Hydropower

BC Supreme Court awards Greengen Holdings damages for thwarted hydroelectric project

BC Supreme Court awards Greengen Holdings damages for thwarted hydroelectric project

In Greengen Holdings Ltd. v. British Columbia (Ministry of Forests, Lands and Natural Resource Operations), the Supreme Court of British Columbia awarded C$10.125 million (US$7.4 million) in damages to Greengen Holdings.

From 2003 to 2009, Greengen sought to develop a run-of-river hydroelectric project on Fries Creek near Squamish, B.C. The powerhouse, head pond and weir, entirety of the penstock, and laydown area for construction were to be on Crown land. Located near the proposed main project site are Brackendale Eagles Park, the Fries Creek Cultural Site and the Monmouth Creek Cultural Site. The Fries Creek and Monmouth sites were established by a Land Use Agreement entered into between the Province and the Squamish Nation (SN) in 2007. There was concern that the project could affect these lands in several ways, which are laid out in the court’s ruling.

To proceed with the project, Greengen required a land tenure over Crown land pursuant to the Land Act and a water license pursuant to the Water Act. The Minister of Agriculture and Lands was responsible for the Land Act and the Minister of Environment was responsible for the Water Act.

After what the Supreme Court calls “a lengthy process involving extensive communications between the plaintiff and the relevant provincial and other ministries and regulatory agencies,” both permits were denied in 2008.

The plaintiff said that the decisions to deny the permits were made not for the reasons set out in the Land Decision Letter and the Water Decision Letter but for collateral political purposes related to the province’s relationship with the SN and its desire to avoid a lawsuit from the SN. The company filed a claim against the defendants based on the tort of misfeasance in public office. An action for misfeasance in public office is concerned with the misuse of power by a holder of government office.

The plaintiff argued that “The reasons provided in the Land Decision and the Water Decision were not the actual reasons underlying those decisions. Rather, those decisions were made for collateral political or otherwise improper reasons having no relation to the merits or legality of the project. Further, the Land Decision and the Water Decision were incorrect in law.”

Further, the government entities “knew that the Land Decision and the Water Decision were invalid, unlawful and ultra vires and that they were likely to cause damage to Greengen. Accordingly, in exercising their powers as public officers in making the Land Decision and the Water Decision, the Government Entities knowingly made invalid, unlawful and ultra vires decisions with knowledge – or in the alternative with reckless indifference to the possibility – that those decisions were likely to cause damage to Greengen. The Land Decision and the Water Decision did cause damage to Greengen.”

In the ruling, the Honourable Justice Loo found that “the plaintiff lost an opportunity to achieve a completed and profitable hydro-electric project and that the misfeasance of government representatives was a legal cause of this loss. … I have concluded that the value of this loss of opportunity is $10.125 million. For the reasons stated above, the Province is liable to the plaintiff for damages in this amount.”

Originally published by Elizabeth Ingram in Hydro Review.