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COURT FILE NUMBER

COURT
JUDICIAL CENTRE
PLAINTIFF
DEFENDANTS
DOCUMENT
ADDRESS FOR SERVICE
AND
CONTACT INFORMATION
OF
PARTY FILING THIS
DOCUMENT
0702-00120
COURT OF QUEEN'S BENCH OF
ALBERTA
DRUMHELLER
JESSICA ERNST
ENCANA CORPORATION,
ENERGY RESOURCES
CONSERVATION BOARD, and
HER MAJESlY THE QUEEN IN
RIGHT OF ALBERTA
REPLY BRIEF OF THE
DEFENDANT HER MAJESTY THE
QUEEN IN RIGHT OF ALBERTA
TO BE HEARD BY THE
HONOURABLE CHIEF JUSTICE
N.C. WIITMANN ON APRIL 16,
2014
ALBERTA JUSTICE
Civil Litigation
gth Floor, Peace Hills Trust Tower
10011 - 109 Street
Edmonton, Alberta TSJ 388
Solicitor: Neil Boyle I Nancy McCurdy
Telephone: (780) 427-2543
Fax: (780) 427-1230
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2:0/2:0 39'i1d
 
£L09£68£0P1 vv : 11 V106/60/V0
CONTENTS
ISSUES RAISED BY THE PLAINTIFF ............... ....................................... 2
Issue #1: Alberta Environment's Application to Strike in an Abuse of
Process ............ ................................................. ....... ........ ........ .... ...... ...... ...... 2
Issue #2: Alberta Environment mischaracterizes an Application to Strike
as an Application for Summary Judgment .......................... .............. .......... ... 3
Issue #3: It is not "plain and obvious" that Alberta Environment cannot owe
a duty of care to Ernst .................................................................................... 5
Issue #4: Alberta Environment is not protected from liability for acts taken
in "bad faith" ................................. ........................................... ...... ............... .. 8
II LIST OF AUTHORITIES ............................................................. ............. 11
2
ISSUES RAISED BY THE PLAINTIFF
Issue #1: Alberta Envi ronment's Applicati on to Strike in an Abuse of
Process
1 . The Applicant, Her Majesty the Queen in right of Alberta ("the Province"),
respectfully submits that it is not barred from bringing the within application,
either under rule 3.68 or under rules 7.2 and 7.3. This is not the case of a "latest
in a successive string of applications," it is essentially the second application, and
on entirely different grounds from the first to second. All parties brought
applications to strike some or all of the claim and the Plaintiff responded by filing
the Fresh Statement of Claim. No costs were awarded as this Court recognized
that these applications effectively never proceeded. The Province then
proceeded with its first application with respect to the Fresh Statement of Claim,
an application to strike only certain paragraphs on the grounds that they were
akin to class proceeding allegations. That application failed and the Province
now seeks to strike the entire claim on the basis that it either fails to disclose a
reasonable cause of action against the Province and/or that it is plain and
obvious that there is no merit to the claims against the Province.
2. With respect to rule 3.68, our Court of Appeal has indicated that the
decision relied upon by the Plaintiff, Grassick v Calgary Power Co. Ltd, does not
stand for an absolute rule that multiple attacks on a pleading may not be made or
that a party is estopped from doing so. Rather, a delay in attacking a pleading or
doing so in a piecemeal fashion, is possible grounds for a costs award. The
Province denies that it proceeded in a piecemeal fashion in any event, as it was
entitled to know the form of pleading it was attacking before bringing an
application to strike that pleading in its entirety.
Alexander v Pacific Trans-Ocean Resources Ltd, 1993 ABCA 43 at para 7.
TAB 1
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3. Even in cases were a party makes more than one application for dismissal
of the entire claim, but the applications are on different grounds, that party is not
estopped or barred from doing so, even if both grounds could have been
advanced at the same time in one application.
Bott v Sorley, 1999 CarsweiiBC 958, [1999] BCJ No 1027 (SC) at paras 16-19.
TAB2
Issue #2: Alberta Environment mischaracterizes an Application to Strike
as an Application for Summary Judgment
4. The Province submits that it is not bringing a striking application in the
guise of a summary j udgment applicati on, it is bringing both as either
complimentary to one another or in the alternative to one another, a not
uncommon practice as was the case in the ERCB's successful application in this
matter. This Court held that the claim against the ERCB was struck or, in the
alternative, dismissed (see Ernst at TAB 5 of the Province's Book of Authorities,
at para. 88).
5. Whether a valid cause of action ari ses is well within rule 3.68, but also
may be relevant to a determi nation under rules 7.2 and 7.3. These rul es provide
for "other evidence", pleadings specifically provided for by Rule 7.2(a) and
records under rule 7.2(b). It is submitted that these pleadings and records do not
require an affidavit to prove their authenticity, and the Province has cited a
number of cases where alternatives to a sworn affi davi t were accepted by the
courts in support of a summary judgment application.
6. The Province cited Combined Air Mechanical (see Tab 14 of the
Province's Book of Authorities) and the SCC's call for an expanded access to
summary dismissal applications. Our Court of Appeal has made a similar call for
courts to not limit themselves to a strict test of whether there is a "genuine issue
for tri al", but instead to examine the record placed before it and determine
whether a claim has any merit in proceedi ng further. In so doing, it commented
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on the myth of disputes eventually going to trial and that this myth should no
longer govern civil procedure. The Province submits that the Plaintiff can take
issue with whether the record of pleadings and other documents provided
provides this court with a view to whether there is merit or not to its claim, but it
cannot take issue with the Province's right to place that record before this court
and applying for summary dismissal on the basis of that record. The Province
could have chosen to wait until after questioning to have a more complete record
but submits that this is an unnecessary step in light to the lack of merit apparent
on the record to date.
Windsor v Canadian Pacific Railway Ltd, 2014 ABCA 108 at paras 11-15.
TAB3
7. The Province adopts and rel ies upon the argument made by the ERCB at
paragraph 15 of its Reply Brief filed January 3, 2013, cited in full as follows:
The Plaintiff in her Brief suggests that the ERCB
bears the onus of disproving each and every issue
raised by Ms. Ernst in her Statement of Claim. There
is no authority for that proposition. The ERCB could
readily admit much of the Plaintiff's claim and still
succeed in showing that there is no cause of action or
that it is plain and obvious that the Plaintiffs claim will
fail. The mere fact that Ms. Ernst has pleaded
something does not lead to the conclusion that if the
allegation is true she would be entitled to a remedy
against the ERCB. The ERCB may readily agree with
the description of the parties, the length of trial, and a
number of facts - none of which lead in themselves to
j udgment. At its essence the ERCB's Application is
quite simple. The ERCB says that the Statement of
Claim does not disclose a cause of action because
the legislation makes it clear that the ERCB has a
public duty, not a private one, and, even if a private
duty is owed by the ERCB, because the ERCB is
immune from suit. The ERCB has satisfied its onus
by clarifying the public nature of its duty, and the
immunity provision. The onus has now shifted to Ms.
Ernst. She has submitted no evidence to meet her
onus. Summary judgment must therefore be granted.
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8. With respect to paragraph 19 of the Respondent's Brief, the ARC Review
did not simply rely upon samples provided by the Province. This independent
body, that has not been named as a party, also looked at additional lines of
evidence (see Tab 34 of the Province's Book of Authorities, at page Ill-Executive
Summary):
• Review of the local and regional geology and hydro stratigraphy.
• Calculation of hydraulic gradients between the aquifer in the Upper
Horseshoe Canyon Formation and the CBM wells.
• A theoretical review of the potential of methane migration along a fracture
(potentially induced by well stimulation) between the Horseshoe Canyon
aquifer and the CBM well using the observed pressure gradients.
• An estimation of the change in dissolved methane concentrations in the
Ernst well related to the measured decrease in well water levels from 2003
to 2007.
• A graphical and statistical approach to the evaluation of the major ion,
bacteria, gas and isotope chemistry of the Ernst well, 145 surrounding
water wells from the AENV database and CBM wells in the area.
9. The conclusion reached was that not only was there insufficient evidence
that energy development projects in the area had adversely impacted Ms. Ernst's
well, but that such projects "most likely have not adversely affected Ms. Ernst's
private water supply well." Such a finding precluded the Province from taking
any steps to require the Defendant EnCana to undertake any reclamation work
on Ms. Ernst's property.
Issue #3: It is not "plain and obvi ous" that Al berta Environment cannot
owe a duty of care to Ernst
10. The thrust of the Plaintiff's argument under this heading is a reliance on an
older line of case law that focused on the operational/policy dichotomy in
analyzing whether a government entity owed a private law duty of care. With
respect, this line of cases is no longer the basis of the test on government liability
in negligence. Under this older line of cases, the only issue was foreseeability of
harm in deciding whether a prima facie duty was owed. The fact that
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government responsibilities being examined arose from statutes that were
phrased in languages of powers and not mandatory duties, and from statutes
which did not expressly provide for civil rights of acti on, and in fact may have
expressly offered immunity from such action, did not factor into these decisions
(i. e. Nielsen v Kamloops; Just v BC; Ingles v Tutkaluk). The fact that the actions
concerned the government's failure to prevent harm originally caused by another
(in this case allegedly by the Defendant EnCana), or by natural causes, was not
considered an obstacle to finding a duty of care. What developed is what
Professor Klar describes as a situation where there was no apparent pattern in
the j udgments or any way to predict whether a matter would be found to be
operational or policy. The SCC decision in Cooper v Hobart (TAB 18 of the
Province's Book of Authorities) added the notion of proximity to that of
foreseeability, and it is both that create a duty of care, a duty that can be negated
by policy considerations. The statute became the only source of government's
duties, private or public. Pre-Cooper decisions are of little precedential value.
Lewis N Klar, QC, "Government Liability in Negligence: How is it Evolving,
and is Fu/lowka v Pinkerton a Game-Changer?" (ih Annual Conference on
Crown Liability, Osgoode Professional Development CLE, 18 February, 2011)
[Unpublished] at pages 12-15.
TAB4
11. When the statute mandates a duty to the public as a whol e, rather than to
individuals, as does the EPEA, then there is no private duty of care owed,
whether the Act includes investigation/inspection duties or not. It has been rare
that proximity has been established by Plaintiffs under this new
proximity/foreseeability regime, as statutes such as the EPEA cl early create a
public duty, not a series of private duties of care to every party that may come
within the confi nes of this legislation. To hold otherwise would create
indeterminate liabil ity and negate the second test under Anns.
12. R v Imperial Tobacco Ltd (see Tab 23 of the Province' s Book of
Authorities) has gone further in holding that implementation of policy decisions,
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which Pre-Cooper would be operational decisions giving rise to a potential claim
in negligence, are not subject to liability in negligence. This has resulted in an
extensi on of the scope of immunity for government actions. Where public
statutory duties conflict with alleged private law duties, it is submitted that the
public duties trump the private duties.
13. The decision in Taylor v Canada (see Tab 24 of the Respondent's Book of
Authorities), is distinguishable in that it deals with a situation where the
government action is related directly to the Plaintiff (i.e. provision of ambulance
services), rather than a situation as in the within action, where the complaint is
about government's failure to protect a Plaintiff from a third party's actions. In
this situation, proximity will usually not be established. The key fact is that the
Plaintiff is in no way different than any other landowner who is in proximity to
energy projects that may or may not have an impact on the environment. If a
duty is owed to her it falls within the public duty of care owed to all who resided in
the area she lived, not to her as an individual. This was not a situation of one
piece of property being searched for environmental pollution; this was a large
geographical area that happened to include the Plaintiff' s property. She was not
the only landowner whose well was tested (see para 69 of the Fresh Statement
of Claim). The duty owed was to the public at large. To hold otherwise would
mean any inspection under the EPEA would create such proximity and a private
duty of care. The Act is not designed in this manner and the immunity provisions
reflect that this was not the Legislature's intention.
14. River Valley Poultry (see Tab 24 of the Province's Book of Authorities) is
ci ted as an example of a case where the Plaintiff was the actual target of the
government investigation, and was going to be directly impacted economically by
that investigation. Any harm befalling the Plaintiff in that case would come from
the government's actions, or the Plaintiff's own actions, not from the actions of a
third party. Despite this, the Court did not find a private duty of care owed. In
that case the Plaintiff had a stronger argument for proximity to government
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officials than does Ms. Ernst. She is looking to government to protect her from
the actions of a third party or an unknown entity. As stated in Taylor v Canada
(see para. 1 07), courts will differentiate between regulators whose positive
actions of negligence create a new risk of harm from regulators whose only
negligence is in fai ling to prevent harm. The latter ('nonfeasance') will generally
not create sufficient proximity to create a private law duty of care.
15. This case is not about one specific investigation. This case rai ses the
notion that any person involved in an EPEA investi gation ought to have standing
to determine the manner and mode of investigation, the scope of testing, both
geographically and also in terms of substances included, and other matters that
may be characterized as 'scientific debate'. What the Plaintiff's claim is seeking
to do is to put her at the table with government workers and dictate to them the
way they should properl y go about their business. Simply inserting the term "bad
faith" in a couple of paragraphs does not change what this case is really about.
Ms. Ernst does not want fracturing to occur, and she wants to have a say in how
testing should be conducted. This would be an infringement on the discretion
afforded the Province's agents under the EPEA, and the statutory immunity that
flows from the use of that discretion. The overall effect of this claim is not about
bad faith allegations within a specific investigation; rather it is about a complaint
as to how the Province conducted its business, termed by the Plaintiff itself in its
brief as a negligent inspection case. The Province is immune from such
allegations of negligence by the provisions of the EPEA.
Issue #4: Alberta Environment is not protected from liability for acts
taken in "bad faith"
16. As stated in the Provi nce' s Bri ef, the first response with respect to this
point is that one does not get to an examination of the immunity clause and
whether it protects against the specific allegations in the Fresh Statement of
Claim until after the hurdle of a private law duty being owed is first cleared. The
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Province submits that the Plaintiff cannot clear this first hurdle, therefore any
discussion as to specific pleadings of bad fai th are irrelevant.
17. Paragraph 73, whi le it contains the phrase "and in bad faith", is really
about the Plaintiff's allegations that the mode and manner of investigation was
negligent and did not accord with her views of proper scientific procedure.
Paragraph 79 is restricted to allegations of negligence. Only paragraph 7 4
contains classic allegations of bad faith, and c) and d) of paragraph 7 4 are not
allegations that ought to be allowed to proceed, as landowners are not granted a
right to share in the Province's investigation. Similar to a criminal investi gation,
the Province is obliged to provide information to the party being investigated
(EnCana) so that this party may respond, but the complainant (similar to the
victim of a crime) does not necessarily participate actively in the investigation or
have any rights in this regard.
18. There is no independent cause of action for bad faith. Any liability that
may arise in tort when a publ ic authority acts in bad faith does not create a stand-
alone action for bad faith. The Plaintiff must first prove that a duty of care was
owed to the Plaintiff by the public authority.
Alberta v Elder Advocates of Alberta Society, as cited in RVB Managements
Ltd v Rocky Mountain House (Town) , 2014 CarsweiiAita 156 (QB) at para 104.
TABS
19. The concept of bad faith in this context, and only after the duty of care is
found, includes acts committed deliberately with intent to harm, and may also
include acts that are so inconsistent with the relevant legislative context that a
court cannot reasonably conclude that they were performed in good faith. The
pleadings do not elevate this case to one with the potential for such a bad faith
exception to the statutory immunity clause contained within the EPEA.
RVB Managements, supra at para 105.
TAB 5
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20. The Province investigates complaints under the EPEA and Ms. Ernst's
complaint was in no way unique. All that is unique is that she is attempting to
participate in the investigation herself by suggesting that other modes or methods
of investigation should be used. Paragraphs 69-73 of the Fresh Statement of
Claim are not about bad faith, they are about Ms. Ernst not agreeing with the
scientific process used to investigate the water on her property. This claim does
raise the specter of indeterminate liability as there is thousands of energy and
other commercial projects situated in this Province, any one of which may have
environmental impacts on surrounding landowners. To hold the Province to
liability in this type of claim creates indeterminate liability from all other
landowners.
21. To elevate landowners in the manner suggested by this Claim means that
the Province would have to follow the landowners' directions in terms of the
manner and mode of investigation it undertakes in a particular case. That is
something that is not provided for in the EPEA. Ms. Ernst is not part of a small,
identifiable group as was the case in either Fullowka or Hill v Hamilton-
Wentworth, she stands in the same position as all Albertans who own land and
who are in sufficient proximity to commercial enterprises to warrant an
investigation as to potential escape of contaminants.
ALL OF WHICH IS RESPECTFULLY SUBMITTED this 2nd d '9! of April , 2014.
Per:
II LIST OF AUTHORITIES
TAB
1. Alexander v Pacific Trans-Ocean Resources Ltd, 1993 ABCA 43
2. Bott v Sorley, 1999 CarsweiiBC 958, [1999] BCJ No 1 027 (SC)
3. Windsor v Canadian Pacific Railway Ltd, 2014 ABCA 108
4. Lewis N Klar, QC, "Government Liability in Negligence: How is it Evolving,
and is Fullowka v Pinkerton a Game-Changer?" (?'h Annual Conference
on Crown Liabil ity, Osgoode Professional Development CLE, 18 February,
2011) [Unpublished]
5. Alberta v Elder Advocates of Alberta Society, as cited in RVB
Managements Ltd v Rocky Mountain House (Town), 2014 CarsweiiAita
156 (QB)