The appellant appealed a decision declaring that its Oil and Gas Lease and Gas Storage Lease with the respondent had terminated.
The Court of Appeal upheld the termination of the Gas Storage Lease, finding the requirement to apply to the Ontario Energy Board within 10 years was a true condition precedent.
However, the Court reversed the decision regarding the Oil and Gas Lease, holding that a 'deemed production' clause in the Unit Operating Agreement kept the lease in full force and effect as long as the appellant continued to make annual rental payments, which it had done.
The appeal was allowed in part.
