This case concerned the tort of misfeasance in public office over an unlawful denial of project permits due to interference from senior government officials. The action was successful at trial and is the first of its kind to result in damages in British Columbia.
Overview
This case considered the tort of misfeasance in public office in the context of the denial of project permits due to interference from senior government officials. From 2003 to 2009, Greengen Holdings Ltd (“Greengen”) tried to develop a hydro-electric project on and around Fries Creek, near the town of Squamish, BC. To proceed with the project, Greengen required a land tenure under section 11 of the Land Act, RSBC 1996, c 245 and a water license pursuant to section 7 of the Water Act, RSBC, 1996, c 483. After a lengthy review process, both applications were denied.
Photo credit: Gordon Lyall
Greengen sued BC using the tort of misfeasance in public office, alleging the senior government officials misused their public power by acting with knowledge that they had no power to make a decision based on the reasons they provided, and that their decision was likely to injure Greengen.
Photo credit: Doane Gregory
Analysis
The judgment details the chronology of events leading up to the rejections of the tenure and license. Initially, senior government officials indicated to Greengen that its applications would be approved, but they later refused to issue approvals because of opposition from Squamish Nation, which asserted that the site is culturally and spiritually significant. In their decision letters, the public officials referenced adverse effects on Squamish Nation’s Aboriginal rights and interests. However, Squamish Nation did not detail their concerns, despite repeated requests for information. The court found the senior officials’ decisions were made unreasonably and in bad faith because they took Squamish Nation’s assertions at face value. The court held that this amounted to misfeasance because the officials’ conduct was knowingly or recklessly inconsistent with the law on the duty to consult and were based on unsubstantiated assertions.
Damages for loss of opportunity
The court found it was highly likely that the project would have been completed and profitable had Greengen received the tenure and license. However, the court accounted for contingencies, such as “significant risks” that could have delayed the project and likely resulted in Greengen not realizing its projected financial results. Ultimately, the court held the senior officials’ conduct resulted in Greengen losing an 18% chance to achieve a wholly successful project. The court awarded $10.125 million in damages for loss of opportunity stemming from the misfeasance, which represented 18% of the pre-contingency award of $56.25 million.
Key takeaways
This is an unusual decision, which raises important questions about how the Crown must undertake consultation and apply the information it receives from First Nations. In context of a project or permit review, Greengen suggests that First Nations should provide timely and detailed information to the Crown so decision-makers can appropriately account for the alleged impacts on their Aboriginal rights and interests. If a project decision is made based on reasons that are not supported by substantive information, the court may find the decision to be made arbitrarily or in bad faith. This decision might serve as a lesson to Crown governments regarding the value of formalizing the decision-making authority of Indigenous governing bodies, for example, under a shared decision-making agreement made under section 7 of the Declaration on the Rights of Indigenous Peoples Act, SBC 2019, c 44.
This case summary provides our general comments on the case discussed and should not be relied on as legal advice. If you have any questions about this case or any similar issue, please contact any of our lawyers.