The application by Western Forest Products (“WFP”) and the Association of British Columbia Landowners for judicial review of a series of bylaws adopted by the Capital Regional District (“CRD”) was allowed where the court found that the voting on the bylaws did not take place in accordance with the Local Government Act, R.S.B.C. 1996, c. 323 (the “Act”) and, consequently, the bylaws were illegal

Administrative law – Natural resources – Timber licences – Decisions of administrative tribunals – Ministerial – Regional Districts – Municipalities – Planning and zoning – Change of by-laws – Validity – Voting procedures – Cost sharing – Definition – Judicial review – Compliance with legislation – Standard of review – Correctness

Western Forest Products Inc. v. Capital (Regional District), [2008] B.C.J. No. 2517, British Columbia Supreme Court, December 23, 2008, R.W. Metzger J.

On January 31, 2007, and without prior notice to the CRD, the Minister of Forests and Range approved the removal of approximately 28,000 hectares of private land from three coastal tree farm licenses (“TFLs”) in the area known as the Juan de Fuca Electoral Area (the “Electoral Area”) located on the south coast of Vancouver Island. In response, the CRD passed a number of bylaws to downzone large areas of the land in the Electoral Area. These bylaws consisted specifically of three amendments to the official community plans that govern land use planning for the areas in question. WFP owned approximately 6,300 acres of land under 68 titles in the CRD, most of which was located in the Electoral Area and was among the lands removed from the TFLs by the Minister. There was no dispute that the purpose of the bylaws was to block the development of certain lands that were removed from the TFLs and held by WFP until the CRD had sufficient time to take appropriate land use planning. WFP sought an order setting aside the bylaws for illegality, pursuant to section 262 of the Act.

The impugned bylaws were given first and second reading on November 17, 2007. The minutes of that meeting record that the only Directors entitled to vote on the bylaws were the Director for the Juan de Fuca Electoral District and the Directors representing the municipalities of the District of Central Saanich and the District of Metchosin.

The majority of the arguments respecting the voting requirements under the Act were connected with a separate issue relating to the validity of two agreements to “share in some but not all of the costs of services”, purportedly created pursuant to section 804.1 of the Act; one between the CRD and Central Saanich, and the other between the CRD and Metchosin. WFP submitted that these two agreements were unlawful. The “cost sharing agreements” created under the Act determined how the Board of Directors which governed the CRD (the “Board”) determined which Directors were “eligible” to vote on the impugned bylaws. As a result of the CRD’s interpretation of the voting requirements under section 791, only the Juan de Fuca Electoral Area Director and the Directors from Central Saanich and Metchosin voted on the impugned bylaws at every stage. The court noted that if the cost sharing agreement were found to be invalid, then the CRD Board did not follow the correct voting procedure pursuant to the Act and, therefore, the impugned bylaws were necessarily illegal and should be set aside.

The court held that the standard of review of the CRD’s actions with respect to the issues in this case was correctness. The correct interpretation of the provisions of the Act at issue involved questions of law for which the CRD was entitled to no deference.

The court reviewed the “cost sharing agreements”, and noted that the meaning of “cost sharing”, read in its entire context and in its grammatical and ordinary sense harmoniously with the scheme of the Act led the court to conclude that these agreements should be connected to the actual, ongoing costs of services incurred by all participants. At a minimum, the agreements must have terms relating to cost apportionment, evaluation of services shared, service area and cost recovery. After reviewing the agreement, the court concluded that the “cost sharing agreements” did not meet the basic requirements under the Act and, accordingly they were illegal.

Having found that the cost sharing agreements were not valid, the court held that the CRD incorrectly determined which Directors were eligible to vote on the impugned bylaws. As the CRD incorrectly interpreted which provisions under the Act governed the vote and did not, as a result, vote on the impugned bylaws in accordance with the Act, the bylaws were found illegal and quashed.

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