A challenge to the validity of oil and gas permits outside the judicial review process is a collateral attack and will be struck, the Alberta Court of Queen’s Bench held recently in Ominayak v Penn West Petroleum Ltd2015 ABQB 342.

By way of background, Penn West Petroleum Ltd. obtained a number of regulatory approvals between 2011 and 2013 to conduct oil and gas operations near Haig Lake, Alberta on lands that the Lubicon Lake Cree assert Aboriginal title and rights. Two groups claim to represent the interests of the Lubicon Cree: the Lubicon Lake Nation, led by former Chief Bernard Ominayak, and the Lubicon Lake Band, led by Chief Billy Joe Laboucan elected on February 15, 2013. Penn West consulted with the Lubicon Cree in obtaining the approvals, including then Chief Bernard Ominayak. We previously wrote about a long-term Order granted by the Alberta Court of Queen’s Bench under the Public Lands Act, RSA 2000, c P-40 after several members of the Lubicon Cree who claimed to be affiliated with Bernard Ominayak blockaded a permitted access road impacting Penn West’s operations.

In June 2013, Bernard Ominayak and several members of the Lubicon Lake Nation commenced a lawsuit in Calgary against the federal and provincial Crown claiming Aboriginal title and rights on lands which include those within Penn West’s operations. A few months later in November 2013, the same plaintiffs filed a separate lawsuit in Peace River against Penn West seeking, among other things, a declaration that Penn West’s approvals were void and of no effect. Penn West brought an application to strike the claim on the grounds that it was a collateral attack on Penn West’s approvals outside of the judicial review process and that it was duplicative of the Crown action.

In a decision released on June 5, 2015, the Alberta Court of Queen’s Bench struck the portions of the claim that sought to invalidate Penn West’s approvals, finding that they were a collateral attack. The Court held that the plaintiffs did not follow the appropriate avenues of judicial review, and to allow the claim would render the judicial review process “irrelevant”, as parties could ignore the judicial review process or state no concern at the consultation stage and later seek to render regulatory approvals invalid through an Aboriginal title claim.

The decision confirms that it is a collateral attack to challenge the validity of regulatory approvals for oil and gas operations outside of the judicial review process based on the principle articulated by the Supreme Court of Canada in Behn v Moulton Contracting Ltd2013 SCC 26 (a decision that we previously discussed here), and that such pleadings will be struck. The decision also leaves the door open to private actions in tort against companies operating in areas subject to asserted but unproven Aboriginal title and rights claims, affirming Saik’uz First Nation v Rio Tinto Alcan Inc2015 BCCA 154, which is currently subject to an application for leave to appeal to the Supreme Court of Canada.