Date: 20000616
Docket: A-58-00
OTTAWA, ONTARIO, THE 16TH DAY OF JUNE 2000
PRESENT: THE HONOURABLE JUSTICE SHARLOW
BETWEEN:
CANADIAN FOREST OIL LTD.
Applicant
CHEVRON CANADA RESOURCES
RANGER OIL LIMITED
Respondents
NATIONAL ENERGY BOARD
Intervener
ORDER & REASONS FOR ORDER
SHARLOW J.A.
[1] Canadian Forest Oil Ltd. has commenced an application for judicial review of a decision made by the National Energy Board to issue a declaration of commercial discovery (CDD). Pursuant to Rule 318(2), the National Energy Board objects to providing, as part of the tribunal record, a certified copy of a document that Chevron Canada Resources submitted to the National Energy Board for consideration in reaching that decision. The basis of the objection is that the document is privileged by virtue of subsection 101(2) of the Canada Petroleum Resources Act.
[2] The facts are not in dispute. On July 24, 1991, the National Energy Board issued to Chevron Canada Resources and others a significant discovery licence (SDL) pursuant to section 30 of the Canada Petroleum Resources Act, R.S.C. 1985, Chap. 36 (2nd supp), as amended. The SDL is designated "SDL 99" and relates to lands at latitude 60E 30', longitude 123E 30', sections 23-30 and 33-40 (5,110 hectares).
[3] In early 1999, a commercial discovery was made by the drilling of the Chevron et al Liard K-29 gas well, which is within the area of SDL 99. On October 15, 1999, Chevron Canada Resources applied for a CDD for the area of SDL 99.
[4] By virtue of Part II.1 of the National Energy Board Act, R.S.C. 1985, c. N-7, and in particular section 28.2, the National Energy Board cannot issue a CDD without first giving to "any person [it] considers to be directly affected by the decision" at least 30 days of its intention to issue the CDD. A person to whom a notice is given is entitled, within a stipulated time, to request a hearing. If such a request is received, the National Energy Board must hold a hearing. Everyone who requested a hearing is entitled to notice of the hearing and has the right to make representations and introduce witnesses and evidence at the hearing. The National Energy Board may then make its decision. Every person who requested a hearing is entitled to notice of the decision and, on request, the National Energy Board's reasons for the decision.
[5] After investigating the application of Chevron Canada Resources, the National Energy Board concluded that a CDD should be issued for an area that covers some but not all of the area covered by SDL 99, and an additional area not covered by SDL 99. The National Energy Board gave notice of its intention to issue the CDD on that basis to all persons it considered to be "directly affected". All of the notified parties waived the 30 day notice period and their right to a hearing. The National Energy Board issued the CDD on January 5, 2000.
[6] Canadian Forest Oil Ltd. holds a working interest in an exploration license, EL 363, which covers an area immediately adjacent to SDL 99, on its northern boundary. The area of EL 363 is not included in the area covered by the CDD that is the subject of this proceeding. The National Energy Board did not consider Canadian Forest Oil Ltd. to be "directly affected" by the CDD, and so it was not given notice of the National Energy Board's intention to issue the CDD.
[7] Canadian Forest Oil Ltd. claims to have reason to believe that the reservoir that is the source of the discovery made by Chevron Canada Resources extends into the area covered by EL 363 and therefore the CDD should have covered that area. It is argued for Canadian Forest Oil Ltd. that if it had been given notice of the National Energy Board"s intention to issue the CDD, it would have had an opportunity to present this information so that the National Energy Board could take it into account. Including part of the area of EL 363 in the CDD would have given Canadian Forest Oil Ltd. certain practical advantages in seeking a production licence.
[8] On January 26, 2000, Canadian Forest Oil Ltd. filed the notice of application for judicial review that commenced this proceeding. The application for judicial review questions the National Energy Board's determination that Canadian Forest Oil Ltd. is not "directly affected", and also its determination of the area covered by the CDD. The notice includes a request that the National Energy Board provide a certified copy of all documents that were before it when the decision was made to issue the CDD.
[9] All of that material has now been produced, except the technical material filed by Chevron Canada Resources in support of its application for the CDD. For ease of reference, I will refer to that material as the "Chevron submission". It appears that information in the Chevron submission would have been relevant to both of the determinations that are the subject of this application for judicial review.
[10] The National Energy Board objects to producing the Chevron submission because of the following provisions of section 101 of the Canada Petroleum Resources Act:
| (2) Subject to this section, information or documentation is privileged if it is provided for the purposes of this Act or the Canada Oil and Gas Operations Act or any regulation made under either Act, or for the purposes of Part II.1 of the National Energy Board Act, whether or not the information or documentation is required to be provided.
(2.1) Subject to this section, information or documentation that is privileged under subsection (2) shall not knowingly be disclosed without the consent in writing of the person who provided it, except for the purposes of the administration or enforcement of this Act, the Canada Oil and Gas Operations Act or Part II.1 of the National Energy Board Act or for the purposes of legal proceedings relating to its administration or enforcement.
(3) No person shall be required to produce or give evidence relating to any information or documentation that is privileged under subsection (2) in connection with any legal proceedings, other than proceedings relating to the administration or enforcement of this Act, the Oil and Gas Production and Conservation Act or Part II.1 of the National Energy Board Act.
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| (2) Sous réserve des autres dispositions du présent article, les renseignements fournis pour l'application de la présente loi, de la Loi sur les opérations pétrolières au Canada, de leurs règlements ou de la partie II.1 de la Loi sur l'Office national de l'énergie sont protégés, que leur fourniture soit obligatoire ou non.
(2.1) Sous réserve des autres dispositions du présent article, les renseignements protégés au titre du paragraphe (2) ne peuvent, sciemment, être communiqués sans le consentement écrit de la personne qui les a fournis, si ce n'est pour l'application de la présente loi, de la Loi sur les opérations pétrolières au Canada ou de la partie II.1 de la Loi sur l'Office national de l'énergie ou dans le cadre de procédures judiciaires à cet égard.
(3) Nul ne peut être tenu de communiquer les renseignements protégés au titre du paragraphe (2) au cours de procédures judiciaires qui ne visent pas l'application de la présente loi, de la Loi sur les opérations pétrolières au Canada ou de la partie II.1 de la Loi sur l'Office national de l'énergie.
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[11] Chevron Canada Resources argues that subsection 101(3) precludes an order requiring the National Energy Board to produce the Chevron submission, and that in any event production should not be ordered because this application for judicial review must inevitably fail or, alternatively, because the production of the Chevron submission would give Canadian Forest Oil Ltd. more information than would have been available to the "directly affected " parties if there had been a hearing. The last point relies upon a practice adopted by the National Energy Board by which its hearings are partitioned, with the result that no party is permitted to know the evidence given by the others.
[12] The first point is a question of statutory interpretation. For purposes of considering that point I will assume that the Chevron submission is within the scope of the privilege in subsection 101(2), that it includes information of value to Chevron Canada Resources, and that harm could be caused to Chevron Canada Resources if that information is disclosed to Canadian Forest Oil Ltd. or other competitors. I also accept that there are important public policy reasons for the statutory privilege created by subsection 101(2). I agree with counsel for Chevron Canada Resources that the objectives of the Canada Petroleum Resources Act depend upon a regime that facilitates full and frank disclosure by resource companies seeking exploration and production rights. The question, then, is whether an order requiring the National Energy Board to produce the Chevron submission as part of the tribunal record in this proceeding is precluded by subsection 101(3).
[13] Canadian Forest Oil Ltd. argues that subsection 101(3) does not preclude such an order because this judicial review is a proceeding relating to the administration or enforcement of the Canada Petroleum Resource Act or Part II.1 of the National Energy Board Act. Counsel for Chevron Canada Resources submitted that reading subsection 101(3) as broadly as suggested by Canadian Forest Oil Ltd. would destroy the efficacy of the statutory privilege in subsection 101(2), because it could lead to anyone being given a right to privileged information simply by filing an application for judicial review. Counsel for Canadian Forest Oil Ltd., on the other hand, stresses that unless this information is disclosed, the Court cannot conduct an effective review of the National Energy Board decision that is the subject of this proceeding.
[14] In my view, subsection 101(3) does not preclude an order for the production of the Chevron submission. The Canada Petroleum Resource Act provides for the regulation of oil and gas resources in certain areas of Canada. The authority of the National Energy Board to issue a CDD with respect to those lands is an integral part of the regulatory scheme, and therefore the issuance of a CDD is an aspect of the administration of the Canada Petroleum Resource Act. This judicial review application raises a question as to the propriety of the issuance of a CDD. I must therefore conclude that this proceeding relates to the administration of the Canada Petroleum Resource Act.
[15] It seems to me that this proceeding also relates to the administration of Part II.1 of the National Energy Board Act. The statutory procedure governing the issuance of CDDs is found in Part II.1 of the National Energy Board Act. This application for judicial review raises a question as to the propriety of the National Energy Board's determination of who the "directly affected" parties are. That is a critical aspect of the statutory procedure.
[16] Having decided that I may order the production of the Chevron submission, I must now consider whether I should do so. In theory, I would be hard pressed to justify an order for the production of privileged material in a proceeding that is so devoid of merit that it must inevitably fail. However, I am not prepared at this stage to make such an assessment of the merits of this judicial review application. Nor am I prepared to give effect to the argument that Canadian Forest Oil Ltd. would not have been permitted to see the Chevron submission, even if it had been granted status as a "directly affected" party. There might be some force to that submission if Canadian Forest Oil Ltd. were challenging only the National Energy Board's determination of who the "directly affected" parties are. However, Canadian Forest Oil Ltd.'s challenge is not so limited.
[17] It does not follow, however, that immediate production of the Chevron submission ought to be ordered. Nothing in the material before me justifies the inevitable and complete destruction of the statutory privilege, or the disclosure of information that retains its value to Chevron Canada Resources only so long as it remains confidential. It may well be that the portions of the Chevron submission that are most relevant to the issues in the judicial review will not include the most sensitive technical and financial information. Rule 151, which deals with confidentiality orders, is designed to deal with the very problem of protecting valuable confidential information from unnecessary disclosure.
[18] For these reasons, the objection of the National Energy Board under Rule 318(2) is allowed, subject to the following:
| (a) Chevron Canada Resources may serve and file a motion under Rule 151 for an order of confidentiality with respect to the material it submitted to the National Energy Board in support of the application for a Declaration of Commercial Discovery for the Chevron et al Liard K-29 well (the Chevron submission). |
| (b) The Rule 151 motion is to be made on or before June 30, 2000. The parties may agree to an extension of that deadline to a date no later than August 30, 2000. Leave of the Court may be sought for any other extension. |
| (c) If Chevron Canada Resources does not serve and file a Rule 151 motion within the stipulated time, the National Energy Board will, within 20 days of expiry of the stipulated time, provide certified copies of the Chevron submission to the Registry and to Canadian Forest Oil Ltd. |
| (d) If Chevron Canada Resources serves and files a Rule 151 motion within the stipulated time, the National Energy Board will not be obliged to provide certified copies of the Chevron submission except as may be required by the order made on that motion. |
Karen R. Sharlow
J.A.
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