Executive Summary: Key Legal and Evidentiary Issues

• The judicial review application was struck because the applicants failed to serve the Town of Strathmore, a directly affected party under Rule 3.15 of the Rules of Court.

• The Environmental Appeals Board’s recommendation and the Ministerial Order to cancel the water licence and require reclamation of the well were upheld as reasonable under the Water Act.

• Elevated fluoride levels (3.5 mg/L) in the well water were identified as a significant and unforeseen risk to human health not anticipated at the time the licence was issued.

• The applicants’ history of non-responsiveness and failure to comply with regulatory directives contributed to the finding that reclamation was appropriate.

• The court found no reversible error in the Board’s interpretation of the Water Act or in its assessment of the evidence and statutory tests.

• Arguments that the Board relied on irrelevant evidence or ignored key submissions were rejected as unfounded; the Board’s decision-making process was detailed and justified.

Facts of the case
Mohinder Singh Gill and Five Pillar Holdings Ltd. applied for judicial review of decisions relating to a groundwater well located on property they owned in the Town of Strathmore, Alberta. The property included a hotel built around 1978, with the well drilled at that time. The hotel was also connected to municipal water lines. The well was originally licensed to White Wezel Enterprises Ltd. in 1982 and the licence was converted to a full licence in 1993. When Five Pillar purchased the property in 1998, it became the holder of the licence, although the licence remained in the name of White Wezel.

The hotel’s water system historically had interconnections between the well and the Town’s municipal supply. In 2012, the Town passed a bylaw prohibiting dual water supply connections. The hotel remained in violation of this bylaw until enforcement action began in 2014. Orders from the Alberta Safety Codes Council in 2014 and 2015 required disconnection, and while the applicants claimed to comply, full disconnection did not occur until 2016.

Testing by Alberta Health Services in 2015 revealed that the fluoride concentration in the well water was 3.5 mg/L, exceeding the 1.5 mg/L limit in Health Canada’s Guidelines for Drinking Water Quality. The Director, Regional Compliance, South Saskatchewan Region, issued a Water Management Order in 2017 declaring the well a “problem water well” and cancelling the licence under section 55(1)(j) of the Water Act due to significant adverse health risks that were not reasonably foreseeable when the licence was issued.

Policy terms and clauses at issue
The decisions centred on key provisions of the Water Act:

• Section 55(1)(j): Allows licence cancellation where a significant adverse effect on human health or public safety occurs or may occur and was not reasonably foreseeable at the time the licence was issued.

• Section 97(1)(f): Permits issuance of a water management order if the well is a problem water well that may cause an adverse effect on health, property, or safety.

• Section 40 of the Water (Ministerial) Regulation: Authorizes declaring a well a problem water well if it may cause, is causing, or has caused an adverse effect.

The Board interpreted the licence purpose of “Hotel Water Supply” to require water suitable for both potable and non-potable uses, and found that elevated fluoride levels frustrated this purpose.

Outcome of the case
The Court of King’s Bench struck the judicial review application because the applicants failed to serve the Town of Strathmore as required under Rule 3.15(3)(c) of the Rules of Court. The Town, as the municipality responsible for water safety, was deemed directly affected. Alternatively, the court found no merit in the judicial review, concluding that the Environmental Appeals Board and the Minister acted reasonably. The Board’s findings on water potability, risk of contamination, and public health threats justified both the licence cancellation and the requirement for well reclamation. The applicants were unsuccessful, and directions were given for cost submissions if no agreement could be reached.

No specific amount for costs had been awarded.