



COURT OF APPEAL FOR ONTARIO

CITATION: Kawartha
    Lakes (City) v. Ontario (Environment), 2013 ONCA 310

DATE: 20130510

DOCKET: C56382

Rosenberg, Goudge and Tulloch JJ.A.

BETWEEN

The Corporation of the City of Kawartha Lakes

Appellant

and

Director, Ministry of the Environment, Wayne
    Gendron, Liana Gendron, Doug Thompson Fuels Ltd., D.L. Services Inc., Farmers
    Mutual Insurance Company and Ian Pepper Insurance Adjusters Inc.

Respondents

Cliff Cole and Jennifer Danahy, for the appellant

Nadine Harris and Fredrika Rotter, for the respondent
    Director, Ministry of the Environment

Martin Forget, for the respondents Wayne Gendron and
    Liana Gendron

Heard: May 1, 2013

On appeal from the order of the Divisional Court (Justices
    W. Larry Whalen, Harriett E. Sachs and Thea P. Herman), dated May 28, 2012,
    dismissing the appeal from the decision of the Environmental Review Tribunal,
    dated July 16, 2010.

Goudge J.A.
:

[1]

This proceeding arises from a fuel oil spill that occurred on December
    18, 2008 on residential property owned by Mr. and Mrs. Gendron.  The Gendron
    property is adjacent to a road allowance owned by the appellant City of
    Kawartha Lakes, which is in turn adjacent to the shore of Sturgeon Lake.  The
    fuel oil was delivered to the Gendrons that day by Thompson Fuels Ltd.

[2]

Following the spill, fuel oil migrated on to the appellants property
    and into Sturgeon Lake.  As a consequence, the Ministry of the Environment (the
    MOE) ordered the appellant to remediate the adverse effects of the spill on its
    property.  The appellant appealed unsuccessfully, first to the Environment
    Review Tribunal, and then to the Divisional Court.  With leave, it now appeals
    to this court.

[3]

All parties agree that the appellant bore no responsibility for the
    spill.  The issue is whether the Tribunal erred in preventing the appellant
    from calling evidence to show who was at fault for the spill.  The Divisional
    Court found that the Tribunal was correct in doing so.

[4]

I would dismiss the appeal.  To explain why, it is necessary to describe
    the background in a little more detail.

[5]

Twelve days after the spill, on December 30, 2008, a provincial officer
    of the MOE issued an order under the
Environmental Protection Act
,
    R.S.O. C.E 19 (the Act). It ordered the Gendrons to prevent, eliminate and
    ameliorate the adverse effects of the spill.  This order was based on the
    Gendrons fault, namely their suspected violation of the Act by discharging or
    permitting the discharge of a contaminant into the natural environment.

[6]

The Gendrons commenced remediation by hiring a clean up firm, but by
    March 20, 2009, they had run out of funds and could not continue any
    remediation off site, that is on the appellants property.

[7]

Faced with this, on March 27, 2009, the MOE issued a provincial
    officers order to the appellant under s. 157.1 of the Act, to remediate the
    adverse effects of the spill on its own property.  As permitted by s. 157.1,
    this was a no fault order.  In other words, the order did not require an
    assertion by the MOE of any fault on the part of the appellant, and none was
    made.

[8]

As the Act permits, the appellant requested the respondent Director of
    the MOE to review the order.  On April 9, 2009 the Director confirmed the
    order.

[9]

The appellant appealed the Directors order to the Environmental Review
    Tribunal.  Under s. 145.2(1) of the Act, such an appeal is a hearing de novo.

[10]

The
    parties before the Tribunal included the appellant, the respondent Director,
    the Gendrons, Thompson Fuels Ltd. and the clean up firm retained by the
    Gendrons.  All parties agreed that the appellant was innocent of any wrong
    doing in connection with spill.  The appellants position was that while the
    MOE had jurisdiction to issue a s. 157.1 order against it as a property owner,
    to do so was unfair and contrary to the polluter pays principle, which
    assigns polluters the responsibility for, and the cost of, remedying the
    contamination for which they are responsible.  To make this case, the appellant
    sought to call evidence that each of the home owners, the fuel provider and/or
    the maker of the fuel tank was at fault for the spill.

[11]

The
    Gendrons moved to prohibit the appellant from calling such evidence.  In its
    procedural decision of November 20, 2009, the Tribunal found that evidence of
    who was at fault for causing the spill should not be permitted.  It held that
    no evidence of the appellants innocence was necessary, since that was agreed,
    and evidence of who was at fault was not relevant since it would be of no
    assistance to the Tribunal in deciding whether the Directors order to the
    appellant should be revoked or upheld.  The Tribunal found that although in
    some cases evidence of the conduct of others would be relevant, this was not
    such a case.  Evidence of others being at fault for the spill was simply
    irrelevant to the Tribunals task of determining whether the Acts objective of
    environmental protection meant that the Directors order should be upheld.  The
    Tribunal concluded that, despite this evidentiary ruling, in proceeding with
    its appeal, the appellant was entitled to argue that its status as an innocent
    owner together with the polluter pays principle should relieve it of the
    Directors order.

[12]

On
    the appeal itself, the Tribunal explicitly considered the issue relating to the
    polluter pays principle.  It found that if environmental work was necessary,
    the environmental protection objective of the Act takes precedence over the
    polluter pays principle.  It concluded that it was not enough for the
    appellant to rely on its status as an innocent victimized owner without
    addressing how the legislative objective of environmental protection would be
    met if the Directors order were revoked.  Since the appellant presented no
    evidence of an environmentally responsible solution in the event of revocation
    of the Directors order, the Tribunal dismissed its appeal.

[13]

The
    appellant appealed to the Divisional Court.  In reasons that are thorough and
    persuasive, the Divisional Court dismissed the appellants attack on both the
    Tribunals procedural ruling and its ultimate disposition of the appeal.

[14]

In
    addition to appealing the Tribunals order, the appellant has taken advantage
    of s. 100.1 of the Act which permits a party subject to a no fault order to
    seek to recover its costs from persons having control of the pollutant.  In
    this case, the appellant seeks recovery from the Gendrons, Thompson Fuels Ltd.
    and the Technical Standards and Safety Authority.  That proceeding has not yet
    concluded.

[15]

In
    this court, the appellant does not contest that the Director had jurisdiction
    to make her order.  Rather it says that in making the order, the Director erred
    in several ways.

[16]

First,
    it argues that in disposing of the appeal itself, the Tribunal erred in law by
    not considering the polluter pays principle.  That argument can be shortly
    disposed of.  The Tribunal explicitly considered the principle.  It did not
    decline to do so.  It is thus unnecessary to decide whether, had it declined to
    consider the polluter pays principle entirely, this would constitute legal
    error.

[17]

The
    appellant also argued that the Tribunals procedural order excluding evidence
    that others were at fault for the spill denied it natural justice and prevented
    it from fully making its case that it should be relieved of the Directors
    order because of the polluter pays principle.

[18]

Framed
    either way, I would dismiss this argument.  It turns entirely on whether the
    evidence sought to be tendered by the appellant was properly found irrelevant
    to the issue before the Tribunal.  If the evidence is irrelevant, excluding it
    does not constitute a denial of natural justice to the appellant, nor does it
    improperly limit its ability to argue that the polluter pays principle requires
    that the Directors order be revoked.

[19]

In
    this case, all agree that the appellant is innocent of any fault for the
    spill.  I agree with the Tribunal and the Divisional Court that evidence that
    others were at fault for the spill is irrelevant to whether the order against
    the appellant should be revoked.  That order is a no fault order.  It is not
    premised on a finding of fault on the part of the appellant but on the need to
    serve the environmental protection objective of the legislation.

[20]

The
    tribunal had to determine whether revoking the Directors order would serve
    that objective.  Deciding whether others are at fault for the spill is of no
    assistance in answering that question.  Evidence of the fault of others says
    nothing about how the environment would be protected and the legislative
    objective served if the Directors order were revoked.  Indeed, by inviting the
    Tribunal into a fault finding exercise, permitting the evidence might even
    impede answering the question in the timely way required by that legislative
    objective.

[21]

I
    would therefore conclude that the Tribunal correctly excluded the evidence
    proffered by the appellant.  The Divisional Court was correct to uphold the Tribunals
    procedural order.  Given this conclusion it is unnecessary to decide if that
    order ought to attract a deferential standard of review.  That issue can be
    left for another case.

[22]

In
    conclusion, I would dismiss the appeal.

[23]

As
    the parties have agreed, there will be no order of costs.

Released: May 10, 2013 (S.T.G.)

S.T. Goudge J.A.

I agree M. Rosenberg J.A.

I agree M. Tulloch J.A.


