Recent Cases Feb 29, 2024

Victory for Ressources Utica and its Subsidiaries: The Superior Court Suspended the Application of Provisions of a Provincial Law Adopted in 2022

In this case, the Superior Court of Québec granted both a request for a stay of application of provisions of the law and provisional execution of its decision notwithstanding any appeal against it. It is worth noting that these two exceptional measures are rarely granted.

In this matter, certain oil and gas operators asked the Superior Court of Québec to suspend the application of provisions of the Act ending exploration for petroleum and underground reservoirs and production of petroleum and brine (the “Act”) until a judgement is rendered on the merits of the constitutional challenge to the Act.

The purpose of the Act is to put an end to exploration and production of petroleum, and to prevent the exploitation of brine. In order to achieve this objective, the legislator has chosen to revoke exploration and production licenses, and to oblige holders of revoked licenses to permanently shut down their wells and proceed with site restoration.

The stay of application of provisions of the Act is part of an action involving twelve court filings combined for a joint hearing on a challenge to the effect and constitutional validity of certain provisions of the Act on the grounds that they infringe upon the fundamental right of ownership guaranteed by the Charter of human rights and freedoms (“Québec Charter”) and the Civil Code of Québec (the “CCQ”).

The decision, issued in January, provides a fresh illustration of the principles governing requests for stays in the application of laws. Requests for such stays are rarely granted.

The Honourable Philippe Cantin, j.s.c. considered that there was a serious question to be decided with respect to the alleged violations to provisions of the Québec Charter and the CCQ following the unilateral revocation of licences. The judge noted in passing the circularity of the argument made by the province’s attorney general to the effect that the terms “except to the extent provided by law” found in Section 6 of the Quebec Charter allow the legislature to regulate the right of all persons to the peaceful enjoyment and free disposition of their property without the possibility for them to invoke an infringement of the right of ownership under the Quebec Charter.

Additionally, the judge considered that serious or irreparable harm would occur without a stay of application of the provisions of the Act requiring the closure of wells and restoration of sites as well as the communication and use of confidential data and trade secrets, that were the subject of considerable private investment by the plaintiffs.

In so finding, the judge concluded that the balance of convenience favoured the plaintiffs, despite the presumption that a duly adopted legislative measure is to the public’s advantage.

Lastly, the judge granted provisional execution of its order notwithstanding appeal, which is also an exceptional measure, on the grounds that if the ruling were to be appealed, the plaintiffs would incur a risk of serious or irreparable harm in the absence of a provisional execution order.

BCF is proud to have acted with success on behalf of Gaspé Énergies inc., Ressources Utica inc., Ressources Utica Nord-Est inc., Ressources Utica Sud-Ouest inc., and Ressources Utica Joly inc. with a team led by Éric Orlup and Julie Dorion that included Ariane Carrier, Ann-Julie Auclair, Valérie Allard, Jean Piette, Catherine Paquet, and Frédérique Boutin.

You can read the judgement here (in French only).

Stay on the lookout!

Subscribe to our communications and benefit from our market knowledge to identify new business opportunities, learn about innovative best practices and receive the latest developments. Discover our exclusive thought leadership and events.