Court of Appeal for Ontario

Date: May 15, 2018

Docket: M48649

Motions Judge: Trotter J.A.

Between

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

Respondent

and

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

Applicants

Counsel

Leo Adler, for the applicants

Nicholas Adamson and Justin Jacob, for the respondent

Heard: April 26, 2018

Trotter J.A.:

A. Introduction

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

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

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

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

B. Background

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

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

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

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

[9] The applicants' trial took place before a judge of the Ontario Court of Justice. The trial judge convicted the applicants of numerous offences under both the EPA and the OHSA: see Ontario (Ministry of Labour and Ministry of the Environment) v. Sunrise Propane Energy Group Inc. et al, 2013 ONCJ 358, 229 A.C.W.S. (3d) 442. Over two years after the convictions were registered, the applicants were collectively ordered to pay fines totalling $5.3 million: see R. v. Sunrise Propane Energy (2016), 129 W.C.B. (2d) 182 (Ont. C.J.).

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

C. The Application for Leave to Appeal

(1) The Test for Leave to Appeal

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

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

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

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

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

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

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

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

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

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

(2) The Proposed Grounds of Appeal

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

(a) Officially Induced Error

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

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

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

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

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

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

[23] The trial judge found, at para. 539, that "Mr. Heyworth either expressly told [the applicants] that they could continue to conduct business by doing truck-to-truck transfers or that he implied that they could continue to conduct business in this manner which led them to be mistaken as to what the situation was." Applying R. v. Jorgensen, [1995] 4 S.C.R. 55, and Lévis (City) v. Tétreault, 2006 SCC 12, [2006] 1 S.C.R. 420, the trial judge found that the applicants could rely on an officially induced error, but only to a point. As the trial judge said, at para. 541:

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

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

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

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

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

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

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

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

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

(b) Compliance with the Ministry of the Environment Order

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

D. Conclusion and Disposition

[37] The application for leave to appeal is refused.

Released: May 15, 2018

"G.T. Trotter J.A."

Footnotes

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

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

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

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