The Defendants appealed an Order that allowed the Plaintiff to amend its Statement of Claim and attach proceeds from a potential sale of lands that were at issue between the parties. The Appeal was allowed, and the Order was set aside on the basis that the “super priority” claim advanced by the Plaintiff could not succeed at law.

The Plaintiff framed its original Action in nuisance and asserted that certain chemical contaminants had migrated onto its lands from the adjoining lands owned by the Defendants. The Plaintiff obtained permission to amend its claim under Rule 3.65 on the basis that none of the exceptions to the general rule allowing amendments applied. The Plaintiff amended its claim to seek a declaration that any Judgment for remediation damages be paid to is from the sale of the Defendants’ lands in priority to any of the Defendants’ secured creditors and registered mortgagees.

The Plaintiff was an unsecured tort claimant; in other words, a private litigant. Nonetheless, it advanced an argument by drawing parallels to the Supreme Court of Canada decision in Orphan Wells Association v Grant Thornton (“Redwater”). The Plaintiff argued that the Alberta Environment and Protected Areas (“AEP”) had a statutory duty under the Environmental Protection and Enhancement Act, RSA 2000, c E-12 to address the damage caused by the migration of contaminants from the Defendant’s lands, similar to how the Alberta Energy Regulator (“AER”) in Redwater had statutory powers to enforce compliance of Redwater’s abandonment and reclamation obligations.

The Court of Appeal disagreed. It noted that while the Redwater decision had the effect of giving the AER a “super priority” over secured creditors in a formal bankruptcy proceeding, it did not create a common law priority entitlement untethered from the applicable legislation and its objectives. The Chambers Judge erred in law when he held that Redwater created a common law “super priority” in favour of a private litigant such as the Plaintiff, outside of insolvency proceedings. The Plaintiff’s “super priority” amendment was hopeless, and the Appeal was allowed.