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The Surface Rights Board is a quasi-judicial tribunal that grants right of entry and assists landowners/occupants and operators resolve disputes about compensation when operators require access to private land or occupied crown land to develop subsurface resources such as oil, gas, and coal or to build and operate pipelines and power transmission lines.

 
Important Rental Recovery Decisions

Throughout the autumn of 2015 the Board issued 40 decisions for applications where landowners sought to recover compensation from operators which had recently undergone receivership proceedings or proceedings under the federal Companies’ Creditors Arrangement Act. In each of these 40 decisions the Board found that any stay of proceedings issued by courts had been lifted. The Board also found that the amount owing was not affected by the insolvency proceedings, either because that the compensation became due after the end of the insolvency proceedings, or because there was no plan of arrangement and the landowner had filed a statutory declaration stating that they had not been paid. (Click here for a summary of the Board decisions involving the receivership of Tallgrass Energy Corp. and Sedna Oil and Gas Ltd. Click here for a summary of the Board decisions involving the CCAA proceedings of FairWest Energy Corporation.)

The Surface Rights Board has issued key decisions directing the Minister to make payments to landowners for unpaid rentals owing from a bankrupt operator:

  • In Portas v PetroGlobe Inc, 2015 ABSRB 708 (Portas), the Surface Rights Board decided that it has the authority to proceed with claims for unpaid rentals that become due and payable after the Operator’s assignment into bankruptcy and prior to a discharge. In result, the Board decided to direct the Minister to make payment of the amount claimed for rental arrears once the Operator’s rights have been terminated and if the compensation due has still not been paid. (Click here for a summary of the Portas decision and click here for the complete Portas decision).
  • In Rodin v PetroGlobe Inc, 2015 ABSRB 737 (Rodin), the Surface Rights Board decided that it has authority to proceed with claims for unpaid rentals that became due and payable before the assignment if the Operator’s rights have been terminated for failure to pay rent that became due after the assignment. The Board also confirmed its decision in Portas that it has the authority to proceed with claims for unpaid rentals that become due and payable after the Operator’s assignment into bankruptcy and prior to a discharge. In result, the Board decided to direct the Minister to make payment of the amount claimed for rental arrears once the Operator’s rights have been terminated and if the compensation due has still not been paid. (Click here for a summary of the Rodin decision and click here for the complete Rodin decision).

Please Note: On October 6, 2015, the Alberta Surface Rights Board issued its decision in Lemke v Petroglobe Inc, 2015 ABSRB 740 (Lemke) pursuant to section 29 of the Surface Rights Act deciding that it did not have authority to proceed with claims for unpaid rentals that accrued solely before the date that the operator was assigned into bankruptcy. The Board distinguished the facts in Lemke from its two recent decisions in Portas and Rodin (see above) “…in which the Board determined it had authority to terminate the operator’s rights under the surface leases based on unpaid compensation that accrued after the assignment in bankruptcy. (Click here for the complete Lemke decision)

 
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