Background
599253 Alberta Ltd. acquired property near Kamloops in 2002 along with responsibility for a licence covering a private dam built on Cherry Creek in 1967–1968. The company and Larry Penner alleged that provincial officials knew from the dam’s early history that its construction departed from the plans and raised stability concerns, but failed to warn later purchasers. They sought damages including legal and engineering expenses and the anticipated cost of complying with orders to repair or remove the dam.
The appellants had previously pleaded guilty to wilfully contravening provincial orders requiring maintenance or repair of the dam. The Supreme Court of British Columbia struck their civil claim under Rule 9-5(1)(a), holding that the Province owed them no private-law duty of care under the principles in Waterway Houseboats Ltd. v British Columbia, 2020 BCCA 378. The appellants argued that they were regulated parties rather than ordinary members of the public and that proximity should be determined at trial.
The Court’s Holding
The Court of Appeal dismissed the appeal. It held that Waterway was a sufficiently analogous precedent that definitively resolved the duty-of-care issue. The Water Act and the Water Sustainability Act establish regulatory schemes directed to the public good and do not support a private-law duty requiring the Province to warn prospective purchasers about hazards in licensed works. Instead, those statutes place responsibility for inspecting, maintaining, and repairing such works on licensees.
The alleged duty would necessarily have extended to any member of the public who might purchase the property, so the appellants were members of the general public for the proximity analysis. Unlike the regulated parties whose claim was remitted for further findings in Waterway, the appellants pleaded no pre-purchase interactions, representations, assumption of responsibility, or reliance involving the regulator. No full Anns/Cooper analysis or trial on proximity was therefore required. The Court did not decide the Province’s alternative abuse-of-process argument.
Key Takeaways
- An analogous appellate precedent finding no regulatory duty of care can dispose of a negligence claim at the pleadings stage without a fresh, full Anns/Cooper analysis.
- Ownership of property carrying a water licence did not transform a duty allegedly owed to all prospective purchasers into a proximate private-law relationship with the regulator.
- Absent pleaded direct interactions, representations, or reliance, the appellants could not establish the fact-specific proximity that might arise between a regulator and a regulated party.
Why It Matters
The decision reinforces that Canadian courts begin regulatory-negligence analysis with the governing statutory scheme. Where legislation serves broad public purposes, protects regulatory decision-making, and assigns maintenance and liability obligations to licensees, courts will not readily shift those obligations to government through tort law.
It also confirms that duty-of-care claims against regulators may be struck before trial when binding precedent and the pleaded facts foreclose proximity, even if the plaintiffs characterize themselves as regulated parties rather than members of the public.