Development Cost Charges may apply if the developer receives a direct or indirect benefit from City drainage works

A developer was denied an exemption to the City of Coquitlam’s development cost charges for drainage works because the developer was found to benefit directly and/or indirectly from the drainage works, and it followed that this imposed new capital costs burdens on the City.

Administrative law – Decisions reviewed – Municipal boards – Judicial review – Appeals – Standard of review – Reasonableness – Municipalities – Building permits

Fraser Mills Properties Ltd. v. Coquitlam (City), [2018] B.C.J. No. 3027, 2018 BCCA 328, British Columbia Court of Appeal, August 23, 2018, H. Groberman, L. Fenlon and B. Fisher JJ.A.

Fraser Mills applied to the City of Coquitlam (the “City”) for building permits for the initial stage of a multi-use development. The City required Fraser Mills to pay development cost charges (“DCCs”) for a number of services including drainage. Fraser Mills paid the DCCs for drainage “under protest”, asserting it was entitled to an exemption under s. 561(3) of the Local Government Act, RSBC 2013 c.1 (LGA) because the development would not benefit from the drainage works and the development would not impose new capital costs burdens on the City.

The City considered that the development imposed a new capital cost burden for drainage given the overall increased demand and the fact that the lands are located at the bottom of a hill that is historically flooded in the wet season. Fraser Mills was unsuccessful in their petition for judicial review, and appealed the matter to the B.C. Court of Appeal.

A key issue on appeal was the standard of review of the City’s decision. The Court held that the decision under review involved a municipal official (a building inspector) applying the provisions of a statute closely related to his administrative functions, and in the absence of authority to the contrary, this decision was reviewable on a standard of reasonableness.

Another issue was the exclusion of expert evidence tendered by Fraser Mills by the chambers judge, when the judge had accepted affidavit evidence from the City’s engineer at the judicial review hearing. The Court agreed that “ideally” the key information from the City’s engineer should have been provided by the City in reasons rejecting Fraser Mills’ request for a DCCs exemption, and that it was “less than satisfactory” for this information to only be made available at the time of a judicial review application. Nonetheless, the Court noted that the chambers judge had treated the affidavit evidence narrowly.

The final issue before the Court was whether the chambers judge erred in concluding that the City’s refusal to grant the exemption for the drainage DCCs was reasonable. The Court noted that the applicant has the onus of establishing entitlement to an exemption. The Court agreed with the chambers judge that the City’s decision was reasonable: where a development receives some benefit from the drainage works (directly or indirectly), it follows that it will impose new capital cost burdens on the City. The City’s decision was therefore upheld.

This case was digested by JoAnne G. Barnum, and first published in the LexisNexis® Harper Grey Administrative Law Netletter and the Harper Grey Administrative Law Newsletter.  If you would like to discuss this case further, please contact JoAnne G. Barnum at jbarnum@harpergrey.com.

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