Environmental Review Tribunal

Tribunal de l’environnement

ISSUE DATE: October 15, 2020

19-048

PROCEEDING COMMENCED UNDER section 139(2)(c) of the Environmental Protection Act, R.S.O. 1990, c. E.19

Appellant:

Poltawa Country Club Corporation

Respondent:

Director, Ministry of the Environment, Conservation and Parks

Subject of appeal:

Terms and conditions imposed on an Amended Environmental Compliance Approval for the collection, treatment, and disposal of domestic sewage

Reference No.:

9762-B3QPBX

Property Address/Description:

All of PIN 14259-0064(R) and as outlined in Plan 43R-15317 dated January 15, 1988

Municipality:

Town of Caledon

Upper Tier:

Regional Municipality of Peel

ERT Case No.:

19-048

ERT Case Name:

Poltawa Country Club Corporation v. Ontario (Environment, Conservation and Parks)

Parties

Counsel/Representative*

Poltawa Country Club Corporation

Ron Chyczij*

Director, Ministry of the Environment, Conservation and Parks

Mitchel Boughs and Nadine Harris

HEARD:

In writing

Maureen Helt, Former Acting Associate Chair

Warren Morris, Member

Nature of the Appeal

1Poltawa Country Club Corporation (“Poltawa”) appeals an Amended Environmental Compliance Approval No. 9762-B3QPBX (“Amended Approval”) issued on June 12, 2019 by the Director, Ministry of the Environment, Conservation and Parks (“Director”) to Poltawa and eight individual works owners and eight lots. Five of the lots had previous Environmental Compliance Approvals (ECA) which were revoked and consolidated in the Amended Approval, and three of the lots are proposed new builds. The Amended Approval was issued for property identified as PIN 14259-0064(R), and outlined in Plan 43R-15317 dated January 15, 1988, in the Town of Caledon (“Subject Property”).

2Poltawa owns the Subject Property and individual works owners are individuals who have entered into an agreement with Poltawa regarding a “lot” on the Subject Property.

3The Amended Approval relates to the establishment of sewage works for the collection, treatment and disposal of domestic sewage from single family homes being developed on 112 lots within the country club located on the Subject Property owned by Poltawa.

4Poltawa has filed this appeal submitting that the Director lacks jurisdiction to issue ECAs for residential septic systems as described in the Ontario Water Resources Act, R.S.O 1990, c. O.40. (“OWRA”).

Overview to the Issuance of the Amended Approval

5By way of background, until 2014, septic system approvals for Poltawa members were arranged between the Poltawa lot owner/member and the local municipality (“Town of Caledon”) for the individual lot at the time of securing a building permit.

6In 2014, the Director assumed responsibility for granting septic system approvals on the Subject Property. Communication occurred between the individual owner/member and the Director, and ECAs were granted for individual lots. Poltawa did not have any involvement or direct knowledge of the ECAs that were issued by the Ministry from 2014 onward.

7In 2017, the Director received additional ECA applications from Poltawa members relating to the Subject Property.

8On September 16, 2017, at the Director’s request, the Director’s office met with two members of the Poltawa Board of Directors for the purpose of Poltawa bringing the sewage works into compliance with the applicable legislation.

9The Director’s office presented four options to Poltawa. Option 1 was to legally subdivide the Subject Property into registered lots with the municipality. If this were done, each sewage works would be viewed individually and would fall under the jurisdiction of the Building Code Act, 1992, S.O. 1992, c. 23 (“BCA”). Option 2 was to create a communal sewage works for the entire Subject Property. Option 3 was for the Director to replace all existing ECAs with a single consolidated ECA issued to Poltawa as the owner of the Subject Property. Option 4 would be for the Director to continue issuing individual ECAs with Poltawa as the primary site owner and the licensee lot owner/member as secondary.

10In October 2017, Poltawa notified the Director that its Board had approved option 3, meaning that the Director would replace all existing ECAs with a single ECA issued to Poltawa as the owner of the Subject Property. Option 3 also stipulated that moving forward, any new individual ECA applications from the site would be added to the one ECA. It is the most recently amended ECA, the Amended Approval, that is the subject of this appeal.

11The Amended Approval has conditions that apply to both Poltawa and the lot owner/member as individual works owners.

12While the Tribunal notes that Poltawa agreed to option 3, as set out above, the Director did not advance this position as a ground for denying the appeal.

13Poltawa appeals the Amended Approval submitting that the Director lacks jurisdiction to issue the Amended Approval and, even if it did have jurisdiction, the Director cannot make the application of the terms and conditions of the Amended Approval retroactive.

Issues

14The purpose of the hearing is to determine the following issues:

Does the Director have jurisdiction under the OWRA to issue the Amended Approval for the Subject Property?
What is the appropriate interpretation of ownership of “lot” for the purpose of the OWRA?
Is there a retroactive application of the Amended Approval?

Preliminary Issue

15At the outset of the hearing, the Director objected to Poltawa raising a new ground of appeal, namely, that the sewage works at the Subject Property are subject to the BCA and not the OWRA, and as such, that the Director lacks the regulatory jurisdiction to issue the Amended Approval to Poltawa under the OWRA.

16The Director took issue with this ground of appeal arguing it is a new issue and one that is not properly before the Tribunal as it was not set out in Poltawa’s Notice of Appeal.

17The Tribunal heard submissions from the parties on this point and determined that it was appropriate to allow Poltawa to pursue this ground of appeal finding that the issue of the applicability of the BCA is directly related to the jurisdiction of the Director, which is an issue raised in the Notice of Appeal.

Result

18The Tribunal finds that Director has jurisdiction to issue the Amended Approval under the OWRA and did not act outside her jurisdiction in ordering the terms and conditions as set out in the Amended Approval. The Director confirmed at the hearing that the terms and conditions do not have a retroactive effect as alleged by Poltawa and, as such, there is no reason why Poltawa and the affected lot owners are unable comply with the requirements of the Amended Approval.

ANALYSIS

Issue 1: Does the Director have jurisdiction under the [OWRA](https://www.canlii.org/en/on/laws/stat/rso-1990-c-o40/latest/rso-1990-c-o40.html) to issue the Amended Approval for the Subject Property?

19To determine the issue of jurisdiction it is necessary to determine if the residential septic systems on the Subject Property are “sewage works” under the OWRA or if they are a “sewage system” under the BCA.

20Poltawa submits that the Director does not have the jurisdiction to issue the Amended Approval because the septic systems are “sewage systems” under the BCA as opposed to “sewage works” under the OWRA.

21Poltawa submits that “sewage works” are designed to handle drainage, storm water, commercial waste or industrial waste as per the OWRA, whereas “sewage systems” are designed to handle effluent from sanitary units such as toilets, bathtubs, showers and sinks as per the BCA. Therefore, it is Poltawa’s position that the legislative intent is for the OWRA to have jurisdiction over larger commercial or institutional sewage works, whereas the BCA applies to smaller residential sewage systems.

22In support of its argument that the septic systems are “sewage systems”, Poltawa states that that there is no definition of “sewage system” under the OWRA; however, there is a definition of “sewage system” in the BCA O. Reg. 332/12 which states:

Sewage system means,

(a) a chemical toilet, an incinerating toilet, a recirculating toilet, a self-contained portable toilet and all forms of privy, including a portable privy, an earth pit privy, a pail privy, a privy vault and a composting toilet system,

(b) a greywater system,

(d) a leaching bed system, or

(e) a system that requires or uses a holding tank for the retention of hauled sewage at the site where it is produced before its collection by a hauled sewage system,

where these,

(f) have a design capacity of 10,000 litres per day or less,

(g) have, in total, a design capacity of 10,000 litres per day or less, where more than one of these are located on a lot or parcel of land, and

(h) are located wholly within the boundaries of the lot or parcel of land on which is located the building or buildings they serve.

23Poltawa submits that a residential septic system is a sewage system identified as a leaching bed system as defined in s. 1.4.1.2 of Regulation 332/12 of the BCA:

“Leaching bed” means an absorption system constructed as absorption trenches or as a filter bed, located wholly in ground or raised or partly raised above round, as required by local conditions, to which effluent from a treatment unit is applied for treatment and disposal…

24“Sewage works”, on the other hand, as defined in the OWRA, does not include plumbing to which the BCA applies. In short, Poltawa’s position is that “sewage works” describe larger systems whereas “sewage system”, as defined under the BCA, relates to the residential septic system.

The Director’s Position

25The Director submits that its jurisdiction comes from s. 53 of the OWRA as the total of sewage for the Subject Property is greater than 10,000 litres per day and that, as Poltawa is the owner of the Subject Property which is one parcel of land, its jurisdiction arises from s. 53 of the OWRA, the relevant provisions of which are set out below.

26The OWRA provides:

Approval, sewage works

53 (1) Subject to section 47.3 of the Environmental Protection Act, no person shall use, operate, establish, alter, extend or replace new or existing sewage works except under and in accordance with an environmental compliance approval. 2010, c. 16, Sched. 7, s. 3 (9).

Exception

(6) This section does not apply,

(a) to a sewage works from which sewage is not to drain or be discharged directly or indirectly into a ditch, drain or storm sewer or a well, lake, river, pond, spring, stream, reservoir or other water or watercourse;

Application

(6.1) This section does apply to sewage works described in clause (6) (a) if,

(a)the sewage works have a design capacity in excess of 10,000 litres per day;

(b)more than one sewage works is located on a lot or parcel of land and they have, in total, a design capacity in excess of 10,000 litres per day; or

(c)the sewage works are not located wholly within the boundaries of the lot or parcel of land on which is located the residence or other building or facility served by the works.

27The Director submits that Poltawa, as the owner of the land on which the sewage works are located, is a person who uses, operates, establishes, alters, extends or replaces new or existing sewage works within the meaning of the OWRA.

28The Director further submits that the individual sewage works do not come within the meaning of “sewage system” under the BCA O. Reg 332/12. To be a sewage system, the Individual Sewage Works must have in total a design capacity of 10,000 liters per day or less when more than one is located on a lot or parcel of land. As established by the uncontradicted evidence of Wayne Simpson, a senior review engineer with the Approvals Services Section of the Ministry of Environment, Conservation and Parts, there are numerous septic systems on the single parcel of land that makes up the Subject Property, the flow of which in the aggregate exceeds 10,000 liters per day. Therefore, the Individual Sewage Works are not “sewage systems” under the BCA and the exemption under s. 53(6)(c) of the OWRA from the requirement for an ECA does not apply.

29It is the Director’s position that Poltawa, as the owner of the land on which the sewage works are located, has ultimate control over the sewage works and therefore is subject to the Amended Approval.

30In terms of legislative intent of the OWRA, the Director submits that the purpose of the OWRA is to provide for the conservation, protection and management of Ontario’s waters and for their efficient and sustainable use to promote Ontario’s long-term environmental well-being. To carry out that purpose, the Director submits the OWRA sets out a scheme for regulating sewage works and that the entities with management and control, such as Poltawa, should be named on the ECA to further the purpose of the OWRA.

Findings

31As noted above, the question that needs to be determined is whether or not the OWRA or the BCA applies to the residential septic systems on the Subject Property.

32It is Poltawa’s position that there is a distinct difference between “sewage works” and “sewage systems” and, on this basis, it argues that the Director has no jurisdiction to issue ECAs for “sewage systems” for the Subject Property as per s. 53(6)(c) of the OWRA.

33The Tribunal is not persuaded by Poltawa’s argument. As noted by the Director, to be a “sewage works” under BCA O. Reg 332/12, the individual sewage works must have in total a design capacity of 10,000 liters per day or less when more than one is located on a lot or parcel of land. The evidence is clear that there are numerous septic systems on a single parcel of land which is the Subject Property.

34The Director relies on the Court of Appeal’s Decision in Belwood Lake Cottagers Association Inc. v. Ontario (Environment and Climate Change), 2019 ONCA 70, 2019 CarswellOnt 1246 (“Belwood”) which states at para. 48, with respect to the purpose of the OWRA:

The scheme and purpose of the OWRA is to regulate the construction and operation of sewage works in order to protect the environment and the public. It entrusts the regulation of “smaller” systems to municipalities under the BCA and “larger systems” to the MOE. As outlined above, the dividing line is based on the design volume of daily sewage flow on a “lot or parcel of land”.

35It is clear from the evidence that the sewage works at the Subject Property collectively have a design capacity greater than 10,000 litres. The Tribunal therefore finds that the OWRA applies and the Director accordingly had the jurisdiction under the OWRA to issue the Amended Approval for the Subject Property.

Issue 2: Ownership of “Lot” for the purpose of the [OWRA](https://www.canlii.org/en/on/laws/stat/rso-1990-c-o40/latest/rso-1990-c-o40.html)

36In order to consider the interpretation of what constitutes a “lot” under the OWRA, it is helpful to set out some relevant background with respect to the ownership of the Subject Property.

37Poltawa was incorporated in 1948 and is the owner the Subject Property.

38In 1971, the Township of Chinguacousy (now the Town of Caledon as successor municipality) amended its zoning by-law to allow for 112 residential lots at the Subject Property. According to Poltawa, there are currently 70 residences on the Subject Property (the Director’s evidence states 67 residences), many of which are permanent residences and supplied by municipal water. All the residences are individually owned by members of Poltawa.

39“Lot owners”, or member licensees, are required to sign two legal documents with Poltawa: i) an indenture contract; and ii) a license agreement. The indenture contract includes a Plan of Survey 43R-15317 that identifies the part of the Subject Property that the member has the exclusive right to use for his/her own purposes. In the past, lot owners had to go to the Town of Caledon for building permits where they could obtain an approval from the town for their septic system.

40A Plan of Survey for the Subject Property is registered with the Land Registry Office. The indenture provides that the active members of Poltawa share equally in all the common assets of Poltawa, such as road allowances and lots not held by active members. The indenture agreement also expressly states that the “Licensee” is responsible for new or replacement sewage systems on their “lot” and the Licensee grants the Poltawa Board of Directors the authority to act as their agent in regard to dealings with various regulatory agencies.

41Poltawa argues that a “lot” can be something other than what is created on a registered Plan of Subdivision and therefore, the Director has no authority to issue the Amended Approval pursuant to s. 53 (6.1) whether or not the septic systems in the Amended Approval are deemed “sewage works” or not.

42In support of its position, Poltawa referred to the Consolidated By-Laws of Poltawa (Articles 4.1, 4.5 and 4.6), whereby lot owners acquire lots to use at their sole pleasure including the right to build a residence, bequest the lot or let the lot to a person of Ukrainian heritage. All proceeds from the sale of the lot are retained by the lot owner.

43Poltawa summarized its position as being one of common sense submitting that the lot owners (i.e. the individual sewage works owners) have exclusive charge, management and control of their lots. The individual lots have been in existence since 1948 and there have been, and continue to be, residential septic systems of these individual lots. Each lot has its own recognized postal address.

44Poltawa objects to the notion that the only definition of a “lot” is something that is created by a registered plan of subdivision. Given that the OWRA has no definition for the term “lot”, Poltawa takes what it argues is a common sense view of what a lot is. Poltawa asserts that lots with specific boundaries can be created by municipalities, which was the case here.

45By way of zoning by-law, the Town accepted registration of a Plan of Survey delineating the separate lots on the Subject Property. In support of its position that the Licensees are in fact lot owners, Poltawa set out the following:

i. Licensees acquire the lots to use at their sole pleasure including the right to build a residence.

ii. Licensees hold the unilateral right to bequest their lot to a beneficiary, and the right to sell the lot to any person of Ukrainian heritage.

iii. All lots are owned, not leased, and as such no rent is paid.

iv. All the proceeds of a sale are retained by the Licensees as lot owner.

v. The lots created by the zoning by-law have all the attributes of separate lots including individual street/postal addresses, voting rights, individual billing for utilities (telephone, cable, internet, natural gas, etc.), individual sub-assessment per lot for realty taxes, individual municipal services such as garbage collection.

vi. Each Licensee can acquire a mortgage on their lot. New Licensees pay land transfer tax when acquiring a lot.

vii. While neither the OWRA nor the Environmental Protection Act contain a definition for “lot”, the Niagara Escarpment Planning and Development Act which applies to the Subject Property, does provide a definition. Regulation 828, R.R.O. 1990 defines “lot” to include “….a parcel of land, (a) described in a deed or other document legally capable of conveying an interest in land, or (b) shown a lot or block on a registered plan of subdivision”.

46On the basis of the above definition, Poltawa submits that the Indenture agreement legally conveys the interest in land as it is executed every time a lot is purchased, when a person is approved as a potential member of Poltawa.

47The Director relies on Belwood, to support its position that the Subject Property is a “lot” owned by Poltawa and, as such, that the Director has jurisdiction over Poltawa as a result of the OWRA.

48In Belwood, the Court of Appeal considered whether a “lot or parcel of land” in s. 53 of the OWRA meant a lot or parcel of land that is legally recognized for municipal and planning law purposes or whether it meant a division of land created by private contracts.

49Poltawa distinguishes its situation from the Belwood case on the following factual grounds:

Poltawa lots are neither owned nor leased, whereas Belwood cottage lots were;
Poltawa structures are permanent residences occupied throughout the year, whereas Belwood cottages were seasonal only;
Poltawa lots can be conveyed by purchase/sale, bequests or inheritance, whereas Belwood cottages could not;
Poltawa lots are separate legal entities recognized for municipal planning purposes, whereas Belwood cottages were not; and
Poltawa lots have fixed boundaries and are registered in a Plan of Survey, whereas Belwood cottages were not.

50Based on the above factors, Poltawa argues the lots on the Subject Property are owned by the members.

51In refuting this argument, the Director points out that in Belwood, the Court found that a “lot or parcel of land” in s. 53 of the OWRA means “a lot or parcel of land that is legally recognized for municipal and planning law purposes, and for which title can be conveyed from one party to another”. The parcel of land on which the Subject Property is located is not subdivided under a registered plan of subdivision and despite the lots being conveyed by an indenture, the individual “lots” in the site are not legally recognized.

52The Director submits that the Subject Property is owned exclusively by Poltawa, and that Poltawa has created a membership structure such that the member licensee obtains use of a lot on the site for a single-family residence in exchange for membership fees, property taxes, indemnification, etc.

53The purchase and sale of a “lot” on the Subject Property, as defined by Poltawa, is subject to Poltawa Board approval which is subject to certain by-laws, it is by way of licence agreement that Poltawa conveys the title to a “lot” to a person. Poltawa is the only entity which has control over the common elements at the Subject Property including recreational and sporting facilities. Any sewage works servicing these common elements are owned, operated and controlled by Poltawa.

54The Tribunal recognizes the distinctions set out by Poltawa in terms of the Subject Property and the facts set out in Belwood. However, the Tribunal is not persuaded that the individual lots on the Subject Property are in fact owned by the Poltawa members. All the member licensee rights stem from Poltawa’ s ownership. For example, the Indenture Contract specifically states that a condition of the agreement is that the member “shall not convey, transfer or dispose of the Lot heretofore assigned, to him/her without first obtaining the consent of the Board of Directors of Poltawa Country Club for such conveyance and transfer”.

55Although the member licensees may appear to be owners, the individual lots on the Subject Property are not recognized at law. As the ultimate owner of the land on which the sewage works exist, the Tribunal finds that Poltawa is a person using, operating, establishing, altering, extending or replacing new or existing sewage works as stipulated in s. 53(1) of the OWRA.

56As the owner of the lot and parcel of land where more than one sewage works is located with a total design capacity in excess of 10,000 litres per day, the OWRA applies and the Director had jurisdiction to issue the Amended Approval to Poltawa. Poltawa is therefore properly named as party to the Amended Approval.

Issue 3: Do the ECA requirements apply to Poltawa retroactively?

57Poltawa submits that it does not have the knowledge, expertise, resources or ability to enforce the Amended Approval, which is issued against both the individual lot owners and Poltawa, and that the Director lacks the authority to introduce retroactive requirements.

58During the hearing, the Director confirmed to the Tribunal that it is not seeking to make the requirements set out in the Amended ECA retroactive. In fact, in its submissions at paragraph 57, the Director states:

There are also no retroactive terms, conditions or obligations imposed by the ECA. Poltawa is only required to comply with the ECA effective the date of the issuance of the ECA since Poltawa was not named on any prior ECAs issued in relation the Site.” Poltawa cannot be held liable for the offence for failing to comply with the ECA for actions or omissions which occurred prior to the ECAs issuance.

59The Tribunal accepts the submissions made by the Director in regard to the lack of retroactivity of the Amended Approval. To provide further clarity, the Tribunal declares that the Amended Approval is effective on a go forward basis and is not to be applied retroactively.

DECISION

60The Tribunal dismisses the appeal and confirms Amended Environmental Compliance Approval No. 9762-B3QPBX.

Appeal Dismissed

“Maureen Helt”

MAUREEN HELT

FORMER ACTING ASSOCIATE CHAIR

“Warren Morris”

WARREN MORRIS

MEMBER

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