Decision Date: July 19, 2002

Panel: Margaret Eriksson

Keywords: Water Act – ss. 1 definitions of “licencee”, “holder of a licence”, “owner”, “rental”,16, 18, 19, 20, 45; Water Regulation – ss. 4, 7; Financial Administration Act – s. 19; procedural fairness; Baker v. Canada (Minister of Citizenship and Immigration) (1999), 174 D.L.R. (4th) 193 (S.C.C.)

Elsie Mychaluk appealed the March 14, 2001 decision of the Deputy Comptroller of Water Rights (the “Deputy Comptroller”) confirming the Appellant’s responsibility to pay 17 years of outstanding fees associated with two water licences, including fees for approximately 5 years when the Appellant did not own the appurtenant land. Due to an administrative oversight, the Water Management Branch had failed to process changes to the licences, or issue any invoices associated with the licences, for 17 years.

The Board found that in order for a person to be liable for the fees, rental and charges associated with a water licence, the person must be the owner of land appurtenant to a licence. The Board found nothing in the language of section 16 or subsection 45(2) of the Act, nor in subsection 7(10) of the Regulation to support the Deputy Comptroller’s position that a person, other than the licence holder at the time the fees accrued, can be invoiced in place of that licence holder. Therefore, the Board found that the Appellant was not liable for fees accrued before she owned the property.

The Board also found that the duty of fairness obligated the Water Management Branch to inform affected parties, including the Appellant, of any departure from the normal process, and of the Ministry’s policy that licences being apportioned are held in abeyance (during which time no fees are assessed or invoices issued) until apportionment is resolved. The Board found that the Appellant should have been informed of the status of the licences after they purchased the property, and that rentals and fees associated with these licences were not included on the invoices issued to them between 1988 and 1999.

The Board found that the delay of 17 years in processing the licences was unreasonable, and that the process applied by the Ministry was arbitrary. Furthermore, the Board found that the assessment was issued without a comptroller first having exercised his or her authority under section 7 of the Regulation to assess rentals and set the rental period and the rental due dates, after the new licences were issued to the Appellant. The Board found that, as the Appellant had no notice that unassessed rentals and fees were accruing, it was a breach of duty of fairness to hold her responsible for any rentals or fees pre-dating the issuance of the new licences. Accordingly, the Board set an ordinary rental period for the conditional licences to be one year, commencing from when the licences were issued to the Appellant.

Therefore, the Board ordered the Water Management Branch to adjust the Appellant’s account and apply any rentals and fees assessed prior to December 7, 1999, as a credit toward future invoices issued in respect of the Appellant’s water licences.

The appeal was allowed.