The Petitioner company unsuccessfully brought a petition for judicial review in respect of the Respondents’ position of penalties regarding the Petitioner’s timber harvesting

Administrative law – Decisions of administrative tribunals – Ministerial orders – Penalties – Natural resources – Forestry – Timber licences – Hearings – Right to hearing – Judicial review – Compliance with legislation – Powers under legislation – Natural justice

656632 British Columbia Ltd. v. British Columbia (Minister of Forests and Range), [2010] B.C.J. No. 1835, 2010 BCSC 1311, British Columbia Supreme Court, September 16, 2010, R.D. Wilson J.

The Petitioner company made applications to the Ministry of Forests for licences to cut timber in the province. The Petitioner made applications in December 2005 and March 2006. The Petitioner was granted licences and the letters outlined restrictions on the timber it was entitled to harvest. Specifically, the letters stated that the licence only authorized the Petitioner to harvest timber up to a maximum of 2,000 cubic metres.

The Petitioner harvested more than 2,000 cubic metres on each of the licences issued. In May 2008, the Petitioner was sent a letter advising that there would be penalty billings applied to each of the licences due to the fact that the maximum harvestable volumes were exceeded. The letter was sent to the Petitioner by the Respondent, Mr. Dave Francis (District Manager of the Mackenzie Forest District). The Petitioner involved its solicitors and, eventually, by letter in December 2009, the solicitors wrote to Mr. Francis asking that he immediately rescind his decision regarding the penalty until the Petitioner had been given an opportunity to be heard. Mr. Francis responded to the December 2009 letter advising that the legislation did not provide for any discretion with respect to penalty and therefore there was not an opportunity for the Petitioner to be heard.

In March 2010, the Petitioner filed a petition seeking to quash the decision made by Mr. Francis and seeking an order that he be given an opportunity to be heard with respect to the allegations of over-cutting on his licences. The Court had to address two issues. The first was whether the Forest and Range Practices Act imposes a statutory duty on the Minister to give the Petitioner an opportunity to be heard as a pre-condition to the recovery of a penalty as prescribed in the Forest Act. If the answer to the first question was no, then the second issue was whether the Minister had a common law duty to give the Petitioner an opportunity to be heard as a pre-condition to the recovery of a penalty.

In respect of the first issue, the Court referred to the wording of s. 71, which requires the Minister to give a person an opportunity to be heard when determining whether the person has “contravened” a provision of the relevant Acts. The Court found this provision related to situations where a person is alleged to have contravened a provision of an Act, which was different than where, as in this case, the Petitioner was alleged to have breached a term of each licence (similar to a breach of contract or agreement with the District Manager).

The Court found that breaching a term of a licence/agreement is not necessarily a contravention of a provision of an Act. The legislature, in the Forest Act, prescribes a formula for the calculation of liquidated damages for breaching the volume limitation term in the licences. The Minister’s authority in the scaling of the timber is limited to setting the standards and monitoring the clients. The Minister has no power, or duty, to perform the task of scaling; that task is a duty imposed upon the licensee. The Court concluded that, since the Minister has no statutory power or statutory power of decision, there can be no “decision” or “power” to be reviewed in a Judicial Review Procedure Act proceeding. Therefore, the Court concluded that s. 71(1) of the Forest and Range Practices Act did not impose a statutory duty on the Minister to give the Petitioner an opportunity to be heard as a pre-condition to the recovery of a penalty prescribed in the Forest Act.

The Court then considered the arguments in respect of a common law duty. The Court noted that the authorities relied upon by the Petitioner pre-supposed a hearing and a determination of contested issues. The Court noted that the Petitioner was seeking, in effect, to lead evidence in order to advance the defences of “due diligence”, “mistake of fact” and “officially induced error”.

The Court rejected the Petitioner’s arguments because the District Manager and the Minister did not have any power or right to decide scale volume or penalty under the Forest Act. Therefore, a hearing would serve no useful purpose. In addition, the Respondents argued that the relevant penalties prescribed in the Forest Act are not “strict liability” penalties but are “absolute liability” penalties. The Court accepted this submission and, therefore, the defences of due diligence and mistake of fact were not available to the Petitioner in any event.

In the result, the Petition was dismissed.

This case was digested by Scott J. Marcinkow of Harper Grey LLP. If you would like to discuss this case further, please feel free to contact him directly at smarcinkow@harpergrey.com or review his biography at http://www.harpergrey.com.

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