Decision Date: May 19, 2000

Panel: Lorraine Shore, Katherine Lewis, Stephen Potter

Keywords: Forest Practices Code of British Columbia Act – ss. 63(6), 63(7); Coast Appraisal Manual – ss. 4.3.1(2), 4.5.3; road reconstruction and replacement costs.

This was an appeal by Western Forest Product Ltd. (“Western”) of an administrative review decision upholding a Stumpage Advisory Notice (“SAN”) from the Regional Appraisal Coordinator. The SAN excluded an additional operating cost estimate for reconstruction and replacement costs incurred by Western. These costs were incurred as a result of agreements between Western and the Ministry of Forests (“MOF”) that Western would perform structural improvements on the Head Bay Forest Service Road (“HBFSR”). Western sought an order rescinding the SAN and directing the Regional Appraisal Coordinator to reappraise the stumpage rate associated with its cutting permit pursuant to section 4.3.1 of the Coast Appraisal Manual.

The Commission found that Western was entitled to claim the appraisal estimate for the reconstruction and replacement costs incurred. The Commission held that the Coast Appraisal Manual has two exceptions where a licensee cannot claim road reconstruction and replacement coasts, and neither applied in this case. The Commission found there was no agreement by Western to forego the appraisal estimate. The Commission noted that Western did structural work and was, therefore, entitled to the reconstruction and replacement estimate. Since the MOF has no authority to compel a licensee to perform structural work, it would be inequitable for MOF to convince a licensee to perform this work and then take the position after the work is done that the licensee should not be compensated for that work. The Commission further found that as Western was doing routine maintenance on roads other than the HBFSR, it was entitled to the maintenance estimate as well. The Commission noted that Western was entitled to both estimates as the two estimates were intended to provide compensation for different kinds of work that Western had performed.

The Commission referred the matter back to the Regional Appraisal Coordinator for reappraisal. The appeal was allowed.