B.C. Supreme Courtroom permits declare in opposition to authorities for damages for improperly cancelled venture
Most growth in B.C. requires approval by authorities, whether or not by allowing, rezoning, subdivision approval, or licencing. That course of typically seems opaque to candidates. Denials, which might successfully terminate a venture, might be given with little or no justification. Usually, the principle avenue accessible to an applicant is a problem by judicial evaluate, a prolonged course of with an unsatisfying finish end result (having the identical decision-maker make a brand new choice).
A latest choice of the B.C. Supreme Courtroom[1] (Greengen) allowed a direct declare for damages in opposition to the federal government for misfeasance in public workplace, a tort which has traditionally been extraordinarily tough to ascertain however which can be a way more enticing treatment than judicial evaluate.
In Greengen, purposes for permits for a run-of-river hydro energy plant had been denied by the Ministry of Setting and Ministry of Agriculture, respectively. The plaintiff alleged that the Province had made the selections improperly (successfully, by caving to strain from an area First Nation). The Courtroom allowed the declare, offering a roadmap to damages claims from builders whose purposes have been unlawfully denied.
The Tort of Misfeasance in Public Workplace
An motion for misfeasance in public workplace might be introduced the place a authorities official deliberately misuses its powers. The Supreme Courtroom of Canada in Odhavji Property v. Woodhouse[2]established two ways in which a plaintiff can show a misfeasance declare:
- Class A: by exhibiting {that a} public officer engaged in illegal conduct that’s particularly supposed to injure the plaintiff; or
- Class B: by exhibiting {that a} public officer acted with data each that that they had no energy to do the act complained of and that the act was more likely to injure the plaintiff.
Each classes require the plaintiff to show that the general public officer’s conduct was intentional and illegal, which means they acted in extra of the powers granted to them underneath the relevant statute, or for an improper goal (resembling malice).
Key Takeaways
A full evaluation of the case is beneath, however some key factors for builders, venture proponents and different candidates are as follows:
1. On pattern: Greengen is in step with the pattern in misfeasance in public workplace instances within the final twenty years which have incrementally expanded the scope of the tort. Specifically, Greengen follows the SCC’s choice in Odhavji, which established that misfeasance in public workplace doesn’t require the general public official to have the precise goal of harming the plaintiff (the official solely must know that the illegal denial was more likely to injure the plaintiff).
As this seems virtually self-evident the place a venture has been denied, Greengen and Odhavji are more likely to encourage additional claims on this space.
2. Class B claims at the moment are on the core of the tort: Previous to the Odhavji choice, which established ‘Class B’ misfeasance claims, plaintiffs needed to present that the general public official particularly supposed to hurt the plaintiff, leading to only a few profitable actions.
Plaintiffs advancing a declare underneath Class B want solely present unlawfulness within the decision-making course of and that the general public officer knew or was reckless to the truth that its conduct was illegal and would injure the plaintiff. In Greengen, this was established by exhibiting that the choice was made by an individual apart from the decision-maker designated by the relevant laws, and that the decision-maker had improperly fettered its discretion.
Greengen is an instance of how a lot simpler the tort is for plaintiffs to ascertain underneath Class B, and it’s laborious to see a state of affairs the place a plaintiff will pursue the rather more tough Class A declare.
3. Inference: As is typically the case with governmental processes, in Greengen there was an absence of clear proof as to how the selections had been made.[3] Whereas the Courtroom acknowledged that neither Greengen nor the Courtroom may decide with specificity precisely what choice was made and by whom, this was not a bar to Greengen’s declare. The Courtroom was keen to make important inferences primarily based on circumstantial proof and a fragmented documentary document, and expressly commented on the appropriateness of constructing such an inference (extract beneath).
The method on this case is helpful to practitioners on this space, who are sometimes unable to ascertain particular details in regards to the governmental course of itself, resulting from an absence of information or unclear proof.
4. Limitation defence denied: The Province sought to have the declare barred on the premise that it was introduced out of time. Critically, the Courtroom discovered that the declare was not discoverable till the Province had offered proof in regards to the choice making course of by a March 2010 Freedom of Info and Safety of Privateness Act That is excellent news for plaintiffs like Greengen who might equally be in the dead of night about whether or not a authorities choice was illegal, and should not understand they’ve a misfeasance declare till nicely after the choice is made. Freedom of knowledge requests are more likely to be a key instrument in establishing future misfeasance claims.
5. Scope: Misfeasance claims have a broad attain and might be introduced in opposition to Crown servants or authorities our bodies that carry out duties which could have an effect on the general public. Whereas Greengen was in search of permits from two Provincial Crown our bodies, the reason for motion successfully permits a declare for any authorities denial.
Info
From 2003 to 2009, Greengen Holdings Ltd. deliberate to develop a hydro-electric venture at Fries Creek, positioned on Crown land close to Squamish, British Columbia. Greengen had been awarded an Power Buy Settlement with BC Hydro, pursuant to which Greengen would promote the facility generated at its proposed hydro-electric venture to BC Hydro at a set value for 40 years.
The Fries Creek space can also be dwelling to a Squamish Nation cultural web site that was established by a Land Use Settlement with the Province in 2007. Greengen’s proposed run of river venture would generate energy by diverting water from Fries Creek into generators, impacting the movement of water into the cultural web site.
To ensure that the venture to go forward, Greengen was required to use for a land tenure over Crown land pursuant to the Land Act[4]and a water license pursuant to the then in pressure Water Act.[5]
Julia Berardinucci of the Ministry of Setting, and Alec Drysdale of the Ministry of Agriculture had been the statutory decision-makers liable for deciding whether or not to grant the water license and land tenure permits, respectively. In November 2008, two assistant deputy ministers suggested Greengen in a telephone name that each permits had been denied. Neither Ms. Berardinucci nor Mr. Drysdale participated on this telephone name.
In August 2009, Greengen obtained letters from Mr. Drysdale and Ms. Berardinucci formally advising that the permits had been denied. Within the letters, the decision-makers defined that the rationale for the denial was as a result of – amongst different issues— the hydro venture would adversely influence the Squamish First Nation’s aboriginal rights within the Fries Creek space.
In 2016, Greengen commenced an motion in opposition to the Province for misfeasance of public workplace, alleging:
- the precise choice to disclaim the permits was made on the time of the November 2008 telephone name, and was not made by the suitable decision-makers; and
- the selections to disclaim the permits weren’t made for the acknowledged functions, however quite as a result of the Province wished to keep away from a lawsuit with the Squamish Nation and feared the adverse publicity which will end result.
Courtroom’s Evaluation
Greengen superior its declare underneath Class B. The Courtroom first thought-about whether or not the selections to disclaim the permits had been illegal, discovering discovered that the November name was the “key to this case and essentially the most troubling facet of the [Province’s] conduct.”[6]
The Courtroom discovered that the selections to disclaim the permits had been made by the November 2008 name, and never when the letters had been despatched in 2009. The Courtroom commented that the one manner the November 2008 name would have been lawful was if Mr. Drysdale and Ms. Berardinucci – the relevant statutory decision-makers— independently made the selections to disclaim the permits previous to the decision, and approved the 2 deputy ministers to convey these choices to Greengen.[7]
The Courtroom discovered that this had not occurred. Ms. Berardinucci testified that she had not decided on the water use allow by November 2008. As for Mr. Drysdale, the decide inferred from the correspondence and different documentary proof that Mr. Drysdale had equally not made any impartial choice with respect to the land tenure by November 2008. This was partially resulting from an inside electronic mail despatched by Mr. Drysdale in August 2008 through which he acknowledged that he was “comfy” granting the land tenure. The Province obtained no further proof between August and November 2008 which might clarify the obvious change in his choice.
In the meantime, within the fall of 2008, discussions had escalated between the Squamish Nation and the Province with respect to Greengen’s proposed venture, with senior politicians and ministers changing into concerned. It was very clear from these discussions that the Nation would take into account it a breach of its Land Use Settlement if the Province granted the water and land tenure permits.
Based mostly on the above, the Courtroom inferred that “somebody greater up” in authorities directed or persuaded Mr. Drysdale to agree that on November 2008 Greengen could be advised the permits had been denied. The decide additional discovered that this choice was made to appease the Squamish Nation.[8] Whereas the Courtroom was unable to establish which authorities officers really made the selections denying the permits, it inferred that the selections weren’t made by Mr. Drysdale or Ms. Berardinucci, commenting that any such inference was permissible in misfeasance instances:
[281] I’m aware that this Courtroom should be cautious in drawing inferences in misfeasance instances, but when there isn’t any affordable and lawful rationalization for the details discovered, it’s open to this Courtroom to search out misfeasance regardless of not having the ability to reply with specificity which people did precisely what…
Because of this, the Courtroom concluded that the November 2008 choices denying the permits had been illegal, as a result of the selections had been both made by individuals apart from Ms. Berardinucci and Mr. Drysdale, or that these public officers had fettered their discretion for improper functions. Additional, sure authorities officers concerned knew (or had been reckless to the actual fact) that the November name was illegal and would trigger Greengen hurt.
In calculating damages, the Courtroom discovered that, because of its hydro venture being unlawfully denied, Greengen had misplaced previous and future potential earnings totalling $56.25 million. Nevertheless, after factoring in “quite a lot of important dangers”[9] that the proposed venture would have confronted, the decide diminished the damages award to $10.125 million.
Conclusion
Greengen is a big case within the growth of the doctrine of misfeasance, and will probably be enticing to builders and venture proponents who’ve been unfairly handled by a authorities choice. In lots of conditions this will probably be extra interesting than a judicial evaluate.
Establishing misfeasance in public workplace stays a excessive bar, however practitioners and builders will seemingly use this case as a roadmap for claims on this space, in addition to useful precedent on the courtroom’s capacity to make inferences on key points. The success of this declare might imply that governmental authorities take such claims (which traditionally have not often succeeded) extra significantly, each in reviewing their very own procedures and in settling potential claims.
Given the importance of the choice, we anticipate an attraction to be filed and can proceed to watch the state of affairs intently.
[1] Greengen Holdings Ltd. v. British Columbia (Ministry of Forests, Lands and Pure Useful resource Operations), 2023 BCSC 1758 (“Greengen”).
[2] 2003 SCC 69 (“Odhavji”).
[3] For an additional software of the doctrine which relied closely on inference, see Alberta (Minister of Infrastructure) v. Nilsson, [2002] A.J. No. 1474 (C.A.)
[4] R.S.B.C. 1996, c. 245.
[5] R.S.B.C. 1996, c. 483.
[6] Greengen at para. 245.
[7] Greengen at para. 280.
[8] Greengen at para. 293, 278.
[9] Greengen at para. 414.
