Létourneau
J.A.:
We
are
in
substantial
agreement
with
the
reasons
and
conclusions
of
the
learned
Tax
Court
Judge,
except
as
regards
his
finding
that
the
Minister
could
not
be
compelled
to
issue
rights
of
the
type
contemplated
in
clause
8
of
the
Farmout
agreement
which
bound
the
parties.
It
is
clear
to
us
from
the
exchange
of
correspondence
between
the
Appellant
and
the
Alberta
Energy
and
National
Resources
Department
that
the
Appellant
thought
that,
by
virtue
of
clause
8
of
the
said
agreement
between
the
two
parties,
it
had
the
right
to
acquire
oil
sands
rights
if
oil
sands
were
encountered
in
the
normal
course
of
developing
rights
under
petroleum
and
natural
gas
leases.
The
relevant
portion
of
that
letter
reads:
Under
the
terms
of
the
AEC/ENR
Letter
Agreement,
AEC
has
the
right
to
acquire
oil
sands
rights
if
oil
sands
are
encountered
in
the
normal
course
of
P
&
NG
development
1.
It
is
also
clear
from
that
correspondence
that
the
Alberta
Energy
and
Natural
Resources
Department
felt
that
it
was
bound
under
the
agreement
to
authorize
the
acquisition,
exploration
and
development
of
the
oil
sands
rights.
In
a
letter
of
July
16,
1980
sent
by
the
Department
in
response
to
the
Appellant
who
had
asserted
its
rights
to
acquire
oil
sands
rights,
the
Assistant
Deputy
Minister
of
the
Department
stated:
As
I
read
clause
8
of
the
Letter
Agreement,
either
party
may
initiate
the
process
of
oil
sands
agreement
issuance
at
any
time
after
AEC
encounters
crude
bitumen.
Where
AEC
applies,
the
Minister
is
obliged
to
respond
(though
under
no
time
constraint)
by
written
notice
with
terms
and
conditions.
Alternatively,
the
Minister
may
provide
the
written
notice
without
having
first
received
an
initiating
application
from
AEC.
Finally,
the
preamble
of
the
Farmout
agreement
also
confirms
that
the
parties
to
the
agreement
understood
that
the
Appellant
was
entitled
to
acquire
the
bitumen
encountered
in
the
Fisher
Creek
area
covered
by
the
agreement:
WHEREAS
pursuant
to
the
Acquisition
Agreement,
if
in
the
course
of
developing
rights
under
the
petroleum
and
natural
gas
leases
AEC
encounters
Crude
Bitumen,
AEC
will
be
accorded
the
right
in
the
Air
Weapons
Range
to
acquire,
explore
for,
and
develop
Crude
Bitumen
under
such
terms
and
conditions
as
Alberta
may
decide.
Contrary
to
what
the
Appellant
contended,
what
was
given
to
it
under
the
agreement
was
more
than
a
mere
expectancy
of
acquiring
property
and
also
more
than
a
right
to
negotiate.
For
these
reasons,
the
appeal
should
be
dismissed
with
costs.
Appeal
dismissed.
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