



COURT OF APPEAL FOR ONTARIO

CITATION: Ontario (Ministry of the Environment and Climate
    Change) v. Sunrise Propane Energy Group Inc., 2018 ONCA 461

DATE: 20180515

DOCKET: M48649

Trotter J.A. (Motions Judge)

BETWEEN

Her Majesty the Queen in Right of Ontario
    (Ministry of the Environment and Climate Change)

Respondent

and

Sunrise Propane Energy Group Inc., 1367229
    Ontario Inc., Shay Ben-Moshe and Valery Belahov

Applicants

Leo Adler, for the applicants

Nicholas Adamson and Justin Jacob, for the respondent

Heard: April 26, 2018

Trotter J.A.:

A.

introduction

[1]

On August 10, 2008, a series of explosions rocked the north end of
    Toronto. They occurred at a propane gas facility operated by Sunrise Propane
    Energy Group Inc. (Sunrise).
[1]
A Sunrise employee, Parminder Singh Saini, was killed. The blasts caused
    structural damage to many surrounding buildings. Residents within a 1.6-kilometre
    radius of the facility were evacuated to enable a major environmental clean-up.

[2]

The applicants were charged under ss. 186(1), 186(2), and 194(2) of the
Environmental
    Protection Act
, R.S.O. 1990, c. E.19 (
EPA
) for discharging
    contaminants into the environment (in violation of s. 14) and failing to comply
    with lawful orders issued to address the clean-up. They were also charged under
    ss. 25(2)(a) and (h) of the
Occupational Health and Safety Act
, R.S.O.
    1990, c. O.1 (
OHSA
) for failing to properly train and ensure the
    safety of its employees.

[3]

After a 14-day trial, the applicants were convicted of nine provincial
    offences. Substantial fines were imposed. Appeals of both the convictions and
    sentences were dismissed.

[4]

The applicants seek to invoke the jurisdiction of this court to review
    their convictions and sentences.
[2]
However, they must first seek leave to appeal. Leave to appeal to this court in
    the provincial offences context is only permitted on questions of law that are
    essential in the public interest or for the due administration of justice in
    the province. As explained below, neither requirement has been met in this
    case. The application must be dismissed.

B.

background

[5]

The evidence at trial was lengthy. However, for the purposes of this
    application, the underlying facts can be stated briefly.

[6]

The explosions happened during a so-called truck-to-truck transfer
    (TTT) of propane at the Sunrise facility, while transferring propane from a
    larger propane truck to a smaller one. The spread of heat caused other propane
    tanks at the facility to explode. This resulted in numerous contaminants being
    discharged into the environment including heat, vibration, sound, gas vapour,
    asbestos, smoke, dust, metal fragments, and other debris. It forced the immediate
    evacuation of approximately 12,000 people from their homes while the fire
    persisted at the facility. Displaced residents suffered lost wages and had to
    pay for temporary shelter and clothing. The explosions caused major structural
    damages to homes and businesses in the area. In addition to the death of Mr.
    Saini, others were also injured.

[7]

The initial explosion was the result of a propane leak that occurred
    during the TTT. The two possible sources for the leak, which were not disputed
    at trial, were the transferring hose or the bypass system of the pump affixed
    to one of the receptacles used to transfer the propane.

[8]

On August 13, 2008, Sunrise became subject to a Provincial Officers
    Order, made under the
EPA
, requiring it to clean up the damage caused
    by the explosion so that local residents could return to their homes. They were
    charged with multiple counts of failing to comply with this Order.

[9]

The applicants trial took place before a judge of the Ontario Court of
    Justice. The trial judge convicted the applicants of numerous offences under
    both the
EPA
and the
OHSA
: see
Ontario (Ministry of
    Labour and Ministry of the Environment) v. Sunrise Propane Energy Group Inc. et
    al
, 2013 ONCJ 358, 229 A.C.W.S. (3d) 442
.
Over two years after the
    convictions were registered, the applicants were collectively ordered to pay
    fines totalling $5.3 million: see
R. v. Sunrise Propane Energy

(2016),
    129 W.C.B. (2d) 182 (Ont. C.J.).

[10]

The
    applicants appealed all of their convictions to a judge of the Superior Court
    of Justice (the appeal judge). The applicants raised numerous grounds of
    appeal. None found favour in that court, and the appeal was dismissed: see
R.
    v. Sunrise Propane Energy Group Inc
.,
2017 ONSC 6954, 142 W.C.B. (2d)
    379.

C.

the application for leave to appeal

(1)

The Test for Leave to Appeal

[11]

The
    applicants seek to appeal their convictions under the
EPA
(but not the
OHSA
). Before addressing the merits of the grounds of appeal, it is
    helpful to set out the statutory and jurisprudential framework for determining
    whether leave to appeal should be granted.

[12]

The
    applicants have already had a full appeal to the Superior Court of Justice. A
    further appeal to this court is not automatic. Leave to appeal is required
    under s. 131 of the
Provincial Offences Act
, R.S.O. 1990, c. P.33 (
POA
),
    which sets the bar very high:

131(1) A defendant or the prosecutor or the Attorney General by
    way of intervention may appeal from the judgment of the court to the Court of
    Appeal, with leave of a judge of the Court of Appeal
on special grounds,
    upon any question of law alone
or as to sentence.

(2) No leave to appeal shall be granted under subsection (1)
    unless the judge of the Court of Appeal considers that in the particular
    circumstances of the case it is
essential in the public interest or for the
    due administration of justice that leave be granted
. [Emphasis added.]

[13]

Historically,
    leave to appeal has been granted sparingly under this section. In the leading
    case of
R. v. Zakarow
(1990), 74 O.R. (2d) 621, Carthy J.A. described
    the test for leave in the following way, at pp. 625-626:

However, s. 114 of the
Provincial Offences Act
sets a
    very high threshold for granting leave to appeal. There must be special grounds
    on a question of law and it must be essential in the public interest or for the
    due administration of justice that leave be granted. No matter how wrong the
    judgment under appeal may be, these other criteria must be met. The section was
    clearly drafted to eliminate all but appeals on the most significant issues.
[3]

The high standard established in
Zakarow
has
    been applied regularly by judges of this court.

[14]

As
    a first step, s. 131(1) of the
POA
requires the identification of a
    pure question of law; not one of fact, nor of mixed fact and law: see
R. v.
    Krukowski
(1991), 2 O.R. (3d) 155 (C.A.), at p. 159;
Ontario (Labour)
    v. Enbridge Gas Distribution Inc
.
, 2011 ONCA 13, 272 O.A.C. 347, at
    para. 35.

[15]

Section
    131(2) broadens the inquiry significantly by engaging the concepts of the
    public interest and the due administration of justice. In
R. v. Rankin
,
    2007 ONCA 127, 216 C.C.C. (3d) 481, Gillese J.A. held, at para. 26, that [p]rovincial
    offences appeal judgments are intended to be final, and leave should only be
    granted in exceptional cases raising issues of broad importance. This
    approach is echoed in
Ontario (Ministry of Labour) v. Guelph (City)
,
    [2013] O.J. No. 6031 (C.A.), in which Watt J.A. held, at para. 39, that the
    inclusion of statutory terms like special grounds and essential mean that further
    appeals should be restricted to exceptional cases where the public interest or
    the due administration of justice makes it absolutely indispensable or
    necessary for the Court of Appeal to decide the issues raised.

[16]

In
    applying this aspect of the test under s. 131 of the
POA
, the focus is
    not on whether the subject matter of the case is of interest or importance to
    the public. In this case, clearly it is  the incident at Sunrise was a
    dramatic, historical event in Toronto. A man lost his life. Many others were
    affected. Rather, s. 131 focuses on the significance of the legal issues raised
    on appeal:
Rankin
, at para. 30.

(2)

The Proposed Grounds of Appeal

[17]

The
    Notice of Application for Leave to Appeal raises numerous grounds of appeal.
    However, in oral argument, only two emerged as serious contenders. As discussed
    below, neither identifies a pure question of law. Both grounds of appeal are
    fact-laden. The legal issues embedded in the grounds fail to transcend the
    unique factual circumstances of this case.

(a)

Officially Induced Error

[18]

The
    first proposed ground relates to the defence of officially induced error. In
    the Applicants Factum, it is posed in the following way:

Can a Judge who finds that the defence of officially induced
    error has been made out by the [applicants] for the regulatory offence charged,
    then impose a deadline that effectively nullifies that very defence  despite
    having accepted that no specific limit was ever set by the official who led the
    [applicants] to believe that they were permitted to continue to conduct
    business by doing truck to truck transfers?

[19]

As
    noted above, the explosions were triggered during a TTT at the Sunrise
    facility. The legality of Sunrise employing TTTs at its facility was an issue
    at trial. However, the applicants were not specifically charged with permitting
    this form of propane transfer; they were charged with discharging contaminants
    into the environment. Nevertheless, the TTT-related issues were important to
    the due diligence defence at trial.

[20]

Well
    before August 10, 2008, the Ontario Technical Standards and Safety Authority (the
    TSSA)
[4]
decided to restrict the practice of TTTs. On October 27, 2006, the TSSA issued
    a Directors Public Safety Order prohibiting this type of transfer, except at a
    licensed bulk plant. The trial judge found that the Sunrise facility did not
    fall under this exception.

[21]

Around
    this time, a TSSA inspector, Donald Heyworth, attended at Sunrise on a couple
    of compliance visits. He ordered Sunrise to comply with the Directors Public
    Safety Order. Discussions were held about upgrading the facility to permit TTTs.
    As he was leaving Sunrise one day, someone asked Mr. Heyworth, Can we continue
    operating? He replied, Yes. At trial he explained that he meant that Sunrise
    could continue to transfer propane from trucks to stationary tanks, and then
    fill cylinders from those tanks. It was not his intention to permit the
    continued use of TTTs. However, the applicants believed that they could
    continue to perform TTTs until its facility was upgraded.

[22]

In
    June 2007, the TSSA issued a Code Adoption Document, which was posted to its
    website on June 14, 2007. The Document prohibited TTTs unless the facility was
    a bulk plant. There was no evidence of anyone purporting to give the applicants
    an exemption from the requirements set out in this Document. The applicants did
    not believe they were bound by this Document, preferring to rely on the (mistaken)
    exchange with Mr. Heyworth, and acting on their understanding that they could
    continue TTTs in the same manner as they had prior to the Directors Public
    Safety Order.

[23]

The
    trial judge found, at para. 539, that Mr. Heyworth either expressly told [the
    applicants] that they could continue to conduct business by doing
    truck-to-truck transfers or that he implied that they could continue to conduct
    business in this manner which led them to be mistaken as to what the situation
    was. Applying
R. v. Jorgensen
, [1995] 4 S.C.R. 55, and

Lévis
    (City) v. Tétreault
, 2006 SCC 12, [2006] 1 S.C.R. 420, the trial judge
    found that the applicants could rely on an officially induced error, but only
    to a point. As the trial judge said, at para. 541:

However, in my view, this defence was only available to themup
    to the date where the code adoption document was issued in June of 2007 which
    prohibited the truck-to-truck transfers.

[24]

The
    appeal judge found no error in the trial judges application of this doctrine. Moreover,
    he concluded that she did not impose an artificial deadline or limitation
    period on the operation of the defence. Placing the issue in wider context, the
    appeal judge said, at para. 63:

The [applicants] were not charged with breaching a regulatory
    practice in conducting truck to truck transfers. The issue of the transfers is
    significant when assessing due diligence. If the [applicants] were expressly
    prohibited from pursuing this practice but continued to do so, any defence of
    due diligence must fail.

[25]

The
    appeal judge concluded, as did the trial judge, that any misconception the
    applicants held about TTTs should have evaporated when the Code Adoption
    Document was posted to the TSSA website on June 14, 2007. As the appeal judge
    concluded, at paras. 66 and 68:

Once the issue had been clarified, it was incumbent upon the [applicants]
    to end the practice or seek approval for an exemption. There is no evidence
    that they did either of these things, or that they sought legal advice on the
    issue.

. . .

For the above reasons, I reject the [applicants] argument that
    the trial judge erred in her assessment of due diligence in the context of
    officially induced error.

[26]

The
    applicants renew this complaint on appeal. I see no error. For the trial judge,
    the issue involved the application of a unique factual set of circumstances to
    a settled body of law: see
Lévis
and
R. v. Bédard
, 2017 SCC
    4, [2017] 1 S.C.R. 89. For the appeal judge, the issue involved an assessment
    of the reasonableness of the trial judges findings. The contours of the
    doctrine of officially induced error were not engaged by the resolution of this
    issue at either level of court.

[27]

The
    applicants submit that further guidance on officially induced error is
    required. Whether or not this is so, the outcome of this case would not be
    affected. Counsel for the applicants did not suggest that an accused person or
    entity is entitled to rely upon erroneous official advice in perpetuity. The
    applicants said that they believed they could do so until they upgraded their
    facility. However, the trial judge found, and the appeal judge affirmed, that
    it was no longer reasonable for the applicants to rely upon the advice after
    the internet posting of the Code Adoption Document.

[28]

Addressing
    the elements of officially induced error in
Lévis
, LeBel J. said, at
    para. 27, it is necessary to establish the objective reasonableness not only
    of the advice, but also of the reliance on the advice. In this case, the trial
    judge was entitled to find that such reliance was not reasonable after the Code
    Adoption Document was posted. The appeal judge found that this conclusion was
    reasonable. I agree with this determination, which is a question of mixed fact
    and law.

(b)

Compliance with the Ministry of the Environment Order

[29]

The
    second ground relates to the enforcement of the Order issued in the aftermath
    of the explosions. In the Applicants Factum, the issue is framed as follows:

Can a Provincial Officers Orderwhich requires a company to
    comply with the Order, unless they provide notice that they cannot, or are
    unwilling, to do so  which notice the trial Judge found that the company did
    provide  nevertheless be convicted for 4 of the 5 counts, after the trial
    Judge ruled that the notice given by the [applicants] only applied to one
    count, and not all?

Even on its face, this is not a question of law. The
    legal question, if there is one, is buried in factual minutiae.

[30]

The
    factual context for this issue arises from a Ministry of the Environment Provincial
    Officers Order, issued on August 13, 2008. The Order was made under the
    authority of the
EPA
. It required the performance of several work
    items to address the fallout of the explosions, as follows:

1. By 5:00 p.m. on August 13, 2008, provide verbal notice
    and written confirmation that Sunrise is able and willing to comply with the
    requirements of the Order;

2. Provide at least 12 hours verbal notice and written
    confirmation if for whatever reason Sunrise cannot or is unwilling to comply
    with the Order;

3. By 5:00 p.m. on August 13, 2008, retain the services of
    one or more qualified persons to carry out the work required by the Order;

4. By 5:00 p.m. on August 13, 2008, provide written
    verification that one or more qualified persons has been retained in accordance
    with item 3;

5. Continue to carry out the cleanup of the residential
    area around 54 Murray Road, effective immediately;

6. By 5:00 p.m. on August 14, 2008, develop and submit to
    the Provincial Officer a Residential Clean-Up Plan;

7. Provide written copies of the sampling results to the Provincial
    Officer and Dr. Shapiro of Toronto Public Health, effective immediately; and

8. Develop a Site Clean-Up Plan for 54 Murray Road within
    24 hours of the Ontario Fire Marshall releasing the site.

[31]

The
    convictions were based on failure to comply with items 1, 4, 5, and 6. The
    applicants were acquitted in relation to item 2  providing notification of an
    inability or unwillingness to comply with the Order, both verbally and in
    writing.

[32]

The
    applicants argue that an acquittal in relation to item 2 means that acquittals
    must follow for all of the non-compliance charges because the items are not
    severable. The trial judge rejected this argument twice. In her reasons for
    judgment at the end of the trial, she said, at para. 570: 
The [applicants] did take
    steps to retain counsel and through counsel to notify the Ministry that they
    did not intend to comply with the clean-up order. Given this, the [applicants]
    have established that they were duly diligent regarding this item.
In
    between conviction and sentence, the applicants brought an application to
    re-open the convictions in relation to compliance with the Order. The trial
    judge reiterated that the acquittal in relation to item 2 was based on due
    diligence. She also said: Although there was a verbal notification there never
    was a written notification. Item two was not complied with.

[33]

Although
    numerous complaints about the Order were made to the appeal judge, including
    the assertion that it lacked precision, the applicants did not squarely argue
    this point. This is reason itself to deny leave to appeal.

[34]

Moreover,
    as noted in para. 32 above, the trial judges acquittal of the applicants in
    relation to item 2 was based on an application of the due diligence defence.
    She did not find that the item had been complied with, for the simple reason
    that the applicants failed to provide
written
notification of their
    inability to comply with the Order. In other words, in terms of the
actus
    reus
of the count relating to item 2, the applicants did not comply.

[35]

This
    ground of appeal essentially turns on whether the trial judge properly
    interpreted the Order. This is a question of mixed fact and law, not one of law
    alone. Even if it could be construed as an error of law, it has not been
    demonstrated that the interpretation of the administrative/enforcement Order
    issued in this case is essential in the public interest or for the due
    administration of justice in the province.

[36]

I
    conclude by returning to
Zakarow
. When denying leave to appeal, Carthy
    J.A. said, at p. 626: I see nothing significant about this proposed appeal
    except that a statute appears to have been misinterpreted. Assuming for the
    sake of argument that the trial judge misconstrued the Order as the applicants
    suggest, I would characterize the error in the same way.

D.

Conclusion and disposition

[37]

The
    application for leave to appeal is refused.

Released: GTT MAY 15 2018

G.T. Trotter J.A.






[1]

The other applicants are a related company (1367229 Ontario
    Inc.), as well as two corporate directors, Shay Ben-Moshe and Valery Belahov.



[2]

In their Notice of Application for Leave to Appeal, the
    applicants purport to appeal the fines that were imposed. However, this issue
    was not pursued in its factum, nor was it addressed in oral argument.



[3]
The version of s.114 of the
Provincial Offences Act
, R.S.O. 1980, c.
    400, in that case was identical in the relevant aspects to the current version
    in s. 131.



[4]

This entity, created by the Ontario
Technical Standards and
    Safety Act, 2000
, S.O. 2000, c. 16, delivers public safety services in a
    number of key business sectors, such as fuels (including propane).


