Decision Date: February 15, 2022

Panel: Darrell Le Houillier

Keywords: Water Users’ Communities Act – ss. 54(1), 56(1)(b), 59(3), 61, 100.1; assessment roll; water users’ community member; purchaser of land; financial liability

The Nature Trust of British Columbia (“NTBC”) filed three appeals related to a decision the Comptroller of Water Rights (the “Comptroller”), Ministry of Forests, Lands, Natural Resource Operations and Rural Development (the “Ministry”). The decision confirmed charges assessed to NTBC by the Allendale Water Users’ Community (“Allendale”), a water users’ community under the Water Users’ Communities Act (the “WUCA”). Under the WUCA, a water users’ community can maintain and operate shared water works, and levy financial assessments on its members. Allendale managed shared works associated with water stored in Allendale Lake, including dams that needed significant repair or decommissioning.

Between 1993 and 2000, NTBC acquired several pieces of land. Five water licences were appurtenant (or legally attached) to that land. The licences allowed the use of water from Allendale Lake and were included in Allendale’s certificate of incorporation. NTBC became a member of Allendale after it acquired the land to which those licences were attached. NTBC also secured the right to have another member of Allendale, Thomas Ranches Ltd., ask the Comptroller to transfer to NTBC another water licence (the “Thomas Licence”) that was in Allendale’s certificate of incorporation. However, the Thomas Licence was never transferred to NTBC.

Water rights granted under some or all of NTBC’s licences, and the Thomas Licence, were used until 2006, and NTBC paid the assessments levied by Allendale for those licences. NTBC continued to pay assessments until 2016, although NTBC claimed that it was not using the water granted under its licences or the Thomas Licence.

In 2017, NTBC applied to the Comptroller to abandon three water licences, including the Thomas Licence. In May 2018, NTBC applied to the Comptroller to abandon its remaining water licences. According to NTBC, the Comptroller did not respond substantively to those applications.

In April 2018, NTBC notified Allendale’s manager that it was withdrawing from Allendale effective immediately. However, Allendale issued a 2018 assessment to NTBC for NTBC’s licences and the Thomas Licence. NTBC objected to the assessment and asked the Comptroller to review the matter.

In 2020, the Comptroller confirmed the 2018 assessment. In making that decision, the Comptroller held that NTBC was still a member of Allendale.

NTBC then appealed: the Comptroller’s decision confirming the 2018 assessment; the Comptroller’s failure to acknowledge NTBC’s withdrawal from Allendale; and, the Comptroller’s alleged failure to make a decision on NTBC’s water licence abandonment applications.

In a preliminary decision (Decision No. EAB-WCA-20-A001(a), April 6, 2021), the Board found the Comptroller’s conclusion that NTBC was still a member of Allendale was a finding within the decision confirming the 2018 assessment; it was not an appealable decision on its own.

With the parties’ consent, the Board then proceeded to hear the appeal of the Comptroller’s decision confirming the 2018 assessment separately from, and before, the appeal of the alleged lack of decision on NTBC’s applications to abandon its water licences. NTBC submitted that Allendale could only levy assessments on its members, and NTBC withdrew from Allendale when it notified the manager in April 2018. In addition, NTBC submitted that it should not have to pay the portion of the assessment associated with the Thomas Licence, since it was not held by NTBC.

First, the Board considered whether NTBC was still a member of Allendale when the 2018 assessment was issued, and whether NTBC was liable for the assessment based on the water NTBC was licensed to use, even if NTBC did not actually use that water. Based on the relevant sections of the WUCA, the Board held that a member cannot unilaterally decide to withdraw from a water users’ community. The members of a water users’ community are the holders of the licences listed in the community’s certificate of incorporation. Section 61 of the WUCA gives the Comptroller, but not a manager or a member of a water users’ community, the authority to alter a water users’ community’s certificate of incorporation. NTBC may request that the Comptroller amend Allendale’s certificate of incorporation.

The Board also found that NTBC did not limit its financial liability for assessments issued by Allendale when NTBC notified the manager of its intention to withdraw. Section 59(3) provides that a “purchaser of land” to which water is conveyed through works controlled by a water users’ community is liable for assessments incurred after purchasing the land to the same extent as an original member, unless and until “the purchaser” notifies the manager that it does not wish to be a member of the water users’ community. When the 2018 assessment was issued, NTBC was a member of Allendale, and not a “purchaser of land” for the purposes of section 59(3). Many years had passed since NTBC purchased the land to which its licences were attached.

Next, the Board considered whether NTBC’s liability for the 2018 assessment should be reduced since NTBC claimed it did not own the land to which the Thomas Licence was attached. The Board found that it had insufficient information to decide that issue, so it directed the Comptroller to: investigate whether the Thomas Licence was still in use and who owns the land to which the Thomas Licence is attached; and, recalculate the 2018 assessment by apportioning liability as described in sections 54(1) and 56(1)(b) of the WUCA, with each member paying a portion based on the amount of water they are licensed to use.

In addition, the Board recommended that the Comptroller voluntarily amend Allendale’s certificate of incorporation by removing NTBC, given that NTBC reportedly no longer used, and could not use, the water rights associated with its licences, and did not wish to remain a member of Allendale.

Accordingly, the appeal was allowed, in part.