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Action No.: 0702-00120 E-File No.: CVQ13ERNSTJ Appeal No.

: ____________________ IN THE COURT OF QUEENS BENCH OF ALBERTA JUDICIAL CENTRE OF CALGARY BETWEEN: JESSICA ERNST, 611640 ALBERTA INC. and ERNST ENVIRONMENTAL SERVICES Plaintiffs and ENCANA CORPORATION, ALBERTA ENERGY AND UTILITIES BOARD, NEIL MCCRANK, JIM REID, ALBERTA ENVIRONMENT, KEVIN PILGER, ALBERTA HEALTH AND WELLNESS and HER MAJESTY THE QUEEN, ALBERTA Defendants

PROCEEDINGS

Calgary, Alberta January 18, 2013 Transcript Management Services, Calgary Suite 1901-N, 601-5th Street SW Calgary, Alberta T2P 5P7 Phone: (403) 297-7392 Fax: (403) 297-7034

i TABLE OF CONTENTS Description January 18, 2012 Discussion Submissions by Mr. Solomon Submissions by Mr. Klippenstein Discussion Certificate of Transcript January 18, 2013 Submissions by Mr. Klippenstein Submissions by Mr. Wanless Submissions by Ms. McCurdy Submissions by Mr. Solomon (Costs) Judgment Reserved Certificate of Record Certificate of Transcript Morning Session Page 1 1 5 20 40 44 45 45 48 69 77 78 80 81

Afternoon Session

1 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32 33 34 35 36 37 38 39 40 41 Proceedings taken in the Court of Queens Bench of Alberta, Courthouse, Calgary, Alberta January 18, 2012 The Honourable Judge Veldhuis M. Klippenstein C. Wanless (No Appearance) (No Appearance) P. M. Bychawski T. D. Gelbman G. S. Solomon, Q. C. C. J. Elliot (No Appearance) (No Appearance) (No Appearance) (No Appearance) (No Appearance) N. A. McCurdy S. Hawkins Morning Session

Court of Queens Bench of Alberta For the Plaintiff Jessica Ernst For the Plaintiff Jessica Ernst For the Plaintiff Alberta Inc. For the Plaintiff Ernst Environmental Services For the Defendant Ecana For the Defendant Ecana For the Defendant Alberta Energy and Utilities Board For the Defendant Alberta Energy and Utilities Board For the Defendant Neil McCrank For the Defendant Jim Reid For the Defendant Alberta Environment For the Defendant Kevin Pilger For the Defendant Alberta Health and Wellness For the Defendant Her Majesty the Queen Court Clerk

THE COURT: Thank you. THE COURT CLERK: THE COURT: THE COURT CLERK:

Good morning everybody. Please be seated.

I didnt know where to put this, My Lady. Thats fine. Thank you. Thank you.

THE COURT: Im a few minutes late, I apologize. I have another case management so I just need a minute here to familiarize. (OTHER MATTERS SPOKEN TO) Discussion

2 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32 33 34 35 36 37 38 39 40 41 THE COURT: Good morning, counsel.

MR. SOLOMON: Good morning, My Lady. My Lady, my name is Glenn Solomon, Im counsel for the ERCB -THE COURT: Yes, thank you.

MR. SOLOMON: -- along with my colleague, Christy Elliot, who is to my right. Counsel for Ms. Ernst in this matter is Murray Klippenstein and his colleague Cory Wanless. THE COURT: MR. KlIPPENSTEIN: Good morning, gentlemen. Good morning.

MR. SOLOMON: Behind me to my right, My Lady, is Nancy McCurdy, who is counsel for the Government of Alberta Environment. THE COURT: MR. SOLOMON: here on behalf of Encana. THE COURT: MR. SOLOMON: you will have had appear bef -THE COURT: Ms. McCurdy, thank you. And then Piotr Bychawski of the Osler firm is

Thank you. And he advises me that Tommy Gelbman, who

Yes.

MR. SOLOMON: -- before you previously, will be here sometime this afternoon to address his part of the issue of costs that -THE COURT: Okay. Can I just have the spelling of your name, sir, because youre -- youre new on the file to me. MR. BYCHAWSKI: MR. SOLOMON: MR. BYCHAWSKI: Yes, My Lady. Give her your card. Yes, I can pass up my card if thatd be easier?

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THE COURT: THE COURT CLERK:

Okay. Thats be great. Thank you. Thank you.

MR. SOLOMON: I warned my friend, My Lady, that I will mispronounce his name. Im sure that I did. THE COURT: MR. BYCHAWSKI: THE COURT: Bychaw -- Bychawski? Is that -- no? Thats close enough, My Lady. Okay. Bychawski. Okay, thank you. Okay.

MR. SOLOMON: My Lady, for the purposes of my submissions today, if you have before you the ERCBs brief of argument, its reply brief, and the fresh statement of claim that will be most, if not all, of what we need to get through my submissions. THE COURT: lot of material, Mr. Solomon. I do. I have that, I reviewed it all. Theres a

MR. SOLOMON: Theres a lot of material, My Lady, and what I propose to do today is not stand here and read it all -THE COURT: Thank you.

MR. SOLOMON: -- to you in anticipation that Your Ladyship has taken the opportunity to review some if not all of it. And in anticipation that were not receiving a decision from the bench on anything today and that your decision will be reserved and you will in the fullness of time, review the materials. THE COURT: Thats absolutely correct. And Ill just tell you, right at the outset, that this is -- and -- and I have to say I canvassed with some of my colleagues, just in terms of volume, to be sure that I wasnt having a misread on this but clearly from everyones view, this a very complex case. Theres a huge volume of material. And even though Ive reviewed a bit through the material two or three times, just in terms of this case management, it would be impossible for me to give any kind of decision today. And theres eight of you, or eight counsel, I think, on this. Theres one of me. So Im

4 1 going to do my utmost to get back in as timely a manner as possible. But, yes, going into 2 today, you know youre not going to get an answer today on this. 3 4 MR. SOLOMON: And, My Lady, I -- I can advise you and maybe 5 the source of some relief that Im not going to be going through every issue that weve 6 raised in our briefs. That doesnt mean that weve abandoned issues; it simply means that 7 theres nothing additional that I feel I need to say on those subject matters. And so Im 8 going to try to do is get to some of the areas where I hope I can offer some assistance to 9 the court. 10 11 THE COURT: Can you -- I -- I -- just let me canvass with you 12 this, Mr. Solomon, and Ill -- and Ill ask. And counsel can listen carefully, and Ill ask 13 for input along the way too. 14 15 One of the struggles I have -- and this case management. For those of you that are in the 16 courtroom, this a less formal proceeding of one we might typically have in a trial setting, 17 if youre wondering why were having a back and forth discussion as people in the 18 courtroom. Im just letting you know that situation. 19 20 Part of case management is to deal with the process of moving large, complex litigation 21 along the way. So, Mr. Solomon, I -- there -- theres two issues here. There is 22 procedural matters that involve everybody and I -- I lump the striking aspect in the 23 statement of claim and moving that along and ultimately a statement of defence and so 24 on. And thats what we talked about and made some progress on arising out of the last -25 the initial hearing in Drumheller. And then our second case management in Calgary. So, 26 theres be huge progress made in -- in that regard. 27 28 But one of the little areas of concern in terms of my approach is, theres those processes 29 but I need you to help me pinpoint or to give me your thoughts in terms of prioritizing. 30 Like, what is the most important thing from the ERCB aspect? Are we talking about the 31 immunity argument? We talking about the striking? Be -- because I -- and I appl -- I 32 think the Crown immunity argument is much more substantive and I need to deal with 33 that in that fashion. 34 35 But there is, you know, some cross over. So, talk to me a little bit, Mr. Solomon, how 36 you see that unfolding and what -- what the priority there is. 37 38 MR. SOLOMON: My Lady, what youve asked for is entirely 39 consistent with what my intention was through my submissions today. Thats going to 40 be -41

5 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32 33 34 35 36 37 38 39 40 41 THE COURT: MR. SOLOMON: THE COURT: Submissions by Mr. Solomon MR. SOLOMON: In terms of whats important in the complexity, let me address those in reverse order. This isnt really complex so much as voluminous. When you work through the briefs, My Lady, virtually every issue comes down to a binary question. Its either one thing or another, and thats going to determine what you do. However, the volume is driven by the fact that there seems to be argument on every issue as opposed to simply selecting some and saying, Heres how well get to the end. In terms of going through this exercise, as I point out in my reply brief, we have two primary applications. One is what we colloquially refer to as striking but under the rules, rule 3.68, its either striking or judgment. Thats kind of a distinction without a difference in this case except that we dont want to confuse the term judgment there with summary judgment under part 7, because they involve different tests. So the plain and obvious test is the one that applies under rule 3.68. Im going to just the abbreviated term striking for whatever relief we may be seeking under rule 3.68. Whether its striking or judgment under rule 3.68, its just the striking application. THE COURT: MR. SOLOMON: application. THE COURT: All right. The other one is just the summary judgment Okay. -- the primary focus. Good.

Under part 7?

MR. SOLOMON: Right. What weve done in terms of process and on reflection Im not sure whether its necessarily helpful or that it may be a better way to do it, is weve said, Well, look, in both cases, the exercise starts with looking at passage in the statement of claim. And Im going to refer to the fresh statement of claim just as the statement of claim. And then we go and we apply the test under rule 3.68, striking test, and we apply the

6 1 summary judgment test. And if either one of those succeeds, that paragraph is out. 2 3 THE COURT: So why are you suggesting to me the priority is 4 looking under part -- 3.68 first then section 7? 5 6 MR. SOLOMON: It doesnt matter which one you do first. 7 Theres no magic, in terms of which one goes first or second. But in terms of process, 8 its easier to do it paragraph by paragraph in the statement of claim, and what youll see 9 when you go through that exercise is when we get to the substantive concepts in the 10 background, principally, public duty as opposed to private duty and the immunity clause. 11 The issues in both applications are the same. How you deal with them from a procedural 12 perspective differs. 13 14 And Im going to jump ahead of myself a little bit in order to assist with this. If it is the 15 case that were looking at, rule 3.68, you look at the statement of claim and you see what 16 words are used in it. You look then at the statute which I point to and I say, It creates 17 only public duties. 18 19 You look at the immunity clause, I say, You cant sue for this. And you determine 20 whether it is plain and obvious, assuming the content of the statement of claim to be true, 21 that the claim can not succeed. So thats exercise one. 22 23 On that same passage in the statement of claim, we go to part 7, which is the summary 24 judgment test. And we approach is somewhat differently. We start the same, we look at 25 the passage in the statement of claim. Then we look at the statute in this case, because 26 thats the primary thing Im pointing to, and I say, The statute creates a prima facie case 27 to support the proposition that the ERCB has a public duty and that nothing within it 28 creates a private duty. 29 30 Now, on that issue -- Ill call it the public duty issue. If you are satisfied that that creates 31 a prima facie case from my proposition, then the onus shifts to the plaintiff, Ms. Ernst. 32 And her onus is an evidentiary onus to show something to indicate that in this case, as a 33 matter of evidence, theres no -- there -- there is a private duty. 34 35 So in the summary judgment, we do not take the pleadings as true or even as arguments. 36 We take them only to frame the nature of the issue. So its a different process. 37 38 Then, under summary judgment, step 2 in this unique circumstance, we go to the 39 immunity clause and you have to ask yourself, based on what the provision in the 40 statement of claims says and what the immunity clause says, have I made out a prima 41 facie case for the proposition that Ms. Ernst may not sue the ERCB for this thing.

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And if I have, then the evidentiary onus on that issue shifts to Ms. Ernst. And she has to rely on something other than what she claims -- she has to rely on some evidence. Something that she can point to, other than her pleading, to satisfy you that my prima facie case has been defeated or can be defeated. So it cant be evidence from the floor and her statement of claim is not presumed to be true in that application. It simply frames the nature of the issue. Now, let me take a big, huge step back and see if I can frame the nature of the action and the overall issue. In Alberta, a place where the rule of law prevails, and prevails in a respectable way, where a person has a dispute about what a public board has done, they have remedies. They have remedies that existed in the common law for centuries. They have remedies that now exist through our rules of court. And while those remedies have changed over the centuries, they are effective remedies sought in these honourable courts everyday. There are hundreds of boards making thousands of decisions in Alberta routinely. If someone is unhappy with what a board has decided, their relief is to seek judicial review and they can then seek what we colloquially refer to as the prerogative writs, they are no longer prerogative writs in Alberta. They are now in the nature of those writs. So if youre unhappy with a decision of the Board, you bring an application by way of originating application for judicial review, seeking certiorari. And that allows the court to quash the decision if it is unreasonable or incorrect, depending on which standard of review applies. You do not get to sue the board. In this sense, while we shouldnt always confound appellate review and judicial review, in this sense though, its akin to appellate review. If, for example, Ms. Ernst doesnt like your decision, she doesnt get to sue you. She get]s to appeal you. Or in otherwise, nobody would want to be a judge of the Court of Queens Bench. They would be at risk of sued in every case. So public policy kicks in and creates a mechanism for judicial review, with prerogative writs or appeals from Queens Bench judges. If it is the case that you feel that a board ought to act and it doesnt act, then the prerogative writ of mandamus is available to you. And it allows the court, if the proper test is met, to compel the board to fulfill its duties. You dont get to sue them for not fulfilling their duties. And if its the case that a board is doing something that you say its not allowed to do, then one of the other prerogative writs kicks in and that is prohibition. And that allows the court to review the conduct of the board and to prohibit it if its appropriate to do so

8 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32 33 34 35 36 37 38 39 40 41 from carrying on the activity complained of. There are short limitations for judicial review. The one in the rules is six months. Some statutes have shorter ones. Ms. Ernst has not pursued any of those remedies that are available to everyone in respect of decisions of boards. In creating a board like the ERCB, what the legislature does is it says, Well, look, if youre only reviewable by the court, youre not personally at risk, then we can give you public functions, public duties. And we will. We want you to take the publics interest to heart and, in doing that, the legislature can -- and in this case did -- determine that the decision-makers on the board, the people implementing the statutory regime need to be protected from suit. So not only is it the case that remedies are available by way of judicial review as opposed to suing the board because their duties are public as opposed to private. But the legislature went a step further and said, Are you going to be immune from lawsuits and so now, you can fill your public duty without having to concern yourself with the personal well-being of yourself and your family and your assets because people cant sue you for the things that you do. Its all a highly sensible regime. The plaintiff made a limitation -- made a litigation choice, she chose to sue instead and thats what gets us to this application. Because I submit you cant. The Board has a public duty, no duty to Ms. Ernst. Ms. Ernsts interests can not prevail over the public duty. If it was the case that there was a private duty to Ms. Ernst, there would also be a private duty to Mr. Smith and Mr. Jones. And when those conflict, presumably anyone of them could sue the Board. It would create an impossible regime. So for that reason, she cant bring this action. Theres no pri -- private duty of care, only a public one; and then the other reason she cant bring it is because there is immunity. Now, this is not a claim that is novel and since used in some striking cases. This is a claim that is wrong. And we cannot confuse wrong with novel. If that were the case, we wouldnt need a striking rule because everyone whos wrong would simply be novel and their claim would be saved. And I submit -- and -- and I understand Im going out on a bit of limb in saying this, that when Your Ladyship considers this case, she should not consider Ms. Ernst wants, but rather her interests. If shes on this adventure, its better to stop her early. The foundational rules under the rules of court certainly suggest that that ought to be the priority. And while she may want something else, if shes going to fail, its better to fail early and focus on that part of her case that may have merit.

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And I say this in a context of a case that has an action number that starts with 0702. So it was filed in 2007 and were at the pleadings stage. And had she focussed on the merits of her claim against Encana, shed be through trial by now. And she would have whatever relief is due to her. I want to take you to the immun -- immunity clause and if you go to my brief at page 22, its reproduced there. THE COURT: Mr. Solomon? MR. SOLOMON: Can I just interrupt you a minute please,

Sorry, page 23.

THE COURT: We have an overflow of people in the courtroom. And, Im sorry, we have to keep the doorway open so if people cant make room for seating, Im going to have to ask you to leave. Cant have you ahead of the bar. I think thats inappropriate. So either scrunch together, or Ill have to have you out. Sorry, Mr. Solomon. MR. SOLOMON: My Lady, there is -- in my respectful view -and I say this as a officer of court -- no principle more important than the open court principle. THE COURT: Yes.

MR. SOLOMON: And if people want to watch these proceedings, I certainly have no objection within them coming inside the bar if we line up some chairs. THE COURT: with respect to that? MR. BYCHAWSKI: Okay, counsel -- any counsel have any issue

I would support that.

THE COURT: Okay. Everybody good? Madam clerk, I do have the consent of counsel that theres no issue with doing a row of chairs in front of the bar. UNIDENTIFIED SPEAKER: THE COURT: Thank you very much, My Lady. Thank you. Well try to accommodate you.

10 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32 33 34 35 36 37 38 39 40 41 Mr. Solomon, just direct me again, Ill find the materials while madam clerk is getting people settled. MR. SOLOMON: behind me. If -THE COURT: MR. SOLOMON: THE COURT: And I wont be distracted by people settling

Okay. -- youre not. Ill just carry on. All right.

MR. SOLOMON: Page 22, paragraph 85 is the immunity clause in section 43 of the ERCA. So page 22, paragraph 85. THE COURT: MR. SOLOMON: THE COURT: MR. SOLOMON: of the ERCB? THE COURT: I have so much -MR. SOLOMON: THE COURT: me. Ive got your other April stuff. Does it start, "Nothing," in section 10(2)? No. Okay. Are you looking at the brief or the reply brief

Oh, Ive got the wrong -- just a minute. Sorry.

I know. Its a lot. Ive got too much material here. Just bear with

MR. SOLOMON: Both of mine, My Lady, will have -- one will have a yellow cover and one will have a -THE COURT: MR. SOLOMON: THE COURT: Yeah, I --- buff colour. All right. Sorry. I have it.

11 1 MR. SOLOMON: Okay. This is the immunity clause. And what 2 I want to do is walk you through a part of it so we can frame the issue of what is 3 covered, whats not covered, what may or may not be covered and what you need to 4 decide about it. And, My Lady, in doing this, Im doing it in the context thats relevant 5 to the statement of claim in this action. So not for all purposes. 6 7 It starts with, "No action"; thats fairly clear terminology. And if we go a few words past 8 that so we can put it in, dot, dot, dot, "No action may be brought." And who can it not 9 be brought against? Well, effectively, the ERCB and anyone associated with the ERCB. 10 What can it not be brought in respect of? Well, no action may be brought against the 11 Board in respect of any act or thing done. Now, my friend says, Well, that doesnt 12 include omissions. I say, Well, act probably includes omissions because every act has an 13 element of omission. You did this but not that. 14 15 And so even a decision not to act, in my respectful submission, is an act in and of itself. 16 But that gets clarified further, because if you go down to the last ten words or so, its not 17 only in respect of any act or thing done, or a decision, order or direction of the Board. 18 So if it made a decision to do something or an order or a direction, then that too would 19 fall within the immunity. 20 21 Now, Ill add this. It is not my argument that omissions are excluded. I dont accept that 22 as correct. However, we can look at that issue and determine whether it applies to the 23 statement of claim and to what extent. So if you decide that the plaintiff is right on her 24 interpretation, that still doesnt mean that this fresh statement of claim continues as is. 25 26 Now, in the plaintiffs brief she says, Well, expressio unius exclusio alterius applies in 27 this case. If they didnt say omissions here but theyve said it in other acts, then you 28 should find that they meant to exclude omissions. I was in the Supreme Court of Canada 29 on that issue a year and a half ago, in a case that we cite in my brief, the 18 News 30 (phonetic) case. And I successfully argued that you cant compare statute to statute nor to 31 make that determination. It doesnt work that way. You have to look at the statute and 32 give it a robust, fulsome interpretation, bearing in mind the nature of the clause here 33 requires some careful reading of it. 34 35 I want to turn to the fresh statement of claim now with that brief brack -- background. 36 And not all of it is relevant to my client. But Ill take you to page 8, paragraph 25 of the 37 fresh statement of claim as a starting point. There we have the list of regulations. Those 38 are the regulations that we have put before you and that the plaintiff have taken some 39 issue on. So when you get to the question of whether these items are evidence in this 40 application, they are under the Evidence Act and we have in our reply brief set out the 41 authority for that.

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If you go to page 11 of the statement of claim, we can start at paragraph 36. Theres nothing prior to that that alleges any act or failure to act on the ERCB. So this is where we get into the substance of the issue. In paragraph 36, the plaintiff says that the ERCB failed to respond reasonably. Thats not an omission. Thats an act. They failed to response to a level that she suggests is reasonable. Its not a failure to respond at all. Its not they did not respond. And they failed to respond in accordance with, what she says, is their required process. Thats not a failure to respond, thats a failure to respond in a certain way. Its not an omission, its an act, but an act that she alleges lacks adequacy. She cant sue for that even on her own argument regarding the immunity clause, assuming that she is owed a private duty. And they say that the ERCB completely ignored her or directed her to the ERCBs legal counsel, who in turn refused to deal with her. Well, those are acts and decisions. Those are things they opted to do. They refused to deal with her. If shes right -- we dont say that she is, but if she is, by her own argument, she cant get past the immunity clause. Now, in paragraph 37 of the statement of claim she says, "The ERCB did not conduct any form of investigation." So, for now, that survives; as youll see, it falls apart momentarily. If we go to paragraph 38, she says that the ERCB breached the duty that it owes to her. And of course, you will be determining whether she does or doesnt, but how did they do that? Well, if you go to the last line: (as read) By failing to implement their own specific and published investigation enforcement scheme, failing to conduct any form of investigation and arbitrarily preventing the plaintiff from participating in the usual regulatory scheme. Arbitrarily preventing is an act, not an omission; and its a decision, not an omission. So, again, even on her own argument, that parts out. Take you back up to -- sorry, I was at 39 there; Ill take you back up to 38 for a moment. This is where she alleges a duty of care which we dispute, but then she defines that duty of care as requiring the ERCB to take reasonable and adequate steps. Now, we say thats owed to the public, not to Ms. Ernst. But in any event, if thats the duty, to take reasonable and adequate steps, we submit that that falls not within omissions necessarily, but within acts.

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It requires them to take steps would fall within omissions. Reasonable and adequate falls within acts. Its now qualitative regarding the acts as opposed to whether an act was done at all or not. And surely we can agree that an omission involves whether an act was done at all or not, but we cant gut the immunity clause (INDISCERNIBLE). And again, I dont accept their interpretation. But even on their interpretation, if were talking about this claim in its fourth iteration, where Ms. Ernst has had lots of opportunities to find a way to do this even by their own interpretation and not getting it. And then she says that they have a duty to conduct a reasonable investigation. Well, again, "reasonable" has to come out, because its qualitative. She cant sue for that. Take you to paragraph 40. And here we have one case of what appears on its face for the moment to be an omission, and the rest appears to be qualitative. And the qualitative parts, I submit, even on the plaintiffs own interpretation have to go. 40(a) we have failing to take reasonable steps; thats qualitative. 40(b), failing to adequately inspect; thats qualitative. (c) failing to adequately inspect. Ill jump down to (f) for a moment, failing to conduct adequate testing, and (h), failing to promptly inform plaintiff. Shes not suggesting there was an omission; shes suggesting that the act that was done was qualitatively inadequate, by her own interpretation of the immunity clause (INDISCERNIBLE). Ill go to (d) and (e) for a moment because there she actually talks about things that are just failures. That is failure to do X, failure Y. Sounds a bit like an omission till we get to paragraph 41. And this is where it all falls apart. She says: (as read) The ERCBs various omissions as listed above were taken in bad faith. I cant fathom how you can have an omission in bad faith. You can have a decision not to do something in bad faith, but as soon as you bring in intent, youre no longer talking about they forgot to do it. You are talking about they decided where, deliberately or maliciously or whatever, that theyre not going to do it. And so now were into decisions, and those are immune. She cant sue on those. And she characterizes the various omissions, all of them as having that level of intent and, therefore, as an act or a decision necessary.

14 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32 33 34 35 36 37 38 39 40 41 We go on -- and Im going to pick it up at paragraph 47. Here, Ms. Ernest is dealing with what she calls, An off hand remark. And she says that in response to It -- so thats not an omission, the ERCB seized on it -- thats not an omission, and then they used it as an excuse, she says, to restrict her speech by prohibiting her from communicating. Those are acts. There can no doubt about it, if were talking about this statement of claim, the fact whether omissions are included in the immunity or not doesnt change the outcome of this application. Paragraph 48, here shes dealing with the events involving Mr. Reed (phonetic), who informed Ms. Ernst that he had instructed all staff to do certain things. Okay. Those again would be acts, theyre not omissions. He did something, he decided something. Paragraph 51, Mr. McKey (phonetic), she says in the middle of that paragraph, "continued to ignore, deflect, and dismiss." Again, those are acts. Not omissions. In paragraph 52, she says: (as read) Mr. Mckey confirmed that the ERCB took a decision to discontinue further discussion. Well, decisions are expressly subject to immunity. In paragraph 55 she says that Mr. Reeds letter was a restriction on communications and that it was meant to punish. So, again, she is bringing in intent and shes referring to an act, or what she describes elsewhere as a decision. In paragraph 56, she refers to the decision to restrict her communication, the decision to continue such restriction. Again, those are decisions expressly covered by the immunity clause. And she says, in paragraph 57, that she was prevented from raising her concerns. Well, again, if she was prevented, its an act, not an omission. Further in paragraph 57, she says that her exclusion from the ERCBs process prevented her from raising certain concerns and exclusion which she says was part of decision. And then she says, in paragraph 58, the ERCBs arbitrary decision regarding prohibiting her from communication. Again, decisions and acts. Not omissions. So even on Ms. Ernst attempt to narrow the immunity clause, all -- or virtually all of her claims against the ERCB failed. Now, lets go back to how they failed. I submit they fail on the striking application because you can look at the claim, you can look at the law, you can determine that she cant ever succeed. I further submit that if you go to the summary judgment test under part 7, you must, I submit, look at it and say, The ERCB has made a prima facie case even on Ms. Ernsts own interpretation of the

15 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32 33 34 35 36 37 38 39 40 41 immunity clause, one that we say is too narrow. And she has put nothing forward to discharge her onus at that point. And therefore, her claim must fail. THE COURT: So, Mr. Solomon, youre arguing that -- or suggesting to the court in your submissions that she fails under both tests? MR. SOLOMON: THE COURT: MR. SOLOMON: to go back to this -THE COURT: Im suggesting that -If you do that analysis. If you -- well, sure. Let me -- I was just about

Okay. Okay.

MR. SOLOMON: -- and make sure that we get this, because the -the procedure that you go through is obviously important. THE COURT: Yes.

MR. SOLOMON: Not that complicated, just slightly different things. So when we go through rule 3.68 now, you look at the provision in the statement of claim -- Ive taken you to it. THE COURT: Yeah.

MR. SOLOMON: And Ive asked you to look at the act and to determine whether theres a public duty or a private duty. If you determine that the act creates only private duties on its face, then she is destined to fail unless theres something pleading in her claim that suggests otherwise. And in some cases, there is. You then take that same provision and you look at the immunity clause in terms of striking and youd say, Is it plain and obvious in light of this immunity clause that what she has pleaded -- not what she hopes she has pleaded or what she can convince you contrary to the claim -THE COURT: M-hm.

MR. SOLOMON: But what shes actually said is bound to fail. And in my respectful submission, she has a serious problem there on our interpretation. She has a roughly equal problem on her own interpretation of the immunity clause.

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So in my respectful submission under rule 3.68, you can decide on that basis that she cant ever succeed. You do not consider anything other than the pleading -THE COURT: MR. SOLOMON: THE COURT: Right. -- under rule 3.68. Right.

MR. SOLOMON: The pleading and the law. Were now done 3.68. Whether you find one way or another, you still have to do part 7 because theres obviously a reasonable opportunity that another court is going to look at this. THE COURT: Yes.

MR. SOLOMON: So findings in the alternative would have to be made in any event. Under part 7, youre going through different exercise. Were starting in the same place. THE COURT: M-hm.

MR. SOLOMON: Were looking at the provision of the pleading. Were saying is she admitted something here, or has she said something. So we look at what she said; we then look at what the impact of the same provisions of the act are. Okay, now, has the ERCB dismissed its initial onus -THE COURT: M-hm.

MR. SOLOMON: -- under the summary judgment test of demonstrating that it has a public duty, not a private duty, under its act. The pleading does not save the claim. The pleading frames the issue -THE COURT: Right.

MR. SOLOMON: -- but it is not evidence and it is not presumed to be true. Unless we say, Well, for the purposes of this application well take that admission. So you look at the act and you say, Okay, well, theres a public duty; theyve discharged

17 1 their onus now the onus shifts to Ms. Ernst, the evidentiary onus, has she put forward 2 anything that would shift that onus? And she cant say, Ive pleaded something. Thats 3 not an answer. 4 5 THE COURT: Right. 6 7 MR. SOLOMON: And then we go to the second issue that weve 8 raised, which is the immunity. And we say, Well, if you look at this immunity clause in 9 light of what shes pleaded, she cant succeed on this. Weve therefore established -- just 10 looking at the statement of claim and the statute that theres a prima facie case with the 11 ERCB (INDISCERNIBLE) And if she wants to fit into some exceptions she could create, 12 she has to again do that with some evidence. 13 14 So she cant point to her pleading and say, That saves me. She has to actually point to 15 something outside of her pleading that saves her. And when we get to the immunity, I 16 say, Look, this is a complete immunity. She says, This is not an immunity that applies to 17 omissions. And I say, I dont agree with you; but even if you are right, that doesnt 18 actually change the outcome in this application because youre not suing based on the fact 19 that there was no act; youre suing on the basis that there were acts undertaken in bad 20 faith to do things that you didnt want done or to not do things that you did want done. 21 22 Youre saying that there are decisions. So in that context, you fail either way. And then 23 Im adding that the foundational rules and the purpose of summary judgment and the 24 purpose of striking is to not drag parties, not just the defendant parties through needless 25 litigation. Through litigation that can determined early and fulsomely and correctly. And 26 in this particular case, not only would you be dragging the ERCB through it; it would be 27 dragging Ms. Ernst through litigations she doesnt need to have. She should focus on her 28 issues. 29 30 And, My Lady, you did in the last time we appeared before you seeking to argue these 31 issues, put them off and give Ms. Ernst an opportunity to try and get right. Shes drafted 32 the fresh statement of claim knowing that we had these complaints because she saw our 33 brief last time. So its either that she wont get it right; and I dont suggest that. Its that 34 she cant get it right. And its not some comment on her, rather; its the state of the law, 35 and it applies to her. 36 37 And, My Lady, I draw your attention to our brief, paragraph 38, which is at page 9. Im 38 not asking you to be paternalistic. Im telling you what the Supreme Court of Canada has 39 said: (as read) 40 41 It is essential to the proper operation of the justice system and

18 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32 33 34 35 36 37 38 39 40 41 beneficial to all parties that claims that have no chance of success be weeded out at an early stage. My Lady, I walked you through earlier the test for summary judgment, the process that you go through with the shifting evidentiary burden. And if you go to paragraph 40 of my brief, thats where the Court of Appeal of Alberta comments on that, or at least affirms the case, the Murphy Oil case. And thats one of the cases -- one of many that supports that interpretation. Lady, one of the issues in dispute in this application relates to whether you can rely on -or -- or whether you have to wait until theres a defence filed. You dont under the new rule. The old rule required that. It was after a defence has been filed you may apply, the new rule says at any time consistent with the early determination of cases that is now a priority in Alberta. There are a series of cases, My Lady, dealing with public duty and private duty. And in our reply brief, we deal with this somewhat exhaustively because in our respectful submission, of some confusion in the argument. Where there is a mediated relationship, there is no private duty that can be read into a public one. Im going to explain and -and what I hope are clear terms, what a mediated relationship is. Theres the case of the Medivac Helicopter (phonetic) that youll see in the materials. Thats a case where the Crown was a service provider in and of itself to people who are injured. Thats a direct relationship. There are then cases of mine workers, and with the mine workers there were specific circumstances that gave rise to broader liability. And then theres cases like Cooper (phonetic) and Edwards (phonetic). Those are the mortgage broker and the Law Society. And those are most akin to this. In those cases, what the court says is, Look, theres no private duty of care because theres a public duty of care. And theres nothing that creates a private duty of care in the circumstance because what we have is a party -- a person or an entity whos regulated. So in the case of the Law Society, the lawyer misusing his trust account was a regulated person. And then we have a person who is not regulated, the person who put money into the trust account and what the court says there is, Theres no duty of care to the person who is not regulated. Theres duty of care to the public. So you govern the lawyer for the benefit of the public but not any person within the public because those would be conflicting priorities.

19 1 2 The same with the mortgage broker. Where the court says, Well, look, its the mortgage 3 broker that is governed; everyone else in this is not a regulated person. And that is 4 referred to in the short hand as the mediated relationship. And so if you have two people 5 who are regulated, it may result in something else. And I dont think it does. 6 7 If you have a direct relationship with no intervening party who is regulated then you have 8 may a private relationship - so if its the Crown providing a service. Its not the case 9 here. 10 11 The case here is that theres a regulated party. Its Encana. And theyre required to do 12 things in accordance with the ERCBs rules, in accordance with Alberta law and Alberta 13 regulations that could go beyond the ERCB. And if they dont do so and theyve acted 14 contrary to law and Ms. Ernst has suffered damage as a result, then presumably she gets 15 relief from them. But she doesnt get relief from the ERCB -- from the ERCB on the 16 basis that they didnt adequately or at all regulate Encana, because the ERCB is not 17 providing a direct service to Ms. Ernst in priority to its public duties. And it cannot. 18 19 So when you go through Cooper and Edwards and Fullowka Mines and all of those other 20 ones, bear in mind that the distinguishing factor -- and that courts point this out in some 21 of those cases -- is whether the relationship is a mediated one or not. And a mediated 22 relationship simply means that the person who is alleged to have physically caused the 23 damage is regulated by the Board. And if so, the duty becomes a public one only. 24 25 My Lady, as I said at the beginning, Im not going to go through everything I say in my 26 brief. I wanted to hit on a few points to help guide the court. That does not mean that 27 weve abandoned anything in our brief. It simply means that I believe weve said it well 28 enough that we dont need to elaborate. If you have anything questions, Im happy to 29 answer those. Failing that, those are my respectful submissions. 30 31 THE COURT: Thank you, Mr. Solomon. And have to say, 32 your submissions and your overview have helped me a lot. Im not saying necessarily I 33 agree or disagree. Im just saying how you set it out has been quite beneficial and 34 hopefully to the other parties as well. Thank you. I have nothing arising at this -- at this 35 moment. 36 37 MR. SOLOMON: My Lady, might I suggest that this would be a 38 convenient time for the morning break as well? 39 40 THE COURT: Yeah, I think thats probably a good 41 suggestion. Ill come back down at 11:20. Okay?

20 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32 33 34 35 36 37 38 39 40 41

MR. SOLOMON: THE COURT: (ADJOURNMENT) THE COURT: you. Mr. Klippenstein . . . ? MR. KLIPPENSTEIN:

Thatd be great. Thank you. Thank you.

Thank you, everyone. Please be seated. Thank

Good morning, My Lady.

THE COURT: I just want to ask, did you -- Im assuming youve arranged a bit of an order among yourselves. But do you want to hear from Ms. McCurdy first and respond, or do you want to -- youre ready to talk now? Submissions by Mr. Klippenstein MR. KLIPPENSTEIN: Yes, Ive spoken with Ms. McCurdy, and it sounds like its okay if I proceed now and follow up -THE COURT: Perfect. Thats good.

MR. KLIPPENSTEIN: -- with -- from my friend, Mr. Solomon. I will be addressing part of Ms. Ernsts submissions relating to the freedom of expression Charter case. THE COURT: Okay.

MR. KLIPPENSTEIN: My colleague, Mr. Wanless, will be addressing the court with respect to the issue of a negligence claim. THE COURT: Okay.

MR. KLIPPENSTEIN: And I will also be addressing a number of the more specific issues, such as the potential Limitations Act argument -THE COURT: Okay.

MR. KLIPPENSTEIN: -- and a few others. My friend, Mr. Solomon, spends considerable time talking about the procedural issues of a -- of an application to

21 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32 33 34 35 36 37 38 39 40 41 strike versus a summary judgment application. I will postpone my comments on -- on those procedural issues, because I think Mr. Solomon was right in saying that it is useful for us to not get too hung up on that initially and to also focus on the substance. Not to say the procedural isnt important, but I am going to focus on the substance -THE COURT: MR. KLIPPENSTEIN: submissions about that -THE COURT: Okay. -- for a while and then, certainly, make some

Okay.

MR. KLIPPENSTEIN: -- procedural issue, as well. Before I begin those submissions, I will, perhaps somewhat unusually -- and taking note of My Ladys comment that this is, in it -- in its nature today, not quite as formal as a -- as a normal trial day -- note that Ms. Ernst is not in the courtroom today. And she was concerned that My Lady not interpret that as a sign of lack of -- of deep interest in the proceedings today or lack of respect for the court. And so she instructed me to convey the following to the court: (as read) I wanted to attend todays hearing, but I decided not to attend, because I feel strongly that my lawsuit should be heard in the judicial district of Drumheller, as it is the courthouse with the closest connection to my dispute. This is where I live, this is where my water is, this is where my coal bed methane wells were drilled, and this is where my water is contaminated. It seems to me that it is important to rural Albertans that disputes and harms that occur in our communities are also judged in our communities. Todays application is not a minor or a merely procedural step. It will determine a core issue of whether a landowner can sue the energy regulator for failing to protect rural Albertans from the harmful effects of the oil and gas industry. I have a lot of respect for this court, and because of this respect I feel it is important to make my position known. I will continue to request that all major applications be heard in Drumheller, as it is the judicial district with the closest connection to my dispute. So, with the greatest of respect, Ms. Ernst instructed me to convey that message to the

22 1 court. 2 3 THE COURT: Thank you for that. And I -- and Ill just 4 simply, for the record, remind everyone that Im respectful of her position as well. And 5 very careful consideration was given to the request to have the case management ask that 6 of the -- this matter held in Drumheller. And, in fact, I took the unusual step of having 7 further discussions with the Chief Justice, and -- and a lot of thought was put into it. And 8 it -- it just seemed to be appropriate to have it in Calgary for these purposes. 9 10 I agree that this -- the outcome of this will be a relatively major decision. I also want to 11 note that the offer of Ms. Ernst viewing this by closed-circuit TV in Drumheller as a live 12 proceeding, that option was certainly extended to her following the decision to have the 13 case management in Calgary. And that option remains open to her at any time we do 14 have a proceeding of this nature in Calgary. So thank you. 15 16 MR. KLIPPENSTEIN: Thank you, My Lady. What I would like to do 17 initially is to discuss the claim by Ms. Ernst that her freedom of expression as guaranteed 18 by the Charter of Rights was infringed by the ERCB. 19 20 That aspect of her claim is described in the statement of claim beginning at page 12, 21 paragraph 42 -- and I apologize, Im having a little trouble with my voice; but I find the 22 more I talk, the better it get -- and is dealt with in the legal brief at page 24, beginning 23 with paragraph 83, for convenience of the courts reference. 24 25 Im going to outline in broad strokes what Ms. Ernsts claim in that regard is. Basically, 26 she attempted to communicate with the ERCB as the regulator and enforcer of oil and gas 27 issues relating to safety and land protection and the environment. She was somewhat 28 critical of the way the ERCB handled it, in -- in particular in relation to her views that her 29 land -- her land and water was being contaminated by fracking. 30 31 And she expressed her views to the Board, but also publicly in -- and to -- to the public 32 media; had her concerns raised in the legislature; spoke about her concerns publicly to 33 many individuals in many communities; and had an ongoing communication with the 34 ERCB at a detailed level about her concerns that her land and water were being 35 contaminated by fracking. 36 37 At some point, however, the Board made a decision to stop the communications between 38 Ms. Ernst and the Board. In fact, the -- the -- the Board returned a letter that she sent to 39 the Board, returned it unopened. And for a period of in excess of a year, Ms. Ernst was 40 left in the position of total silence from the government agency that has the extensive 41 responsibilities under the statute to regulate all aspects, essentially, of the oil and gas

23 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32 33 34 35 36 37 38 39 40 41 industry. So she was left in a void. What Ms. Ernst says in this claim, is that she has a right of freedom of expression, that she was exercising it, that that right was breached by the ERCB by essentially blocking her expression. She says that freedom of expression is essential in a democratic society. Its one of the core underlying values; that that includes the right to criticize, and it also includes the -- the right, in a democratic situation, to have your communications received by the government. And those are important words, in terms of the legal claim, that your -- the right to have the communications received by the government. In this case, broad -- the government, broadly speaking, includes the ERCB, in my submissions, for this purpose, because it is an agency created by the government with very large powers and ron -- responsibilities over oil and gas sector and the -- the safety and -- and management of land and water and environmental issues. I am not going so far, and Ms. Ernst is not going so far, as to say that the Charter right of freedom of expression gives her the right to demand of government, or of the ERCB, a hearing, a formal hearing or that they do what she wants. That would take things much too far. And I will go through shortly some of the decisions of various courts saying, Just because you have a right of freedom of expression that is constitutionally guaranteed doesnt mean that the government or an agency of the government has to give you a platform to speak on. You dont -- you dont automatically have a right to a megaphone. You dont have a right to an audience. So those cases are mentioned by my friend, and I will go through some of those. What Ms. Ernst is saying, is that the Board has to at least receive her expressions as a basic, minimal threshold level of her right of expression. They cannot simply slam the door in her face and walk away because they feel like it. And -- and thats whats happened. I -- again -- and Ill come to this again; I use the example of the letter from Ms. Ernst to the Board that was returned unopened. And there are several other specific examples that are used to -- to highlight. The general idea is that she couldnt -- she -- she was not being heard at all by the Board, as far as she could tell. And, again, I dont want to push this too far. Thats not what were saying here. Were not -- because then many people will say, Wait a minute, you have a right of freedom of expression. But if everybody says that, I can automatically require the government to sit

24 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32 33 34 35 36 37 38 39 40 41 and have a meeting with me or read everything that I write, most people could see, in a moments reflection, that -- that that can go too far. It can be too much. But Ms. Ernst -- Ms. Ernst would have liked, would have liked some of those things. But thats not as far as this legal right goes, in my submission. But the right -- and -- and my friend, Mr. Solomon, in his le -- in his legal brief, I think, fails to -- to recognize that there is a step that is important, of recognizing the right of freedom of expression without having to go all the way down the road. And my friend, Mr. Solomon, seems to suggest that Ms. Ernst is saying she has a constitutional right to be listened to. And in a way, thats partially true, but its a little ambiguous to say, a right to be listened to. Because what does that mean? Does that mean they have to convey a -- have a meeting with somebody to listen to the whole thing for a whole afternoon? I mean, that can get unworkable. And this -- this isnt being pushed that far. This is -- this is saying, at a minimum, a right to have the communications, her free expression, received. Now, that is a -- a sort of basic threshold level of right that is asserted for freedom of expression. And then that links, fundamentally, to the fact that we live in a democracy and that the government, in some way, has to listen to everybody, to ordinary people. That doesnt mean it has to always do what anybody wants, obviously. But the point that Ms. Ernst is saying, There has to -- communications that her freedom of expression are a part of, have to be received by the government. And here they werent. There was a deliberate, arbitrary, punitive decision and set of actions that said: We will not receive your commu -- communications any more. In fact, were going to send them back without even looking at them. And if, in a democracy where the government says, We do have to listen to people, ultimately, at the end of the day -- because that is fundamental. You cant just say, We just happen to not like you and youve been criticizing me too much, so I am returning your letter unopened, so there. And thats what they did to Ms. Ernst. Now, I understand, I think we all understand, that it could be un -- unworkable and extreme if the -- the right of freedom of expression allowed anybody to write long, long letters and require government officials to read them from beginning to end or to -- to say, Here are my 15 points of complaint; I want a two-hour meeting so that I can explain them to you, and then you tell me why youre not listening to me. That can go too far, and I want to recognize that. But thats not what happened here. And so the -- the -- the freedom of expression doesnt have to go that far. And it is

25 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32 33 34 35 36 37 38 39 40 41 helpful for everyone if that step of a right to be -- have your communication received is recognized. Its good for the government. If we all know that the government has to receive it, whether they have to read the letter from beginning to end, you know, sometimes you just cant read everything. And sometimes you get stuff, you know, when its the tenth letter from somebody and -you know, and you say, Okay, Ive seen this before and I know Ive handled it responsibly and I can only do so much. That -- you know, that is sometimes necessary. But not saying, I am -- we are not communicating with you anymore, were not opening your letters, were sending them back. Now, just to be more specific from the pleadings on that point, if I could ask My Lady to turn to -- and -- and I might add, this is particularly the case when an agency such as the ERCB has the exclusive jurisdiction to deal with these sorts of issues in the -- in the oil and gas sector. The legislature has said, Everything now goes to you; from a -- a mandate to -- to develop the industry, to a mandate to protect the environment, to protect the water, its all yours, basically, ERCB. And then the ERCB creates an extensive policy and plan for enforcement and compl -- compliance, opens offices all over the province, publicly sends out all -- or publishes all kinds of assurances to the citizens that the safety rules and environmental rules are being enforced. So in that context, it is especially important from the point of freedom of expression, that a citizen can say they have received my communications, and I understand that they know that. So in the statement of claim, paragraph 42 notes that: (as read) The ERCB is authorized by the legislature as the agency responsible for regulating all aspects of the oil and gas industry and that the ERCB has established a specific forum and process for communicating with the public and hearing public complaints and concerns. Paragraph 43: (as read) The ERCB has invited and encouraged public participation, including through the compliance and operations band -- branch and its field surveillance branch, and emphasizes the importance of public involvement in the regulation of oil and gas development in

26 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32 33 34 35 36 37 38 39 40 41 Alberta. Paragraph 45: (as read) Throughout 2004 and 2005, Ms. Ernst frequently voiced her concerns regarding negative impacts caused by oil and gas development near her home through contact with ERCBs compliance investigation and enforcement offices and through other modes of public expression. Paragraph 46: Ms. Ernst was a vocal and effective critic of the ERCB. Her public criticisms brought public attention to the ERCB in a way that was unwanted by the ERCB and caused embarrassment within the organization. Paragraph 47: Ms. Ernst pleads that as a result of and in response to her public criticisms, the ERCB seized on an offhand reference to (INDISCERNIBLE) made by Ms. Ernst, and used it as an excuse to restrict her speech by prohibiting her from communicating with the ERCB through the usual channels. These serious restrictions greatly limited her ability to lodge complaints, register concerns, and to participate in the ERCB compliance and enforcement provis -- process. Then to particular examples, paragraph 48: (as read) In particular, in a letter dated November 24th, 2005, Mr. Jim Reid, the manager of the compliance branch of the ERCB, informed Ms. Ernst that he had instructed all staff at the compliance branch of the ERCB to avoid any further contact with her. So that is slamming the door to her communications. And, again, I am not suggesting that the -- the right of freedom of expression, the Charter right, the constitutional right, goes so far as to say that Mr. Reid has to have a meeting with her. I mean, it would be good, probably good for everybody, for her to be listened to more. But the constitutional right of freedom of expression does not require that. But what it -- what it prohibits, in my view, is what happened here. He -- the -- Mr. Reid took the positive step of

27 1 instructing all staff to avoid any further contact. 2 3 Then, paragraph 49: (as read) 4 5 On December 6th, 2005, Ms. Ernst wrote to the ERCB. This 6 letter was returned unopened. 7 8 It wasnt even, you know, heard at that point. It wasnt received. Paragraph 53: (as read) 9 10 On October 22, 2006, Ms. Ernst again wrote to Mr. McCrank to 11 request that she be permitted to communicate unhindered with the 12 ERCB like any other member of the public. 13 14 So although Ms. Ernst is saying, This is a constitutional right of freedom of expression 15 that we have here, that she is relying on, shes not seeking, as in some cases, that she get 16 government funding to broad -- to create broadcasts. Shes not seeking that she has 17 access to some, you know, special way of getting an audience. So it is a basic threshold 18 level that she is seeking. 19 20 Now, again, she hopes that if she does get listened to, her communications are received, 21 that it will make a difference in the long run; that she has good ideas; that she -- her 22 concerns are legitimate; that it is good for the environment and for the public interest if 23 her concerns are taken seriously. 24 25 She -- she wants all that. But in -- in this particular claim, it doesnt go so far as to ask 26 for some kind of special treatment for her. This is -- what shes asking is, is for 27 protection for the basic freedom of expression right. 28 29 THE COURT: So let me ask you this, Mr. Klippenstein. The 30 ERCB has given -- has parameters set out in the legislation. And if you -- youve 31 indicated that that was her opportunity and course of action to take. Now, theres also a 32 protocol and procedure set out, in terms of when a decision is made by that entity, there 33 are steps to be taken through administrative law procedures. 34 35 So explain to me, so I understand, how -- how that ties in. As I understand it, from all of 36 the material before me, she did not take steps to have that particular decision of no 37 communication reviewed by anyone, as I understand it. And this course of action, in 38 terms of a litigation, has been chosen. Am I -- do I understand that correctly? 39 40 MR. KLIPPENSTEIN: Its partly correct and -- and partly, I may 41 suggest, a -- a little differently. And I know my friend, Mr. Solomon, emphasized that

28 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32 33 34 35 36 37 38 39 40 41 point this morning. THE COURT: No, and -- and I -- the reason I raise this, or direct your attention, I understand the argument that you make under section 2 of the Charter. I understand that and her position where she comes from. But we -- weve got, in terms of the case management and how this moves forward and the considerations I need to make, not in terms of the finality of that argument, but how we -- how we process it and what the correct approach to this is. Whats the link? How do we tie this together to litigation versus the administrative law process? MR. KLIPPENSTEIN: to get to. THE COURT: Thats a very important point that I was going

Okay.

MR. KLIPPENSTEIN: And that raises the question of: What is the procedure for implementing a claim under the Charter? That is probably explained by two things. And if I -- with your permission, if I may hand up several pieces of paper, one of which is a decision of the Court of Appeal in Prete in Ontario, and one is some excerpts from the Charter for convenience. THE COURT: Mr. Klippenstein? MR. KLIPPENSTEIN: THE COURT: Okay. Do counsel have a copy as well,

Yes, I provided -Okay, thank you.

MR. KLIPPENSTEIN: -- copies of the decision. I havent provided copies of the excerpts from the Charter, although Im sure my friends can recite that in their sleep anyway. First of all, in the one-page excerpt from the Canadian Charter of Rights and Freedoms, paragraph 24(1) says: (as read) Anyone whose rights or freedoms as guaranteed by this Charter have been infringed or denied may apply to a court of competent jurisdiction to obtain such remedy as the court considers appropriate and just in the circumstances.

29 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32 33 34 35 36 37 38 39 40 41 That is the foundation step 1, an application to the court. In the decision of Prete, which Ive provided to My Lady, again, this is from 1993, a decision of the Court of Appeal, as the courts were beginning to figure out how to use this -- this Charter. At paragraph 7, theres an indented, long paragraph and -THE COURT: Yes.

MR. KLIPPENSTEIN: -- and halfway through that, near the right-hand side, theres a sentence that begins, "The question arises then." THE COURT: MR. KLIPPENSTEIN: Yes. (as read)

The question arises then, whether section 24(1) of the Charter confers a right to an individual to seek a remedy from a competent court. In my view it does. When a person can demonstrate that one of his Charter rights has been infringed, access to a court of competent jurisdiction to seek a remedy is essential for the vindication of a constitutional wrong. The eff -- the effect of that is that this -- the Charter claim is a -- is a lawsuit for remedies, in this case financial compensation, in the same way as a tort, for example, or a contractual claim. Theres no contractual claim in this action, but there is a tort claim for -- for negligence. The two, in my respectful submission, should be handled exactly the same from a procedural point. They can go side by side in the same proceeding, treated not differently at all. Theres some legal arguments that apply here and there and so forth, but they are the same. They are legal claims to the court for compensation as a remedy. And so going forward they, in my submission, would be handled essentially the same. That -- that, for example, is different from the possibility that this was an application for judicial review, you know, as an exercise in administrative law. This is not that, in my submission. THE COURT: MR. KLIPPENSTEIN: happily offer a simple solution. (INDISCERNIBLE). So this is one of those cases where I can

30 1 2 THE COURT: Thank you. 3 4 MR. KLIPPENSTEIN: Now, since I have My Ladys attention directed 5 to the Prete case, I will actually refer to the case for something else, which is also a 6 significant point. And that is the question of whether the statutory immunity section 7 passed by the Alberta legislature has an effect on this freedom of expression Charter of 8 Rights claim. 9 10 And in my submission, the common sense position has been borne out by the courts, 11 which is that a provincial legislature cannot pass a law that infringes upon a constitutional 12 Charter right. Its an exercise of the basic idea that the Constitution overrides an ordinary 13 act of the legislation. 14 15 That is dealt with by this Ontario Court of Appeal decision in paragraph 8 that says: (as 16 read) 17 18 The reasons of Lamer J., standing alone, are strongly persuasive 19 that a statutory enactment cannot stand in the way of a 20 constitutional entitlement. Section 32(1)(b) of the Charter 21 provides that the Charter applies to the legislature and government 22 of each province. The remedy section of the Charter would be 23 emasculated if the provincial government, as one of the very 24 powers the Charter seeks to control, could declare itself immune. 25 26 27 Now that, in my submission, is a very succinct and important sussing out of some key 28 concepts here. Now, again, for convenience in the one page collation of the Charter 29 sections which I handed to My Lady a moment ago, we have section 32(1) quoted, which 30 the court refers to. The exact wording is: (as read) 31 32 This Charter applies (b) to the legislature and government of each 33 province in respect of all matters within the authority of the 34 legislature of each province. 35 36 So my friend, Mr. Solomon, this morning went to considerable lengths to talk about 37 aspects of the claim here which he said were actions rather than omissions and that, 38 therefore, the statutory immunity section barred a claim based on that. 39 40 This is what I think that fails to take into account. If Im correct in saying that Ms. Ernst 41 has a Charter of Right freedom of expression right that was breached here, and can sue on

31 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32 33 34 35 36 37 38 39 40 41 that in a court for compensation and remedies, then that statutory immunity clause cannot stop it. That takes us beyond acts, omissions, interpretations of the wording of the statutory immunity clause. It is a simple, bare fact of constitutional law that if this Charter right, the constitutional right of freedom of expression, exists the provincial legislature cannot, through a statutory immunity clause, block it. THE COURT: Well, thats, as I understand you, vis-a-vis her position, in terms of communicating with the ERCB. But if a court were to find -- were to accept Mr. Solomons position, if that were the case -- and Im not saying which way -- I -- I dont know which is the right way. But if one accepted that, then youre saying that, if I understand your argument, that there would be the exception with respect to the decision on prohibiting her from communicating any further with the ERCB. MR. KLIPPENSTEIN: THE COURT: that, if one found immunity? Yes. But are you arguing that it goes further than

MR. KLIPPENSTEIN: My colleague, Mr. Wanless, who will be dealing with those issues in the real -- in -- in the context of the neg -- negligence claim. THE COURT: MR. KLIPPENSTEIN: constitutional Charter right. THE COURT: MR. KLIPPENSTEIN: THE COURT: MR. KLIPPENSTEIN: THE COURT: Okay. Now, a negligence claim is not a -- a

Of course. So the two can be handled differently by -Okay. Okay. -- a statutory immunity clause. Okay.

MR. KLIPPENSTEIN: It -- it -- there -- my friend could argue that the statutory immunity clause bars a negligence claim but does not bar a constitutional Charter freedom of expression claim.

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THE COURT: MR. KLIPPENSTEIN: am putting forward for Ms. Ernst. THE COURT: MR. KLIPPENSTEIN: your -- your work. THE COURT: case, Mr. Klippenstein.

Okay. And that is the position, succinctly, that I am --

Okay, thank you. Yeah. So, unfortunately, that does complicate

Theres -- theres nothing simple about this

MR. KLIPPENSTEIN: But -- but that is -- that is a fundamental point and that does -- again, the -- the two claims, the freedom of expression claim and the negligence claim, are both claims for breaches of rights seeking remedies that can go -going back to what My Lady said before, can go in parallel. They dont have to be treated that ones in administrative law, or -- or this -THE COURT: MR. KLIPPENSTEIN: THE COURT: MR. KLIPPENSTEIN: purposes. THE COURT: Right. -- this is an appeal. Okay. They are structurally the same for procedural

Right.

MR. KLIPPENSTEIN: But My Lady has identified one difference, which is the statutory immunity clause I say, you know, might apply to one. My colleague hopefully will demonstrate that, in fact, it does not. THE COURT: MR. KLIPPENSTEIN: freedom of expression claim stands. THE COURT: Okay. But regardless of that, in my submission, the

Okay.

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MR. KLIPPENSTEIN: THE COURT: MR. KLIPPENSTEIN: THE COURT:

Now -I -- I understand your position. Yeah. Yeah. Okay.

MR. KLIPPENSTEIN: Now, I mean, and thats interesting because some of the court decisions take pains not to take the freedom of expression right too far, which is why many of the cases say, Youre not entitled to demand that a government provide you a platform or a megaphone. You know, because we all can imagine, like, the funding requirements. Theres cases saying, You cant -- you cant -- the government can say, Were funding this group to consult on a -- on an issue -THE COURT: M-hm.

MR. KLIPPENSTEIN: -- but were not funding you. And that they can do. You dont have a right to say, I want funds to speak. You know, theres a case on the Quebec referendum that says the Quebec government can set the rules for the referendum and exclude people from other provinces who move to Quebec. And thats not -- your right of freedom of expression doesnt go that far. And -- and so -- because you -- precisely because it is constitutional, it is so protected and so forceful, and overrides a provincial statutory legislation, you know, immunity clause, or other things. It is -- it -- it would -- it would overload the wagon if -THE COURT: M-hm.

MR. KLIPPENSTEIN: -- the freedom of expression went that far and overruled everything. And I -- I have to beg -- it feels like Im arguing against myself here, but I -- I dont think so. No, the point is simply that the freedom of expression right that Ms. Ernst claimed, as Ive said, you know, repeatedly, is -- is the right to be -to -- to have your communications received. And the thing about what happened here is, that it -- it went -- the Board, in my submission, went so far that its actually a bit of an unusual case. You dont have many situations where an agency of the government says to somebody, We are not communicating with you anymore, period. And were returning your letters. Im -- I --

34 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32 33 34 35 36 37 38 39 40 41 Im not sure Ive ever heard of a case like that before. And that -- well, Ill come back to part of that shortly. The -- the legal argument, the legal brief, goes through some points which I wont repeat, because in -- in a way, theyre kind of simple. Like, the court -- the courts have said, What -- what -- what is considered expression? Thats in the fact, I mean, I -- I am submitting its kind of easy, I think, to have Ms. Ernsts letters and complaints and -- are expression. I will specifically address the issue that this, today, is a preliminary application, whether you consider it under rule 3 or rule 7. And because what I am suggesting right now is a constitutional Charter right, the courts have said, be extra careful in dismissing a Charter right claim at a preliminary stage. Now, again, that is one of those ways in which, I think, My Lady may -- may be required to treat the Charter claim just a little bit differently. THE COURT: M-hm.

MR. KLIPPENSTEIN: And Ill read some of the cases in a moment. But the result might be that -- that this court might say that the test I have to apply at a motion to strike or a summary judgment, works a little differently for a Charter claim. And -- and I might, you know, and I -- I am suggesting that the court should be more reluctant to strike out a Charter claim at a preliminary stage than -- than other causes of action. And theres considerable authority for that, which I will -- I will note. At tab 29 of the plaintiffs book of authorities, in a case of Public Service Alliance of Canada, if the court could turn up that volume II of the plaintiffs book of authorities. THE COURT: MR. KLIPPENSTEIN: Okay. At the tab 29.

THE COURT: Go ahead, Mr. Klippenstein. Ive got so much material, Im not going to hold you up here. MR. KLIPPENSTEIN: That is the case of the Public Ser -- Service Alliance of Canada, and at page -- page 10 of that decision, which is the last page, in paragraph 40, the prothonotary of the federal court says in the underlined portion: (as read)

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I reiterate the point already made. A motion to strike for want of a reasonable cause of action is an unlikely vehicle in cases which com -- comprise substantive Charter claims that raise issues of general importance and call for a contextual approach in the assessment of fact. So that is in fact, in my submission, a different test to apply under rule 3 and rule 7, to claims based on the Charter, which this is. Similarly, at tab 30, in the decision of Pacific Press, a decision of the British Columbia Supreme Court, that is a Charter claim, a Charter rights claim, such as the freedom of expression claim here. And the court says, in paragraph 12: (as read) The nature of the balancing of interests required by this test [which is the section 1 of the Charter] in -- requires, in my respectful view, a careful analysis of the circumstances within the context of the factual matrix from which they arise. Such a process does not easily lend itself to the type of summary determination sought here. Then the court quotes, in paragraph 15, a decision of the Supreme Court of Canada, Justice Cory, where the court says: (as read) Charter decisions should not and must not be made in a factual vacuum. To attempt to do so would trivialize the Charter and inevitably result in ill-considered opinions. So, in my respectful submission, again, whether the court considers this as a rule 3 or a rule 7 application, motion to strike, or summary judgment, the freedom of expression Charter part of the case, which can be identified separately -THE COURT: MR. KLIPPENSTEIN: THE COURT: Yes. -- has a different test. Okay.

MR. KLIPPENSTEIN: Let me for a moment, as I mentioned before that I would, refer My Lady to a number of authorities commenting about the importance of freedom of expression. In -- in a sense, its perfectly obvious to us all, but the courts

36 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32 33 34 35 36 37 38 39 40 41 have reiterized -- reiterated in, you know, the -- the fundamental nature of this. Beginning at tab 31, of volume II, in the case Committee for the Commonwealth of Canada, which was a decision of the Supreme Court of Canada. Once again, thats at tab 31, page 25 of that decision, paragraph 69. The court says: (as read) The libert -- liberty to comment on and criticize existing institutions and structures is an indispensable component of a free and democratic society. It is imperative for such societies to benefit from a multiplicity of viewpoints, which can find fertile sustenance through various media of communication. So the court emphasizes the -- the -- using the word, "indispensable component of a free and democratic society." The court also talks about criticizing institutions and how that -that -- thats important, and also talks about having "various media" of communication. And -- and, in a sense, I think this is almost so obvious to all of us that it doesnt need to be repeated, but the -- the courts have -- have said that. And in this case, again, the -- the right of freedom of expression that Ms. Ernst is asking for is simply the right to have her communications received. And I keep saying that, because its easy to mischaracterize this as saying, I want some special platform. And I -- in my submission, even granting Ms. Ernst the right that Ive just expressed, helps the -- helps, perhaps in a small way, the values and principles that Ive just referred to from the Supreme Court. Because instead of having a door slammed in your face, someone in the government agency at least has to receive your communication. The door is open a little bit. Its better to -- to -- to have a requirement to -- to listen a little bit, at least look at the letter. You know, maybe theres something there. Dont just automatically say, Because it comes from Jessica, Im throwing it in the garbage; Im sending it back. THE COURT: Okay.

MR. KLIPPENSTEIN: You know, just look at it. You dont have to read the whole thing, maybe. You know, so its not a -- it -- it is on the one hand not a -- a huge demand on resources, but its also not nothing. THE COURT: MR. KLIPPENSTEIN: Okay. You know, you could say -- you could say, Oh,

37 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32 33 34 35 36 37 38 39 40 41 well, what do you want them to just open the letter and throw it in the file? You know, thats trivial. Youre making a Charter case for a trivial -- but Im saying that -- that is a healthy step. Its good that we recognize we cant slam the door arbitrarily on somebody just because we dont like something they said. And some good can come out of that. THE COURT: So I understand the -- the argument that youre making, Mr. Klippenstein, and the position that youve taken, in terms of this courts consideration of the test that I ought to apply with respect to this aspect. MR. KLIPPENSTEIN: THE COURT: Okay. I will try and move on then. Okay.

MR. KLIPPENSTEIN: Very -- very quickly, at the next tab, tab 30 -well, still on the same tab, paragraph 94, theres a quote from, I think, Mr. Justice Cory when we -- when he was -- when -- when -- when he was a member of the Court of Appeal, at the bottom of the page, very quickly: (as read) Its difficult to imagine a more important guarantee of freedom to a demo -- democratic society than that of freedom of expression. A democracy cannot exist without the freedom to express new ideas and to put forward opinions about the functioning of public institutions. And -- and so forth. And he says: (as read) The concept of free and uninhibited speech permeates all truly democratic societies. And the court uses the word permeates. And this may be an example, in -- in this case, of -- of permeating as, you know, is -- this is a -- the ERCB is a separate agency. Its not a newspaper. Its a regulatory agency, but it is still a good thing if it at least has to receive the communications from Albertans, and cant just say, I dont like you, Im shutting the door. The -- the factum of Ms. Ernsts points out two ways in which the ERCBs decision to -to not communicate, to not even receive communications, breaches the Charter principles of freedom of expression. One is that it punishes her. She was a vocal critic, and they punished her. They -- by saying, Were not going to even receive anything from you anymore. I exaggerated a

38 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32 33 34 35 36 37 38 39 40 41 little bit in that last comment. I exaggerate, but a -- a little bit. But, you know, sending under -- sending letters back unopened and so forth. There are several cases that talk about how punitive actions are not a sufficient reason to breach a -- a -- to breach a Charter right. At tab 32, the case of Haydon v. Canada, a federal court decision, paragraph 62: (as read) In the present case -- case, both karties -- parties concede . . . And I guess that by the time it got to this case the government conceded, I guess. . . . both parties concede that the governments conduct, namely that of issu -- imposing a reprimand and instruction upon the applicants, constitutes a limit of the applicants freedom of expression within the meaning of subsection 2(b) of the Charter. In other words, a reprimand, a punitive action based on what theyd said, was a breach of their Charter freedom of expression. Similarly, the next tab, paragraph 33, Pridgen v. University of Calgary is another punishment case. And in that case, several -- and I believe it was students who had some restrictions imposed on them by the university for something theyd done. Paragraph 75: (as read) The effect of the review committee was to sanction the applicants and prohibit them from publicly espousing their critical views regarding Professor Mitra while studying at the University of Calgary. The purpose of the order is to restrict the applicants freedom of expression. So that can be seen as both a -- a punitive action and a restriction action. In my submission, both of those would apply to what -- to the -- to the position the ERCB took against Ms. Ernst, both punitive and restrictive; punitive in the sense that we are restricting your freedom of expression, and restrictive in the sense were just not going to -- were not -- were not going to even look at your mail any more. Now, those again are set out in the -- in the legal brief and at -- with some more -- more detail. Now, in -- in my friend, Mr. Solomons, submissions, he quite rightly makes much of a distinction that the courts have identified between a positive right and a negative right. And in the case of Charter rights, the general position the courts have -- have developed is that you cant ask as a -- based on one of your Charter rights, that the government do something positive. Instead, youre asking that the courts not do -- sorry, the government

39 1 not do something negative. 2 3 And the -- the metaphor that is sometimes used in the cases is that a Charter right of 4 freedom of expression, for example, does not give you a right to a megaphone from the 5 government. It just means they cant gag you. So -- and those -- those ca -- theres a 6 series of cases that are very important, and my friend has very -- very competently set out 7 those. 8 9 And the key point that I would make is that Ms. Ernst, in seeking from this court a 10 remedy for the freedom of expression right as Ive outlined it, is not saying that this is a 11 positive right which demands something from the government. And that is a big 12 distinction. 13 14 She is saying that the right to simply receive communications is not a positive demand. It 15 is -- especially when this occurs in a board that has a big process for receiving complaints 16 and says, We will ensure that all complaints are acted on and so forth. So it is -- it is not 17 a -- a demand upon the government, it is just saying, Dont block me; dont slam the 18 door. 19 20 THE COURT: M-hm. 21 22 MR. KLIPPENSTEIN: Now, the reason -- or -- or -- or what the courts 23 have recognized is that -- that if there is a sort of pre-existing fundamental right that is 24 not making the -- the -- that is not making an additional new demand on the government. 25 Its -- so, therefore, its not a -- a positive claim. 26 27 An example is the case of Cunningham at tab 38. And in paragraph 55, this was a 28 decision of the Alberta Court of Appeal, the court makes an important distinction between 29 that positive right and negative right claim. And does so by referring to the case of Baier. 30 And Baier is a very important case, setting out the limitations of a Charter rights claim. 31 32 In paragraph 55, in the -- the last paragraph, the court says: (as read) 33 34 The chambers judge then relied on Baier v. Alberta and concluded 35 that under the first of the three factors, the appellants claim was 36 not founded in a fundamental freedom but rather was one seeking 37 access to a statutory regime. 38 39 Thats a key distinction in the -- in the various cases on -- on freedom of expression. 40 And just as in the sentence that Ive just highlighted, Ms. Ernst is relying on a 41 fundamental freedom. And its not based on a particular statutory regime. It -- it could

40 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32 33 34 35 36 37 38 39 40 41 look that way, but accurately understood, its not. Paragraph 56 continues that point. And the Court of Appeals says: (as read) The Baier analysis applies when legislation itself gives rise to a right sought to be protected. If, however, that right existed before the legislation came into force, then its incorporation into a statutory regime only crystallizes the pre-existing right and sets standards for acc -- accessing it -- for accessing it. And that is what characterizes the situation in the claim of Ms. Ernst. Shes saying, I have a pre-existing right of freedom of expression. And in a democracy, the government or government agencies cant slam the door. They at least have to receive it. And so that right is separate from the foundation of the ERCBs legislation. Its pre-existing, its fundamental, its -- its so primal that its a legitimate recognized Charter right. Discussion THE COURT: Okay. Mr. Klippenstein, I need to be mindful of the time. I dont -- I dont want to cut anyones submissions short, but I -- Im just going to interject. And do you anticipate being longer this -- a lot longer? Because I think what I should do is consider a -- a break and find out where -- where were going to go, in terms of the balance of the submissions today. MR. KLIPPENSTEIN: Yeah, thank you, My Lady. I was also looking at the clock. And if -- if the court wishes to take a -- a normal lunch now, this is a good break. I may be very close to my Charter -- the end of my Charter submissions. And if I have a break, I can shorten them to the -- and then I would hope and anticipate Mr. Wanless can make some points about the -THE COURT: Just so you know, for purposes of case management, I -- I understand clearly your position on behalf of Ms. Ernst, where youre coming from and -- and the consideration I need to -- to give with respect to the -- the section 2 argument. So, you know, there will be -- depending on -- on the outcome, youll have an opportunity for further submissions, whether it be at trial or whatever. So I -- I -- just to be clear, for your purposes, I -- I know where youre going and what you want me to consider. So Im good on that. So and, Mr. Wanless, I take it then youre -- youre going to ultimately make some

41 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32 33 34 35 36 37 38 39 40 41 further submissions with respect to the second stream and in terms of the negligence? MR. WANLESS: THE COURT: An hour? MR. WANLESS: Yes. Yes, thats correct. Okay. Well, how much time do you expect?

Slightly over an hour.

THE COURT: Okay. All right. And then, Ms. McCurdy? I dont want you to feel that youve been left out. MS. MCCURDY: Thank you, My Lady. We dont have many submissions. We believe that our briefs are very straightforward. THE COURT: They are indeed.

MS. MCCURDY: And unless Your Ladyship has questions or -or concerns with respect to them, I -- I dont anticipate being very long at all. THE COURT: All right. Okay. And, Mr. Solomon, youll, I take it, want some opportunity to respond, maybe? MR. SOLOMON: THE COURT: So far, my reply will be under three minutes. Okay.

MR. SOLOMON: Well see how that progresses. I -- I do note, however, that my friends for the plaintiff will obviously want to respond to Alberta Justice too -THE COURT: MR. SOLOMON: has to factor into the time. Of course. -- much like theyre doing to me. And so that

THE COURT: Yes, and who is going to, in terms of that response, in terms of any submissions that Ms. McCurdy makes, does -- or, do you have a reply that you anticipate? MR. KLIPPENSTEIN: Yes, we do.

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THE COURT: MR. KLIPPENSTEIN: THE COURT: everything -MR. KLIPPENSTEIN: THE COURT: MR. KLIPPENSTEIN: THE COURT:

Okay. Its -- its a -- it wont be -Because youll receive the briefs and

Yes. -- and that -Yes, yes. Right.

MR. KLIPPENSTEIN: So I think -- and I understand youre all looking at the clock at the end of the afternoon, so we will -- we will try and find a way to make those as short as possible. THE COURT: Okay. And -- and the reason I say that, I mean, you -- you gentlemen in particular have travelled a long way to come here. I want to make sure -MR. KLIPPENSTEIN: Thank you.

THE COURT: -- that you get your opportunity to at least highlight the areas for my consideration, and -- and allow counsel to give a -- a favourable response. So okay. What I think Ill do then is break till -- I dont know, what are -- an hour, an hour and 15, is that good for everybody? MS. MCCURDY: Yes, My Lady.

THE COURT: Anyone have anything else booked for this afternoon, or did you anticipate being here for the day? Okay. Ill come back -- how about 1:45? Does that work? That gives people a chance to have a break and come back. Madam clerk, are you good with that? THE COURT CLERK: THE COURT: Yes, My Lady, thank you. Thank you. So well resume at 1:45, and if

43 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32 33 34 35 36 37 38 39 40 41 counsel are able to just be sure youre focussed in terms of your submissions and where we have to go. Ms. McCurdy, you know where youre at, so Ill come back then at 1:45. Okay? MR. KLIPPENSTEIN: THE COURT: MS. MCCURDY: Thank you very much, My Lady. Thank you. Thank you, My Lady.

PROCEEDINGS ADJOURNED UNTIL 1:45 PM

44 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32 33 34 35 36 37 38 39 40 41 Certificate of Transcript I, Cheryl Lavigne certify that (a) I transcribed the record, which was recorded by a sound-recording machine, to the best of my skill and ability and the foregoing pages are a complete and accurate transcript of the contents of the record, and (b) the Certificate of Record for these proceedings was not included orally on the record.

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45 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32 33 34 35 36 37 38 39 40 41 Proceedings taken in the Court of Queens Bench of Alberta, Courthouse, Calgary, Alberta January 18, 2013 The Honourable Mr. Justice Veldhuis M. Klippenstein C. Wanless (No Appearance) (No Appearance) P. M. Bychawski T. D. Gelbman G. S. Solomon, Q. C. C. J. Elliot (No Appearance) (No Appearance) (No Appearance) (No Appearance) (No Appearance) N. A. McCurdy S. Hawkins Afternoon Session Court of Queens Bench of Alberta For the Plaintiff Jessica Ernst For the Plaintiff Jessica Ernst For the Plaintiff Alberta Inc. For the Plaintiff Ernst Environmental Services For the Defendant Ecana For the Defendant Ecana For the Defendant Alberta Energy and Utilities Board For the Defendant Alberta Energy and Utilities Board For the Defendant Neil McCrank For the Defendant Jim Reid For the Defendant Alberta Environment For the Defendant Kevin Pilger For the Defendant Alberta Health and Wellness For the Defendant Her Majesty the Queen Court Clerk

THE COURT: THE COURT CLERK: THE COURT: Submissions by Mr. Klippenstein

Thank you, everyone. Please be seated. Thank you, My Lady. Mr. Klippenstein.

MR. KLIPPENSTEIN: Thank you, My Lady. I will just address one issue and then I -- with your leave, Mr. Wanless will address the -- the negligence issues. THE COURT: Okay.

MR. KLIPPENSTEIN: I would like to say a few points about the issue of the Limitations Act and limitation period. As I understand it, my friend, Mr. Solomon,

46 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32 33 34 35 36 37 38 39 40 41 is saying that there is an admission in the statement of claim, in paragraph 48, because that paragraph says -- and in that paragraph Ms. Ernst has pleaded a reference to a letter dated November 24th, 2005. And then Mr. Solomon, I believe, wants to, through a -- a number of inferences -- or suggestions, say that from that reference to a letter dated November 24th, since the claim was begun on December 3rd, 2007, there is more than two years passage from when the cause of action arose or was discoverable. Briefly, a number of points and reply number 1, the only admission or statement in paragraph 48 in the statement of claim is that the letter was dated November 24th. There is no admission about when it was received or it could reasonably have been received. So my friend has to somehow bridge a gap. And in my submission, ERCB does not. There is no way to get from November 24th to December 3rd, because ERCB has not filed any evidence on that point. All we have is speculation. In fact, my factum points out that Ms. Ernst was in the Yukon until December 3rd and didnt receive or re -- or read the letter until she returned. I mean, thats the real-world explanation, to be frank. And my friend I think seems to want to bridge that gap by shifting the onus. I -- as I understand it that is one of the reasons my friend is referring to the summary judgment procedure in number 7, in par -- rule 7, saying ERCB has presented a prima facie case and the onus shifts, presumably on this point is it the intention. But again, theres no prima facie case. A letter is dated November 24th. Thats it. There -- theres a -- theres a gap that my friend has not got over, so there is no prima cas -- prima -- prima facie case and theres no onus. THE COURT: MR. KLIPPENSTEIN: THE COURT: I understand your point. Yep. Yeah.

MR. KLIPPENSTEIN: Thank you. Then the Limitations Act itself, and thats at tab 41 of Ms. Ernsts book of authorities. And Ill just read it. And it says: (as read) Whichever period expires first, the defendant, on pleading this Act as a defence, is entitled to immunity from liability. "On pleading this Act as a defence." We have no pleadings yet. They havent filed a defence, so its premature to make any decision on that basis. And finally, the -- Ill -- if

47 1 I could direct the courts attention to a Court of Appeal of Alberta decision plaintiff J. N., 2 if I may hand that up. 3 4 THE COURT: Thank you. 5 6 MR. KLIPPENSTEIN: On the question of the limitations period in 7 paragraph 14, the court says: (as read) 8 9 In Novak v. Bond Maj -- Justice Major noted that the critical time 10 is one: 11 12 . . . at which a reasonable person would consider that 13 someone in the plaintiffs position, acting reasonably in 14 light of his or her own circumstances and interests, could 15 not necessarily should - bring an action. This approach is 16 neither purely subjective nor purely objective. The question 17 becomes: in light of his or her own circumstances and 18 interests, at what point could the plaintiff reasonably have 19 brought an action? 20 21 McLach -- Justice McLachlin [as she then was], speaking for the 22 majority in the same case, also espoused a variant of a "restrictive 23 subjective/objective approach" that takes into account the 24 plaintiffs "important and substantial interest," adding that "purely 25 tactical considerations have no place in this analysis." Time 26 begins to run, she explained, when: 27 28 In light of the plaintiffs particular situation, the bringing of 29 a suit is reasonably possible, not when it would be ideal 30 from the plaintiffs perspective to do so. 31 32 The -- the point is, there is an element about the reasonableness, about whats reasonably 33 possible, about the particular situation. So that needs to be examined on the facts. And if 34 the plaintiff says, I was in New Brun -- in -- in the Yukon as an environmental scientist 35 doing work, I didnt come home until December 3rd, didnt see the letter until then, thats 36 important for the court to know, because that addresses these points and that we dont 37 have before us here. And in my submission, on all these reasons it would be -- it would 38 be evidentially ill-founded to make -- to -- to -- to dismiss the action on that point. At 39 this point, its not required by the law and it doesnt give due regard to the sensitivity of 40 the factors according to (INDISCERNIBLE) mentioned. 41

48 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32 33 34 35 36 37 38 39 40 41 So those are my submissions. And with your leave, Mr. Wanless will make submissions on some of the other topics. THE COURT: Mr. Klippenstein. MR. KLIPPENSTEIN: THE COURT: Submissions by Mr. Wanless MR. WANLESS: Good afternoon, My Lady. For my submissions I will primarily be relying on the brief of the plaintiff, Jessica Erst -- Ernst, the pleadings and both of our books of authority. And I will also be making reference to the book of authorities of the defendant, Energy Resources Conservation Board, volume III, briefly. As my colleague mentioned, Im going to be addressing our submission on the cause of action of negligence. And the question is: Is it possible for the ERCB to owe a duty of care to Jessica Ernst? We heard from my friend this morning. He said that it is plain and obvious the ERCB does not and cannot owe a duty of care. He says that the ERCBs duty are owned -- owed only to the public and that the ERCB simply does not need to consider Ms. Ernst. It does not need to consider any particular individual, and thats regardless of the individual circumstances, how much contact there may have been, what the relationship may have been, the public duty trumps the private. My friend also argued that it is totally and absolutely immune from the lawsuits because of a statutory immunity clause. In my submission, the ERCB is seeking an interpication -- sorry, an interpretation, which is sweeping total draconian and, frankly, in our submission, incorrect. Weve read both of these arguments. Our submissions are that they are misplaced and -and neither of them meets the very high onus of showing that it is plain and obvious that the claim is bound to fail. My friend spoke a bit about the -- the two applications that are brought - that is, the motion for -- sorry, the application for summary judgment and the application to strike. I think it may be useful to note that regardless of which application we are considering at a particular moment, both of them are very, very high tests. If I could direct you to paragraph 9 of our factum, this is on page 2. It sets out the test for a summary judgment application. And according to the case law: (as read) All right. Thank you very much,

Thank you, My Lady. Mr. Wanless.

49 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32 33 34 35 36 37 38 39 40 41 It must be plain and obvious that the action cannot succeed, that the action is bound to fail, or that the action has no prospect of success. And the defendant who wants a summary dismissal has the evidentiary burden of showing that there is no genuine issue of material fact requiring trial. In this case we dont have evidence of the sort that you would normally expect to find in the motion -- or in an application for summary judgment. There are no affidavits. There are no transcripts of cross-examination. And in fact, my friend, in his submissions, both in his reply brief and -- and this morning, suggested that hes relying primarily on legislation. Then theres the application to strike. It similarly has a very high burden on the defendants. Paragraph 16 of our factum, this is on page 5: (as read) The defendants bear the extremely high onus of proving that the plaintiffs action is bound to fail. A court should only strike a pleading if it is plain and obvious or beyond a reasonable doubt that the facts, taken as proved, do not disclose a reasonable action, and the plaintiff is entitled to a broad and generous reading of the pleadings. I would submit in this particular instance, Im not sure as a practical result it matter -- it matters that much which were considering, because in both cases primarily what were looking at is the legislation. Im -- I do not mean to suggest that these are not distinct tests; they are. THE COURT: M-hm.

MR. WANLESS: I just think as a practical matter, to be honest, I dont see how the ERCB could be successful on one but -- but not the other. I think they go together. My friend raised a number of points this morning that I, in the course of my submissions, would like to touch on briefly. At the beginning -- at the outset I would like to sort of set a -- a roadmap of the points that I -- I will address in -- in my submission so you know which -- where Im going. THE COURT: Okay.

MR. WANLESS: My friend stated that the pleadings talk about actions not omissions. I think that is a misreading of the pleadings, and I -- I would like to seek to clear that up. And -- and my --my worry is that the ERCBs interpretation

50 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32 33 34 35 36 37 38 39 40 41 renders the distinction between an omission and an action meaningless. The second point that was raised is the ERCB says that Ms. Ernst was in an -- a mediated or indirect relationship with the ERCB. This is an important point that we need -- need to address. In our submissions, in fact, the relationship was direct; it was not mediated. My friend spoke specifically about the cases of Cober -- or Cooper v. Hobart and Edwards. And in both of those cases -- its important to point out that both of those cases were class actions. They were class actions in which investors or clients of -- of lawyers were seeking to recover damages, despite the fact that they had never had any contact whatsoever with the regulator. In other words, the only relationship that they could possibly claim had to be mediated. It had to go through -- in -- in one (1) case the mortgage broker -- or, sorry, the investment broker, and -- and in the other case it had to go through the lawyer. In this case were talking about something quite different. Were talking about a -- a case where Ms. Ernst had continual direct, meaningful interaction with the ERCB, where she raised specific points relating to her specific sit -- situation that was within the jurisdiction of the Board and that the Board actually knew about what was happening to her. As a result, the relationship is direct and we can maybe en -- envision it instead of being a line where theres an -- the -- the regulator and the regulated, in an individual, this is more like a triangle -THE COURT: Okay.

MR. WANLESS: -- where the regulator has interactions both directly with the companies that theyre regulating, but also with members -- individual members of the public. THE COURT: Okay.

MR. WANLESS: I think thats an important point. The -- the next point was the fact that the ERCB is said to owe only public duties and not private ones. And in my refact -- respectful submissions, this needs to be put into context, because I think its actually putting the cart before the horse. In almost all cases where you have a -- a public agency, a government agency, theyre going to owe public duties. That doesnt mean automatically that they cant also have private duties. It doesnt mean that theres going to be a conflict. It doesnt mean that the conflict cant be resolved and it doesnt mean that the conflict is serious enough to actually negate the duty of care. And if we go to the Anns (phonetic) test, we see that the -- the -- this is not -- the -- the

51 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32 33 34 35 36 37 38 39 40 41 contrast between a public and private potential conflict is not something that you consider at the outset. In fact, its something that you consider after youve concluded that theres a prima facie duty of care and it can potentially negate that, but it wont unless its a -its a serious conflict. And finally, at the outset my friend mentioned the ERCBs role and spoke, I would say, about a specific aspect of -- of the boards role. The Board is a quasi-judicial body, no doubt, but that is only one part of its functioning. So theres a board thats more akin to this court, but it also has all sorts of on the ground operational parts of -- of the organization. I mean, it has field offices, it has inspectors, and I want to make clear that this lawsuit is focussed entirely on the operational side of things. Its not at all based on the judicial aspect of the ERCB. I would also like to point out that my friend had mentioned that it may have been possible for our client to seek other remedies, judicial review remedies in particular, and other administrative law remedies. A couple of responses to that. First, Im not so sure when exactly she would have clearly understood the decis -- a decision had been made against her. According to the pleadings, they negligently failed to regulate and to respond in any way to her complaints. They didnt send her a letter saying, Weve decided not to investigate. They didnt send her a letter saying, Weve looked into it theres nothing there. It was nothing like that. It was -- it was just they never implemented their -- their mandate, they never implemented their specific scheme, and so it wouldnt have been clear at what point what decision she could have judicially reviewed. Similarly, regarding the Charter claim, at one point she was told that, You can no longer communicate with my staff. She didnt know what that meant, so she tried for many months to seek clarification, What does that mean? And she never got a clear answer back until several months later when the -- one of the senior lawyers of the ERCB told her in fact that the Board had made a decision. So Im not so sure when exactly she could have brought some sort of claim in -- in a JR or other administrative-type claim. I would also say that even if she does have those remedies, this lawsuit and those remedies are not exclusive. She can opt which one to take; theyre independent of one another. I would like to turn specifically to the issue of the statutory immunity clause and specifically whether its plain and obvious that the ERCB can rely on the statutory immunity clause. In broad strokes, this is a claim for negligent omission. And Ill -Ill -- Ill go into that in -- in more detail in a second. But its our submission this is

52 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32 33 34 35 36 37 38 39 40 41 negligent omission. The ERCB is seeking to rely on a statutory immunity clause which on its face does not include the words omission or things not done. Those words simply cannot be found. The ERCB is encouraging the court to add words to the statute which are not there and the effect of this would be to grant sweeping, total, and draconian immunity to the ERCB. You cant touch us, ever. The ERCBs approach is contrary to the rules of statutory interpretation. Its contrary to the Supreme Court, and its contrary to the idea that when youre going to take rights away from citizens, you have to be very clear, you have to be very specific. And its also contrary to the statutory interpretation principle that when there is ambiguity, which we dont think there is; we think its clear, no omissions. But if there were ambiguity, it has to be resolved in the favour of the citizen, especially because her rights are being affected. Theyre being taken away. My friend this morning went through our pleadings and said that what were talking about are not omissions, theyre actually actions. In my respectful submission, I think that this requires some lin -- linguistic gymnastics. I would ask the court to go to tab 26 of our authorities, which is in volume II. And this is an excerpt from Blacks Law Dictionary. And frankly, it provides what I would consider a very clear common sense definition to the word omission. It is simply, "A failure to do something." And if you go to the pleadings, thats exactly what were alleging. And Im going to go through the pleadings much as my friend did, but I -- I am going to differ slightly in my interpretation of -- of what exactly were pleading here. I would start by directing you to paragraph 36. And the important point I would submit here is the ERCB failed to respond reasonably. Okay. Fair enough. What did they do? Instead, the ERCB either completely ignored Ms. Ernst or refused to deal with her complaints. In other words, they did nothing. They failed to act. For further clarification, Im at paragraph 37. The ERCB did not conduct any form of indiv -- investigation. And I would emphasize that this -- this is our primary pleading, that there is -- the ERCB did not conduct any form of investigation. And everything else, I think, has to be read through that. Par -- paragraph 39, the ERCB breached its duty and continued to breach its duty by failing to implement the ERCBs own specific and published investigation (INDISCERNIBLE) scheme and failed to conduct any form of investigation. There it is again, "failed to conduct any form of investigation," none whatsoever. And so I think paragraph 40 has to be read through a lens. Particulars of the ERCBs

53 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32 33 34 35 36 37 38 39 40 41 negligence, so it was defined above, now were getting a -- a bit more specific, failing to take reasonable steps. Now, in -- in light of the above, my submission is how that should be read is they failed to act. What are we saying that they should have done? They should have taken reasonable steps. Similarly, B) they -- failing to adequate -- adequately inspect and investigate. That can be read again in two ways. Its our submission that -that -- that in light of what we said above, they failed whatsoever to conduct any form of investigation. They failed to inspect. What should they have done? They should have inspected adequately. And I wont go through much more than that. I wont belabour the point. My friend also attempted to convert what is, on its face, an omission into (INDISCERNIBLE) by saying the ERCB tal -- took a conscious decision not to act and that conscious decision therefore is an action. There are two problems with that. First, we are suing for failures to act. Thats the precise definition of omission. Im not sure it matters if the failure was a conscious failure or if it was a negligent failure; it was still a failure to act. I think its perfectly reasonable to say that we can have negligent omissions and negligent actions. We can also have intentional omissions and intentional actions. So the intention there, I dont think, converts what is on its face an omission into an action. Now, we go through in some detail in our factum the rules of st -- statutory interpretation and -- and I -- I wont do too -- too much of a detailed look at this, but I do want to draw your attention to a few key cases. Again, the actual statutory immunity clause is: (as read) No action or proceeding may be brought against the board in respect of any act or thing done. No omissions. I would direct you to tab 18 of the plaintiffs authorities. That -- this case is Morguard v. Winnipeg City. And on page 12 theres an explanation of the importance that when legislatures are going to take away rights they have to do so expressly. And this is in the -- the first non-indented paragraph: (as read) In more modern terminology, the courts require that in order to adversely affect a citizens right, the legislature must do so expressly. Truncation of such rights may be legislatively unintended or even accidental, but the courts must look for express language in the statute before concluding that these rights have been reduced. The principle of construction becomes even more important and more generally operative in modern times because the legislature is guided and assisted by a well-staffed and ord -ordinarily very articulate executive.

54 1 2 The resources at hand in the preparations and the enactment of 3 legislations are such that a court -- court must be slow to presume 4 oversight or inarticulate intentions when the rights of citizens are 5 involved. The legislature has complete control of the process of 6 legislation, and when it has not for any reason clearly expressed 7 itself, it has all the resources available to correct the inadequacy of 8 expression. This is more true today than ever before in our history 9 of the parliamentary rule. 10 11 We go through in -- in some detail in our -- in our brief the various other statutes that the 12 same legislative body has enacted. And in each case theyre clear; they say both 13 omissions and actions, clearly indicating that theres a difference between the two. I 14 mean, perhaps most telling is just a few months ago, Alberta -- the Alberta government -15 well, I should say its in the process of restructuring the ERCB. The Bill 2 to has 16 received -- is -- is not quite law, but it is almost there. Its -- in volume II you can find it 17 at -- volume II, tab 22. 18 19 Oh . . . I misspoke, its volume -- volume II, tab 21. 20 21 THE COURT: Thank you. 22 23 MR. WANLESS: And this is Bill 2, Responsible Energy 24 Development Act. This Act is restructuring the ERCB; its going to bring it -- make it part 25 of a larger regulatory body. They specifically turn their minds to what words should be 26 used, and in fact this time they included omissions. It says: (as read) 27 28 No action or proceeding may be brought against the regulator, a 29 director, a hearing commissioner, an officer, or an employee of the 30 regulator, or a person engaged by the regulator -- regulator in 31 respect of any act done or thing no -- thing done or om . . . 32 33 Sorry, Im going to start again: (as read) 34 35 In respect of any act or thing done or omitted to be done. 36 37 And again, it specifically referenced omissions. The Supreme Court has also specifically 38 considered the question: What should be done when the limitation clause fails to include 39 omissions? And the case I would like to reference is at tab 23. And the case regarded 40 the negligent failure of a trustee of an estate to take stert -- certain steps and the failures 41 were neglects to keep in force, fails to replace, does not notify, clearly omissions.

55 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32 33 34 35 36 37 38 39 40 41

This case turned on the question of leave and whether leave was required in cases alleging negligent omissions as opposed to actions. And the specific -- on page 5 you can find the specific clause -- statutory clause. And it says -- and this is right near the top, 1-7-1: (as read) Except by leave of the court, no action lies against the superintendent, an official receiver, or a trustee with respect to any report made under, or any action taken pursuant to the provisions of this Act. And the question here is whether negligent omissions of the defendant -- and that is negligent -- neglects to keep in force or fails to replace and does not notify, were actions taken pursuant to the statute under that particular clause. If so, he was required and the action could -- could now be brought in its present form; if not, the action could proceed. And the court found that leave was not required because omissions were not specified specifically in section 171. And I would read from the Court of Appeal, which was then approved: (as read) The plaintiff does not report of any -- [or] has not complained of any report made under or any action taken pursuant to the provisions of this Act. On the contrary, he blames the trustee for not having taken action. It seems obvious to me that section 171, the wording of which does not lend itself to misinterpretation, cannot apply in this case. The Supreme Court approves of this. paragraph: (as read) It says, the underlined section of the next

To be more precise, he asked the court to find that the leave of the court is a prerequisite whenever an action is brought against a trustee by reason of his fault, whether this be an act of omission or commission. This is not the way that the legislature -- legislation is worded, however. Since the legislator used a much more restrictive wording in section 171, it is not possible to come to any other conclusion, other than the one reached by the Court of Appeal. Namely, it does not apply to omissions. Ive already directed you to Morguard v. Winnipeg City. I think that case very articulately explains the -- the concept that if you want to take away rights, including rights of actions, you have to do it very explicitly.

56 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32 33 34 35 36 37 38 39 40 41 And we have other cases in our brief that support that -- that principle, so I -- I wont go through those. My final point on statutory immunity is even if the statute on its face was ambiguous, even if you could look at it and say, Well, maybe theres omissions, maybe it could in some way be read to include omissions, the Supreme Court has been quite clear that any ambiguity in the statute that takes away rights should be resolved in favour of the plaintiff. And -- and a case that we have that supports this is found as -- the plaintiffs book of authorities at tab 25. THE COURT: MR. WANLESS: THE COURT: MR. WANLESS: Corporation. Sorry, tab 25? Twenty-five, yeah. Okay. Thank you. It is Berardinelli v. Ontario Housing

And the relevant paragraphs are 9 and 10, which are on page 5. Actually, Ill -- Ill -- Ill just read paragraph 10: (as read) Section 11 being a restrictive provisions wherein the rights of action of the citizen are necessarily circumscribed by its terms, attracts a strict interpretation and any ambiguity found upon the application of the proper principles of statutory interpretation should be resolved in favour of the person whose right of action is being truncated. So even if its ambiguous, it still must be resolved in -- in favour of our client. So those are -- those are my submissions regarding statutory immunity. Im happy to take questions on that if you have any, or I -THE COURT: MR. WANLESS: THE COURT: Thats --- can move on? -- thats okay.

MR. WANLESS: Okay. Okay. Now, Im going to address the issue of whether a duty of care can be owed by the ERCB to our client. And we can do

57 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32 33 34 35 36 37 38 39 40 41 this in one of two ways. We can do it first by showing that the duty of care alleged falls within or is analogous to a category where courts have already found that there is a duty of care. And in our submissions, theres actually very close parallels between this case and building inspection cases. And so Ill -- Ill explore that in a little bit of -- little bit of detail, or we can show that its possible that the ERCB might own a novel duty of care and this involves the application of the Anns test. I think we can do both. Now, first, previously recognized categories, the Supreme Court has repeatedly held that once a government agency such as the ERCB has established an investigation or inspection mechanism at an operations level, it will owe a duty of care. In other words, this government agency can be liable in negligence if it fails to administer the investigation or inspection reasonably, including if it negligently fails to act at all. That is once the regulatory scheme is in -- in place and they should have had (INDISCERNIBLE) inspection and they failed to, they can be held liable for that as well. This is very similar to the case that Ms. Ernst is forwarding. And I would direct you to one of the building inspection cases, which is Rothfield, which is in volume I, tab 10. At paragraph 4, which is found on page 7, the Supreme Court talks about the scope of the duty owed by the city and it starts by -- by taking a broad look at the bylaw that the inspection scheme operates within. And it notes that: (as read) The city adopted the relevant building bylaw for the health, safety, and protections of persons and property. This is interesting, because I would argue that obviously that bylaw and that statutory structure would create some public duties. As well see, however, the Supreme Court clearly says in this case you can also have private duties. I will start reading about halfway down near the -- the right-hand side of the page: (as read) The city, once it made the policy ded -- decision to inspect building plans and construction, owed a duty to care to all who it is reasonable to conclude might be injured by the negligent exercise of those powers. And then it goes on to say that, "That duty is also owed," and this is in paragraph 5, the underlined bit: (as read) Third parties, such as neighbours and subsequent purchasers or occupiers of the building, obviously have no say in the actual construction of the building that proved defective. It is therefore reasonable that they should be entitled to rely on the mun --

58 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32 33 34 35 36 37 38 39 40 41 municipality to show reasonable care in inspecting the progress of construction. And thats interesting as well, because you could say that there is no direct relationship between the investigator and the third party and yet, despite that, still found a duty of care. Now in our case, in many ways its fairly similar. Again, there was a general -in -- in -- in Rothfield there was the general statutory scheme in the bylaw and then they found, once you operationalize inspection, duty of care. In our case we can go to the ERCB statute which is found at tab 17. And the -- some of the purposes of the Act, albeit not all of them, are: (as read) To control pollution and to ensure environment conservation in the exploration for processing development and transportation of energy resources and energy and also to secure the safe -- the observance of safe and efficient practices in the exploration of processing. So in some ways thats similar to the -- the bylaw, the purpose being health, safety, and protection of the persons and property. Now, according to our pleadings, the ERCB set out a -- a very detailed inspection and enforcement scheme, which set out exactly how the ERCB would respond to public complaints, which set out how they would inspect oil and gas facilities, and which set out specific enforcement when breaches were uncovered. And I would direct you to -- this is the book of authorities of the defendant, ERCB, volume III. And this is just an example, but on tab 48 you have part of the compliance assurance. It would also come in the form of policy and practice documents that wouldnt necessarily take the form of a -- a directive. And on page 2 it talks about the ultimate goal of the ERCB compliance assurance program; this is at the very top: (as read) The ultimate goal of the ERC comp -- ERCB compliance assurance program is to ensure compliance with the requirements that are written, monitored, and enforced on behalf of all Albertans. Compliance insurance -- [or, sorry] -- compliance ensures that resource activity within the province is conducted in a manner that protects public safety, minimizes environmental impact, and ensures effective conservation of resources, and ensures stakeholder confidence in the regulatory process. At the very bottom of this page, this is number 3, the heading is, "Compliance Assurance Based on Inherent Risk." And then it has a number of factors that should be considered.

59 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32 33 34 35 36 37 38 39 40 41 And this is all part of the -- the regulatory matrix and its specific inspection regime which was operational as -- focus should be put on health and safety and environmental impact. Those are both factors which are highly relevant in this case. The ERCB also (INDISCERNIBLE) reliance on this regime by making frequent public representations regarding what rural landowners could expect from the ERCBs enforcement branches. And I would direct you to paragraph 27 of our pleadings. The ERCB made numerous public representations regarding what individuals adversely impacted by oil and gas activities could expect from the ERCBs enforcement branches and field offices and from its published investigation and enforcement compliance mechanism. In particular, the ERCB represented: A) that the ERCB ensures that water and agricultural lands are protected from adverse impacts caused by oil and gas activities; B) the ERCB specifically protects all fresh water aquifers from adverse impacts caused by oil and gas activities; C) ERCB field offices are responsible for and do in fact inspect oil and gas operations to ensure compliance with all applicable standards, specifications, and approval conditions; D) ERCB field staff investigate and respond to all public complaints to ensure that appropriate action is taken; and E) when non-compliance is identified the ERCB triggers an established policy for ERCB enforcement actions. In this specific instance, the ERCB knew about problems with Encanas drilling in Rosebud. They knew, for example, that Encana was hydraulically fracturing at shallow depths in close proximity to the Ernst well. It knew that there were serious problems with the regional aquifer, including concerns about potential contamination with well water. It also had been informed the -- the radical change in Ms. Ernsts water may have been linked to Encanas CBM activities. And the ERCB also knew that Encana had perforated and fractured it directly into the Rosebud aquifer. And despite all this knowledge, the pleadings say, the ERCB failed to conduct any form of investigation whatsoever and failed to respond in accordance with its investigation and enforcement process. In the building inspection cases, the important issue is whether the government agency has decided to implement an inspection scheme. Once it has, it cannot then negligently fail to inspect. And the -- the legal principle for this can be found at tab -- volume I, tab 9. And this case is Ingles v. Tutkaluk. And I would start by directing you to paragraph 23, which is on page 14. And it -- and it goes through talking about the legislative scheme, what its purposes are. It starts by saying: (as read) The legislative scheme is designed to ensure that the uniform standards of construction and safety are imposed and enforced by municipalities.

60 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32 33 34 35 36 37 38 39 40 41

I would argue that the -- the legislators scheme, including specifically the compliance and enforcement mechanism, is very similar. Its also directed at ensuring uniform standards of -- of the development of oil and gas, specifically to prevent against pollution and to protect health and safety. And then it goes in to talk about specific parts of the regime which are set out at -- in the Act. I would say similarly there are specific parts of the compliance and enforcement scheme that are set out specifically both in legislation, but also in policy documents. And then halfway through the paragraph on -- the first paragraph on page 15, it notes that: (as read) The purpose of the building inspection scheme is clear from these provisions: to protect the health and safety of the public by enforcing safety standards for all construction projects. I would say that -- that a dominant purpose of the ERCBs compliance and enforcement scheme is very similar. Its also directed at health and safety. Its also directed at preventing against pollution. The Supreme Court goes on to find that in light of all of this -- and this is the -- the second-last sentence of that paragraph: (as read) The province has made the policy decision that the municipalities appoint inspectors who will inspect construction projects and enforce the provisions of the Act. Therefore, municipalities owe a duty of care to all who it is reasonable to conclude might be injured by the negligent exercise of their inspection powers. And then paragraph 25, for clarity, it notes that not only will -- will the regulator be -could be found negligent for doing a negligent inspection, but also, and this is the underlined bit of paragraph 25: (as read) The city could be found negligent if it ignores its own scheme and chose not to inspect the renovations. In this case the ERCB had a protocol. It has -- had a specific published investigation and enforcement process, and yet it failed to implement it even when there were signs indicating that it should. Again, the principle in building inspection cases is the agency, once it made the policy decision to inspect building plans and construction, owed a duty of care to all who it is reasonable to conclude might be injured by the negligent exercise of those powers. To -- we could easily apply that in this case with just a couple changes of words. The ERCB, once it made the policy decision to establish the compliance and enforcement

61 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32 33 34 35 36 37 38 39 40 41 scheme, owed a duty of care to all who it would be reasonable to conclude might be injured by the negligent exercise of these powers, including negligently failing to inspect. In the alternative, if I am incorrect that this falls within the pre-existing -- or is analogous to the pre-existing duties of care, we would need to conduct an Anns test analysis. The Anns test asks two questions: Is there sufficient foreseeability and proximity between the plaintiff and the defendant? And if so, are there policy reasons for not extending it? And again, because this is a preliminary motion, we -- we dont need to decide right now if there actually is a duty of care. It doesnt have to be decided today. Rather we -rather we just need to be satisfied that it is not plain and obvious and beyond doubt that there cannot be a duty of care. In these cases and important consideration is whether or not there is a relationship of proximity. And that relationship is generally described -- its approximate if it is considered close and direct. In our submissions, Ms. Ernsts relationship with the ERCB was very close and very direct. The relationship obviously was not always smooth, but it did involve frequent and continuing interactions with various employees of the ERCB, all the way up the chain, all the way up to the very top and included significant interactions with senior legal counsel and the head of compliance and enforcement. Id like, at this time, to raise an argument -- or excuse me, address an argument raised by my friend this morning. And the overarching argument was that because the ERCB is a government agency that has a statutory framework, that means that it has some public duties. It therefore cannot owe private duties of care. I dont believe that this is accurate. There are plenty of counter-examples. Theres lots of cases where the government agency, which does own public duties, also owes private duties. Many of those are -- are contained with our -- in our brief. But I want to address this in a -- in a bit more detail. Perhaps the case thats most helpful in this matter is Fullowka, which can be found at tab 8 of volume I of the plaintiffs book of authorities. And I would direct you to paragraph 57. And it talks about policy considerations. And policy considerations are the proper time at which to consider whether theres a conflicting duty such that it has to negate a duty of care. And it notes -- this is the underlined portion halfway down: (as read) In order to trump the existence of what would otherwise be a duty of care, foreseeability and proximity having been established, these residual policy considerations must be more than speculative. They must be compelling; there must be a real potential for negative consequences of imposing the duty of care. And then we get into the meat of the discussion at paragraph 72, when it talks specifically

62 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32 33 34 35 36 37 38 39 40 41 about policy of consideration of conflicting duties. Second sentence in paragraph 72: (as read) Conflicting duties have been an important consideration in dealing with proximity in claims against regulators and others carrying out statutory duties. No argument there, were going to have to consider it here. (as read) Serious negative policy consequences may flow where such conflicts exist. However, it does not follow that such consequences will flow from every imposition of a duty of care on those who carry out statutory or public duties. No such concern about conflicting duties was noted by the court in the building inspector cases. I do not understand what duty could conflict with the inspectors duty to order the immediate cessation of work in an unsafe mine. Of course, every exercise of discretion calls for weighing and balancing different considerations that do not always point in the same direction. But there is a difference between the need to exercise judgment and the existence of conflicting duties. I see no conflict here. And that last couple sentences, I would sub -- submit, is particularly important. Whenever you have a public authority with public duties, not everything is going to point in the same direction. This was the case in Hill, for instance. Hill is the case where a lawsuit was brought against the police for a negligent investigation of a suspect. Now, the police obviously have very significant public duties. Their primary focus has to be on public safety. If there is a particular crime that theyre investigating they owe duties to -- in addition to the public also to the particular victims of the crime. And yet the Supreme Court said, You can still owe a private duty to the suspect. I mean, and -- and all of these cases in -- they are going to have duties that are slightly in conflict, but as the Supreme Court said here: (as read) Every exercise of discretion calls for weighing and balancing of different considerations that do not all point in the same direction. But there is a difference between the need to exercise judgment and the existence of conflicting duties. And then at the -- near the end of paragraph 74 the Court of Appeal asserted that imposing a duty to carry out their public duties with reasonable care might cause the

63 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32 33 34 35 36 37 38 39 40 41 regulators to over-regulate or under-regulate in abundance of caution. This, in my view, is speculative and falls far short of showing that theres a real potential for negative policy consequences arising from -- from conflicting duties. Moreover, any tension between the broader public interest and the immediate demands of safety may be taken into account in formulating the appropriate standard of care. And again, the court there is emphasizing that if youre going to identify a conflict, youve got to identify a specific conflict. You cant just say in general there -- there might be a -- a conflict between the public and a private, you have to be specific. And its interesting to note, Fullowka is a case -- is not a summary -- its not a summary judgment. Its not a motion to strike. Its after trial. I want to return to the issue of proximity in particular, in cases where theres a public regulator. And the Supreme Court ha -- has what I consider to be very, very helpful comments in Imperial Tobacco. They can -- Imperial Tobacco can be found in our materials at tab 13; and this again is the first volume, and its page 24. And in fact, I would say all of page 24 is -- is important, because it distinguishes between different ways that you can establish proximity and the role specifically of statute. And it distinguishes between two situations. It distinguishes between the situation in which the duty of care is grounded entirely in the statute; we are not making that claim here. Interestingly, Cooper v. Hobart fits within that category, and Edwards fits within that category. The second is a situation where the duty of care is alleged to arise from interactions between the claimant and the government. It is not negated by statute. Paragraph 45, the second situation is the proxim -- is where the proximity essential to the private duty of care is alleged to arise from a series of specific interactions between the government and the claimant. The argument in these cases is that the government has, through its conduct, entered into a special relationship with the plaintiff sufficient to establish the necessary proximity for a duty of care. And this distinction is particularly important at a pleading stage. As the court -- as the Supreme Court explains at paragraph 47: (as read) Since this is a motion to strike, the question before us is simply whether, assuming the facts pleaded to be true, there is any reasonable prospect of successfully establishing proximity, on the basis of a statute or otherwise. And again, it makes -- it distinguishes between the two scenarios: (as read)

64 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32 33 34 35 36 37 38 39 40 41 On the one hand, where the sole basis asserted for proximity is the statute, conflicting public duties may rule out any possibility of proximity being established as a matter of statutory interpretation.

In other words, all you need in those cases is to look at the legislation and you can make a decision one way or the other. It then contrasts that: (as read) Where a situat -- when the asserted basis for proximity is grounded in specific conduct and interactions, and in such instances ruling a claim out at the proximity stage may be difficult. So long as there is a reasonable prospect that the asserted interactions could, if true, result in a finding of sufficient proximity and the statute does not exclude the possibility, the matter must be allowed to proceed to trial. Again, in this instance we are alleging -- the pleadings are quite clear on this, and the brief is quite clear on this. Were alleging that the duty -- the proximity relationship comes from specific interactions between Jessica Ernst and the ERCB. The point here is that she was not an undifferentiated member of the public. THE COURT: M-hm.

MR. WANLESS: On the contrary, she had significant interactions with several ERCB employees, again, all the way up the -- the ladder, all the way to the very top. And further, because of those specific interactions, the ERCB had extensive knowledge about the plaintiff, about the plaintiffs water, about the Rosebud aquifer, about Encanas new and untested drill program in Rosebud, and about the fracturing directly into the aquifer. Again, all of this is to say that there is a very close, direct, and significant relationship between Ms. Ernst and the ERCB. They knew her specifically and they knew her very well. THE COURT: M-hm.

MR. WANLESS: And again, I would like to return briefly to an issue raised by my friend this -- this morning. He -- he attempted to suggest that Ms. Ernsts relationship with the ERCB was a mediated or indirect relationship. And in our submission, thats not correct. It was very -- it was unmediated and it was direct. Now, I believe that those are my submissions subject to any questions that you may have.

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THE COURT: ahead of me. Thank you. MR. SOLOMON: and then -THE COURT: MR. SOLOMON: THE COURT:

Thank you, Mr. Wanless. I have lots of reading

My Lady, I propose that I briefly do my reply

Before Ms. McCurdy? Yes. Okay.

MR. SOLOMON: And then we can get onto the Alberta Justice application and perhaps then take a -- or take a short break and then get on with that, whatever you prefer. My Lady, you have heard an overwhelming evidence from counsel table that must be ignored in its entirety in this application because its not actually evidence on which you can base a finding. Let me deal with the summary judgment striking issue. My friend has again blurred them and he has said to you, Well, look, you know, this is a preliminary application so you just look at the pleadings. Thats right on the striking application. On the striking application you assume the pleadings are true. My friend said, I cant imagine a case where the ERCB cant succeed on one, -- that is, striking, for example -- but can succeed on the other, summary judgment. But this is a possibility in this very case. Let me give you an example. Lets deal with the issue of the public/private duty. Under the striking application, I point to the statute and I say, That speaks only to a public duty. And my friends can say, Well, the pleadings speak to other things. And it may very well be that you agree with that submission and you say, Well, on that basis Im not prepared to strike on the basis of the public duty. I then go back to you on the summary judgment and I say the same thing, the same paragraph of the statement of claim, the same portion of the legislation that speaks to public duties only, and Ive now made my prima facie case that the ERCB has a public duty. My friends now have the onus to demonstrate that its something other than a public duty, that is that theres some exception that applies to them and they cant, as theyve tried to do today, do that based on referring to the statement of claim, because the statement of claim is not assumed to be true on a summary judgment application. Rather, the legal test well established in Alberta, including by our Court of Appeal, is that the evidentiary onus then shifts to them. And so they actually have to establish with

66 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32 33 34 35 36 37 38 39 40 41 evidence -- and its not evidence they say through counsel at the podium; its actual evidence -- that theres a private duty. And so -- and -- and we get into that with other things too; for example, that the relationship was direct. They say, Well, you know, she had contact with ERCB. Well, on the striking application maybe you can glean that from the pleadings. On the summary judgment application you cant glean that from anything, because its not in evidence. They say that, you know, she contacted the ERCB. The ERCB contacted her, failed to do things, whatever the case may be. In the absence of evidence, you cannot connect any of those dots for them. And so thats fatal to them on summary judgment even though, if you look at the pleading and accept it as true, as you would the striking application, it may not be fatal. THE COURT: But doesnt that go back, Mr. Solomon, to the very question I asked at the onset, in terms of how do we approach this from a practical point of view? Because remember, were in case management, okay. So because youre taking a position and -- and there are two different tests for -- under rule 3 and rule 7. So how do I practically deal with this so I can go through and look at the fresh statement of claim and consider the striking application by you and by Ms. McCurdy and address those issues and will come up with an end result or conclusion with respect to what I find is appropriate for the statement of claim? Then at what point in time do I -- do I send that back then to everyone and say, Okay, now, plaintiff has an opportunity to respond to what we have here in view of your summary judgment application. Do they have an opportunity to put that evidence before the court? MR. SOLOMON: No. The fact that were in case management doesnt change the legal test, nor is it -- does it change the fact that this is an application brought on notice, being determined on its merits today. THE COURT: So youre telling me -- or so -- so I understand this, youre saying that if in fact the plaintiff wanted to allege the evidence in support of the argument under sect -- or rule 7, that that evidence ought to have been before the court today by way of affidavit or whatever? MR. SOLOMON: THE COURT: MR. SOLOMON: Right, she cant -Is that --- hedge her bets.

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THE COURT:

Thats -- okay.

MR. SOLOMON: She cant -- she cannot say, Well, okay, were going to argue and oppose it, but if we lose, then we want a second kick at the can. THE COURT: MR. SOLOMON: THE COURT: MR. SOLOMON: THE COURT: MR. SOLOMON: application. THE COURT: MR. SOLOMON: THE COURT: Okay. It doesnt work that way. Okay. They have to bring their evidence -Okay. -- and put their best foot forward at this

In response to the documentation that -Right. And --- you filed? Okay.

MR. SOLOMON: -- and, My Lady, if you go back to our briefs on the first time we did this, I raised this issue ad nauseam -THE COURT: MR. SOLOMON: evidentiary burden. THE COURT: MR. SOLOMON: THE COURT: MR. SOLOMON: Yes. -- as well there to, that they actually have an

Yes, I understand that. I just -So its not like Im being unfair. Okay. Theyve been well warned.

68 1 THE COURT: Thank you. 2 3 MR. SOLOMON: My Lady, with respect to the Preet case, which 4 was handed to me in court today for the first time, its a 1993 case. It doesnt actually 5 reflect the practice that we have in similar circumstances in Alberta. My friend has relied 6 on it for the proposition that an immunity clause should be read down so as not to 7 preclude Charter claims. The general rule for reading down is that you are seeking to 8 diminish the words of an enactment. Youre taking an enactment and youre saying, Im 9 going to give it either a lesser meaning rather than a greater meaning, or Im going to 10 create an exemption within for constitutional reasons. 11 12 And when youre doing that youre doing it based on the Charter. And in Alberta the first 13 step is to give notice to AG Alberta and AG Canada under the Judicature Act to say, Im 14 seeking relief with respect to the interpretation of an enactment as a result of the Charter 15 that will lead me to relief in respect of that enactment. 16 17 And in this case that would be a challenge to the immunity clause. That is, they would 18 be saying the immunity clause is over-broad and cannot be saved under section 1 to the 19 extent that it denies or allows a denial of Ms. Ernsts section 2(b) rights. And so having 20 not done that theyre not actually bringing this in a way that its currently brought. 21 Constitutional exemptions are a phenomenon that, as youll know, became more prevalent 22 in the late 90s and the early 2000s as the law around those evolved. 23 24 So they are in fact seeking a constitutional exem -- exemption in respect of the immunity 25 clause, but theyre not seeking it in their claim and theyre not seeking it properly. 26 27 I might add, constitutional challenges can be raised on judicial review. It is a means by 28 which you raise them. I have one case; its a privacy commissioner in the United Food 29 and Commercial Workers. Its gone to our Court of Appeal on a constitutional issue. Its 30 going to the Supreme Court of Canada later this year. The two cases my friend relies on, 31 Pridgen and Haydon are both judicial review cases involving Charter challenges and so 32 its an appropriate place to raise Charter challenges. 33 34 My friend has also pointed you to (INDISCERNIBLE) the Charter issues should not be 35 determined where facts are an issue. Thats right. But there are no facts raised by the 36 plaintiff here, none, zero. And the challenge wasnt raised properly, and so we cant 37 bring in section 1 evidence in the way of facts, because -- I havent done that for us -38 they havent done that properly either. And so the entire issue of the Preet case is its an 39 old case from Ontario that doesnt reflect what we do here. 40 41 Now, my friend, Mr. Klippenstein, also made much about the fact that -- on the positive

69 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32 33 34 35 36 37 38 39 40 41 rights/negative rights issue that the ERCB must receive communications, and he pointed to a letter that he says was sent back. Whether it was refused or not is a different question; but in any event, Ms. Ernst claims that she got a letter back. Thats one letter. His argument on everything else would lead to the same conclusion that weve reached in our brief on the positive/negative rights, that shes seeking something that she cant have. So if it is the case that were down to the scope of well, they cant return letters to her, then perhaps hes right on that. But were dealing with something far more limited, even by his argument. And with respect to the pleadings I -- I address with you the qual -what I call the qualitative elements. THE COURT: M-hm.

MR. SOLOMON: My friend has been redrafting this from the floor, suggesting that you should ignore those for the purpose of this application. But after we get through this pleading state, we have to go to discovery and to trial. And so the pleadings as written are important; thats going to define the scope of what we do. And my friend has suggested that there can be intentional omissions. Sure, I can decide not to do something, I agree. But thats a decision, and that too is part of the immunity. And so all it does is it moves it from one part of the immunity to another. It doesnt make it outside of the immunity in total merely because its an intentional omission. Those are all of the matters that I have in reply, My Lady. THE COURT: Thank you very much, Mr. Solomon. Ms. McCurdy, do you want to just roll along or would you prefer to have a break? MS. MCCURDY: THE COURT: an opportunity to speak today. Submissions by Ms. McCurdy MS. MCCURDY: For the record my name is McCurdy, first initial N, on behalf of Her Majesty the Queen in right of Alberta. The provinces application is different than the ERCBs application at this juncture and perhaps can be characterized as more fundamental in nature. Its our position that the statement of claim, or the fresh statement of claim, needs to be properly drafted and finalized before any further application or steps that may or may not be taken by the province can be made. Im fine to proceed, My Lady. Lets go. I want to make sure everybody has

70 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32 33 34 35 36 37 38 39 40 41 As set out in our brief and our reply brief, it is our position that there are substantive and improper defects in the fresh statement of claim that firstly, do not comply with the rules of court; secondly, do not comply with the intentions of the rules of court; and thirdly, dont comply with the relevant case law. Its our position that these defects are not simply technical defects, nor narrow formal flaws, as suggested by the plaintiff. The Alberta rules of court require pleadings to clearly state facts that are the foundation of legally valid causes of action and to omit extraneous and irrelevant parties, evidence, and argument. The fresh statement of claim as weve heard is the fourth attempt by the plaintiff to frame the issues against the defendant. And while better than the three previous attempts, it still contains the substantive and improper defects that we believe must be excised and can be easily excised from the fresh statement of claim. If the pleadings cannot be drafted in a way that comply with the rules and the case law, the court can, if necessary, assist to ensure that the pleadings comply with the rules and the relevant case law. My Lady, Im going to hand up a case that Ive provided to my friends. THE COURT: Thank you. You gave me two copies. You probably wanted to keep one, didnt you? MS. MCCURDY: THE COURT: Yes. Thank you. Thank you.

MS. MCCURDY: And its a decision of Mr. Justice Hawco, 2012, and I refer you in particular to paragraph 3. It was a similar type of application in a matter and Justice Hawco said at paragraph 3: (as read) I would of course prefer to not be involved in drafting of pleadings. It is clear, however, that even the proposed drafts prepared by the plaintiff contains evidence and argument and, occasionally, colourful language. What I therefore propose is to go through what I shall refer to the Crew draft. I shall also refer to the Cenovus draft, and the result will be an amalgam of both drafts, which will become the amended statement of claim. We submit, My Lady, that this is the type of approach that could be utilized by yourself in this situation. And, My Lady, the brief that we filed, the original brief set out paragraph by paragraph the substantive improper defects in the fresh statement of claim. I

71 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32 33 34 35 36 37 38 39 40 41 dont propose to go through the submissions in our briefs in any great detail, given the time. But Id simply like to highlight a couple of points, then give the plaintiff an opportunity to respond, and then respond if necessary. Firstly, Id like to comment on the irrelevant and improper inclusion of third parties in the fresh statement of claim. This is a personal action brought by Ms. Ernst against three defendants. It is not a class action. There are references in the fresh statement of claim to other landowners and numerous water wells in the Rosebud region throughout the fresh statement of claim and in particular, the section of the fresh statement of claim that alleges a cause of action against the province. Now, the undefined other landowners in the Rosebud region, which is also undefined, are not parties to this action. And, therefore, those references are completely irrelevant to whether the -- this plaintiffs specific water well was contaminated and the determination with respect to what duty of care, if any, the province owed this specific plaintiff in this specific case and whether or not the province breached that duty. By the inclusion of these undefined non-parties, the plaintiff is attempting to argue in her pleadings without any factual basis that there are other complaints and contamination of other wells potentially caused by oil and gas activities in the Rosebud area. Now, the plaintiff argues in her brief that the information regarding other landowners is necessary, as it goes to the knowledge of the province regarding suspected problems. Interestingly, however, in her brief the plaintiff argues that references to other landowners do not necessitate any inquiry into what actually happened to water of the neighbouring landowners. We submit that information about what actually happened at neighbouring wells is not necessary then its irrelevant to the plaintiffs claim. And by suggesting there are other problems in the area, or could potentially be other problems in the area, without any actual facts leaves the province in almost an impossible situation as these allegations are almost impossible to prove or disprove. Now, I should note that the claim against the province is in negligence only. No other cause of action has been plead against the province. And therefore, in order to be successful in a claim of negligence, the plaintiff has to show the province owed a duty of care to Ms. Ernst, that the province failed to meet that duty of care, and that caused Ms. Ernst damage. Its not necessary for her to prove that the province knew of other complaints, if there were any, and its not necessary for the province -- or the plaintiff to prove that the province did or did not investigate other landowners complaints, again, if there were any.

72 1 Despite the volume of paper produced so far, we submit this is a relatively straightforward 2 claim. It would become far more complex if information regarding other landowners and 3 other wells became involved in this action. 4 5 In practical terms, assuming the action against the plaintiff -- or the action against the 6 province got to the production stage, the province may be required to produce undefined 7 voluminous records regarding other landowners with no apparent connection or relevance 8 to the plaintiffs specific circumstances and no real value to any party in the litigation. 9 10 The questioning process would also be unfairly burdened by the inclusion of these 11 third-party issues. Its also important to note that this action will be an adjudication of 12 the plaintiffs specific claim. It is not a public inquiry. As such, the references in the 13 fresh statement of claim to irrelevant matters are not proper. 14 15 Some of these allegations include Encana diverting fresh water from underground aquifers 16 without the required permits, non-specific concerns regarding potential impacts on 17 groundwater caused by undefined Encanas CBM activities, significant and legitimate 18 unanswered questions regarding CBM activities at undefined Encana wells, breaches of 19 the Water Act. These are not proper in this context, nor is the reference to the rights of 20 the public in paragraph 85 of the fresh statement of claim. 21 22 We submit while its entirely appropriate for the plaintiff to file a claim about her specific 23 situation and any allegations regarding how the oil and gas industry, or how this system 24 as a whole operates, and any allegations regarding how the oil and gas industry may 25 affect other individuals or the public, are irrelevant in this context and should be struck 26 from the fresh statement of claim. Again, this action is about what happened, if anything, 27 to this specific plaintiff. It is not, by its very nature, a public in -- inquiry into fracking 28 or into the oil and gas activities in the Rosebud region. 29 30 Now, My Lady, there are other significant defects in the fresh statement of claim 31 specifically relating to improperly plead evidence and argument. And these are outlined 32 in our brief, and I dont propose to go into those unless you have any questions regarding 33 those. 34 35 THE COURT: I thought you were quite clear in your brief, in 36 terms of identifying the areas of concern. To -- to me, I thought it was set out quite 37 well -38 39 MS. MCCURDY: Thank you. 40 41 THE COURT: -- and clearly.

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MS. MCCURDY: And I -- I dont propose then to make any further submission, although I would like the opportunity to respond to any -THE COURT: MS. MCCURDY: Mr. Wanless. Yes. -submissions of Mr. Klippenstein or

THE COURT: All right. respond or would you like a couple of minutes?

Which of counsel would like to

MR. KLIPPENSTEIN: It -- I -- if the court intends to take a break, my submissions wont be that long, so it may be that or -THE COURT: MR. KLIPPENSTEIN: THE COURT: MR. KLIPPENSTEIN: THE COURT: MR. KLIPPENSTEIN: THE COURT: MR. KLIPPENSTEIN: Thats fine. But I also wouldnt mind the break to -Okay. -- to shake them -Absolutely, then --- and that might be helpful. -- you can narrow your focus on it. Yes. Yes.

THE COURT: Im -- I dont -- I dont want to put too tight of parameters on people, but weve had a long day and weve had a tremendous amount of information. So it would be nice if we could wrap up by 4. Is that doable? MR. KLIPPENSTEIN: In -- in my view, yes.

THE COURT: Okay. Great then. Ill just -- Ill take ten minutes. Ill come down in about ten minutes. Okay. Thank you. (ADJOURNMENT)

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THE COURT: THE COURT CLERK:

Thank you, everyone. Please be seated. Thank you, My Lady.

MR. KLIPPENSTEIN: Thank you, My Lady. I have a number of submissions in reply to the arguments of Alberta. Alberta has focussed in part on the issue of the mention of potential can -- contamination of the lands and waters of other landowners and makes various assertions about why that is improper or inadvisable. This -- this is not a car accident case. This is not a -- a case where the sewer -- where, you -- you know, theres some water flowing from one persons aboveground yard to another yard. The nature of this case involved two things. One is the Rosebud aquifer and the underground movement of water, and the second is the process of fracking, which involves extensive underground drilling and large networks of underground fractures deliberately created. The result is that there is a significant area of underground geography that is involved, because Ms. Ernst says, There is methane coming into my well and into my house, which has flowed underground through cracks and fractures and through the Rosebud aquifer. So that is inherent in this claim. That is why the knowledge that Alberta had about complaints from other landowners in the surrounding area is relevant and necessary to the question of duty of care, proximity, foreseeability, in terms of what Alberta knew, what -when they should have been triggered that there was a problem. The statement of claim talks a little bit in paragraph 5 about the rosebud aquifer and that it supplies fresh water to a number of private homes near Rosebud, near Ms. Ernsts home, and to the community of Rosebud. And aquifer, by definition, has water travelling distances underground. And so contamination in that water, almost by definition, will flow from different -- and will affect the different parts of that aquifer. THE COURT: Might that not fall under the -- more properly under the category of evidence that would be submitted by an expert witness, Mr. Klippenstein? MR. KLIPPENSTEIN: Certainly, that will be a big issue for expert wit -- expert testimony, but theres a distinction between what actually happened underground and where, which will be dealt with at trial; and on the other hand, what clues, what signals, what knowledge, what red flags Alberta Environment had as part of

75 1 their tasks. 2 3 I mean, this is happening underground, so its not a case of there being a large sign 4 popping up beside the highway saying, Okay, Alberta Environment, look at this. Its all 5 happening underground. So necessarily and because of the flow of the water and also 6 because of the nature of fracking, and that is also dealt with in paragraph 14 and -- and 7 23 and in other paragraphs about the -- the -- and its in the nature of fracking that it is 8 deliberately desiring to create lengthy pathways underground where the intention and the 9 hope is chemicals will travel. Thats what its all about. 10 11 So both in terms of the travel of water in the aquifer and in terms of fracking, it is 12 inherent in this case that it, you know, it will not happen just under Ms. Ernsts house. It 13 cant be avoided that thats an issue. And that -- its correct to say that doesnt prove that 14 it happened. But when you look at the part of the picture that is Alberta Environments 15 legal possible responsibility, what they knew, and were clued into, what they were tipped 16 off, what -- the flow of knowledge about foreseeability and proximity, the relationship to 17 that area. Thats how complaints from other landowners is relevant. Its in the nature of 18 what the alleged problem is, the flow of water, the long distance fracturing of 19 underground. 20 21 My friend -- so that is why it is relevant, okay. 22 23 THE COURT: Okay. I understand your point. 24 25 MR. KLIPPENSTEIN: My friend complains that this will result in -26 for example, at the discovery processes, extensive demands of documents and so forth. 27 But theres a built-in limit, which is relevance. Is it relevant to proximity and -- and, you 28 know, foreseeability, because thats all -- the only reason its in there. We know we will 29 have to prove the actual underground flow with expert testimony. Were not saying there 30 were complaints and therefore there was contamination underground. That will have to be 31 proved at trial. What -- so it will not excessively expand discovery or production, 32 because the relevance test, the relevance filter is there. 33 34 My friend will be able to say, How is that relevant to showing that Alberta Environment 35 had knowledge? Some of it will be and some of it wont, so there is a built-in limit. 36 My -- my friend further objects that this is somehow a -- in the nature of a class action. 37 Well, it is clearly not. There is one person seeking damages. Now, it may be that that 38 has implications for the way the situation is perceived. And its clear that Ms. Ernst, you 39 know, thinks so and hopes so. But the rules of the legal proceedings are completely able 40 to and will restrict, and my friends will be watching like a hawk that we dont have a 41 public inquiry.

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And -- and the trial judge will, obviously, as we all will, know what the rules are. So there is a good reason for the limited reference to landowner knowledge and it does not create problems that are not easily managed by the ordinary rules of litigation, in my submission. Secondly, my friend in paragraph 28 of the -- of the brief disagrees with words -- certain words and says that they are purposely plead to sensationalise the plaintiffs claim. Here are the words, hazardous, pollutants, contaminated, contamination. I really am at a loss how to see those as sensationalizing. My client says thats what they are. Hazardous is a term that has defined scientific and ordinary usage and health -- health meanings. Pollutants, contaminated, contamination, are used precisely and also sometimes more generally. So those are, in my submission, are -- are completely appropriate for a claim. My friend may not like that her client is being sued for contamination or having a role in it, but thats the fact. THE COURT: Well, and youll recall from our very first case management, or -- or proceeding we had in Drumheller, that was one of the main issues, and certainly the document went back for redrafting. Weve got the fresh statement of claim. A lot of that has been addressed, but clearly Ill be going through it paragraph by paragraph. And I will address the issues that all of the parties have raised in that regard. Ill be left to make decisions in that regard. But I think that argument has been -- or that position has been on the record from the get-go. MR. KLIPPENSTEIN: Thank you. Then finally my friend specifically refers to paragraphs 84 and -- and 85 as particularly egregious examples. Well, those pertain to punitive damages and the tort remedy of disgorging proceeds. Those are serious allegations, yes. Theyre also well-accepted allegations and concerns long recognized by tort courts everywhere. My friend may not like it that Jessica is saying negative things and harsh things and strong things about her client, but this is a lawsuit. This isnt nice for them; thats normal, in my respectful submissions. So Ms. Ernst should not be unduly muzzled to satisfy the -- the tender delicacies of the defendants. This is an adversarial process. Those are my submissions. THE COURT: Thank you Anyone -- Ms. McCurdy, would you like to respond? very much, Mr. Klippenstein.

MS. MCCURDY: My Lady, my first comment is with respect to my friends response that there is built -- a built in-limit of relevance in the discovery

77 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32 33 34 35 36 37 38 39 40 41 process. Well, what makes something relevant is the pleadings. And when there are references to other landowners and very broad terms like that, it is difficult therefore to determine what is relevant. Relevancy is too broad in that context. With respect to paragraphs 84 and 85 of the fresh statement of claim, our brief sets out our position with respect to those paragraphs. And, My Lady, I believe that the wording used in those paragraphs is very similar to the wording that you specifically reference in the first application as being inappropriate in a pleading. In particular, the use of the phrase cynical disregard is not appropriate in a pleading in this context. Those are my submissions, My Lady. THE COURT: Mr. Klippenstein, Mr. Wanless? MR. KLIPPENSTEIN: THE COURT: MR. KLIPPENSTEIN: THE COURT: anything you with to add? Submissions by Mr. Solomon (Costs) MR. SOLOMON: I suppose I can add that Im not asking anyone to be gentle towards me. My Lady, the only other item that we have to address is costs. THE COURT: MR. SOLOMON: beyond what is in my brief. THE COURT: MR. SOLOMON: Yes. And I have nothing to say on the subject Thank you very much. Anything further,

I believe those are our submissions. Okay. Thank you very much, My Lady. Thank you, gentlemen. Mr. Solomon, is there

Okay. So those are my submissions.

THE COURT: Thank you. Ms. McCurdy, anything in that regard? And I think Ms. Killeran (phonetic), if Im not mistaken, had wanted an opportunity if co -- if we got to the point of costs to -- to make submissions. And I know were at the end of our time today, and Im wondering if there had been comments made

78 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32 33 34 35 36 37 38 39 40 41 in some of the written submissions if -- there may be further opportunity at another case management, I think, to properly address those. I have quite a lot on my plate at this point in time. I want to get this moving forward, and there will certainly -- I -- I know its a pressing issue and it needs to be addressed and we put it off last time again, because I knew there was more coming. So subject to any further comment . . . MR. SOLOMON: Theres no urgency associated with that issue, My Lady. Its been brought forward simply because we were directed to bring it forward. If it gets punted off to another day, thats fine, nobody will be harmed by that. THE COURT: Thank you. It will be ultimately dealt with. Mr. -- okay, Im going to try your name, Bychawski, sorry -MR. GELBMAN: THE COURT: MR. GELBMAN: Oh, no, Im Mr. Gelbman. Mr. -Oh, youre Mr. Gelbman. I didnt --- Mr. Bychawski was here this morning.

THE COURT: He was this morning, thank you. I thought you looked familiar from the last proceeding, yes. MR. GELBMAN: can speak -THE COURT: From -- from the last proceeding, yeah, and I

Thank you. My apologies.

MR. GELBMAN: Thank you. On behalf of Encana, we were prepared to speak to costs today if thats the preference, but we -- theres no -- theres no pressing urgency there. Judgment Reserved THE COURT: Okay. I would like to leave it. Im, as Im sure counsel are, on overload at this point. And I think in the circumstances that there -its probably correct, there isnt an urgency on costs. So if we can leave that to be spoken to on another day, because Im sure people will have submissions to make in that regard, then I will deal with this in the interim. Any other comments or questions before we adjourn today?

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MR. KLIPPENSTEIN: MS. MCCURDY:

No, thank you. No, My Lady.

THE COURT: All right. Thank you, everyone, for your extensive written briefs, your extensive case law -- much of which Ive left upstairs, because I think Ive got two bankers boxes -- and for your submissions today to help give me some further direction. I have a really huge task ahead of me on a very important case with a lot of very important issues. I cant give you a timeline. I will give it my very best effort and actually, perhaps, ask for some additional time to -- to work on it so I can get something back -- back to you. I will stay in touch with you through my assistant in terms of giving a report back, I guess, on a status update. I think thats the best that I can offer. MR. KLIPPENSTEIN: On behalf of Ms. Ernst and ourselves, Id like to thank you, My Lady, for your careful consideration today. THE COURT: MR. SOLOMON: Thank you very much, Mr. Klippenstein. Actually, we all would, My Lady.

THE COURT: Okay. Thank you. Thank you very much as well to the -- the people that came and listened to the matter in the court. I appreciate given that the courtroom was full that everybody was very courteous and -- and quiet throughout the proceedings, and I extend my gratitude in that regard. Thank you for that. All right, everyone, thanks very much. Thanks, madam clerk. Have a great weekend and there will be ultimately a report back on this as soon as I can. Thank you. THE COURT CLERK: MR. SOLOMON: Thank you, My Lady. Thank you, My Lady.

PROCEEDINGS ADJOURNED SINE DIE

80 1 Certificate of Record 2 3 I, Sharon Hawkins, certify that this recording is the record made of the evidence in the 4 proceedings in Court of Queens Bench, held in courtroom 1502, at Calgary, Alberta, on 5 the 7th -- 18th day of January, 2013, and that I was the official clerk in charge of the 6 sound-recording machine during these proceedings. 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32 33 34 35 36 37 38 39 40 41

81 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32 33 34 35 36 37 38 39 40 41 Certificate of Transcript I, Jodi Follett, certify that (a) I transcribed the record, which was recorded by a sound-recording machine, to the best of my skill and ability and the foregoing pages are a complete and accurate transcript of the contents of the record, and (b) the Certificate of Record for these proceedings was included orally on the record and is transcribed in this transcript.

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