Her Majesty the Queen v. Inco Limited [Indexed as: R. v. Inco Ltd.]

54 O.R. (3d) 495

[2001] O.J. No. 2098

Docket Nos. C33137 and C33245

Court of Appeal for Ontario

McMurtry C.J.O., Laskin J.A. and Blair R.S.J.

(ad hoc)

June 6, 2001

• Application for leave to appeal to the Supreme Court of Canada was dismissed with costs March 7, 2002 (Gonthier, Major and LeBel JJ.). S.C.C. File No. 28778. S.C.C. Bulletin, 2002, p. 371.

Charter of Rights and Freedoms--Search or seizure--Inspector who has reasonable and probable grounds for believing that crime under Ontario Water Resources Act has been committed cannot rely on inspection provisions of s. 15 of Act and must obtain judicial authorization for entering premises to interview employees and obtain documents--Ontario Water Resources Act, R.S.O. 1990, c. O.40, s. 15--Canadian Charter of Rights and Freedoms, s. 8.

Charter of Rights and Freedoms--Standing--Corporation claimed that its employees' Charter rights were violated by questioning by Investigation and Enforcement Officer with Ministry of the Environment--Corporation did not have standing to advance claim for relief based on alleged violation of its employees' Charter rights.

Environmental law--Offences--Defendant charged under s. 30(1) of Ontario Water Resources Act after discharge of water from defendant's complex found to contain high levels of nickel and iron--Trial court applied incorrect test in only considering whether nickel and iron content in effluent exceeded provincial guidelines--New trial ordered to determine whether nature and circumstances of discharge had capacity to impair water quality --Ontario Water Resources Act, R.S.O. 1990, c. O.40, s. 30(1).

The defendant operated a nickel mining complex. When a discharge of water from the complex was found to contain high levels of nickel and iron, an employee of the defendant reported the discharge to the Ministry of the Environment ("MOE"). An Investigation and Enforcement Officer ("IEB Officer") of the MOE interviewed the defendant's employees and asked them to provide certain documents concerning the discharge, including the defendant's sampling analysis of the discharge and operational procedures on shutdowns. The defendant was charged with discharging untreated mine effluent into a creek and failing to report the discharge forthwith, contrary to ss. 30(1) and (2) of the Ontario Water Resources Act, R.S.O. 1990, c. O.40. The defendant moved unsuccessfully to have the charges stayed as an abuse of process. The defendant was convicted. The defendant's appeal was allowed on the ground that the trial court had misinterpreted the legal test for proving the offences created by s. 30 of the Act with re spect to the water impairment issue. The appellate court held that it was appropriate to consider on the impairment issue the entire circumstances of the discharge, including the length of time over which it occurs along with the nature, quality, quantity and concentration of the material that is being discharged. The trial court only considered whether the nickel and iron content in the effluent exceeded provincial guidelines on permissible levels of nickel and iron emissions -- guidelines which do not have the force of law. A new trial was ordered on the charge of discharging untreated mine effluent contrary to s. 30(1). The defendant's alternative argument that the trial court erred in dismissing its motion to stay the charges as an abuse of process was not dealt with. The Crown appealed on the water impairment issue and the defendant appealed on the abuse of process issue.

Held, the Crown's appeal should be dismissed; the defendant's appeal should be allowed.

Inherently toxic substances will always fail the test for determining whether an offence under s. 30(1) has been made out, reflecting zero-tolerance for discharging materials that, by their nature, may impair water quality. If the material in the discharge is not inherently toxic, then it will be necessary to consider the quantity and concentration of the discharge as well as the time frame over which the discharge took place. The effluent in this case contained very high levels of nickel and iron. The Crown did not press the case that the presence of high levels of iron in the discharge had the capacity to impair water quality. The key question was whether the nickel in the discharge is an inherently deleterious substance in water, or whether it is innocuous absent certain conditions surrounding its discharge. Although s. 30(1) does not require a showing of actual impairment of water, it does require a showing of capacity to impair. The appellate court was correct in directing a new trial on the impairment issue, for purposes of determining whether the nature and circumstances of the discharge of nickel, including its quantity and concentration, as well as the time frame over which the discharge took place, had the capacity to impair water quality.

Section 15 of the Act permits provincial officers to make "inspections" without a warrant or court order for the administration of the Act or regulations. Section 19(1) of the Act authorizes a warrantless seizure of "things" that are produced or in plain view during a s. 15 inspection if the provincial officer reasonably believes that there has been a contravention of the Act. Section 20 of the Act authorizes a provincial officer to conduct a warrantless search where a provincial officer has reasonable grounds to believe that an offence has been committed, but exigent circumstances make it impractical to obtain a warrant. At the time of the events in question, the Act did not contain a procedure for obtaining a search warrant, but an IEB officer could rely on the general warrant powers in s. 158 of the Provincial Offences Act, R.S.O. 1990, c. P.33. That provision authorizes a justice to issue a warrant where he or she is satisfied that there is reasonable ground to believe that a location contains evidence of an offence that has been, or is suspected to have been, committed. Where an inspector under a regulatory regime possesses reasonable and probable grounds to believe that an offence has been committed, the requirements of Hunter v. Southam Inc. (1984 33 (SCC), [1984] 2 S.C.R. 145, 11 D.L.R. (4th) 641) will be met. The legislative scheme at issue in this case also indicated that where reasonable grounds exist that an environmental offence has been committed, the investigator may conduct a warrantless search only in exigent circumstances. Absent exigent circumstances, where a provincial officer has reasonable grounds to believe that an offence has been committed, he or she should resort to s. 159 of the Provincial Offences Act and seek a warrant.

The IEB Officer's testimony on whether he possessed reasonable and probable grounds to believe that an offence had been committed before he interviewed I Ltd.'s employees and required the production of documents was equivocal. Considering the equivocal nature of that testimony and the failure of the courts below to make a finding of reasonable and probable grounds, a new trial was required to decide whether the IEB Officer exceeded his statutory authority.

I Ltd. also sought a stay of the charges based on the alleged violation of its employees' rights under ss. 7, 9 and 10(b) of the Canadian Charter of Rights and Freedoms. Corporations cannot claim the protection of s. 7, 9 or 10(b) of the Charter. The defendant lacked standing to advance a claim for relief based on the alleged violation of its employees' Charter rights. The defendant's Charter claims were not raised out of public interest, nor did they constitute a matter of public importance. The claims arose in the context of a legislative scheme that was subsequently amended, and the claims focused on the conduct of an individual investigator whom the defendant claimed overstepped his lawful authority in the circumstances of this particular case. The defendant was not attacking the constitutionality of the Ontario Water Resources Act.

APPEAL and CROSS-APPEAL from a judgment allowing an appeal from a conviction under the Ontario Water Resources Act, R.S.O. 1990, c. O.40 and ordering a new trial.

Hunter v. Southam Inc., 1984 33 (SCC), [1984] 2 S.C.R. 145, 33 Alta. L.R. (2d) 193, 11 D.L.R. (4th) 641, 55 N.R. 241, [1984] 6 W.W.R. 577, 9 C.R.R. 355, 27 B.L.R. 297, 14 C.C.C. (3d) 97, 2 C.P.R. (3d) 1, 41 C.R. (3d) 97 (sub nom. Southam Inc. v. Director of Investigation and Research of Combines Investigations Branch); Potash v. Comité paritaire de l'industrie de la chemise, 1994 92 (SCC), [1994] 2 S.C.R. 406, 61 Q.A.C. 241, 115 D.L.R. (4th) 702, 168 N.R. 241, 21 C.R.R. (2d) 193, 4 C.C.E.L. (2d) 214, 91 C.C.C. (3d) 315 (sub nom. R. v. Potash, Comité paritaire de l'industrie de la chemise v. Sélection Milton); R. v. Imperial Oil Ltd. (1995), 17 C.E.L.R. (N.S.) 12 (Ont. Prov. Div.), affd (1997), 25 C.E.L.R. (N.S.) 182 (Ont. C.A.); R. v. Toronto Electric Commissioners 1991), 6 C.E.L.R. (N.S.) 301 (Ont. Gen. Div.), consd Other cases referred to Canadian Egg Marketing Agency v. Richardson, 1997 17020 (SCC), [1998] 3 S.C.R. 157, 166 D.L.R. (4th) 1, 231 N.R. 201, 57 C.R.R. (2d) 1; Irwin Toy Ltd. v. Quebec (Attorney General), 1989 87 (SCC), [1989] 1 S.C.R. 927, 24 Q.A.C. 2, 58 D.L.R. (4th) 577, 94 N.R. 167, 39 C.R.R. 193, 25 C.P.R. (3d) 417; R. v. Carosella, 1997 402 (SCC), [1997] 1 S.C.R. 80, 31 O.R. (3d) 575n, 142 D.L.R. (4th) 595, 207 N.R. 321, 41 C.R.R. (2d) 189, 112 C.C.C. (3d) 289, 4 C.R. (5th) 139; R. v. Fitzpatrick, 1995 44 (SCC), [1995] 4 S.C.R. 154, 129 D.L.R. (4th) 129, 188 N.R. 248, 32 C.R.R. (2d) 234, 102 C.C.C. (3d) 144, 43 C.R. (4th) 343; R. v. Jewitt, 1985 47 (SCC), [1985] 2 S.C.R. 128, 20 D.L.R. (4th) 651, 61 N.R. 159, [1985] 6 W.W.R. 127, 21 C.C.C. (3d) 7, 47 C.R. (3d) 193; R. v. McKinlay Transport Ltd., 1990 137 (SCC), [1990] 1 S.C.R. 627, 72 O.R. (2d) 798n, 39 O.A.C. 385, 68 D.L.R. (4th) 568, 106 N.R. 385, 47 C.R.R. 151, 55 C.C.C. (3d) 530, 76 C.R. (3d) 283, 90 D.T.C. 6243; R. v. O'Connor, 1995 51 (SCC), [1995] 4 S.C.R. 411, 130 D.L.R. (4th) 235, 191 N.R. 1, [1996] 2 W.W.R. 153, 33 C.R.R. (2d) 1, 103 C.C.C. (3d) 1, 44 C.R. (4th) 1; R. v. Panarctic Oils Ltd., 1983 4769 (NWT TC), [1983] N.W.T.R. 143, 43 A.R. 199, 12 C.E.L.R. 78, 3 F.P.R. 429 (N.W.T. Terr. Ct.); Thomson Newspapers Inc. v. Canada (Director of Investigation & Research, Restrictive Trade Practices Commission), 1990 135 (SCC), [1990] 1 S.C.R. 425, 72 O.R. (2d) 415n, 39 O.A.C. 161, 67 D.L.R. (4th) 161, 106 N.R. 161, 47 C.R.R. 1, 54 C.C.C. (3d) 417, 29 C.P.R. (3d) 97, 76 C.R. (3d) 129 Statutes referred to Canadian Charter of Rights and Freedoms, ss. 7-9, 10(b), 11(d) Collective Agreement Decrees, An Act respecting, R.S.Q., c. D-2 Environmental Protection Act, R.S.O. 1990, c. E.19, ss. 160-161, 163.1(2) [en. 1998, c. 35, Part I, s. 24] Ministry of the Environment Act, R.S.O. 1990, c. M.24, s. 3(2) Ontario Water Resources Act, R.S.O. 1990, c. O.40, ss. 1 "inspection", "waters", 5(3), 15, 15(2)(i) [en. 1998, c. 35, Part II, s. 47], 16(1) 19-21, 19(1), 20(2), 22.1(2) [en. 1998, c. 35, Part II, s. 58], 28, 28(1), 30, 53 Provincial Offences Act, R.S.O. 1990, c. P.33, ss. 120, 158-160, 158(1) Authorities referred to Sterling, N.W., Speech to the House, December 1, 1998

David Stratas and Douglas T. Hamilton, for appellant/ respondent. J.G. Herlihy and Michel Hélie, for respondent/appellant.

The judgment of the court was delivered by

MCMURTRY C.J.O.:--

Overview

[1] The appeal and cross-appeal involve the following two primary issues:

(a) The appeal of Inco Limited ("Inco") relates to its submission to the courts below that the actions of an Investigation and Enforcement Officer of the Ministry of Environment were an abuse of process as the officer had no statutory authority to compel Inco employees to submit to questioning and to produce documents and other materials.

(b) The appeal of the Crown relates to whether or not the proper test was applied for determining whether the offence of impairing water quality had been committed.

[2] Inco's motion to have the charges against it stayed as an abuse of process was dismissed. Inco was convicted by the court of first instance of discharging untreated mine effluent into a creek near its Levack Mine Complex in the Sudbury area and of failing to report the discharge forthwith, contrary to ss. 30(1) and (2) of the Ontario Water Resources Act, R.S.O. 1990, c. O.40 ("OWRA").

[3] Wilson J. allowed Inco's appeal from the convictions and ordered a new trial. He concluded that the court below had misinterpreted the legal test for proving the offences created by s. 30 of the OWRA with respect to the water impairment issue. Wilson J. did not deal with Inco's alternative argument that the lower court erred in dismissing its motion to stay the charges as an abuse of process.

[4] For the reasons that follow, the Crown's appeal on the impairment issues is dismissed and the new trial ordered by Wilson J. is confirmed. The appeal of Inco on the abuse of process issue is allowed and may be part of any new trial.

Facts

[5] Inco operates a nickel mining complex in the town of Levack in the Regional Municipality of Sudbury. Water is used in the mining process and it becomes contaminated with high levels of nickel and iron. To reduce the level of heavy metals, Inco treats the water with lime before releasing it into Grassy Creek, from where it ultimately flows into the Onaping River.

[6] Between December 25, 1993 and March 1, 1994, Inco conducted a planned shut-down of a number of its mining operations, including the water treatment system. It was a very cold winter, but a thaw occurred in mid-February. On February 23, 1994, an Inco employee detected a flow of water from the mine treatment area, which is close to Grassy Creek. The discharge was found, sampled and tested on the 23rd, 25th and 28th of February, as well as the 1st and 2nd of March. Each of the tests revealed that the escaped water had very high levels of nickel and iron, levels that significantly exceeded Inco's own treatment objectives. An Inco employee reported the discharge to the Ministry of the Environment ("MOE") on March 2, 1994.

[7] Abatement officers with the MOE [See Note 1 at end of document] attended the site on March 2, 1994. They met with Inco employees and collected water samples for the purpose of determining toxicity levels. They also advised an Investigation and Enforcement Officer of the MOE, Officer Dennis Sloan ("IEB Officer"), that there had been a discharge from the mine treatment area into Grassy Creek and that samples were being analyzed by the MOE.

[8] The IEB Officer contacted senior Inco employees, including its in-house counsel, to advise that he intended to interview any Inco employee who had knowledge of the incident. Inco's in-house counsel identified the relevant personnel and arranged for interviews to be conducted at Inco. He also advised the employees that they were under a statutory obligation to submit to the interviews. On March 9 and 10, 1994, the IEB Officer attended at Inco and interviewed the employees in the presence of in-house counsel. At the beginning of each interview, counsel stated his objection to the interview and indicated that his clients were co-operating to avoid potential charges of obstruction. He also voiced his objection without success to the taping of the interviews by the IEB Officer. After the questioning sessions, the IEB Officer requested Inco personnel to provide various documents concerning the discharges, including Inco's sampling analysis of the discharges and Inco's operational procedures on shutdowns.

[9] Inco was subsequently charged with discharging untreated mine effluent into Grassy Creek between February 23 and March 2, 1994, contrary to s. 30(1) of the OWRA. Inco was also charged with the offence of failing to notify the MOE of the discharge between the same period, contrary to s. 30(2) of the OWRA. Section 30 of the OWRA states:

30(1) Every person that discharges or causes or permits the discharge of any material of any kind into or in any waters or on any shore or bank thereof or into or in any place that may impair the quality of the water of any waters is guilty of an offence.

(2) Every person that discharges or causes or permits the discharge of any material of any kind, and such discharge is not in the normal course of events, or from whose control material of any kind escapes into or in any waters or on any shore or bank thereof or into or in any place that may impair the quality of the water of any waters, shall forthwith notify the Minister of the discharge or escape, as the case may be.

[10] Section 1 of the OWRA defines "waters" to mean "a well, lake, river, pond, spring, stream, reservoir, artificial watercourse, intermittent watercourse, ground water or other water or watercourse".

[11] Section 28 of the OWRA speaks to the impairment element of the offence created by s. 30. At the time of the events in question, it read [See Note 2 at end of document]:

28. Under sections 29, 30, 32 and 33 the quality of water shall be deemed to be impaired if, although the quality of the water is not or may not become impaired, the material discharged or caused or permitted to be discharged or any derivative of such material causes or may cause injury to any person, animal, bird or other living thing as a result of the use or consumption of any plant, fish or other living matter or thing in the water or in the soil in contact with the water.

Reasons of the Courts Below

Trial court

[12] At the trial, presided over by Justice of the Peace Kitlar, Inco brought a motion to stay the charges against it based on allegations of abuse of process. Inco's position was that the IEB Officer did not have statutory authority to interview Inco's employees nor to seize documents from Inco. Kitlar J.P. denied the motion, finding that if there were a possibility that any of the Inco employees were going to be charged, the IEB Officer would have cautioned them.

[13] On the issue of whether the Crown had established the elements of the offences created by ss. 30(1) and (2) of the OWRA, Kitlar J.P. found that there was a flow of water from the treatment area into Grassy Creek on the dates in question and that the samples contained excessive nickel and other metals. He observed that the allowable level of nickel in the provincial guidelines on water quality is 0.05 parts per million ("ppm"). The nickel concentration in Inco's mine effluent on February 23 ranged between 44 and 44.7 ppm. Similarly high concentrations were found on the other dates. He held that the discharge was of a nature that may impair the quality of the water and that not all reasonable steps were taken to avoid the discharge, contrary to s. 30(1) of the OWRA. With respect to s. 30(2), Kitlar J.P. concluded that Inco should have contacted the MOE about the discharge on the first day the flow was detected. He entered a finding of guilt on both counts and imposed a fine of $24,010 .

Appeal to Wilson J. of the Ontario Court of Justice (Provincial Division)

[14] On Inco's appeal pursuant to s. 120 of the Provincial Offences Act, R.S.O. 1990, c. P.33 ("POA"), Wilson J. overturned both of the convictions and ordered a new trial. He held that Kitlar J.P. failed to apply the correct test for determining whether an offence under s. 30(1) had occurred. Wilson J. stated that the correct test was established by Austin Prov. J. in R. v. Imperial Oil Ltd. (1995), 17 C.E.L.R. (N.S.) 12 at p. 18 (Ont. Prov. Div.). Wilson J. quoted the following passage from Imperial Oil:

In a case such as the one before me, the offence is made out where the Crown proves beyond any reasonable doubt that the discharge of material may impair the quality of the water, based upon not only the nature of the material, but also the nature and circumstances of the discharge of that material, including its quantity and concentration, as well as the time frame over which the discharge took place. Such factors may be very relevant to the issue of impairment. In this case, for example, it is the large quantity of activated sludge over a short time frame which renders the discharge of material potentially impairing.

(Emphasis in original)

[15] Wilson J. then stated that ". . . it is appropriate to consider on the impairment issue the entire circumstances of the discharge including the length of time over which it occurs along with the nature, quality, quantity and concentration of the material that is being discharged." He concluded that Kitlar J.P. did not apply this test, but instead only considered whether the nickel and iron content in the effluent exceeded provincial guidelines on permissible levels of nickel and iron emissions -- guidelines which do not have the force of law. According to Wilson J., Kitlar J.P. should also have considered the other factors in the Imperial Oil test. Wilson J. held that this failure was an error of law and ordered a new trial of the charge of discharging untreated mine effluent contrary to s. 30(1).

[16] Wilson J. also ordered a new trial on the charge of failing to report the discharge contrary to s. 30(2) ". . . in the light of my decision on the other count and having regard to the fact that they were tried together". Wilson J. did not rule on the merits of the abuse of process issue.

A. Inco's Appeal: The Abuse of Process Issue

Positions of the parties

[17] Inco contends that the IEB Officer had no statutory authority to compel Inco employees to submit to questioning and to produce documents and other materials. According to Inco, when the IEB Officer engaged in this investigation, he already had reasonable grounds to believe that an offence had been committed and improperly used the inspection power under s. 15 of the OWRA to build a case for prosecution.

[18] Inco asserts that ss. 19-21 of the OWRA, ss. 160-161 of the Environmental Protection Act, R.S.O. 1990, c. E.19 ("EPA") and ss. 158-160 of the POA exhaustively address the powers of IEB officers to engage in compulsory searches and seizures and to gather evidence, such as through compulsory interrogation sessions, when offences are being investigated. Inco asserts that these powers expire after reasonable and probable grounds exist for the laying of charges. Under these provisions, IEB officers have the power to seize items without a warrant only in very limited (exigent or urgent) circumstances and, pursuant to the POA, only with a search warrant issued by a justice on the basis of reasonable and probable grounds. According to Inco, there was no statutory authority that permitted the IEB Officer to require Inco employees to submit to compulsory interrogation sessions nor to produce documents. In engaging in such conduct, the IEB Officer infringed Inco's right under s. 8 of the Canadian Charter of Rights and Freedoms to remain secure against unreasonable search and seizure and its right under s. 11(d) to a fair trial.

[19] In addition, Inco argues that the IEB Officer's conduct violated various Charter rights of Inco's employees: the compulsory questioning sessions infringed the employees' rights to silence and fair treatment under s. 7; the compulsory gathering of documents and information infringed their s. 8 rights; their detention was contrary to s. 9; and they were not afforded their s. 10(b) right to silence. Inco's position is that the IEB Officer's conduct constituted an abuse of process for which a stay of proceedings must be granted.

Relevant statutory provisions

[20] Section 15 of the OWRA permits provincial officers to make "inspections" without a warrant or court order for the administration of the Act or regulations. Section 1 of the OWRA defines "inspection" as "includ[ing] an audit, examination, survey, test and inquiry". The relevant parts of s. 15, as they read at the time of the events in question, are as follows:

15(1) For the administration of this Act or the regulations, a provincial officer may, without a warrant or court order, at any reasonable time and with any reasonable assistance, make inspections, including,

(a) entering any part of the natural environment to ascertain the extent, if any, to which contaminants have caused an adverse effect, the causes therefor, and how any adverse effect may be prevented, eliminated or ameliorated and the natural environment restored;

(b) entering any place to ascertain the quality or quantity of water, the reasons therefor, and how any impairment thereof may be prevented, eliminated or ameliorated;

(c) entering any place in or from which the provincial officer reasonably believes a contaminant is being, has been or may be discharged into the natural environment;

(d) entering any place that the provincial officer reasonably believes is likely to contain documents related to,

(ii) the discharge of a contaminant into the natural environment;

(j) taking samples;

(k) recording or copying any information by any method;

(l) requiring the production of any document that is required be kept under this Act or the regulations, and any other document that is related to the purposes of the inspection;

(m) upon giving a receipt therefor, removing from a place documents produced pursuant to a requirement under clause (l) for the purpose of making copies or extracts and promptly returning them to the person who produced them; and

(n) making reasonable inquiries of any person, orally or in writing.

(5) Upon request, a provincial officer who exercises a power set out in subsection (1) shall identify himself or herself as a provincial officer either by the production of a copy of his or her designation or in some other manner and shall explain the purpose of the inspection.

(6) A provincial officer who exercises the power set out in clause (1)(n) may exclude from the questioning any person except counsel for the individual being questioned.

(9) Every person who hinders or obstructs any employee or agent of the Minister in the exercise of his or her powers or the performance of his or her duties under subsection (1) is guilty of an offence.

(Emphasis added)

[21] Section 19(1) of the OWRA authorizes a warrantless seizure of "things" that are produced or in plain view during a s. 15 inspection if the provincial officer reasonably believes that there has been a contravention of the Act:

19(1) A provincial officer may, without a warrant or court order, seize any thing that is produced to the provincial officer, or that is in plain view, during an inspection under section 15 or 17 if the provincial officer reasonably believes that there has been a contravention of this Act or the regulations and that the thing will afford evidence of the contravention.

[22] Section 20 of the OWRA authorizes a provincial officer to conduct a warrantless search where a provincial officer has reasonable grounds to believe that an offence has been committed, but exigent circumstances must exist to make it impractical to obtain a warrant. The relevant parts of that provision state:

20(2) A provincial officer may, without a search warrant, search any place other than a room actually used as a dwelling if the provincial officer has reasonable ground to believe,

(a) that an offence has been committed;

(b) that there is in such place any thing that will afford evidence as to the commission of the offence; and

(c) that there are exigent circumstances that make it impractical to obtain a search warrant.

[23] At the time of the events in question, the OWRA did not contain a procedure for obtaining a search warrant. However, an IEB officer could rely on the general warrant power in s. 158 of the POA. This provision authorizes a justice to issue a warrant where he or she is satisfied that there is reasonable ground to believe that a location contains evidence of an offence that has been, or is suspected to have been, committed:

158(1) Where a justice is satisfied by information upon oath that there is reasonable ground to believe that there is in any building, receptacle or place,

(a) anything upon or in respect of which an offence has been or is suspected to have been committed; or

(b) anything that there is reasonable ground to believe will afford evidence as to the commission of an offence,

the justice may at any time issue a warrant . . . authorizing a police officer or person named therein to search such building, receptacle or place for any such thing, and to seize and carry it before the justice issuing the warrant . . .

[24] The Crown maintains that s. 15 of the OWRA authorized the IEB Officer's impugned conduct. As seen, s. 15 authorizes provincial officers, including officers with the Investigation and Enforcement Branch, to conduct warrantless inspections and investigations except under circumstances prohibited by s. 8 of the Charter as unreasonable searches and seizures. The Crown submits that the IEB Officer did not conduct such an unconstitutional search, as the nature of the information sought, the individuals from whom it was sought, and the manner in which it was sought demonstrated no incursion into Inco's reasonable expectations of privacy. Furthermore, the information provided was essentially that to which the MOE is otherwise entitled under the regulatory scheme.

[25] The Crown acknowledges that it did not take the position before Kitlar J.P. that s. 15 authorized the impugned conduct of the IEB Officer but rather submitted that s. 15 was clearly a section used only by abatement personnel for inspection and not by members of the Investigation and Enforcement Branch. The Crown at trial had argued that investigations were authorized by the IEB Officer's appointment under Ministry legislation and his assigned duties on behalf of the Ministry. [See Note 3 at end of document] The Crown acknowledges this inconsistency on appeal, but maintains that the better view is that s. 15 authorized the IEB Officer's conduct in this case.

[26] In relation to the alleged breach of the Charter rights of Inco's employees, the Crown submits that to seek Charter relief, Inco must establish an infringement of its own Charter rights rather than the rights of its employees. In any event, the Crown submits that no individual was compelled to incriminate himself and thus the evidence obtained through the interrogation sessions is both compellable and admissible against Inco.

Analysis of abuse of process argument

[27] The first branch of Inco's argument that the investigation against it was an abuse of process relates to its submission that the IEB Officer did not have lawful authority to conduct the questioning sessions and to demand and seize various documents from Inco. This submission is closely tied to its argument that the investigation violated its s. 8 right to remain secure against unreasonable search and seizure. If the IEB Officer's warrantless search and seizure was not authorized by law, then, in accordance with Hunter v. Southam Inc., 1984 33 (SCC), [1984] 2 S.C.R. 145, 33 Alta. L.R. (2d) 193, there was a violation of Inco's rights under s. 8. The jurisprudence in the context of regulatory inspections and s. 8, as well as the nature of the legislative regime at issue, indicate that the question of whether the IEB Officer had statutory authority for his actions turns on whether he possessed reasonable and probable grounds to believe that an offence had been committed when he engaged in the impugned conduct. If he did have reasonable and probable grounds to believe that an offence had been committed before he commenced the investigation, then Hunter v. Southam, supra, would apply.

[28] The Supreme Court of Canada's decision in Potash v. Comité paritaire de l'industrie de la chemise, 1994 92 (SCC), [1994] 2 S.C.R. 406, 61 Q.A.C. 241, is relevant to the issue of whether a statutory power of inspection can be used as legislative authority for the type of conduct that is impugned in this case. The question in Comité paritaire was whether a power of inspection in the Act respecting Collective Agreement Decrees, R.S.Q., c. D-2 was inconsistent with s. 8 of the Charter or s. 24.1 of the Quebec Charter of Human Rights and Freedoms because it did not require prior judicial authorization to be exercised. La Forest and L'Heureux-Dubé JJ. gave separate but concurring reasons for finding that the power of inspection was consistent with s. 8 and s. 24.1 of the Canadian and Quebec Charters, respectively.

[29] La Forest J. held that the scope of the constitutional guarantee afforded by s. 8 may vary depending on whether a search or inspection is involved. At p. 417 S.C.R., he adopted the following passage distinguishing an inspection from a search:

[TRANSLATION] An inspection is characterized by a visit to determine whether there is compliance with a given statute. The basic intent is not to uncover a breach of the Act: the purpose is rather to protect the public. On the other hand, if the inspector enters the establishment because he has reasonable grounds to believe that there has been a breach of the Act, this is no longer an inspection but a search, as the intent is then essentially to see if those reasonable grounds are justified and to seize anything which may serve as proof of the offence. [See Note 4 at end of document]

[30] La Forest J. accepted that the underlying purpose of an inspection is to ensure compliance with a regulatory statute. He went on to find at p. 421 S.C.R. that the underlying purpose of an inspection is not altered when the inspection is prompted by a complaint:

It may be that in the course of inspections those responsible for enforcing a statute will uncover facts that point to a violation, but this possibility does not alter the underlying purpose behind the exercise of the powers of inspection. The same is true when the enforcement is prompted by a complaint. Such a situation is obviously at variance with the routine nature of an inspection. However, a complaint system is often provided for by the legislature itself as it is a practical means not only of checking whether contraventions of the legislation have occurred but also of deterring them.

(Emphasis added)

[31] La Forest J. rejected the argument that s. 8 requires prior judicial authorization to conduct an inspection of an employer's premises for purposes of monitoring compliance with the legislation in question. He stated as follows at p. 422 S.C.R.: "[i]n view of the important purpose of regulatory legislation, the need for powers of inspection, and the lower expectations of privacy, a proper balance between the interests of society and the rights of individuals does not require, in addition to the legislative authority, a system of prior authorization."

[32] L'Heureux-Dubé J. agreed with the conclusion that an inspection power does not require prior judicial authorization to be reasonable for s. 8 purposes. She stated at p. 452 S.C.R. that the purpose of an inspection provision in the regulatory context is to permit inspectors to determine whether an offence has been committed. According to L'Heureux-Dubé J. at p. 453 S.C.R.: "[i]t is of the very nature of an administrative inspection in a regulated industry that it takes place when there are no reasonable grounds to believe that a particular offence has been committed" (emphasis in original). Like La Forest J., she concluded at p. 454 S.C.R. that:

. . . a mere complaint is insufficient in itself to justify inspectors being subject to the requirements of Hunter v. Southam Inc. There is an important distinction between having reasonable and probable grounds to believe that an offence was committed and simply having an information, especially if the latter is given anonymously.

[33] The implication of the Comité paritaire decision is that where an inspector under a regulatory regime possesses reasonable and probable grounds to believe that an offence has been committed, the Hunter v. Southam requirements will need to be met. The legislative scheme at issue in the case at bar also indicates that where reasonable grounds exist that an environmental offence has been committed, the investigator may conduct a warrantless search only in exigent circumstances: see s. 20(2) of the OWRA. Absent exigent circumstances, where a provincial officer has reasonable grounds to believe that an offence has been committed, he or she should resort to s. 158 of the POA and seek a warrant.

[34] The IEB Officer's testimony on whether he possessed reasonable and probable grounds to believe that an offence had been committed before he interviewed Inco's employees and required the production of documents was equivocal. On the pre- trial motion to have the charges dismissed as an abuse of process, he initially testified that he had reasonable grounds to believe that there had been a breach of the OWRA on March 7, prior to conducting the interviews. However, on cross- examination by the Crown, he recanted that evidence and said that he did not have grounds to lay the impairment charge until after he had completed the interviews of Inco employees on March 9 and 10 and had received the expert opinion of an MOE biologist on whether the levels of nickel and iron were capable of impairing water quality.

[35] Neither of the courts below made a finding as to whether the IEB Officer had reasonable and probable grounds to believe that an offence under the OWRA had been committed before he conducted the interviews of Inco's employees. Wilson J. did not deal at all with the issue of whether the IEB Officer was acting within his statutory authority, while Kitlar J.P. dismissed Inco's concerns on the abuse of process point without any significant elaboration. Considering the equivocal nature of the IEB Officer's testimony, and the failure of the courts below to make a finding on reasonable and probable grounds, a new trial is required to decide whether the IEB Officer exceeded his statutory authority.

[36] It will be necessary for the court hearing the new trial on these charges to make a finding on whether reasonable and probable grounds existed prior to the IEB Officer's interviews of Inco's employees. If there was enough evidence to support the existence of reasonable and probable grounds before the IEB Officer entered Inco's premises, then the inspection provision in s. 15 of the OWRA could not be relied on and the IEB Officer ought to have obtained judicial authorization to enter Inco's premises. Urgent circumstances such as would make obtaining a warrant impractical did not exist.

[37] I am therefore of the view that under the legislative scheme as it existed at the time of this incident, the existence of reasonable and probable grounds would have limited the investigative techniques available to provincial officers. It appears that this view was held by the Legislature as amendments were passed. In order to strengthen the enforcement powers under environmental legislation,5 the OWRA and the EPA were both amended effective February 1, 1999. Among the amendments was the addition of the following provision, which is now found in s. 22.1(2) of the OWRA and s. 163.1(2) of the EPA:

On application without notice, a justice may issue an order in writing authorizing a provincial officer, subject to this section, to use any device, investigative technique or procedure or to do any thing described in the order if the justice is satisfied by evidence under oath that there are reasonable grounds to believe that an offence against this Act has been or will be committed and that information concerning the offence will be obtained through the use of the device, technique or procedure or the doing of the thing.

[38] An IEB officer who has reasonable and probable grounds to believe that an environmental offence has been committed can now apply for judicial authorization to conduct questioning sessions of the type that were authorized by the former s. 15(1)(n) of the OWRA [now s. 15(2)(i)] under the "investigative technique" umbrella.

[39] Inco's claim for a stay is based not only on the alleged infringement of its s. 8 rights, but also on the alleged infringement of the employees' s. 8 rights. This claim under s. 8 need not be addressed as Inco has standing to assert its own s. 8 claim, which will need to be addressed at a new trial in the manner outlined above.

[40] Inco also requests a stay of the charges based on the alleged violation of the employees' rights under ss. 7, 9, and 10(b) of the Charter. Inco asserts that it has standing to raise the constitutionality of regulatory measures used against it, even if the rights invoked belong to natural persons. It is well accepted that corporations cannot claim the protection of s. 7 of the Charter: see Irwin Toy Ltd. v. Quebec (Attorney General), 1989 87 (SCC), [1989] 1 S.C.R. 927 at p. 1004, 24 Q.A.C. 2, and Thomson Newspapers Inc. v. Canada (Director of Investigation & Research, Restrictive Trade Practices Commission), 1990 135 (SCC), [1990] 1 S.C.R. 425 at p. 572, 39 O.A.C. 161. Nor can corporations invoke ss. 9 or 10(b) of the Charter, because corporations cannot be arrested or detained: see Canadian Egg Marketing Agency v. Richardson, 1997 17020 (SCC), [1998] 3 S.C.R. 157 at p. 183, 166 D.L.R. (4th) 1.

[41] Inco relies on Canadian Egg Marketing Agency, supra, in support of its argument that it has standing to advance the Charter claims of its employees. In that decision, the Supreme Court of Canada explained that a court has residuary discretion to entertain Charter arguments from parties that would not normally have standing where the question involved is one of public importance. The Supreme Court also established that a corporate accused charged with an offence has standing to challenge the constitutionality of the legislation giving rise to the proceedings, as does a corporate defendant in civil proceedings instigated by the state under a regulatory regime.

[42] In my view, Inco's Charter claims are not raised out of public interest, nor do they constitute a matter of public importance. The claims arise in the context of a legislative scheme that has subsequently been amended and their claims are focused on the conduct of an individual investigator whom they claim overstepped his lawful authority in the circumstances of this particular case. Furthermore, Inco is not attacking the constitutionality of the OWRA and, in fact, Inco acknowledges that the type of regulatory powers at issue have been upheld by the Supreme Court in R. v. McKinlay Transport Ltd., 1990 137 (SCC), [1990] 1 S.C.R. 627, 39 O.A.C. 385 and R. v. Fitzpatrick, 1995 44 (SCC), [1995] 4 S.C.R. 154, 129 D.L.R. (4th) 129, and are not impugned in this appeal.

[43] Accordingly, Inco lacks standing to advance a claim for relief based on the alleged violation of its employees' Charter rights. The only basis for its abuse of process argument is s. 8 of the Charter and the associated issue whether the IEB Officer was acting beyond his statutory authority when he entered Inco's premises.

[44] Assuming it is found at a new trial that the IEB Officer had reasonable and probable grounds at the time he questioned Inco's employees and thus lacked statutory authority for his investigation, the presiding justice will be required to decide if it is appropriate to grant the remedy that Inco seeks, namely a stay of charges. This of course will require the presiding justice to exercise his or her discretion in accordance with the test for granting a stay for abuse of process as established by the Supreme Court of Canada: see R. v. Carosella, 1997 402 (SCC), [1997] 1 S.C.R. 80 at p. 112, 142 D.L.R. (4th) 595, R. v. O'Connor, 1995 51 (SCC), [1995] 4 S.C.R. 411 at pp. 460-62 and p. 465, 130 D.L.R. (4th) 235, and R. v. Jewitt, 1985 47 (SCC), [1985] 2 S.C.R. 128 at pp. 136-37, 20 D.L.R. (4th) 651.

B. The Crown's Appeal: The Impairment Issue

Position of the parties

[45] The primary issue on the Crown's appeal is the proper test for determining whether the offence of impairing water quality under s. 30(1) has been committed. The Crown's position is that Wilson J.'s interpretation of that provision is unduly restrictive on a plain reading of the Act. The Crown asserts that the test described by Austin Prov. J. in R. v. Imperial Oil, supra, and adopted by Wilson J., is not relevant where the material discharged into water is such that it may impair water quality by its very nature. The Imperial Oil test, set out above at para. 14, is repeated here for convenience:

In a case such as the one before me, the offence is made out where the Crown proves beyond any reasonable doubt that the discharge of material may impair the quality of the water, based upon not only the nature of the material, but also the nature and circumstances of the discharge of that material, including its quantity and concentration, as well as the time frame over which the discharge took place. Such factors may be very relevant to the issue of impairment. In this case, for example, it is the large quantity of activated sludge over a short time frame which renders the discharge of material potentially impairing.

(Emphasis in original)

According to the Crown, the Imperial Oil test is only applicable in cases where the material discharged is innocuous by nature, but may become harmful if it is discharged in a certain quantity, or under certain conditions.

[46] In contrast, Inco argues that this court's reasons dismissing the appeal from Austin Prov. J.'s decision in Imperial Oil affirmed the general applicability of the Imperial Oil test to charges under s. 30: (1997), 25 C.E.L.R. (N.S.) 182 (Ont. C.A.). Thus, according to Inco, the relevant test for determining whether a discharge of material may impair water quality requires a consideration of the entire circumstances of the discharge, including the length of time over which it occurs, along with the nature, quality, and concentration of the material that is being discharged. Inco submits that the Crown failed to adduce evidence directed to establishing the nature of the metals in the discharge, the nature of the discharge as a whole, and the circumstances of the discharge. Inco contends that it offered the only evidence on these issues and that this evidence showed that the discharge had no potential to impair. Inco thus asks that an acquittal be entered on both charges.

Analysis of argument on impairment issue

[47] A review of this court's brief reasons in Imperial Oil does not bear out Inco's contention that the decision affirms the general applicability of the Imperial Oil test. Indeed, the court stated that it was unnecessary to review and rationalize the impairment jurisprudence under the OWRA to dispose of the appeal. The court indicated its agreement with Austin Prov. J.' s conclusion that a conviction imposed by a justice of the peace under s. 16(1) of the OWRA [now s. 30(1) of the OWRA] was not unreasonable considering the circumstances of the discharge in that case. But this court did not comment on the correctness or applicability of the test that she articulated.

[48] The prosecution in Imperial Oil arose from the discharge by Imperial Oil of approximately 12,400 pounds of a material known as activated sludge into the St. Clair River. Activated sludge is described by Austin Prov. J. at p. 17 C.E.L.R. as not being toxic, persistent or bioaccumulative, but rather a micro- organic substance that is ubiquitous and pre-exists naturally in small quantities in unpolluted waters. She found that if activated sludge were discharged at low levels, it would not have the capacity to impair water quality. However, the evidence was that if it were discharged at high concentrations, it might deplete oxygen available for aquatic organisms and thereby impair water quality.

[49] Austin Prov. J. considered Corbett J.'s decision in R. v. Toronto Electric Commissioners (1991), 6 C.E.L.R. (N.S.) 301 (Ont. Gen. Div.). At issue in that case was a discharge into Lake Ontario of a very small quantity of polychlorinated biphenyls ("PCBs"). The defence argued that the small quantity of PCBs discharged did not have the capacity to impair the receiving water and thus an offence under what is now s. 30(1) of the OWRA was not made out. Corbett J. rejected this argument on the basis that the release of any quantity of PCBs would create impairment of the quality of the receiving waters due to the inherent toxicity, persistence, and bioaccumulativeness of PCBs. She stated at p. 316:

In my opinion, the offence is constituted when the Crown proves that any material discharged into Lake Ontario may impair the quality of the water course . . . The section is broad, and the use of the words "may impair" shows the intention of the legislation is not to prohibit the results of certain acts but to prevent the discharge of any material which, by its nature, may impair the quality of the water course.

[50] Austin Prov. J. observed at p. 17 C.E.L.R. that Toronto Electric Commissioners affirmed a zero-tolerance principle in relation to the discharge of toxic chemicals into Ontario waterways. Having accepted that the substance at issue before her was not toxic, she nonetheless held at p. 18 C.E.L.R. that Toronto Electric Commissioners ". . . does not preclude a conviction in circumstances where a substance which may have no potential to 'impair' at low levels becomes capable of impairing as a result of the excessive quantity or concentration of material discharged". This significant qualifying sentence immediately precedes the statement in Imperial Oil of the test, which Inco claims has general application.

[51] Austin Prov. J. concluded that the offence of impairing water quality was made out because of the large quantity of the effluent that was discharged over a short time frame. These circumstances rendered the discharge potentially impairing because the combined effect of the high level of discharge over a short period of time may have depleted oxygen required by aquatic life.

[52] The Imperial Oil test should be applied when determining whether an offence under s. 30(1) has been made out. Inherently toxic substances will always fail that test, reflecting zero- tolerance for discharging materials that, by their nature, may impair water quality. If the material in the discharge is not inherently toxic, then it will be necessary to consider the quantity and concentration of the discharge as well as the time frame over which the discharge took place.

[53] This approach is in accordance with the language of ss. 28 and 30(1) of the OWRA, which creates a wide ambit of protection for Ontario waters. Section 30(1) prohibits the discharge into water of materials that may impair the quality of the water of any waters. The wording of s. 30(1) indicates two things: i) the material need only have the capacity to impair the water to be caught by the provision; and ii) the water that may be impaired is any water, not just the water where the material is discharged. Section 28(1) indicates that impairment under s. 30(1) will be deemed to have occurred where the material causes, or may cause, injury to any living thing as a result of the use or consumption of living matter in the water or surrounding soil. Emitting materials into waters that may impair water quality is forbidden, except under enumerated circumstances where Certificates of Approval may be obtained: see s. 53 of the OWRA.

[54] Such a broad scope of protection is not difficult to justify. Environmental damage caused by discharging materials into Ontario waters may not be immediately apparent after the discharge. As well, impairment may be caused by the accumulation of materials over time. As Bourassa Terr. Ct. J. in R. v. Panarctic Oils Ltd. (1983), 1983 4769 (NWT TC), 12 C.E.L.R. 78, 43 A.R. 199 (N.W.T. Terr. Ct.) explains at pp. 85-86 C.E.L.R., p. 205 A.R.:

In my view, the destruction of any ecosystem or environment is a gradual process, effected by cumulative acts -- a death by a thousand cuts, as it were. Each offender is as responsible for the total harm as the last one, who visibly triggers the end. The first offender can't be allowed to escape with only nominal consequences because his input is not as readily apparent.

[55] The effluent at issue in Inco contained very high levels of nickel and iron. On the appeal to this court, the Crown did not press the case that the presence of high levels of iron in the discharge had the capacity to impair water quality. The key question to be decided is whether the nickel in the discharge is an inherently deleterious substance in water, akin to the PCBs considered in Toronto Electric Commissioners, or rather, like the activated sludge in Imperial Oil, a material that is innocuous absent certain conditions surrounding its discharge.

[56] The Crown argues that Wilson J. erred in calling for the application of the Imperial Oil test. But the Crown does not allege that nickel is an inherently toxic or harmful substance in water, regardless of the concentration level of the nickel or the circumstances under which it is deposited. Indeed, the Crown relies on evidence linking the toxic effect of the effluent to the very high concentration level of nickel in this particular discharge. For example, the Crown states in its factum, relying on the trial evidence of the MOE's expert witness, Gerald Myslik, that:

. . . the nickel concentrations observed in this case "have been associated with toxic effects on a number of organisms, either through short duration or long duration . . ." The harm which such nickel concentrations can do to aquatic organisms ". . . could be either directly killing them or affecting their reproduction, affecting their growth or . . . their mobility".

[57] Inco contends that nickel is not necessarily a toxic substance in water. Inco's expert witness, James Bishop, vice- president of the environmental consulting company, BEAK International, gave evidence that nickel and iron are naturally present in soil and lakes and rivers in Ontario, and that they are essential for plant and animal life. According to Mr. Bishop, there are many different forms of nickel, some of which are not harmful. Mr. Bishop also gave evidence that the hardness of the effluent and the presence of other metals or constituents in the effluent must be assessed in order to determine whether the discharge has the potential to impair water quality.

[58] Although s. 30(1) does not require a showing of actual impairment of water, it does require a showing of capacity to impair. I would uphold Wilson J.'s decision directing a new trial on the impairment issue, for purposes of determining whether the nature and circumstances of the discharge of nickel, including its quantity and concentration, as well as the time frame over which the discharge took place, had the capacity to impair water quality.

[59] Accordingly, the Crown's appeal on the impairment issue is dismissed and Inco's appeal on the abuse of process issue is allowed and a new trial is ordered. There will be no order as to costs.

Appeal by Crown dismissed; cross-appeal allowed.

Notes

Note 1: Abatement personnel are involved with encouraging measures to bring about compliance with environmental legislation.

Note 2: Section 28 in the OWRA, as amended, is to the same effect.

Note 3: Specifically, the Crown relied on s. 3(2) of the Ministry of the Environment Act, R.S.O. 1990, c. M.24 permitting the Minsiter to appoint employees "for the proper conduct of the business of the Ministry" and the power in s. 5(3) of the OWRA to designate employees as "provincial officers".