Executive Summary: Key Legal and Evidentiary Issues

• Dispute arises from alleged constructive taking of coal rights following ministerial policy shifts in Alberta.

• Appellants claim deprivation of property use and value without compensation, citing constructive taking principles.

• Key legal issue centers on whether former Minister Savage can be compelled to answer questions under Part 5 of the Alberta Rules of Court.

• The “Leeds” test requires both special circumstances and that the minister is the best-informed person; the Court found these met for Minister Savage.

• Court of Appeal ruled the case management judge erred by relying solely on documentary evidence without permitting direct questioning.

• Former Minister Savage must attend questioning; Minister Nixon is not compelled due to insufficient evidence of unique knowledge.

Background and policy chronology

The appellants—Cabin Ridge Project Limited, Cabin Ridge Holdings Limited, Atrum Coal Limited, Elan Coal Limited, Black Eagle Mining Corporation, and Montem Resources Alberta Operations Ltd.—own freehold and leasehold mineral rights in Alberta. Their interests are primarily in category 2 lands under Alberta's 1976 Coal Policy, which historically allowed surface mining only under restricted conditions.

On March 31, 2020, then-Minister of Energy Sonya Savage signed a briefing note to rescind the 1976 Coal Policy. The policy change was announced on May 15, 2020, and took effect June 1, 2020. The rationale included increasing Alberta’s investment attractiveness and clarifying regulatory processes for categories 2 and 3 lands.

After the rescission, Alberta Energy allowed existing lease applicants the right of first refusal to acquire leases on former category 2 lands. The appellants claimed they invested significant resources into these projects.

However, on February 8, 2021, Minister Savage issued Ministerial Order 054/2021, reinstating the 1976 Coal Policy. While stating it would not affect existing approvals, the order halted new exploration approvals for Category 2 lands and prohibited “mountain top removal” (a term left undefined). Subsequent orders (Orders 064/2021, 093/2021, and 002/2022) established a Coal Policy Committee, suspended all exploration approvals, and formalized indefinite suspension pending further notice.

On June 13, 2022, then-Minister of Environment and Parks Jason Nixon approved an updated Eastern Slopes Policy, embedding the coal categories and reinforcing the continued suspension of coal activities.

Litigation and claims

Between early 2022 and early 2023, the appellants filed actions alleging that the ministerial actions constituted a constructive taking by His Majesty the King in Right of Alberta. They relied on Annapolis Group Inc v Halifax Regional Municipality, 2022 SCC 36, asserting the deprivation of reasonable land use and a corresponding benefit to the Crown. Additional claims included private nuisance and unjust enrichment.

The respondents denied any constructive taking or tortious liability and claimed no unjust enrichment.

Case management and appeal

The case is jointly case managed. In July 2023, a case management judge set a February 2024 deadline for Part 5 questioning. The respondents initially agreed that Minister Savage and Minister Nixon would be available but reversed their position in January 2024. This prompted cross-applications by the appellants under Rules 5.17, 5.21, and 6.38.

The case management judge denied the applications, reasoning that the documentary record already explained the rationale behind the ministerial decisions. He found no special circumstances justifying questioning Minister Savage and stated there was no evidence Minister Nixon had meaningful involvement.

Court of Appeal’s analysis and findings

The Court of Appeal held that the case management judge correctly identified the “Leeds” test but misapplied it. The test requires that special circumstances exist and that the minister is the person best informed to answer relevant questions.

The Court found that former Minister Savage personally made the decisions central to the litigation, and thus, she had unique knowledge that others did not possess. Testimonies from various government officials indicated they lacked detailed knowledge of the minister's motives, particularly regarding the reinstatement of the 1976 policy, the prohibition on mountain top removal, and the indefinite suspension of exploration.

The Court emphasized that questions of motive, intent, and purpose are material to the constructive taking claim. The appellants had been denied the opportunity to ask such questions directly of the key decision-maker.

Minister Nixon, on the other hand, was found not to be the person best informed, despite a factual error by the case management judge regarding his involvement.

Outcome

The appeal was allowed in part. The Alberta Court of Appeal ordered that former Minister Savage must attend questioning. The decision to deny the same for Minister Nixon was upheld, as the Leeds test was not met in his case. The respondents retain the right to raise objections to specific questions on the basis of public interest immunity.