Decision Date: March 20, 2017

Panel: Alan Andison, Cindy Derkaz, James Mattison

Keywords: Administrative Tribunals Act – s. 47(1)(a); failure to appear; application for costs; special circumstances

The Assistant Regional Water Manager (the “Regional Manager”), Ministry of Forests, Lands and Natural Resource Operations, and the Participants in this appeal, requested an order of costs against the Appellants after the conclusion of the appeal hearing.

The appeal was filed by Mr. Hobby and SC Ventures Inc. against a decision of the Regional Manager denying an apportionment of water rights held under various water licences on Oliphant Lake and Spectacle Creek. Mr. Hobby owns SC Ventures Inc.

In 2005, SC Ventures Inc. became the registered owner of Lot 74 in the Malahat District. In 2007, Mr. Hobby became the registered owner of Lot 75 in the Malahat District.

On May 12, 2015, the Regional Manager issued a new conditional water licence apportioning water, which was previously assigned to a number of historical licences, to certain property owners that had used the water. He also cancelled portions of the water licences that were appurtenant to properties that had not used the water and did not have any agreement to connect to the infrastructure used to convey the water. Lots 74 and 75 were among the properties that had their water licences cancelled.

Mr. Hobby and SC Ventures Inc. appealed the Regional Manager’s decision. They requested that some water be apportioned to Lots 74 and 75.

The Board scheduled a nine-day hearing of the appeal, commencing on June 20, 2016.

On June 1, 2016, the Regional Manager advised that he would be challenging the Appellants’ standing to appeal the decision in relation to Lot 75. He advised that Lot 75 had been sold, and neither of the Appellants had any legal interest in the property.

On June 13, 2016, seven days before the start of the hearing, the Appellants applied to postpone the hearing on the basis that they were involved in a Supreme Court action “to take back the Malahat District Lot 75 property.” If successful in court, the Appellants stated that they would continue to pursue their appeal before the Board in relation to Lot 75. The Board granted the postponement.

On September 22, 2016, the Regional Manager advised the Board that the Appellants’ court proceedings regarding Lot 75 had been dismissed. The Regional Manager requested that the Board schedule a teleconference to address the status of the appeal.

During the teleconference, all of the Parties and Participants consented to an oral hearing of the appeal commencing at 9:00 am on January 3, 2017. In a subsequent letter, the Board confirmed the hearing date, and that the appeal would be restricted to Lot 74. A Notice of Hearing was sent to all Parties and Participants.

On January 3, 2017, the hearing commenced at the scheduled time. The Appellants were not in attendance. The Board adjourned the hearing until 10:30 a.m. while the Board’s staff attempted to locate Mr. Hobby. At 10.01 a.m., the Board’s staff contacted Mr. Hobby by telephone. He advised that he would not be attending the hearing. He was notified that the appeal would be dismissed if he did not appear by 10:30 am. The Board reconvened the hearing at 10:30 a.m. The Appellants failed to appear, and the Board dismissed the appeal.

After the hearing ended, the Regional Manager learned that the Appellants had not held an ownership interest in Lot 74 since November 18, 2016. The Regional Manager then advised the Board and the Participants of that fact.

Subsequently, the Regional Manager and the Participants requested that the Board order costs against Mr. Hobby. They submitted that costs were warranted because Mr. Hobby’s conduct in the appeal process was improper and abusive. In particular, he failed to advise the Board or the Parties and Participants that the Appellants no longer had an ownership interest in Lot 74, which was the only basis for the Appellants’ standing to appeal after Lot 75 was sold, and he failed to notify the parties or the Board that he would not be attending the hearing.

In response, Mr. Hobby apologized for his failure to attend the hearing, and submitted that he had suffered financial and emotional stress over the past several years. He also submitted that the issues in the appeal had merit.

The Board found that there were special circumstances in this case that warranted an award of costs, and costs should be awarded against both of the Appellants jointly and severally. Specifically, the Board found that the Appellants failed to advise the Board or the Parties and Participants that the Appellants no longer had an ownership interest in Lots 74 or 75. By failing to provide that information, Mr. Hobby knowingly or recklessly misled the Board and caused prejudice to the Regional Manager and the Participants. In addition, Mr. Hobby provided no reasonable explanation for his failure to provide notice that he would not be attending the appeal hearing. The Board found that Mr. Hobby is a sophisticated self-represented party who was familiar with the appeal process and the court litigation process. He knew, or should have known, that his failure to disclose the sale of Lots 74 and 75, and his failure to attend the hearing, was conduct that fell below acceptable standards.

Regarding the quantity of costs, the Board found that the appeal involved matters of ordinary difficulty, and therefore, costs should be awarded based on Scale B of the BC Supreme Court Civil Rules. If an agreement could not be reached on the quantum of costs, the Board requested that the Regional Manager and the Participants file claims for their appeal-related costs from May 20, 2016, which was when the Appellants filed their Statement of Points without disclosing the sale of Lot 75, up to January 3, 2017.

The applications for costs were granted.