2014 ONSC 5582
COURT FILE NO.: 2055/14
ERT Case No.: 13-084-13-087
DATE: 20140929
ONTARIO
SUPERIOR COURT OF JUSTICE
(Divisional Court)
B E T W E E N:
Scotty Dixon, Jennifer Dixon, Thomas Ryan and Catherine Ryan
Julian N. Falconer, Asha James and Junaid Subhan for the Appellants/Appellants on Appeal
Appellants/Appellants on Appeal
- and -
The Director, Ministry of the Environment
No one Appearing
Respondent/Respondent on Appeal
-and-
St. Columban Energy LP
Respondent/Respondent on Appeal
Darryl A. Cruz and Eric Pellegrino for the Respondent/Respondent on Appeal
ONTARIO
SUPERIOR COURT OF JUSTICE
(DIVISIONAL COURT)
Court File No. 2056/14
ERT Case No.: 13-097/13-098
B E T W E E N:
Shawn Drennan and Tricia Drennan
Julian N. Falconer, Asha James and Junaid Subhan for the Appellants/Appellants on Appeal
Appellants/Appellants on Appeal
- and -
The Director, Ministry of the Environment
No one Appearing
Respondent/Respondent on Appeal
-and-
K2 Wind Ontario Inc. Operating as K2 Wind Ontario Limited Partnership
Respondent/Respondent on Appeal
Chris Bredt, James Bunting and Nathaniel Read-Ellis, for the Respondent/Respondent on Appeal
HEARD: September 22, 2014
LEITCH J.
[1] The appellants, Shawn Drennan and Tricia Drennan (the “Drennan Appellants”), bring a motion seeking “a stay of the construction of the K2 Wind Project” pursuant to rule 63.02, Rules of Civil Procedure, R.R.O. 1990, Reg.194, s. 106 of the Courts of Justice Act, R.S.O. c.C.43, and s. 24.1 of the Canadian Charter of Rights and Freedoms, Part 1 of the Constitution Act, 1982, being Schedule B to the Canada Act 1982 (U.K.), 1982, c. 11., restraining K2 Wind Ontario Inc. from all “construction related activities regarding the K2 Wind Project” until the resolution of the appeal to this court or other disposition of the appeal.
[2] In their motion materials, the Drennan appellants define the K2 Wind Project as “the construction of a wind farm consisting of upwards of 140 wind turbines in which one of the wind turbines will be as close as 714 meters from their home”.
[3] The appellants, Scotty and Jennifer Dixon and Thomas and Catherine Ryan, (the “Dixon and Ryan Appellants), also bring a motion to stay the construction of “the St. Columban Wind Project” restraining the respondent, St. Columban Energy LP, from all construction related activities relating to the St. Columban Wind Project relying on the same statutory authorities as the Drennan appellants.
[4] The Dixon and Ryan appellants define the St. Columban Wind Project as one involving wind turbines 551 meters from their home with other turbines within a two-kilometer radius of their home.
[5] The Director, Ministry of the Environment, takes no position on these motions.
Background Facts
[6] The respondents sought a renewable energy approval (a “REA”) from The Director, Ministry of the Environment as mandated by s. 47.5 of the Environmental Protection Act R.S.O. 1990 c. E-19, (the “Act”) for their renewable energy projects.
[7] The Director issued a REA for the St. Columban Project on July 22, 2013, and for the K2 Project on July 23, 2013.
[8] Any member of the public, resident in Ontario may challenge an application for a REA and require a hearing by the Environmental Review Tribunal (the “ERT”) pursuant to s. 143.1 of the Act. Section 143.1(3) provides that such a hearing can be required only on the grounds that engaging in the renewable energy project in accordance with the REA will cause either serious harm to human health, or serious or irreversible harm to plant life, animal life, or the natural environment.
[9] The appellants exercised their rights under s. 143.1 of the Act and filed with the ERT Notices of Appeal of the REAs and Notices of Constitutional Question.
[10] The appellants’ Notices of Appeal and Constitutional Question alleged a violation of s. 7 of the Charter and asserted that the proposed projects would cause serious harm to human health. As the respondents have emphasized on these motions, the appellants did not raise any water management issues in their appeals to the ERT.
[11] Section 145.2.1(2) of the Act provides that the ERT shall review a decision of the Director and shall consider only whether engaging in the renewable energy project in accordance with the REA will cause serious harm to human health or serious and irreversible harm to plant life, animal life, or the natural environment.
[12] The appellants’ notices required the ERT to consider whether the projects will cause serious harm to human health. There were no allegations by the appellants about serious and irreversible harm to the environment.
[13] As the St. Columban respondents set out, the ERT heard the testimony of 19 witnesses, including the Dixon and Ryan appellants. On January 16, 2014, in a 63-page decision, the ERT dismissed the appeal by the Dixon and Ryan appellants in relation to the St. Columban Project.
[14] In relation to the Dixon appeal, the ERT heard the testimony of 20 witnesses, including eight (8) experts, as well as the Drennan appellants. On February 6, 2014, in a 102-page decision, the ERT dismissed the Drennan’s appeal in relation to the K2 Project.
[15] Section 145.6(1) of the Act permits an appeal to this court by any party to a hearing before the ERT on a question of law.
[16] On February 14, 2014, and on February 28, 2014, the Dixon and Ryan appellants and the Drennan appellants, respectively, filed a Notice of Appeal in this court.
[17] I note that there is a third appeal from a further decision of the ERT that will be heard together with the appeals by the Drennan appellants and the Dixon and Ryan appellants. The appellants in the third appeal are not parties to these motions for a stay.
[18] The three appeals are to be heard together November 17, 18, and 19, 2014.
The Status of a Decision of the ERT Pending an Appeal
[19] Section 145.6(3) of the Act provides that an appeal of a decision of the ERT to either this court or to the Minister does not stay the operation of the decision unless the ERT orders otherwise.
[20] Section 143(2) of the Act also provides that the ERT may stay the operation of a decision on a party’s application.
[21] In addition, s. 145.6(4) of the Act provides that if the ERT’s decision is appealed to this court, this court may stay the operation of the decision.
Other Relevant Provisions in Relation to these Motions for a Stay
[22] Section 106 of the Courts of Justice Act, provides that a court, on motion by any person, may stay any proceeding on such terms as are considered just.
[23] Rule 63.02 of the Rules of Civil Procedure, provides that an interlocutory or final order may be stayed on such terms as are just by an order of a judge of the court to which an appeal has been taken.
[24] In addition, this court has inherent jurisdiction to grant a restraining order or interlocutory injunction. With respect to such relief, rule 40.03 provides that on such a motion, the moving party shall undertake to abide by any order concerning damages that the court may make unless the court orders otherwise.
The Jurisdictional Issue Raised by the Respondents
[25] The respondents emphasize that this court is given statutory authority pursuant to the Act to stay only the operation of “the decision” which is the subject of the appeal. In this case, the orders, which they say are the subject of the appeal, are the orders of the ERT dismissing the appeals from the Director’s decisions to issue the REAs.
[26] Similarly, the respondents submit that rule 63.02 does not provide jurisdiction for the stays which are sought because it only provides jurisdiction for the stay of orders under appeal, which are again the ERT orders dismissing the appeal and not the issuance of the REAs by the Director. The respondents also note that s. 106 of the Courts of Justice Act only references a stay of a proceeding and the appellants are not seeking that relief.
[27] The respondents argue that these motions seek a stay of the Director’s decisions to issue REAs and this court does not have the jurisdiction to grant that relief. They further argue that what the appellants seek is the extraordinary relief of a wide ranging injunction, which they acknowledge is within the court’s jurisdiction, and which engages rule 40.03.
[28] The respondents’ position is supported by the decision of this court in Pitt v. Wainfleet Wind Energy Inc., 2014 ONSC 3970, where the court stated at para. 2 that rule 63.02 provides only the procedural means for this court to order a stay of the decision of the ERT dismissing an appeal of a REA issued by the Director, but does not confer any jurisdiction or procedural means for the court to grant a stay of the REA itself. In that case, this court noted at para. 4 that there is a specific statutory mechanism for obtaining a stay of the operation of a REA in s. 143(2) of the Act and it is the ERT that has the authority to stay the operation of an REA.
[29] In Pitt, it was noted that this court has inherent jurisdiction to grant interlocutory relief under Rule 40 and indeed, Harvison Young J. exercised such discretion enjoining the defendant in that case from further construction or operation of certain wind turbines on the condition that the applicant provided an undertaking respecting damages in the event that the appeal was dismissed. She stated in her endorsement that in that case there were no “special circumstances” which rebutted the strong presumption that interlocutory relief must be accompanied by an undertaking for damages referencing Vieweger Construction Co. v. Rush & Tampkins Constructions Ltd., 1964 53 (SCC), [1964] S.C.J. No. 60 (S.C.C.), [1965] S.C.R. 195.
[30] The appellants argue that this reasoning leads to “an absurd result”. Their argument in relation to this issue is succinctly set out in para. 15 of the appellants’ reply factum as follows:
By the logic set out in Pitt, if the ERT allows an appeal of a Director’s decision to issue an REA and the Director appeals the ERT decision to the Divisional Court, the Divisional Court would have the jurisdiction to grant a motion for stay brought by the Director. This is because a stay would stop the operation of the ERT decision and restore the decision of the Director. However, if an individual or community organization appeals the decision of the ERT to deny an appeal of the decision of the Director to issue an REA, that individual or community organization would not be able to obtain a stay. Thus, of the parties to an ERT appeal, only the Director would be able to avail himself of the provisions of section 145.6(4) of the EPA under the interpretation proposed in Pitt. Clearly, this is an absurdity that the legislator could not have intended.
[31] In relation to this issue, I agree with the respondents that neither rule 63.02 nor s. 106 of the Courts of Justice Act provide jurisdiction to this court to grant the relief which the appellants are seeking namely, a halt to construction activity rather than a stay of the order under appeal.
[32] Similarly, s.145.6(4) of the Act does not provide the statutory authority to enjoin the respondents from continuing their construction activity pursuant to the REAs issued by the Director. The REAs remain valid and operational when, in these circumstances, the ERT’s decisions that are under appeal confirmed that Director’s decisions and there has been no application to the ERT to stay the operation of the Director’s decisions.
[33] As the respondents note, the appellants were not without a remedy because it was open to them to seek a stay from the ERT of the REAs. In addition, the appellants may pursue an interlocutory injunction in this court, which in my view, is the proper characterization of the relief sought on these motions.
[34] In order to receive the relief they seek, the appellants must meet a three-part test that I review further in these reasons.
[35] I note that Mr. Falconer, on behalf of the appellants, acknowledged that the appellants would also have had to meet this test in order for the stays to be granted pursuant to s. 145.6 of the Act or rule 63.02 if I had found those provisions were applicable.
[36] As the respondents note, the major difference between a stay and an injunction is that the latter requires the appellant to provide an undertaking in relation to damages. The appellants on these motions requested that the court not require them to provide such an undertaking, and they are not prepared to do so, submitting that the public interest aspect of their appeals provide the special circumstances justifying relief from that obligation.
[37] As Mr. Drennan outlined in his affidavit sworn May 22, 2014 in support of his motion, he and his wife are unable to give a meaningful undertaking as to damages and if required to provide such an undertaking, they would not be in a position to seek a stay. He deposed further that while the appeal affects their personal interests, it is “inextricably linked to the public good.” He expressed his belief that the provincial government should “not allow “for profit” corporations to endanger the health of Ontario residents, particularly when the adverse health effects are only now being studied by the federal government”.
[38] Ms. Dixon in her affidavit sworn June 11, 2014, in support of these motions takes the same position with respect to the requirement of providing an undertaking in respect of damages.
[39] I will next set out the test that the appellants must meet to justify the granting of the relief they seek.
The Test for Interlocutory Injunctive Relief
[40] The Supreme Court of Canada in its decision in RJR-MacDonald Inc. v. Canada (A.G.), 1994 117 (SCC), [1994] 1 S.C.R. 311, refined the test for interlocutory injunctive relief and summarized that test at para. 43 as follows:
First, a preliminary assessment must be made of the merits of the case to ensure that there is a serious question to be tried. Secondly, it must be determined whether the applicant would suffer irreparable harm if the application were refused. Finally, an assessment must be made as to which of the parties would suffer greater harm from the granting or refusal of the remedy pending a decision on the merits.
[41] The court stated at paras. 44-45 that: the “serious question” threshold is a “low one” and below the prima facie level and noted that a judge should not engage in an extensive review of the merits subject to certain exceptions which are not applicable in this case. A judge must be satisfied that the application is “neither vexatious nor frivolous.”
[42] Further, in RJR-MacDonald at para. 57, the court described the second test as the determination whether the litigant who seeks the interlocutory injunction would, unless the injunction is granted, suffer irreparable harm. The court defined “irreparable” as referring to the nature of the harm suffered rather than its magnitude and, specifically described it as harm which either cannot be quantified in monetary terms or which cannot be cured, usually because one party cannot collect damages from the other.
[43] The remaining test involves the determination of which of the parties will suffer the greater harm from the granting or refusal of the interlocutory injunction pending a decision on the merits. In other words, the balance of convenience must be weighed. According to the guidance from the court in RJR-MacDonald, it is at this stage that it is appropriate to consider the harm that might be suffered by the respondents should the injunctive relief be granted. The court further instructed at para.64 that in constitutional cases, the public interest is a “special factor” which must be considered in assessing where the balance of convenience lies.
[44] All counsel agree that this three-part test should be considered collectively and holistically.
[45] I turn next to a consideration of whether the appellants have met this test on these motions.
Have the Appellants Met the Required Test to Grant the Injunctive Relief they seek?
[46] The first issue to be considered is whether there are serious issues to be tried on the appeals.
[47] Paragraph 5 of the appeal factum (filed at the hearing of these motions), outlines the appellants’ constitutional challenges to the process for issuance of REAs by the Ministry as well as the test before the ERT as follows:
a. the approval for the project has a serious adverse impact on the appellants’ physical and psychological integrity;
b. the process for granting the REAs does not require the Director to consider the potential health effects on the appellants, and as such has a serious impact on the appellants’ psychological integrity;
c. the appellants’ right to security of the person is violated by a process for granting the REAs which does not comply with the precautionary principle, and as such has a serious impact on the appellants’ psychological integrity;
d. the granting of an approval for a wind project without requiring the wind company to conduct any form of study to determine adverse health effects on neighbours living in close proximity to the proposed project has a serious impact on the appellants’ psychological integrity; and
e. the test of “serious harm to human health”, applicable to appeals of the Director’s decision by virtue of section 142.1 of the Act violates s. 7 of the Charter by permitting those violations of the appellants’ right to security of the person that fall short of the “serious harm” threshold.
[48] The appellants outline in para. 8 of the appeal factum, the alleged errors in law by the ERT as follows:
a. in determining that it lacked jurisdiction to assess the Director’s decision to issue the REAs in respect of compliance with section 7 of the Charter;
b. in failing to read down section 142.1 of the Act, such that it complied with section 7 of the Charter;
c. in holding that the appellants were required to call health professionals with diagnostic skills to show a link between wind turbines and the adverse health effects suffered by witnesses living in close proximity to wind turbines (“post-turbine witnesses”);
d. in holding that inferences could not be drawn as to the source of the post-turbine witnesses’ adverse health effects, especially in circumstances where the medical witnesses called by the Respondents did not examine the post-turbine witnesses nor provide other causes for their adverse health effects;
e. in holding that the evidence of the post-turbine witnesses was insufficient to support an inference that their adverse health effects were linked to living in close proximity to wind turbines;
f. in finding that there was no evidence before the ERT to support a finding that harm to human health occurs at thresholds above the 40dBA limit; and
g. in holding that the adverse health to humans suffered when living in close proximity to wind turbines was insufficient to engage section 7 of the Charter.
[49] Mr. Drennan deposed in his affidavit that further study on the effects of wind turbines on human health is required referencing a May 2010 report of the Chief Medical Officer of Health for Ontario and the fact that Health Canada announced a Wind Turbine Noise and Health Study on July 11, 2012. He also noted that the Ministry has placed a moratorium on offshore wind farm construction (wind farms placed on a body of fresh water) while further scientific research is conducted. He further noted that during his testimony at the hearing before the ERT, Dr. Michaud opined that there is a knowledge gap about the effect that wind turbines have on human health.
[50] In a supplemental affidavit, Mr. Drennan referenced the announcement by the Ministry of a request for proposals for a “technical evaluation to predict offshore wind farm noise impacts in Ontario”.
[51] Both Ms. Dixon and Mr. Drennan have deposed in their affidavits that these appeals raise legal questions regarding the constitutionality of the regulatory scheme that in their view “allows the State to impose conditions that may harm members of the public residing in the area.” They outline their position that, as a result of the regulatory process under Act, wind turbine products in Ontario that create a risk of harm must be approved notwithstanding uncertainty as to health effects.
[52] They contend that “the harm to the public arises from the fact that no studies have conclusively found that wind turbines have no impact on human health. To the contrary, studies have shown that there is a data gap in respect of the effect that wind turbines have on human health”, and they state that Ontario residents have reported adverse health effects as have other individuals living elsewhere in the world in proximity to industrial wind turbines.
[53] The respondents’ position is that the appellants’ appeals are weak because the ERT considered extensive expert evidence and testimony from laypersons ultimately making factual findings that the respondents submit are supported by the evidentiary record.
[54] The respondents submit further that the ERT had significant data respecting onshore wind turbines for its consideration (as distinct from offshore turbines, which is now the subject of further study).
[55] However, I am satisfied that the appellants meet the low threshold of establishing that there is a serious question to be tried, or in other words, that the appeal is neither vexatious nor frivolous. Therefore, I will proceed to consider the other parts of the applicable test: will the appellants suffer irreparable harm if the respondents are not restrained from continuing the construction activity and which party will suffer the greater harm from the granting or refusal of the restraining order.
[56] Mr. Drennan deposed that the impact of the development of the K2 Project on his family’s home and farm property will be substantial and creates “a significant risk of serious and irreversible damage” to land “as a result of flooding on the property”. In addition, he expressed his belief that the project will “irreversibly damage the region’s ground water reserves, including by way of contamination”. He further outlined his specific concerns and communications in relation to issues at the Ashfield switching station in the spring of 2014.
[57] He further deposed that in addition to the flooding and other water management issues, he has “numerous concerns” about the serious nuisance caused by the development of the project that remain unaddressed which he detailed in para. 61 of his affidavit sworn May 22, 2014.
[58] Ms. Dixon deposed that one of their children has hyper-sensitive hearing and gets headaches easily because of loud noises, with the intensity of her headaches varying based on the intensity and duration of the noise source. Their daughter also experiences sleep apnea and has seen a specialist in relation to this condition. Ms. Dixon is worried about the health effects from both audible and inaudible noise, and she is concerned about the close proximity of the turbines to their home and the hypersensitivity to noise that their daughter suffers from. She further deposed that she was advised by the Ryan appellants and verily believes that they too are concerned about negative health impacts associated with living in close proximity to industrial wind turbines.
[59] In summary, Ms. Dixon deposed that the impact of the development of the project on her family’s home and farm property will be substantial and irreparable; will cause a serious nuisance; will reduce the value of their property; and, will also cause health risks for her daughter.
[60] The appellants submit that the issue of ground water contamination now being asserted raises a health issue. That issue as well as the drainage issues were not raised before the ERT and are not issues on the appeal as Mr. Faulkner acknowledged. However, they further submit that the harm caused by failure to grant the stay need not be restricted to the grounds of appeal.
[61] Mr. Wendelgass, swore an affidavit on behalf of the K2 respondents, setting out his assertion that the Drennan lands experienced storm water run-off prior to any construction activity; the fact that the Ashfield switching station is located on lands owned by Hydro One Networks Inc., which is not a responding party; in any event the respondents have worked to address these issues in conjunction with Hydro One; the construction of the switching station was completed in accordance with applicable provincial approvals and mitigation measures have been installed; and continuing construction, including the implementation of K2 Wind’s long term storm water management plan, will further mitigate or resolve the Drennan’s concerns.
[62] With respect to Mr. Drennan’s concerns in relation to ground water contamination, Mr. Wendelgass referenced the report and hydro geological assessment of Stantec Consulting Ltd., dated July 21, 2014, which concluded amongst other things, that “the proposed development of the site is expected to cause no detrimental changes in ground water recharge patterns and, subsequently, cause no impact to existing water table conditions or ground water flow patterns beneath the site”.
[63] I will consider first the drainage and ground water issues. Injunctive relief cannot be granted on the basis of those alleged harms. Regardless of whether those issues pre-existed the construction, are the responsibility of a non-party or have been resolved, those issues are not before the court as this matter moves forward. The constitutional question and the issues on appeal relate to harm caused by operation of the wind turbines.
[64] The purpose of an injunction is to preserve rights pending litigation. An injunction is obtained in order to protect a status quo until issues are determined on an ongoing application, or in this case, an appeal. In other words, the serious issues on appeal must cause the alleged irreparable harms considered on an injunction.
[65] The remaining questions are whether the appellants’ assertions respecting potential harm to human health resulting from wind turbines constitute the type of irreparable harm justifying an injunction described in RJR-MacDonald and which of the appellants and respondents will suffer the greater harm from the granting or refusal of the injunctive relief.
[66] Mr. Faulkner on behalf of the appellants alleged that the respondents had made a strategic decision to start construction immediately after the decisions of the ERT were rendered, noting that it has been apparent since November 23, 2012, that the appellants planned to seek an injunction to halt construction of these projects.
[67] While it is true that the Drennan appellants brought a motion for an injunction, which was heard by Grace J. March 1, 2013, and have exercised all of their rights thereafter, the regulatory scheme allows the respondents to commence construction (as they did in March, 2014, following their public announcement) unless the ERT stays the Director’s decision or makes some other order.
[68] Mr. Wendelgass deposed there is a risk of costs or penalties for failure to meet deadlines which could be triggered or exacerbated by any stay of construction (although as the appellants note, the respondents have the benefit of a force majeure clause in their contract); he outlined the interest expense being incurred in relation to the project funding; the potential impact on a Community Benefits Fund Agreement and Road Use Agreement; the costs relating to demobilization and remobilization of contractors currently working on the project; and the impact on other operating costs.
[69] Mr. Menendez also detailed the construction time-table in relation to the St. Columban project and costs arising if that time-table was interfered with, including potentially irresolvable problems respecting the delivery and storage of equipment, and substantial costs associated with demobilization, remobilization and costs escalations.
[70] As the respondents emphasized, all of the appellants’ allegations respecting harm relate to noise generated by an operational wind turbine. Mr. Wendelgass, on behalf of the K2 respondents deposed that the K2 Project will not be operational until January, 2015, and will not commence commercial operation until mid-2015. Mr. Menendes on behalf of the respondent, St. Columban, deposed that its project would not be operational until at least February, 2015.
[71] In relation to Ms. Dixon’s assertion that their property value had declined and would continue to decline throughout construction, I agree with the respondents that it is only the outcome of the appeal that will have an impact on property values. As Mr. Menendes deposed, a temporary cessation of construction between the hearing of these motions and the hearing of the appeals would not influence property values following the appeal, and if the appellants are successful on the appeal and the REAs are revoked, the construction projects would be decommissioned and the sites restored.
[72] If the appellants are successful on their appeal, the respondents would be required to decommission the projects and could not commence operations. In other words, they are expending monies on projects that might not become operational if the appellants’ appeals are allowed and they do so at their own financial risk. However, in undertaking that risk, I am satisfied that they are not causing irreparable harm of the nature described in RJR-MacDonald which would allow this court to grant the appellants the extraordinary relief they are seeking on these motions.
[73] To use the words, of the Supreme Court in Canada in RJR-MacDonald at p. 341, I conclude that a refusal to grant relief does not so adversely affect the appellants that the harm could not be remedied if the eventual decision on the merits of the appeal does not accord with the result of this interlocutory application.
[74] In these circumstances, I also find that the balance of convenience favours the respondents. Therefore, I need not address the appellants’ request that they be relieved from an undertaking in relation to damages, a factor which is taken into consideration in assessing the balance of convenience.
[79] For these reasons, these motions are dismissed.
“Justice L. C. Leitch”
Justice L. C. Leitch
Released: September 29, 2014