Executive Summary: Key Legal and Evidentiary Issues

• ENMAX Power Corporation sought permission to appeal a Court of King's Bench decision ordering compensation to Remington Development Corporation under s 25(1)(b) of the Surface Rights Act for losses related to power transmission lines crossing downtown Calgary land.

• Interpretation of "titled unit" under s 25(1)(b) is central to the dispute, specifically whether compensation should be limited to the Subject Properties (4.4 acres) or extended to the entirety of the Interlink Lands (11.27 acres).

• The appeal judge took a novel approach by awarding a lump sum of $11,078,123 based on delayed market value recovery of the entire Interlink Lands, departing from the Tribunal's more restrictive $7,916,482 award.

• Permission to appeal was granted in part on the statutory interpretation question, as it is or could be of significant importance to landowners and utilities operating in Alberta.

• Remington's cross-appeal regarding ss 25(1)(c) and (d) was denied, as those issues are properly addressed within the main appeal on the correct interpretation of s 25 as a whole.

• Challenges to the appeal judge's factual findings were denied on the basis that ENMAX failed to demonstrate a reasonable prospect of having those findings overturned, regardless of whether a reasonableness or palpable and overriding error standard applies.

The land acquisition and the transmission lines

In 2002, Remington Development Corporation purchased 11.27 acres of land in downtown Calgary, registered as 13 separately titled parcels, known collectively as the Interlink Lands. The land was acquired from the Canadian Pacific Railway Company. From 1948 until their removal in 2023, ENMAX Power Corporation operated two power transmission lines that crossed the Interlink Lands. The transmission lines were located on and above four of the 13 parcels, comprising 4.4 acres referred to as the Subject Properties. On May 17, 2018, the Surface Rights Board granted ENMAX four right of entry orders (ROEs) regarding the transmission lines, covering 1.23 acres entirely within the Subject Properties. This date became the Effective Date for compensation purposes.

The Tribunal's compensation decision

The grant of the ROEs triggered a mandatory hearing under s 23 of the Surface Rights Act to determine the amount of compensation payable and to whom. The compensation hearing proceeded before the Land and Property Rights Tribunal, an entity created through the amalgamation of the former Surface Rights Board with certain other administrative decision-makers. On October 21, 2022, the Tribunal rendered its decision, interpreting "titled unit" in s 25(1)(b) of the Surface Rights Act as limiting Remington's compensation to losses linked to the Subject Properties rather than to the entirety of the Interlink Lands. Accordingly, the Tribunal ordered ENMAX to pay Remington a lump sum of $7,916,482 under s 25(1)(b), annual payments of $3,000 per year for loss of use under s 25(1)(c), and $353,989 per year for adverse effect under s 25(1)(d).

The Court of King's Bench appeal

Both parties appealed the Tribunal Decision to the Court of King's Bench pursuant to s 26 of the Surface Rights Act. The appeal took the form of a new hearing with both parties introducing new evidence in a trial-like setting. The appeal judge determined the Tribunal had erred in a number of ways, most significantly in how it identified the actual loss suffered by Remington, based on the unique circumstances in the case, and in particular the urban setting in which the dispute had manifested. Most significantly, he did not limit the applicability of s 25(1)(b) to the Subject Properties. He went on to award compensation to Remington based on the prolonged delay of Remington's recovery of the market value of the entirety of the Interlink Lands due to the sustained presence of the transmission lines. He ordered ENMAX to make a lump sum payment of $11,078,123 plus interest to Remington pursuant to s 25(1)(b). He further found that no additional compensation was payable under ss 25(1)(c) or (d), in part because his award under s 25(1)(b) fully compensated Remington.

ENMAX's proposed grounds of appeal

ENMAX sought permission to appeal the King's Bench decision to the Court of Appeal of Alberta. Its proposed grounds included that the appeal judge erred by substituting his own compensation analysis for that of the Tribunal despite the standard of review, failing to limit the compensation order to the Subject Lands, applying an interest rate of 4.5% per annum in attempting to estimate the actual loss to Remington, and substantively conflating s 25(1)(b) with matters that ought to have been considered under ss 25(1)(c) and (d). ENMAX further argued the appeal judge erred by finding as fact that the delay in development of the Interlink Lands was caused by the ROEs and the sustained presence of the transmission lines and not by other factors, and by making various other findings and conclusions which were unsupported by the evidence at trial.

Remington's response and cross-appeal request

Remington argued permission to appeal should not be granted, contending the Appeal Decision was well-reasoned, the appeal judge properly distinguished Sabo, and the unique circumstances raised issues that were specific to the parties and unlikely to ever arise again. They characterized the difference in the amounts awarded by the Tribunal and the Appeal Court as approximately $695,000, which they argued was not sufficiently significant as between the two parties to warrant the bringing of an appeal. In the alternative, Remington sought permission to cross-appeal regarding ss 25(1)(c) and (d), arguing that if the appeal judge erred in his approach by awarding a lump sum under s 25(1)(b), then it follows that he also erred in finding no compensation was owed to Remington under s 25(1)(c) or (d).

The Court of Appeal's ruling

Justice Tamara Friesen of the Court of Appeal of Alberta granted ENMAX's application in part and denied Remington's application. Permission to appeal was granted with respect to the appeal judge's interpretation of s 25, including his finding that compensation under s 25(1)(b) was not restricted to the Subject Lands and included compensation for losses related to the delayed development of the entirety of the Interlink Lands. The Court found this to be a question of statutory interpretation that is or could be of significant importance to landowners and utilities operating in Alberta, and which significantly impacts on the parties. Further, considering the finding in Sabo, the appeal has at least a reasonable prospect of success. Permission to appeal the various factual findings made by the appeal judge was denied, as on either a reasonableness standard or the standard of palpable and overriding error, ENMAX did not meet its burden of proof with respect to the test for leave to appeal. The Court noted the record illustrated that the facts raised under the second ground are ones on which reasonable people can disagree, and it was open to the appeal judge to determine them as he did. Remington's cross-appeal was also denied, as those concerns are properly addressed as part of the appeal proper with respect to the correct interpretation of s 25 as a whole. Finally, the Court encouraged both parties to give more thought to the question of the standard of review as they prepare for the substantive appeal. No exact final amount can be determined at this stage, as the matter proceeds to a substantive appeal before the Court of Appeal.