IN THE SUPREME COURT OF BRITISH COLUMBIA
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Citation: |
Waterway Houseboats Ltd. v. British Columbia, |
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2019 BCSC 581 |
Date: 20190416
Docket: S103630
Registry: Kelowna
Between:
Waterway Houseboats
Ltd., Vinco Holdings Ltd.,
Waterway Houseboat Charters Ltd.,
Waterway Vacations Shuswap #76 Limited Partnership
by its General Partner Waterway Partnership Equities Inc.,
Waterway Vacations Shuswap #80 Limited Partnership
by its General Partner Waterway Partnership Equities Inc.,
Waterway Vacations Shuswap #84 Limited Partnership
by its General Partner Waterway Partnership Equities Inc.,
Waterway Vacations Shuswap #85 Limited Partnership
by its General Partner Waterway Partnership Equities Inc.,
Waterway Vacations Shuswap #86 Limited Partnership
by its General Partner Waterway Partnership Equities Inc.,
Waterway Vacations Shuswap #69 Limited Partnership
by its General Partner Waterway Partnership Equities Inc.,
Waterway Vacations Shuswap #75 Limited Partnership
by its General Partner Waterway Partnership Equities Inc.,
Waterway Vacations Shuswap #79 Limited Partnership
by its General Partner Waterway Partnership Equities Inc.,
Waterway Vacations Shuswap #82 Limited Partnership
by its General Partner Waterway Partnership Equities Inc.,
Waterway Vacations Shuswap #58 Limited Partnership
by its General Partner Waterway Partnership Equities Inc.,
Waterway Vacations Shuswap #61 Limited Partnership
by its General Partner Waterway Partnership Equities Inc.,
Waterway Vacations Shuswap #63 Limited Partnership
by its General Partner Waterway Partnership Equities Inc.,
Waterway Vacations Shuswap #59 Limited Partnership
by its General Partner Waterway Partnership Equities Inc.,
Waterway Vacations Shuswap #68 Limited Partnership
by its General Partner Waterway Partnership Equities Inc.,
Waterway Vacations Shuswap #70 Limited Partnership
by its General Partner Waterway Partnership Equities Inc.,
Waterway Vacations Shuswap #72 Limited Partnership
by its General Partner Waterway Partnership Equities Inc.,
Waterway Vacations Shuswap #77 Limited Partnership
by its General Partner Waterway Partnership Equities Inc.,
Waterway Vacations Shuswap #81 Limited Partnership
by its General Partner Waterway Partnership Equities Inc.,
Waterway Vacations Shuswap #78 Limited Partnership
by its General Partner Waterway Partnership Equities Inc.,
Waterway Vacations Shuswap #65 Limited Partnership
by its General Partner Waterway Partnership Equities Inc.,
Waterway Vacations Shuswap #62 Limited Partnership
by its General Partner Waterway Partnership Equities Inc.,
Waterway Vacations Shuswap #67 Limited Partnership
by its General Partner Waterway Partnership Equities Inc.,
Waterway Vacations Shuswap #66 Limited Partnership
by its General Partner Waterway Partnership Equities Inc.,
Waterway Vacations Shuswap #55 Limited Partnership
by its General Partner Waterway Partnership Equities Inc.,
Waterway Vacations Shuswap #57 Limited Partnership
by its General Partner Waterway Partnership Equities Inc.,
Waterway Vacations Shuswap #73 Limited Partnership
by its General Partner Waterway Partnership Equities Inc.,
Waterway Vacations Shuswap #74 Limited Partnership
by its General Partner Waterway Partnership Equities Inc.,
Waterway Vacations Shuswap #54 Limited Partnership
by its General Partner Waterway Partnership Equities Inc.,
Waterway Vacations Shuswap #53 Limited Partnership
by its General Partner Waterway Partnership Equities Inc.,
Waterway Vacations Shuswap #52 Limited Partnership
by its General Partner Waterway Partnership Equities Inc.,
Waterway Vacations Shuswap Limited Partnership #18
by its General Partner Waterway Partnership Equities Inc.,
Waterway Vacations Shuswap Limited Partnership #23
by its General Partner Waterway Partnership Equities Inc.,
Waterway Vacations Shuswap Limited Partnership #24
by its General Partner Waterway Partnership Equities Inc.,
Waterway Vacations Shuswap #51 Limited Partnership
by its General Partner Waterway Partnership Equities Inc.,
Waterway Vacations Shuswap Limited Partnership #6
by its General Partner Waterway Partnership Equities Inc.,
Waterway Vacations Shuswap Limited Partnership #12
by its General Partner Waterway Partnership Equities Inc.,
Waterway Vacations Shuswap Limited Partnership #19
by its General Partner Waterway Partnership Equities Inc.,
Waterway Vacations Shuswap Limited Partnership #16
by its General Partner Waterway Partnership Equities Inc.,
Waterway Vacations Shuswap Limited Partnership #41
by its General Partner Waterway Partnership Equities Inc.,
Waterway Vacations Shuswap Limited Partnership #17
by its General Partner Waterway Partnership Equities Inc.,
Waterway Vacations Shuswap Limited Partnership #43
by its General Partner Waterway Partnership Equities Inc.,
Waterway Vacations Shuswap Limited Partnership #22
by its General Partner Waterway Partnership Equities Inc.,
Waterway Vacations Shuswap Limited Partnership #29
by its General Partner Waterway Partnership Equities Inc.,
Waterway Vacations Shuswap Limited Partnership #28
by its General Partner Waterway Partnership Equities Inc.,
Waterway Vacations Shuswap Limited Partnership #30
by its General Partner Waterway Partnership Equities Inc.,
Jeff S. Benson Professional Corporation, Northstar Avlease Ltd.,
Russel Wise, Carolyn Wise, Sundance Boating Corp., Margo Preston
Dwayne Lawson, Willis Enterprises Inc., Bruce Anderson,
Carol Anderson, 0835021 B.C. Ltd., Jerry Charest,
Happy Holiday Ventures, Leo Skerry, Frances Skerry, Grant Morstad,
Maureen Morstad and Reynold Hert
Plaintiffs
And
Her Majesty the
Queen in Right of the Province of British Columbia,
The District of Sicamous, Bryan McLaughlin and Constance McLaughlin
Defendants
And
Her Majesty the
Queen in Right of the Province of British Columbia,
The District of Sicamous, Bryan McLaughlin and Constance McLaughlin
Third Party Defendants
Before: The Honourable Mr. Justice G.P. Weatherill
Reasons for Judgment
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Counsel for the Plaintiffs: |
J. Robinson K. Ihas T. Young |
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Counsel for the Defendant |
L. Lee A. Lay |
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Counsel for the Defendant, |
S. Brearley |
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Counsel for the Defendants |
D. Bilkey |
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Place and Date of Trial: |
Kelowna, B.C. April 16-20, 23-27,
30, |
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Place and Date of Judgment: |
Kelowna, B.C. April 16, 2019 |
Contents
b. Her Majesty the Queen in Right of the Province of British Columbia
d. Bryan McLaughlin and Constance McLaughlin
V. CHRONOLOGY AND FINDINGS OF FACT
b. The Sicamous Creek Watershed Assessment
b. The Defendants’ Positions Generally
iii. The McLaughlins’ Position
i. Is There a Significantly Analogous Precedent?
ii. Was the Harm Suffered by the Plaintiffs Reasonably Foreseeable?
iii. Was There a Relationship of Sufficient Proximity?
iv. Residual Policy Considerations
i. What Was the Standard of Care Expected?
ii. Did Mr. Doyle Breach the Standard of Care?
c. Is the Province Liable to the Plaintiffs in Negligence?
d. Privative Clauses in the Water Act
a. Purpose and Interpretation of the Water Act
i. The Channel Restoration Approval
ii. The McLaughlin Bridge Approval
iii. Summary of Water Act Liability
XIII. CONTRIBUTORY NEGLIGENCE/VOLUNTARY ASSUMPTION OF RISK
a. Public Nuisance Claim Against the Province
b. Private Nuisance Claim Against the Province
b. The Cause of the 2012 Flood
c. The Cause of Avulsions ‘A’ and ‘D’
XVII. CONCLUSIONS ON LIABILITY
b. Compensation Under s. 21 of the Water Act
c. Diminution of Value of the Vinco Property
e. Past and Future Loss of Profits
XIX. THE NEGLIGENCE ACT AND THIRD PARTY NOTICES
[1] Flooding of creeks, rivers, lakes and other waterways during the annual spring run-off are costly and frequently occurring natural events. They are a serious and expensive problem that can disrupt and sometimes devastate those affected. There are different categories of floods. One of the more serious is called a “debris flood” – a very rapid flow of water in a steep channel that is heavily charged with trees, rocks, sediment and other debris.
[2] The plaintiffs were unfortunate victims of a debris flood on June 23, 2012 (“2012 Flood”) that caused significant damage to their property and houseboat business on Mara Lake in the District of Sicamous. The plaintiffs claim that the 2012 Flood was caused by improper actions taken by the defendants in the aftermath of a similar flood that occurred in July 1997 (“1997 Flood”). Those actions relate to the implementation of several flood recovery projects including creek bed dredging and the reconstruction of a private bridge.
[3] The defendants deny any wrongdoing and say that in their emergency response efforts following the 1997 Flood, they acted in accordance with all applicable statutes, regulations and standards at the time. Given the significant financial constraints and urgency of the situation, the defendants say that their actions in implementing the flood recovery projects were reasonable. They say that the damage caused by the 2012 Flood was inevitable and resulted from naturally occurring phenomenon that would have happened regardless of the 1997 Flood recovery projects.
[4] Sicamous Creek flows into Mara Lake a few kilometres south of Sicamous, British Columbia. The plaintiffs’ houseboat business and property is located on Mara Lake immediately to the north of Sicamous Creek. The property (“Vinco Property”) is owned by the plaintiff Vinco Holdings Ltd. (“Vinco”) who leases it to the plaintiff Waterway Houseboats Ltd. (“Waterway”), a related company. Waterway has operated its houseboat business at the Vinco Property since 2007 when it relocated from its previous location in Sicamous. Vinco acquired the Vinco Property in 2003 and 2005 from its previous owners, Mr. and Mrs. Maurer (the “Maurers”), who had operated a campground known as the Beachcomber Campground on that property. The Vinco Property is divided in half by Highway 97A into the upper Vinco Property and the lower Vinco Property.
[5] The 1997 Flood caused major damage to the Beachcomber Campground and to Mervyn Road, which is a public road dividing Sicamous Creek to the south and the Vinco Property to the north. Mervyn Road provides public access to a boat launch immediately adjacent to the Vinco Property.
[6] Following the 1997 Flood, certain works were undertaken in and around Sicamous Creek (“Works”). These Works were authorized by the Province and included dredging and armoring the Sicamous Creek channel (“Channel Restoration”) and replacing a private bridge (“McLaughlin Bridge”) owned by the defendants Bryan McLaughlin and Constance McLaughlin (the “McLaughlins”) spanning Sicamous Creek near where the creek enters Mara Lake (“McLaughlin Bridge Replacement”). A previous bridge owned by the McLaughlins had been removed as part of the emergency response to the 1997 Flood after a build-up of trees, rocks and other debris plugging the bridge caused the creek to overflow across Mervyn Road and onto the Beachcomber Campground.
[7] The Works were the culmination of months of consultations, discussions and negotiations between representatives of the Province of British Columbia (“Province”), the District of Sicamous (“District”), the Department of Fisheries and Oceans (“DFO”) and, to a lesser degree, the McLaughlins and the Maurers. The Works were completed in the spring of 1998.
[8] Nine years later, Waterway moved onto the Beachcomber Campground property. Five years after that, the 2012 Flood occurred. The 2012 Flood caused significant damage not only to Waterway and the Vinco Property, but to Highway 97A and multiple other properties as well. Days of intense rainfall combined with snowmelt in the Sicamous Creek watershed created a debris flood. Similar to the 1997 Flood, the opening under the McLaughlin Bridge became completely blocked (“Blockage”) causing the creek to overflow its banks onto the Vinco Property and Waterway’s infrastructure. Essentially, the 2012 Flood was a repeat of the 1997 Flood, but with far worse consequences.
[9] The plaintiffs sue the Province, the District and the owners of the McLaughlin Bridge (the “McLaughlins”) in relation to the Works saying that they were improperly approved, designed and constructed and caused foreseeable physical damage and economic loss. The plaintiffs sue in negligence, nuisance and under the Water Act, R.S.B.C. 1996, c. 483 (which was in force at all material times of this action).
[10] At the root of this lawsuit is the cause of the 2012 Flood. Specifically, whether the Works played a role or whether the flooding and consequent damage would have happened in any event. In its most basic form, the plaintiffs’ claim is that the Province was negligent in communicating the terms and conditions of approvals issued for the Works and that the District and the McLaughlins did not construct the Works in accordance with their terms.
[11] The plaintiffs say that the Blockage that led to the 2012 Flood occurred when a truck that had fallen into the creek became lodged under the McLaughlin Bridge. This plugged the channel and caused floodwaters to back up and wreak havoc. The plaintiffs say that had the Channel Restoration and McLaughlin Bridge Replacement been properly designed and constructed, the truck would have passed underneath the bridge and the Blockage and resulting flood would not have occurred.
[12] The plaintiffs claim damages for property damage and business losses in the approximate amount of $10 million.
[13] The defendants deny any liability for the plaintiffs’ property damage and business losses. The defendants’ theory is that the 2012 Flood was a naturally occurring and inevitable event caused by heavy rainfall, snowmelt and high water levels in Mara Lake. They say that substantially all of the damage caused would have happened in any event of the Works following the 1997 Flood. They say that the Blockage was caused by the unusually high level of Mara Lake at the time.
[14] There are a number of provincial statutes at play in this case, the most important of which is the Water Act. Another act of importance in this case is the Emergency Program Act, R.S.B.C. 1996, c. 111.
[15] There are several plaintiffs in this case. All of them are involved in the Waterway business. Waterway’s operations, marina and related infrastructure are located on the 6.61 hectare Vinco Property on the shores of Mara Lake.
[16] Waterway began operating its first fleet of houseboats on the Vinco Property in 2006. The remainder of the fleet and the entire Waterway business moved there in 2007.
[17] While there is no written lease between Waterway and Vinco in evidence, it is clear that Waterway leases the Vinco Property from Vinco. Both Waterway and Vinco are accordingly “owners” within the meaning of the Water Act. As such, both Waterway and Vinco are entitled to remedies not available to the other plaintiffs.
[18] The plaintiffs Waterway Vacations Shuswap Limited Partnership #6, 12, 16, 17, 18, 19, 22, 23, 24, 28, 29, 30, 41 and 43, and Waterway Vacations Shuswap #51, 52, 53, 54, 55, 57, 58, 59, 61, 62, 63, 65, 66, 67, 68, 69, 70, 72, 73, 74, 75, 76, 77, 78, 79, 80, 81, 82, 84, 85 and 86 Limited Partnership (collectively “Vacations LP”) are limited partnerships. These partnerships are represented in this case by their general partner Waterway Partnership Equities Inc., which is a wholly-owned subsidiary of Waterway.
[19] The plaintiffs Jeff S. Benson Professional Corp., Northstar Avlease Ltd., Sundance Boating Corp., Willis Enterprises Inc., 0835021 B.C. Ltd. and Happy Holiday Ventures are corporations or partnerships. These plaintiffs and Vacations LP own individual houseboats that make up the majority of Waterway’s fleet (currently 66 houseboats) and will be referred to collectively as the “Individual Houseboat Owners”.
[20] The plaintiff Waterway Houseboat Charters Ltd. (“Charters”) is a wholly-owned subsidiary of Waterway. Although essentially a shell company that plays no active role in the Waterway business, it is named on the written management agreements between Waterway and the Individual Houseboat Owners. In most cases, Charters is nominally a party to these agreements as Waterway’s agent.
[21] The structure and relationship among the various plaintiffs is somewhat complicated. Generally speaking, the houseboats are owned by individual or corporate entities and are managed by Waterway. Waterway provides the staff and equipment required to operate the business. By all outside appearances, the houseboats belong to Waterway. Waterway has day-to-day control over each houseboat and receives a management fee of 55% for all but three houseboats; it receives 60% on those three.
[22] The Province administers provincial laws including the Water Act and the Emergency Program Act and regulations made under those Acts.
[23] The District is a municipal corporation pursuant to the Local Government Act, R.S.B.C. 1996, c. 323. It has its office at 446 Main Street in Sicamous, British Columbia. The lower portions of Sicamous Creek are located within its municipal boundaries.
[24] The defendant McLaughlins are the registered owners of lakefront property located on Mara Lake (“McLaughlin Property”). They purchased the McLaughlin Property in 1987. Sicamous Creek enters Mara Lake at the north end of the McLaughlin Property.
[25] The McLaughlins live in Alberta. The McLaughlin Property is used as a summertime vacation property. Mr. McLaughlin is a mechanical engineering technologist. Since 1984, he has done consultant work in the hydroelectric industry and has dealt with a number of engineers involved in that field.
[26] At all material times, the McLaughlin Property had no permanent structures.
[27] While there were many persons involved in the events surrounding the 1997 Flood, its aftermath, the Works and the 2012 Flood, it is helpful at this point to mention some of those people who played a significant role. Their names and roles are detailed in the chart below:
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NAME |
ROLE |
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Paul Doyle |
§ Testified at trial having been called by the plaintiffs under the adverse witness rule § A professional engineer, now retired, he was employed through most of his career by the Ministry of the Environment’s Water Management Branch’s engineering section (“Water Branch”) for the southern interior § He was the senior engineer and head of the Water Branch based in Kamloops for approximately twenty years § He was very experienced in the area of water hydrology § Over his career, he had issued thousands of Water Act approvals and in doing so, used his education, training and experience in determining the appropriate mandatory conditions that should be attached to each one § In issuing approvals, he took into account various concerns including future risks of flooding § He was the Water Branch’s representative in charge of approving the Channel Restoration and McLaughlin Bridge Replacement (more specifically, he was the Province’s engineer appointed under s. 9 of the Water Act who issued the Approvals) |
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Bob Costerton |
§ Did not testify § Also a professional engineer who worked with the Water Branch in Kamloops § Mr. Doyle was his supervisor |
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Allan Zackodnik |
§ Did not testify § Also a professional engineer – he was the Water Branch’s Regional Water Manager for the Southern Interior and as such was the highest ranking official in the Water Branch § He was Mr. Doyle’s superior |
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Karen Williams |
§ Testified at trial having been called by the plaintiffs under the adverse witness rule § She was the District’s municipal administrator from 1996-2008 § Following the 1997 Flood, she was the District’s representative who negotiated with Mr. Doyle in relation to the Works and acted as a conduit between the Province and the McLaughlins § Visited the site following the 1997 Flood and observed bank erosion and debris in the creek bed and damage to Beachcomber Campground, the marina and Mervyn Road (all were littered with flood debris including sediment, branches, trees and rocks) § Observed how the debris had blocked the creek channel including upstream from the McLaughlin Bridge |
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Louise Maurer |
§ Testified by videoconference from Calgary § From 1988 to 2003, she owned and operated the Beachcomber Campground and then sold it to Vinco § Witnessed the destruction caused by the 1997 Flood and was an advocate for the Channel Restoration so that she could get her Beachcomber Campground business up and running again § Wrote letters to both Ms. Williams and Mr. Doyle urging them to remedy the flooding issue |
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Grady MacDonald |
§ Did not testify § Employed by the District as its public works foreman and reported to Ms. Williams § At all material times he was the District’s representative at site meetings § Oversaw the Channel Restoration |
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Mike Whitehead |
§ Testified at trial § Has been a heavy equipment operator and contractor all of his working life and at the time of trial was 58 years old § Since 1985, he has lived on property on the south bank of Sicamous Creek upstream of Highway 97A; in the time he has lived there, he has only seen two floods in Sicamous Creek, 1997 and 2012, both of which were equally devastating § In 1998, he was hired to perform the Channel Restoration which involved removing debris and sediment from the creek bed and cleaning up the creek banks and placing riprap § His instructions came from various Ministry representatives who had designed the Works § He was not asked to put the creek back to its pre-1997 Flood condition but followed the instructions he was given § Prior to the 2012 Flood, he purchased a new Dodge 1500 short box crew-cab pick-up truck (“Truck”) and had parked it on his property about 50 feet from the bank of Sicamous Creek § He was out of town during the 2012 Flood – upon his return, the Truck and about 50 feet of his property were gone together with a row of some 20-30 large trees § The Truck was later found downstream from his property mangled and destroyed § For as long as he had lived on his property, the Sicamous Creek bed had always been much wider upstream of the Highway 97A Bridge than downstream of it |
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Gord Varszegi |
§ Testified at trial § He was Waterway’s dock manager in 2012 and was present during the 2012 Flood § Observed the flooding, took photographs and videos of what occurred and testified as to timing of various events |
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Gary Bens |
§ Testified at trial about his observations of the 2012 Flood § Witnessed the 2012 Flood from his property on the north bank of Sicamous Creek some distance upstream and east of the Highway 97A bridge § Observed that at approximately 3:30 pm on June 23, 2012, Sicamous Creek was dark brown, flowing extremely fast, and eroding the south bank of the channel along Mr. Whitehead’s property § Stated that by 6:00 pm, the flow of the creek appeared to have peaked and stayed at a relatively steady level through 9:00 pm § Stated that between 6:00 and 9:00 pm the creek appeared to be “breathing” but was not getting higher § By 9:30 pm, he believed the creek had stabilized and the risk of flooding to his property had passed § He last checked his property at 10:30 pm and noted water flowing through his carport prompting him to leave his property § As he did, he noted about an inch of water flowing down his road |
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Lloyd Courage |
§ Did not testify § He is a professional engineer practising in Alberta § He visited the McLaughlin Property at Mr. McLaughlin’s behest in July 1997 and provided Mr. McLaughlin with an engineering opinion for the reconstruction of the McLaughlin Bridge dated July 31, 1997 that was in turn given to Mr. Doyle who received it in early September 1997 |
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Bob Harding |
§ Did not testify § He was the representative of the federal DFO involved in the approval process for the Works § He attended the February 26, 1998 site meeting and prepared sketches for the Channel Restoration (“Harding Sketches”) |
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Chris Duffy |
§ Testified at trial and was the only non-expert witness called by the Province § Since 2008, he has been the executive lead for Emergency Management British Columbia and testified about the Emergency Program Act |
[28] The parties filed a comprehensive and detailed Agreed Statement of Facts wherein many facts, documents, photographs, videos and events were agreed to. I will not attempt to repeat them but those facts that are helpful to my findings will be interwoven into the Chronology and Findings of Fact below.
[29] In 1986, the original McLaughlin Bridge was constructed with appropriate approvals from the Province.
[30] The 1997 Flood began on July 12, 1997. The opening beneath the McLaughlin Bridge became obstructed by debris and the Sicamous Creek overflowed its banks onto Mervyn Road and the Beachcomber Campground. The channel bed was infilled by three to five feet of sediment, gravel, rocks and other material over a distance of approximately 600 metres upstream. Mervyn Road was washed out.
[31] On July 21, 1997, the creek started to swell again threatening further flooding. Debris had again started to pile up at the McLaughlin Bridge. Ms. Maurer called emergency services who brought in an excavator to clear the blockage. Ultimately, the decision was made by provincial officials to remove the McLaughlin Bridge as a preventative measure. Once removed, the water level in the creek dropped immediately and dramatically.
[32] Following the 1997 Flood, the Province approved and funded the Channel Restoration and the McLaughlin Bridge Replacement as well as other repairs to Mervyn Road. The Province provides financial relief to qualifying individuals or local governments for damages caused by natural disasters. The funding program is known as the Provincial Emergency Program (“PEP”). The legislation authorizing that assistance is the Emergency Program Act and the Compensation and Disaster Financial Assistance Regulation, B.C. Reg. 124/95 [DFA Regulation].
[33] Per s. 5(2) of the DFA Regulation, the Province can also, at its discretion, compensate persons who have had real or personal property damaged as a result of government action taken in response to an emergency or disaster.
[34] By regulation, PEP does not allow for any funding over and above what is needed to restore property to its pre-emergency condition. Put another way, it does not pay for the cost of improvements. The purpose of the relief in this case was to fund the cost of returning damaged property back to pre-1997 Flood conditions.
[35] In late July 1997, Mr. McLaughlin engaged Mr. Courage (the engineer contact he had in Alberta) who attended the site and provided his opinion that the bridge could be replaced at its previous height provided that Sicamous Creek was dredged to restore the bed to its pre-flood condition and maintained at that level in the future. He did not recommend raising the bridge as an alternative to excavation of the creek bed. Mr. Courage’s engineering expertise did not include river/stream hydrology.
[36] On July 31, 1997, Mr. Doyle made his first visit to the site. He spoke to Ms. Maurer who expressed her concerns about the infilled creek bed and the potential for future flooding. It was immediately clear to Mr. Doyle that the McLaughlin Bridge was in a terrible location and he questioned whether it should be replaced at all. Based on his years of experience, his judgment was that if the bridge was to be replaced, it would have to be much higher than it was previously. A minimum one metre bridge height increase was a general rule of thumb developed by the Water Branch over the years in circumstances where bridges were removed due to flood blockages.
[37] Mr. McLaughlin was anxious to have his bridge replaced as soon as possible. Pursuant to the Water Act, he faxed a notification of reinstallation for the bridge to Mr. Costerton on August 6, 1997 (Mr. Doyle was out of the office at the time). He attached a sketch of the new proposed bridge as provided by Mr. Courage.
[38] The following day, Mr. Costerton replied with a letter stating that the bridge could be reinstalled without a Water Act approval provided it was “at least 1 metre higher” than it previously was and provided the new bridge complied with regulations under the Water Act, specifically Part 7 of the Water Regulation, B.C. Reg. 204/88 [Water Regulation] (“Mr. Costerton’s August 7, 1997 letter”). Those regulations are important because, as will be discussed below, s. 44(1)(b)(iii) of the Water Regulation required that the replacement bridge be capable of handling a “1 in 200 year flood” and high enough to allow the free passage of a debris flood.
[39] Neither the McLaughlins nor the District appreciated the onerous significance of this regulation.
[40] On August 7, 1997, representatives of the District met to discuss the 1997 Flood and whether it was the District’s responsibility to replace the McLaughlin Bridge as the Province had suggested. Ms. Williams expressed her concerns about future liability for the bridge and recommended that the onus be placed on Mr. McLaughlin with the District assisting him in a sponsored PEP funding application. The committee agreed.
[41] On September 3, 1997, Mr. Doyle was back in the office and reported his opinion to Mr. Zackodnik that a future flood of Sicamous Creek was a very real possibility and that Mr. Courage’s recommended bridge reconstruction did not take this significant risk into account.
[42] On September 12, 1997, Mr. Zackodnik wrote to Ms. Williams advising that the Province would not be handling the Channel Restoration, but would assist with the necessary s. 9 Water Act approvals. Respecting the McLaughlin Bridge Replacement, he stated:
The only technical issue with the bridge is that for the bridge to go back, it must be raised by one metre if it is to remain in its existing location.
[43] On September 16, 1997, Mr. Doyle wrote to the Ms. Maurer explaining that the District would be undertaking a large scale lowering of the Sicamous Creek bed to be funded by the PEP. It was thought that dredging of some 1.5 metres of material would be required to restore the creek bed back to its previous depth.
[44] On December 18, 1997, the District received its funding approval from PEP for the Channel Restoration, McLaughlin Bridge Replacement and Mervyn Road repairs. The Channel Restoration funding was limited to restoring the creek bed to its pre-flood condition without any enhancements. The Mervyn Road repair funding was limited to the portion needed to accommodate the McLaughlin Bridge Replacement.
[45] On January 3, 1998, Ms. Maurer wrote Ms. Williams with her concern over the McLaughlin Bridge. Specifically, she did not want the height of Mervyn Road to be increased because it would be detrimental to her business as larger recreational vehicles would not be able to access portions of her campground. She copied that letter to Mr. Doyle. Negotiations between Ms. Williams and Mr. Doyle began in earnest regarding the height of the new McLaughlin Bridge. To accommodate Ms. Maurer’s concerns, Ms. Williams asked if the Sicamous Creek bed could be dredged six feet rather than three feet to allow the McLaughlin Bridge to be reinstalled at its original elevation. In a subsequent telephone discussion, Mr. Doyle indicated to Ms. Williams that he may accept a 0.6 metre increase in the McLaughlin Bridge elevation (rather than a one metre increase) to accommodate Ms. Maurer’s concerns.
[46] Under the Water Act, any changes in and about a stream must be approved by the Water Branch. On February 4, 1998, Mr. Doyle sent blank Water Act approval applications to Ms. Williams (“Applications”). In order to complete the Applications, design sketches and cross-sections setting out the proposed work were required.
[47] Ms. Williams was anxious to have the Works completed as soon as possible. In addition, there was a DFO-mandated deadline of April 1, 1998, for all works within Sicamous Creek. To expedite matters, she acted as a liaison between the Province and the McLaughlins. The issue of the height of the McLaughlin Bridge Replacement in relation to the height of the new Mervyn Road and Channel Restoration became a hot topic of debate between Mr. Doyle and Ms. Williams. On February 4, 1998, Ms. Williams faxed Mr. Doyle regarding the McLaughlin Bridge Replacement. In part her letter stated:
As discussed the District is not representing the private interests of Mr. McLaughlin in the replacement of the bridge, we are acting as a resource in conjunction with our full claim for flood recovery. We will not accept the liability associated with the replacement of this bridge on private property but rather we are hoping to acquire a consensus that all parties will benefit by lowering the bridge to accommodate the road works without negatively impacting the [Maurers]. We hopefully will not be in a position to debate the decision for removal of the bridge or prior creek restoration. I am looking for a win-win and I believe my request will do just that….
I am hoping to bypass the bureaucratic assessment of the 1-foot difference in bridge elevation considering the initial height requirement was also a decision outside our authority. I am reluctant to debate this issue further considering the potential for political and private property owner conflict and ramifications.
[48] On February 13, 1998, Ms. Williams again wrote to Mr. Doyle stating that the “property owners” had agreed to a 0.6 metre height increase for the McLaughlin Bridge Replacement and had accepted the plans for the Mervyn Road repairs. She stated that the District was hesitant to proceed with the creek dredging and requested the Province’s approval as soon as possible.
[49] On February 18, 1998, Ms. Williams sent the completed Applications to Mr. Doyle stating:
…it is imperative considering the current weather conditions and contractor availability to commence the creek works on Monday, Feb 23/98.
[50] She sought approval to commence the Works immediately but neglected to put forth any design sketches or cross-sections as required by the Applications.
[51] On February 25, 1998, Mr. Doyle wrote Ms. Williams stating that the Province was still awaiting design sketches to properly adjudicate the Applications. A site meeting with Mr. MacDonald (the District’s public works foreman) and Mr. Harding (a DFO representative) was planned for the next day.
[52] The February 26, 1998 site meeting took place the next day. Present were Mr. Doyle, Mr. Harding, Mr. MacDonald, Mr. Whitehead and a representative of the Ministry of Transportation and Highways named Mr. Dodds. Of those present, Mr. Doyle was the only professional engineer and the only one authorized to approve the Works. As Mr. Doyle testified, “the buck stopped with him”.
[53] The purpose of the February 26, 1998 site meeting was to develop a consensus amongst those present and come to some sort of agreement or common understanding of the work that was to be done. Mr. Harding put together sketches of the Channel Restoration that were meant to guide the remediation works (“Harding Sketches”). Other than the Harding Sketches, there were no design or cross-sectional sketches ever provided.
[54] On March 6, 1998, Mr. Doyle issued approvals pursuant to s. 9 of the Water Act to the District (the “Channel Restoration Approval”) and to Bryan McLaughlin (the “McLaughlin Bridge Approval”) (collectively, the “Approvals”). He sent the McLaughlin Bridge Approval to Mr. McLaughlin care of the District. The cover letter to Mr. McLaughlin stated:
Your bridge is in a tenuous location on the creek and hopefully the additional height above the bed may reduce future problems with obstructions.
[55] Mandatory conditions attached to the Channel Restoration Approval included:
a) Condition ‘B’ - requiring riprap protection, specified berm removal and specified dredging of the channel as “refined during a joint field inspection on February 26, 1998 with the maximum channel bed dredging of 1 metre”;
b) Condition ‘C’ – requiring the Channel Restoration to comply with the Harding Sketches prepared during the February 26, 1998 site meeting;
c) Condition ‘D’ - requiring the Channel Restoration to be completed by April 1, 1998;
d) Condition ‘F’ – requiring the Channel Restoration to be conducted in accordance with ”mutually agreed conditions” during the February 26, 1998 site meeting with the final channel profile being hydraulically stable;
e) Condition ‘L’ - requiring the riprap to be angular in shape and suitably graded and sized to resist movement by freshet (spring run-off) flows; and
f) Condition ‘M’ - requiring the completed protected channel to have a cross-sectional area no less than its present cross-sectional area, meaning the channel could not be smaller than it was before the 1997 Flood.
[56] Mandatory conditions attached to the McLaughlin Bridge Approval included:
a) Condition ‘C’ - requiring all works to be designed by a qualified professional engineer and to be at least 0.6 metres higher than the lowest point of the previous bridge;
b) Condition ‘H’ - requiring that the District approve the bridge design; and
c) Condition ‘P’ - requiring that appropriate design methods and construction techniques for the site conditions be utilized.
[57] After the Approvals were issued, the District and the McLaughlins each arranged for independent contractors to carry out the Works.
[58] Both Approvals also repeated the wording of s. 21 of the Water Act stating that the District and Mr. McLaughlin were respectively required to make “full compensation” for any damage or loss resulting from the Works. The full import of s. 21 is discussed later in these reasons.
[59] Mr. Doyle did not like the change to the height requirement (from at least one metre to at least 0.6 metre) but, in light of the other conditions attached to the Approvals, he was prepared to agree to it. In other words, he was prepared to agree to the at least 0.6 metre height increase provided that a qualified professional engineer signed off on it. He considered Condition ‘H’ (the requirement that the District approve the design) to be an important back-up provision to Condition ‘C’. In his mind, this meant that two qualified professional engineers would be involved in approving the height of the replacement bridge.
[60] Upon Ms. Williams learning of Condition ‘H’ on March 19, 1998, she faxed Mr. Doyle referring to Mr. Costerton’s August 7, 1997 letter stating that no s. 9 Water Act approval was required for the new bridge. Further, that the District would not accept responsibility for the McLaughlin Bridge Replacement.
[61] Throughout, Ms. Williams and Mr. McLaughlin were under the impression that because the Province had agreed to a minimum height increase of 0.6 metres (rather than the at least one metre increase it had earlier required), the Province had assumed responsibility for determining the height. Mr. Doyle, however, was under the impression that the District and the McLaughlins each bore that responsibility.
[62] The District hired Mr. Whitehead to perform the Channel Restoration. It was completed by the April 1, 1998 deadline. On April 1, 1998, Mr. Doyle made a site visit. He did not like what he saw because the end result was a channel that was too narrow and too constricted. Further, he noted that improper riprap had been used. He foresaw future problems and recorded his thoughts in file notes dated April 2, 1998 stating:
… Found the finished creek channel to tight (bottom < 3m wide) in straight reach next to Mervyn Rd. Round rock (mixed with angular) has crowded the channel reducing the conveyance as the banks were protected. I predict in a big flood that the banks of round rock will collapse into channel & recreate a scenario similar to 1997. Dredged depth is nowhere near a metre in the reach – maybe only 0.3 m (or less?) at McLaughlin bridge. Floating debris or collapsed round rock banks may cause renewed problems. MOTH has certainly protected [right] abutment & bridge. This may tend to throw flow against [left] bank [down stream] & start this giant pile of round rock unravelling during high water.
[63] Also on April 2, 1998, Mr. Doyle faxed a response to Ms. Williams’ March 19, 1998 letter stating that a Water Act approval was, in fact, required due to the continued vulnerability of the McLaughlin Bridge at that location. He stated:
I do not like the bridge at that location and have only approved the bridge replacement because of the unique set of circumstances which exist at McLaughlin’s lot. If the new bridge fails or causes a problem in the future, I will oppose any further replacement.
[64] The District’s response came swiftly. On April 6, 1998, Ms. Williams went over Mr. Doyle’s head, writing to Mr. Zackodnik and making it clear that the District would assume no responsibility for the McLaughlin Bridge Replacement. She stated in part:
Despite earlier agreement that it was not required, and the District’s position in assisting with the application process for replacement of the [McLaughlin Bridge], Paul Doyle insisted that application be made …
The approval is now before us … and I note that Item H ‘Approval of the bridge design is required from the District of Sicamous’. The District has stated on many occasions that it accepts NO RESPONSIBILITY for replacement of this bridge. We have made considerable effort thru this process to accommodate all the necessary works to remediate the creek, upgrade the road and protect private properties.
[65] The following day, Ms. Williams wrote Mr. Doyle reiterating that the District would not be giving any approval as contemplated by Condition ‘H’ and that she believed Mr. McLaughlin had met the remaining conditions of the McLaughlin Bridge Approval. She ended the letter by stating that in her view, responsibility for the McLaughlin Bridge rested with the McLaughlins.
[66] On April 14, 1998, Mr. Zackodnik directed Mr. Doyle to “sort out the controversy”, “clear the books” and get the Works completed. Mr. Doyle took Mr. Zackodnik’s direction to “clear the books” to mean that he was to forego his engineering judgment and, as Mr. Doyle put it, “get this approval out of the way, over and done with, signed”.
[67] Mr. Doyle accordingly amended the McLaughlin Bridge Approval by removing Condition ‘H’. That left Conditions ‘C’ and ‘P’ requiring that the McLaughlin Bridge Replacement be designed by a qualified professional engineer according to the specifications set out in those conditions.
[68] He telephoned Mr. McLaughlin and told him about the amendment. Following these discussions, he wrote a memo to the file stating in part:
…this should satisfy everyone’s concerns (until the next flood).
My site visit…showed that channel was too constricted by rip rap, which is erodible, upstream of McLaughlin Bridge site and blockage of the channel is likely when high flow next occurs.
[69] Meanwhile, Mr. McLaughlin hired a mechanical engineer, Mr. Norlander, to design the superstructure and abutments of the McLaughlin Bridge Replacement. Thinking that the design height came from Mr. Doyle, Mr. McLaughlin’s instructions to Mr. Norlander were that the new bridge had to be reinstalled exactly 0.6 metres higher than the previous bridge. Mr. McLaughlin retained an independent contractor to reinstall the bridge and provided him with Mr. Norlander’s engineering plans.
[70] Thus, the McLaughlin Bridge Replacement was completed in May 1998 without the involvement of a professional engineer qualified in river hydrology and was exactly 0.6 metres higher than the previous bridge. Mr. McLaughlin received full PEP reimbursement for the cost of the bridge replacement on August 26, 1998.
[71] In 1998 and 1999, a Sicamous Creek watershed assessment was conducted by Dobson Engineering Ltd. to determine watershed conditions at that time. The assessment was also conducted to determine the effects of past land-use practice and the potential impacts from proposed forest development. A report called “Interior Watershed Assessment for the Sicamous Creek Watershed” was prepared by Mr. Michael Milne, a forest hydrologist with Dobson Engineering Ltd. (“Dobson Report”). It was presented to a Watershed Assessment Committee that included representatives of the Province and District. One of Mr. Milne’s recommendations was that the Sicamous Creek channel be monitored for destabilization and channel infilling. Another was that the McLaughlin Bridge be raised to permit passage of floating debris.
[72] One of Mr. Milne’s concerns was that the McLaughlin Bridge was installed too low and that the creek channel between Highway 97A and Mara Lake was too narrow. He was particularly concerned that the upstream water channel was twice as wide and twice as deep as the downstream channel. That, combined with the height of the McLaughlin Bridge, would be insufficient to accommodate the volume of water and debris should, as expected, another flooding event similar to the 1997 Flood occur. Without modifications, Mr. Milne’s view was that in a similar flooding event, these design errors would cause the banks to destabilize, plug the channel underneath the McLaughlin Bridge and flood neighbouring properties.
[73] The Dobson Report was an ominous precursor of the 2012 Flood. Mr. Milne’s concerns were similar, if not identical, to those earlier expressed by Mr. Doyle.
[74] Waterway relocated to the Vinco Property in 2007. In addition to building the infrastructure to operate a houseboat business, Vinco investigated the viability of a mixed commercial and residential development on the Vinco Property. In order to obtain the required government approvals, Vinco commissioned geotechnical engineering reports from EBA Engineering Consultants Ltd. (“EBA”). Those reports, dated September 8, 2006 and June 1, 2007 (together the “EBA Reports”) warned that the Vinco Property was at a moderate to high risk of debris flooding from Sicamous Creek. EBA’s review of historical flood events disclosed that Sicamous Creek had experienced debris floods at a frequency of one in every 20 years or so. EBA recommended that if a development project were to proceed, flood mitigation measures would be required:
Based on our interpretation of the data, it is our opinion that the subject property situated below Highway 97A and adjacent to Sicamous Creek, is in a moderate to high risk location and that mitigation measures for protection would be necessary for the development as laid out. Below the highway, the buildings may be subject to direct or indirect debris flood impacts consisting of sediment and debris deposition and scour.
[75] EBA concluded:
Proposed development of the subject property is situated on the fan of Sicamous Creek. Geotechnical hazards, namely flooding, debris flow, and debris flood, are addressed in this report to accompany the environmental impact assessment and Development Permit application.
Based on the hazard assessment, the following conclusions are presented.
· Sicamous Creek is judged to be subject to debris flood, rather than debris flow, and the hazard is considered to be moderate to high;
· The risk of flood or debris flood impact to the subject property is considered to be low (above Highway 97A) and moderate to high (below Highway 97A). The potential for channel avulsion along the fan is considered relatively low due to the incised nature of the channel;
· Based on channel gradient, a large proportion of sediment and organic debris will likely be deposited in the channel upstream of the fan or within the first several hundred metres of the fan apex, upstream of the subject property;
· Sediment deposition across the fan would depend on channel constrictions such as the highway bridge and two other private bridges, stream bank weaknesses, and local topography. For the subject property, overbank flooding is most likely to occur upstream of the driveway bridge without mitigation; and,
· Mitigation measures, such as elevation through fill placement, erosion protection along Mervyn Road, and possible construction of a flood spillway, could reduce the hazard to properties and infrastructure on the subject property. The detailed design of the mitigation measures should consider the impact on adjacent properties.
[76] In short, the EBA Reports were a warning to Vinco that without flood mitigation measures in place, the Vinco Property could expect to experience flooding starting upstream of the McLaughlin Bridge. Despite this warning, Waterway relocated its business to the Vinco Property with no flood mitigation measures being considered or taken.
[77] In the early afternoon of June 23, 2012, the waters in Sicamous Creek began to swell. The timing of events thereafter is critical to an overall understanding of this case.
[78] The level of Mara Lake was high in the days preceding the 2012 Flood. Portions of the Vinco Property (including Waterway’s administration building) were below the lake water level and were protected by sandbagging. Waterway’s operations continued despite the high water levels.
[79] The Sicamous Creek watershed experienced heavy rainfall on June 23, 2012 which, combined with a period of warm weather and consequent rapid snowmelt, caused high flows in Sicamous Creek charged with sediment and debris. The same phenomenon occurred in a number of other creeks in the area at the same time.
[80] I accept the evidence given by Mr. Varszegi and Mr. Bens on their observations of what occurred and of the timing of those events. At approximately 3:00 pm on June 23, 2012, the creek was raging. The creek level had increased significantly from its level earlier in the day. The flow was dark brown in colour and forceful enough to move and flush large boulders, entire full size trees and their root systems, and other debris into the lake. Trees slammed into McLaughlin Bridge, stalled briefly and then were forced underneath and into the lake. By 3:30 pm, there was a large mass of trees and debris floating in deep water in the lake to the north of the creek, rotating clockwise. The flow of the creek was like a “jet” of water shooting into Mara Lake and was not mixing with the lake water. The “jet” of water shot straight into the lake and then abruptly disappeared as it reached deep water. I accept that this means the flow maintained a substantial velocity until it reached deep water in the lake.
[81] At that point, there was still approximately 20 inches of clearance between the top of the creek water and the underside of the McLaughlin Bridge.
[82] By approximately 4:45 pm, the gap between the underside of the McLaughlin Bridge and the top of the creek flow had narrowed to about ten inches. The flow was extreme and continued to flush boulders, rocks, sediment, trees, branches and other debris into the lake. By 5:30 pm, the level of the outflow was elevated above the level of Mara Lake. At this point, Sicamous Creek was neither backing up nor spreading out into the lake. This elevation was later described by one of the plaintiffs’ experts, Dr. Church, as “supercritical flow” meaning that much, if not all, of the material entrained in it was flushed into deep water before dropping out into the lake.
[83] Shortly before 6:00 pm, the top of the flow was lapping against the underside of the McLaughlin Bridge. Intermittently, debris was trapped by the bridge, temporarily plugging the flow and causing water to spill over the channel’s north bank until the trapped debris was forced under the bridge and flushed downstream into the lake by the sheer power of the flow.
[84] Meanwhile, upstream from the Highway 97A Bridge, the creek’s banks were eroding and slumping significantly causing trees to fall into the flow and be carried downstream. This included the creek banks and trees along Mr. Whitehead’s property. Erosion on the south bank was more significant than what had occurred during the 1997 Flood.
[85] The Truck arrived at the McLaughlin Bridge at 5:48 pm. Prior to its arrival, the debris flow was contained within Sicamous Creek’s channel and was able to pass under the McLaughlin Bridge, albeit with some overbank spillage. I conclude that the Truck immediately plugged the channel after slamming into the upstream side of the McLaughlin Bridge and becoming lodged underneath it. Being carried by the very fast and powerful flow, more debris arrived at the now-plugged bridge. The debris piled up on its upstream side and exacerbated the Blockage. Flooding was immediate.
[86] A major part of the flow then spilled over the north bank, across Mervyn Road and onto the Vinco Property (later defined as Avulsion ‘A’). The infilling of the channel caused by the Blockage resulted in the creek bed becoming increasingly shallower. Soon, there was no channel left and the flow went wherever it found least resistance, namely across the Vinco Property.
[87] How far upstream this infilling occurred and whether it progressed far enough to cause another major avulsion that occurred upstream of the Highway 97A Bridge (later defined as Avulsion ‘D’) were significant issues at trial.
[88] The peak flow of the creek occurred at approximately 6:00 pm (shortly after the arrival of the Truck) and lasted for about three hours before it began to decline in volume and velocity. Had the Blockage not occurred, I conclude the creek would have continued to flush the majority of the flow during that time into Mara Lake.
[89] An “avulsion” is the lateral displacement of creek water from its current channel into a new channel. In other words, an avulsion occurs when a creek cuts a new channel. There can be partial avulsions and complete avulsions. Over the Sicamous Creek’s recorded history, it has experienced many complete avulsions with the creek cutting new channels in its alluvial fan.
[90] During the trial, the parties referred to five distinct avulsions that occurred over the June 23-24, 2012 flooding timeframe as Avulsions ‘A’, ‘B’, ‘C’, ‘D’, and ‘E’. I will do the same:
a) Avulsion ‘A’ – the overbank flow immediately upstream of the McLaughlin Bridge and below the Highway 97A Bridge that flowed in a northerly direction over the Vinco Property. It started at about 5:50 pm on June 23, 2012, growing increasingly in volume and size as it progressed upstream towards the Highway 97A Bridge;
b) Avulsion ‘B’ – the flow of Sicamous Creek that resulted in water running through Mr. Bens’ carport on the south side of Two Mile Road, starting near the apex of the fan (about 300 metres upstream of the Highway 97A Bridge), and that cut back into Sicamous Creek’s original channel to the west of Mr. Bens’ house. It occurred later in the evening on June 23, 2012;
c) Avulsion ‘C’ – the flow on the east side and immediately upstream of the Highway 97A Bridge that followed the existing ditch on the east side of the Highway 97A embankment and toward Two Mile Creek Road, eventually crossing the highway onto and over the lower portion of the Vinco Property at its north end and into Mara Lake;
d) Avulsion ‘D’ – the flow from approximately 160-170 metres upstream of Highway 97A that ran down part of Two Mile Road, across the upper Vinco parking lot east of Highway 97A, and cut through Highway 97A onto the northern portion of the lower Vinco Property; and
e) Avulsion ‘E’ – the flow that began later on during the flood at the intersection of Highway 97A, Mervyn Road and Two Mile Road. At that point, the entire flow of Sicamous Creek, which was greatly reduced, had avulsed into the channel created by a combination of Avulsions ‘C’, ‘D’ and ‘E’. For the balance of these reasons, I will describe the channel that resulted from these three avulsions simply as Avulsion ‘D’.
[91] There is broad consensus amongst the parties that most of the damage to the Vinco Property was caused by Avulsions ‘A’ and ‘D’.
[92] How each of the avulsions were caused and whether the Channel Restoration or the McLaughlin Bridge Replacement played a role in their creation was a main focus of the trial. It was also the subject of detailed, technical and lengthy expert evidence on both sides, which will be summarized in the next section of these reasons.
[93] The parties called a number of experts in the field of river hydrology to provide their opinions on the sequence of events that occurred during the 2012 Flood and to explain their views on whether the Channel Restoration and/or the McLaughlin Bridge Replacement made any difference to the damage caused to the Vinco Property.
[94] In short, the plaintiffs’ experts opined that the combination of the McLaughlin Bridge Replacement and the Channel Restoration caused, in particular, Avulsions ‘A’ and ‘D’. They say that without the Blockage, the avulsions and subsequent flooding would not have occurred.
[95] The defendants’ experts opined that the avulsions occurred independent of the Blockage and that the resultant damage to the Vinco Property would have occurred in any event of the Works.
[96] The plaintiffs called three experts: Dr. Michael Church, Mr. Brian LaCas, and Dr. Russell Smith. Each expert was qualified in his respective field.
[97] Dr. Church is a registered professional geologist and Professor Emeritus of geography at the University of British Columbia where he has taught for 38 years. His research expertise is in fluvial geomorphology (the scientific study of the landforms on the Earth’s surface, including rivers and streams and the processes that have fashioned them). He also has expertise in surface water hydrology and fluvial sedimentology. In other words, he understands the science behind the flooding of creeks and rivers.
[98] He has impressive credentials and is eminently qualified in his areas of expertise. I had no trouble qualifying him. He presented as an objective, careful, knowledgeable and highly academic witness in his field of study.
[99] In a nutshell, Dr. Church’s opinion is that the 2012 Flood damage to the Vinco Property was caused by the Blockage. When the Blockage occurred, the flow of Sicamous Creek, which was raging at the time, was forced to slow and almost stop when it reached the Blockage. It was no longer able to transport the debris that it was carrying. Thus, rocks, sediment and other entrainments dropped out of the flow and were deposited in front of the Blockage causing a reduction in the channel’s depth and an inability to accommodate the flood waters.
[100] The shallower depth in turn caused the upstream flow to decrease in velocity and the issue snowballed. Sediment and other material dropped from the flow as the velocity decreased and a “sediment wedge” was created in the channel. Ultimately, the flow had nowhere to go but overbank, breaching the north bank and flooding the Vinco Property.
[101] Dr. Church assumed that the flood reached its peak at 6:00 pm on June 23, 2012, and that, because of the sheer force of the flow, no aggradation would have occurred at the area of the McLaughlin Bridge prior to the Blockage. Despite the significant erosion going on upstream, he opined that most of the material would have been flushed into the lake. In other words, but for the Blockage, any flooding of the Vinco Property would have been minimal. He likened the flow process to a “waterslide” whereby the force of the water and slope “jettisoned” the entrained material into the standing lake water, not slowing down until deep water was reached.
[102] Thus, in his opinion, the decisive event that caused the flood damage was the Truck plugging the McLaughlin Bridge. In the absence of the McLaughlin Bridge, or had the bridge been higher, the Truck would have kept moving and been carried into the lake.
[103] Mr. LaCas is a professional engineer with a specialty in hydrological engineering. He was qualified as an expert in a number of areas including: hydrological and hydrotechnical engineering, stream channel geomorphology, open channel water surface profile modelling, hydraulic modeling design, field review of clear span bridges and stream channel restoration works for steep mountain creeks, and the standard of care of consulting engineers in British Columbia.
[104] From 1982-1988 he was employed by the Ministry of Environment and was an engineer appointed under the Water Act performing hydrological engineering and supervision of river restoration projects. He is now a consulting engineer specializing in flood prevention design, flood restoration and remediation projects for rivers and creeks.
[105] He testified that customary professional engineering standards treat public safety as a top priority and thus cutting corners is not acceptable.
[106] Briefly, Mr. LaCas’ opinions were that:
a) Channel restoration/bridge design are the purview of hydrological and/or hydrotechnical professional engineers;
b) A professional engineer responsible for designing a bridge such as the McLaughlin Bridge would take into account the land on both sides and look for solutions that would not endanger habitable areas;
c) Had a qualified professional engineer designed the McLaughlin Bridge Replacement, it would have been built an additional 1.4 metres higher than it was (and two metres higher than the original bridge height);
d) Ideally a backup bypass channel should have been constructed so that flood waters could be diverted into Mara Lake in the event the McLaughlin Bridge was blocked; and
e) Had the McLaughlin Bridge been constructed two metres higher, it is unlikely the 2012 Flood would have caused such significant damage to the Vinco Property.
[107] From an engineering perspective, he stated that the goal of creek restoration after a flood is to increase the capacity of the channel for future flows. This is usually done by reinforcing its banks and removing aggradated sediment. In this case, widening the creek would not have been possible because it would have encroached on private property. Thus, it was even more important in this case that proper engineering measures respecting the Works be followed.
[108] In his opinion, Condition ‘C’ in the McLaughlin Bridge Approval requiring Works to be designed by a “qualified professional engineer” meant that an engineer with qualifications related to the issue at hand (namely reinstalling a bridge over a creek prone to debris floods) needed to be retained. This meant that Mr. McLaughlin needed to involve a hydrotechnical engineer – not a structural engineer. In his opinion, any engineer qualified in hydrology who visited the site would have recognized it was on an alluvial fan and posed serious problems. That engineer would have recognized that rebuilding the bridge 0.6 metres higher was insufficient and that the height should have been raised, at a minimum, a further 1.4 metres.
[109] Mr. LaCas’ opinions were based on hydraulic modelling that simulated flows in Sicamous Creek at the peak of the flood. The modelling he used included photographic evidence of the 2012 Flood as data input. This became an area of criticism from defence experts because it was their view that his modelling did not take into account any sedimentation that may have occurred before the flood peaked. Mr. LaCas disagreed. Similar to Dr. Church, Mr. LaCas’ opinion was that, during its peak, the flow of Sicamous Creek had more than enough power to prevent any sedimentation in the channel.
[110] Mr. LaCas also disagreed with the defence suggestion that the standing high lake water would have acted as a brake, slowing down the flow and causing aggradation to occur upstream (known as the “backwater effect”). In his view, because the flow was “supercritical”, the high momentum and velocity of the jetted flow would have flushed everything into Mara Lake and there would have been no backwater effect but for the Blockage.
[111] Dr. Smith is a hydrologist and professional engineer. He was qualified as an expert in the following areas: snowpack and runoff hydrological modeling in mountainous catchments areas (particularly in the interior of British Columbia), flood frequency analysis, and field monitoring of hydrological, hydrometric and meteorological processes.
[112] He was asked by the plaintiffs to determine, to the best of his knowledge, what happened during the 2012 Flood in terms of timing and volume of the water flow in Sicamous Creek. Specifically, he was asked to:
a) Prepare a clear water hydrograph from 12:00 pm on June 23, 2012 to 12:00 am on June 25, 2012;
b) Prepare a long-term hydrograph covering 1997 through 2017; and
c) Calculate the time period for the 2012 Flood based on the annual maximum flows produced by the long-term hydrograph.
[113] Using modelling software known as “Raven”, Dr. Smith attempted to simulate what happened during the 2012 Flood to, in effect, duplicate the event (using his own data collected in 2017 from the field as well as data available to him through other sources). In crafting the model, he relied on the science of hydrology along with his own experience, knowledge and education.
[114] Even though his models did not consider input channel roughness, channel geometry, channel slope, water slope or any backwater effect, Dr. Smith was confident that his models produced a rough approximation of flow volume and timing during the 2012 Flood.
[115] He prepared two reports. The first is dated November 30, 2017. On the eve of submitting it, he realized there was a one-hour time lag in his modelling because he did not account for daylight savings time. That was corrected resulting in his second report dated January 5, 2018.
[116] He was subjected to a lengthy, intense and skillful cross-examination by Mr. Weintraub. Dr. Smith defended his opinion in a passionate and persuasive manner. He acknowledged the frailties of modelling in general and conceded that no model is perfect. As he stated: “all models are wrong, but some are useful”. No model can perfectly represent or recreate the environment, but through careful analysis and exercising sound judgment during parameterization, models can be valuable tools for understanding hydrological events.
[117] Dr. Smith’s modelling results were adopted by Dr. Church and Mr. LaCas as bases for their opinions. In other words, they relied on Dr. Smith’s hydrographs and extrapolated their opinions from them.
[118] The defendants jointly called two liability experts, Dr. Matthias Jakob and Dr. Younes Alila. Each were qualified in their respective fields.
[119] Dr. Jakob was qualified as an expert in hydro-geomorphic processes, debris flood hazard/risk assessment, watershed and hillslope geomorphology, fluvial and mass movement sedimentology, alluvial fan evolution, and hydrology and hydraulic modelling.
[120] The focus of Dr. Jakob’s work is assessing steep creek hazards and risks. This requires extensive knowledge of fluvial sedimentology and alluvial fan evolution. He has studied these issues in depth.
[121] He was asked to critique the expert reports and testimony of Dr. Church and Mr. LaCas. Interestingly, Dr. Jakob and Dr. Church are colleagues and have collaborated on and published a number of peer-reviewed articles together. Dr. Jakob acknowledged that Dr. Church is highly qualified in fluvial geomorphology. He agreed with Dr. Church’s competence calculations and analysis.
[122] Dr. Jakob did, however, take issue with two aspects of Dr. Church’s evidence. His first point of contention is that Dr. Church relied on Mr. LaCas’ cross-sections, which Dr. Jakob believed were unreliable. Among other criticisms, he pointed out that Mr. LaCas did not consider the possibility of aggradation in the channel before peak flow whereas Dr. Jakob believed that pre-peak flow aggradation must have occurred.
[123] Another point of contention was Dr. Church’s opinion that prior to the Blockage, the flow was flushing all sediment into deep water and no aggradation was occurring in the channel. To the contrary, Dr. Jakob believed that aggradation was occurring prior to the Blockage, in turn causing a strong backwater effect from the lake upstream to the McLaughlin Bridge. As more material was transported by the ever-increasing flow, more material was introduced into the channel, thus adding to the channel backfilling. He believes that the channel would have been infilled with rock, sediment and other material by natural processes completely independent of the Blockage.
[124] While not ruling out Dr. Church’s theory (that sediment, rock and other debris were propelled over the McLaughlin Bridge thus explaining the sizable amount of material that ended up downstream of the bridge), Dr. Jakob preferred his own theory that a majority of the sedimentation downstream of the McLaughlin Bridge occurred before the Blockage.
[125] It was his belief that the process of progressive erosion widened the channel upstream of the Highway 97A Bridge. As the channel widened, the flow changed from a deep, fast flow to a shallower, slower flow. According to Dr. Jakob, this caused infilling of the channel through aggradation. At the same time, the velocity of the flow was constricted by channel narrowing at the Highway 97A Bridge, which further contributed to the channel infilling process. To illustrate his point, he used the analogy of four lanes of vehicles merging into one: the velocity of the vehicles must slow down in order to merge. Similarly, the velocity of the stream must slow down as it reaches the opening under the Highway 97A Bridge – as it does, it can no longer carry heavier rocks and sediment which drop to the creek bed causing it to infill.
[126] As these two processes occurred, the sediment pushed the creek onto the north side causing it to erode and overflow ultimately creating Avulsion ‘D’.
[127] Although he agreed it was theoretically possible, Dr. Jakob rejected Dr. Church’s hypothesis that a 390 metre long sediment wedge was formed in the channel upstream of the McLaughlin Bridge following the Blockage that caused Avulsion ‘D’. At best, he believes that such a sediment wedge might have reached the Highway 97A Bridge.
[128] Dr. Jakob also disagreed with Dr. Smith’s calculations, largely due to the different methodology and parameters used by Dr. Smith. Dr. Jakob used a “field approach” whereas Dr. Smith used a “rainfall runoff” approach. In the result, Dr. Jakob’s flow calculations were substantially higher than those determined by Dr. Smith. Dr. Smith’s calculations were relied upon by Mr. LaCas in his analysis and then further relied upon by Dr. Church who used Mr. LaCas’ results to form his opinions. Dr. Jakob’s point is that because Dr. Smith’s calculations were flawed, the reports and opinions that relied on those calculations are also flawed.
[129] In sum, Dr. Jakob’s opinion is that the damage suffered to the Vinco Property was inevitable given the magnitude of the debris flood. He believes that Avulsion ‘D’ is unrelated to the McLaughlin Bridge and Channel Restoration. Additionally, because Mara Lake was so high at the time, he believes Avulsion ‘A’ would have occurred even in the absence of the McLaughlin Bridge. He agreed, however, that some of the flooding caused by Avulsion ‘A’ was probably enhanced by the Blockage.
[130] Dr. Alila is a professional engineer and professor of hydrology at the Faculty of Forestry at the University of British Columbia. He was qualified as an expert in event-based and long-term hydrological modelling. Dr. Alila was retained to review and critique the reports of Dr. Smith and Mr. LaCas.
[131] While he has no personal experience with the specific modelling program used by Mr. LaCas, he has vast experience in modelling generally. He had no quarrel with Dr. Church’s report and generally did not comment on it (his one area of disagreement was that Dr. Church relied on the peak flow analyses provided by Mr. LaCas and Dr. Smith). He agreed that Dr. Church’s opinion was outside his area of expertise.
[132] Dr. Alila visited the lower fan of Sicamous Creek in April 2016, spending a number of hours touring the delta. He did not go into the watershed. He did not take any measurements nor did he record any observations such as tree height, species, slope gradients, slope aspects, or soil – all of which he agreed have features important to understanding the watershed processes.
[133] Nonetheless, he was critical of Dr. Smith’s predictions largely because, in his view, Dr. Smith’s modelling was highly dependant on unreliable and suspect inputs and calibrations. Consequently, Dr. Alila’s opinion was that Dr. Smith’s predicted flows for the 2012 Flood were invalid. He stated:
In summary, the overall integrity of the entire modeling exercise conducted by [Dr. Smith] is highly questionable, as it suffers from the [garbage in, garbage out] syndrome as ‘nonsense input data produces nonsense output or garbage …’ that leads to ‘arguments [that] are unsound if their premises are flawed’.
[Emphasis added.]
[134] In his opinion, it was impossible to determine whether the creek’s discharge (as seen from the photographs) would be higher or lower than Dr. Smith’s models without further reference to detailed hydraulic modeling of the entire reach of Sicamous Creek.
[135] The seven points of disagreement Dr. Alila had with Dr. Smith’s opinion can be summarized as follows:
a) Dr. Smith made errors in the coding of radar precipitation that resulted in major amplifications on the predictions of the 1997 and 2012 flood flows. As a result, the Raven model predictions were inflated by over 76% and are therefore unreliable.
b) Dr. Smith used measured flows in 2017 to calibrate the Raven model. By exaggerating the amount of rain over the Sicamous watershed using radar, the entire calibration process was compromised.
c) The Raven model suffers from “overfitting”/”over-parameterizations”. Put another way, the greater the number of parameters being used, the greater the chance for inaccuracy. Dr. Smith compared field measurements in 2017 with Raven predictions using various calibrations and he picked the one he thought was the best fit. Using this method, there is no assurance that the predictions are real or accurate.
d) Dr. Smith did not validate the Raven model by using the accepted “split-sample experiment” which he says is crucial to building confidence in model.
e) Dr. Smith used the Raven model to simulate 2017 flows and compared them to his observed field measurements. When the two were close, he decided the Raven parameters would be used for his other predictions. According to Dr. Alila, this method is only valid for predicting low and moderate flows, not peak flows. In Dr. Alila’s view, it was improper to extrapolate the model to predict peak flows the way that Dr. Smith did.
f) Dr. Smith determined that the best fit for the 2012 Flood corresponded to the Radar Medium scenario using the process of elimination. He incorrectly eliminated Radar High, Radar Low and two other scenarios on the basis of his professional judgment, however there were too many unknown and uncertain variables in the process for him to have validly selected Radar Medium to the exclusion of others. The range of rain provided by Environment Canada through radar is not meant to be interpreted as a probability precipitation.
[136] Dr. Alila similarly had misgivings regarding Mr. LaCas’ opinions. There are essentially two areas of disagreement Dr. Alila has with Mr. LaCas’ opinion: (1) how he coded the geometry of the Sicamous Creek channel, and (2) his selection of what is known as the “Manning n coefficient” relating to channel roughness. Getting both of these criteria correct, he says, is critical to a model’s reliability.
[137] He criticized Mr. LaCas for an alleged lack of transparency in his calculations. According to Dr. Alila, the calculations lacked detail and left him guessing as to how he arrived at some of his conclusions. Further, he was critical of Mr. LaCas for making professional “judgment calls” in parameterizing his model. Further, Mr. LaCas had not performed a “sensitivity analysis”, which Dr. Alila believed was necessary. As he put it, “the devil is in the detail” and the detail was not put into the models.
[138] My impression of Dr. Alila’s critique was that he expecting scientific certainty. Therefore, because Dr. Smith and Mr. LaCas exercised a certain degree of discretion, their opinions were not valid. As explained later in these reasons, however, scientific certainty is not the goal in these types of models. Rather, models are prediction tools. Scientific certainty is also not the standard of proof required to decide the issues in this case.
[139] The plaintiffs summarize their claim as follows:
a) To the defendants’ knowledge, the channel opening under the McLaughlin Bridge was woefully inadequate. Had it been properly designed by a qualified professional engineer, the Blockage would not have occurred and the damage caused by the 2012 Flood would have been minimal and/or non-existent;
b) When the McLaughlin Bridge was reinstalled, all three defendants exercised control over its height but nobody took responsibility for its proper design. Instead, they turned a blind eye to the issues involving the McLaughlin Bridge’s height;
c) The McLaughlin Bridge Replacement and the Channel Restoration were complex, risky activities that should have been carried out with design and construction oversight from a qualified professional engineer. Failure to engage a qualified professional engineer resulted in a channel that was materially smaller (both in terms of depth and width) than the pre-1997 Flood channel and in an inadequate opening under the McLaughlin Bridge;
d) The defendants all knew, or ought to have known, that their failure to engage a qualified professional engineer in the design of the Works would likely result in severe flooding and damage to the Vinco Property;
e) As members of a reasonably foreseeable class of persons that could be affected by future flooding, the defendants owed the plaintiffs a duty of care to ensure the Works were properly designed;
f) Specifically, the Province in turning a blind eye to the fact that the Works would be completed without satisfying the mandatory Approval conditions acted in bad faith and therefore cannot hide behind the Water Act’s privative clause;
g) The Channel Restoration and the McLaughlin Bridge Replacement were not performed in accordance with the strict conditions set out in the Approvals and improper shortcuts were taken. Therefore, the provisions of s. 21 of the Water Act make the McLaughlins and the District strictly liable to the plaintiffs for the 2012 Flood damage; and
h) The 2012 Flood was not an overwhelming flood. Thus, but for the failure of the District, the McLaughlins, and the Province to ensure the Works were properly designed and constructed, the 2012 Flood would have passed with, at worst, only minor damage to the Vinco Property.
[140] The plaintiffs make these key points in support of their claims:
a) Following the completion of the Works, the Sicamous Creek channel at the McLaughlin Bridge was shallower and narrower than it was before the 1997 Flood. In other words, the McLaughlin Bridge was reinstalled closer to the bed of Sicamous Creek than it had been prior;
b) Had the District not crowded the channel with round riprap, it would have been wider. Further, had the District dredged the creek closer to its original elevation, it would have been deeper and the Truck would have passed and the Blockage would not have occurred. Following the Channel Restoration, the channel was, in the words of Mr. Doyle, “way too constricted, way too narrow”;
c) Before the Truck arrived, the 2012 Flood had effectively reached its peak and was fully contained within the Sicamous Creek channel;
d) The plaintiffs’ experts should be preferred because they were better qualified and more engaged than the defendants’ experts with the evidence of what happened during the 2012 Flood; and
e) The eyewitness, video and photographic evidence supports the plaintiffs’ theory of causation.
[141] The plaintiffs further submit that causation of the damage to the Vinco Property is established with respect to the Works for the following reasons:
a) The reconstructed banks and bed of the Sicamous Creek were not hydraulically stable or adequately protected from erosion. As predicted by Mr. Doyle, this caused the bed and banks to be mobilized by the flood waters thus exacerbating the Blockage and, in turn, the subsequent infilling of the channel;
b) The Blockage was the cause of the overbank flow that rapidly eroded the north bank and significantly exacerbated Avulsion ‘A’; and
c) Avulsion ‘D’ was a direct result of the upstream channel infilling caused by the Blockage.
[142] Waterway says all three defendants are to be blamed for this.
[143] The defendants say that the 2012 Flood was so massive that it would have overwhelmed the channel in any event of the defendants’ alleged negligence. They say that the backwater effect caused by the high level of Mara Lake resulted in substantial aggradation upstream to the point that the channel would have been almost fully infilled and flooding of the Vinco Property would have occurred regardless of the Blockage.
[144] The defendants all say that even if Avulsion ‘A’ can be attributed to the Blockage, by far the most severe damage caused to the Vinco Property was due to Avulsion ‘D’ which was completely unrelated to Blockage and caused by naturally occurring phenomenon. They argue that Sicamous Creek was almost fully infilled right up to the McLaughlin Bridge before the Blockage occurred and thus, there was no room in the channel for the substantial flow of the creek in any event. They say that debris and the Truck may have exacerbated the Blockage but did not cause Avulsion ‘A’.
[145] The Province does not dispute that Waterway suffered damages from the 2012 Flood. It does dispute, however, that it owed a duty of care to any of the plaintiffs or that the plaintiffs can maintain a successful claim in negligence or nuisance against it. At all times, the Province maintains that it acted well within its statutory responsibilities and authority under the Water Act and PEP.
[146] The Province says that the Sicamous Creek is an active alluvial fan and as such, the risks of such a flood were inherent to anyone owning property or locating a business in that area. The plaintiffs knew of and voluntarily assumed that risk when they relocated Waterway to the Vinco Property. Indeed, as a result of commissioning the EBA Reports in 2007, Vinco and Waterway knew there was a moderate to high risk of a debris flood occurring.
[147] Waterway complains that the Province’s actions in allowing the McLaughlin Bridge Replacement and the Channel Restoration stepped outside the four corners of its statutory responsibilities under the Water Act and the Emergency Program Act. The Province says, to the contrary, that its actions in 1997 and 1998 were part of a legitimate response to an emergency situation impacting local properties and infrastructure. This, the Province submits, was well within its mandate and consistent with its responsibilities.
[148] The Province says that the plaintiffs are attempting to assert a positive duty on the Province to assume responsibility for the design of the Works. This, the Province says, cannot be sustained because its function was merely as a public regulator and benefit provider – not as a party close enough in proximity to create a private law duty of care.
[149] Further, the Province submits that this Court should not second-guess Mr. Doyle’s judgment who at all times was acting in a quasi-judicial decision-making function as a regulator. Given the unique, institutional role of approving officers under the Water Act and the broad discretion they are afforded, the Province submits that it would be wrong for this Court to adopt the standards as suggested by the plaintiffs.
[150] The Province is not an insurer for damages caused by floods. It provides some financial assistance to qualifying businesses and persons under the PEP, but the scope of that funding is limited to prescribed eligible expenses. Generally, financial assistance is available to restore property to its pre-flood condition. It does not fund enhancements or new flood protection infrastructure.
[151] Even if a duty of care is found, the Province submits that the standard of care cannot, as the plaintiff suggests, be a “best practises of a consulting qualified professional engineer” standard.
[152] Even further, the Province says that the plaintiffs have failed to prove causation on a “but for” standard. The Province says that the consensus between the experts is that even without the presence of the McLaughlin Bridge, the Vinco Property would have been heavily impacted by the 2012 Flood.
[153] The Province relies on the defence experts who say:
a) That the high water level of Mara Lake created the backwater effect that extended to the McLaughlin Bridge causing sediment to be deposited in the channel to the point that the flow exceeded the channel capacity and overflowed its banks; and
b) That the avulsions were unrelated to the Blockage, each occurring as the result of local sedimentation in the channel bed and/or flow blockage/constriction at the Highway 97A Bridge.
[154] The hypothetical “non-negligent” conduct suggested by the plaintiffs would have required the Province to:
a) Have pre-1997 Flood cross-sections of Sicamous Creek prepared prior to the Channel Restoration;
b) Insist that the District approve the reconstruction of the McLaughlin Bridge; and
c) Require Mr. McLaughlin to have the bridge designed by a qualified professional engineer.
[155] The Province says that there simply has been no causal link between these requirements and the plaintiffs’ losses.
[156] Alternatively, if causation is found, damages to be assessed against the Province should be nominal. The Province relies on Dr. Jakob’s theory of the event that the Vinco Property would have suffered damage regardless.
[157] Finally, the Province submits that the losses claimed for pure economic losses by the Individual Houseboat Owners are not recoverable as a matter of law. Further, their claim for relational economic loss also fails because they do not fall within one of the exceptions to the general rule that pure economic loss is not recoverable: Martel Building Ltd. v. Canada, 2000 SCC 60 at paras. 36-38.
[158] The District adopts the Province’s submissions on causation.
[159] The District says that Mr. Doyle’s balancing of the various competing interests was a proper exercise of his discretion and his mode of proceeding cannot be challenged by the plaintiffs. That balancing is distilled in the Approvals and is protected by the Water Act’s s. 49 privative clause.
[160] Further, the evidence shows that whatever the District was obliged to do under the Channel Restoration Approval, it did within its four corners of its statutory and legal duties and within the physical and economic constraints it faced. For the District to have done more would have amounted to a breach of the Approval conditions and a possible actionable trespass on the land of the Province and the land of the private owners. Given the physical constraints, the channel could not realistically have been dredged any deeper or made any wider than the Approval permitted. The fact of the matter was that the channel was “way too constricted, way too narrow”. There was nothing other than a full scale reconstruction of Sicamous Creek that could have solved the problem. Such a construction was well beyond the District’s mandate and ability to fund.
[161] Initially, Mr. Doyle requested cross-sections from the District. The District concedes they were not forthcoming. Though the plaintiffs say that the District should be faulted for this, the District argues that the pre-1997 Flood Sicamous Creek cross-sections were not known with precision and would have been approximated in any event. When Mr. Doyle attended the February 28, 1998 site meeting, he was apparently content to rely on the rudimentary Harding Sketches. Mr. Doyle could have insisted on the cross-sections but exercised his discretion not to. In any event, s. 9 of the Water Act refers to “conditions in writing”. There was no condition that cross-sections be provided. The Approval gave no dimensions and only stated that the channel could not be dredged more than one metre.
[162] Further, it is not reasonable to expect an approval holder to guess what conditions in an approval mean. Section 41 of the Water Act imposes stiff civil and criminal sanctions for breaching an order or condition and it would be grossly unfair to imply conditions that were not explicitly set in writing. In situations where there are penal consequences, the orders and conditions must be construed narrowly. Conditions cannot be added by implication: Bell ExpressVu Limited Partnership v. Rex, 2002 SCC 42.
[163] On their face, the Approvals were ambiguous in terms of what the District and the McLaughlins were required to do in the circumstances. The contra proferentem rule requires that any ambiguities be construed in favor of the District and the McLaughlins.
[164] The District asserts that it was merely an Approval holder and reminds the Court that it was not an owner of Sicamous Creek or of the land on either side of the McLaughlin Bridge. Without the issuance of the Approval, the District had no obligation to be involved in the post-1997 Flood remediation efforts. Therefore, its obligations are confined to the terms and conditions of the Approval.
[165] It argues that to make the creek deeper and wider would have required professional engineering. This would have, in effect, meant that the District would have had to question the wisdom of the orders issued by Mr. Doyle and the conditions he deemed advisable. They were not required to do so. Section 21 requires only that they take reasonable care in the works performed in accordance with the Approval.
[166] The District summed up the plaintiffs’ case this way:
…The extra work sought by the plaintiffs is inconsistent with the Province’s mandate. There is no ability for this court to conclude this extra work would ever have been approved under the Water Act and therefore could not be completed without committing an offence under the Water Act...
In truth, this is the heart of the plaintiffs’ claim. Their complaint traces back to this very beginning; The Province, with knowledge of the risk to the Vinco property, simply should have expanded its mandate and the available financial resources. Without an expansion of that mandate, none of the work the plaintiffs say should have been performed could have been.
[167] Finally, the District agrees with the Province that the Individual Houseboat Owners have no ability to claim in public or private nuisance because they are not landowners and have no legal interest in the Vinco Property.
[168] The McLaughlins also adopt the Province’s submissions on causation.
[169] They say that the bridge height was a matter negotiated between the Province and the District to their exclusion. They submit that they simply performed the requirements imposed on them as they understood them and that their conduct was reasonable throughout. They argue that:
a) The plaintiffs have failed to prove that “but for” the McLaughlin Bridge, their damage would not have happened;
b) Section 21 of the Water Act must be read conjunctively and therefore, the McLaughlins are only responsible for damage if they are found not to have exercised reasonable care;
c) In any event of s. 21, they cannot be held liable because the defence of statutory authority protects them from strict liability. This defence is based on the fact that the bridge re-installation was authorized because there was no other practical alternative to provide them with access to their property;
d) Principles surrounding public welfare offences and punishment ought not to be inflicted on those who act reasonably and are without fault;
e) The plaintiffs failed to act reasonably by relocating their business to the Vinco Property in the face of significant and known risks. If any liability is found, Vinco and Waterway should be found contributorily negligent; and
f) Save for Vinco and Waterway, the plaintiffs have no standing to sue for pure economic loss.
[170] The McLaughlins contend that in any event of my interpretation of s. 21 of the Water Act, their actions were reasonable and they are entitled to the defence of due diligence. They argue that even if the Water Act imposes strict liability, it should be treated as a public welfare offence of a civil nature and punishment should not be inflicted on them: R. v. Sault Ste. Marie (City), [1978] 2 S.C.R. 1299.
[171] The Water Act is at the forefront of this case. It is a statute that has been on the books since at least the early 1900s and has evolved over time.
[172] In simple terms, it vests ownership of all provincial waters (including streams, rivers and creeks) in the Province and provides that any construction completed in or around provincial waterways must be approved by the Province and completed in accordance with any conditions or terms set by the Province. Failure to perform work on those conditions can attract liability for any damage caused by works completed.
[173] The relevant definitions of the Water Act as it existed in 1997 and 1998 are:
“approval” means an approval of the …engineer under section…9;
“changes in and about a stream” means
(a) any modification to the nature of a stream…or flow of water within a stream, or
(b) any activity or construction within the stream channel that has or may have an impact on a stream;
“engineer” means a professional engineer employed by the government and designated in writing by the comptroller as an engineer and includes a regional water manager;
“owner” means a person entitled to possession of any land…and includes a person who has a substantial interest in the land…;
“stream channel” means the bed of a steam and the banks of a stream, whether above or below the natural boundary and whether usually containing water or not, including all side channels;
“works” means
…
(c) obstructions placed in or removed from streams banks or beds of streams, and
(d) changes in and about a stream.
[174] The relevant sections of the Water Act as it existed in 1997 and 1998 are:
2(1) The property in and the right to the use and flow of all the water at any time in a stream in British Columbia are for all purposes vested in the government.
. . .
9(1) …an engineer may grant an approval in writing authorizing on the conditions he or she considers advisable
(a) a person to make changes in and about a stream . . .
(2) A … person … may only make changes in and about a stream in accordance with an approval under this section. . . .
. . .
18(4) …an engineer may amend an approval granted under section 9, on the conditions he or she considers advisable.
. . .
21(1) A licensee, holder of an approval or person who makes a change in and about a stream in accordance with the regulations must
(a) exercise reasonable care to avoid damaging land, works, trees or other property, and
(b) make full compensation to the owners for damage or loss resulting from construction, maintenance, use, operation or failure of the works.
. . .
39(1) In addition to all other powers given under this Act… an engineer may do one or more of the following:
…
(d) order the repair, alteration, improvement, removal of or addition to any works:
(e) order the restoration or remediation of any changes in and about a stream; . . .
(2) An order under subsection (1) may be made subject to any conditions the engineer considers advisable.
. . .
48 An action may not be brought against … a[n] engineer …for anything done or left undone by that person in good faith in the performance or intended performance of an authority conferred or duty imposed under this Act or the regulations.
49 . . . a[n] . . . order of . . . [an] engineer must not be questioned, reviewed or restrained by . . . a proceeding . . . in any court . . .
[175] For the purposes of this case, ss. 9 and 21 of the Water Act are especially relevant. Section 9 authorizes the Province’s engineer to approve works in or around a stream on conditions he or she considers advisable. Section 21 imposes liability on a holder of an approval issued under s. 9 to make full compensation to owners (as defined in the Water Act) for damage caused by works.
[176] It is on the backdrop of these two sections that the plaintiffs claim full compensation for the damage caused by the 2012 Flood.
[177] The photographic and video evidence along with the oral testimony I have heard leaves no doubt that the term “catastrophic” is an apt description of the 2012 Flood. It caused devastating damage not only to the Vinco Property and Waterway business, but to Highway 97A, the Highway 97A Bridge and numerous other properties bordering Sicamous Creek. It was similar in nature but more severe than the 1997 Flood.
[178] Distilled for simplicity, the 1997 Flood was caused by substantial debris piling up against the upstream side of the former McLaughlin Bridge causing water to breach the banks of Sicamous Creek. The flooding was significant enough that a decision was made to remove the former McLaughlin Bridge entirely to allow the debris and flood waters to discharge into Mara Lake.
[179] After the 1997 Flood, Mr. Doyle foresaw the problem with the reinstallation of the McLaughlin Bridge because of its “terrible” location over a creek channel that from a potential flooding perspective was already compromised. As an engineer appointed under the Water Act, Mr. Doyle was called upon to use his engineering judgment and consider other relevant factors such as available PEP funding, the reconstruction of Mervyn Road and the rights of the McLaughlins and the Maurers. Faced with significant physical and economic obstacles, Mr. Doyle actively worked with the stakeholders to come up with a solution.
[180] The plaintiffs’ claim is essentially that Mr. Doyle allowed for a minimal “Band-Aid” solution to a larger problem that he knew would arise in the future. By issuing the Approvals against his better judgment, Mr. Doyle breached the duty of care he owed the plaintiffs as future adjacent property and business owners.
[181] The plaintiffs say that Mr. Doyle’s decisions respecting the Approvals were not in accordance with what he “considered advisable” from an engineering perspective. When the Works were not completed to Mr. Doyle’s satisfaction, the plaintiffs submit that he took a hands-off/“not my problem” approach, crossed his fingers and closed the books.
[182] Therefore, as against the Province, at issue is first whether Mr. Doyle’s balancing act can be called into question as a Water Act engineer charged with exercising his discretion under s. 9. Secondly, whether Mr. Doyle was obliged to take any action after completion of the Channel Restoration and McLaughlin Bridge Replacement when he was dissatisfied with the results. The resolution of these issues requires consideration of whether the Province owed a duty of care to the plaintiffs, and if so, whether that duty was breached.
[183] As against the District and the McLaughlins, at issue is first whether they owed the plaintiffs a duty of care, and if so, whether that duty was breached. Secondly, whether s. 21 of the Water Act imposes liability (either in nuisance or as strict liability) upon them for any damage caused by the Channel Restoration and/or the McLaughlin Bridge Replacement.
[184] If liability is found against any of the defendants, the plaintiffs must then prove causation and damages.
[185] As against the Province, liability in this case can be determined in accordance with the law of negligence. To determine this liability, I must establish what duty, if any, Mr. Doyle (as an engineer appointed under the Water Act) owed to the plaintiffs (as future owners and occupiers of the Vinco Property).
[186] As against the McLaughlins and the District, liability can be determined on the basis of s. 21 of the Water Act because they were both approval holders under s. 9.
[187] Accordingly, I will focus my analysis on the law of negligence and the Water Act. Though not necessary for the disposition of this case, I will nonetheless deal with the issues of nuisance and joint torfeasorship in the event that I am wrong in my findings.
[188] Additionally, the defendants have filed third party notices against each other each seeking contribution and/or indemnity from other defendants in the event that they are found liable. I will deal with these issues later in these reasons.
[189] If liability is found against any of the defendants, they assert that Waterway and Vinco must be found contributorily negligent for relocating their business in an area they knew, or ought to have known, to be prone to debris floods. I will also deal with this issue later on in these reasons.
[190] The issues are:
a) Firstly, whether the Province is liable in negligence. There are some sub-issues under this part:
i. Whether the Province owed the plaintiffs a duty of care. This will include foreseeability and proximity analyses.
ii. If there is a duty of care, whether the Province breached the standard of care;
b) Secondly, whether the McLaughlins and/or the District are liable under s. 21 of the Water Act;
c) Thirdly, whether the plaintiffs have a claim in either public or private nuisance;
d) Fourthly, whether the plaintiffs have proven causation; and
e) Finally, the measure of damages if applicable.
[191] Conduct is negligent if it creates an unreasonable risk of harm. In measuring whether the risk of harm is an unreasonable one, the Court must balance the danger created by the defendant’s conduct on the one hand and the utility of that conduct on the other. If the hazard outweighs the social value of the activity, liability is imposed; if it does not, the defendant is exonerated.
[192] In assessing the risk, the Court looks at two components: (1) the chance or likelihood that the harm will culminate, and (2) the gravity or severity of the potential harm that will ensue if the risk unfolds: A. Linden, B. Feldthusen et al., Canadian Tort Law, 11th ed. (Toronto: LexisNexis, 2018) at 159.
[193] It is well settled that proof of a claim in negligence requires the plaintiff to demonstrate that:
a) The defendant owed the plaintiff a duty of care;
b) The defendant’s behaviour breached the requisite standard of care;
c) The plaintiff suffered damage; and
d) The damage was caused, in fact and in law, by the defendant’s breach.
Mustapha v. Culligan of Canada Ltd., 2008 SCC 27 at para. 3 [Mustapha]; Childs v. Desormeaux, 2006 SCC 18 at para. 13 [Childs]; Deloitte & Touche v. Livent Inc. (Receiver of), 2017 SCC 63 at para. 77 [Deloitte].
[194] The test to establish a duty of care was summarized by the Court of Appeal in Carhoun & Sons Enterprises Ltd. v. Canada (Attorney General), 2015 BCCA 163 [Carhoun] at para. 50 as follows:
[50] The test for determining the existence of a private duty of care owed by a public authority is known as the “Anns/Cooper” test: Cooper v. Hobart, 2001 SCC 79. The test requires a court to address the analysis by considering the following series of questions:
1) Does a sufficiently analogous precedent exist that definitively found the existence or non-existence of a duty of care in these circumstances;
If not;
2) Was the harm suffered by the plaintiff reasonably foreseeable;
If yes;
3) Was there a relationship of sufficient proximity between the plaintiff and the defendant such that it would be just to impose a duty of care in these circumstances;
If yes, a prima facie duty arises;
4) Are there any residual policy reasons for negating the prima facie duty of care established in question/step 3, aside from any policy considerations that arise naturally out of a consideration of proximity.
If not, then a novel duty of care is found to exist.
[195] All parties agree that the plaintiffs’ allegations do not fall within a settled category that the courts have recognized as giving rise to a duty of care. Accordingly, a full Anns/Cooper duty of care analysis is required: Deloitte; Rankin (Rankin’s Garage & Sales) v. J.J., 2018 SCC 19 [Rankin].
[196] Here, the question is whether it was reasonably foreseeable that the undersized channel opening (caused by a combination of the Channel Restoration and the McLaughlin Bridge Replacement) would result in the Blockage and ensuing flood.
[197] The defendants concede that flooding to the Vinco Property was generally within Mr. Doyle’s contemplation when he issued the Approvals. After the 1997 Flood, My. Doyle had direct knowledge of the damage that a blockage of the McLaughlin Bridge could cause. He knew the McLaughlin Bridge was a problem and that if the channel opening was not large enough, the problem would be repeated.
[198] Therefore, the flooding was reasonably foreseeable. Mr. Doyle recognized that Sicamous Creek was a dormant volcano and that it was a matter of when, not if, it was going to erupt. He foresaw the risk that the Works could, and likely would, result in a blockage of the McLaughlin Bridge causing Sicamous Creek to overflow its banks.
[199] The Province denies, however, that Mr. Doyle ought to have realized that the District and the McLaughlins were relying on him as a bridge design engineer as opposed to just a regulator. Citing Deloitte, the Province argues that the reasonable foreseeability of the McLaughlins’ and District’s reliance on Mr. Doyle must be determined by the relationship of proximity between the parties and the scope of the Province’s undertaking. At para. 35 of Deloitte, the Supreme Court of Canada stated:
[35] As a matter of first principles, it must be borne in mind that an injury to the plaintiff in this sort of case flows from the fact that he or she detrimentally relied on the defendant’s undertaking, whether it take the form of a representation or the performance of a service. It follows that an injury to the plaintiff will be reasonably foreseeable if (1) the defendant should have reasonably foreseen that the plaintiff would rely on his or her representation; and (2) such reliance would, in the particular circumstances of the case, be reasonable (Hercules, at para. 27). Both the reasonableness and the reasonable foreseeability of the plaintiff’s reliance will be determined by the relationship of proximity between the parties; a plaintiff has a right to rely on a defendant to act with reasonable care for the particular purpose of the defendant’s undertaking, and his or her reliance on the defendant for that purpose is therefore both reasonable and reasonably foreseeable. But a plaintiff has no right to rely on a defendant for any other purpose, because such reliance would fall outside the scope of the defendant’s undertaking. As such, any consequent injury could not have been reasonably foreseeable.
[Emphasis added.]
[200] I conclude that Mr. Doyle’s capitulation on the bridge height being “at least 0.6 metres higher” demonstrates that he knew or ought to have known that the District (and through the District, the McLaughlins) would accept that height as design advice.
[201] I also conclude that the Province and District expected that the McLaughlins would rely on Mr. Doyle’s expertise with respect to the bridge height. Mr. McLaughlin’s evidence, which I accept on the point, was that the bridge height issue was a debate that the District and Province were engaged in to his exclusion. He simply wanted his bridge replaced, the details of which were being worked out by others.
[202] While I agree that it was not reasonably foreseeable that the Truck would fall into Sicamous Creek and cause the Blockage, it was reasonably foreseeable that a blockage of some kind would occur, be it by trees, large rocks, or a combination of other debris. That was the reason behind Mr. Doyle’s concern with the McLaughlin Bridge height. Future neighbours in the area should have been in Mr. Doyle’s mind when he approved the Works.
[203] Foreseeability of harm is not enough to ground a duty of care. The plaintiffs must still establish that there was a sufficiently “close and direct” relationship that makes it “just and fair” to impose a duty of care in law: Deloitte at para. 25. These concerns are heightened in claims for economic loss: R. v. Imperial Tobacco Canada Ltd., 2011 SCC 42 [Imperial Tobacco] at para. 42.
[204] The Province argues that, in relation to itself and the plaintiffs, the factors giving rise to proximity, if they exist, must arise from statute. The Province argues that nothing in the Water Act or the Emergency Program Act evinces any intent to create a private law duty of care. To the contrary, it says, both statutes contain provisions intended to protect engineering decisions from judicial scrutiny. Therefore, if a duty is found to exist in this case, it must be grounded on the Province’s officials acting outside the scope of their mandate.
[205] In The Los Angeles Salad Company Inc. v. Canadian Food Inspection Agency, 2013 BCCA 34, at para. 40, Mr. Justice K. Smith outlined three circumstances where a relationship of proximity can exist with respect to government actors:
[40] . . . First, the relationship may be created in the statute itself, although the Court cautioned that, since statutes are most often “aimed at public goods”, it may be difficult to infer that the legislature intended to create private law tort duties, especially where such duties would conflict with the duty to the public and where the public duty is overarching. Next proximity may “arise from a series of specific interactions between the government and the claimant” although, even here, a finding of proximity might have to give way for policy reasons if to recognize it would conflict with the statutory duty. Finally, proximity may be found in a combination of statutory duties and interactions between the parties.
[206] In that case, the Court of Appeal was asked to consider whether federal government food inspectors owed a private law duty of care to sellers of food products. The Court concluded that the statement of claim should be struck for not disclosing a reasonable claim. On the issue of proximity, the Court found that while proximity may be created by the regulator’s conduct, it does not typically arise when the regulator is simply discharging its statutory responsibilities in the public interest:
[55] . . . In my view, the clear purpose of the relevant legislative scheme is to protect the health of Canadians by preventing the sale of contaminated food in Canada. To recognize a private law duty of care to food sellers would conflict with that purpose. It would put food inspectors in the untenable position of having to balance the paramount interests of the public with private interests of food sellers and would thereby have a chilling effect on the proper performance of their duties. Thus, the statutory scheme excludes the possibility of sufficient factual proximity to make it just and reasonable to impose a prima facie duty of care in the circumstances of this case: see Imperial Tobacco (S.C.C.) at para. 47.
[207] Defining the relationship in a proximity analysis may involve looking at expectations, representations, reliances, and the property or other interests involved: Cooper v. Hobart, 2001 SCC 79 [Cooper] at paras. 32-34. Essentially, these are factors that allow the evaluation of the closeness of the relationship between the plaintiff and the defendant and inform whether it is just and fair to impose a duty of care in law.
[208] McLachlin J., as she then was, made the following observations while discussing proximity in Canadian National Railway Co. v. Norsk Pacific Steamship Co., [1992] 1 S.C.R. 1021 [Norsk] at 1152-1154:
. . . Proximity is the controlling concept which avoids the spectre of unlimited liability. Proximity may be established by a variety of factors, depending on the nature of the case. To date, sufficient proximity has been found in the case of negligent misstatements where there is an undertaking and correlative reliance (Hedley Byrne); where there is a duty to warn (Rivtow); and where a statute imposes a responsibility on a municipality toward the owners and occupiers of land (Kamloops). But the categories are not closed. As more cases are decided, we can expect further definition on what factors give rise to liability for pure economic loss in particular categories of cases. In determining whether liability should be extended to a new situation, courts will have regard to the factors traditionally relevant to proximity such as the relationship between the parties, physical propinquity, assumed or imposed obligations and close causal connection. And they will insist on sufficient special factors to avoid the imposition of indeterminate and unreasonable liability. The result will be a principled, yet flexible, approach to tort liability for pure economic loss. It will allow recovery where recovery is justified, while excluding indeterminate and inappropriate liability, and it will permit the coherent development of the law in accordance with the approach initiated in England by Hedley Byrne and followed in Canada in Rivtow, Kamloops and Hofstrand.
I add the following observations on proximity. The absolute exclusionary rule adopted in Stockton and affirmed in Murphy (subject to Hedley Byrne) can itself be seen as an indicator of proximity. Where there is physical injury or damage, one posits proximity on the ground that if one is close enough to someone or something to do physical damage to it, one is close enough to be held legally responsible for the consequences. Physical injury has the advantage of being a clear and simple indicator of proximity. The problem arises when it is taken as the only indicator of proximity. As the cases amply demonstrate, the necessary proximity to found legal liability fairly in tort may well arise in circumstances where there is no physical damage.
Viewed in this way, proximity may be seen as paralleling the requirement in civil law that damages be direct and certain. Proximity, like the requirement of directness, posits a close link between the negligent act and the resultant loss. Distant losses which arise from collateral relationships do not qualify for recovery.
[Emphasis in original.]
[209] The plaintiffs argue that a proximate relationship exists because the property (then the Beachcomber Campground) along with the property owners (the Maurers) were within the defendants’ reasonable contemplation at the time of the Works. Further, they submit that it was within the defendants’ reasonable contemplation that the Beachcomber Campground would be sold in the future to a business such as Waterway. They cite several factors in support of this proposition.
[210] Put briefly, those factors relate to: the Vinco Property’s physical proximity (including the physical presence of the Province’s representatives on the Vinco Property); the Water Act legislative scheme that is intended to benefit persons who may be adversely affected by such changes (which in the plaintiffs’ submission, creates a discrete class of persons); and specific interactions between the Province, the District, the Maurers and the McLaughlins that created or contributed to foreseeable risks to those with interest in the property.
[211] The defendants counter these submissions. Put briefly, they say that physical proximity does not equate to legal proximity. They say that field investigations are routine and that it is standard practice that Province representatives are physically present onsite. Further, they argue, there is nothing in the Water Act that suggests an intention to create a private law remedy against the government. Indeed, the Water Act provides an exclusive right of appeal of the regulator’s decisions to the Environmental Appeal Board. With respect to the plaintiffs’ point about specific interactions, the Province says that the plaintiffs must show that any interactions the Province had with the McLaughlins, the Maurers or the District fell outside its role as regulator in order to establish a duty of care.
[212] The defendants argue that as was the case in Cooper, proximity does not arise in this case and that a finding of proximity would set a dangerous precedent.
[213] The plaintiffs say that this case is different than Cooper. In Cooper, there were no “specific interactions” to ground the duty of care and therefore the only possible source of duty arose from the statute. They point to Carhoun and Imperial Tobacco as examples where duties of care arose from “specific interactions” between the government and other parties. Although Carhoun dealt with “specific interactions” between the government and the claimant, the plaintiffs point out that the interactions need not be with the claimant directly: Hill v. Hamilton-Wentworth Regional Police Services Board, 2007 SCC 41; Fullowka v. Pinkerton’s of Canada Ltd., 2010 SCC 5; Kamloops (City) v. Nielsen, [1984] 2 S.C.R. 2 [Kamloops]; Taylor v. Canada (Attorney General), 2012 ONCA 479.
[214] The plaintiffs agree that they were unrelated third parties uninvolved with the Works and therefore did not have “specific interactions” with the Province. They therefore rely on the interactions between the Province, the District, the Maurers and the McLaughlins to ground the duty of care saying that those interactions affected them as future owners/occupiers of the then Beachcomber Campground.
[215] Our Court of Appeal very recently revisited the issue of proximity in Wu v. Vancouver (City), 2019 BCCA 23 [Wu] which was released after the trial in this case but before these reasons were given. The Court discussed the trend in the jurisprudence towards an increasing emphasis on the proximity branch of the duty of care analysis.
[216] At issue in Wu was whether proximity existed in a case where the City failed to make a decision on a development permit application within a reasonable time. The consequence of not making the decision was an arguable loss of compensation that was possible under certain bylaws at the time. The Court held that the relationship that existed between the property owners and the City was not sufficiently proximate. At paras. 50 and 52, the Court stated:
[50] The most significant evolution in applying the Anns/Cooper framework is the increasing emphasis placed on the analysis of proximity, at the expense of reasonable foreseeability, as the critical element in recognizing a prima facie duty of care. In Cooper, the Supreme Court of Canada made clear that reasonable foreseeability standing alone is insufficient to ground a prima facie duty of care. In addition to reasonable foreseeability, there must be proximity: Cooper at para. 42. In Deloitte & Touche v. Livent Inc. (Receiver of), 2017 SCC 63, the Supreme Court of Canada has recently traced the refinements in the Anns/Cooper framework placing greater emphasis on a robust analysis of proximity as the touchstone for recognizing a novel prima facie duty of care.
. . .
[52] The evolution in the Anns/Cooper framework is also reflected in cases dealing with the recognition of private law duties owed by public authorities. The historical emphasis on the distinction between operational and policy decisions has been overshadowed by a more rigorous proximity analysis. . . .
[217] At para. 57, the Court noted that:
[57] . . . where a conflict arises between a potential private law duty and the public authority’s duty to the public, the private law duty would unlikely be recognized.”
[218] Further at para. 58:
[58] . . . as a general proposition subject only to arguably rare exceptions, statutory duties owed by public authorities are insufficient to ground private law duties arising out of interactions that are inherent in the exercise of the public law duty. [emphasis added]
[219] Thus, whether proximity exists will depend on how Mr. Doyle’s actions are characterized. That is, whether they were inherent in the exercise of his duties as an engineer under the Water Act.
[220] The Court in Wu, at paras. 59 and 70, looked specifically at the proximity analysis relating to a public body when an individual public official is involved:
[59] Typically, if a private law duty of care is recognized, it will arise from specific interactions either between the public authority and the claimant sufficient to create the necessary proximity or in the context of a statutory scheme: Imperial Tobacco at paras. 45-46. An example of such an approach is found in Fullowka v. Pinkerton’s of Canada Ltd., 2010 SCC 5, where the Court emphasized the specific features of the relationship between the plaintiffs and the regulator in the circumstances of the case. There, a combination of factors, including the regulatory regime and the interactions and knowledge of regulators, were necessary to ground a finding of proximity. Vlanich v. Typhair, 2016 ONCA 517, para. 31, helpfully explains how proximity may arise between a public authority and a member of the public where a public authority assumes responsibility for ensuring compliance with standards.
. . .
[70] Importantly, this does not foreclose the possibility that a relationship of proximity could be created in the context of a scheme, including this one, and specific facts and circumstances arising from interactions between the parties. There could be a case in which a public official negligently misrepresented certain facts that were relied on by an applicant. This is not such a case. Alternatively, a public official could act in such a way so as to assume a responsibility to have regard for the private interests of an applicant who in turn relies upon that assumption of responsibility. Again, this is not such a case. The representations the judge referred to were, at best, general statements about process. I see nothing in the evidence that would warrant treating them as actionable misrepresentations, and the judge did not do so.
[Emphasis added.]
[221] Dealing with the facts, no one disputes that both the McLaughlin Bridge Replacement and the Channel Restoration, as approved by the Province, are in close physical proximity to the Vinco Property. The issue is whether there is legal proximity.
[222] The Province argues that s. 21 of the Water Act makes it clear that legal responsibility for the Works rests with the McLaughlins and the District. It says that this legal responsibility is not dependent on any measure of physical proximity, just a nexus between the Works and damage to an “owner” as defined by the Water Act. The Province argues that it would neither be fair nor reasonable to burden the Province with the responsibility of regulating some parties’ acts while simultaneously protecting other parties’ private, economic interests.
[223] The Province cites Imperial Metals Corporation v. Knight Piésold Ltd., 2018 BCSC 1191 [Imperial Metals] for the proposition that the plaintiffs must prove that the interactions between the Province and its co-defendants fell outside the Province’s role as regulator:
[108] As a general rule, provided a regulator deals with a regulated party for the purpose of administering and enforcing the statutory scheme, interactions with the regulated party will not give rise to a relationship of proximity: Elder Advocates at para. 72; Gill at paras. 32-33; Los Angeles Salad at paras. 52-53.
[109] However, during oral argument, the Province accepted that there are exceptions to this general rule. The Province framed the exceptions as follows:
1) Where the regulator steps outside the role of regulator, and assumes the role of designer, developer or advisor to the regulated party: Imperial Tobacco at paras. 53-54; Waterway Houseboats at paras. 17-18, 55.
2) Where the regulator acquires knowledge of serious and specific risks to the person or property of a clearly defined group of the class that the statutory scheme was intended to protect: Fullowka at paras. 54-55; Taylor v. Canada (Attorney General), 2012 ONCA 479 at paras. 109-111.
3) Where the regulator makes a specific misrepresentation to the regulated party – apart from a regulatory statement – that invites reliance, and the regulated party relies on the misrepresentation for the purpose for which it was made: Imperial Tobacco at paras. 59-60; Deloitte& Touche at paras. 30-31, 34-35.
4) Where interactions between the regulator and the regulated party give rise to a clear set of expectations that the regulator will consider the interests of the regulated party, and the statute does not expressly or implicitly exclude consideration of those interests: Carhoun at paras. 97-104; Wu at paras. 164-165.…
(Collectively, the “Accepted Exceptions”.)
[110] I am in agreement with the Accepted Exceptions, although I do not suggest that these are necessarily the only situations in which proximity may be found against a regulator. . . .
[Emphasis added.]
[224] Category #1 in Imperial Metals (as underlined above) is applicable here. As I will expand on later in these reasons, I find that Mr. Doyle stepped “outside the role of the regulator” and assumed the role of designer to a regulated party, that being the District and the McLaughlins.
[225] Category #2 is also applicable. I find that Mr. Doyle acquired knowledge of serious and specific risks to the property of a clearly defined group that the Water Act was meant to protect (that being the owners and future owners of property in and around works authorized by the Water Act).
[226] Category #3 is also applicable. I find, for reasons I will explain, that Mr. Doyle made specific representations to the McLaughlins about the bridge height that invited reliance and that the McLaughlins did, indeed, rely upon the representations (see Imperial Tobacco at paras. 59-60; Deloitte at paras. 30-31, 34-35).
[227] In order for proximity to exist, a “close causal connection” between the alleged misconduct (Mr. Doyle’s discussions and concessions leading to the Approvals) and the complained of harm (2012 Flood) may be a relevant consideration: Odhavji Estate v. Woodhouse, 2003 SCC 69 at para. 55. I find that a close causal connection exists in this case.
[228] By this finding, I do not suggest that the Province’s Water Act engineers are required to design works they approve as a matter of course or that the Province will always owe a private law duty of care when it learns of proposed works that may pose a danger to a particular person or property.
[229] Rather, my finding focuses on what the Province should not do. As I will discuss in more detail under the standard of care, it firstly should not increase the risk to the plaintiffs through careless communications with those it regulates. Secondly, it should not violate its own statutory scheme in order to approve works on conditions it knows are inadequate.
[230] While it is true that the plaintiffs themselves were not, and could not have been, on the defendants’ radar at the time the Works were undertaken (and therefore did not have any more direct a relationship with the defendants than other members of the public), they were future purchasers of the Beachcomber Campground. Therefore, their status as “future neighbours” makes the relationship between the plaintiffs and defendants proximate.
[231] Taking a holistic approach to determining the proximity issue (as opposed to an “all-or-nothing” checkbox approach), I conclude that there was a relationship of sufficient proximity between the plaintiffs and the defendants that grounds a prima facie duty of care.
[232] Despite the existence of a proximate relationship, defendants are permitted to establish that policy considerations ought to negate a prima facie duty of care: Childs at para. 13.
[233] Assessing the residual policy stage involves a consideration of factors external to the relationship between the parties, including: (1) whether the law already provides a remedy; (2) whether recognition of the duty of care creates “the spectre of unlimited liability to an unlimited class”; and (3) whether there are “other reasons of broad policy that suggest that the duty of care should not be recognized”. It asks whether it would be better, for reasons relating to legal or doctrinal order or arising from other societal concerns, not to recognize a duty of care in a given case: Deloitte at para 40.
[234] As further explained by the Supreme Court of Canada in Cooper at paras. 37-39:
[37] This brings us to the second stage of the Anns test. As the majority of this Court held in Norsk, at p. 1155, residual policy considerations fall to be considered here. These are not concerned with the relationship between the parties, but with the effect of recognizing a duty of care on other legal obligations, the legal system and society more generally. Does the law already provide a remedy? Would recognition of the duty of care create the spectre of unlimited liability to an unlimited class? Are there other reasons of broad policy that suggest that the duty of care should not be recognized? Following this approach, this Court declined to find liability in Hercules Managements, supra, on the ground that to recognize a duty of care would raise the spectre of liability to an indeterminate class of people.
[38] It is at this second stage of the analysis that the distinction between government policy and execution of policy falls to be considered. It is established that government actors are not liable in negligence for policy decisions, but only operational decisions. The basis of this immunity is that policy is the prerogative of the elected Legislature. It is inappropriate for courts to impose liability for the consequences of a particular policy decision. On the other hand, a government actor may be liable in negligence for the manner in which it executes or carries out the policy. In our view, the exclusion of liability for policy decisions is properly regarded as an application of the second stage of the Anns test. The exclusion does not relate to the relationship between the parties. Apart from the legal characterization of the government duty as a matter of policy, plaintiffs can and do recover. The exclusion of liability is better viewed as an immunity imposed because of considerations outside the relationship for policy reasons – more precisely, because it is inappropriate for courts to second-guess elected legislators on policy matters. Similar considerations may arise where the decision in question is quasi-judicial (see Edwards v. Law Society of Upper Canada, [2001] 3 S.C.R. 562, 2001 SCC 80).
[39] The second step of Anns generally arises only in cases where the duty of care asserted does not fall within a recognized category of recovery. Where it does, we may be satisfied that there are no overriding policy considerations that would negative the duty of care. In this sense, we agree with the Privy Council in Yuen Kun Yeu that the second stage of Anns will seldom arise and that questions of liability will be determined primarily by reference to established and analogous categories of recovery. However, where a duty of care in a novel situation is alleged, as here, we believe it necessary to consider both steps of the Anns test as discussed above. This ensures that before a duty of care is imposed in a new situation, not only are foreseeability and relational proximity present, but there are no broader considerations that would make imposition of a duty of care unwise.
[235] Canadian courts have accepted the contrast first described in Anns v. Merton London Borough Council, [1978] A.C. 728 (H.L.) [Anns] between public officials' “policy” decisions, which cannot give rise to tort liability, and their “operational” acts or omissions, which can. In Holland v. Saskatchewan, 2008 SCC 42 at para. 14, the Supreme Court of Canada summarized the distinction as follows:
[14] Policy decisions about what acts to perform under a statute do not give rise to liability in negligence. On the other hand, once a decision to act has been made, the government may be liable in negligence for the manner in which it implements that decision...
[Emphasis in original.]
[236] In Just v. British Columbia, [1989] 2 S.C.R. 1228, the Supreme Court of Canada considered public authority liability and recognized the distinction between “policy” and “operational” decisions, finding that a true policy decision undertaken by a government agency constitutes a valid basis to negate a duty of care. In that case, the majority of the Court commented on what constitutes such a policy decision, stating at 1245:
[I]t should be borne in mind that such decisions are generally made by persons of a high level of authority in the agency, but may also properly be made by persons of a lower level of authority. The characterization of such a decision rests on the nature of the decision and not on the identity of the actors. As a general rule, decisions concerning budgetary allotments for departments or government agencies will be classified as policy decisions.
[237] The Province contends that the prospect of indeterminate liability is a policy factor that negates a duty of care in this case. Such concerns, it says, relate to the virtually unlimited exposure of government to private claims, which may tax public resources and chill government efforts to enforce legitimate public interests. It points to Ernst v. Alberta (Energy Resources Conservation Board), 2014 ABCA 285, aff’d 2017 SCC 1 [Ernst] and Alberta v. Elder Advocates of Alberta Society, 2011 SCC 24 [Elder] in support.
[238] In Ernst, the Alberta Court of Appeal observed at para. 18:
[18] Forcing the Board to consider the extent to which it must balance the interests of specific individuals while attempting to regulate in the overall public interest would be unworkable in fact and bad policy in law. Recognizing any such private duty would distract the Board from its general duty to protect the public, as well as its duty to deal fairly with participants in the regulated industry. Any such individualized duty of care would plainly involve indeterminate liability, and would undermine the Board’s ability to effectively address the general public obligations placed on it under its controlling legislative scheme.
[239] In Elder, the Supreme Court of Canada stated at para. 74:
[74] . . . Where the defendant is a public body, inferring a private duty of care from statutory duties may be difficult, and must respect the particular constitutional role of those institutions: Welbridge Holdings Ltd. v. Greater Winnipeg, [1971] S.C.R. 957, per Laskin J., as he then was, for the Court. Related to this concern is the fear of virtually unlimited exposure of the government to private claims, which may tax public resources and chill government intervention. It is arguable that to impose a duty of care on the plaintiff class on the facts pleaded would open the door to a claim in negligence by any patient in the healthcare system with an entitlement to receive funding for health services, whether primary or extended. This raises the spectre of unlimited liability to an unlimited class, decried by Cardozo C.J. in Ultramares Corp. v. Touche, 174 N.E. 441 (N.Y. 1931), at p. 444: see Design Services Ltd. v. Canada, 2008 SCC 22, [2008] 1 S.C.R. 737, at paras. 59-66.
[240] The Province argues that Mr. Doyle’s decision to issue the Approvals involved both policy-making and quasi-judicial elements and were not merely operational decisions. The Province argues that engineers under the Water Act must act judicially in considering approval applications and determine the policies that should apply in each instance. This process, the Province says, is inconsistent with a duty of care to persons potentially harmed by approval holders’ authorized works. For example, in Cooper at para. 52, the Court stated:
[52] In our view, even if a prima facie duty of care had been established under the first branch of the Anns test, it would have been negated at the second stage for overriding policy reasons. The decision of whether to suspend a broker involves both policy and quasi-judicial elements. The decision requires the Registrar to balance the public and private interests. The Registrar is not simply carrying out a pre-determined government policy, but deciding, as an agent of the executive branch of government, what that policy should be. Moreover, the decision is quasi-judicial. The Registrar must act fairly or judicially in removing a broker’s licence. These requirements are inconsistent with a duty of care to investors. Such a duty would undermine these obligations, imposed by the Legislature on the Registrar. Thus even if a prima facie duty of care could be posited, it would be negated by other overriding policy considerations.
[241] The Province argues that faced with several competing interests (the District needing Mervyn Road repaired, the McLaughlins’ desire to have their access restored, PEP financial constraints and other limited resources), Mr. Doyle was entitled to issue the Approvals despite considering them ill-advised. The Province says that in doing so, he was making a policy-based and quasi-judicial decision that should not be the subject of judicial interference.
[242] I cannot agree. In my view, Mr. Doyle’s mandate to issue the Approvals is contained entirely within s. 9 of the Water Act. He was engaged in operational and engineering decisions throughout. It cannot be said that his decision-making was quasi-judicial. As will be discussed later in these reasons, it cannot be policy for Mr. Doyle to issue approvals contrary to his engineering judgment, hold his nose, shrug his shoulders and “clear the books”. The mere presence of multiple stakeholders does not convert an operational decision into a policy decision.
[243] Here, Mr. Doyle attempted to do what the Supreme Court of Canada has warned against in Ernst and Elder. His duty as a regulator was to protect the public by using his engineering judgment. While I agree that some balancing of interests was required, in the particular circumstances of this case and especially given his knowledge of the history of Sicamous Creek, Mr. Doyle was required to give weight to the hydrological issues and put his engineering expertise and judgment ahead of those other interests in exercising his discretion under s. 9.
[244] Other matters (such as the McLaughlins’ “entitlement” to access or the limits of PEP funding) were the purview of others.
[245] The plaintiffs do not ask this Court to find that the Province owes a duty to exercise reasonable care in establishing conditions of approvals to all persons who may be affected by works subject to an approval. Insofar as approvals are concerned, the duty is only to not issue approvals on conditions that the decision-maker believes are inadvisable. Put another way, the duty is to not grant approvals in excess of statutory jurisdiction.
[246] I agree with this characterization.
[247] I am not persuaded that indeterminate liability is a basis for negating the prima facie duty of care in this case. The evidence is that Water Act engineers do not usually get involved at the level that Mr. Doyle became involved in this case. I do not accept that the class of individuals who would be owed a duty is as large as the Province suggests. In this case, it is restricted to persons who would be directly affected by the Approvals.
[248] In sum, there are no residual policy considerations that would negate the prima facie duty of care that I have found was owed to the plaintiffs by the Province.
[249] I conclude that the Province owed a duty of care to the plaintiffs as future owners and occupiers of the Vinco Property. There was a relationship of proximity that existed between them such that it was reasonably foreseeable that careless acts or omissions could result in injury.
[250] To ground a claim in negligence against the Province, the plaintiffs must also establish that that Mr. Doyle’s conduct fell below the standard of care that would be expected of an “ordinary, reasonable and prudent person in the same circumstances”: Ryan v. Victoria (City), [1999] 1 S.C.R. 201 [Ryan] at para. 28.
[251] The questions then are:
i. What was the standard of care that would be expected of a person in Mr. Doyle’s circumstances at the time?
ii. Did Mr. Doyle breach that standard of care?
[252] As has been indicated, Mr. Doyle was a regulator/engineer appointed under s. 9 of the Water Act. His job was to apply specialized knowledge and experience to the assessment of the works and to issue approvals on conditions he considered advisable.
[253] The plaintiffs did not adduce any expert evidence on the standard of care required of such regulators/engineers under s. 9 of the Water Act. They only adduced expert evidence on the standard of care of consulting engineers. The Province asserts that the standard of care of consulting engineers is different than that of regulatory engineers (such as those appointed under the Water Act) and that the plaintiffs’ failure to call evidence on the point is fatal to their case.
[254] In the absence of such evidence, however, the Court may look to external factors, including legislative standards, policies and guidelines to determine the standard of care.
[255] In this case, I have the Water Act, the regulations made pursuant to it and Mr. Doyle’s own evidence and documented concerns. In my view, that guidance, together with common sense and the practice described by Mr. Doyle, is sufficient to determine the required standard of care.
[256] Section 9 of the Water Act sets the standard. It says in part:
9(1) The …engineer may grant an approval in writing authorizing on the conditions he or she considers advisable…
[257] The key words are “he or she considers advisable”. Professional engineers are appointed under the Water Act for a reason. The reason being to ensure that engineering standards and considerations are enlisted in the highly technical and specialized nature of river hydrology as part and parcel of the considerations that go into s. 9 approvals.
[258] Mr. Doyle was a professional engineer hired by the Province to make s. 9 approval decisions based on his education, training and experience and on conditions he considered advisable from an engineering standpoint. His professional view of what was “advisable” should not have been compromised by political, economic or other factors. Those considerations were for others.
[259] Mr. Doyle has been working as a professional engineer with the Ministry in the Water Branch for his entire career. He understood river hydrology and knew the risk that Sicamous Creek posed. He described it as a “hanging fire”, meaning that it was a disaster waiting to happen.
[260] I found Mr. Doyle to be frank and straightforward as a witness. He was knowledgeable, professional and refreshingly candid. As well as being a very experienced engineer with the Water Branch, he prided himself as a practical man too. That, unfortunately, was his undoing.
[261] When Mr. McLaughlin first requested permission to replace his bridge, the Province initially felt it would be acceptable to follow its general rule of thumb and allow him to proceed without a Water Act approval provided it was put back “at least 1 metre higher” and met the requirements of Part 7 of the Water Regulation.
[262] In fact, the Water Regulation was quite onerous and would have required Mr. McLaughlin at s. 44(1)(b)(iii) to ensure that:
(iii) the hydraulic capacity of the bridge is equivalent to the hydraulic capacity of the stream channel, or is capable of passing the 1 in 200 year maximum daily flow, and the height of the underside of the bridge is also adequate to provide free passage of flood debris…
[263] I conclude that the Water Regulation could not have been complied with without the design advice of a professional engineer qualified in river hydrology.
[264] Mr. Doyle would have known of the Water Regulation when he took control of the process in September 1997. The effect of his involvement was to supersede s. 44(1)(b)(iii) of the Water Regulation with his engineering judgment. He knew that his engineering expertise was required because of what he observed during site visits and fly overs in July 1997. He knew the McLaughlin Bridge’s location was tenuous.
[265] He knew that the Approvals in this case were not run-of-the mill Water Act approvals. Rather, these Approvals demanded his careful attention. Despite the District and the McLaughlins wanting the Works to move along quickly, there are some projects that simply cannot be rushed. This project was one of them. In issuing the Approvals, he knew his role was to minimize the foreseeable risks notwithstanding the financial, physical and other constraints existing at the time.
[266] The science of river hydrology is not something lay people like Mr. McLaughlin, Ms. Williams, Ms. Maurer and Mr. MacDonald should be expected to understand. That is why Mr. Doyle’s involvement was so important. As between the Province, the District and the McLaughlins, he was the only person who understood the issues and knew what was required from an engineering standpoint.
[267] The District was also adamant that it wanted nothing to do with the McLaughlin Bridge Replacement. It would have been obvious to Mr. Doyle that neither the District nor the McLaughlins understood the significant issues involved.
[268] Nevertheless, he allowed himself to accept pushback from the District whose primary concern was completing the Mervyn Road repairs and Channel Restoration within PEP funding limits and DFO timing constraints. The District’s pushback was driven to a large degree by Ms. Maurer’s concerns about the height of Mervyn Road.
[269] I do not accept the defendants’ submission that the decision to reduce the height of the McLaughlin Bridge (from the initial “at least 1 metre higher” to “1 metre higher”, then to “at least 0.6 metres higher”, and finally to “0.6 metres higher”) occurred as a resulting of Mr. Doyle’s balancing act that took into account the interests of Ms. Maurer, the Province and the District.
[270] It is clear that as regulator and engineer, Mr. Doyle did not want the McLaughlin Bridge replaced unless it was designed by a qualified professional engineer. This is why he was hesitant to remove Condition ‘H’ (requiring that the District sign off on the design). He only removed Condition ‘H’ due to pressure from the District and an instruction from Mr. Zackodnik to “clear the books”.
[271] The Province says Mr. Doyle, as a regulator, was entitled to remove Condition ‘H’ at his discretion and his decision cannot be attacked. The Province further suggests that Mr. Doyle knew he lacked legal authority to impose Condition ‘H’ and that he had no authority to force the District to design or sign off on the bridge. According to the Province, this is another reason why Mr. Doyle removed Condition ‘H’.
[272] I conclude that this suggestion is a defence after-thought. Firstly, there is no mention of this issue in any contemporaneous document. Secondly, Condition ‘H’ was only binding on Mr. McLaughlin to obtain the District’s approval. If the District’s approval was not forthcoming, the bridge could not be replaced.
[273] Mr. Doyle’s trial evidence on this point is telling. Referencing a memorandum he wrote to the file:
Q. And you agree with me that you were “pretty pissed off” when you wrote this?
A. Yes.
Q. You were mad?
A. Aren’t they equivalent?
Q. To some people, yes. But you were mad?
A. Yes.
Q. And the reason you were pissed off and mad when you wrote this was you did not want to approve the McLaughlin bridge without condition H?
A. Yes.
Q. Okay. In fact you were writing this memorandum because, in your words, you were “pretty disgusted with the way things were coming out the end of the pipe was that the McLaughlin bridge approval was not going to have condition H in it?
A. Yes.
Q. And the way things were going out at the end of the pipe seemed likely to you that the McLaughlin bridge would be built at 0.6 metres higher without a professional review by a qualified engineer?
A. Yes.
Q. And that was precisely the result you were desperate to avoid?
A. Yes.
[274] Mr. Doyle’s examination for discovery testimony further confirms the point:
Q. Item H, “Approval of the bridge design is required from the District of Sicamous”, you inserted that as a condition initially?
A. That was an important condition, I felt, initially, yes.
Q. And it was important because you wanted to ensure the bridge was professionally designed?
A. It – it was sort of a backup condition which reinforced C. If something went haywire with either one of them, hopefully one of them would – would make sure that the bridge was designed okay. You know, C, try – striving for getting somebody who knew what they were doing to design the bridge and take responsibility as a professional engineer meant H was – I just wanted some assurance from some other party other than us – like, other than the Ministry of Environment – that this thing had been approved for the very reason why we’re sitting about here.”
. . .
Q. So you were concerned that nobody was going to take responsibility for this bridge and you wanted to make sure somebody took responsibility for it?
A. Absolutely, because it – it was a bridge that was in a very difficult spot and it – it was clear to me that somebody’s got to step up to the plate, as they say.
[275] It is clear that he never wanted the 0.6 metre height to be used as the design height, but nonetheless expected that the bridge was going back in at exactly 0.6 metres and that no qualified professional engineer would be engaged. In that sense, he simply paid lip service to Condition ‘C’ (the condition that the McLaughlin Bridge be designed by a qualified professional engineer and at least 0.6 metres higher than the lowest point of the previous bridge).
[276] The fact that the Province and District were seemingly at an impasse did not permit Mr. Doyle to fly in the face of obvious hazards just to smooth over a problem and “clear the books”. That, in my view, misses the point of his s. 9 Water Act duties and by doing so, he acted outside the scope of those duties.
[277] Mr. Doyle testified that he did not like the conflict and wanted to “satisfy everyone’s concerns”. But this was not his job. He was not appointed as a mediator.
[278] In my view, Mr. Doyle should have stood by his engineering judgment and made it abundantly clear that Condition ‘C’ was still in play and the bridge required the design of a qualified professional engineer notwithstanding the “at least 0.6 metres” minimum. At that point, it may well have meant a delay in the bridge reinstallation and may well have required Mr. McLaughlin to seek other remedies, including perhaps an appeal to the Environmental Appeal Board.
[279] Given Mr. Doyle’s knowledge that Mr. McLaughlin was essentially on standby waiting for negotiations between the Province and the District to conclude, Mr. Doyle had a duty to clearly communicate his concerns to Mr. McLaughlin in a manner that Mr. McLaughlin could understand. Specifically, he was required to ensure that Mr. McLaughlin knew that he could not rely on the minimum 0.6 metre increase unless it was approved by a qualified professional engineer.
[280] Instead, through his words and actions, he allowed Mr. McLaughlin to assume that the 0.6 metre height increase was some sort of design height compromise between the District and Province and that the new bridge could be installed exactly 0.6 metres higher.
[281] The Province argues that Mr. Doyle’s involvement must be put into context. That context being that Mr. Doyle was engaged in an emergency response. In that context, the Province argues, Mr. Doyle was acting as a regulator and assisting the District and Mr. McLaughlin solve the many problems that the 1997 Flood created. The Province maintains that Mr. Doyle acted reasonably in light of the situation.
[282] In hindsight, Mr. Doyle wished he had been clearer with his intention that Condition ‘C’ meant that the engineering of the McLaughlin Bridge required an engineer versed in river hydraulics:
Q. So you agree with me that the approval does not on its face require that the qualified professional engineer be versed in river engineering or river hydraulics?
MR. DOYLE: A. No, but I certainly wish that it would have said that.
Q. So you agree that it doesn’t say it on its face.
A. Yeah. Twenty years later, I would strongly agree with that.
[283] As far as Mr. McLaughlin was concerned, despite the wording of the McLaughlin Bridge Approval, the height of the bridge had been dictated to him as exactly 0.6 metres higher than the previous bridge:
Q. And so it’s fair to say that when you saw this 0.6 metre higher number in the approval, that you understood the reason it had changed from 1 metre higher down to 0.6 metre higher was that the District had a desire to do something about the height of your bridge because it was going to cause problems at 1 metre higher?
MR. MCLAUGHLIN: A. That’s right.
THE COURT: So the approval, Mr. McLaughlin, said “at least 0.6 metres,”…What did you think that meant…?
A. That was the minimum I could go, this 0.6.
THE COURT: Did you ever ask for clarification of anyone?
A. No. I was – my first drawings I was prepared to go the 1 metre, and that would have satisfied the Ministry at that time but it didn’t satisfy the District. So the District went back and got that …reduced, and the Ministry agreed to it. So I just said, “Hey, they’re both happy. Best of both worlds.”
THE COURT: Am I hearing you say that the Ministry said to you with the approval – and you understood the Ministry had authority over the creek – “at least 0.6 metres” –
A. Right.
THE COURT: – but from discussions you had, understandings you had from the District, they wanted it as low as they could get away with?
A. That was when the statement was 1 metre…They wanted to reduce it because of access to both sides of the road….
THE COURT: Understood. But the approval said “at least 0.6 metres”? …So did you interpret that to mean 0.6 metres?
A. Yes.
THE COURT: Where did you get that from?
A. Like I said, they both agreed to it. So if I would have gone higher and it would have cost the District more money, I’m sure I would have got some feedback and some pressure to reduce that to the 0.6.
THE COURT: That was your assumption?
A. That was my assumption, yes, pardon me.
[284] Despite Mr. Doyle’s stated concern that the bridge height be engineered, he conceded that he was aware that the working design was only 0.6 metres higher. In cross-examination, he gave this testimony:
Q. Mr. Doyle, when we were going over the February 26th, 1998 site meeting relating to Mervyn Road, the channel restoration works and the McLaughlin bridge, you agreed with me that the discussion at that meeting in relation to the McLaughlin bridge was that it would be reinstalled 0.6 meters higher.
MR. DOYLE: A. Yes.
Q. And it is fair to say that everyone at that meeting regarded the 0.6 metre higher elevation as the working design for the McLaughlin bridge reinstallation?
A. Yes.
Q. And that 0.6 metre working design had come out of your discussions with Ms. Smith (Williams)?
A. Yes.
Q. And so by the time of that February 26, 1998 site visit, the 0.6 metre height increase that you had accepted was the working design for the height of the McLaughlin bridge reinstallation?
A. Yes.
[285] Despite this, Mr. Doyle somehow felt that it was still up to Mr. McLaughlin to comply with Condition ‘C’ and have a qualified professional engineer check the design.
[286] If, as the Province seems to suggest, Mr. Doyle was permitted to issue approvals when his engineering judgement told him that it was not advisable to do so, how could he be said to be acting within the scope of his mandate? In my view, he could not be.
[287] I conclude that Mr. Doyle fell below the standard of care of engineers appointed under the Water Act. He allowed other considerations to influence his duties. To the extent that he made the Approvals conditional, he did not take adequate steps, knowing what he knew, to make sure they were understood.
[288] Mr. Doyle was clearly frustrated with the District’s position and with what was happening. By trying to be practical, he forgot his role as a Water Act engineer and allowed his frustration to get the better of him. He did not exercise the judgment that an “ordinary, reasonable and prudent” engineer appointed under the Water Act would have in the same circumstances.
[289] In Carhoun, our Court of Appeal commented on the liability of public regulators at para. 43:
[43] I begin by noting that public regulators are not exempt from civil liability. The Supreme Court of Canada has affirmed the importance of this liability, saying: “It is important for public authorities to be liable in general for their negligent conduct in light of the pervasive role that they play in all aspects of society. Exempting all government actions from liability would result in intolerable outcomes”: R. v. Imperial Tobacco, 2011 SCC 42 at para. 76.
[290] The Province says that in granting the Approvals, Mr. Doyle was simply following operational orders: firstly, to restore the channel to its pre-1997 Flood condition, and secondly, to approve the re-installation of the McLaughlin Bridge.
[291] A compromise to balance competing interests and funding issues is generally acceptable, but not, in my view, at the expense of professional engineering judgment. In effect, the Province says that, given the simultaneous interaction between the Water Act and the Emergency Program Act, it was impossible for Mr. Doyle to comply with his duty under s. 9 of the Water Act.
[292] I disagree.
[293] Had a qualified professional engineer been engaged by the McLaughlins, I conclude that the bridge would not have been replaced only 0.6 metres higher than it was previously. The only expert evidence on the point was from Mr. LaCas who opined that, given the information available at the time, it should have been 2.4 metres higher. I accept his evidence on this point. Mervyn Road would have been required to accommodate the additional height. There is no evidence before me on what would have been required to construct Mervyn Road to accommodate a higher bridge height or what the cost would have been but I am satisfied that it would not have been prohibitive. It would simply have involved a ramp or approach of some kind.
[294] Mr. Doyle’s site inspection on April 1, 1998, disclosed that the Channel Restoration did not meet the conditions of the Channel Restoration Approval. He foresaw that if the McLaughlin Bridge Replacement went ahead, the completed package of bridge and channel were going to be more hazardous under high flow conditions than they were before the 1997 Flood.
[295] Despite this, he took no steps to remedy the problem. He simply noted the concerns in a memo. At that point, the McLaughlin Bridge Replacement had not begun. It was at this point even more critical that the McLaughlins knew the importance of having the bridge height engineered.
[296] I liken this case to building inspection cases such as Kamloops, Rothfield v. Manolakos, [1989] 2 S.C.R. 1259, and Ingles v. Tutkaluk Construction Ltd., [2000] 1 S.C.R. 298, where subsequent homeowners have been successful at trial after suffering loss or damage due to the failure of building inspectors to inspect or ensure compliance with building codes (as described in Imperial Metals, paras. 51-64).
[297] Similarly in building inspection cases, a building inspector issue blueprints (or, in this case: “Approvals”) in accordance with building codes (in this case: on certain conditions deemed advisable). Continuing with the analogy, imagine a case where the house (in this case: bridge) is built but the building inspector (in this case: Water Act regulator engineer) is aware that it is not up to code. Despite this, he or she does nothing about it other than note his or her concerns in a file memo.
[298] Likewise in this case, future affected owners (Vinco and Waterway) are entitled to expect that works are completed “up to code”, or in other words, in accordance with approvals.
[299] As a result of Mr. Doyle’s negligence, the Province is liable to the plaintiffs.
[300] The Province says that even if this Court finds that Mr. Doyle failed to meet the standard of care, the Province is entitled to the protection of the privative clauses in ss. 48 and 49 of the Water Act, the relevant sections of which then read:
48. An action may not be brought against … a[n] engineer . . . for anything done or left undone by that person in good faith in the performance or intended performance of an authority conferred or duty imposed under this Act. . . .
49. Except as otherwise provided in this Act, a[n] …investigation…or order of the . . . engineer must not be questioned, reviewed or restrained by injunction, a proceeding in the nature of prohibition or other process or proceeding in any court. . . .
[301] The Province argues that no action can lie against Mr. Doyle due to the fact that he was acting in good faith when the Approvals were issued. Further, the Province says that the discussions Mr. Doyle had with the District, the McLaughlins and other stakeholders were an “investigation” within the meaning of s. 49.
[302] The Province’s arguments can be disposed of quickly.
[303] First, the plaintiffs have not brought an action against Mr. Doyle. The action is against the Province. In my view, while s. 48 will protect Mr. Doyle provided that he acted in good faith, it does not protect the Province from Mr. Doyle’s negligence. Second, s. 49 uses language of judicial review. In the context of this case, it means that judicial review proceedings could not have been brought to question, restrain, stop or interfere with Mr. Doyle’s investigation into matters concerning the 1997 Flood. Section 49 does not protect the Province for Mr. Doyle’s negligent acts.
[304] The purpose of the Water Act is management of public water in the public interest: Western Canada Wilderness Committee v. British Columbia (Oil and Gas Commission), 2014 BCSC 1919.
[305] Section 2 of the Water Act vests the right to the use of and flow of all water in streams in British Columbia and requires any modifications to the nature or flow of a stream or any activity or construction that may have an impact on a stream to be made only with the written approval of an engineer under the Water Act on conditions he or she considers advisable, or in accordance with the regulations.
[306] The Water Act is strict. The Province has complete control over the use of water and over any changes to streams, stream beds or bridges spanning streams. That authority is granted to the Province for good reason.
[307] The regulations made pursuant to the Water Act are important because when the Province first advised Mr. McLaughlin via Mr. Costerton’s August 7, 1997 letter that he could replace his bridge without a Water Act approval, he was still required to comply with the regulations. The relevant section of the Water Regulation as it was in the 1997/1998 timeframe is s. 44(1)(b)(iii):
(1) For the purposes of section 9 of the Water Act, the following changes in and about a stream may be made without obtaining an approval or licence for that change, provided that the change is made in accordance with this regulation …:
(b) the construction, maintenance or removal of a clear span bridge, provided that
(iii) the hydraulic capacity of the bridge is equivalent to the hydraulic capacity of the stream channel, or is capable of passing the 1 in 200 year maximum daily flow, and the height of the underside of the bridge is also adequate to provide free passage of flood debris and ice flows,
[308] Under the Water Regulation, the McLaughlin Bridge could only have been replaced if it was capable of passing a 1 in 200 year flood and it was high enough to provide free passage of a debris flood. In order to rebuild without an approval, therefore, Mr. McLaughlin would have needed to retain a qualified professional engineer qualified in water engineering and hydraulics to ensure s. 44(1)(b)(iii) of the Water Regulation was satisfied.
[309] Respecting the consequences of an approval holder working in or about a stream, there was much debate between the parties as to whether the provisions of s. 21(1) of the Act are conjunctive (the plaintiffs’ position) or disjunctive (the defendants’ position). The provision is again reproduced below:
21(1) A licensee, holder of an approval or person who makes a change in and about a stream in accordance with the regulations must
(a) exercise reasonable care to avoid damaging land, works, trees or other property, and
(b) make full compensation to the owners for damage or loss resulting from construction, maintenance, use, operation or failure of the works
[310] I agree with the plaintiffs that s. 21(1) is conjunctive. This means that despite holders of an approval using reasonable care in performing works in a stream as authorized by the approval, they are nevertheless liable for damage caused by the “construction, maintenance, use, operation or failure of the works”.
[311] Previous versions of British Columbia’s Water Act provide insight into legislative intent behind the section. Of relevance, the 1939 Water Act (indexed at 1939 S.B.C. 323) [1939 Act] reads as follows:
Licensee to make compensation for damage
16. (1) Every licensee shall exercise reasonable care to avoid damaging any land, works, trees, or other property, and shall make full compensation to the owners for any damage or loss resulting from the construction, maintenance, use, or operation of the licensee's works.
(2.) Subject to subsection (1), every holder of a licence for power purpose or waterworks purpose shall have authority to fell and remove any tree and to remove any rock or other thing that endangers his works. R.S. 1936, c. 305, ss. 85, 134 (i) (redrawn).
[Emphasis added.]
[312] Subsection 16(1) of the 1939 Act encompasses both ss. 21(1)(a) and (b) of the Water Act in place at the time of these events. In my view, the intention in the 1939 Act was that a licensee had to exercise reasonable care and make full compensation. In further support of a conjunctive interpretation, the heading itself reads: “Licensee to make compensation for damage”. Subsection 16(2) also makes more sense in that context: a licensee can remove rocks and trees but subject to s. 16(1), he or she must compensate for such removal if it damages land.
[313] The 1939 Act provision was redrawn from an earlier version of that provision in the 1914 Water Act (indexed at 1914 S.B.C. 81) [1914 Act] which reads as follows:
Licensee to make compensation for damage
88. Every licensee, when constructing, maintaining, or operating his works, or when entering upon any lands in connection with the rights granted him under this Act, shall do as little damage as possible, and shall make full compensation to all owners thereof for any loss, damage, or injury done when exercising the powers aforesaid, which compensation shall, failing agreement, be determined by arbitration pursuant to the "Arbitration Act." 1914, c. 81, s. 29.
[314] This provides further support that the provision is conjunctive. It also provides some insight on the legislature’s intent in adding the “reasonable care” phraseology. The 1914 Act provision does not suggest that a licensee is absolved from liability if he or she acts reasonably.
[315] Section 21(a) is action focused. It is not restricted to “works”. Section 21(b) is restricted to works.
[316] Therefore, the McLaughlins, as holders of the McLaughlin Bridge Approval, and the District, as holder of the Channel Restoration Approval, were required to comply with both s. 9(2) and ss. 21(1)(a) and 21(1)(b). They were only allowed to make changes in and about a stream in accordance with an approval and were not only required to exercise reasonable care to avoid damaging land and other property, but were obliged to make full compensation to owners for damage or loss resulting from any of the works that they implemented.
[317] In other words, s. 21(1)(b) means what it says: if the construction, maintenance, use, or operation of the works fail, full compensation must be made by the approval holder. Even if reasonable care is taken, the holder of the approval is still liable to make full compensation to those who meet the definition of “owners” for any damage incurred from implemented works.
[318] “Works” as defined include “obstructions placed in or removed from streams or the banks or beds of streams” as well as “changes in and about a stream” which include “any activity or construction within a stream channel that has or may have an impact on a stream or stream channel”.
[319] As approval holders, both the District and the McLaughlins are strictly liable to Vinco and Waterway as “owners” for damage caused by the Channel Restoration and McLaughlin Bridge Replacement. Vinco and Waterway are the only plaintiffs that have a potential claim under s. 21 of the Water Act because they are the only ones who meet the definition of “owner” under the Water Act.
[320] They have two available causes of action: (1) against the McLaughlins as the holders of the McLaughlin Bridge Approval (it was admitted at trial that even though the approval is in Mr. McLaughlin’s name only, it was issued to both) and (2) against the District as the holder of the Channel Restoration Approval.
[321] The Channel Restoration resulted from a mandate issued by the Province to fund what was required to restore the creek bed to its pre-1997 Flood condition. There was no funding for any additional work. It is clear that the District reluctantly agreed to undertake the Channel Restoration.
[322] The District was motivated to negotiate with the Province for a lower height for the McLaughlin Bridge due to Ms. Maurer’s concerns and also the cost associated with raising Mervyn Road. The McLaughlin Bridge height issue was holding up the Channel Restoration and Ms. Williams was pressuring the Province to resolve the matter quickly. By February 4, 1998, she was frustrated and wanted to bypass the “bureaucratic assessment” of the bridge elevation. She was “reluctant to debate the issue further considering the potential for political and private property owner conflict and ramifications”.
[323] I am satisfied that Ms. Williams took a very narrow view of the problem of Sicamous Creek. She simply wanted Mervyn Road rebuilt in a way that would minimize any impact to the Beachcomber Campground and at a cost that would be paid by PEP.
[324] Before issuing the Approval, Mr. Doyle requested pre- and post-channel cross-sections. He wanted to know the scope of the proposed work. It is instructive that Ms. Williams apparently did not appreciate the importance of pre- and post-1997 Flood channel cross-sections. It is not surprising, however, that she did not appreciate the scope of the issue. It was far beyond her expertise. Cross-sections were never provided. Mr. Doyle was the only qualified engineer present during the February 26, 1998 site meeting when the Channel Restoration design was completed. I find that Mr. Doyle provided the design for the Channel Restoration.
[325] I find that those present discussed channel bank protection and agreed on the type of riprap to be used. I find that they also agreed that the channel should not be “necked-down” by the riprap causing a reduction of the channel size. In other words, the consensus reached was that the channel should be restored to its pre-1997 Flood condition but the channel size was not to be reduced.
[326] Those discussions led to the mandatory conditions in the Channel Restoration Approval. Those conditions included that angular riprap be used to reduce channel encroachment and the chances of it falling into the creek during high water flow.
[327] Other than hiring Mr. Whitehead, it is apparent that the District did nothing else. Mr. Whitehead was not supervised. I infer that, because of his experience, he was left to do what he felt needed to be done and he was not privy to or aware of the hydrological issues involved in the lower reaches of Sicamous Creek. Nor should he have been – that was Mr. Doyle’s domain as a Water Act engineer and the District’s domain as the holder of the Channel Restoration Approval.
[328] The District argues that it did not have any obligation to provide supervision to its contractor, Mr. Whitehead, to ensure compliance with the terms of the Approval.
[329] I disagree. Implied in the Approval is the obligation to ensure the Works were carried out in accordance with its terms. Although Mr. Whitehead’s credentials and abilities were not challenged and there is no debate that he was qualified, it misses the point to suggest that because the Approval did not require the District to supervise its contractor, it can escape responsibility for ensuring the conditions of the Approval were complied with.
[330] Respecting the District, Conditions ‘L’ (angular riprap) was not complied with. Riprap is used to prevent erosion of river/stream banks. Mr. Doyle wanted angular rock because it has a much better chance than round rock of withstanding high water flows. In fact, contrary to Condition ‘L’, Mr. Whitehead used round rock mixed with angular rock.
[331] Condition ‘M’ (finished cross-sectional area could not be smaller than it was before) was also not complied with. There is no evidence that Mr. Whitehead was instructed about or even knew of Conditions ‘L’ and ‘M’. Indeed, the evidence suggests he was simply left to his own devices after given a general overview of his mandate.
[332] The District argues that no evidence was adduced that would suggest that the use of angular rock would have made any difference to the channel. The District submits that for me to find otherwise would amount to guesswork and conjecture: Kerr (Litigation Guardian of) v. Creighton, 2008 BCCA 75 at paras. 58-62.
[333] I disagree. Mr. Doyle explained that angular rock was to be used due to its ability to withstand heavy creek flows and minimize bank erosion. I accept that the riprap installed by the District did not meet the conditions of the Channel Restoration Approval and I accept that the failure to install the specified riprap contributed to the overall events resulting in the Blockage.
[334] I conclude that during peak flow, the force of the creek would have torn apart the riprap and transported it downstream thus contributing to the Blockage at the McLaughlin Bridge. Angular riprap, if it was in place, would have been more resistant to being dislodged. The photographs of the aftermath corroborate this finding.
[335] In the District’s case, I find that Conditions ‘B’, ‘C’, ‘F’, ‘L’ and ‘M’ of the Channel Restoration Approval were not complied with. The channel was not dredged to its pre-1997 Flood depth (Condition ‘B’) nor did it comply with the Harding Sketches or with the “mutually agreed conditions of work”. Further, the final channel profile was not hydraulically stable (Conditions ‘C’ and ‘F’), improper riprap was used (Condition ‘L’) and the protected channel cross-section was smaller than it was before (Condition ‘M’).
[336] In sum, I find that the non-compliance with these conditions contributed to the events leading up to Avulsion ‘A’.
[337] Mr. McLaughlin was present during the 1997 Flood and witnessed the damage caused by the McLaughlin Bridge at that time. He knew the explosive power of the creek.
[338] Without asking for clarification, and knowing that the creek bed was shallower than it was before the 1997 Flood, Mr. McLaughlin nevertheless took the words of the Approval “at least 0.6 m” as approved by a qualified professional engineer, to mean “exactly 0.6 m” without approval by a qualified professional engineer.
[339] After the McLaughlin Bridge Replacement, Mr. McLaughlin saw that there was less clearance between the bridge and the creek bed than before the 1997 Flood even though the bridge itself was 0.6 metres higher. He wanted more clearance but did not think to do so during construction because he believed the 0.6 metres height increase was a direction by the Province and the District. He recorded his concerns in contemporaneous notes shortly after the McLaughlin Bridge Replacement was complete. I accept Mr. McLaughlin’s evidence on this point. Indeed, both Mr. Doyle and Ms. Maurer noted the same thing.
[340] In the McLaughlins’ case, I find that Condition ‘C’ requiring that “all works” be designed by a qualified professional engineer was not complied with. The McLaughlins should have known that the term “qualified professional engineer” meant a hydrological engineer with expertise in bridges and river hydraulics. Even if they did not know, they should have taken steps to determine what was meant by “qualified professional engineer”. Accordingly, the McLaughlins are liable under the Water Act and cannot take advantage of the defence of due diligence.
[341] In my view, the District’s and McLaughlins’ failure to comply with the Approvals make them liable to make full compensation to owners as defined by the Water Act for any damage or loss resulting “from the exercise of the rights granted” by the Approvals.
[342] This means any loss or damage caused to the Vinco Property and Waterway reasonably flowing from the Channel Restoration, McLaughlin Bridge Replacement or a combination of both fall at their respective feet.
[343] The defendants argue that if they are found liable to the plaintiffs in negligence, Waterway and Vinco ought to be found contributorily negligent for moving the business to the Vinco Property in 2008 despite knowing the substantial risk of flooding that Sicamous Creek posed.
[344] Waterway and Vinco acquired this knowledge through the EBA Reports, which were originally commissioned for the purpose of a proposed development (the project was abandoned with the 2008 recession). The EBA Reports cautioned against the project and warned of a significant hazard of flooding. Indeed the conclusion of the flood hazard assessment stated:
Sicamous Creek is judged to be subject to debris flood, rather than debris flow, and the hazard is considered to be moderate to high . . .
[345] The EBA Reports recommended flood mitigation measures be taken if the contemplated development were to proceed. No flood mitigation works were initiated because the development was abandoned.
[346] In Bow Valley Husky (Bermuda) Ltd. v. Saint John Shipbuilding Ltd., [1997] 3 S.C.R. 1210 [Bow Valley], McLachlin J. (dissenting in part), defined contributory negligence this way at para. 76:
[76] I accept the defendants’ submissions. The test for contributory negligence was summarized by Denning L.J. in Jones v. Livox Quarries Ld., [1952] 2 Q.B. 608 (C.A.), at p. 615:
Although contributory negligence does not depend on a duty of care, it does depend on foreseeability. Just as actionable negligence requires the foreseeability of harm to others, so contributory negligence requires the foreseeability of harm to oneself. A person is guilty of contributory negligence if he ought reasonably to have foreseen that, if he did not act as a reasonable, prudent man, he might be hurt himself; and in his reckonings he must take into account the possibility of others being careless.
[347] The defendants contend that the plaintiffs failed to act reasonably in the face of a significant foreseeable risk of flooding by failing to take any steps to mitigate that risk.
[348] I agree. I find that Vinco and Waterway knew that the Vinco Property was naturally prone to flooding and accepted that flooding would occur from time to time. Despite the clear warning in the EBA Reports, I find that they ignored the issue. Knowing what they knew, flood mitigation measures of some kind should have been undertaken by them and their failure to do so was unreasonable in the circumstances.
[349] The defendants have met their burden in proving contributory negligence on a balance of probabilities.
[350] I assess Vinco’s and Waterway’s degree of fault collectively at 25%.
[351] Joint liability in negligence may be found where there is a concerted action between two or more parties to a common end. In such cases, both parties can be liable for any tort committed by the others. Three conditions must be satisfied in order to find liability on that basis: (1) the defendant must have provided substantial assistance to the commission of an act by the primary tortfeasor; (2) the assistance must have been pursuant to a common design on the part of the defendants that the tort be committed; and (3) the act must constitute a tort as against the claimant: I.C.B.C. v. Alexander, 2016 BCSC 1108 [Stanley Cup Rioters] at paras. 25-26.
[352] The plaintiffs say that if a finding is made that the Province was negligent, the McLaughlins and the District are also guilty of negligence as joint tortfeasors. They argue that because all three defendants were engaged in a concerted action to a common end respecting the McLaughlin Bridge Replacement and Channel Restoration, they are each liable for any tort committed by the other. Specifically, the plaintiffs assert that the Province and District assisted the McLaughlins with a common design for the bridge height.
[353] Before joint liability will be found, the participating defendants must be engaged in a wrongful (as opposed to lawful) purpose. If they are acting together for a lawful purpose that is potentially dangerous, the joint tortfeasor concept does not apply: Martin v. Martin, [1996] N.B.J. No. 167 (C.A.) at paras. 20-21.
[354] In Stanley Cup Rioters, Myers J. explained the difference at paras. 14-19:
[14] It is important in the present case to distinguish the concepts of joint tortfeasorship and joint and several liability. It is also important to set out the criteria for the concepts and to delineate their boundaries.
[15] There have been numerous descriptions of the concepts. The classic case is the English Court of Appeal's judgment in "Koursk" (The), Re [1924] P. 140, which dealt with collisions between three vessels. Perhaps the most commonly cited academic work is Glanville Williams, Joint Torts and Contributory Negligence (London: Stevens & Sons, 1951). He set out the following typology at pages 1-16.
A. Joint Tortfeasors – Joint Liability
[16] Two or more tortfeasors are joint tortfeasors in one of the following three situations:
1. Where one is the principal of or vicariously liable for another (p. 6);
2. Where a duty imposed jointly upon them is not performed (p. 9);
3. Where there is concerted action between them to a common end (p. 9).
B. Several Concurrent Tortfeasors – Joint and Several Liability
[17] Several concurrent tortfeasors are independent tortfeasors whose acts concur to produce a single result (p. 16). This can occur in two circumstances: where two causes are necessary in order to effect the consequence or where either cause would be sufficient in itself to produce the consequence. The common characteristic is that it is impossible to apportion the damage among the different tortfeasors.
[18] Williams refers to all the above as concurrent tortfeasors. Concurrent tortfeasors are generally liable for all of the (same) damages. Other cases and works refer to this as joint and several liability. The use of the phrase "joint tortfeasorship" in this circumstance is inaccurate and misleading: per Bankes L.J. in The Koursk at p. 150. The High Court of Australia drew a helpful delineation in Thompson v. ACTV (1996), 186 CLR 574 at 580-1:
The difference between joint tortfeasors and several tortfeasors is that the former are responsible for the same tort whereas the latter are responsible only for the same damage.
C. Several Tortfeasors causing different damages – Several Liability
[19] The third related category that arises in cases where there are multiple people involved in an event or a case is that of several tortfeasors causing different damage. In this instance each tortfeasor is liable only for the damage which he has caused by himself.
[355] Applying the law to this case, there was nothing unlawful about the reinstallation of the McLaughlin Bridge or the Channel Restoration per se. The plaintiffs’ complaint is that it was the combination of the Works that resulted in the clearance being significantly less than it should have been.
[356] The District cannot be said to have acted together with the Province or the McLaughlins respecting the bridge construction other than negotiating its height. The McLaughlins simply went along with what the Province and District negotiated.
[357] In my view, this is not a case where the concept of joint tortfeasorship applies. The Province’s role was engaged by the duties imposed under the Water Act. The District’s duties were dictated by the Channel Restoration Approval and the McLaughlin’s duties were dictated by the McLaughlin Bridge Approval. There was no “common design” that would attract liability in the nature of joint tortfeasorship as contemplated in law.
[358] As I have indicated, liability in this case can be decided based on the principles of negligence (as against the Province) and the Water Act (as against the District and McLaughlins). However, if I am wrong, I will provide my comments on liability in nuisance against the Province.
[359] A public nuisance is any activity that unreasonably interferes with the public’s interest in questions of health, safety, morality, comfort or convenience. The conduct complained of must amount to an attack upon the rights of the general public to live their lives unaffected by inconvenience, discomfort or other forms of interference: Ryan at paras. 52-53.
[360] The “unreasonableness” of the interference must be substantial and not just a trivial annoyance. The interference must be intolerable to an ordinary person, and must be assessed considering the nature, severity and duration of the interference, the character of the neighbourhood, the sensitivity of the plaintiffs’ use and the utility of the activity: St. Lawrence Cement Inc. v. Barrette, 2008 SCC 64 at para. 77.
[361] The damage complained of must be “special” in the sense that it rises above that of the general public and is of a different “kind” and “degree”: Stein v. Gonzales (1984), 58 B.C.L.R. 110 (S.C.). As was explained by McLachlin J. (as she then was) in Stein at paras 4 and 5:
[4] Public rights, including claims for public nuisance, can be asserted in a civil action only by the Attorney General as the Crown officer representing the public. A private person can bring an action for an alleged or anticipated breach of the law only where that breach would constitute a breach of his private rights or would inflict "special" or "peculiar" damage upon him . . .
[5] The policy behind this rule is that the public and criminal jurisdiction of the court is not to be usurped in a civil proceeding. As long as the suffering or inconvenience is general, there is no place for independent intervention by private citizens. This rule, which prevents individuals from taking upon themselves the role of champions of the public interest, has been said to be established "for the purpose of preventing oppression by means of a multiplicity of civil actions for the same cause" . . .
[Citations omitted.]
[362] Therefore, to succeed in a claim for public nuisance, the plaintiffs must show that the Province caused an unreasonable interference with a public right and that they suffered “special” or “peculiar” damage that was more egregious than any damages suffered by the general public rising out of the same interference.
[363] In this case, the plaintiffs assert that the interference with Mervyn Road, the beach adjacent the Vinco Property, the public foreshore and the public boat ramp all constitute “special” damage.
[364] The beach belongs to the Province up to the high water mark and the public has access to it. The Province has a lease agreement with Vinco that allows it to build the Waterway docks. The plaintiffs’ claim is essentially that the beach is less attractive now than it was before the 2012 Flood.
[365] The evidence does not establish that the public access to the beach or foreshore was limited for more than three weeks. While there is no doubt that the beach as it now appears is different that it was before, I am not satisfied that the difference in appearance was of operational significance to either Vinco or Waterway. By its nature, waterfront property situated on a fan delta can be expected to change from time to time. There is no public right to an attractive beach. Thus, I am not persuaded that there was an interference with the public’s interest in the beach – accordingly, the claim for the beach adjacent to the Vinco Property fails on the first element of public nuisance.
[366] Respecting Mervyn Road, while there is no dispute that a public right-of-way exists over it and that the 2012 Flood blocked access to it, I am not satisfied that the plaintiffs suffered special damage by its blockage. Indeed, the evidence is that once Mervyn Road was blocked the plaintiffs immediately opened and used an alternative access from Highway 97A to the Vinco Property.
[367] Respecting the foreshore, there is no evidence of an interference with the public’s right to access it, never mind evidence that the plaintiffs suffered special damage as a result.
[368] Respecting the public boat launch, while the plaintiffs’ temporary inability to use the ramp was inconvenient, there is no evidence that proves that the plaintiffs suffered any greater inconvenience than did the general public. Further, the evidence is that trees and other debris flushed into Mara Lake prior to the Blockage – in other words, the interference would have been caused regardless of the defendants’ acts.
[369] The plaintiffs allege that the public nuisance resulted from the Blockage caused in part by the inadequate Channel Restoration. There is no allegation that the Province caused direct harm to the Vinco Property, but rather that the Province permitted the District and the McLaughlins to perform the Works.
[370] The Province says that Waterway’s nuisance claim against the Province is unprecedented. No case has been produced where nuisance has been found against a government regulator for lawfully authorizing the activities of others.
[371] On this point, I agree with the Province. The plaintiffs’ claim against the Province for public nuisance fails.
[372] Private nuisance can be described as the unreasonable interference with the use and enjoyment of land that would not be tolerated by the ordinary occupier: Canadian Tort Law, at 548-549. Anyone who actively creates a nuisance can be liable and that liability will continue for as long as the offensive condition remains.
[373] The following general definition of private nuisance was adopted by the Court of Appeal in Royal Anne Hotel Co. Ltd. v. Village of Ashcroft, [1979] B.C.J. No. 2068 (C.A.) at para. 10:
[10] A person . . . may be said to have committed the tort of private nuisance when he is held to be responsible for an act indirectly causing physical injury to land or substantially interfering with the use or enjoyment of land or an interest in land where, in the light of all the surrounding circumstances, the injury or interference is held to be unreasonable.
[Emphasis in original.]
[374] Respecting the Individual Houseboat Owners, they have not established, nor have they attempted to establish, that they had an interest in the land that was affected by the 2012 Flood. Therefore, they do not meet the threshold required to advance a claim in private nuisance. That leaves Waterway and Vinco.
[375] The onus of proving that the defendant caused unreasonable interference with the use and enjoyment of the plaintiffs’ land rests with the plaintiffs. Once demonstrated, the onus shifts to the defendant to show that the use of the land was reasonable: Canadian Tort Law at 550.
[376] The plaintiffs assert that the McLaughlin Bridge Replacement and Channel Restoration caused a private nuisance when they interfered with the flow of Sicamous Creek and caused a flood to the Vinco Property.
[377] The Province denies that it can be found liable for private nuisance. The Province reiterates that it merely granted the Approvals for the McLaughlin Bridge Replacement and the Channel Restoration and that it did not undertake the actual construction of either project. Rather, those projects were the responsibility of the other defendants pursuant to their Water Act Approvals. The Province neither owned nor created the Works that the plaintiffs allege gave rise to actionable nuisance.
[378] The plaintiffs, however, do not claim against the Province as the owner of Sicamous Creek, but instead for issuing the Approvals that enabled the other defendants to cause the nuisance. They assert that by designing and approving the Channel Restoration and providing directions for the height of the McLaughlin Bridge Replacement, the Province failed to abate the nuisance and is therefore liable.
[379] I cannot accede to this argument. Such a concept was rejected in Hoffman v. Monsanto Canada Inc., 2005 SKQB 225 where the Court stated at para. 122:
[122] The tort of nuisance imposes strict liability when the conditions for its application are met. The implications of holding a manufacturer, or even inventor, liable in nuisance for damage caused by the use of its product or invention by another would be very sweeping indeed. It is my conclusion that where the activity complained of is the activity of one who is not in occupation or control of adjoining land, and no independent malfeasance is alleged, then, at the very least, direct causation of the damage alleged must be alleged. This is not the case. I conclude that there are no facts alleged in this case that could support a finding that the defendants substantially caused the nuisance alleged.
[380] Other than issuing the Approvals, there is nothing the Province did that directly impacted the Vinco Property. Respecting the plaintiffs’ allegation that the Province failed to abate the nuisance, I agree with the Province that it had no obligation to do so considering the nuisance existed by virtue of a natural hazard resulting from a naturally occurring watercourse: Lynds v. Runge, 2002 BCSC 1579 at para. 52.
[381] The plaintiffs’ claim against the Province in private nuisance fails.
[382] Before the defendants will be liable in damages, the plaintiffs must prove causation.
[383] The test for proving causation is the “but for” test. The plaintiffs must prove on a balance of probabilities that “but for” the construction of the Works, the damage they suffered would not have occurred: Clements v. Clements, 2012 SCC 32 at para. 8. In other words, the question is: even if the Province, the District and the McLaughlins did what the plaintiffs say they should have done, would it have made any difference?
[384] The “but for” causation analysis is to be applied using a robust, pragmatic and common sense approach. Scientific certainty is not required. Inferences of causation may be drawn on the basis of common sense. Causation can be inferred – even in the face of inconclusive or contrary expert evidence – from other evidence, including merely circumstantial evidence: Benhaim v. St-Germain, 2016 SCC 48 at para. 54; British Columbia (Workers’ Compensation Appeal Tribunal) v. Fraser Valley Health Authority, 2016 SCC 25 at para. 38.
[385] Justice Garson (in dissent in the result) summarized the basic principles in British Columbia v. Canadian Forest Products Ltd., 2018 BCCA 124 at para. 135 as follows:
[135] To summarize, the following principles emerge from the Supreme Court of Canada’s jurisprudence on causation in negligence:
a) The appropriate test for causation is the “but for” test, except in rare circumstances unrelated to this appeal: Clements.
b) Courts must take a common-sense approach to “but for” causation rather than requiring certain or scientific proof of causation: Snell at 328; Clements at para. 9.
c) The burden of proof remains with the plaintiff: Snell at 330. However, as in other fact-finding contexts, a court may infer “but for” causation based on an assessment of all the evidence if the defendant fails to introduce sufficient evidence contrary to the plaintiff’s theory of causation: Clements at paras. 10-11.
d) In determining whether the defendant has introduced sufficient evidence to contradict the plaintiff’s theory of causation, the trier of fact may consider the relative positions of the parties to adduce evidence on causation: Benhaim at para. 54. In other words, evidence should be “weighed according to the proof which it was in the power of one side to have produced and in the power of the other to have contradicted”: Blatch v. Archer (1774), 98 E.R. 969 at 970, cited in Clements at para. 11, Benhaim at para. 48.
e) Even if the defendant’s negligence created causal uncertainty and the plaintiff has adduced some evidence in support of its theory of causation, the trial judge is not obliged to draw an inference of causation against the defendant: Benhaim at para. 42.
f) The trial judge’s decision to infer or not infer causation is a finding of fact and attracts deference on appeal: Benhaim at paras. 36, 42.
[386] With these principles in mind, I will provide my conclusions on causation from inferences I have drawn from the evidence as a whole, including the photographs, videos, and various expert opinions that I have accepted.
[387] If there is one thing that is clear, it is that the fields of hydrological, hydrotechnical, stream channel geomorphology, and fluvial sedimentology engineering are highly specialized and complex.
[388] Much of the expert evidence led at trial involved academic debate amongst the experts who were attempting to determine causation with scientific precision. Each expert theorized on what may have happened based on a series of assumed facts that, if true, might explain their version of the events.
[389] Dr. Alila is often requested by scientific publications to peer review and critique other scientists. His job is to ensure that the exacting standards set by particular publications are met. As such, he acts as a gatekeeper for his field. He has high standards and holds his peers to rigorous standards as well.
[390] I am satisfied that Dr. Alila, who is clearly highly qualified in his field, critiqued both Dr. Smith and Mr. LaCas on a standard of scientific precision. He did not agree with the approach they took in using approximations that were necessitated by the unavailability of precise data. He found the use of these approximations to be unacceptable. The rigorous standard of scientific certainty, of course, is not the standard upon which I am to decide this case.
[391] Indeed, none of the experts can say with precision what happened. There are simply too many unknowns and too many variables. Factors such as volume, velocity, depth of the flow, resistance, riprap on the channel banks, and channel dimensions (to name a few) are all at play. To add to the complexity, all of these factors change depending on timeframe and location in the creek channel.
[392] Sicamous Creek is dynamic and ever-changing. It is not a laboratory where controlled testing can be performed. No one knows the state of the creek bed and how much, if any, aggradation existed immediately prior to the 2012 Flood. No one knows precisely the volume or velocity of the flow during the 2012 Flood. In light of these variables, the experts did the only thing they could do: use their expertise, experience and engineering principles to attempt to “calculate” the results. At best, these attempts were educated guesses.
[393] I was impressed by Dr. Smith’s knowledge of this subject area. He is clearly a very experienced and knowledgeable expert in the area of modelling and simulations. He maintained confidence throughout his testimony that his simulations of the 2012 Flood, while not precise, were approximately correct.
[394] Of all the experts who testified, I am satisfied he knew the Sicamous watershed best.
[395] Attempts to challenge his opinions were not successful and were met with carefully considered, thoughtful and confident responses. There are many, many variables that go into his models and he used his experience and judgment to parameterize and calibrate them.
[396] It is correct that when the number of input parameters increase, more judgment calls need to be made and it is more likely that the model will be inaccurate. The reliability of Dr. Smith’s models to precisely emulate the 2012 Flood is limited but I am persuaded that they are nonetheless helpful in estimating the timing and flow volume of the Sicamous Creek during the 2012 Flood.
[397] I am satisfied that Dr. Smith’s methodology, calibration and parameter range took into account all necessary and relevant variables such that the model is as reliable as was possible in the circumstances.
[398] Additionally and importantly, Dr. Smith’s simulations complement the photographs, videos and witness testimony. They corroborate Mr. Bens’ evidence that the flow peaked at around 6:00 pm on June 23, 2012 and that it stabilized by approximately 9:00 pm. The photographs and videos confirm that, more likely than not, the flows were not “off the charts” after 6:00 pm. as the defendants suggest. Rather, they were probably manageable by the channel, but for the Blockage. I accept that the creek was flowing at a rate of 50-60 cubic metres/second and that the channel was able to handle it, albeit barely.
[399] On balance, and the acknowledged frailties with the data, I find that Dr. Smith’s models are a reasonable approximation of the events of the 2012 Flood.
[400] There were two main differences between Dr. Church and Dr. Jakob’s opinions related to the causation of Avulsions ‘A’ and ‘D’.
[401] First, Dr. Church says that the flow (and sediment contained within it) would have been flushed into Mara Lake irrespective of its high water and thus, the Blockage caused Avulsion ‘A’. Dr. Jakob disagrees and says that the high lake water level is the single most contributory factor to the aggradation eventually occurring and ultimately causing Avulsion ‘A’. He says that the channel had already aggradated due to the backwater effect that occurred prior to the Blockage. Dr. Jakob’s view is that Avulsion ‘A’ would have occurred in any event because the channel had almost completely filled in with sediment.
[402] Secondly, Dr. Church says that the avulsions upstream of Avulsion ‘A’, particularly Avulsion ‘D’, were also caused by the Blockage because it created a progressive upstream sediment wedge. Dr. Jakob, on the other hand, says that Avulsion ‘D’ had nothing to do with the Blockage and occurred independent of it.
[403] Dr. Church criticized Dr. Jakob’s approach on the basis that his opinion was based on a “how to design the channel for safety” point of view rather than a “what happened” historical point of view. Because of the supercritical flow prior to the Blockage, Dr. Church does not believe the high lake water level would have had the effect Dr. Jakob suggests. Because Sicamous Creek flows through a deep, narrow channel, he believes that it was competent to transport and flush debris even at moderate flows. Therefore, Dr. Church’s view is that aggradation would not have occurred but for the Blockage.
[404] Dr. Jakob’s opinion is that Avulsion ‘D’ occurred some 160-170 metres upstream from the Highway 97A Bridge and was caused by two complementary processes that were totally independent of the Blockage. Those processes were: (1) massive bank erosion and consequent channel widening; and (2) a sediment wedge from the Highway 97A Bridge upstream raising the bed of the channel and reducing stream competence.
[405] Based on a review of the videos of the 2012 Flood, Dr. Church does not accept that most of the sediment material that ended up on the Vinco Property came from Avulsion ‘D’. This is firstly because a substantial volume of sediment and rocks were transported over the Vinco Property by Avulsion ‘A’ and secondly because Avulsion ‘D’ occurred much later as the flow was receding (meaning the flow would have been mostly water at that point with little to no sediment embedded therein).
[406] It is impossible to know precisely when the sediment began overflowing the bank. I accept that the peak of the flood occurred when Avulsion ‘A’ became active and Avulsion ‘D’ had not yet begun. I accept that Avulsion ‘D’ started well after peak flows. I note as well that Avulsion ‘D’ started out relatively small and did not fully develop until June 24, 2012 and by then, the sediment being transported by the flow had substantially reduced. I accept that by the time Avulsion ‘D’ was complete, most of the sediment from the watershed had been spent.
[407] Accordingly, I accept Dr. Church’s opinion that the majority of the sediment from the watershed (approximately 25,000 cubic metres) was likely transported onto the Vinco Property via Avulsion ‘A’. This view is corroborated by the photographs, videos and eyewitness testimony of the 2012 Flood.
[408] I also accept Dr. Church’s opinion that, compared to Avulsion ‘A’, Avulsion ‘D’s contribution to the sediment deposit on the lower Vinco Property, excluding the sediment that was flushed through the property into Mara Lake, was much smaller, likely less than 30% of the total.
[409] The timing of the chain of events is important in determining causation.
[410] Mr. Varszegi (Waterway’s dock manager) testified on these points. He was sensible, careful and fair in giving his evidence. He took photographs minutes before the Truck arrived at the bridge. These photographs are instructive and helpful, especially when compared to the photos of the bridge taken afterwards. He stated, and I accept, that by approximately 3:30 pm on June 23, 2012, he observed Sicamous Creek flowing fast. He heard the sound of rocks crashing in the creek, and saw full-size trees transported down the channel, driven by the force of the flow under the McLaughlin Bridge and flushed into Mara Lake.
[411] He described the flow as an elevated jet of chocolate coloured water being shot into the lake. The jet disappeared abruptly some distance into the lake where it met a large debris mat floating in the lake. At that point, everything was being flushed into the lake.
[412] He noted that between 3:40 pm and 4:45 pm, the level of Sicamous Creek rose about one foot. He noted that by 5:30 pm, the waves were making contact with the underside of the McLaughlin Bridge. Debris was being temporarily captured by the McLaughlin Bridge causing a thin sheet of water upstream to spill over the north bank. With the force of the flow, the captured debris broke free and was forced under the bridge. Following that, the flow resumed.
[413] At approximately 5:48 pm on June 23, 2012, Mr. Varszegi observed the Truck “rafting” down Sicamous Creek nose first. It hit the south bank and spun sideways. He saw it “shuddering” along the bank and roll roof-first, crashing into the McLaughlin Bridge and ultimately disappearing. Immediately thereafter, the creek backed-up and flowed over the north bank onto Mervyn Road and onto the Vinco Property. The overbank flow was dramatic and grew faster and deeper as it expanded upstream (Avulsion ‘A’).
[414] Within 30 minutes, a large pile of debris had jammed against the upstream side of McLaughlin Bridge which by then was completely blocked. There was no place for the flow to go other than over the channel’s banks. Prior to the Blockage, he stated that any overbank flows were minimal and caused by transient blockages.
[415] I have already accepted that peak flow occurred at about 6:00 pm and stabilized at that level through to about 9:30 pm when it began to subside.
[416] I conclude that, more likely than not, the Sicamous Creek channel, as debris laden as it was, was still able to carry the flows into Mara Lake. I conclude that the debris was being flushed into Mara Lake and over the lip of the delta. The videos and photographs speak volumes on this point.
[417] In my view, Dr. Church’s theory that the aggradation occurred well after the arrival of the Truck makes the most sense. The flow necessary to move the sediment, full-size trees, and large boulders could not have been a shallow flow as Dr. Jakob opined. I conclude that the sedimentation occurred after the Blockage.
[418] I am satisfied that, but for the Blockage, the flow could have been contained within the channel.
[419] I am satisfied that at about 5:48 pm, the Truck became jammed under the McLaughlin Bridge which plugged the channel and caused the Blockage, which in turn caused Avulsion ‘A’.
[420] Therefore, if there was no Truck, there would have been no Blockage and flooding to the Vinco Property caused by Avulsion ‘A’ would have been minimal.
[421] While all experts who testified were exceptionally qualified in their fields and were all helpful, as between Dr. Church’s and Dr. Jakob’s competing theories of the cause of Avulsion ‘A’, I prefer Dr. Church’s theory. With respect to the competing theories of the cause of Avulsion ‘D’, I prefer Dr. Jakob’s theory that it was totally unrelated to the Blockage and was caused by other naturally occurring phenomena.
[422] Therefore, I conclude that the flood damage caused to the Vinco Property was due to a combination of factors, some related to the Blockage and some not. Those factors are:
a) The height of the McLaughlin Bridge was insufficient to handle a 1 in 200 year debris flood;
b) The Channel Restoration resulted in the creek channel below the Highway 97A Bridge being shallower and narrower than it was prior to the 1997 Flood;
c) Avulsion ‘A’ was predominantly caused by the Blockage. Had the McLaughlin Bridge been higher, the Truck and other debris in the flow would have been flushed into Mara Lake and most of the flooding caused by this avulsion would have been averted; and
d) Avulsion ‘D’ started much later than Avulsion ‘A’ as the volume and flow of the creek reduced after peak flow. Avulsion ‘D’ occurred independently of the Blockage and the Works.
[423] In sum, I find that significant flooding, damage, erosion and debris deposit on the Vinco Property occurred as a result of Avulsion ‘A’ which would have made it impossible for Waterway to operate its business in any event of Avulsion ‘D’. Avulsion ‘D’ simply added to the flood debris, but was more confined to the north portion of the property.
[424] The lead-up to the 2012 Flood was a perfect storm. Mara Lake levels were the highest they had been since the early 1970s. There was significant rainfall on a significant snowpack in the Sicamous Creek watershed. The resulting debris flood was extraordinary.
[425] Here, I am satisfied that both the McLaughlins and the District as approval holders fell short of complying with the conditions in the Approvals. In accordance with s. 21 of the Water Act, they are both liable to make full compensation to Vinco and Waterway for damages suffered as a result.
[426] The Province is liable to the plaintiffs due to Mr. Doyle’s failure to meet the standard of care of a professional engineer by compromising his professional judgment in allowing the McLaughlin Bridge to be reconstructed at a height that was too low especially after knowing that the Channel Restoration was improperly constructed.
[427] In terms of the specific damage that each defendant is liable for, I conclude as follows:
a) The Province is liable to the plaintiffs in negligence for damage caused to the Vinco Property and Waterway by Avulsion ‘A’;
b) The District is liable under s. 21 of the Water Act to Vinco and Waterway for damage caused by Avulsion ‘A’;
c) The McLaughlins are liable under s. 21 of the Water Act to Vinco and Waterway for damage caused by Avulsion ‘A’;
d) Vinco and Waterway are 25% contributorily negligent for the damage caused by Avulsion ‘A’;
e) The Province, the District and the McLaughlins were jointly responsible for Avulsion ‘A’ and the damages caused by them are indivisible; and
f) The defendants are not liable to the plaintiffs as joint tortfeasors.
[428] Waterway was forced to close for three weeks from June 23, 2012 to July 12, 2012. Only due to the extraordinary effort of Waterway’s staff was business able to resume when it did, albeit in a rudimentary and makeshift fashion. Sailing reservations for that three week period were cancelled. For those customers who had pre-paid, Waterway gave the option of a full refund or an opportunity to book two future trips for the price of one.
[429] In addition to lost profits, Waterway and Vinco lost most of its infrastructure, including buildings, equipment, inventory, supplies and materials. In addition, it incurred significant clean-up costs.
[430] Waterway also lost profits and management fees from the sale of ancillary goods and services such as water sport rentals and food/dry goods typically sold to houseboat guests before and after sailings.
[431] Waterway and Vinco claim damages in three categories: diminution in property value; business losses; and special damages.
[432] The Individual Houseboat Owners suffered no property damage but lost their share of revenues for the 2012 sailing season when their payments were deferred by Waterway’s management (due to the significant reduction in revenues and expenses incurred due to the 2012 Flood). This deferment upset a number of Individual Houseboat Owners who were counting on these funds to pay their own expenses. The result of this dissatisfaction was that six of the houseboats left the Waterway fleet and commenced lawsuits against Waterway.
[433] I have already determined that Avulsion ‘A’ caused the majority of the damage whereas Avulsion ‘D’ was responsible for a lesser degree. I have also determined that the Vinco Property would have been damaged to some extent in any event of the Works (albeit minor by comparison). I propose to deal with this issue by way of a percentage reduction to some of Waterway’s and Vinco’s claims.
[434] The plaintiffs are only entitled to compensation for loss caused by an actionable wrong and therefore, the damages done by Avulsions ‘A’ and ‘D’ must be divided: Blackwater v. Plint, 2005 SCC 58. The defendants submit, and I agree, that Waterway should not be entitled to a windfall merely because it is difficult to untangle the sources of damage. Although some of the damage was overlapping, I conclude I am still able to make a determination of the damages caused by Avulsion ‘A’.
[435] Dr. Jakob prepared a drawing of the avulsions on an aerial photograph of the flood’s aftermath. On the drawing, he opined as to where each avulsion started and the route each avulsion took as it exited the existing channel and progressed onto the Vinco Property. I accept this sketch as an approximation of the avulsions’ various routes through the Vinco Property, in particular because it dovetails with the photographic and video evidence of the 2012 Flood.
[436] Avulsion ‘A’ raged across Mervyn Road and onto the lower Vinco Property destroying everything in its path. Specifically, I conclude that Avulsion ‘A’ caused most if not all of the damage to the southern portion of the Vinco Property (including the administration building, the parking lot and other outbuildings).
[437] Avulsion ‘D’, although also significant, was more confined to the upper portion of the Vinco Property to the east of Highway 97 near the houseboat docks. Avulsion ‘D’ occurred later in the evening on June 23 and into June 24, during which time the flow was reducing in volume and strength. The rocks and boulders seen in the photographs strewn throughout the upper parking lot were likely caused by water erosion from Avulsion ‘D’. It is unlikely that they were caused by aggradation or transported by the flow itself.
[438] Although imprecise, the percentage of the total damage caused by Avulsion ‘A’ compared to Avulsion ‘D’ calls for an assessment. In all the circumstances, I conclude that 80% of the total losses resulted from Avulsion ‘A’ and 20% resulted from Avulsion ‘D’.
[439] The object of damages in tort is to put the plaintiffs in the same position they would have been “but for” the defendants’ wrongful acts.
[440] Under established Canadian tort law, a defendant is liable if the plaintiff proves – in respect of causation – that the defendant caused the damage. If the defendants prove that some of the plaintiffs’ injuries would have occurred regardless of their negligence, the defendants’ liability can be reduced: Deloitte at para. 95.
[441] To be recoverable, damages must have been reasonably foreseeable consequences of the breach. The principle of remoteness imposes limits on recoverable damages as a matter of fairness. Determining the degree of probability of a reasonable foreseeable consequence requires a remoteness analysis: Mustapha at paras. 12-14.
[442] Reasonable foreseeability is to be determined at the time of the tort on a “reasonable person” objective standard: Milliken v. Rowe, 2012 BCCA 490 at paras. 24-27. Consequently, I must assess damages based on what was reasonably foreseeable at the time of the Works in 1998.
[443] I have earlier found that the flooding damage to the Beachcomber Campground, as it then was, was a reasonably foreseeable risk. It was also reasonably foreseeable that the Beachcomber Campground would have been sold to a business like Waterway that could be significantly affected by flood damage.
[444] I am satisfied therefore that the plaintiffs are entitled to recover damages because they would have been in the reasonable contemplation of reasonable persons in the defendants’ shoes at the time. Further, they are not too remote.
[445] I have also found that Waterway and Vinco ought to bear some degree of blame for relocating to the Vinco Property despite the warnings in the EBA Reports.
[446] As “owners” under the Water Act, Vinco and Waterway are entitled to claim “full compensation” for their loss and damage resulting from the Approvals.
[447] The plaintiffs assert that the words “full compensation” under s. 21 means all losses including consequential economic loss.
[448] Prior to this trial commencing, the defendants brought an application to strike the plaintiffs’ claim. I dismissed the application but my reasons became an issue during submissions prompting me to file a clarifying Corrigendum (cited as 2018 BCSC 606, revised October 17, 2018) stating that neither I nor the drafters of the legislation intended to restrict damage claims to real property.
[449] Repeating from the Corrigendum to Reasons for Judgment dated October 17, 2018, paras. 44-47:
[44] I am in substantial agreement with the plaintiffs’ submissions. The Water Act is concerned with the regulation of property rights in water and the limited relationship addressed in s. 21. The case law and academic commentary on the “complete code” doctrine emphasize the need for care in defining the scope of a complete code: Tucci v. Peoples Trust Company, 2017 BCSC 1525 at paras. 64-68; Gendron v. Supply and Services Union of the Public Service Alliance of Canada, Local 50057, [1990] 1 S.C.R. 1298 at 1315-1320; Ruth Sullivan, Sullivan on the Construction of Statutes, 6th ed (Markham: LexisNexis Canada, 2014) at 536-539. In particular, there is a need for careful attention to legislative intent as determined by considering all relevant factors, including the text, scheme, object and history of the legislation and the presumption that the legislature does not intend to abrogate common law rights unless it says so explicitly or by necessary implication.
[45] Therefore, in my view, the Water Act is a complete code solely with respect to the allocation of property rights in water, and with respect to causes of action between “Owners” and licensees, approval holders and persons who make changes in and about a stream (as defined) in accordance with the regulations, where they cause damage to land, trees, works (as defined) or other property including real property. It is not a comprehensive code that subsumes common law nuisance and negligence claims.
[46] It was not the intention of the Legislature to abrogate those claims.
[47] The impact of this conclusion is that under s. 21 of the Water Act, “owners” may only sue approval holders who fail to take reasonable care in making changes in and about a stream for property damage or loss resulting from construction, maintenance, use, operation or failure of the “works” under s. 21 of the Water Act. They may sue others for other harms by way of common law causes of action. In particular, the Individual Houseboat Owners who are not “owners” may sue for economic loss. While pure economic loss is generally not recoverable, the plaintiffs plead a quasi-joint venture relationship, one of the exceptions to that rule.
[450] Indeed, the point was reinforced by my summary in para. 66:
[66] . . . (a) “Owners” as defined in the Water Act may only pursue causes of action against approval holders where they fail to take reasonable care in making changes in and about a stream or where they suffer damage or loss to property resulting from construction, maintenance, use, operation or failure of their “works”, which includes the right to claim under the common law doctrines of nuisance and negligence. Section 21 has not abrogated those doctrines. Those who are not “owners” or did not suffer damage to property may not pursue a claim under s. 21;
[451] Therefore, I conclude that Waterway and Vinco as “owners” are entitled to claim all losses they have incurred resulting directly or indirectly from Avulsion ‘A’, including physical losses, special damages and economic losses.
[452] Vinco claims for damages not only to its physical structures but for changes to the shape and configuration of the Vinco Property, including the beach and foreshore, thus making it less useful and ultimately less valuable.
[453] The plaintiffs acknowledge the difficulty in assessing damages for diminution in value but argue that on a balance of probabilities, damages can be made out.
[454] This head of damage came down to a debate between the plaintiffs’ appraiser, Mr. Steven Danielson and the defendants’ appraiser, Mr. Carl Nilsen.
[455] The plaintiffs retained Mr. Danielson, a qualified appraiser, to provide an opinion on the diminution in value of the Vinco Property post-2012 Flood.
[456] His appraisal is based on the highest and best use of the Vinco Property, both pre- and post-2012 Flood.
[457] His opinion is that immediately prior to the 2012 Flood, the Vinco Property (land only) had a fair market value of $7,170,000 and immediately after the 2012 Flood, its value was reduced to $5,760,000, a difference of $1,410,000. These calculations were based on the buyer being an “experienced property developer.”
[458] In simple terms, he attributes the diminution in value of $1,410,000 to the significant change in topography and attractiveness of the property as well as the contamination caused by the 2012 Flood. The contamination relates to the organic matter (trees, root systems, silt and other debris) and non-organic matter (vehicles, equipment, parts of buildings) that were buried underneath the property to an unknown extent.
[459] In preparing his opinion, Mr. Danielson was not provided with and did not review the EBA Reports that suggested the pre-2012 Flood soil conditions were “fair to poor”. While he agreed, on face value, that poor soil conditions would have had an adverse influence on the property value, he stated that it is common for lakefront properties to have poor soil conditions and that developers generally take this into account when making offers to purchase. He disagreed that the EBA Reports would impact or change his appraisal opinions.
[460] The comparables he used in his appraisal were varied and, although similarly located in a flood plane, were noticeably different than the Vinco Property. He stated that he factored those differences into his final adjustments.
[461] In short, Mr. Danielson’s opinion was that the highest and best use of the Vinco Property in June 2012 was its use as a houseboat business. Anyone buying the Vinco Property at this point would likely be doing so with a plan to “hold onto it” pending a better residential development climate. A development would not have been economically feasible in 2012 due to the poor real estate market but, he says, downturns in the economy are usually temporary and improve at some point.
[462] The most likely potential purchaser for the Vinco Property in 2012 would have been a property developer who, if comparing its pre- and post-flood state, would have applied a discount to the offer due to the unknown risks associated with the contamination and the less attractive visual changes to the property. He says experienced developers are used to risks and uncertainty and simply factor that into the discount. He says that an appropriate discount for the Vinco Property would be 20%, which is the approximate discount he applied to arrive at the post-2012 Flood valuation of $5,760,000.
[463] The defendants also called evidence on the diminution of value issue. They jointly retained Mr. Nilsen, a property valuator, to prepare a response to Mr. Danielson’s appraisal.
[464] The defendants did not ask Mr. Nilsen to express an opinion on the pre-flood value of the Vinco Property or how the 2012 Flood may have affected its value. He was simply asked to critique Mr. Danielson’s opinions.
[465] In his view, Mr. Danielson’s pre-flood valuation of $7,170,000 was too high. He did not agree with Mr. Danielson’s appraisal methodology nor did he agree with his opinion on the reduction in value of the Vinco Property after the 2012 Flood.
[466] In his opinion, the use made by Mr. Danielson of comparables was not valid. While he agrees that some properties, by their nature and location, have limited “apples-to-apples” comparables and that a certain degree of latitude on the part of the appraiser is required, the appraiser must be clear and cautious on how those differences may affect the appraisal. The further away the comparables are, the greater the need for care and caution in the appraisal. In the circumstances of this case, he felt Mr. Danielson was not as cautious as he should have been.
[467] Mr. Nilsen also believed that Mr. Danielson had not fully reflected on market variations for this type of property. He was critical of Mr. Danielson’s assumption that there were unknown detrimental soil conditions after the 2012 Flood. He noted that appraisers are not qualified to comment on the cost of remediation of property.
[468] Mr. Nilsen did agree, however, that the most likely purchaser of the Vinco Property in 2012 would have been either a developer who was prepared to hold the property, or someone who wanted to operate a business similar to Waterway’s.
[469] He agreed that a prudent buyer would be concerned about unknown soil characteristics and would undertake a due diligence investigation before making an offer. He agreed that when properties contain detrimental conditions, the value is lower: the higher the risk, the lower the offer price. He agreed that these types of risks need to be considered in valuing the property.
[470] The appraisal process is not an exact science. It involves looking at available data, adjusting for various factors such as trends in the market and then ultimately applying experience and professional judgment.
[471] The ultimate issue in any appraisal is what a third party buyer would pay considering market conditions and the type of development or use of the property.
[472] I conclude that, reflecting on the 2008 worldwide downturn in the economy, the market for development property such as the Vinco Property was slow in the 2012 timeframe. The most probable buyer, if one could be found, would have been an experienced developer who would have likely held the property for development until the market improved. The fact that the property was waterfront property brings with it a normal risk that is usually factored into the purchase price.
[473] Having weighed Mr. Danielson’s opinion against Mr. Nilsen’s opinion, I find that I am unable to conclude that the plaintiffs have met the burden of proof. Although I am satisfied that the property looks aesthetically different and that there are unknown risks associated with the land, the takeaway from Mr. Danielson’s evidence was that Vinco Property’s soil conditions would have been a significant risk for development in any event due to its waterfront location. Given the EBA Reports, I conclude that the risk factors to a developer would have been the same or similar before and after the 2012 Flood and that the 2012 Flood did not have a significant impact on the Vinco Property’s value.
[474] It follows that Vinco’s claim for diminution in value is dismissed.
[475] With a few exemptions, pure economic loss (a loss that is not accompanied by physical injury or property damage) is not recoverable. One exception is known as "relational economic loss” which allows a plaintiff who suffered no physical damage to claim economic damages because of the relationship he or she has to another person who has suffered physical damage. Some relationships (joint or common ventures) can support claims for pure economic loss in certain circumstances: Norsk at para. 73; Bow Valley at paras. 46-48.
[476] In addition to the physical losses, Waterway and Vinco claim economic losses. In addition to the three week period of lost revenues immediately following the flood, Waterway claims that the business suffered ongoing losses in the form of reduced revenues. These losses are known as “consequential economic losses” (not “pure economic losses”) and are recoverable because they are consequent from the physical losses they sustained.
[477] The Individual Houseboat Owners did not suffer any physical damage to their houseboats but claim they suffered financial losses. They assert that these losses are “relational economic losses” and as such are an exception to the general rule that economic losses are not recoverable. They say they were engaged in a form of common or joint venture with Waterway.
[478] The joint venture exception was first identified by the Supreme Court of Canada in Norsk. Briefly, the facts of Norsk were that the defendant caused damage to a bridge owned by the plaintiff. A third party railway company (Canadian National Railway) did not own the bridge but used it regularly. As a result of the damage caused by the defendant, the railway had to reroute its trains which resulted in a loss. The Court found that a joint or common venture existed and that the railway could claim damages for pure economic loss. McLachlin J., as she then was, stated at 1162:
Such a characterization brings the situation into the "joint" or "common venture" category under which recovery for purely economic loss has heretofore been recognized in maritime law cases from the United Kingdom and the United States. The reasoning, as I apprehend it, is that where the plaintiff's operations are so closely allied to the operations of the party suffering physical damage and to its property (which—as damaged— causes the plaintiff's loss) that it can be considered a joint venturer with the owner of the property, the plaintiff can recover its economic loss even though the plaintiff has suffered no physical damage to its own property. To deny recovery in such circumstances would be to deny it to a person who for practical purposes is in the same position as if he or she owned the property physically damaged.
[Citations omitted.]
[479] Continuing at 1164:
. . . I do not read the authorities which have considered the implications of a joint venture between the plaintiff and the owner of the damaged property as confining themselves to the formal terms of the contract. I prefer a more flexible test which permits the trial judge to consider all factors relevant to their relationship. The terms of the contract are an important consideration in determining whether economic loss is recoverable. But the contract may tell only part of the story between the parties. If the evidence establishes that having regard to the entire relationship between the owner of the damaged property and the plaintiff, the plaintiff must be regarded as standing in the relation of joint or common venturer (or a concept akin thereto) with the property owner with the result that in justice his rights against third parties should be the same as the owner's, then I would not interfere.
[480] In Bow Valley, five years after Norsk, McLachlin J., as she then was, stated at paras. 45-51:
[45] The foregoing suggests the need for a rule to distinguish between cases where contractual relational economic loss can be recovered and cases where it cannot be recovered. Such a rule, as I wrote in Canadian National Railway Co. v. Norsk Pacific Steamship Co., [1992] 1 S.C.R. 1021, should be morally and economically defensible and provide a logical basis upon which individuals can predicate their conduct and courts can decide future cases (p. 1147). Although this Court attempted to formulate such a rule in Norsk, a split decision prevented the emergence of a clear rule. Given the commercial importance of the issue, it is important that the rule be settled. It is therefore necessary for this Court to revisit the issue.
[46] The differences between the reasons of La Forest J. and myself in Norsk are of two orders: difference in result and difference in methodology. The difference in result, taken at its narrowest, is a difference in the definition of what constitutes a “joint venture” for the purposes of determining whether recovery for contractual relational economic loss should be allowed. We both agreed that if the plaintiff is in a joint venture with the person whose property is damaged, the plaintiff may claim consequential economic loss related to that property. We parted company because La Forest J. took a stricter view of what constituted a joint venture than I did.
[47] The difference in methodology is not, on close analysis, as great as might be supposed. Broadly put, La Forest J. started from a general exclusionary rule and proceeded to articulate exceptions to that rule where recovery would be permitted. I, by contrast, stressed the two-step test for when recovery would be available, based on the general principles of recovery in tort as set out in Anns v. Merton London Borough Council, [1978] A.C. 728 (H.L.), and Kamloops (City of) v. Nielsen, [1984] 2 S.C.R. 2: (1) whether the relationship between the plaintiff and defendant was sufficiently proximate to give rise to a prima facie duty of care; and (2) whether, if such a prima facie duty existed, it was negated for policy reasons and recovery should be denied.
[48] Despite this difference in approach, La Forest J. and I agreed on several important propositions: (1) relational economic loss is recoverable only in special circumstances where the appropriate conditions are met; (2) these circumstances can be defined by reference to categories, which will make the law generally predictable; (3) the categories are not closed. La Forest J. identified the categories of recovery of relational economic loss defined to date as: (1) cases where the claimant has a possessory or proprietary interest in the damaged property; (2) general average cases; and (3) cases where the relationship between the claimant and property owner constitutes a joint venture.
[49] The case at bar does not fall into any of the above three categories. The plaintiffs here had no possessory or proprietary interest in the rig and the case is not one of general averaging. While related contractually, the Court of Appeal correctly held that the plaintiff and the property owner cannot, on any view of the term, be viewed as joint venturers.
[50] However, that is not the end of the matter. The categories of recoverable contractual relational economic loss in tort are not closed. Where a case does not fall within a recognized category the court may go on to consider whether the situation is one where the right to recover contractual relational economic loss should nevertheless be recognized. This is in accordance with Norsk, per La Forest J., at p. 1134:
Thus I do not say that the right to recovery in all cases of contractual relational economic loss depends exclusively on the terms of the contract. Rather, I note that such is the tenor of the exclusionary rule and that departures from that rule should be justified on defensible policy grounds. [Emphasis in original.]
[51] More particularly, La Forest J. suggested that the general rule against recovery for policy-based reasons might be relaxed where the deterrent effect of potential liability to the property owner is low, or, despite a degree of indeterminate liability, where the claimant’s opportunity to allocate the risk by contract is slight, either because of the type of transaction or an inequality of bargaining power. I agreed with La Forest J. that policy considerations relating to increased costs of processing claims and contractual allocation of the risk are important (p. 1164). I concluded that the test for recovery “should be flexible enough to meet the complexities of commercial reality and to permit the recognition of new situations in which liability ought, in justice, to lie as such situations arise” (p. 1166). It thus appears that new categories of recoverable contractual relational economic loss may be recognized where justified by policy considerations and required by justice. At the same time, courts should not assiduously seek new categories; what is required is a clear rule predicting when recovery is available.
[481] Here, only five of the Individual Houseboat Owners have a contract directly with Waterway. The rest have contracts with Charters, a shell company, and the appointed “sole and exclusive” manager on Waterway’s behalf. None of the Individual Houseboat Owners have a contract with Vinco.
[482] The management contracts between the Individual Houseboat Owners and Charters (as Waterway’s agent) suggest no joint venture or partnership exists between them. Those agreements all state:
NO PARTNERSHIP: Nothing in this Agreement shall be construed so as to, or shall, constitute a partnership or joint venture between the Manager and the Partnership. In fulfilling its obligations and exercising its rights hereunder, the Manager shall be an independent contractor or the Partnership and shall have the independent direction and control of the management and operation of the Charter Houseboat, subject to specific direction of the Partnership.
[483] The defendants argue that whether or not the Individual Houseboat Owners and Waterway were engaged in a joint venture must be determined by the contracts. The contracts are explicit that no joint venture exists. Indeed, it appears that Waterway went out of its way to ensure the contracts spelled out that they were not engaged in a partnership or joint venture with the Individual Houseboat Owners.
[484] However, despite the wording of the management agreements, this case is a situation where the Individual Houseboat Owners’ right to recover relational economic loss should nevertheless be recognized: Bow Valley at para. 50. In my view, the evidence establishes that having regard to the entire relationship, the Individual Houseboat Owners must be regarded as being in a common venture with Waterway and Vinco: Norsk at 1164. Accordingly, justice requires their claim for economic losses be allowed to the same extent that it is allowed for Waterway.
[485] The reality is that Waterway could not operate without the Individual Houseboat Owners, and vice versa. Indeed, in the Agreed Statement of Facts, the parties agreed that “at the time of the 2012 Flood, some or all of the Plaintiffs were involved in the business of offering and providing houseboat vacation packages.” Their relationship is so closely tied together that it would be manifestly unjust to allow Waterway to recover its economic losses to the exclusion of the Individual Houseboat Owners.
[486] Waterway is a seasonal business earning substantially all of its revenues from May to September of each year. At the time of the 2012 Flood, it had 66 houseboats in its fleet that were available for rent.
[487] In addition to revenues from chartering houseboats (the “Charter Revenue”), Waterway earned additional revenues from ancillary services including fuel and propane sales, septic service charges, programs sold with houseboats, food services, a retail shop and general store, water equipment rental, and repairs to third party houseboats (the “Ancillary Revenue”).
[488] Generally speaking, the Charter Revenue is pooled within each fleet of houseboats and allocated proportionately among the Individual Houseboat Owners (the “Allocated Payments”). Costs, such as houseboat repairs, renovation work, and management fees are deducted from the Allocated Payments and the Individual Houseboat Owners are paid the balance at the end of the sailing season, usually in October.
[489] Ms. Alice Letang has been employed with Waterway since 1992 and since 2011 has been its chief financial officer. Prior to that she worked as its financial controller.
[490] Ms. Letang is responsible for all of Waterway’s financial record-keeping and is very familiar with it. She testified about Waterway’s and Vinco’s combined financial position including reservation history, cancellation, and debts owing to investors and trades. She has prepared annual budgets for the past 20 years. She monitors houseboat reservations and uses available information to prepare each year’s budget. She has done an admirable job over the years. Her revenue budget numbers usually come remarkably close to the actual numbers for each year, save for the 2012 sailing season when she was below budget revenues of some $1.4M.
[491] Waterway had insurance coverage for the buildings and some infrastructure lost in the 2012 Flood and received $927,421.83 in insurance proceeds. That money was used to pay Vinco’s operating loans that were incurred during the clean-up from the 2012 Flood and to pay various contractors hired to replace infrastructure so that Waterway could reopen as quickly as it did.
[492] Waterway had received $798,917.37 in prepaid guest bookings for the three weeks it was forced to close. Refunds of those bookings commenced in early July 2012 and totalled $619,013.08. Rebooking proceeds valued at $179,917.37 were kept by Waterway.
[493] Ms. Letang explained how the Allocated Payments work. She prepared payout spreadsheets explaining how payments are made to the Individual Houseboat Owners in accordance with their various management agreements. These spreadsheets start in 2002 and continue onward. Most houseboats in the fleet split the revenue by 55/45, while four boats split the revenue 60/40. This means that Waterway takes either 55% or 60% of the revenues respectively. The Individual Houseboat Owners then pay for insurance, radio, satellite, renovations, park permits, sewer, internet, upgrades and other charges.
[494] The decision to withhold the Allocated Payments for the 2012 sailing season from the Individual Houseboat Owners was made by Mr. Vinje. Ms. Letang was never directed to make even partial payments. Her understanding of Mr. Vinje’s rationale was that there was simply no money available – the business’ lines of credit had been run up and Mr. Vinje had already made a significant personal infusion of capital ($491,000) to help defray the 2012 Flood expenses.
[495] Additionally, if Waterway had any hope of being prepared for the 2013 sailing season, any available financial resources had to be held in reserve pending future reservations and consequent cash flow. Mr. Vinje’s decision was that a deferral of payments was the least of two evils. Ms. Letang’s evidence confirms that by February 2013, Waterway was experiencing severe cash shortages and significant debts that were threatening its continued ability to operate.
[496] After Waterway’s management made the decision to defer the Allocated Payments for the 2012 sailing season, six houseboats left the Waterway fleet, thus impacting revenues available to Waterway in subsequent years.
[497] The parties attempted to estimate the financial impact to Waterway’s business by comparing pre-flood revenues and estimated projected revenues to the actual revenues. It was a difficult, time-consuming and imprecise exercise. The plaintiffs retained Mr. Don Spence to prepare an opinion on the past and future loss of income under two scenarios and based on certain assumptions. The defendants retained Ms. Rosanne Walters to critique Mr. Spence’s methodology and provide alternative calculations based on different assumptions.
[498] Mr. Spence is a chartered professional accountant and business valuator.
[499] He prepared two reports. The first is dated July 28, 2016 (“First Spence Report”) and the second is dated February 13, 2018 (“Second Spence Report”). The Second Spence Report was intended to update his opinion, correct errors in the First Spence Report, and reflect more current financial information including the 2017 sailing season.
[500] Mr. Spence made a series of assumptions upon which he relied to base his opinions. These assumptions included that:
a) Waterway experienced ongoing negative publicity related to the 2012 Flood which resulted in decreased revenues through fiscal 2019;
b) By May 31, 2012, Waterway’s pre-booked houseboat sailings for the 2012 sailing season were 85% of its total revenues for the year;
c) Six houseboats left the Waterway fleet after the 2012 sailing season as a result of management’s inability to pay the Individual Houseboat Owners their Allocated Payments;
d) Absent the 2012 Flood, Waterway’s annual Charter Revenue would have increased by 4% for each of 2014 and 2015. For the years 2016-2020, it would have increased with inflation;
e) The Ancillary Revenue, fuel sales and variable costs would have increased proportionate to Charter Revenue;
f) Waterway continued to experience a loss of Charter Revenue and Ancillary Revenue due to the 2012 Flood through fiscal 2019; and
g) Waterway’s houseboat utilization rate would have been the same in any event of the 2012 Flood.
[501] Mr. Spence was asked to quantify past and future business losses under two scenarios: firstly, assuming that the six houseboats that left Waterway’s fleet after the 2012 Flood would have remained in the fleet indefinitely but for the flood; secondly, assuming that those same six houseboats would have left the fleet in any event of the 2012 Flood before the start of the 2015 sailing season.
[502] His updated calculations of the losses under these two scenarios are:
|
Scenario One |
|
Allocated To: |
|
|
|
Total |
Waterway |
Continuing Houseboat |
|
Past Loss |
$5,172,000 |
$3,529,000 |
$1,643,000 |
|
Future Loss |
|
|
|
|
Continuing Houseboats |
740,000 |
460,000 |
280,000 |
|
Lost Houseboats |
1,410,000 |
1,410,000 |
---- |
|
Loss |
$7,322,000 |
$5,399,000 |
$1,923,000 |
|
Scenario Two |
|
Allocated To: |
|
|
|
Total |
Waterway |
Continuing Houseboat |
|
Past Loss |
$4,772,000 |
$3,129,000 |
$1,643,000 |
|
Future Loss |
|
|
|
|
Continuing Houseboats |
740,000 |
460,000 |
280,000 |
|
Loss |
$5,512,000 |
$3,589,000 |
$1,923,000 |
[503] His approach considered the 2008/2009 economic downturn, which had a negative effect on Waterway’s revenues. He made a series of assumptions regarding when Waterway would have recovered from that downturn had the 2012 Flood not occurred. He assumed Waterway would have recovered to its pre-2008 recession levels by the 2014 sailing season but for the 2012 Flood.
[504] Taking an average of earnings per boat from the 2007, 2008 and 2009 sailing seasons, he estimated that each boat earned an average of $69,900 each year. He took the average of those three years because they showed a steady revenue growth trend continuing from 2004 until the recession hit in 2008. Because he was attempting to project the normal level of Waterway’s business recovery following the 2008 recession, he thought it inappropriate to use the three years immediately preceding the 2008 recession to assess Waterway’s losses.
[505] His opinion is therefore based on “revenues-per-boat”, assuming the average “revenue-per-boat” in 2015 was the same as it was pre-2008. He assumed that but for the 2012 Flood, Waterway would have had 66 houseboats in the fleet through the 2019 sailing season.
[506] Had he used the three years prior to the 2012 Flood as his baseline, he agrees that his findings would be that Waterway had recovered to its pre-flood revenues by 2015. However, in his view, the effect of the 2008 recession on Waterway’s pre-2012 Flood revenues had to be considered in assessing the overall loss.
[507] Once he had the baseline per-boat revenue calculation, he multiplied it by the number of boats in the fleet (66) to get gross revenues of $4.614M. He then added an assumed annual growth rate of 4%.
[508] The point of his report is that Waterway was clawing its way out of the 2008 recession and in the process was impacted by the 2012 Flood. If the 2012 Flood had not happened, Waterway would have clawed its way back to the pre-recession revenues by 2015.
[509] Because of the lack of reliable economic data in the Sicamous area post-2008 recession, he factored mostly macroeconomic indicators into his assessment.
[510] He concluded that by the 2019 sailing season, Waterway’s losses resulting from the 2012 Flood would have ended.
[511] The defendants jointly called Ms. Walters as an expert. She is also an accountant and chartered business valuator with experience in economic loss quantification.
[512] She prepared a response report to Mr. Spence’s report and prepared alternative calculations of Waterway’s estimated business losses.
[513] While Ms. Walters does not dispute that Waterway suffered financial losses from the 2012 Flood, she believes it recovered from the effects of the flood by the end of fiscal 2015 (2014 sailing season).
[514] For a variety of reasons, she disagrees with Mr. Spence’s methodology and approach. For example, she notes that:
a) Mr. Spence did not consider the fact that Waterway’s houseboat fleet was declining in size prior to the 2012 Flood, which would have resulted in lower overall revenues after the flood;
b) Mr. Spence did not consider the fact that revenues for the six non-continuing houseboats were historically significantly lower than the continuing houseboats;
c) Mr. Spence did not take into account Waterway’s erratic revenue levels prior to the 2012 Flood and did not justify his assumption that revenues would have steadily grown in the years after the flood;
d) Mr. Spence’s use of an 85% advanced booking ratio for the 2013 fiscal year was speculative and not justified based on historical data;
e) Mr. Spence’s assumed annual growth rate of 4% between 2013 and 2015 was too aggressive. An annual growth rate of 2% would have been more appropriate;
f) Mr. Spence omitted the consideration of insurance cost savings by not having to insure the non-continuing houseboats that left the fleet after the 2012 Flood;
g) Mr. Spence failed to include customer promotion, customer appreciation and houseboat cleaning costs in his variable cost calculations resulting in his variable costs being too low;
h) Mr. Spence assumed that the six houseboats left because Waterway had no option but to defer the Allocated Payments due to insufficient financial resources. Ms. Walters’ review of Waterway’s and Vinco’s financial statements disclose that, to the contrary, they had the financial wherewithal to pay the Allocated Payments either partly or in full. It would have therefore been possible to appease the Individual Houseboat Owners and perhaps houseboats would not have left the fleet. In other words, Ms. Walters believes that the departure of the six houseboats after the 2012 Flood was due to Waterway’s and/or Vinco’s own making.
[515] In her opinion, the net effect of these shortcomings is that Mr. Spence’s projected losses are grossly exaggerated.
[516] She does not believe Waterway’s pre-2008 recession years are relevant to the projected losses from the 2012 Flood because at that time the Waterway fleet was growing and the economy was booming. The pre-recession economy was different. Economic and industrial factors in the two years post-2008 recession and pre-2012 Flood (namely, 2010 and 2011) would, in her view, more closely reflect what would have happened but for the 2012 Flood.
[517] Her point is that the pre-2008 recession steep growth period is not indicative of what would have happened coming out of the recession. Further, she points out that there was also a post-2012 recession in Alberta, a key source of Waterway’s business and a factor that Mr. Spence failed to consider.
[518] She also criticized Mr. Spence for using Sunshine Houseboats (a houseboat business located in the Kootenays) as a guide. In her view, Sunshine Houseboats is not a comparable business because it is located in a different market with a number of different economic factors and indicators.
[519] Ms. Walters calculated losses related to the 2012 Flood based on four scenarios as follows:
a) Scenario #1 – Revenue streams had returned to “without flood” levels by the end of fiscal 2015. Loss to Waterway: $921,376; loss to Individual Houseboat Owners: $391,221; total loss: $1,312,597.
b) Scenario #2 – Revenue streams respecting the continuing houseboats had returned to “without flood” levels by the end of fiscal 2015 but the non-continuing houseboat revenue loss continued through the end of fiscal 2015. Loss to Waterway: $1,105,215; loss to Individual Houseboat Owners: $391,221; total loss: $1,496,436.
c) Scenario #3 – Revenue streams respecting the continuing houseboats had returned to “without flood” levels by the end of fiscal 2015 but the non-continuing houseboat revenue loss continued through the end of fiscal 2016. Loss to Waterway: $1,291,229; loss to Individual Houseboat Owners: $391,221; total loss: $1,682,450.
d) Scenario #4 – Revenue streams respecting the continuing houseboats had returned to “without flood” levels by the end of fiscal 2015 but the non-continuing houseboat revenue loss continued through the end of fiscal 2017. Loss to Waterway: $1,478,832; loss to Individual Houseboat Owners: $391,221; total loss: $1,870,053.
[520] Projecting loss of revenues from the non-continuing houseboats into the end of fiscal 2020 (assuming it can be attributed to the 2012 Flood), she calculates an additional loss of $576,419 to Waterway.
[521] Because Ms. Walters determined that lost revenues for the continuing houseboats would have ended at the end of fiscal 2015, she did not calculate any future losses from that point on for those houseboats.
[522] She also noted that the decreased revenues that Waterway experienced were in part related to the reduction in the overall size of its fleet prior to the 2012 Flood. She separated out the revenues per houseboat for the continuing houseboats and the non-continuing houseboats and noted that the average revenues for the non-continuing houseboats were significantly lower than the continuing houseboats. The average revenue per continuing houseboat, while dropping in fiscal 2013 (2012 sailing season), rebounded to their pre-flood levels by the end of fiscal 2015.
[523] The nature of Waterway’s business makes it extremely difficult to predict what business would have looked like but for the 2012 Flood. There are simply too many economic factors and other unknowns to say with precision what the financial impact of the 2012 Flood was. An assessment of past and future loss of earnings is therefore required.
[524] I have considered both Mr. Spence’s opinions and Ms. Walter’s critique. On balance, I prefer Ms. Walters’ analysis over Mr. Spence’s. Based on her analysis, I conclude the average revenue per continuing houseboat recovered to the levels they would have been, but for the 2012 Flood, by the end of fiscal 2015.
[525] Taking everything into account, I conclude that Waterway’s revenue losses likely continued through the 2014 sailing season. However, I find that by the 2015 sailing season, Waterway had likely recovered to its “without flood” revenues.
[526] I also conclude that the reason the non-continuing houseboats left the fleet was directly due to Waterway’s management decision to defer payment of the Allocated Payments. I find, however, that Waterway had valid business reasons for doing so and that its losses from those six houseboats leaving the fleet are recoverable. Further, I am prepared to accept that had the six houseboats remained with the fleet, Waterway would have enjoyed revenues from them through the end of fiscal 2017.
[527] Accordingly, I find that Waterway has proven damages for loss of profits caused by the 2012 Flood as follows:
|
Economic Loss for Waterway and Vinco |
|
|
Loss of income from continuing houseboats through fiscal 2015 |
$735,319 |
|
Loss of income from non-continuing houseboats through fiscal 2017 |
$743,513 |
|
Total gross loss of earnings |
$1,478,832 |
|
25% deducted for Waterway’s contributory negligence |
$1,109,124 |
|
20% deducted for Avulsion ‘D’ |
$887,299 |
|
Total net loss of earnings |
$887,299 |
[528] I also accept Ms. Walters’ opinion regarding losses to the Individual Houseboat Owners. They have proven loss of earnings as follows:
|
Economic Loss for Individual Houseboat Owners |
|
|
Total gross loss of earnings (as set out by Ms. Walters) |
$391,221 |
|
20% deducted for Avulsion ‘D’ |
$312,997 |
|
Total net loss of earnings |
$312,997 |
[529] Therefore, Waterway and Vinco are awarded net damages for economic loss of $887,299 and the Individual Houseboat Owners are awarded net damages for economic loss of $312,997.
[530] At the outset of the trial, the parties filed an agreement on special damages (“Damages Agreement’). The Damages Agreement is that Waterway and Vinco incurred special damages totaling $1,771,288.24. Of that, the parties have agreed that the maximum recoverable special damages by the plaintiffs, subject to the plaintiffs proving liability and causation, is 90% or $1,594,159.42.
[531] Based on the Damages Agreement and on my previous findings, the plaintiffs’ claimable losses are restricted to damages caused by Avulsion ‘A’.
[532] It is virtually impossible to say with precision what portion of the creek went where or what damage was caused by Avulsion ‘A’ (as opposed to Avulsion ‘D’). Accordingly, an assessment is also required on this head of damage.
[533] An affidavit sworn by Ms. Letang (Waterway’s CFO) was filed in evidence. Ms. Letang’s affidavit contains a series of detailed spreadsheets she prepared particularizing the losses and expenses that Waterway and Vinco suffered as a result of the 2012 Flood. She sorted the losses into 31 different loss categories (“Loss Categories”). She also helpfully indicated the approximate physical location of each loss category on an aerial photograph (“Loss Category Map”). This became the basis for Waterway’s and Vinco’s claim for special damages. Her evidence provides the ability to approximate what damages were caused by Avulsion ‘A’ and what damages were caused by other sources.
[534] Using a combination of the Loss Category Map and Mr. Jakob’s avulsion map, I am able to assess the locations of the various loss categories and determine whether they were likely caused by Avulsion ‘A’ or ‘D’.
[535] With that approach, I have determined that Waterway and Vinco have proven that Avulsion ‘A’ was responsible for the following Loss Categories in the following amounts:
|
Category No. from Ms. Letang’s Affidavit, Exh. 17 |
Loss Category |
Amount |
Amount Awarded |
|
1. |
Guest Services Temporary Building |
$36,756.12 |
0.00 |
|
2. |
Guest Services Contents |
$25,456.33 |
0.00 |
|
3. |
Orientation Building |
$7,054.30 |
0.00 |
|
4. |
Administration and Shop |
$196,337.38 |
$196,337.38 |
|
5. |
Administration Contents |
$3,594.52 |
$3,594.52 |
|
6. |
BBQ Shack |
$5,633.34 |
0.00 |
|
7. |
Stock |
$51,322.39 |
$51,322.39 |
|
8. |
Tools, Etc. |
$105,992.24 |
$105,992.24 |
|
9. |
Staff Tools |
$3,221.83 |
$3,221.83 |
|
10. |
Septic Pump Outs and Rentals |
$11,396.09 |
$11,396.09 |
|
11. |
Washroom Building |
$34,885.72 |
$34,885.72 |
|
12. |
Fuel Storage |
$48,359.99 |
$48,359.99 |
|
13. |
Electrical Building A |
$26,690.56 |
$26,690.56 |
|
14. |
Electrical Building B |
$6,568.12 |
0.00 |
|
15. |
Boat Lift |
$1,604.00 |
$1,604.00 |
|
16. |
Signage |
$23,310.02 |
$15,541.00 |
|
17. |
Parking Lot Set Up/Landscape |
$139,519.85 |
$139,519.85 |
|
18. |
Upper Parking Lot |
$11,252.81 |
0.00 |
|
19. |
Docks |
$13,252.77 |
$6,626.00 |
|
20. |
Houseboats |
$1,530.65 |
$765.00 |
|
21. |
Breakwater |
$11,068.34 |
0.00 |
|
22. |
Boat Ramp |
$57,158.67 |
$57,158.67 |
|
23. |
Sewer |
$67,678.67 |
$67,678.67 |
|
24. |
Relocation |
$222,117.77 |
$222,117.77 |
|
25. |
Water To Staff Accommodations |
$22,140.27 |
0.00 |
|
26. |
2004 U Built Trailer |
$3,275.74 |
$3,275.74 |
|
27. |
Billboard |
$1,160.00 |
$1,160.00 |
|
28. |
Land |
$260,662.23 |
$260,662.23 |
|
29. |
Guests |
$341.68 |
$341.68 |
|
30. |
Dredging |
$40,936.38 |
$32,749.00 |
|
31. |
Other |
$331,009.48 |
$264,800.00 |
|
|
Total |
$1,771,288.26 |
$1,555,800.33 |
[536] I conclude that Waterway and Vinco have not proven that any of Loss Categories 1, 2, 3, 6, 14, 18, 21 and 25 were caused by Avulsion ‘A’. Those were either caused by Avulsion ‘D’ or, in the case of the “Breakwater” (Loss Category 21), would have occurred in any event of the Works. Respecting Loss Categories 16, 19 and 20, I have assigned a percentage that I consider represents the damage caused by Avulsion ‘A’ (respectively, 66.67%, 50%, and 50%).
[537] Respecting Loss Categories 30 and 31, an assessment of how much ought to be assigned to Avulsion ‘A’ needs to be made and I have assessed that percentage at 80%. To be clear, “Other” (Loss Category 31) refers to inventory, professional fees, extra wages paid to employees and the book value of miscellaneous capital assets that were damaged or lost as a result of the 2012 Flood.
[538] Waterway and Vinco are therefore awarded special damages of $1,555,800.33 less 25% for contributory negligence, for a total of $1,166,850.
[539] The Negligence Act, R.S.B.C. 1996, c. 333, sets out how damages are to be apportioned in cases where two or more persons are at fault. The relevant sections are:
Apportionment of liability for damages
1(1) If by the fault of 2 or more persons damage or loss is caused to one or more of them, the liability to make good the damage or loss is in proportion to the degree to which each person was at fault.
(2) Despite subsection (1), if, having regard to all the circumstances of the case, it is not possible to establish different degrees of fault, the liability must be apportioned equally.
(3) Nothing in this section operates to make a person liable for damage or loss to which the person's fault has not contributed.
Awarding of damages
2 The awarding of damage or loss in every action to which section 1 applies is governed by the following rules:
(a) the damage or loss, if any, sustained by each person must be ascertained and expressed in dollars;
(b) the degree to which each person was at fault must be ascertained and expressed as a percentage of the total fault;
(c) as between each person who has sustained damage or loss and each other person who is liable to make good the damage or loss, the person sustaining the damage or loss is entitled to recover from that other person the percentage of the damage or loss sustained that corresponds to the degree of fault of that other person;
(d) as between 2 persons each of whom has sustained damage or loss and is entitled to recover a percentage of it from the other, the amounts to which they are respectively entitled must be set off one against the other, and if either person is entitled to a greater amount than the other, the person is entitled to judgment against that other for the excess.
. . .
Liability and right of contribution
4(1) If damage or loss has been caused by the fault of 2 or more persons, the court must determine the degree to which each person was at fault.
(2) Except as provided in section 5 if 2 or more persons are found at fault
(a) they are jointly and severally liable to the person suffering the damage or loss, and
(b) as between themselves, in the absence of a contract express or implied, they are liable to contribute to and indemnify each other in the degree to which they are respectively found to have been at fault.
[540] I have found that the Province is at fault for breaching its duty of care to the plaintiffs. I have found the District and the McLaughlins are each at fault under s. 21 of the Water Act. I have found Waterway and Vinco are 25% at fault for locating their operations on the Vinco Property without taking into account the potential for a debris flood and without any flood mitigation measures being considered.
[541] I conclude that the Negligence Act is not restricted to negligence claims and applies to claims under s. 21 of the Water Act. In the circumstances of this case, I cannot conclude that one defendant was more blameworthy than the other, nor can I determine whose actions were responsible for what damages. Accordingly, I conclude that each of the defendants should bear an equal share of the damages. This means that the Province, the District and the McLaughlins are each severally liable to the plaintiffs to pay 25% of the damages I have awarded.
[542] Given my findings, the Third Party Notices filed by the defendants against each other are moot and are dismissed.
[543] To summarize:
a) Waterway and Vinco are awarded damages for economic loss in the amount of $887,299 and special damages in the amount of $1,166,850.
b) The Individual Houseboat Owners are awarded damages for lost profits in the amount of $312,997.
[544] These awards are net of the reduction I have made of 25% for contributory negligence on the part of Waterway and Vinco.
[545] Because of my finding of contributory negligence on the part of Vinco and Waterway, their damage claim is several pursuant to ss. 1 and 2(c) of the Negligence Act. Each defendant pays $684,716 to Vinco and Waterway.
[546] The Individual Houseboat Owners are awarded damages in the amount of $312,997 jointly and severally against the defendants.
[547] I wish to thank counsel for the hard work and civility both before and during the trial, without which this complex and technically challenging case would have taken much longer. I also wish to thank them for their detailed and thoughtful submissions.
[548] The parties are at liberty to speak to costs.
“G.P. Weatherill J.”