South Etobicoke Residents & Ratepayers Association Inc. v. The Ontario Realty Corporation et al.

[Indexed as: South Etobicoke Residents & Ratepayers Assn. Inc. v. Ontario Realty Corp.]

75 O.R. (3d) 641

[2005] O.J. No. 2242

Docket: C42483

Court of Appeal for Ontario,

Borins, Blair and LaForme JJ.A.

June 6, 2005

Administrative law -- Judicial review -- Standard of review -- Decision of Director of Approvals in Ministry of Environment to grant certificate of air approval pursuant to s. 9 of Environmental Protection Act entitled to considerable deference -- Standard of review of Director's decision patent unreasonableness -- Decision of Director to issue certificate of air approval for crematorium not patently unreasonable -- Environmental Protection Act, R.S.O. 1990, c. E.19, s. 9.

The appellant brought an application for an order preventing the sale of a cemetery by the Ontario Realty Corp. (the "ORC") to a private company that proposed to construct a crematorium. The appellant challenged the decision of the Director of Approvals in the Ministry of Environment to issue a certificate of air approval for the proposed crematorium pursuant to s. 9 of the Environmental Protection Act ("EPA"), and challenged an environmental assessment conducted by the ORC on the ground that it did not comply with applicable class environmental requirements and s. 3 of the Environmental Assessment Act, R.S.O. 1990, c. E.18 ("EAA"). The Divisional Court dismissed the application. The appellant appealed.

Held, the appeal should be dismissed.

The decision of the Director to grant a certificate of air approval pursuant to s. 9 of the EPA was entitled to considerable deference, and the standard of review of the Director's decision was patent unreasonableness. The decision was not patently unreasonable. With respect to the ORC, the Divisional Court correctly found that it did not fail to meet the requirements of the EAA. It held that the rezoning and planning approval process undertaken by the purchaser was not an activity "by or on behalf of" the province within the scope of s. 3(a) of the EAA, with the result that the ORC was not obliged to undertake a further assessment under the ORC class environmental assessment in respect of planning actions by the purchaser. The ORC was correct in concluding that it was not obliged to apply its class environmental assessment process in respect of planning actions by the purchaser. [page642]

APPEAL from the judgment of the Divisional Court of the Superior Court of Justice (Then, Cosgrove and Thomas JJ.), reported at 2004 34444 (ON SCDC), [2004] O.J. No. 72, 181 O.A.C. 303 (S.C.J.), dismissing an application for judicial review.

Statutes referred to Environmental Assessment Act, R.S.O. 1990, c. E.18, s. 3 [as am.] Environmental Bill of Rights, 1993, S.O. 1993, c. 28, s. 27 Environmental Protection Act, R.S.O. 1990, c. E.19, s. 9 [as am.]

Rodney Northey, for appellant. P. David McCutcheon and Carlton D. Mathias, for respondent The Ontario Realty Corp. William J. Manuel and Risa Schwartz, for respondent Director, Air Approvals. Ronald B. Moldaver, Q.C., for respondents 1385521 Ontario Ltd. and 1177284 Ontario Ltd.

[1] Endorsement BY THE COURT: -- This is an appeal by the South Etobicoke Residents and Ratepayers Association Inc. ("SERRA") from the decision of the Divisional Court that dismissed its application for judicial review against the Ontario Realty Corporation ("ORC") and the Director of Approvals in the Ministry of Environment ("Director") arising from an agreement by the ORC to sell the former Lakeshore Psychiatric Hospital Cemetery to a private company that proposed to operate the cemetery and construct a crematorium and columbarium on the site. SERRA opposed the sale on the ground that the operation of the crematorium would further pollute the already-polluted air. It applied to the Divisional Court for an order preventing the sale, alleging non-compliance with environmental protection legislation. Writing for a majority of the court, Then J. dismissed SERRA's application, concluding that there had been compliance with the environmental legislative requirements. We agree with this result and would dismiss the appeal.

[2] SERRA challenged the Director's decision to issue a certificate of air approval for the proposed crematorium pursuant to s. 9 of the Environmental Protection Act, R.S.O. 1990, c. E.19 ("EPA"). In addition, it challenged an environmental assessment conducted by the ORC on the ground that it did not comply with applicable class environmental requirements and s. 3 of the Environmental Assessment Act, R.S.O. 1990, c. E.18 ("EAA").

[3] We agree with the conclusion of the Divisional Court that the decision of the Director to grant a certificate of air approval, [page643] pursuant to s. 9 of the EPA, allowing for the operation of a crematorium at the site, was entitled to considerable deference and that the standard of review of the Director's decision was patent unreasonableness.

[4] In our view, the Divisional Court did not err in holding that the Director's decision was not patently unreasonable. The court held that it was not patently unreasonable for the Director not to consider background air contaminants, or factors that were perhaps desirable from a scientific or environmental perspective, as this was not required under the s. 9 approval process. At the time, the province of Ontario had not as yet adopted a dispersion model that would make the assessment of background concentration a requirement of the s. 9 approval process. Nor did the Director act unreasonably in not imposing a condition prohibiting the operation of the crematorium on smog alert days, as he specifically averted to this issue and exercised his discretion not to impose specific conditions given the purchaser's voluntary agreement to not operate the cremators on smog alert days. In addition, the Director was not unreasonable in failing to consider requirements for biomedical waste incinerators, since the Ministry of the Environment ("MOE") had separate requirements for cremators.

[5] With respect to the ORC, the Divisional Court correctly found that it did not fail to meet the applicable requirements of the EAA. It held that the rezoning and planning approval process undertaken by the purchaser was not an activity "by or on behalf of" the province within the scope of s. 3(a) of the EAA, with the result that the ORC was not obliged to undertake a further assessment under the ORC class environmental assessment in respect of planning actions by the purchaser. Based on its interpretation of s. 3 of the EAA, the Divisional Court determined that the ORC was correct in concluding that it was not obliged to apply its class environmental assessment process in respect of planning actions by the purchaser. To adopt such an interpretation would mean that private undertakings otherwise outside the scope of the EAA would be caught by the class assessment process.

[6] In addition, in our view the Divisional Court correctly rejected SERRA's position that the ORC conducted a lower level of assessment (Category B) than was required by the class environmental assessment (Class EA) for this undertaking on the ground that the undertaking or activity that was being examined was the sale of the land, and not subsequent planning proposals undertaken by the purchaser. In addition, the court held that the ORC's decision to implement the applicable Class AE [page644] methodology was within the ORC's jurisdiction and was therefore entitled to considerable deference and that it met the applicable standard of review of reasonableness simpliciter. The court added that less deference was warranted when it came to the question of whether or not the Class EA applied to actions by the purchaser, as that question depended on the correct interpretation of s. 3 of the EAA.

[7] Both before the Divisional Court and this court, the respondents argued that the Divisional Court lacked jurisdiction to hear SERRA's application for judicial review on the ground that its entitlement to challenge the Director's decision was by appeal with leave to the Environmental Review Tribunal under s. 27 of the Environmental Bill of Rights, 1993, S.O. 1993, c. 28. Other than finding that notice of the Director's decision had been posted by the MOE on its electronic registry in accordance with s. 27, the Divisional Court did not address the jurisdictional issue. Although we believe that there is merit in the respondents' position, given our decision on the substantive issues there is no need to consider it.

[8] As we are in agreement with the reasons for judgment of the majority of the Divisional Court, we would dismiss the appeal with costs, on a partial indemnity basis, fixed in the amounts of $25,000 for each of the Ontario Realty Corporation and the Attorney General of Ontario, and $10,000 for the respondent purchaser, 1385521 Ontario Limited and 1177284 Ontario Limited, all amounts being inclusive of disbursements and GST.

Appeal dismissed.