ONTARIO
SUPERIOR COURT OF JUSTICE
DIVISIONAL COURT
MATLOW, LACK, HEENEY, JJ.
B E T W E E N:
JANE MILLER MONTAGUE and DONALD LEE
Peter C. Pickfield, for the Respondent Jane Miller Montague
The Respondent Donald Lee, personally
Respondents
- and -
THE DIRECTOR, MINISTRY OF THE ENVIRONMENT
Frederika Rotter and Laura Nemchin, for the Appellant
Appellant
HEARD: September 24, 2004 and January 17, 2005 at Hamilton
1This appeal raises what have been characterized as important issues concerning the ability of the Ministry of the Environment to protect the environment from contamination through the means of orders under ss. 17, 18 and 43 of the Environmental Protection Act1 (“the Act”). The Act empowers the Director to make orders to clean up contamination and prevent the discharge of contaminants into the environment, which can be imposed on both the persons responsible for the contamination, as well as on those persons who currently own and control the land, even if the latter had nothing to do with causing the contamination. The Act, therefore, includes both a “polluter pays” and an “owner pays” enforcement mechanism.
2The concern of the Director, and the motivating force behind this appeal, is this: the decision of the Environmental Review Tribunal (“the Tribunal”) dated January 6, 2004, which is the subject-matter of this appeal, could be interpreted to mean that the Tribunal lacked jurisdiction to make an order against the current owner, Jane Montague (“Montague”), by reason of the fact that she had nothing to do with the contamination being placed in the ground. Such an interpretation, if followed by subsequent Tribunals, would undermine the “owner pays” side of the enforcement mechanism.
The Facts:
3The property in question was owned by the R.E. Lee Paint Company Limited (“Lee Paint”) from 1960 to 1986. It manufactured paint and solvents on the property. In 1978, a fire destroyed its factory.
4The Respondent, Donald Lee (“Lee”), was a director and officer of the company, and was given responsibility for the cleanup after the fire. He hired contractors to perform the cleanup, and attended at the site himself only every two or three days. During the cleanup, around 80 barrels were observed to be stacked up against the remains of the factory, in addition to several large holding tanks. Lee knew that the holding tanks were removed but did not know what was done with the barrels. The Ministry had inspectors on site during part of the cleanup.
5The property sat vacant until 1986, when it was purchased by Montague. She applied to rezone the property from industrial to residential. The Ministry consented to the rezoning without raising any environmental concerns about the property. Montague built a house and occupied it until it was listed for sale in 1991.
6At the insistence of prospective purchasers, Montague arranged for an environmental consulting firm to carry out an environmental site assessment on the property. This resulted in the discovery of three large metallic anomalies buried beneath the ground. One of these anomalies was excavated and approximately 80 drums that still contained, or had at one time contained, harmful liquid chemicals, were unearthed. These have been stored safely on the site by Montague since that time. While the soil in the immediate vicinity of the drums was contaminated, drinking wells in the area have been unaffected, and the risk of further contamination is low.
7The Director issued an order to Lee Paint, Lee and Montague, requiring extensive remedial work to be done on the site, pursuant to ss. 17, 18 and 43 of the Act. Lee and Montague appealed that decision to the Tribunal. While Lee Paint did not appeal the order, that company is now essentially defunct and is not in a position to carry out its terms.
8The order of the Tribunal revoked the Director’s order against Lee in its entirety. It also revoked that portion of the order against Montague that required her to pay for the remediation of the property, leaving intact only the provisions which required her to provide access to the property and to register a prohibition on title to the property.
9The Director now appeals the order of the Tribunal to this court, pursuant to s. 144(2) of the Act, which provides that any party to a hearing before the Tribunal may appeal to the Divisional Court on a question of law.
Standard of Review:
10Despite the fact that the Act expressly provides for an appeal to this court on a question of law, it is still necessary to determine the appropriate standard of review to be applied. As the Supreme Court of Canada stated in Dr. Q. v. College of Physicians and Surgeons of British Columbia2,
The term “judicial review” embraces review of administrative decisions by way of both application for judicial review and statutory rights of appeal. In every case where a statute delegates power to an administrative decision-maker, the reviewing judge must begin by determining the standard of review on the pragmatic and functional approach.
11The pragmatic and functional approach was outlined in the leading case of Pushpanathan v. Canada (Minister of Citizenship and Immigration)3, and requires the court to consider four contextual factors in determining the proper standard of review:
the presence or absence of a privative clause or statutory right of appeal;
the expertise of the tribunal relative to that of the reviewing court on the issue in question;
the purposes of the legislation and the provision in particular; and
the nature of the question - law, fact or mixed law and fact.
12Dealing with the first factor, we have already noted that the Act provides for a statutory right of appeal to this court on questions of law, which favours the normal appellate standard of correctness. However, the Act provides a different mechanism for appealing questions other than questions of law, in s. 144(3):
Appeal to Minister
(3) A party to a hearing before the Tribunal may, within thirty days after receipt of the decision of the Tribunal or within thirty days after final disposition of an appeal, if any, under subsection (2), appeal in writing to the Minister on any matter other than a question of law and the Minister shall confirm, alter or revoke the decision of the Tribunal as to the matter in appeal as the Minister considers in the public interest.
13This section operates, in our view, as a form of privative clause with respect to questions other than questions of law, since it gives exclusive jurisdiction over such questions to the Minister. Questions of fact, for example, would fall into this category. The appeal before this court, however, is on questions of law, and this section reinforces the intention of the legislature that such questions are to be decided only by a court of law. Where, as here, the statute provides for a specific type of question to be referred to the reviewing court, a “more searching standard of review” is suggested: Dr. Q. v. College of Physicians and Surgeons of B.C..4
14The second factor is the expertise of the tribunal relative to this court. The Environmental Review Tribunal Act dictates the composition of the Tribunal.5 The members of the Tribunal do not require any special qualifications. The members do not require any legal or scientific experience or training. They are merely appointed by the Lieutenant Governor in Council and cannot be in the employ of the Ministry of the Environment.6 The Tribunal may appoint an expert to assist it on any matter.7
15A consideration of this factor also points toward a standard of correctness. On questions of law, the expertise of this court would be presumptively superior to a Tribunal whose members are not required to have any legal training.
16The third factor calls for an examination of the purpose of the Act. The purpose of the Act is found in s. 3:
The purpose of this Act is to provide for the protection and conservation of the natural environment.
17This legislation is intended to provide for the protection of the environment and, by implication, the protection of the general public that depends on the environment. It requires the Tribunal to engage in policy issues and consider policy objectives, and to balance multiple sets of interests. These considerations point toward a more deferential standard of review.
18However, while the general purpose of the statutory scheme must be considered, it is also necessary to consider the specific legislative purpose of the provisions under consideration by the reviewing court, which are ss. 17, 18 and 43 of the Act. The appellant submits that a significant jurisdictional question is at issue in this appeal, which strikes at the heart of the Director’s power to make the orders that are necessary to protect and conserve the natural environment. Thus, the legal issues have wider implications that bear upon the very purpose of the Act and call for the higher standard of review of correctness.
19The final factor is the nature of the question. The questions before this court are purely legal ones, relating to the jurisdiction of the Director to make orders. Where an issue of pure law is under consideration, a more searching review is called for, particularly where the decision will be one of general importance or great precedential value: Chieu v. Canada (Minister of Citizenship and Immigration)8.
20Based on our analysis of the four factors, above, we conclude that the standard of review on the questions of law raised in this appeal is one of correctness.
Relevant Provisions of the Act:
21Sections 17, 18 and 43 of the Act provide as follows:
Remedial orders
- Where any person causes or permits the discharge of a contaminant into the natural environment, so that land, water, property, animal life, plant life, or human health or safety is injured, damaged or endangered, or is likely to be injured, damaged or endangered, the Director may order the person to,
(a) repair the injury or damage;
(b) prevent the injury or damage; or
(c) where the discharge has damaged or endangered or is likely to damage or endanger existing water supplies, provide alternate water supplies.
Order by Director re preventive measures
(1) The Director, in the circumstances mentioned in subsection (2), by a written order may require a person who owns or owned or who has or had management or control of an undertaking or property to do any one or more of the following:
To have available at all times, or during such periods of time as are specified in the order, the equipment, material and personnel specified in the order at the locations specified in the order.
To obtain, construct and install or modify the devices, equipment and facilities specified in the order at the locations and in the manner specified in the order.
To implement procedures specified in the order.
To take all steps necessary so that procedures specified in the order will be implemented in the event that a contaminant is discharged into the natural environment from the undertaking or property.
To monitor and record the discharge into the natural environment of a contaminant specified in the order and to report thereon to the Director.
To study and to report to the Director upon,
i. measures to control the discharge into the natural environment of a contaminant specified in the order,
ii. the effects of the discharge into the natural environment of a contaminant specified in the order,
iii. the natural environment into which a contaminant specified in the order is likely to be discharged.
Grounds for order
(2) The Director may make an order under this section where the Director is of the opinion, upon reasonable and probable grounds,
(a) that the nature of the undertaking or of anything on or in the property is such that if a contaminant is discharged into the natural environment from the undertaking or from or on the property, the contaminant will result or is likely to result in an effect mentioned in the definition of “contaminant” in subsection 1 (1); and
(b) that the requirements specified in the order are necessary or advisable so as,
(i) to prevent or reduce the risk of the discharge of the contaminant into the natural environment from the undertaking or from or on the property, or
(ii) to prevent, decrease or eliminate an effect mentioned in the definition of “contaminant” in subsection 1 (1) that will result or that is likely to result from the discharge of the contaminant into the natural environment from the undertaking or from or on the property.
Order for removal of waste
- Where waste has been deposited upon, in, into or through any land or land covered by water or in any building that has not been approved as a waste disposal site, the Director may issue an order to remove the waste and to restore the site to a condition satisfactory to the Director to,
(a) an owner or previous owner or a person who otherwise has or had charge and control of the land or building or waste;
(b) an occupant or previous occupant of the land or building; or
(c) a person that the Director reasonably believes engaged in an activity prohibited by section 40 or 41 that resulted in the deposit of the waste.
22It can readily be seen that, in each instance, the statute provides that the Director may, not shall, make an order. It is, therefore, a matter of discretion, and the Director is entitled to consider issues of fairness in determining whether or not to make an order, after having decided that he has jurisdiction to make an order.
23The powers of the Tribunal on an appeal are governed by s. 144(1) of the Act, which provides as follows:
Powers of Tribunal
- (1) A hearing by the Tribunal shall be a new hearing and the Tribunal may confirm, alter or revoke the action of the Director that is the subject-matter of the hearing and may by order direct the Director to take such action as the Tribunal considers the Director should take in accordance with this Act and the regulations, and, for such purposes, the Tribunal may substitute its opinion for that of the Director.
24The Tribunal, therefore, stands in the shoes of the Director, and is entitled to exercise its own independent discretion as to whether or not an order should be issued.
25The decision of the Ontario Environmental Appeal Board (as the Tribunal was then known) in 723597 Ontario Inc. (C.O.B. Appletex) v. Ontario Ministry of the Environment and Energy9, approved by the Divisional Court on appeal10, establishes a two-step procedure. First, the Tribunal determines the issue of jurisdiction, which is whether or not an order can be made against a party. If it determines that it has jurisdiction to make an order, the next stage is to determine whether it should make an order. In exercising its discretion, the Tribunal is entitled to consider issues of fairness.
26The Tribunal’s role in this regard was described by the Board in Appletex as follows:
The powers of the Board are not limited to ruling on whether a Director has acted within his or her jurisdiction. This is clear from the power given to the Board to substitute its views for those of the Director. Moreover, if the powers of the Board were limited to ensuring that the Director exercises his or her discretion in good faith and within the ambit of his or her statutory powers, there would be little need for such a Board, since judicial review is available for an excess of jurisdiction.
But neither is the Board’s role to simply substitute its own view of what is fair for that of the Director. The substitution of one decision maker’s unfettered discretion for the unfettered discretion of another does little to provide the clarity, certainty and predictability that should be a feature of a regulatory regime.
However, the Board may fulfill a variety of roles within the scope and purpose of the EPA, such as determining whether the Director has failed to follow Ministry policies guiding the exercise of discretion or has followed such policies slavishly without apparent regard to factors that would make following the policy inappropriate in the specific case, or the Board can fill a policy vacuum.
Where neither the Ministry nor the Director appear to have put their mind to principles of fairness, efficiency, and effectiveness to guide the exercise of discretion, the Board may attempt to enunciate and apply such principles.11
27Against that background, we now consider the decision of the Tribunal that is called into question in this appeal.
The Decision Affecting Donald Lee:
28The Tribunal arrived at the following conclusions that were specific to the respondent, Lee:
While he was given the responsibility for the cleanup of the property after the fire, there is no evidence adduced to suggest he was responsible for the burial of any drums or debris on the property.
From the evidence adduced, the Tribunal finds Donald Lee was never an “owner” of the property, pursuant to s. 17 or 18 of the EPA.12
29The Tribunal framed its decision to revoke the order against Lee in the following terms:
The Order against Donald Lee is revoked because the Director has failed to prove on a balance of probabilities that Donald Lee:
had any management or control over the R.E. Lee Paint Company Limited or, over the property owned by the R.E. Lee Paint Company Limited at the time of the fire in September 20, 1978, and
was responsible for the burial of the drums of paint and solvents following the fire.13
30We agree with counsel for the appellant that the order against Lee was revoked on jurisdictional grounds. We will deal with the order under s. 17 first.
31The Tribunal’s decision is, with respect, not well written. In concluding that Lee was not “responsible for” the burial of the drums, the Tribunal was not asking itself the question mandated by the Act. Section 17 permits the Director to make an order against any person who “causes or permits” the discharge of a contaminant into the natural environment. Apparently the Tribunal was of the view that Lee did not bury the drums himself or direct that they be buried and one may therefore conclude that he did not “cause” the drums to be buried.
32The question remains, however, whether his conduct “permitted” the burial of the waste. The Supreme Court of Canada, in Regina v. City of Sault Ste. Marie14, while interpreting a similar section of the Ontario Water Resources Act15, stated the following: “The ‘permitting’ aspect of the offence centers on the defendant’s passive lack of interference or, in other words, its failure to prevent an occurrence which it ought to have foreseen”. The fact that Lee had responsibility for the cleanup of the site, including the 80 drums of waste, yet chose to leave the site unsupervised for two or three days at a time while the cleanup was underway, are factors that should have been considered by the Tribunal in this regard.
33The Tribunal’s decision with respect to s. 18 was based on the following findings of fact:
Lee never had any direct charge, management or control over the company or the property at the time of the fire;
Although he owned a few shares in Lee Paint, he should not be considered as
the owner of the company or the property;
At the time of the fire, and until his mother passed away, he was not the directing mind of Lee Paint.
34Those findings of fact are not under review in this appeal. However, we are of the view that the Tribunal erred in law in failing to direct its mind to the proper legal issues under s. 18, and in applying a test for liability was far too narrow.
35Liability under s. 18 flows from having had “management or control of an undertaking or property”. Accepting the findings of fact of the Tribunal, it cannot be suggested that Lee had management or control of the property, or of the company that owned the property. However, the question remains whether he had management or control of the “undertaking”.
36The nature of the undertaking that is relevant for purposes of s. 18 can be found in s. 18(2). That subsection speaks to the “risk of the discharge of the contaminant into the natural environment from the undertaking…”. Before the Tribunal can determine who had management or control, it is first necessary to determine what it is that was being managed or controlled. This requires the Tribunal to determine what undertaking it is that created the risk of discharge.
37That is precisely what the Board did in P & L Tire Recycling Inc. v. Director, Ministry of the Environment16. At p. 12 of that decision, the Board took the time to define precisely what undertaking created the risk:
The undertaking that could result in a discharge causing harmful impacts consisted of: the storage of tires; the operations involved in altering both the tires that were on the property at the time of purchase and the additional tires brought onto the property for the purposes of selling the tires or parts of them; the business of selling tires and tire parts; the transportation of tires and tire parts to and from the property; and, most important, the bringing of additional tires to the property. The things on the property that could contribute to harm if a contaminant were discharged were not only the tires themselves, but also the buildings and equipment that could cause a fire or help it to spread to the tires.
38The undertaking that presented the risk of discharge in the case at bar was the cleanup of the debris, including the 80 drums of waste. It is noteworthy that the factory was completely destroyed, so that the business of paint and solvent manufacturing was no longer being carried on at these premises after the fire. It would appear that the only undertaking being carried on following the fire was the cleanup operation. Responsibility for that undertaking was, on the facts as found by the Tribunal, given to Lee. While he was not the controlling mind of the company as a whole, it is only necessary that he be in a position of management or control of the undertaking that creates the risk of contamination to attract liability under s. 18.
39As to the meaning of the words “management or control”, the Board in P & L Tire had this to say:
Management and control are overlapping concepts. It is impossible to state precisely where one leaves off and the other begins. The Oxford Encyclopedic English Dictionary defines “manage” as “organize; regulate; be in charge of (a business, etc.)”. “Management” has a corresponding definition as “the process or an instance of managing”. “Control” as a noun is defined as “the power of directing, command”, or alternatively as “the power of restraining”. Thus, control includes both the power to make things happen and to prevent them. As a verb, “control” means “have control or command of; dominate; exert control over; regulate; hold and check; restrain”. Black’s Law Dictionary (5th Edition) defines “control” as “the power or authority to manage, direct, superintend, restrict, regulate, govern, administer or oversee”.
In the context of liability for conviction of an offence, the concept of control was explored in the Supreme Court of Canada decision in R. v. the City of Sault Ste. Marie [citation omitted]. In that case, the Court said that where a person commits a prohibited act, his or her employer or principal has also commtited the offence where the employer or principal was in a position to control the conduct of the offender and to prevent the conduct, but failed to do so. That case established the principle that control is not limited to direct supervision, oversight or ownership, but may be found where one person has the ability to strongly influence the conduct of another. This ability to influence may be found in the ability of those in charge of business activities to supervise, inspect, improve their business methods, and to exhort those whom they may be expected to influence or control…17
40In Appletex, the Divisional Court quoted with approval the following comments by the Board as to the scope of management and control necessary to give the Board jurisdiction to make an order under ss. 18 and 43:
“Control” does not only encompass the formal legal control available to officers and directors, but also de facto control by others in a position to significantly influence the management of the undertaking. It can incorporate control of the purse strings through means other than direct or daily participation in the corporation or its business. Similarly, “management” of the undertaking is not restricted to management of the operations creating a risk of pollution. Indeed, as will be seen below, in the view that we take of this matter, the real issue in this case in regard to Messrs. Bell and Harris is not how the business was conducted as an operating entity but how the property was decommissioned when the business was abandoned. The aspects of management and control that are most important to our decision are not those that relate to operating decisions but those relating to the decision to abandon the business and the premises.18
41The Tribunal in the case at bar found that it lacked jurisdiction to make an order against Lee under s. 18 because he was not the directing mind of the company. That was, in our view, an error of law because it defines “management or control” too narrowly. While he was not running the company as a whole, he was placed in charge of the cleanup operation which is the undertaking that created the risk of discharge. He hired the subcontractors who did the work, and was therefore in a supervisory position over them and in a position to exert influence in the way the cleanup was conducted. All of these factors would have been sufficient to give the Tribunal jurisdiction to make an order under s. 18, had it directed its mind to the proper legal test for liability.
42Turning to s. 43, a discussion as to the jurisdiction of the Tribunal to make an order under that section is notable by its absence. While the Tribunal expressly declined jurisdiction to make an order under ss. 17 and 18 against Lee, s. 43 was not mentioned. That section gives jurisdiction to make an order against “an owner or previous owner or a person who otherwise has or had charge and control of the land or building or waste”. Lee does not have to be found to be an “owner” to be liable to an order under this section, nor is it necessary that he have charge and control of the business as a whole. So long as he had charge and control of the “waste”, jurisdiction lies under this section to make an order against him.
43As already noted, the Tribunal made a clear finding of fact that Lee had responsibility for the cleanup of the property after the fire. That responsibility included dealing with the 80 waste drums that were stacked up against the remains of the building. Had it considered s. 43, the Tribunal may well have concluded that Lee had charge or control of the waste during the cleanup phase, thereby rendering him liable to an order.
44We are of the view that the Tribunal erred in law in failing to consider the issue of Lee’s liability under s. 43, when a finding of liability under that section was clearly open to it on the facts as found by the Tribunal. We are also of the view that the Tribunal erred in law in failing to consider whether Lee “permitted” the discharge of the contaminants under s. 17, and in failing to properly direct itself as to the test for liability under s. 18. For those reasons, the appeal is allowed as it relates to the revocation of the Director’s order against Lee and a new hearing before a differently constituted Tribunal is directed.
The Decision Affecting Jane Montague:
45Counsel for the appellant submit that the order was substantially revoked against Montague for jurisdictional reasons as well. They primarily rely on two passages from the Tribunal’s decision to support this contention. The first reads as follows:
In this matter, the Director has issued the Order against Mrs. Montague who was not in possession of the property or an owner responsible for managing it at the time of the burial of the waste.
The Tribunal disagrees with the Director that Mrs. Montague must be subject to the requirements of sections 17 of 18 of the Order [sic] by virtue of her status as owner of the property.19
46The second passage reads as follows:
There is no evidence to show Mrs. Montague caused or permitted any discharge of the contaminants into the natural environment pursuant to section 17 of the EPA.
Thus, the Tribunal finds the Director did not have jurisdiction to issue an order under section 17 of the EPA to Mrs. Montague.20
47There is no doubt that the Tribunal revoked the order made against Montague under s. 17 on jurisdictional grounds because its reasons expressly say that. There is also no doubt that this decision was legally correct based on the factual findings of the Tribunal. Section 17 can be invoked only against a person who “causes or permits” the discharge of a contaminant into the environment. Since the drums were buried many years before Montague purchased the property, she clearly did not “cause” the discharge. The Ministry had argued before the Tribunal that she was “permitting” contaminants to leak from the drums during her period of ownership, but that argument was dismissed on evidentiary grounds. While there was staining of the soil around the drums, the Tribunal found that no evidence was led by the Director to prove that this was the result of ongoing discharge from the drums, as opposed to staining that occurred immediately at the time the drums were buried.
48We do not agree with the appellant that the Tribunal revoked the decision made against Montague under s. 18 on jurisdictional grounds. To begin with, if the Tribunal intended to do so, it would have expressly said so, as it did with respect to s. 17. Secondly, if the Tribunal had concluded that it lacked jurisdiction to make an order, it would have revoked the entire order against Montague rather than only part of it. The fact that the Tribunal affirmed part of the order against Montague clearly indicates that the Tribunal considered itself vested with jurisdiction to make an order.
49Finally, the Tribunal embarked on a “fairness” analysis in its reasons. That is the second stage of the Appletex approach outlined above, and need only be engaged in once jurisdiction to make an order has been determined to exist. The Tribunal was clearly familiar with Appletex and referred to it several times in its decision.
50It is true that the Tribunal, under the subtitle “The issue of fairness”, discussed one issue only relating to the extent to which Ministry guidelines must be considered in the fairness analysis. However, the reasons of the Tribunal are replete with factual findings that bear on the fairness issue. Those findings include the following:
Montague exercised the due diligence of the day when she purchased the property, and did not err in her failure to require an environmental site assessment prior to her purchase of the property;
The MOE consented to the rezoning of her property, and should not have done so if it had any concerns about the quality of the cleanup done on the property;
Montague was not in possession of the property at the time of the burial of the waste, and had nothing to do with the contamination being placed in the ground;
At the time the anomalies were discovered, Montague took immediate action to identify the anomalies and excavate the drums;
The cost of remediation will be a minimum of many hundreds of thousands of dollars and could reach several million dollars;
Montague is an elderly retiree, and cannot pay for the further cleanup of the property.
51While it would have been preferable for the Tribunal to have collected all of those findings under the “Fairness” subtitle, we are satisfied that these findings were made and considered by the Tribunal in the context of its consideration of the fairness issue.
52When the Tribunal made the comment quoted above at para. 45, in which it disagreed with the Director that Montague “must” be subject to ss. 17 and 18 “by virtue of her status as owner”, it was not stating that it had no jurisdiction to make an order against her. It was, instead, stating that the mere fact that she was an owner did not mean that the Tribunal must make an order against her.
53Reading the reasons of the Tribunal as a whole, imperfect as they are, we are satisfied that the Tribunal correctly assumed that it had jurisdiction to make an order against Montague but, after considering the fairness issue, declined to make any order that would burden her with the financial responsibility for the cleanup.
54There can be no question that the Director, and the Tribunal, had jurisdiction to make an order against Montague, under both ss. 18 and 43. Both sections clearly empower the Director to make an order against the current owner, so the “owner pays” enforcement mechanism remains available to the Director. Jurisdiction is obvious, and perhaps that explains why the Tribunal did not directly address that issue with respect to ss. 18 and 43. Jurisdiction under s. 17, however, is not so obvious, and requires factual findings to support it, which again perhaps explains why the Tribunal felt the need to make a specific jurisdictional finding with respect to s. 17.
55For the foregoing reasons, we do not agree that the Tribunal erred in law in failing to find jurisdiction to make an order against Montague under ss. 18 and 43. We are satisfied that the Tribunal did find jurisdiction, but after considering the fairness issue it exercised its discretion and decided not to burden Montague with the financial responsibility for the cleanup. Accordingly, we find no basis for interfering with the Tribunal’s decision.
56Before closing, there is one point raised by counsel for the appellant that merits specific consideration. It flows from the Tribunal’s discussions under the subtitle “The issue of fairness”, where it stated the following:
The Tribunal [and its predecessor, the Environmental Appeal Board] has ruled that “guidelines” are designed to provide guidance to Directors and are not Ministry policy, thus, they need not be followed by a Director. Further, the Director has not submitted any evidence to show that the Proposed Amendments to Compliance Guideline [exhibit 17] are anything more than “proposed”.21
57The guideline in question is dated May, 1997. In an appendix to the document, it discusses various scenarios where owners of properties might be considered to be “innocent”, such that the Director might exercise his discretion so as to relieve them from liability under the Act. It specifically considers the case of the innocent purchaser who buys a contaminated site without notice of the presence of contamination. It suggests that this should not be a ground for relieving the buyer of liability. By encouraging a policy of “buyer beware”, purchasers would be encouraged to conduct “proper audits”, which would make it difficult for vendors to sell a contaminated property.
58Despite the fact that the title of this document is “Proposed Amendments to Compliance Guideline”, counsel for the appellant demonstrated that, by virtue of the date that this proposed guideline was posted and the expiry of the prescribed deadline for comment, it had, in fact, become an official guideline by the time this appeal was heard by the Tribunal. Thus, it is argued that the Tribunal misapprehended the evidence in stating that the guideline was nothing more than “proposed”.
59While it appears that the Tribunal was in error in this regard, nothing turns on it. Counsel for the appellant concedes that such guidelines “need not be followed by a Director”. Thus, there is no error of law in the Tribunal’s statement to that effect. Appletex and other cases make it clear that the Tribunal must consider Ministry guidelines, and it is clear that the Tribunal did turn its mind to the guideline in question. It is equally clear that the Tribunal made a conscious decision not to follow the guideline and it is a fair inference that it would have done so irrespective of whether the guideline was official or merely proposed. In the exercise of its discretion, the Tribunal was quite entitled to choose not to follow this guideline. While documents of this nature may guide its discretion, they cannot fetter it.
60The findings of the Tribunal earlier in its decision make it clear that it had the “buyer beware” concept in mind when considering the issue of fairness. It specifically found that Montague “exercised the due diligence of the day” when she purchased her property. In other words, she did all of the “proper audits” that a reasonable buyer would have been expected to do in 1986. While standards have changed substantially since then, and environmental audits have become the norm when purchasing industrial property, fairness dictates that such high standards should not be retroactively applied to Montague.
61In the result, we find no reversible error in the decision of the Tribunal as it relates to Montague and the appeal in that regard is dismissed.
62With respect to costs, counsel for the appellant indicated that they are not seeking any costs of this appeal. It will not, therefore, be necessary to receive submissions as to the costs of their successful appeal of the order as it relates to Lee. With respect to the Montague appeal, if counsel cannot resolve the issue between themselves, we will receive written submissions on costs from Mr. Pickfield within 20 days, responding submissions from counsel for the appellant within 10 days thereafter, and any reply submissions within 5 days thereafter.
Heeney J.
Matlow J.
Lack J.
Released: March 1, 2005
COURT FILE NO.: 04-168-DV
DATE: 05-03-01
ONTARIO
SUPERIOR COURT OF JUSTICE
(DIVISIONAL COURT)
B E T W E E N:
JANE MILLER MONTAGUE and DONALD LEE
Respondents
- and –
THE DIRECTOR, MINISTRY OF THE ENVIRONMENT
Appellant
REASONS FOR JUDGMENT
Matlow, Lack and Heeney JJ.
Released: March 1, 2005
Footnotes
- R.S.O. 1990 c. E.19 as amended
- 2003 SCC 19, [2003] 1 S.C.R. 226 at para. 21
- 1998 778 (SCC), [1998] 1 S.C.R. 982
- Supra note 2 at para. 27
- S.O. 2000, C. 26, Sched. F.
- Ibid., at s. 1(2).
- Ibid., at s. 6.
- 2002 SCC 3, [2002] 1 S.C.R. 84 at para. 23
- (1994), 13 C.E.L.R. (N.S.) 257, hereafter “Appletex”
- (1995) 1995 10633 (ON SC), 26 O.R. (3d) 423 (Div. Ct.)
- Supra note 8 at pp. 290-291
- ERT decision January 6, 2004, Appeal Book Tab 2, p. 22
- Ibid, p. 24
- (1978), 1978 11 (SCC), 85 D.L.R. (3d) 161 (S.C.C.) at p. 184
- R.S.O. 1970, c. 332
- [1992] O.E.A.B. No. 21
- Ibid, p. 12 - 13
- Supra note 9 at p. 427
- Supra, note 11, at p. 20
- Ibid, p. 21
- Ibid, p. 23