Decision Date: October 18, 2013

Panel: Loreen Williams

Keywords: Water Act – ss. 20, 22.01; Water Regulation – s. 3(5); licence; substitution; apportionment; land subdivision; beneficial use; notice

Katrina Sigloch appealed a decision of the Assistant Regional Water Manager (the “Water Manager”), Ministry of Forests, Lands and Natural Resource Operations (the “Ministry”), to issue a new water licence to Patricia and Richard Prescott, in substitution for a pre-existing water licence. The new licence authorizes the Prescotts to divert a total of 1,500 gallons of water per day from McLeod Lake: 500 gallons per day for domestic purposes; and, 1,000 gallons per day for industrial (stock watering) purposes. The new licence is appurtenant to land (“Lot B”) owned by the Prescotts near Kamloops, BC.

Ms. Sigloch are several members of her family are joint owners of land (“Lot A”) adjacent to the Prescotts’ land. There is no residence on Lot A, but the Siglochs use it during the Summer, and cultivate a garden and fruit trees there.

The original licence was issued in 1979, and it authorized the diversion of 1,500 gallons of water per day for domestic use. The original licence was appurtenant to a parcel of land (the “Original Property”) that was, in 2001, subdivided into Lots A, B, and C. All of the subdivided lots border on McLeod Lake. After the subdivision, the ownership of Lots A and C was retained by the company that had owned the Original Property, but Lot B was sold to Ms. McGregor.

In 2001, Ms. McGregor filed an application for apportionment, whereby all of the water rights associated with the original licence would become appurtenant to Lot B. The company that, at the time, owned Lots A and C consented to the apportionment. However, the application was not addressed by the Ministry until 2009.

Meanwhile, in 2003, Ms. Sigloch and members of her family purchased Lot A.

In 2009, Ms. McGregor submitted a statutory declaration in support of her previous application for apportionment. In the declaration, she stated that the historical and beneficial use of water under the original licence occurred solely on the part of the Original Property that became Lot B.

In 2010, the Prescotts purchased Lot B from Ms. McGregor.

In February 2010, staff from the Ministry conducted a field inspection of Lots A and B, as part of the review of the application for apportionment. They observed no visible water use on Lot A. However, on Lot B, they observed water lines to a house and a garden, as well as evidence of livestock.

A few days later, the Ministry sent a letter by regular mail to the address listed in the land titles registry for the owners of Lot A (the Siglochs), advising that the original water licence needed to be amended or cancelled due to the subdivision of the Original Property. To determine whether the owners of Lot A may be entitled to part of the water rights under the original licence, the Ministry requested that they either complete a part of a form that was attached to the letter, and pay the required fee, or, alternatively, indicate on the form that they were abandoning their interest in the original licence. The Ministry received no response.

In November 2011, the Water Manager issued the new water licence to the Prescotts, in substitution for the original licence. The Water Manager did send a notice of his decision to the Siglochs.

In December 2012, Ms. Sigloch became aware of the Water Manager’s decision. Ms. Sigloch appealed to the Board on the basis that part of the water allocated under the new licence should have been allocated to Lot A, because Lot A was once part of the Original Property, to which the original licence was appurtenant. Also, she submitted that she never received notice of the application for apportionment, or that the Ministry was considering apportioning the original licence. Ms. Sigloch requested that the Board reverse the decision to issue the new licence. Alternatively, she asked the Board to order that two new licences should be issued in substitution for the original licence: a licence appurtenant to Lot A allowing the diversion of 500 gallons per day; and, a licence appurtenant to Lot B allowing the diversion of 1,000 gallons per day.

The Board found that section 3(5) of the Water Regulation does not require that notice be given to parties whose rights or land may be affected by the apportionment of an existing water licence. Rather, the notice provisions in section 3 of the Water Regulation deal with applications for new water licences. The Board also found that, although the apportionment decision in this case resulted in the issuance of a “new” licence, this new licence was issued in substitution for the Original Licence as a consequence of the apportionment.

However, the Board noted that the Ministry’s Policy Manual recommends that, when considering apportionment applications, notice should be provided to persons who have a valid interest in the lands within the appurtenancy of the original licence. Further, the Board found that the Water Manager was obliged, under the general principles of procedural fairness, to notify the Siglochs of the proposed apportionment, because their rights as land owners were potentially affected by the apportionment of the original licence.

In any event, the Board found that the Ministry had attempted to notify the Siglochs of the proposed apportionment, by sending a letter to the mailing address listed in the land title search for the owners of Lot A. Although the Siglochs claimed that they did not receive the Ministry’s letter, the Board found that providing notification by regular mail was reasonable in the circumstances, particularly given that there was no indication that the rights under the original licence had ever been exercised on Lot A or by the Siglochs. Thus, there was no evidence that the Siglochs were affected by the apportionment. Moreover, the Board found that the appeal proceedings provided the Siglochs with a full hearing on the matter, and therefore, the appeal process cured any defects in the Water Manager’s notification procedure.

Next, the Board considered whether the original licence should have been fully reapportioned to Lot B, in the circumstances. The Board found that, based on the evidence of beneficial use, both historically and currently, it was appropriate to allocate all of the water rights under the original licence to Lot B. The Board also found that decisions regarding apportionment of existing water rights cannot be based on vague future plans for potential water use. In this case, the Siglochs had no tangible plans for potential water use, such as building a dwelling or raising livestock on Lot A, and the evidence was that they obtain sufficient water for their garden and fruit trees by other means, such as by drawing water by hand from the lake and transporting water from their home by vehicle.

Accordingly, the appeal was dismissed.