Executive Summary: Key Legal and Evidentiary Issues

• Applications by Three Sisters Mountain Village Properties Ltd and Thunderstone Quarries Canmore Ltd for security for costs against Bow Valley Engage Society were dismissed, so Bow Valley’s appeal may proceed without posting security for costs.

• The Court found that, given Bow Valley’s litigation history and proven ability to raise funds, Three Sisters and Thunderstone would likely be able to enforce any costs award in Alberta and that Bow Valley reasonably has the ability to pay a costs award.

• Bow Valley’s appeal, including arguments about the interpretation of “directly affected,” the constitutionality of rule 3.15, and the Designated Director’s jurisdiction and decision under the Environmental Protection and Enhancement Act, was found to have some merit and not to be plainly without merit.

• The amount of security sought—$29,413.13 for each applicant (a total of $58,826.26) to be posted within 30 days—with the consequence that the appeal would be struck if not paid, was considered too onerous and prejudicial to Bow Valley’s ability to continue the appeal.

• The Court took into account the relationship between Bow Valley’s appeal and the other three related appeals, including Stoney Nakoda’s reliance on Bow Valley’s factum on the merits, when assessing whether it was just and equitable to order security.

• The significance of the issues to the community and the importance of the legal questions raised by Bow Valley were factors that, on balance, militated against ordering security for costs.                                                                                                                                                                                                                                                                                             

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Facts of the case
Bow Valley Engage Society filed an appeal in the Court of Appeal of Alberta from a decision of a chambers judge dated March 14, 2025 in Bow Valley Engage Society v Alberta (Environmental Protection and Enhancement Act, Designated Director), 2025 ABKB 158. In that decision, the chambers judge struck two originating applications for judicial review and, in the alternative, dismissed them on their merits. The judicial review applications had challenged a decision of the Designated Director under the Environmental Protection and Enhancement Act, RSA 2000, c E-12, relating to the Three Sisters Mountain Village Project, a development of land east of Canmore under the Three Sisters Mountain Village Area Structure Plan and the Smith Creek Area Structure Plan. Bow Valley and the Stoney Nakoda First Nations (Bearspaw, Chiniki, and Goodstoney First Nations) had requested that the Designated Director order an environmental impact assessment for the project. The Designated Director concluded that she lacked jurisdiction to determine whether an environmental impact assessment was warranted because the activities in the Area Structure Plans did not fall within the definition of “proposed activity” under the Act. She determined that “the current Three Sisters project and its ongoing construction are a continuation of the overall tourism and recreational project that was applied for and approved by the Natural Resources Conservation Board in 1992.”

Bow Valley and Stoney Nakoda’s applications for judicial review were heard together. Stoney Nakoda has its own related appeal (No 2501-0107AC). The two appellants divided the grounds of appeal and arguments between them so that there is no overlap in submissions, and their arguments must be read together. In addition to these two appeals, there are two other related appeals (Nos 2401-0275AC and 2401-0276AC) in which Three Sisters appeals a preliminary decision of a chambers judge who had refused to strike the judicial review applications of Bow Valley and Stoney Nakoda. All four appeals are perfected and are scheduled to be heard together on February 5, 2026.

The chambers decision and service on Thunderstone
In the underlying decision, the chambers judge held that Thunderstone Quarries Canmore Ltd was directly affected by the applications for judicial review, so that Bow Valley and Stoney Nakoda were required to serve Thunderstone under rule 3.15(3)(c) of the Alberta Rules of Court. He rejected Bow Valley’s and Stoney Nakoda’s arguments that this rule violated section 96 of the Constitution Act, 1867. He found that the rule did not render it impossible to bring an application for judicial review in compliance with the Rules and that the case was, in any event, not appropriate for a constitutional pronouncement. Because Bow Valley and Stoney Nakoda had failed to serve Thunderstone, the chambers judge dismissed the applications for judicial review on that basis. In the alternative, he found that the Designated Director’s determination was reasonable.

After the chambers decision, the same judge issued a written decision on costs in Bow Valley Engage Society v Alberta (Environmental Protection and Enhancement Act, Designated Director), 2025 ABKB 463. He ordered Bow Valley to pay costs to both Thunderstone and Three Sisters. Bow Valley and Thunderstone agreed to Thunderstone’s bill of costs in the amount of $8,679.61, which has been paid into trust in Thunderstone’s counsel’s account. Bow Valley and Three Sisters have not yet agreed on Three Sisters’ bill of costs and have provided further submissions to the chambers judge, awaiting his further direction.

The security for costs applications and the governing test
Three Sisters and Thunderstone each applied in the Court of Appeal for security for costs in respect of Bow Valley’s appeal. They asked that security for costs be set at $29,413.13 apiece, calculated on Column 5 of the Alberta Rules of Court with a 1.25 inflationary factor, and that Bow Valley be required to post the security within 30 days, failing which its appeal would be struck.

The applications were governed by rules 4.22 and 14.67 of the Alberta Rules of Court. Rule 4.22 provides that the Court may order a party to provide security for payment of a costs award if it considers it just and reasonable to do so, taking into account whether it is likely the order will be enforceable against assets in Alberta, the respondent’s ability to pay a costs award, the merits of the action, whether an order would unduly prejudice the respondent’s ability to continue the action, and any other appropriate matter. Rule 14.67 permits a single appeal judge to order security for costs on an appeal and provides that if security is not provided as ordered, the appeal is deemed to have been abandoned and the other party is entitled to a costs award.

The Court referred to the test for security for costs described in Poole v City Wide Towing and Recovery Service Ltd, 2020 ABCA 102, and to cases including Milot Law v Sittler, 2024 ABCA 116. It noted that the applicant bears the burden of establishing, on a balance of probabilities, that it is just and equitable to order security for costs or that the respondent will be unable to pay costs that may be awarded. This is a disjunctive test. The Court also emphasized that a security for costs order is discretionary and is intended to balance the parties’ reasonable expectations and rights in order to reach a just and reasonable outcome.

Financial position and ability to enforce a costs award
On the financial criteria, Three Sisters and Thunderstone argued that Bow Valley had limited assets and was unlikely to be able to pay a costs award. They relied on Bow Valley’s statement of financial position as at December 31, 2023, which showed net assets of $3,870. They contended that Bow Valley’s funds were not a net figure and that the Court did not know what debts or obligations existed, including legal fees.

Bow Valley responded that it has longstanding involvement in Alberta and in Canmore, that it currently has $25,550.15 in its bank account, and that it has a subscriber network of 1,373 persons who can be relied on for further funding if costs are awarded against it. It further pointed out that it had paid the current costs award in favour of Thunderstone into trust with an irrevocable direction to pay, pending appeal, referring by analogy to Beaumont Energy Inc v Amik Oilfield Equipment and Rentals Ltd, 2017 ABCA 327.

Justice Feehan concluded that, given Bow Valley’s longstanding involvement in litigation involving this project and its proven ability to raise funds, it was reasonable to determine that Three Sisters and Thunderstone would be able to enforce a costs award against Bow Valley if it were unsuccessful on appeal. The Court found that Bow Valley reasonably has the ability to pay a costs award.

Merits of the appeal
Three Sisters and Thunderstone submitted that Bow Valley’s appeal was weak. They emphasized that the chambers judge’s conclusion that Thunderstone was “directly affected” for purposes of rule 3.15(3)(c) was reviewable on a standard of palpable and overriding error and argued that there was no such error. In their view, Thunderstone was directly affected because it is a landowner within the development area, and, if the judicial review applications succeeded, an environmental impact assessment could be required in relation to its lands, possibly leading to additional stipulations or conditions. They also noted that Thunderstone had already contributed to wildlife corridors in the area as a result of the 1992 Order of the Natural Resources Conservation Board.

They further argued that there was no merit to an appeal regarding the constitutionality of rule 3.15, which attracts a correctness standard. In their submission, the rule does not entirely restrict access to the Court of King’s Bench but is a mandatory procedural requirement that must be satisfied and is not discretionary. They added that, even if the chambers judge had been wrong on the striking of the judicial review applications and on the constitutional question, his finding that the Designated Director’s decision was reasonable meant that this ground of appeal also had little merit.

Bow Valley contended that the issue of whether the Designated Director had jurisdiction to require an environmental impact assessment, based on the definition of “proposed activity” in section 39(c) of the Environmental Protection and Enhancement Act, raises a question of law informed by this Court’s prior decisions in Castle – Crown Wilderness Coalition v Alberta (Director of Regulatory Assurance Decision, Alberta Environment), 2005 ABCA 283, and Alexis v Alberta (Environment and Parks), 2020 ABCA 188. It argued that Thunderstone should not have been found to be directly affected where it had never participated in any regulatory proceeding about the Three Sisters development and that this extended the phrase “directly affected” too far. Bow Valley also pointed to the fact that there had been no evidence before the chambers judge that Bow Valley or Stoney Nakoda knew of Thunderstone’s existence until it filed its application to strike, even though Thunderstone was registered as landowner within the Smith Creek Area Redevelopment Plan.

On the constitutional issue, Bow Valley submitted that other Canadian jurisdictions have “off-ramps” in similar procedural regimes—provisions that allow flexibility or remedy for failures of service—and cited examples from British Columbia, the Federal Courts, Manitoba, and Ontario. It argued that a mandatory requirement to strike an application for non-service, with no possible remedy, is unconstitutional.

Justice Feehan held that, while it would be premature to assess the ultimate strength of Bow Valley’s submissions, which should be left to the appeal panel, it was not possible to say that these arguments had no merit.

Potential prejudice from an order for security and timing
On the issue of prejudice, Three Sisters and Thunderstone argued that Bow Valley’s ability to continue the appeal would not be unduly prejudiced by an order for security because Bow Valley could fundraise to pay the security. They suggested that Bow Valley was more likely to be successful in raising funds to post security for an appeal than to fundraise later for an ultimate costs award, and they characterized an order for security as striking an appropriate balance by allowing the appeal to proceed but at Bow Valley’s risk if the appeal failed.

The Court observed that the intended result would be that Bow Valley would have to fundraise $58,826.26 within 30 days, failing which its appeal would be struck, and described this as “a tall order.” Bow Valley also submitted that the application for security was brought too late because the appeal was scheduled for February 5, 2026, and an order requiring fundraising right up until the hearing would be too onerous. It relied on cases including Amex Electrical Ltd v 726934 Alberta Ltd, 2014 ABQB 66, and Aski Construction Ltd v Markos, 2017 ABCA 341, on the timing of security for costs applications.

Relationship with the Stoney Nakoda appeal and other considerations
Under rule 4.22(e), the Court was entitled to consider other appropriate matters. Bow Valley argued that if security for costs were ordered and it failed to post the security so that its appeal was struck, this would affect Stoney Nakoda’s appeal. Stoney Nakoda only advances arguments on rule 3.15 and relies on Bow Valley’s factum regarding the merits of the underlying judicial review. Three Sisters and Thunderstone replied that they would consent to Stoney Nakoda advancing submissions that otherwise would have been advanced by Bow Valley, and Justice Feehan noted that it was not clear that this would improve the situation.

Bow Valley further submitted that resolution of the issues was important to the community and that the issues raised were important questions of law, and that this also weighed against ordering security for costs.

Ruling and overall outcome
After weighing the statutory factors and the parties’ submissions, Justice Feehan concluded that, on balance, it was not just or equitable to order security for costs against Bow Valley. The applications by Three Sisters Mountain Village Properties Ltd and Thunderstone Quarries Canmore Ltd for security for costs were dismissed. The applications were heard on December 18, 2025, and reasons were filed at Edmonton, Alberta, on January 8, 2026, in the decision cited as Bow Valley Engage Society v Alberta (Environmental Protection and Enhancement Act, Designated Director), 2026 ABCA 2. Total monetary award/costs/damages granted or ordered cannot be determined.