Canada: Provincial Regulator May Owe Private Duty Of Care

The saga of Rosebud, AB resident Jessica Ernst continues ( click here to read the original email alert).

On the heels of a recent Court of Appeal ruling which found Ms. Ernst could not sue the Energy Resources Conservation Board ("ERCB"), Chief Justice Wittmann has dismissed an application by Alberta Environment ("AENV") to strike the claim against it. In denying the application, the Chief Justice has cleared the path for Ernst to argue that AENV owed her a private duty of care and is liable to her for damages (see Ernst v. EnCana Corporation, 2014 ABQB 672).

Facts

Ms. Ernst has been engaged in a lengthy legal battle with EnCana, the ERCB, AENV, and others in relation to alleged contamination of her water well. Ms. Ernst contends fracking fluid used by EnCana contaminated the Rosebud aquifers which provide her well water.

Procedural History

In September the Court of Appeal dismissed the claims of Ernst against the ECRB (predecessor to the Alberta Energy Regulator). Ms. Ernst's action against AENV and EnCana were unaffected by that ruling.

Emboldened by the Court of Appeal decision, AENV brought an application to effectively end Ernst's claim against it. The application sought to strike all portions of the claim pertaining to AENV as no reasonable cause of action existed. Specifically, AENV argued that it did not owe a private duty of care to Ms. Ernst, or in the alternative, that any claim against it would fail on account of the statutory immunity AENV enjoyed under legislation. AENV also argued it should be granted summary judgment against Ernst as, for the same reasons, the claim had no merit.

The Court rejected both arguments. Chief Justice Wittmann noted the prospect of finding sufficient proximity giving rise to a duty of care between a regulator and individual may exist where a regulator "embarks upon a course of conduct calling for operational decisions relating to that individual".

The Court rejected AENV's claims that it enjoyed statutory immunity under the Environmental Protection Enhancement Act ("EPEA") and the Water Act. The Court interpreted the immunity provisions cited as not expressly extending to AENV. Rather, the wording of these sections provided immunity to individuals exercising functions under the respective acts. The Court went on to note that the statutory provisions at issue differed from those relating to the ERCB which did expressly grant immunity to the regulator.

The Court, having found a reasonable cause of action exited, held that summary judgment was inappropriate.

Lastly, the Court expressed its displeasure with AENV by awarding triple costs to Ms. Ernst. In so doing, the Court pointed out that Ms. Ernst was "wholly successful" in the application. The Court expressed annoyance with the fact that, despite an earlier failed attempt, AENV had made a second attempt to hae the claim struck and viewed the application as unnecessarily repetitive.

Conclusions

While seemingly a victory for those seeking recourse against regulators, we caution against relying heavily on this decision. Justice Wittmann was required, by the nature of the application, to accept the allegations in the Statement of Claim as proven. It was on this basis that he concluded a private duty of care may exist. Justice Wittmann acknowledged, and the fact remains, that Ms. Ernst still faces the difficult task of proving the required proximity, breach of duty, and resulting damages necessary to establish a claim in negligence.

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