Law360 Canada ( September 8, 2025, 12:39 PM EDT) -- Appeal by Yangarra Resources Ltd. (Yangarra) from trial judge’s decision. Yangarra was the successor in interest to a Crown petroleum and natural gas lease encumbered by an eight per cent overriding royalty (Royalty) held by PrairieSky Royalty Ltd. (PrairieSky). Yangarra was unaware of the encumbrance when it purchased the leasehold interest. When PrairieSky discovered that the Royalty was not being paid, it sued Yangarra and its predecessor. Yangarra claimed that as a bona fide purchaser for value without notice, it was not bound by the Royalty and owed no Royalty payments to PrairieSky. PrairieSky contended the Royalty was a legal interest running with the land and binding on Yangarra, regardless of whether Yangarra knew about the encumbrance. The trial judge found that the Royalty was an interest in land and the interest was legal rather than equitable. Accordingly, the Royalty was binding on Yangarra and all subsequent working interest owners of the land. Given this finding, he concluded that determining whether Yangarra was a bona fide purchaser for value without notice was unnecessary and awarded damages against Yangarra for unpaid royalties plus prejudgment interest. Yangarra argued the trial judge erred in principle when determining that the Royalty was a legal rather than an equitable interest. It argued that the defence of bona fide purchaser for value without notice was available. It also appealed the damages and prejudgment interest awards. PrairieSky argued the trial judge made no error....