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Cymbaluk v TransAlta Corporation, 2018 ABCA 429

Link to decision summarized

Permission to Appeal – Denied


In this decision, the Alberta Court of Appeal (“ABCA”) considered an application by David Cymbaluk, Ferne Cymbaluk, and Philip Cymbaluk (the “Cymbaluks”) for permission to appeal a decision of the AER dated September 7, 2018 (the “AER Decision”). The AER Decision addressed the obligations of TransAlta Corporation (“TransAlta”) with respect to the sand, gravel, clay, and marl (the “Subsurface Materials”) removed during the mining operation at TransAlta’s Highvale Coal Mine.

The ABCA denied permission to appeal.

Background

TransAlta is the owner of the Highvale Coal Mine, a surface coal mine located approximately 75 kilometres west of Edmonton. The Cymbaluks resided on lands adjacent to the mine boundary and jointly owned a southeast quarter of section within the mine area (the “Lands”).

Before TransAlta commenced mining on the Lands, it applied for a right of entry order under the Surface Rights Act, from the Surface Rights Board (the “SRB”). On November 8, 2005, the Board granted the order authorizing TransAlta to enter the Lands “for the removal of minerals and for or incidental to any mining operations and for the construction and operation of tanks, stations and structures for or incidental to such mining operations or the production of coal.”

On November 23, 2006, the AER’s predecessor granted TransAlta an approval under the Environmental Protection and Enhancement Act (“EPEA”), which authorized TransAlta to remove subsoil taken from the lands and substitute suitable spoil or overburden for the salvaged subsoil (the “2006 Approval”). The Cymbaluks received notice of the EPEA application but did not appeal the granting of the 2006 Approval. The 2006 Approval was valid for ten years.

On September 10, 2016, the AER renewed the 2006 Approval, permitting TransAlta to construct, operate, and reclaim the mine (the “2016 Approval”).

The Cymbaluks expressed concerns regarding the reclamation and restoration plans for the project. They asserted that the clay that TransAlta removed from the lands during pre-mining operations was material that belonged to them and was taken. The AER found that the applicants did not demonstrate that they were “directly and adversely affected by the applications.”

Both the 2006 Approval and 2016 Approval set out a number of terms and conditions for the construction, operation, and reclamation of the mine.

The AER Decision

The issues before the AER were:

(a)     whether TransAlta had an obligation to return the Subsurface Materials; and

(b)     whether the AER had the jurisdiction to address ownership rights over the Subsurface Materials claimed by the Cymbaluks.

The AER found that TransAlta was not required to return all Subsurface Materials that it removed. The AER found that TransAlta was authorized to substitute soil or overburden for the salvaged subsoil on the lands. The AER observed that TransAlta was required, under the 2006 Approval, 2016 Approval, and its Reclamation Plan, to return subsoil to a depth of one metre. Further, the AER observed that TransAlta could not reverse its past soil handling and disposition, which were undertaken in accordance with its 2006 Approval.

The AER held that it did not have jurisdiction to address the property right claim by the Cymbaluks in the Subsurface Materials. The AER stated its jurisdiction was “confined to regulating the operation, abandonment and reclamation of energy resource activities in accordance with the Responsible Energy Development Act (“REDA”) and the applicable energy resource and specified enactments.” The AER stated that if the applicants believed they suffered a loss of Subsurface Materials following reclamation, they may have recourse to the SRB or to the courts.

Issues

The Cymbaluks sought permission to appeal the AER Decision on the following grounds:

(a)     whether the AER erred in concluding it did not have jurisdiction to address the applicants’ property rights claim to the Subsurface Materials;

(b)     whether the AER made a finding about TransAlta’s proprietary claim to the Subsurface Materials, and if so, whether that was an error because it was inconsistent with its conclusion on jurisdiction; and

(c)     whether, by referring to the 2006 Approval in its reasons, the AER breached procedural fairness because it referred to evidence that neither party put before it.

Test for Permission to Appeal

The ABCA set out that, under REDA section 45(1), permission to appeal may be granted on questions of law or jurisdiction only. When deciding whether to grant permission, the ABCA considers the following factors:

(a)     Is the issue of general importance?

(b)     Is the point raised of significance to the decision itself?

(c)     Does the appeal have arguable merit?

(d)     What standard of review is likely to be applied?

(e)     Will the appeal unduly hinder the progress of the proceedings?

ABCA Findings

Did the AER Err in Concluding It Did Not Have Jurisdiction to Address the Applicants’ Property Rights Claim to the Subsurface Materials?

The ABCA determined that while the jurisdiction of the AER to determine property rights is a question of law, it had no arguable merit, and permission to appeal on this ground was denied.

Did the AER Err by Making a Finding About Property Rights in Subsurface Materials Inconsistent with Its Conclusion on Jurisdiction?

The applicants sought permission to appeal the AER’s finding that “TransAlta … may use Subsurface Materials removed from [the land] for reclamation purposes on other parcels that form part of TransAlta’s Highvale Mine.” The applicants argued that this was a finding on property rights, and was therefore inconsistent with the AER’s conclusion on jurisdiction.

The ABCA held there was no inconsistency. Accordingly, permission to appeal on this ground was denied. The ABCA found that the AER made rulings on how reclamation could occur. It did not address ownership rights or the implications that might arise if there was interference with ownership rights.

Did the Decision Violate Procedural Fairness by Referring to the 2006 Approval?

The ABCA found that the applicants were already aware of the relevant contents of the 2006 Approval and were not denied fairness.

Although procedural fairness is a question of law, the ABCA found that given that one part of the permission to appeal test asks whether the point raised is of significance to the decision itself, the circumstances did not warrant permission to appeal on this ground. The ABCA found this was not an issue of general importance. Whether in this case the AER should have considered the 2006 Approval was a matter of primary significance to the parties alone.

Summary

The ABCA denied the application for permission to appeal.

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