Decision Date: September 25, 2007

Panel: Lorraine Shore, Bruce Devitt, Robert Wickett

Keywords: Forest Practices Code of British Columbia Act – s. 138(4); costs; special circumstances; evidence; admissions; supplementary reasons

On August 2, 2006, the Commission rendered its decision in respect of two appeals brought by Kalesnikoff Lumber Ltd. (“Kalesnikoff”). Both appeals were allowed and the Commission rescinded the two determinations made by the Deputy District Manager (the “District Manager”) relating to slides that occurred on a logging road constructed by Kalesnikoff in the Kootenay Lake Forest District.

Although Kalesnikoff had applied for costs at the end of the oral hearing of the appeals, the Commission’s Reasons for Decision did not address the issue of costs. When this omission was identified, the parties were given an opportunity to make further written submissions on the issue. The Commission’s decision regarding costs was set out in Supplementary Reasons.

Kalesnikoff submitted that the Government ought to be penalized in costs for making “very careless and serious allegations” against Kalesnikoff and the professionals involved in the project, which affected their reputations in the community. Kalesnikoff argued that the malfeasance of the Government in this case constituted the type of “special circumstance” that warrants an order of actual legal costs under the Commission’s Procedure Manual.

The Commission noted that a number of Kalesnikoff’s allegations of malfeasance related to matters that occurred prior to the District Manager’s determinations, and found that it had no jurisdiction to award costs for pre-appeal behaviour.

Kalesnikoff also argued that the Government had changed its theory of the case part way through, thus causing undue delay in the proceedings and prejudice to Kalesnikoff. However, the Commission found that, although neither party put its position squarely before the Commission at the outset of the appeals, the Government’s approach was consistent with the approach adopted by the decision-makers below, and the position it articulated in its Statement of Points did not change at the hearing.

Kalesnikoff alleged that the Government had no reasonable evidence in support of its theories and that its defence of the determinations was, therefore, unreasonable. The Commission found that that was not a case where “no evidence” was tendered – rather, it was a case where the Commission had found that the evidence tendered was ultimately not credible and/or was erroneous. There was no indication that the Government had knowingly based its case on unreliable evidence, or unreasonably defended the determinations.

The Commission confirmed that admissions ought to be made in proceedings where a party has no evidence to refute evidence tendered by the opposing party. However, while the Government failed to make admissions until later in the proceedings, and after unsuccessfully attempting to impeach Kalesnikoff’s evidence through cross-examination, those actions did not cause any prejudice to Kalesnikoff. The Commission also rejected Kalesnikoff’s claim that the Government improperly impugned the professional reputation of Kalesnikoff’s Qualified Registered Professionals during the appeal process.

Therefore, the Commission found that there was no evidence of malfeasance, such that Kalesnikoff should be awarded actual costs. The Commission denied the application for costs.