CHEVRON CANADA RESOURCES v CANADA (EXECUTIVE DIRECTOR OF INDIAN OIL AND GAS CANADA), 2018 ABQB 48

romaine j

3.72: Consolidation or separation of claims and actions

Case Summary

The Plaintiffs (“Chevron”) entered into an oil and gas lease with the Defendant Crown pursuant to which Chevron was required to pay royalties to the Defendant Crown for the benefit of the Defendants Ermineskin Indian Band (“Ermineskin”), Louis Bull Indian Band (“Louis Bull”), Montana Indian Band (“Montana”), and Samson Indian Band (“Samson”)(collectively the “Bands”). Chevron alleged it had made various overpayments on the lease and brought a Claim for unjust enrichment against the Defendants jointly and severally for the net overpayment (“Chevron Claim”). Louis Bull, Montana, and Samson counterclaimed, asserting both that the lease was invalid and that Chevron had underpaid on the lease (“Counterclaims”).

In 2005, due to related Federal Court and other pending proceedings, Romaine J. had ordered a stay of the Counterclaims on the basis that it would be an abuse of the Court's process to allow the “duplicative and contrary allegations” against the Crown to continue. Samson applied to stay the Trial of the Chevron Claim pursuant to Rule 3.72 pending final judgment in the related proceedings.

Romaine J. stated that the remedy under Rule 3.72 is discretionary and must be exercised in accordance with established principles. The first question under Rule 3.72 is whether the issues in the two Actions are substantially the same or inextricably related. If so, the party seeking the Stay must establish both that continuing the Claim would be unjust because it would be oppressive, vexatious, or otherwise an abuse of the Court’s powers and that the Stay will not cause an injustice to the opposing party. When considering these questions, the Court should be mindful of efficient dispute resolution and efficient use of the Court’s and the parties’ resources.

Justice Romaine concluded that the stay of the Counterclaims would not prejudice Samson in its defence of the Chevron Claim. However, a stay of the Chevron Claim would cause prejudice to Chevron due to delay. The Federal Court Actions had been proceeding for over 20 years, and would take years more to resolve. The risks of further delay included the death of witnesses, fading of memories, retirement of counsel, and significant lost opportunity costs. For these reasons, Romaine J. denied Samson’s Application for a stay of the Trial.

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