Environmental Review Tribunal

Tribunal de l’environnement

ISSUE DATE: July 31, 2015

CASE NO(S).: 14-039

PROCEEDING COMMENCED UNDER section 140(1) of the Environmental Protection Act, R.S.O. 1990, c.E.19, as amended

Appellant: Alex Krek

Respondent: Director, Ministry of the Environment and Climate Change

Subject of appeal: Order issued under sections 157.3(5)(b) and 157.3(6) of Environmental Protection Act to retain a consultant to prepare and complete all specified work respecting assessment and remediation of petroleum impact and ground water from a spill.

Reference No.: 6527-9HBQB9-DO

Property Address/Description: 1033 Bayview Point Road

Municipality: Lake of Bays

Upper Tier: Muskoka

ERT Case No.: 14-039

ERT Case Name: Krek v. Ontario (Environment and Climate Change)

Heard: June 30, 2015, in Toronto, Ontario

APPEARANCES:

Parties	Counsel/Representative+
Alex Krek	Dennis O’Leary
Director, Ministry of the Environment and Climate Change	Sylvia Davis
Henry Fischler	Self-represented
Dianne Klein	Self-represented
Dieter Knoppke	John Buhlman
Thomas and Ingeborg Sickinger (via TCC)	Thomas Sickinger+

ORDER DELIVERED BY JUSTIN DUNCAN AND HEATHER I. GIBBS

REASONS

Background

1On May 6, 2014, Cindy Hood, Director, Ministry of the Environment and Climate Change (“MOECC”) issued Director’s Order No. 6527-9HBQB9-DO (“Director’s Order”) requiring Alex Krek (“Appellant”) to retain a consultant to prepare and complete all specified work respecting assessment and remediation of petroleum impact on ground water from a spill that took place in 1990 at a site located at 1033 Bayview Point Road, Dorset, Lake of Bays, in the District Municipality of Muskoka, Ontario.

2On May 20, 2014, the Appellant filed an appeal of the Director’s Order under s. 157.3(5)(b) and s. 157.3(6) of the Environmental Protection Act (“EPA”) requesting that the Environmental Review Tribunal (“Tribunal”) vary, revoke and provide other relief from the Director’s Order. Also on May 20, 2014, the Appellant delivered a Notice of Allegation requesting that, if the Director’s Order is not rescinded, Dieter Knoppke be added as an orderee.

3Further background to this proceeding can be found in the Tribunal order dated September 22, 2014, which was issued following the preliminary hearing. Briefly, the Director’s Order is part of an ongoing response to a spill of fuel oil from an above-ground fuel tank that occurred in 1990 on cottage property belonging to Mr. Krek. The added parties are neighbouring property owners. There are currently a number of lawsuits pending that are related to the spill. One action was settled and is the subject of Minutes of Settlement and Judgment of Weekes, J. dated October 31, 1997 and November 3, 1997, respectively. Clean-up orders by the Director have been the subject of several appeals to the Tribunal over the years.

4As part of its preliminary procedural directions in this appeal, the Tribunal invited the parties to provide an issues list for the hearing. The Tribunal invited all parties to comment in writing on the issues raised by the other parties, and imposed a deadline of May 11, 2015 for filing Notices of Allegation.

5The preliminary hearing continued on June 30, 2015 in Toronto, Ontario for oral submissions on the parties’ proposed issues in the proceeding. By means of this Order, the Tribunal is clarifying the subject matter of the appeal and its scope, and organizing the issues raised by this appeal. Clarification in this appeal is required in order to avoid wasting time and resources in preparation for and attendance at the hearing.

Relevant Legislation and Rules

6Tribunal Rules of Practice

180. The Tribunal may identify, define or narrow the issues to be determined and the evidence to be heard in the proceeding and may direct the order in which issues and evidence will be considered.

Statutory Powers Procedure Act

5.3(1) If the tribunal’s rules made under section 25.1 deal with pre-hearing conferences, the tribunal may direct the parties to participate in a pre-hearing conference to consider,

(a) the settlement of any or all of the issues;

(b) the simplification of the issues;

5.3(3) A member who presides at a pre-hearing conference may make such orders as he or she considers necessary or advisable with respect to the conduct of the proceeding, including adding parties.

Discussion, Analysis and Findings

7Counsel for the Director and for the Appellant amalgamated the issues lists provided by each of the parties into one list, loosely grouped by theme. Together the parties provided a total of 27 issues, some of which were amorphous and broad, others very technical, and many of which were duplicative. The formulation of the issues reflected the parties’ individual interests in this ongoing clean-up resulting from a spill that occurred some 24 years ago.

8At the preliminary hearing on June 30, 2015, the Tribunal stated its usual approach in identifying the subject matter of the hearing, which informs the relevant issues. No party made any submissions on this point.

9The Tribunal has applied the following principles in making its determinations relating to the subject matter of the hearing (also referred to as the “scope of the appeal”) and relevant issues in this appeal:

i. The Tribunal has the power under the Statutory Powers Procedure Act and the Tribunal’s Rules of Practice to set the procedure and determine the issues before it.

ii. The subject matter of the appeal is determined first by the Notice of Appeal and by the Director’s Order.

iii. The issues to be considered will be refined as the hearing date nears, as work items are deemed to be satisfied by the Director. Currently, work items 1 to 5 of the Director’s Order have been deemed satisfied by the Director and are no longer under appeal. The question of compliance with the Order, and whether or not the Director should consider the work items complied with, are not within the purview of the Tribunal.

iv. Requests by a party to expand the Director’s Order by including items that are not related to work already ordered by the Director are outside the scope of the appeal. The Director’s Order under appeal is part of an iterative process and is one in a series of steps aimed, as noted above, at clean-up of a site following a spill that occurred over 20 years ago. The Director retains the power and discretion to issue additional orders at any time. The Tribunal’s task at this juncture is to examine the appeal by the Appellant of the current Director’s Order (for a description of the Tribunal’s usual procedures, see DeMarco and Muldoon, Environmental Boards and Tribunals in Canada: A Practical Guide, Lexis Nexis Canada Inc. 2011 at p. 68).

v. Added parties may not add issues that are not already within the scope of the appeal as noted above. This principle was discussed in RPL Recycling & Transfer Ltd. v. Ontario (Ministry of the Environment) (2006), 21 C.E.L.R. (3d) 80 (Ont. E.R.T.) at para. 20.

vi. The Tribunal’s task on an appeal such as this is not to determine fault for a spill but rather, to determine how the environmental protection objectives of the EPA should be fulfilled. See Kawartha Lakes (City) v. Ontario (Environment), 2013 ONCA 310.

10Applying these principles, the Tribunal finds that the following issues were raised in the Notice of Appeal and are within the scope of the appeal. Paragraph numbers refer to paragraphs of the Appellant’s Notice of Appeal:

1. Whether Mr. Krek has management or control of a source of contamination and is, therefore, properly subject to the Director’s Order (paras. 74 and 82).

2. Whether the MOECC lacked jurisdiction to issue the Provincial Officer’s Order or the Director’s Order because:

a. There is no discharge or threat of discharge of a contaminant (para 74);

b. There is no evidence that fuel oil has migrated and adversely affected any property other than the Knoppke property (para. 74);

c. Mr. Krek no longer has care, custody or control of the contamination (para. 83); or

d. MOECC has contributed to the harm (para. 76).

3. Whether the Orders should be should be struck or modified as counter to the principle of fairness and to the MOECC’s policies (para. 77).

4. Whether the Orders require activities that are not practicable and are inconsistent with s. 91(3) of the EPA, having regard for “the technical, physical and financial resources that are or can reasonably be made available” (para. 78). A related question is whether Alex Krek’s financial circumstances are relevant to the Director’s jurisdiction and decision to issue the order, and/or to the Tribunal’s determination of the appeal.

5. Whether the Orders amount to a denial of natural justice and fairness as they place Mr. Krek in “double jeopardy” due to law suits; or could place him in a situation where he will be unable to comply with any Court Order (para. 80).

6. To the extent that all or any portion of the Orders are upheld, whether parties should be added to the Director’s Order (paras, 75, 81 and 84) and, if so:

a. Whether Dieter Knoppke should be added to the Orders (including whether there are reasons specific to this appeal that prevent naming him. i.e., issue estoppel, abuse of process); and

b. Whether the Orders should contemplate use of Mr. Knoppke’s remedial fund of $150,000 (para. 81).

7. Whether the Tribunal has the jurisdiction to require that the lake-based water supply required in the Director’s Order (para. 2):

a. Be provided by Ecowater North or Water Depot, or

b. Have a maintenance plan imbedded as part of the Director's Order.

11The Tribunal has itself framed this list of issues based on the lists and materials provided by the parties and the Tribunal’s understanding of the matter. Issues relating to remedy have not been included in this list for hearing; they may be addressed following the Tribunal’s determination on the main issues. New issues will not be added without leave of the Tribunal.

12The issues as framed by the parties, and recorded in Ms. Davis’ amalgamated list, are found in the table at Appendix A. The table indicates the Tribunal’s finding for each of the listed issues. The findings in the table reference the principle applied and/or the related issue number that describes what the Tribunal has found to be within the scope of the appeal. Issues listed as “added issues” in the table were included in correspondence from the parties and raised at the preliminary hearing on June 30, 2015 after Ms. Davis’ list was compiled.

13If any party believes the Tribunal has improperly excluded an issue, they are requested to provide written submissions explaining why the issue is within the subject matter of the appeal and why the principle does not apply, by August 14, 2015. Any submissions should be copied to all other parties.

14Some of the listed issues are unlikely to proceed to argument before the Tribunal. A telephone conference call will be scheduled at least three weeks prior to the hearing to further refine the list, and to identify which are appropriate for written submissions only.

Procedural Directions Ordered

“Justin Duncan”

JUSTIN DUNCAN

MEMBER

“Heather I. Gibbs”

HEATHER I. GIBBS

VICE-CHAIR

Appendix A – Issues proposed by parties with Tribunal findings

If there is an attachment referred to in this document, please visit www.elto.gov.on.ca to view the attachment in PDF format.

Environmental Review Tribunal A constituent tribunal of Environment and Land Tribunals Ontario Website: www.elto.gov.on.ca Telephone: 416-212-6349 Toll Free: 1-866-448-2248

Appendix A

Issues proposed by parties, with Tribunal findings

No.	Issue	Tribunal Finding
	“Revocation, Compliance, Expansion of Director’s Order”
1	Should the Director’s Order issued May 6, 2014 (the “Director’s Order”) be revoked in whole or in part?	Issue relating to remedy.
2	To what extent has Mr. Krek complied with the Order?	Not an issue for hearing. This question is preliminary to determining what remains in dispute at the time of the hearing. Principle iii.
3	Should the Director’s Order be expanded to require the full remediation of the Site (as described in the Director’s Order), as well as neighbouring impacted properties, as originally required by the Provincial Officer’s Order of September 5, 2006 and confirmed by the Director’s Order Number 8450-6TRPFV dated September 21, 2006, and as proposed in the Remedial Action Plan prepared by Mr. Krek’s consultant?	Out of scope. Principles ii, iv and v.
4	Should the Tribunal order the Director to: a) Expand/Ensure the Current Director’s Order to incorporate and complete a comprehensive delineation using ‘site specific raw’ data to ensure the full extent of the contamination is known and identify all impacted property owners b) Expand the Director’s Order to provide ‘site specific’ information to fill in all of the data gaps of the 2010 Site Conceptual Model in order to provide an expert or the Director with the minimum information required to be able to address appropriate remediation alternatives. c) Expand the Director’s Order to include the remediation of the Krek property consistent with: the Settlements, Court Orders of 1997, 2002 and 2005 between Mr. Krek and Mr. Knoppke; the expectation of Environment Canada and previous ERT decisions. d) Re-instate a date to ensure containment measures are taken not only to prevent the re-contamination of the Knoppke property but also the known impacted properties of Fischlers, Kleins and Sickingers, a requirement of the POO of September 2006.	Out of scope. Principles ii, iii, iv and v.
5	Should the Tribunal order the Director to expand the Director’s Order to appropriately deal with the amount of Free Phase in the wells and the on-going recontamination of the wells.	Out of scope. Principles ii, iv, v.
	“Ownership, Management and Control” Re: Mr. Krek
6	Whether by agreement as part of the settlement with Dieter Knoppke or by law, is Alex Krek responsible to prevent contamination from migrating from the Site and to remediate his neighbours’ properties, including Dieter Knoppke’s property, as a result of petroleum hydrocarbon contamination spilled on the Site and which migrated to neighbouring properties?	The portions of this issue within scope of the appeal are described by Issue 1.
7	Does Alex Krek own or have the management or control of an undertaking or property that is the source of contamination and, therefore, subject to the Director’s Order and responsible for the spill on the Site and the contamination that migrated from the Site to neighbouring properties?	Issue 1.
	Re: Mr. Knoppke
8	Even if the ERT has jurisdiction to add Dieter Knoppke to the Director’s Order, is there any basis for adding him to the Director’s Order since he did not and does not own or have the management or control of an undertaking or property that is the source of the contamination which lead to the Director issuing the Director’s Order?	Issue 6a.
9	Even if the ERT has jurisdiction to add Dieter Knoppke to the Director’s Order, is there any basis for adding him to the Director’s Order given that Mr. Krek is the owner of the Site, is responsible for the petroleum hydrocarbon contamination, refused to take any steps to remediate the Site and neighbouring properties, interfered with Mr. Knoppke’s efforts to remediate his property and he or his representatives damaged remediation equipment?	Issues 1 and 6a.
	“Jurisdictional Issues”
10	Does the Tribunal have the jurisdiction to make a determination that Mr. Krek took all reasonable steps to prevent a spill of pollutant as per Section 99(3) of the Environmental Protection Act (EPA)?	Out of scope. Principles ii, vi. The question of whether the Tribunal can make findings under s. 99(3) has not been linked to anything in the Director’s Order.
11	What is the jurisdiction of the Tribunal given the definition of “practicable” per Subsection 91(3) of the EPA?	Issue 4.
12	Does the Tribunal have the jurisdiction to expand the Director’s Order beyond its original scope to include: a) a complete cleanup of the site and neighbouring property; and b) closing all remaining data gaps; c) containment measures to prevent oil from entering Lake of Bays.	Out of scope. Principles ii, iv, v. Requests expansion of Director’s Order into new areas that are not within the original Director’s Order.
13	Does the Tribunal have the jurisdiction to require that the lake-based water supply required in the Director’s Order be provided by Ecowater North or Water Depot?	Issue 7.
14	Does the Tribunal have jurisdiction to modify the Director’s Order given the availability of Mr. Krek’s resources and/or the resources which may be available for other parties, including a $150,000 Remediation Fund paid to Mr. Knoppke? To the extent that the availability of resources is relevant to the Tribunal’s jurisdiction, does the Tribunal have jurisdiction to prioritize and/or direct expenditures at specific tasks?	Issues 4 and 6.
15	Does the Tribunal have jurisdiction to make any of the orders requested by Mr. Krek as against Mr. Knoppke?	Issue 6.
16	Are the settlements entered into between Mr. Krek and Mr. Knoppke and the Judgments of the Superior Court relevant to the Director’s Order and the jurisdiction of the Tribunal?	Issues 5, 6a.
17	Does the ERT have jurisdiction to make the orders requested against Dieter Knoppke, in particular: a) Does the ERT have jurisdiction to add Dieter Knoppke to the Director’s Order? b) Does the ERT have jurisdiction to require Dieter Knoppke to account for money paid to him pursuant to a settlement and Superior Court order? c) Does the ERT have jurisdiction to make a declaration and finding that Dieter Knoppke pursuant to a Superior Court order has the legal care, custody and control over remediation equipment and monitoring wells and is obligated to maintain them? d) Does the ERT have jurisdiction to make a declaration and finding that by reason of a Superior Court order Dieter Knoppke is the owner of a pollutant?	Part (a) included in Issue 6. Parts (b) to (d) related to remedy.
	“Relevance”
18	Are the financial circumstances of Mr. Krek and/or other resources available relevant for the purposes of the Director’s Order and the jurisdiction of the Tribunal?	Issue 4.
19	Is the settlement entered into between Alex Krek and Dieter Knoppke and the Superior Court order relevant to the Director’s Order and Alex Krek’s appeal of the Director’s Order?	Issues 5, 6a.
20	Are Alex Krek’s financial circumstances relevant to the Director’s jurisdiction and decision to issue the order to Alex Krek?	Issue 4.
	“Issue Estoppel and Abuse of Process”
21	Do the doctrines of issue estoppel and abuse of process apply to Mr. Krek’s Notice of Allegations and Notice of Appeal such that Mr. Krek is precluded from re-litigating the issue of the use of and accounting for the settlement funds paid to Mr. Knoppke by Mr. Krek’s insurer, Unifund, for the remediation of Mr. Knoppke’s property?	Issue 6.
	“Other”
22	Does the settlement agreement between Mr. Knoppke and Mr. Krek preclude Mr. Krek from issuing a Notice of Allegation in respect of this appeal?	Issue 6a.
23	Funding for all the work required	The portions of this issue within scope of the appeal are described by Issues 4 and 6. Otherwise, principles ii and iv apply.
	“Added Issues”
24	Should the Tribunal add Unifund or the MOECC to the Order such that they must contribute to clean-up costs?	Issues 2d and 6.
25	Given the availability of resources available to the Appellant, should any of the unfulfilled requirements of the Director’s Order be deemed impracticable under the EPA and/or should these items be prioritized to ensure that they are completed in priority to other items.	Issue 4.
26	To what extent should the Director’s Order reflect and/or be modified in light of the fact that one of the parties, Mr. Knoppke, was provided by Mr. Krek in late 1997 with a $150,000 interest bearing remediation fund. Stated differently, the issues list would ask what aspects of the Directors Order should be modified or dismissed in light of what Mr. Knoppke may or may not have done with such funds for the past 17+ years.	Issue 6.