Decision Date: June 18, 2013

Panel: Alan Andison

Keywords: Water Act – s. 92(9); preliminary decision; stay application; order

Sage Investments Ltd. (the “Company”) appealed an order issued to it by the Assistant Regional Water Manager (the “Water Manager”), Kootenay Boundary Region, Ministry of Forests, Lands and Natural Resource Operations (the “Ministry”). The order applied to private land (“Lot 860”) owned by the Company, adjacent to Arrow Lake.

The Company purchased Lot 860 in December 2008, and commenced logging on Lot 860 in January 2009. In July 2011, the Ministry received a complaint regarding the logging practices on Lot 860. The Ministry conducted an initial site visit in July 2011. A further site inspection was planned in October 2011, but it did not take place due to inclement weather.

In July 2012, the Ministry conducted a site inspection. The Ministry staff found numerous sites where unauthorized works were in streams or stream channels, and those works appeared to have been created in connection with recent logging. The unauthorized works included logging debris in streams, the use of stream channels as skid roads, and the use of log bundles rather than culverts as stream crossing structures. In August 2012, the Ministry sent a registered letter to the Company requesting that it voluntarily retain a qualified professional to develop a site restoration plan for the unauthorized works in streams on Lot 860, and submit the plan to the Ministry by October 2012. The Ministry received no response.

In April 2013, the Water Manager issued the order. The order requires the Company to submit a report prepared by a qualified professional to the Water Manager, by June 30, 2013. The order also requires the Company to undertake the remedial measures approved by the Water Manager, to mitigate the effects of unauthorized works in unnamed streams on Lot 860, by November 1, 2013. Finally, the order requires the Company to submit a report prepared by a qualified professional, documenting the remedial work undertaken, by December 15, 2013.

The Company appealed the order on the grounds that the order is unclear as to which “works” it pertains to, and that some of the works were created by a previous land owner. The Company also requested a preliminary stay of the order pending a final decision from the Board on the merits of the appeal.

The Water Manager opposed the stay application.

In determining whether the stay application 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 appeal raised serious issues, including whether the order is too vague for the Company to know which works it must remediate. Also, some material facts were in dispute, such as whether the Company caused or is responsible for some, or any, of the unauthorized works in streams on Lot 860. On its face, the appeal raised serious issues which were not frivolous, vexatious, or pure questions of law. Consequently, the Board proceeded to consider the next part of the test.

Regarding the second part of the test, the Board found there was a likelihood of irreparable harm to the Company’s financial interests if a stay was denied. In particular, the Board found that the Company would incur costs to comply with the order. Although those costs are quantifiable, it was uncertain whether the Company would be able to recover those costs, if a stay was denied and the Company is ultimately successful in its appeal.

Turning to the third part of the test, the Board weighed the potential harm to the Company’s interests, if a stay was denied, against any potential harm to the Water Manager’s interests if a stay was granted. The Board found that the balance of convenience favoured granting a stay. The Company’s financial interests would likely suffer irreparable harm if a stay was denied. In terms of the Water Manager’s interests, there was evidence that some environmental harm had already occurred on Lot 860, but it appeared that this harm had existed since at least July 2011, when the Ministry received the complaint that led to the investigation. It was unclear why the Ministry waited until March 2013 to issue the order, given that the Ministry conducted a second site inspection in July 2012, and notified the Appellant of the problems on Lot 860 in August 2012. Also, the evidence was unclear regarding the likelihood that the existing environmental harm may worsen or increase if a stay was granted. In the circumstances, the Board concluded that there was insufficient evidence to find that the risk of further harm to the environment, if a stay was granted, outweighed the likelihood of harm to the Appellant’s interests, if a stay was denied.

Accordingly, the stay application was granted.