ConocoPhillips Canada Resources Corp v Shell Canada Limited, 2019 ABQB 727

An old oil well leaked and contaminated the ground, and neither party in this dispute wanted to claim ownership and perform the required remediation. ConocoPhillips Canada Resource Corp ("Conoco") sought a declaration that Shell owned the well based on a sale of its rights by Conoco's predecessor ("Gulf"). Shell denied ownership, and claimed that the wells were abandoned and could not be transferred. Shell also outlined various failures that support that the well was not transferred and filed a counterclaim. The judgment lists the issues raised as follows: "the interpretation of the contract, the consideration of the context within which it was made, the subsequent conduct of the parties, the legislative regime in 1991, the effect of the Limitations Act, the doctrine of laches and acquiescence, and the ability to file a counterclaim in relation to an alleged collateral agreement made 27 years ago". The significant passage of time posed problems in terms of the reliability of evidence, records, and testimonies. Both parties made numerous submissions. Most generally, Conoco sought a declaration that Shell acquired the wells from Gulf, that Shell would indemnify Conoco for environmental liabilities, that specific performance or a mandatory injunction would force Shell to complete the formal transfer of assets, and that costs incurred since filing the action should be awarded. In response, Shell sought a declaration that it did not acquire ownership of five of the seven wells. It was argued that the wells were not part of their former purchase, that the wells were abandoned at the time, and that the wells would have been named specifically if they were intended to be part of any sale. Furthermore, it was submitted that the Court should not direct a transfer that was not possible at the time of the original sale. Finally, Shell argued that Gulf retained the responsibility to properly abandon the wells. In the alternative, if Shell was found to own the wells, Shell sought damages for losses in relation to Conoco not fulfilling its contractual duties and failing to meet its duty of care to "file the well termination records, to advise of and remediate the environmental issues and to advise Shell of its view of Shell's responsibility". It was held that the wells in dispute were owned by Shell, but that Conoco did not provide evidence to support post claim damages. The wells were not explicitly listed in the original sale, there was no regulatory ownership at the time of the sale, and the wells were not explicitly considered "petroleum and natural gas rights". However, it was found that the wells were profit-a-prendres, that they retained a possibility of re-entry, and that the wells were implicitly included in the definition of "petroleum and natural gas rights" .The defendant failed to provide evidence that a consideration of context prior to the sale supported that the parties intended to exclude the well in question from being transferred. The Court also found that the indemnity agreement implied wells were assets. Laches were not found to apply to this matter either. Finally, Shell's counterclaim application was also dismissed because the limitation period for claims regarding conduct of the parties had expired, and an entire agreement clause within the sale agreement absolved any contractual obligations for Conoco to advise Shell on matters of ownership or contamination. Shell's counterclaim in tort was also dismissed because there was also no special relationship that obligated Gulf or Conoco to advise Shell of the contamination.