The Court dismissed an application for judicial review of a decision of the British Columbia Utilities Commission, denying them costs for their participation in regulatory proceedings involving B.C. Hydro and Power Authority. The Commission’s decision to deny costs, finding that the Appellants lacked a substantial interest in the proceedings and failed to show that they were impacted by the outcome of the proceedings, was not patently unreasonable.

Administrative law – Decisions of administrative tribunals – Utilities Commission – Judicial review – Costs – Procedural requirements and fairness – Natural justice – Standard of review – Patent unreasonableness

Sierra Club of Canada (British Columbia) v. British Columbia (Utilities Commission), [2008] B.C.J. No. 402, British Columbia Court of Appeal, March 7, 2008, R.T.A. Low, K.J. Smith and P.D. Lowry JJ.A.

The Respondent, B.C. Utilities Commission, is a statutory tribunal that regulates public utilities under the Utilities Commission Act, R.S.B.C. 1996, c. 473. The Appellants were non-profit organizations who had participated in three regulatory proceedings before the Commission involving the B.C. Hydro and Power Authority. The Appellants appealed orders made by the Commission which substantially denied them costs in two of those proceedings. The question before the Court was whether the Commission’s decisions were patently unreasonable and whether the Commission violated the principles of natural justice.

Section 118 of the Act authorizes the Commission to order costs payable by one party in a proceeding to another. The Commission has adopted guidelines for awarding such costs. Costs are regularly ordered to be paid by the utility involved in a proceeding to other participants where the Commission considers a participant has addressed material issues and made a worthwhile contribution.

In this case, the Commission gave reasons for substantially denying the costs sought by the Appellants in the two proceedings at issue. With respect to the first proceeding, the Commission Panel determined that the issues raised by one of the Appellants did not represent substantial issues in the proceeding. With respect to the second proceeding, the Commission Panel did not consider the Appellants to represent a substantial interest in the proceeding. Its objective was far removed from the key issues under consideration in the proceeding.

The Court applied the standard of patent unreasonableness to its review. The Act includes both a privative clause and statutory right of appeal, confining appeals to the Court to questions of law. A decision based solely on findings of fact could not be challenged unless it could be said to be patently unreasonable such that it amounts to an error of law. The Court also noted the Commission’s particular expertise in the conduct of its proceedings, which extends to the awarding of costs. Moreover, section 118 of the Act affords the Commission a discretion with respect to awarding costs, and it is well recognized that the Court will only interfere with the exercise of a discretion if it was based on an error in principle or was clearly wrong.

The Court held that the Appellants fell far short of establishing the Commission’s decisions to refuse costs sought in the two proceedings were patently unreasonable exercises of its discretion. This was principally because the evidence adduced in the proceedings was not before the Court.

The Court also dismissed the Appellants’ argument on procedural fairness. They contended that the Commission had provided them with a favourable review of their budget at the outset of the proceedings, and could not then say at the conclusion of the proceedings that those favourable budget reviews were not binding on them. The Court noted that the budget reviews were undertaken by the Commission staff, not by the members of the Panel who presided over the proceedings. A review of a budget submitted by a participant serves only a limited purpose. It may alert the participant to difficulties foreseen at the outset, but it does not provide a participant with anything that may later be said to be in any way binding on the Commission after the issues have been fleshed out, the evidence adduced, and the submissions made. There is nothing unfair about that.

In the result, the appeal was dismissed.

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