This was an Application for Judicial Review.

The Alberta Energy Audit (AEA) audited MEG Energy Corp.’s (MEG) end-of-period statements from 2014 and 2015. AEA issued audit determinations in June and November 2021. MEG objected to both. This led to final Decisions by the Director of Dispute Resolution in June 2022.

MEG subsequently applied for Judicial Review of those Decisions, alleging that the audits were procedurally unfair and unlawful. The procedural issues related to AEA’s alleged failure to complete the audits within prescribed statutory time periods and a lack of disclosure of determinations in other audit files. MEG also contended that portions of the substantive Decisions were unreasonable.

MEG argued that the audit statutory time period expired; however, there were Ministerial Orders extending the time period, but the AEA did not inform MEG of them. Justice Eamon found that MEG was not prejudiced because MEG was entitled to review the fairness and reasonableness of the extension orders in the present Judicial Review.

The Court referenced Rule 3.15, which imposes a strict, non-extendable time limitation on commencing proceedings for Judicial Review. However, Eamon J. stated that Rule 3.15 and the doctrine against collateral challenges did not preclude MEG from challenging the extension decisions in the Judicial Review. Nonetheless, the Court found the extension decisions valid, and that MEG had waived any objections by continuing to participate in the audits without raising the issue of expired time limits.

While examining MEG’s claims for bias, the Court criticized the Director for not fully documenting communications with the auditors; however, that did not amount to bias or unfairness. The Court noted that if there was a document missing from the Certified Record then the parties should have addressed it well before the scheduled hearing. Justice Eamon noted that the Court can allow the Record to be supplemented in appropriate cases where issues such as bias or procedural fairness are in issue, perhaps even directing examination of a witness in certain circumstances according to Rule 3.21.

The Court upheld the Decisions to extend the audit periods and found that there was no breach of procedural fairness or bias in the non-disclosure of previous audit determinations or the Director’s consultations with the AEA. However, Eamon J. sent back the Decision on the cost of the Diluent Tanks for reconsideration because it was unreasonable.