Decision Date: July 30, 2021

Panel: Darrell Le Houillier

Keywords: Water Sustainability Act – s. 9, 22(1); Administrative Tribunals Act – ss. 31(1)(c) and (g); conditional water licence; res judicata; issue estoppel; abuse of process; fully recorded stream; water licence priority based on precedence date

In November 2020, an Assistant Water Manager with the Ministry of Forests, Lands, Natural Resource Operations and Rural Development issued a conditional water licence (the “Licence”) to Kenneth and Dawn Olynyk (the “Olynyks”). The Licence authorized the Olynyks to divert 4 cubic metres of water per year from McGillivray Creek from April 1 to September 30, for “lawn, fairway, and garden” purposes, and to construct associated works. The works included a water pipeline extending from McGillivray Creek, across Crown land, to the Olynyks’ property. The Licence was subject to several conditions.

McGillivray Creek is located in a semi-arid area between Lytton and Lillooet, B.C. The Reuters operate a ranch and grow hay on their property. Before the Licence was issued, the Reuters held two licences allowing them to divert water from McGillivray Creek from April 1 to September 30 each year. One licence was for irrigation and domestic purposes, and the other licence was for power generation. The original point of diversion for the Reuters’ irrigation licence was downstream of the Licence’s point of diversion, but in the late 1980s the Reuters began using a second point of diversion upstream of the Licence’s point of diversion. Since then, the second point of diversion was the main source of water for the Reuters’ licences, but they maintained the works at the original point of diversion.

Both the Olynyks and the Reuters appealed the Licence. The appeals were part of an ongoing dispute between the Olynyks, the Reuters, and other landowners in the area over the use of water from McGillivray Creek.

In appealing the Licence, the Olynyks objected to conditions in the Licence requiring them to install a flow metering device and hire a professional engineer to prepare plans for the works and to supervise construction. They also disputed a condition that limited the Licence to a five-year term.

The Reuters appealed on the basis that the Licence should not have been granted. They argued that there is insufficient water in McGillivray Creek to support the Licence given the priority of existing licences, and this issue was previously decided when the Ministry denied Mr. Olynyk’s previous application for a similar licence and the Board dismissed his appeal of that decision in 1992. Furthermore, the Reuters submitted that Mr. Olynyk built unauthorized works to divert water from McGillivray Creek in 1990, and he had illegally used water from the Creek since then. The Reuters also submitted that their water pipeline could be damaged if the Olynyks buried their water pipeline close to the Reuters’ water pipeline.

The Board found that neither the doctrines of res judicata and issue estoppel, nor the Board’s power to dismiss an appeal on the basis that the subject matter was previously decided in another proceeding (section 31(1)(g) of the Administrative Tribunals Act (the “ATA”)), applied. In the appeal involving Mr. Olynyk’s previous application for a licence, the Board did not hear evidence or consider the issue of water availability in McGillivray Creek. In addition, the Board’s power to dismiss the present appeal as an abuse of process (section 31(1)(c) of the ATA) did not apply, because there were significant factual differences between the Licence and the previous licence application, and in what was known about water availability in McGillivray Creek when the 1988 application was denied versus when the Licence was granted.

In addition, based on both historical and new evidence, the Board held that McGillivray Creek is recharged by a spring and perhaps aquifers downstream of the Reuters’ second point of diversion, and before the flow reaches the Licence’s point of diversion.  Therefore, although McGillivray Creek is fully recorded at the second point of diversion and there is insufficient water to satisfy the existing licences using that point of diversion, water was available downstream for licencing. There was enough water to support the Licence, given that the water diverted under the Licence would be less than 1% of the flow in McGillivray Creek at the Licence’s point of diversion. In addition, environmental flow needs were not a concern. The Creek does not flow into fish habitat during the period of licensed water withdrawals, frogs were not found near the Creek, and there was no evidence that any adverse environmental effects would result from the Licence. Furthermore, the Reuters’ licences on McGillivray Creek have earlier precedence dates than the Licence. Therefore, based on section 22(1) of the Act, the Reuters have priority as water users over the Olynyks in the event of a water shortage in the Creek.

The Olynyks did not deny that they had used water from McGillivray Creek without a licence for many years, and the Board found that their unauthorized water use appears to have been contrary to the Act. The Water Manager’s decision to issue the Licence did not condone any illegal water use by the Olynyks. Unauthorized water use may be addressed by the Ministry using its enforcement powers under the Act, and those powers are separate from the power to consider an application for a water licence. Regarding concerns that Mr. Olynyk may divert more water than the Licence allows, the Board held that the conditions in the Licence will allow the Ministry to monitor how much water he uses. If he uses more than the Licence allows, the Ministry can take enforcement action.

Regarding the Licence conditions that the Olynyks objected to, the Board was not satisfied that Mr. Olynyk had sufficient expertise to properly design and install the works. Although he had designed and installed works that provided the Olynyks with water in the past, there was evidence that those works had leaked and been repaired. Also, the Olynyks intended to bury their water pipeline, and this created risks such as damaging other buried water pipelines, or underground leaks causing slope instability. It was appropriate to require that a professional engineer approve the design for the works and supervise construction. In addition, it was appropriate to require a flow metering device, given the water scarcity in the area. Further, given the water scarcity, the evolving understanding of water flow in the Creek, and Mr. Olynyks’ history of unauthorized water use, it was appropriate to limit the Licence to a five-year term, which would allow time to gather further information and monitor compliance.

In summary, the Board concluded that the Licence should not be reversed as requested by the Reuters, and the Licence’s conditions should not be varied as requested by the Olynyks. The Licence was confirmed, and the appeals were dismissed.