Dam licence holders lose bid to make B.C. pay repair costs through negligence claim

The British Columbia Court of Appeal has rejected a negligence lawsuit seeking to shift the costs associated with a private dam near Kamloops to the provincial government, finding that the pleaded duty to warn subsequent property purchasers had no foundation in the applicable regulatory scheme.

In 599253 Alberta Ltd. v British Columbia, 2026 BCCA 424, a unanimous panel upheld the striking of the company’s and Larry Penner’s claim without a trial. The October 29 ruling leaves in place the conclusion that the province did not owe them the private duty of care they alleged. It does not decide a damages amount or establish the truth of their historical allegations about the dam’s construction.

The company bought property adjacent to the Cherry Creek dam in 2002, when the appellants became responsible for its licence. They alleged that provincial officials knew of design and construction problems decades earlier and should have warned later purchasers of properties to which the licence was attached. Their claim sought compensation for costs connected with defending enforcement proceedings and complying with repair requirements.

A duty to warn had to fit the statutory scheme

Writing for the court, Justice Butler said the existing decision in Waterway Houseboats Ltd. v British Columbia governed the duty-of-care question. That case sets out how courts assess claims that a public regulator acting under legislation owes an individual a private duty of care. Where a sufficiently analogous precedent has definitively answered that question, the inquiry can end without a fresh, full analysis.

The court emphasized the allocation of responsibility under the Water Act and its successor, the Water Sustainability Act. Licence holders must inspect, maintain and repair the works for which they are responsible, and can be liable for damage to other property. The appellants’ principal claim that the province should bear the cost of repairing or removing the dam ran directly against that allocation of responsibility.

Waterway had already examined the Water Act’s public purpose, regulatory powers, protections for regulators and compensation provisions. It found no legislative intention to create a private duty of care toward individual property owners in the position of members of the general public. The appeal court found no significant difference in the relevant provisions of the successor legislation that would change that analysis here.

The appellants argued that they should instead be treated as regulated parties with a relationship close enough to the province to support a duty of care. They relied on a different group of parties in Waterway whose possible claim had been returned to trial for further consideration.

The distinction was direct interaction. Those parties had dealt directly with the regulator, and findings were needed about that relationship. A relationship capable of supporting a private duty can depend on matters such as representations, reliance or an assumption of responsibility. The appellants in this case had not pleaded interactions, representations or reliance that provided a basis for sending that issue to trial.

Their proposed duty was, in substance, a warning to anyone who might buy the property after the earlier owners. The court agreed that this placed them in the position of members of the general public for the duty-of-care analysis. Holding a licence did not, by itself, establish the particular relationship their negligence claim required.

Later disclosure complaints did not bridge the gap

The pleadings also complained about access to historical information after Penner was notified in 2018 that maintenance work was required. The lower-court judge had identified a substantial gap: those disclosure events occurred more than 16 years after the property purchase, with no pleaded pre-purchase representations or reliance connecting the alleged failure to warn to that purchase.

The judge also noted that the plaintiffs had identified no provision of the water legislation imposing a positive obligation to disclose historical licensing information. The appeal court agreed that the claimed duty to warn the public and subsequent purchasers lacked a statutory foundation. Its decision concerns the negligence claim pleaded in this case, rather than a finding that regulators can never owe private duties or that every information-access dispute is barred.

The appellants also challenged the lower judge’s comments about limitation periods, historical Crown immunity and changes to the original licence conditions. The appeal court found that the judge could properly identify those problems with allegations concerning events in the late 1960s. But the decisive point was the absence of the asserted private duty under the analogous Waterway precedent; a separate trial on proximity was unnecessary.

Enforcement history did not become a separate ruling

Before bringing the lawsuit, the appellants had pleaded guilty to wilfully contravening a dam repair and maintenance order. Each was fined $2,000. The sentencing judge took account of the significant costs they would face to repair or remove the structure.

The province argued that allowing the civil action after those guilty pleas and the lenient sentences would also be an abuse of process. Justice Butler said that argument was not without merit, but expressly declined to decide it because the duty-of-care issue already disposed of the appeal.

The result is that the lawsuit remains struck. The decision reinforces the need for a pleaded private duty consistent with the governing regulatory scheme; allegations that officials knew about a problem did not supply that missing duty in these circumstances.

Source: 599253 Alberta Ltd. v British Columbia, 2026 BCCA 424.