Decision Date: August 10, 2011

Panel: Alan Andison

Keywords:  Water Act – s. 92(9); stay; preliminary decision; RJR-MacDonald Inc. v. Canada (Attorney General) (1994), 111 D.L.R. (4th) 385 (S.C.C.)

On June 27, 2011, the Assistant Regional Water Manager (the “Regional Manager”), Cariboo Region, Ministry of Forests, Lands and Natural Resource Operations (the “Ministry”), issued an order to Dr. Julia Low Ah Kee Inc. (the “Applicant”).  The order requires the Applicant to restore the flow of Chavez Creek by removing a “blockage” in that creek, and blocking off a “ditch” which is diverting water from Chavez Creek to Cedar Creek.  The Applicant appealed the order, and requested a stay of the order pending a decision from the Board on the merits of the appeal.

In 2010, the Applicant purchased a parcel of land, Lot 167, in the Cariboo Region.  The Applicant holds a conditional water license (the “License”) that is appurtenant to Lot 167.  The License allows a maximum of 18,502.35 cubic metres (15 acre feet) of water per year to be diverted from Cedar Creek for irrigation purposes, from April 1 to September 30.  The License provides that 10 acres on Lot 167 may be irrigated with the diverted water.

In May 2011, the Applicant’s contractor cleared some vegetation from Cedar Creek.  In June 2011, Ministry staff investigated the site in response to a public inquiry.  Ministry staff found a diversion that was allegedly directing water from Chavez Creek into a ditch connected to Cedar Creek.  The Regional Manager issued the order after determining that the Applicant’s License authorizes water diversion out of Cedar Creek, but not out of Chavez Creek.

In her application for a stay, the Applicant argued that she did not create a new diversion of Chavez Creek, and that the existing diversion that has been diverting water from Chavez Creek to Cedar Creek for over fifty years.  She also submitted that the alleged blockage is actually part of the natural creek bank, and that the order contradicts the Applicant’s water rights under the License.   
The Regional Manager opposed the stay application. 

The Participants Doug E. Schuk and Jackson Sandford Hart, who hold water licenses on Chavez Creek, also opposed the stay application.  The other Participant provided no submissions.

In determining whether a stay ought to be granted, the Board applied the three-part test set out in RJR-MacDonald Inc. v. Canada (Attorney General).  With respect to the first stage of the test, the Board found that the Applicant’s appeal raised serious issues to be decided, which were not frivolous, vexatious or pure questions of law.

Regarding the second part of the test, the Board found that denying a stay would severely prejudice the Applicant’s appeal rights.  If a stay was denied, the Applicant would have to carry out the work required by the order by August 15, 2011.  The Board held that evidence of the physical state of the diversion, which the order requires to be removed, is relevant to the appeal and will form an important part of the Applicant’s case.  Although the Applicant provided some photographic evidence of the area in support of her stay application, that evidence was insufficient for the Board to adjudicate the merits of the appeal.  The appeal raised numerous issues and the parties disputed many material facts.  The Board could not decide the merits of the appeal in the short time available before the August 15, 2011 deadline, and there was little time available before the deadline for the Applicant to gather evidence at the site.  The Board concluded that, if a stay was denied, the Applicant’s ability to make her case would be severely prejudiced, and the Board would no longer be able to consider evidence that would be relevant and helpful in deciding the appeal.  The harm to the Applicant’s appeal right would be irreparable in nature, as it is harm that could not be compensated by an award of damages.

Turning to the third part of the test, the Board found that the Applicant’s interests would suffer greater harm, if a stay was denied, than the Regional Manager’s and Participants’ interests would suffer if a stay was granted.  If a stay was denied, the Applicant would suffer irreparable harm because her ability to make her case in the appeal would be severely prejudiced.  In addition, denying a stay would cause some cost and inconvenience to the Applicant if she is successful in her appeal, because she would have to remove the diversion and block off the “ditch” in compliance with the order, and then she would have to reverse those things if the order is reversed by the Board.  Regarding the potential harm to the interests of the Regional Manager and the Participants, the Board held that granting a stay and maintaining the status quo with respect to the diversion would not compromise the rights of downstream licensees or fisheries on Chavez Creek in 2011, as there was an abundance of water flowing in Chavez Creek as of mid-July.  The Participants, Mr. Hart and Mr. Schuk, acknowledged that any harm they may suffer if a stay is granted would be in the future if there was a low flow year.  If the Board confirms the order after hearing the appeal on its merits, any inconvenience to the downstream licensees and fisheries values on Chavez Creek would be limited to the period of time during which the Board would consider and decide the merits of the appeal.  Moreover, even if low flows occur in Chavez Creek before the appeal is decided, Mr. Schuk has alternate water sources available to him, as he holds several licenses on water sources other than Chavez Creek.  For all of those reasons, the Board concluded that the balance of convenience weighed in favor of granting a stay.

Accordingly, the application for a stay was granted.