Sahtu Secretariat Inc. v. Canada
T-1033-95
Dubé J.
12/11/99
11 pp.
Action for declaration amount payable to Crown pursuant to clause 18 of agreement (Proven Area Agreement) between Crown and Imperial Oil Ltd. dated July 1944 royalty as defined in Sahtu Dene and Metis Comprehensive Land Claim Agreement (Sahtu Dene Agreement)-Latter agreement providing Crown pay percentage of resource royalties received by Crown in year-Pursuant to Proven Area Agreement, clause 18, Crown to receive annual payment representing 33 1/3% of total well-head price of all petroleum and natural gas produced, saved and sold from Proven Area-Defendant has refused to pay royalty on it, alleging that by virtue of Proven Area Agreement, defendant owns one-third and Imperial Oil Ltd. twothirds of production; that Proven Area operated as unit for production of petroleum and natural gas by Imperial Oil on behalf of itself and Crown; and that payments in question not royalties within meaning of Sahtu Dene Agreement-Applying definition given by Jerome A.C.J. in preliminary determination (1997), 133 F.T.R. 203 (F.C.T.D.), "royalty" within meaning of Sahtu Dene Agreement must meet following five criteria: must be "any payment, whether in money or in kind"; must be "in respect of production of a resource"; resource must be in defined area; payment must be "paid or payable to government as owner of the resource"; and payment must not be "for a service, for the issuance of a right or interest or for the granting of an approval or authorization"-Issues whether payments in respect of production of resource and whether paid or payable to government as owner of resource-Production of resource must mean more than simply resource; includes among plethora of processes, surveying, drilling, extracting, and storing of product; includes processes involved in extracting minerals from where they lay: Jerome A.C.J. in reasons for order (supra)-Definition of "royalty" in Sahtu Dene Agreement contemplating broad reach, as made clear by use of words "any payment"-As "production" necessary precondition for "payment", words "in respect of" must be interpreted in broadest possible manner-Finding of Jerome A.C.J. that term "royalty" referring to government as owner of land, as opposed to owner of resource, does not conform to literal interpretation of definition of "royalty", which definition declared not to be ambiguous-Although parties and Court bound by order to effect word "royalty" as defined in Sahtu Dene Agreement not ambiguous, not bound by reasons for order-Reasons for orders or judgments not appealable-F.C.A. has no jurisdiction at all to entertain appeal from reasons for judgment: Carlile v. Canada (1993), 161 N.R. 139 (F.C.A.)-If defendant intended to exclude annual payments in question from all-embracing "any payment", defendant ought to have said so-While definition clearly excluding "any payment for service, for issuance of right or interest or for granting of approval or authorization", silent with reference to annual payments or payable to government by Imperial Oil-Declaration will issue to effect amounts payable to defendant pursuant to clause 18 of Proven Area Agreement resource royalties described in Sahtu Dene Agreement, clause 10.1.1.