Court of Appeal of Alberta Confirms Limits on Cross-Examination of Court Officers

On April 16, 2026, the Court of Appeal of Alberta (ABCA) released its decision in Coast Automotive Group Inc (Re). The ABCA dismissed an application for leave to appeal a decision in the Companies’ Creditors Arrangement Act (CCAA) proceedings of Coast Automotive Group Inc. and certain of its affiliates (the Coast Auto Group). In dismissing the leave application, the ABCA affirmed that, absent unusual or exceptional circumstances, court officers will not be subject to cross-examination.

Background

The Coast Auto Group entered CCAA proceedings in July 2025 on application by its senior secured lender. The Monitor was appointed with expanded powers, including the authority to market and sell the debtor’s automotive dealership business. After completing a successful sale process and two court-approved transactions, the Monitor brought an application seeking its discharge and termination of the CCAA proceedings. The Monitor filed its Third Report and a Fee Affidavit sworn by its corporate representative in support of its application.

Separately, the Coast Auto Group and certain of its founders (the Cross-Applicants) commenced litigation (the Founder Claim) asserting various allegations against the applicant lender. The Monitor was not named as a party to the claim.

The Cross-Applicants responded to the Monitor’s application with a cross-application including a request to adjourn the Monitor’s application. The Court of King’s Bench of Alberta (Court) granted an adjournment and set a litigation timetable that provided the Cross-Applicants with an opportunity to question the Monitor on its Fee Affidavit and pose written interrogatories to the Monitor on its Third Report.

Chambers Decision

Dissatisfied with the Monitor’s written interrogatory responses and objections made during cross-examination, the Cross-Applicants brought an urgent application seeking further cross-examination of the Monitor, including on its Third Report. 

The Chambers Justice dismissed the application. Reaffirming established law, the Court held:

• court-appointed officers in CCAA proceedings are generally not subject to oral questioning, absent unusual or exceptional circumstances;
• this limitation on questioning protects a court-appointed officer’s neutral and objective role; and
• the proper tool for clarifying court officers’ reports is written interrogatories, not expanded oral questioning.

The Court also confirmed that court officers may refuse to answer questions that are overly broad, irrelevant or outside the scope of their mandate.

The Chambers Justice found that no unusual or exceptional circumstances existed in this case — the Monitor had cooperated fully in responding to relevant questions. Importantly, the Court emphasized that:

• the scope of permissible questions was narrow, given the late stage of the CCAA proceeding;
• cross-examination on a court officer’s fees is limited strictly to testing the reasonableness of the accounts themselves; and
• questioning on a fee affidavit is not an opportunity to revisit historical events or actions already sanctioned by prior court orders.

The questions the Monitor did not answer were either irrelevant or aimed at gathering information to support the Founder Claim, a collateral purpose for which questioning of the Monitor is not permitted. 

Leave to Appeal Decision

The Cross-Applicants sought leave to appeal the Chambers Justice’s decision; the ABCA dismissed their application in its entirety. Applying the test for leave to appeal, the ABCA found:

• the proposed appeal raised no issues of significance to the practice, as the law is settled and well established;
• the proposed appeal would not advance the proceedings and, if successful, risked compromising the Monitor’s neutrality; and
• the proposed appeal lacked merit.  

Following the ABCA’s decision, the Monitor’s application to terminate the CCAA proceedings and the cross-application proceeded. On May 11, 2026, the Court released its decision dismissing the cross-application and granting the Monitor’s application.

Key Takeaways

This case provides a clear restatement of the judicial protection afforded to court officers in insolvency proceedings. Court-appointed officers are protected from cross-examination except in rare cases. Stakeholders cannot use questioning as a “fishing expedition” or to support separate litigation.  

For more information, please contact the authors or any other member of our Restructuring & Insolvency group.