Her Majesty the Queen in Right of the Province of Date:, 2018 MBCA 2

Citation: Her Majesty the Queen in Right of the Province of Date: 20180111 Manitoba v Kochanowski et al, 2018 MBCA 2 Docket: AI17-30-08752 IN THE COURT OF APPEAL OF MANITOBA BETWEEN : HER MAJESTY THE QUEEN IN RIGHT ) D. G. Guénette and OF THE PROVINCE OF MANITOBA ) T. B. Dobson ) for the Applicant Applicant ) ) G. Kochanowski and ) C. Kochanowski - and - ) on their own behalf ) ) Chambers motion heard: GARY KOCHANOWSKI and cindy ) December 14, 2017 KOCHANOWSKI ) ) Decision pronounced: Respondents ) January 11, 2018 MARC M. MONNIN JA [ 1 ] The applicant applies for leave to appeal a decision of the Disaster Assistance Appeal Board (the Board) pursuant to

section 12.4(2) of The Water Resources Administration Act , CCSM c W70 (the Act ). That

section provides for an appeal to this Court from a specific type of decision of the Board, but only on a question of law and with leave granted by a judge of this Court. [ 2 ] As this is the first time such a leave application has been heard by this Court under that statute, I will provide more background than I normally would on an application for leave. Background [ 3 ] This application arises from a claim made by the respondents, property owners near the Shellmouth Dam (the dam) in Western Manitoba.

The claim is brought under a program known as the Shellmouth Dam Compensation Program (the Program), established under the Act and regulations made under it. As explained by the applicant in its thorough material supporting the application, the Program’s purpose is to offer one possible avenue for landowners to obtain a specified category of flood-related compensation as opposed to commencing a lawsuit.

Shellmouth Dam [ 4 ] The dam is a flood-related structure built with the intent to alleviate the consequences of the disastrous flood of 1950, the construction of which created a body of water now known as Lake of the Prairies. In essence, it is a reservoir controlled by the structure. While initially constructed to control flooding conditions, the reservoir now serves as a source for irrigation and water for downstream communities, as well as providing a recreational venue.

The operation of the dam is therefore subject to a number of interests and is supervised by the Province of Manitoba in consultation with an advisory committee on which representatives of the various interests participate. The Program [ 5 ] The Program, established under the Act , compensates landowners affected by “artificial flooding” which is defined in

section 12.1(1) of the Act . For ease of reference, I have attached the relevant sections of the Act , the Manitoba, Shellmouth Dam Regulation , Man Reg 13/2011, the Manitoba, Shellmouth Dam Compensation Regulation , Man Reg 14/2011 (the Compensation Regulation), and The Emergency Measures Act , CCSM c E80, as an appendix hereto.

[ 6 ] Once a person makes a claim under the Act , the Emergency Measures Organization (EMO) is in charge of the investigation and initial decision of the claim pursuant to

section 12.2(2). For the purpose of the Program, artificial flooding occurs where the operation of the dam causes the Assiniboine River to exceed its “unregulated level”, which is defined in the Act as the “scientifically demonstrable level that would be expected in [the Assiniboine River] at a given time . . . in the absence of the designated water control work” (at

section 1). The Claim [ 7 ] The respondents claim that their property was affected by the operation of the dam. They claimed to have suffered a loss due to flooding in 2011 and 2012 and submitted a claim for compensation under the Program for those two years. They were awarded compensation for the 2011 flooding, but were denied coverage for anything in 2012.

The letter from the EMO gives no explanation for the denial for the 2012 year, although the evidence put forward before me, and also the Board, was that EMO retained the services of an adjusting firm which concluded that the canola crop, seeded by the respondents in 2012, was flooded by water levels which would have occurred naturally irrespective of the dam’s operation.

Therefore, in EMO’s estimation, there was no damage caused by “artificial flooding” as defined by the Act and regulations. [ 8 ] The respondents appealed to the Board. [ 9 ] As part of its leave application material, the applicant provided copies of what was filed by it to the Board on the appeal, as well as what it provided to the Board at the hearing. This includes the “2012 Report on Artificial Flooding due to Operation of the Shellmouth Dam” prepared by Manitoba Infrastructure and Transportation pursuant to

section 12.7(1) of the Act (the 2012 Report). This

section requires the Minister, if he/she determines that damage has occurred due to artificial flooding, to cause a report to be made setting out the extent and duration of the artificial flooding.

The applicant says that this report goes only to the issue of whether damage had occurred due to the dam’s operation in the overall sense, but does not identify the damage or the specific locations of where it occurred. [ 10 ] In its material before the Board, the applicant filed hydrographs depicting what it submitted was the extent of the water levels of both regulated and unregulated flows for the period of May 15 to August 7, 2012.

By these hydrographs, it sought to depict the level of artificial flooding on the property owned by the respondents during that time period and to extrapolate for the Board the lengths of time that the property was subject to artificial flooding. The extent of flooding was based upon water levels on the property and the heights of the property which data had been obtained using radar from a 2008 study (LiDAR). As well, the applicant presented evidence to the Board that canola seed would die under water after three days.

It submitted that the hydrographs provided evidence that natural flooding occurred on the respondents’ farm for a period longer than three days before any period of artificial flooding occurred, meaning that there was no damage caused to the respondents’ property by artificial flooding due to the operation of the dam. [ 11 ] In an exchange with the Board as part of the applicant’s opening statement, the Board Chairperson confirmed his understanding that what was at issue was “causation”. [ 12 ] The Board issued its decision wherein it set out in abbreviated form the position of the parties and the information it received from them.

Its conclusion was as follows: The Board, after carefully reviewing the presentations, the summaries and the Exhibits, determined that on the balance of probability, more likely than not, the farm of Cindy and Gary Kochanowski incurred considerable flood damages due to the 2012 Shellmouth Dam Artificial operations, and decided to allow the appeal. [ 13 ] It noted that it relied upon comments found in the 2012 Report. It mentioned the requirements of

section 9 of the Compensation Regulation which requires the EMO to inspect a claimant’s damaged property and obtain information concerning the damage. It concluded that the EMO did not take these steps with respect to the respondents’ property. It allowed the 2012 claim and referred the matter back to the EMO for them to determine the appropriate compensation award in accordance with the normal claims management process. [ 14 ] The applicant says that, in the circumstances, the Board:

a) failed to properly interpret and apply the definition of “artificial flooding” as set out in the Act ;

b) failed to properly interpret and apply the definition of “economic loss” as used in the Act ;

c) exceeded its jurisdiction by awarding compensation on the basis of the Minister’s policy decision and the EMO’s claim administration process in the absence of any evidence of damage caused by artificial flooding; and

d) did not provide sufficient reasons for its decision. Law With Respect to Leave Applications [ 15 ] The applicant concedes that this application is governed by this Court’s accepted test for granting leave to appeal taking into consideration the statutory context of the Act . That test is set out in the jurisprudence of this Court and has three aspects: 1) does the applicant raise a question of law or jurisdiction? 2) do the questions raise an arguable case of substance which have a reasonable chance of success?

3) are the questions of sufficient importance to warrant consideration by this Court? See Pelchat v Manitoba Public Insurance Corp and Automobile Injury Compensation Appeal Commission , 2006 MBCA 90 ; and Manitoba Housing v Gabriel et al , 2017 MBCA 64 . Analysis [ 16 ] I am not convinced that the applicant’s grounds of appeal raise issues of law alone or an excess of jurisdiction which would allow me to grant leave to appeal. [ 17 ] The first two grounds suggest an error of law in the

interpretation and the application of sections of the Act which form part of the Board’s constituent statute. While the sections are not referenced in the Board’s decision, on these types of applications, I must consider what was before the Board in terms of submissions and material.

It is clear that the applicant’s counsel put before the Board the relevant statutory criteria set out in the Act and the applicant’s submission as to how it should be interpreted and applied based upon the evidence. [ 18 ] The Board’s decision does not lead to the conclusion that it refused to interpret the Act in the manner suggested, only that the evidence convinced it that the test had been met. At best, these are issues of mixed fact and law which this Court has indicated time and time again that it will not review.

Issues based upon evidentiary considerations are within the sole purview of the administrative tribunal (see Harder v Director Fort Garry/River Heights , 2017 MBCA 11 ). [ 19 ] The next ground of appeal alleging excess of jurisdiction suffers from the same problem. It raises allegations that the Board considered irrelevant matters or did not have any evidence before it to reach the conclusion it did. In fact, the Minister’s declaration was not just a policy decision as suggested by the applicant. It could be used as evidence of a factual determination with respect to damages caused by the operation of the dam.

I agree that it could not be used as evidence of specific damage to the respondents’ property, but it was nevertheless evidence before the Board which was relevant to its decision. [ 20 ] Consideration of the EMO’s administration process and how it administered this specific claim was also relevant to the Board’s consideration.

The issue of whether there was any evidence of damage caused by artificial flooding is the specific issue left to the Board and is not an issue of law alone. [ 21 ] As to the final ground of appeal, the sufficiency of the Board’s reasons, I understand the applicant’s frustration in not having been provided with reasons that deal specifically with points that were raised by it before the Board. However, the Board need not address all the issues raised by the parties. Suffiency of reasons is rarely, if ever, a stand-alone ground of appeal.

It must be coupled with other matters in order to substantiate that the decision of the board under review is unreasonable (see Newfoundland and Labrador Nurses’ Union v Newfoundland and Labrador (Treasury Board) , 2011 SCC 62 at paras 14 , 16). [ 22 ] That is not to say that the Board should be commended for its reasons.

While they may have survived this application for leave to appeal, in other circumstances where other factors are at play, a lack of adequate reasons may well give this Court reason to review the Board’s decisions. [ 23 ] For these reasons, I have concluded that leave to appeal should be dismissed. JA APPENDIX “A” The Water Resources Administration Act , CCSM c W70:

Definitions 1 In this Act “artificial flooding” , in relation to a given event, means flooding of a water body (

a) that is caused by the operation of a designated water control work, or the operation of a designated water control work and one or more other water control works, and

(

b) whereby the water body exceeds its unregulated level at the time of the event; . . . “damage” , in relation to eligible property, means that the property (

a) is physically destroyed, or (

b) due to submersion or physical damage, is rendered inoperable, less useful, less valuable, less productive or hazardous to human or animal health; . . . “designated water control work” means (

a) the Shellmouth Dam, or (

b) any other water control work designated in the regulations for the purpose of this definition, not including the “floodway” as defined in The Red River Floodway Act insofar as it relates to “spring flooding” as defined in that Act ; . . . “economic loss” means, subject to the regulations, (

a) wages, salary or business income that a person loses because he or she cannot work or carry on business due to artificial flooding, and (

b) extraordinary costs and expenses of working or carrying on business that a person incurs due to artificial flooding; . . . “unregulated level” , in relation to artificial flooding, means the scientifically demonstrable level that would be expected in the water body at a given time (

a) in the absence of the designated water control work, or (

b) if specified by regulation in respect of the water body, in the absence of the designated water control work and one or more other specified water control works; . . .

Claims for artificial flood damage and economic loss 12.1(1) A person may claim compensation under

section 12.2 if (

a) artificial flooding has damaged the person’s eligible property or caused the person to have an economic loss; and (

b) the person meets any applicable eligibility requirements set out in the regulations. . . . Eligible economic loss 12.1(3) A person may claim compensation under

section 12.2 for economic loss caused by artificial flooding only if the economic loss occurs in Manitoba and, (

a) in the case of a loss that results from artificial flood damage to real property that the person owns or leases or in which the person resides, only if all applicable floodproofing criteria in relation to the damaged property have been complied with at the time the loss occurs; and (

b) in the case of a loss that results from artificial flood damage to personal property that the person owns or leases, only if all applicable floodproofing criteria in relation to the land, building or structure where the damaged property is located have been complied with at the time the loss occurs. . . . Application for compensation 12.2(1) A person who wishes to claim compensation must file an application for compensation in accordance with the regulations and must comply with the other requirements of the regulations.

Emergency Measures Organization determines claims 12.2(2) After a person files a compensation application and complies with the requirements of the regulations, the Emergency Measures Organization must (

a) determine whether the claimant meets any applicable eligibility requirements set out in the regulations; (

b) if the claim relates to property damage, determine whether artificial flooding damaged the property and whether it is eligible property; (

c) if the claim relates to economic loss, determine whether artificial flooding caused the loss and whether it is an eligible loss; (

d) assess the value of the damage or loss; (

e) evaluate whether and to what extent the claimant may be entitled to receive assistance or compensation under another program of the Government of Manitoba or Canada or a local government; and

(

f) determine the amount of compensation to be awarded under this Act in respect of the damaged property or loss. . . . Appeals 12.4(1) A person whose application for compensation is partly or wholly refused or who disagrees with any part of a determination, assessment or evaluation under subsection 12.2(2) may appeal to the Disaster Assistance Appeal Board appointed under The Emergency Measures Act . Appeal to Court of Appeal 12.4(2) A decision of the Disaster Assistance Appeal Board under subsection (1) may be appealed upon a question of law to The Court of Appeal with leave granted by a judge of that court. Application for leave to appeal 12.4(3) An application for leave to appeal must (

a) state the grounds of the appeal; and (

b) be made within 30 days after the date of the decision sought to be appealed, or within such further time as the judge under special circumstances allows. Notice of the application must be served on the government in accordance with

section 11 of The Proceedings Against the Crown Act . . . . Government to provide compensation 12.5 When a person is awarded compensation because of a determination under subsection 12.2(2) or an appeal decision under

section 12.4, the government must provide the person with compensation in the amount awarded, subject to any applicable provisions of the regulations. . . . Report on occurrence of damage or loss due to artificial flooding 12.7(1) If the minister determines that damage to eligible property or economic loss has occurred due to artificial flooding, the minister must make, or cause to be made, a report that sets out the extent and duration of the artificial flooding. Shellmouth Dam Regulation , Man Reg 13/2011 Artificial flooding report 3(1) An artificial flooding report in relation to artificial flooding caused by the operation of the Shellmouth Dam must include the following information:

(

a) a statement of the period reported on; (

b) a statement that the minister has determined that damage to eligible property or economic loss has occurred during the reporting period due to artificial flooding caused by the operation of the Shellmouth Dam; (

c) charts showing, for the reporting period, regulated and unregulated (

i) discharges from the Shellmouth Dam, and (ii) water levels for the Assiniboine River at relevant hydrometric monitoring stations; (

d) charts showing the dates that artificial flooding began and ended for each relevant hydrometric monitoring station; (

e) a description as to how the regulated and unregulated levels were determined; (

f) a description of all Shellmouth Dam operations and any technical issues that arose during the reporting period; (

g) if operating guidelines have been approved for the operation of the Shellmouth Dam, a statement as to whether the dam was operated in a manner consistent with the guidelines during the entire reporting period, and if not, a description of the time period and circumstances in which it was operated in a manner inconsistent with the guidelines; (

h) a tabulation showing all Shellmouth Dam gate adjustments during the reporting period, including (

i) the date and time of each adjustment, (ii) the reservoir water level and the volume of water stored in the reservoir, at the time of each adjustment, and (iii) the riparian outlet flow, spillway flow and total outflow resulting from each adjustment. Shellmouth Dam Compensation Regulation , Man Reg 14/2011:

Definitions 1 The following

definitions apply in this regulation. . . . “artificial flooding” means artificial flooding of the Assiniboine River caused by the operation of the Shellmouth Dam. “artificial flooding report” means an artificial flooding report within the meaning of the Shellmouth Dam Regulation .

“compensation” means compensation within the meaning of sections 12.1 to 12.6 of the Act . . . . Appeal to the Disaster Assistance Appeal Board 11(1) A claimant who wishes to appeal to the Disaster Assistance Appeal Board under subsection 12.4(1) of the Act must file an appeal application with the board in the form and with the information the board requires.

The appeal application must be filed within 90 days after the date of the compensation statement setting out the compensation award being appealed, or within any longer period that the board allows. . . . 11(10) The board may receive information and documentation under oath, affirmation, declaration or otherwise, and is not bound by the rules of law respecting evidence that apply to judicial proceedings. . . . 11(12) In making its decision about an appeal the board is bound by sections 12.1 to 12.6 of the Act and by this regulation.

The board must follow the valuation procedure used by the Emergency Measures Organization unless it is satisfied that another valuation procedure is more appropriate and fair, having regard to the nature of the claimant's property damage or economic loss. 11(13) After a hearing or other consideration of an appeal, the board may, by order, (

a) allow the appeal in whole or in part and award compensation to the claimant in a higher amount than the original compensation award or for an item not included in the original compensation award; or (

b) dismiss the appeal and confirm the original compensation award. The Emergency Measures Act , CCSM c E80: Establishment of Disaster Assistance Appeal Board 17(1) The Lieutenant Governor in Council shall appoint a board to be known as the Disaster Assistance Appeal Board consisting of three or more persons. . . . Disaster assistance appeal 17(6) A claimant may appeal a decision of the Emergency Measures Organization respecting claims for specific losses or expenses for disaster assistance to the Disaster Assistance Appeal Board.

Duties of board 17(7) The Disaster Assistance Appeal Board shall (

a) set a fee payable by an appellant for the hearing of an appeal; (

b) hear appeals from the disposition of claims for disaster assistance by the Emergency Measures Organization; and (

c) dispose of an appeal by confirming, varying or setting aside the decision of the Emergency Measures Organization with respect to disaster assistance.