kamloops

for the

premise that a government agency vested with enforcement

discretion will not owe a duty of care

in the exercise of their enforcement powers.

Alberta Environment neglects to mention that in

that case, the majority found that because the government

had established

a framework for

inspections,

the government agency

did owe

a duty of care to exercise its operational duties,

including inspections,

in good faith and without negligence.

Even the dissent in

Kamloops

that

a government agency

can

be held liable if

it

makes operational decisions based on

held

“extraneous or improper matters, or from bad faith”

Claim.

exactly what is alleged in the Statement of

Kamloops

at paras

18-20

AENV

Brief

at para 41.

[Plaintiff’s Authorities, Tab 20].

17

58. In sum, the actions of Alberta Environment’s inspectors are certainly reviewable. In the

words of the Supreme Court, the “government agency must act in a reasonable manner which

constitutes a bona fide exercise of discretion”. To avoid liability, the government agency must

show that it conducted its inspection to the standard that would be expected of an ordinary,

reasonable and prudent person in the same circumstances.” Once Alberta Environment has

decided to create an inspection scheme, and does in fact conduct such an investigation of a

citizen’s water well, it will owe a duty to conduct that inspection in good faith and without

negligence. If it does not conduct a reasonable investigation (as is alleged here), it can be liable.

Just at paras 25 & 30 [Plaintiff’s Authorities, Tab 19]. Ingles at paras 18-19 [Plaintiff’s Authorities, Tab 18].

Alberta Environment is in a proximate relationship with the Plaintiff

59. In the alternative, if the duty of care alleged is not found to fall within a pre-existing or

analogous category of negligence (which the Plaintiff strongly disputes), this Honourable Court

must apply the two-part Cooper/A nns test to determine if it is plain, obvious and beyond doubt

that a duty of care cannot exist on the facts as pleaded. Under the Cooper/Anns test, the court

asks:

 

a. whether Alberta Environment is in a relationship of sufficient proximity and

foreseeability with the Plaintiff that aprimafacie duty of care is owed; and

b. if so, whether there are any overriding policy considerations that justif negating

or limiting the duty of care.

Hill at para 20 [Plaintiffs Authorities, Tab 15].

60.

The Statement of Claim clearly discloses material facts sufficient to ground a relationship

of sufficient foreseeability and proximity under the Cooper/Anns test. It is certainly not the case

that it is “plain and obvious” that there cannot be a relationship of sufficient foreseeability and

proximity between Ernst and Alberta Environment.

61. Alberta Environment does not contest that it was foreseeable that harm could have been

suffered by the Plaintiff if Alberta failed to exercise reasonable care in engaging in the

implementation of its inspection and enforcement scheme. This makes sense as discussed

18

above,

Alberta Environment’s mandate includes safeguarding “human health” and “property”,

and “protecting the water supplies

of household users”, including by taking remedial steps

to

repair contamination after it occurs.

If Alberta Environment fails in its responsibilities,

it is

clear that rural landowners who depend upon private wells for their supply of safe drinking water

could be seriously harmed.

EPEA,

see eg ss

109

&

113

[AENV Authorities at Tab 2].

Water Act,

see eg s

105

[AENV Authorities at Tab 3].

Groundwater Evaluation Guideline,

February 5, 2003 at 21

{AENV Authorities at

Tab 30].

62. Instead, Alberta Environment incorrectly

asserts that Alberta Environment is not in a

relationship of sufficient proximity with Ms.

Ernst.

AENV

Brief

at eg para 58.

63. In

answering the question of whether there is a relationship of

sufficient proximity

between a plaintiff and a defendant, the Supreme

Court differentiates between two

situations.

The first kind of situation is where the alleged duty of care is said to arise explicitly or implicitly

from the statutory scheme.

In other words, the only

source of proximity is the statute itself.

R v Imperial Tobacco

Canada Ltd, 2011

SCC 42 (QL) at paras 43-44

(“Imperial

Tobacco”)

[Plaintiffs Authorities, Tab 21].

64. The second kind of situation,

and the situation relevant for this Application,

is where the

duty of care is alleged to arise from interactions

between the claimant and the government, and

this potential duty of care is not negated by the statute.

not the statute alone, but is also founded

In other words,

the source of proximity

on other factors derived from the nature of the specific

relationship between the claimant and the government

agency.2

the second scenario in the following terms:

The Supreme Court explained

is

The second situation is where the proximity

alleged to arise from a series of specific

claimant.

The argument in

essential to the private duty of care is

interactions between the government and the

government has, through its

these cases is that the

conduct, entered into a special relationship

establish the necessary proximity for

with the plaintiff sufficient to

a duty of care.

In these cases, the governing

of

proximity

statutes are still relevant to the analysis.

For instance, if a finding

2 In direct conflict with the

Supreme Court’s ruling in Imperial

Tobacco, Alberta Environment states

in its

Brief that

“the governing statute is the sole basis for all of a statutory

Brief

at para 43.

regulator’s duties”.

This is clearly incorrect. AENV

19

would conflict with the state’s general public duty established

by the statute, the

court may hold that no proximity arises.

However, the

factor that gives rise to a

duty of care in these

types

of cases is the specific interactions

between the

government actor and the claimant.

[Emphasis added]

Imperial Tobacco

at paras 43

& 45

[Plaintiffs Authorities,

Tab 21].

65.

In the

case at bar,

the Plaintiff is

not

basing her claim only on the statutory

scheme.

Rather, the allegations against Alberta Environment

in the present Statement

of Claim are in the

second category established by McLachlin CJ in

asserting that Alberta Environment has “through its

Imperial Tobacco.

conduct,

In other words,

Ernst is

entered into a special relationship

with the plaintiff sufficient to establish the necessary

proximity for a duty of care”, based in large

part on the faulty and bad faith on-the-ground

investigation of Ernst’s well conducted by Alberta

Environment inspectors.

66. Crucially, when the duty of

care

alleged is based on specific interactions between the

government actor and the claimant, as it is in this case, the Supreme Court notes that it will be

difficult to strike a claim at the pleadings

stage:

Since this is a motion to strike, the question

the facts pleaded to be true, there is any reasonable

before us is simply whether,

assuming

prospect of successfully

establishing proximity, on the basis of a statute or otherwise

[W]here the

asserted basis

for proximity is grounded in specific conduct and interactions,

ruling a claim out at the proximity

reasonable prospect that the asserted interactions

stage may be difficult.

So long as there is a

could, if true, result in a

finding of sufficient proximity, and the statute does not exclude that possibility,

the matter must be allowed

to proceed to trial,

subject to

any policy

considerations that may negate the prima facie duty of care at the second stage of the

analysis.

[Emphasis added, citations omitted]

Imperial Tobacco

at para 47

[Plaintiffs Authorities, Tab 21].

The pleadings disclose a proximate relationship

between Alberta Environment and Ernst

67. The factors which can satisfy the requirement of

proximity

are

“diverse

and

the circumstances of the case”.

In addition to personal contact between the parties,

depend on

other indicia

of proximity can include the “expectations, representations,

reliance and property or other

interests involved”.

care is

As the Supreme Court has repeatedly

emphasized, “where a private duty of

said to arise from the specific relationship of

the regulator and the plaintiff the entirety of

the circumstances

said to

constitute that relationship must be considered in determining whether

that duty exists.”

20

Taylor v Canada (Attorney General),

2012 ONCA 479 at para

117 (“Tayor”)

[Plaintiffs Authorities,

Tab 24].

Hill at para 24 [Plaintiff’s Authorities,

Tab

15].

68. The Statement of Claim outlines five factors which establish

Alberta Environment and Ernst:

close proximity between

a. Alberta Environment conducted an investigation

and review directed exclusively at

investigating the cintamination of

Ernst’s

water well.

 

Statement of Claim

at paras

69-77

[AENV Authorities, Tab

I].

b.

Alberta Environment employees and inspectors,

including in particular lead

investigator Kevin Pilger, had repeated and direct contact with Ernst regarding

Alberta Environment’s investigation into her contaminated water.

 

Statement of Claim

at paras 63,

67, 70 & 74

[AENV Authorities, Tab

1].

c. Both Alberta Environment employees and government ministers made various direct

and specific representations to Ernst regarding the conduct of Alberta Environment’s

investigation into her well.

Statement of Claim at

paras 63-64

[AENV Authorities, Tab

1].

d. Alberta Environment created a specific Compliance Assurance Program designed to

ensure “clarity and certainty” regarding investigation

and enforcement.

Statement of Claim at

paras 6 1-62

[AENV Authorities, Tab

1].

e.

AENV Compliance Assurance at

The

nature of

Ernst’s interests.

1,

34-36

69. Each of the five factors will be considered

in turn below.

[AENV Authorities, Tab 32].

1.

Alberta Environment engaged in a specific investigation of the contamination ofErnst’s well water

70.

The single most important indicator of

proximity in this case is that Alberta Environment

engaged in a specific on-the-ground

investigation of Ernst water well.

This investigation was

21

entirely focused on a) determining whether Ernsts water well was contaminated; and, if so b)

identifying the causes of the contamination in Ernsts water.

Statement of Claim at paras 69-77 [AENV Authorities, Tab 1].

71. Alberta Environment specifically attended at Ernsts property to sample and test Ernsts

water well. These tests revealed that her water was contaminated with very high and hazardous

levels of methane and a variety of other contaminants including F-2 hydrocarbons, 1-Propanol 1-

Methyl and Bis (2-ethyhexyl) phthalate, strontium, barium and chromium.

Statement of Claim at para 70 [AENV Authorities, Tab 1].

72. After completing their investigation, Alberta Environment arranged for the Alberta

Research Council to conduct a review of the results from the investigation.

maintains that the review itself was faulty and unreliable, the intent of the review was entirely

focused on determining what caused the serious contamination of Ernsts water well.

While the Plaintiff

Statement of Claim at para 75-76 [AENV Authorities, Tab 1].

73. During this time, and in recognition of the fact that Ernsts water was contaminated with

hazardous chemicals, Alberta Environment began delivering safe and drinkable water to Ernsts

residence.

Statement of Claim at para 77 [AENV Authorities, Tab 1].

2.

SpecifIc interaction between Alberta Environment employees and investigators and Jessica Ernst

74.

Specific interaction or personal contact between the plaintiff and members of the

government agency is a key factor in establishing a relationship of sufficient proximity. In

considering whether the relationship in question is close and direct, the existence, or absence, of

personal contact is significant.”

Fullowka at para 44 [Plaintiff’s Authorities, Tab 12].

75. Ernst had direct and continual interactions with various investigators and employees from

the Regional Services Division of Alberta Environment regarding a specific and on-the-ground

investigation of the contamination of Ernsts water well. This investigation necessitated several