2024 ONSC 5016
DIVISIONAL COURT FILE NO.: DC-22-00000166-00JR
DATE: 2024/09/19
ONTARIO
SUPERIOR COURT OF JUSTICE
DIVISIONAL COURT
Sachs, Hebner and Davies JJ.
BETWEEN:
Nathan Reicheld
Applicant
– and –
His Majesty the King in Right of Ontario as Represented by the Minister of Natural Resources and Forestry
Respondent
Zain Naqi, for the Applicant
Shahana Kar and Shayna Levine-Poch, for the Respondent
HEARD at Hamilton: June 4, 2024
H. Sachs J.
Overview
[1] The Applicant, Nathan Reicheld (“Nathan”), seeks to judicially review the decision of the Designee of the Minister of Natural Resources and Forestry (the “Designee”) under the Oil, Gas and Salt Resources Act, R.S.O. 1990, c. P12 (the “Act”) ordering him to repair and plug 62 hazardous petroleum wells owned by Glenfred Gas Wells Ltd. (“Glenfred”), which declared bankruptcy in 2022.
[2] The Designee’s decision was an appeal of three orders issued under the Act by an Inspector against Nathan. The stated basis for all three orders was that Nathan was associated with Glenfred and had decision-making authority in relation to the wells. Therefore, he was an “operator” of the wells within the meaning of the Act.
[3] The Designee upheld all three orders against Nathan.
[4] Glenfred Gas Wells Limited (“Glenfred”) was owned and operated first by Nathan’s grandfather and then, when he died, by Nathan’s father. Nathan was never a shareholder, officer, director or employee of Glenfred. He had no financial interest in and received no financial benefit from Glenfred.
[5] Nathan works full-time as a public servant for the City of Hamilton. In 2012, Nathan’s father was diagnosed with Parkinson’s disease. As his father became increasingly debilitated with the disease, Nathan began to perform certain activities in relation to the wells.
[6] The Designee found that Nathan’s activities on behalf of Glenfred were sufficient to establish that he was an operator of the wells. Nathan submits that this decision is unreasonable because the Designee never found that Nathan had decision making authority in relation to the wells and because there was no evidence that would support an inference to that effect. On this basis Nathan submits that the Designee’s decision must be set aside.
[7] The Minister of Natural Resources and Forestry (the “Minister”) asserts that the decision is reasonable, justified on the facts and the law, and furthers the “polluter pays” principle that underlies Canadian environmental jurisprudence.
[8] For the reasons that follow, I would allow the application and set aside the Designee’s order.
Motion to Admit Fresh Evidence
[9] Nathan sought to introduce an affidavit on this application setting out his financial circumstances and the cost of plugging the wells. He sought to introduce this evidence with a view to establishing that complying with the orders would be financially ruinous to him. According to Nathan, assessing the fairness and reasonableness of the orders cannot be done without consideration of the impact of the orders on the Applicant.
[10] I agree with the Minister that the evidence should not be admitted. The proposed fresh evidence could have been put before the Designee. Our function on judicial review is to review the decision-maker’s decision, not to decide the matter for ourselves on the merits. Admitting evidence that was not before the original decision-maker risks inappropriately expanding the court’s role. Given this, fresh evidence will only be admitted on judicial review in exceptional circumstances, as described in Re Keeprite Workers’ Independent Union et al. and Keeprite Products Ltd., 1980 1877 (ON CA), 29 O.R. (2d) 513 (C.A.). Under Keeprite the evidence must set out general background that would assist the court, show procedural defects that are not apparent from the record or the reasons, or show a complete lack of evidence to support a material finding of fact. The evidence at issue is not being tendered for any of these purposes. It is therefore inadmissible.
Factual Background
The Legislative Context
[11] Petroleum wells in Ontario are regulated by the Minister under the Act and the related regulation, Exploitation, Drilling and Production, O. Reg. 245/97 (the “Regulation”). A licence issued by the Minister is required to drill or operate a well.
[12] The Act distinguishes between a “well” and a “work”. Pursuant to s. 1(1) of the Act, a “well” is defined as a “hole in the ground, whether completely drilled or in the process of being drilled, for the purpose of [a number of different things, including the production of oil and gas.] A “work” is a well or any pipeline or other structure or equipment that is used in association with a well.
[13] The issue in this case is whether Nathan was an “operator” of a work. Under s. 1(1) an “operator” in respect of a work is defined as:
(a) A person who has the right as lessee, sub-lessee, assignee, owner or holder of a licence or permit to operate the work,
(b) A person who is authorized under subsection 10(1.1) to operate the work without a licence,
(c) A person who has the control or management of the operation of the work, or
(d) If there is no person described in clause (a), (b) or (c), the owner of the land on which the work is situated.
[14] Nathan was not the owner or holder of the licence to operate the work – Glenfred was. Nathan was not authorized to operate the work without a licence. The question is whether he had the control or management of the operation of the work.
[15] The Act contains a number of provisions that are designed to protect the environment from the dangers that wells can pose. These include requiring an operator to file annual production and well status reports and requiring operators to plug a well that is no longer in use within 12 months of it becoming inactive.
[16] The Act also prohibits leaks that are a hazard to public safety or that pollute the environment. An inspector appointed by the Minister inspects wells and, pursuant to s. 7.01(a) of the Act, may order an operator to plug a well if the inspector is of the opinion that the well is a hazard to the public or the environment (“Plugging Orders”).
[17] Plugging Orders may be appealed to the Minister. The Minister may designate an individual as their designee to dispose of an appeal. The designee may rescind or affirm the inspector’s order or substitute a new order. The designee’s order stands in place of the inspector’s order.
The Inspector’s Orders Against Nathan
[18] Scott Sandau is a Ministry employee appointed as an inspector under the Act. Between July and October 2021, he inspected 62 wells licenced to Glenfred. He determined that all of these wells were hazards to the public and the environment. As a result, he issued three orders against Glenfred, Nathan, and Sally Reicheld (Nathan’s mother).
[19] The first order was issued on July 30, 2021 and it directed that 27 wells be plugged. In the order Glenfred is described as the licensee of the wells and Nathan and his mother are described as being “associated with Glenfred and have decision-making authorities. Each of them is an ‘Operator’ (as defined in the [Act]) of the wells that are the subject of the Order as persons who have control or management of the operation of the works of which the wells in question form a part.”
[20] The second order was issued on October 4, 2021 and it ordered the plugging of 36 additional wells that had been licensed to Glenfred. Again, the order named Nathan and his mother, using similar wording to the first order to justify naming them in the order. In particular, the order states that “Sally Reicheld and Nathan Reicheld are associated with Glenfred and on the basis of information gathered it is my belief that they have decision-making authorities on behalf of the company such that they each are an ‘operator’…of the wells that are the subject of this Order…”
[21] The last order was issued on December 17, 2021. This order was issued against the same parties. The same wording is used to describe Nathan and his mother’s liability as is used in the October 4, 2021 order. In the order the inspector found that 43 wells were leaking or had damaged infrastructure and that all 62 wells were unmaintained and were not being inspected weekly. As a result, the order directed Glenfred, Nathan and his mother to fix all the leaks and repair all the damaged infrastructure in 43 wells by January 14, 2022 and to ensure that weekly inspections were conducted with respect to all the wells referenced in the order.
[22] Nathan and his mother appealed all three orders. The basis for their appeal was that neither was an “operator” within the meaning of the Act. After a three-day hearing where 11 witnesses testified, the Designee decided the appeals on October 27, 2022. He dismissed Nathan’s appeal but allowed his mother’s appeal. The Designee substituted the Inspector’s orders with three new orders removing Nathan’s mother and compelling Nathan to plug, repair and conduct weekly inspections of the wells with new dates for completion.
Glenfred
[23] Glenfred Gas Wells Limited (“Glenfred”) was incorporated in 1965. Its business consisted of extracting and distributing natural gas deposits in the Jarvis area of Ontario. Glenfred made an assignment in bankruptcy on August 17, 2022. Glenn Reicheld and Fred Reicheld had been the directors of Glenfred since 1965. Glenn was Nathan’s grandfather and Fred was Nathan’s father. Glenn died 15 years ago, and Fred died on March 9, 2021.
[24] For many years Glenn owned and operated Glenfred, and his responsibilities were taken over by Fred after his death.
Nathan’s Involvement with Glenfred
[25] Nathan was never a shareholder, director or officer of Glenfred. He had no financial interest in the company and the uncontradicted evidence is that he received no financial benefit from the company. He was never employed by the company.
[26] Fred was diagnosed with Parkinson’s in 2012. As his father’s condition deteriorated, Nathan acted as a volunteer assisting his father with certain activities in relation to Glenfred. He did so by reading gas meters and occasionally interacting with regulators including the Minister and the Technical Standards and Safety Authority (“TSSA”). Nathan’s father was not comfortable with technology. He did not use a cell phone or email. Nathan therefore provided his contact information so that people could communicate more easily with Glenfred.
[27] Nathan called a number of witnesses at the hearing who testified to the fact that throughout his life Fred kept tight control over his business affairs. The bookkeeper for Glenfred for twenty-five years testified that, until his death, Fred reviewed and approved of all her work and that she never received any direction from Nathan or his mother. She also confirmed that Nathan received no financial compensation from Glenfred. Once Fred passed away, she stopped receiving any direction about Glenfred and stopped working for Glenfred. Glenfred’s corporate lawyer for forty years testified that all his dealings in relation to Glenfred were with Fred, and that to his knowledge Nathan had no control over the company. The company’s accountant since 2007 testified that he only dealt with Fred, never with Nathan.
[28] Nathan’s mother testified as to Fred’s tight control over the company. She testified that neither she nor Nathan could influence Fred’s decisions regarding the company. She also testified that, while Fred’s physical capacity diminished, his mental capacity did not. She confirmed that Fred had no computer skills, no email accounts and no cell phone.
Nathan gave evidence that as a result of his physical decline, Fred fell into a ditch while reading the metres on one of the wells. After that, Nathan read the gas meters once a month, doing so in the evenings after work and on the weekends. Nathan also helped his father communicate with regulators from time to time. According to Nathan, while he may have been the face of those contacts, at all times it was his father who made the decisions in relation to Glenfred’s activities.
[29] Inspector Sandau testified as to his dealings with Nathan since 2019. According to him, those interactions included discussions about leaks, manual audit reports and the potential sale of the wells. An engineer with the TSSA’s Fuels Safety Program testified about his interactions with Nathan during an audit of Glenfred under the Technical Standards and Safety Act, 2000, S.O. 2000, c. 16, on November 14, 2014. As a result of those interactions, the engineer formed the opinion that Nathan was in charge of Glenfred’s day to day operations. The documents prepared after that audit reflected this understanding and were never corrected by Nathan. A representative from Enbridge Gas testified that Nathan was Enbridge’s contact for Glenfred and that any payments received by Enbridge for Glenfred were emailed to Nathan. Three customers testified that Nathan read their meters. One customer stated that in 2017 Fred told him that Nathan would have to be consulted with respect to a purchase of a well from Glenfred. He also testified that Nathan shut off the gas at his well and put a lock on it.
The Designee’s Decision
[30] The Designee found that “Nathan’s dealings with multiple regulatory agencies and customers on substantive issues through a variety of communication methods over an extended time period (since 2014)” constituted “substantial evidence” that he was an operator. He therefore found that it was appropriate to rely on this court’s decision in Bilodeau v. Her Majesty the Queen in Right of Ontario, 2022 ONSC 1742, 98 C.B.R. (6th) 54.
[31] He then went on to make the following findings with respect to Nathan:
There can be concurrent operators of the same well (ie. someone other than the licensee) – Glenfred, Sally and Nathan are identified as “operators”
You can have a full-time job elsewhere and still be in control or management – Nathan has a full-time job with the City of Hamilton
One need not be a director or officer of a company in order to exercise control or management. Nathan is not a director or officer of Glenfred
Under the Act the test speaks to “control and management”. “Control” and “Management” are overlapping concepts rather than synonymous concepts – Nathan has demonstrated classic attributes of management over an extended period of time with multiple regulators and customers.
Regular communications with a regulator about a well or works is an indication of operator status- Nathan has had regular communications with multiple regulators since 2014.
The assertion that one is acting merely as an information conduit for another may not successfully establish a lack of management or control. Nathan did not advise regulators that he was just a communication conduit for his father.
[32] He therefore found that Nathan was an “operator” at the time the Inspector’s Orders were made.
Standard of Review
[33] The parties agree that the applicable standard of review is reasonableness. The party challenging the decision has the burden of showing that it is unreasonable. To find that a decision is unreasonable, the reviewing court must be satisfied that there are sufficiently serious shortcomings in the decision such that it does not exhibit the required degree of justification, intelligibility and transparency (Canada (Minister of Citizenship and Immigration v. Vavilov, 2019 SCC 65, [2019] 4 S.C.R. 653).
[34] As summarized at para. 105 of Vavilov: “In addition to the need for internally coherent reasoning, a decision, to be reasonable, must be justified in relation to the constellation of law and facts that are relevant to the decision” (citations omitted).
Analysis
The Jurisprudence
[35] This case raises the question of when a volunteer who is giving assistance to a disabled family member and who has no legal or financial connection to the work where the wells are located can be considered to be an operator with control or management of the work in question. While there is no case that provides a direct answer to this question, the leading jurisprudence relied upon by the Designee does provide some important guidance.
[36] Bilodeau is the only decision under the Act that deals with the question of who is an “operator”. In Bilodeau, the case law under the Environmental Protection Act (the “EPA”) was reasonably relied upon to provide guidance on this question. As found by the Designee in Bilodeau, both the Act and the EPA define an “operator” as someone who has “control or management of the operation” of an enterprise. Both are remedial pieces of legislation whose purposes would be undermined if the directing minds of corporations could hide behind their corporate structures to avoid compliance with regulatory orders designed to remediate the environmental damage caused by their activities. Bilodeau also accepted that the polluter pay principle is firmly entrenched in environment law in Canada.
[37] Before discussing Bilodeau, I will deal with the significant cases under the EPA: P & L Tire Recycling Inc. v. Ontario (Ministry of the Environment), [1992] O.E.A.B. No. 21 (“P&L Tire”), and Rocha v. Ontario (Environment and Climate Change), 97 C.E.L.R. (3d) 49.
[38] In P & L Tire, the Ontario Environmental Appeal Board discussed the meaning of “management and control” as follows:
71 Management and control are overlapping concepts. It is impossible to state precisely where one leaves off and the other begins. The Oxford Encyclopedic English Dictionary defines, “manage” as “organize; regulate; be in charge of (a business, etc.)”. “Management” has a corresponding definition as “the process or an instance of managing”. “Control” as a noun is defined as “the power of directing, command”, or alternatively as “the power of restraining”. Thus, control includes both the power to make things happen and to prevent them. As a verb, “control” means “have control or command of; dominate; exert control over; regulate; hold and check; restrain”. Black’s Law Dictionary (5th Edition) defines “control” as “the power or authority to manage, direct, superintend, restrict, regulate, govern, administer or oversee”.
72 In the context of liability for conviction of an offence, the concept of control was explored in the Supreme Court of Canada decision in R. v. Sault Ste. Marie (City) (1978), 1978 11 (SCC), 85 D.L.R. (3d) 161, 40 C.C.C. (2d) 353 (S.C.C.)… ... That case established the principle that control is not limited to direct supervision, oversight or ownership, but may be found where one person has the ability to strongly influence the conduct of another. This ability to influence may be found in the ability of those in charge of business activities to supervise, inspect, improve their business methods, and to exhort those whom they may be expected to influence or control: Sault Ste. Marie at C.C.C. 371. In one of the few attempts by the courts to elaborate on the “control” test set out [in] Sault Ste. Marie the Chief Magistrate of the Yukon Territorial Court has suggested that the legal classification of a contractual relationship between parties, while relevant to determining whether one of them has control over the other, is less important than determining if the accused had an ability to influence or control the offending conduct of the other contractual party.The ability to influence the conduct of someone is measured by the powers the person may employ to affect the conduct in question. These powers may derive from legislation, financial control, executive control, expertise, ownership, or contractual or legal rights, and from any other factor creating an influential bargaining power, position of authority, or ability to control offending activities: R. v. Placer Developments Ltd. (1983), 13 C.E.L.R. 42 (Y.T. Terr. Ct.), at 47.
[39] What emerges from P & L Tire is the fact that “management” and “control” are overlapping concepts. An essential ingredient of control is decision making authority. The definition of “management” cited in P&L is “organize; regulate; be in charge of” – all concepts that have inherent in them the power to make decisions. P & L Tire also establishes that control can exist when one person has the power to strongly influence the conduct of the person who does have decision making authority.
[40] In Rocha, Mr. Rocha was named in an order requiring the taking of preventative measures regarding contaminated groundwater. The property was owned by one company, and the business causing the contamination was owned by another. Mr. Rocha had a relationship with both companies. He was first retained to provide financial accounting advice. His role then expanded to include dealing with any environmental issues relating to the property. He also provided money to finance the activities of the companies. Mr. Rocha appealed the order against him to the Environmental Review Tribunal (“ERT”). The issue before the Tribunal was whether Mr. Rocha had control or management of the enterprise in question and thus, could be considered an operator of that enterprise.
[41] The ERT upheld the order against Mr. Rocha, but only after making two key findings. First, it found that Mr. Rocha was not only in contact with the Minister with respect to all environmental issues, but also that he had clear authority to deal with the Minister and others regarding all environmental issues. He was the person in the company who actually dealt with all those issues. Second, a “key additional factor” was that Mr. Rocha was able to restrain the companies from taking any steps to address the contamination on the property by “refusing to finance environmental prevention and clean-up work and by providing financial advice not to comply with Ministry orders” (para. 132). In other words, Mr. Rocha was found to have the power to influence the decisions of the companies in relation to the pollution caused by the companies.
[42] In Bilodeau, the Divisional Court judicially reviewed the decision of a designee under the Act upholding a plugging order against Mr. Bilodeau, who was found to be an “operator” of the wells in question. The order was upheld based upon the following factors:
(i) Mr. Bilodeau had been a shareholder, consultant and Chairman, President and CEO in the company that held the licences for the wells in question, Onco Petroleum Inc. (“Onco”).
(ii) When Onco started to experience financial difficulties, Mr. Bilodeau and several other investors founded another company, known as “Energex” to salvage Onco’s business. Mr. Bilodeau was the sole director of Energex. Energex loaned money to Onco to salvage its business. Its loan was secured against Onco’s assets. The money advanced was used, among other things, to drill another well and to provide the Ministry with a bond for Onco’s wells.
(iii) When Onco’s business failed to recover, Energex demanded repayment of its loan. A receiver was appointed. The court granted that receiver the authority to enter into an agreement with Energex whereby all of Onco’s assets would be sold to Energex in exchange for a payment from Energex to Onco of $200,000.00, which was to be paid from Onco’s debt to Energex by way of set-off. The agreement, which was signed by Mr. Bilodeau, on behalf of Energex, contained a clause whereby Energex agreed to responsible for all of the environmental responsibilities respecting the lands on which the wells were located associated with the “Abandonment and Reclamation of the Wells.” At the time the plugging orders were issued, Energex had become the owner of Onco’s assets.
(iv) Mr. Bilodeau then dealt with the Ministry regarding effecting the transfers of the licenses to the wells from Onco to Energex. These negotiations were ultimately unsuccessful.
(v) Mr. Bilodeau filed Annual Status Reports for the wells, which were signed by Mr. Bilodeau on behalf of Energex and in which Energex was identified as the operator of the wells.
[43] On the basis of all of these factors, the designee decided that Mr. Bilodeau had the power to control and manage the wells in question – a power that included the ability to make things happen and the power to prevent things from happening.
[44] In all these cases, there were clear findings that the people identified as “operators” had the legal power to make decisions concerning the works in question or the ability to influence the decisions of the person who did have that legal power. In addition, there was ample evidence to justify those findings.
[45] The jurisprudence therefore requires that a person has decision making authority or the ability to influence the person who has that authority before liability can be found under the Act as an “operator”. This serves as a legal constraint, and the Designee must justify their decision in light of this requirement. The fact that the cases focus on “control” as opposed to “management” does not change this requirement. As the caselaw explains, “control” and “management” are overlapping concepts. It would be unfair and unreasonable to interpret the Act to find that a low-level employee who carries out functions in relation to an enterprise could be held liable for the pollution caused by that enterprise unless it could be established that that employee actually had decision making authority in relation to that enterprise. The same is true of a person such as Nathan who assumed his role as a volunteer helping his sick father.
[46] Here, the orders that the Designee was reviewing were made because of the Inspector’s belief that Nathan had decision-making authority over the operation of Glenfred. Without a finding that Nathan had this authority or the power to influence the decisions of the person with this authority, the Designee’s decision is unreasonable. Without evidence to justify that finding the Designee’s decision is also unreasonable.
The Designee made no finding that Nathan had the power to make decisions concerning the works in question or the power to influence the person who did have that power
[47] The Designee made several findings in support of his conclusion that Nathan was an “operator”. They can be summarized as follows:
The Designee found that Nathan’s assertion that his communications with regulators “were solely on behalf of his father” was not credible since he never advised the regulators that he was communicating in this capacity; there was no evidence that Fred was unable to communicate himself either over the telephone or personally; the company letterhead had Nathan’s email address embedded in it; his “signature [was] embedded with the company name” and the use of the words “we” and “our” when discussing the company with others and the fact that he engaged in communications in relation to the company after Fred died.
Nathan had ample opportunity to advise regulators that he was acting on behalf of his father, and he did not do so. According to the Inspector, if he had done so, the Inspector would have required a statement from Fred that this was O.K.
The Designee accepted the evidence of Mr. Manoucheri concerning the audit of Glenfred that the TSSA conducted in 2014. Mr. Manoucheri testified that Nathan was the only Glenfred representative who attended that audit and that Nathan gave no explanation as to why this was the case. The audit occurred at Nathan’s home and included a review of the “companies’ operational manuals, record keeping, certification requirements” and discussions about how the company dealt with problems and emergencies. The audit also included an inspection of some field locations and throughout the day Nathan “seemed very aware and knowledgeable about the Glenfred gas well system, the steel pipe issue and fusion. As a result of his interactions with Nathan, Mr. Manoucheri had no cause to doubt that Nathan was in charge. The report that was sent after the audit identified Nathan as “in charge of everyday operations” and “manager of Glenfred”. Nathan commented on the report in writing and did not correct these assertions. The contact information on file for Glenfred with the TSAA had Nathan as the “operations manager”.
The Designee relied on Bilodeau for his finding that Nathan was an “operator.” In doing so, he found that the following principles were applicable:
(a) There can be concurrent operators of the same wells.
(b) Someone with a full-time job elsewhere can still be in control or management.
(c) Someone who is not a director or officer of a company can still exercise control or management.
(d) Management and control are overlapping concepts but are not synonymous. Nathan had demonstrated “classic attributes of management over an extended period of time with multiple regulators and customers.”
(e) An indicator of “operator” status is regular communications with a regulator and Nathan had had regular communications with multiple regulators since 2014.
(f) The assertion that one is acting merely as information conduit for another may not successfully establish lack of management or control and “Nathan did not advise regulators that he was just a communication conduit for his father.”
[48] Taken separately and together, these findings do not constitute a finding that Nathan had decision making authority over or the power to influence the decisions concerning the activities of Glenfred in relation to the works in question. The Designee did not accept that Nathan was merely a “communication conduit” for his father. He clearly found that Nathan was communicating on substantive issues with regulators in relation to Glenfred and that Nathan was knowledgeable about those issues. This is not a finding that Nathan had the decision making authority in relation to those issues. One can be knowledgeable about issues and communicate about them without having the authority to make the decisions concerning those issues.
[49] The Designee accepted Mr. Manoucheri’s evidence concerning the TSSA 2014 audit. Mr. Manoucheri testified that as a result of that audit he was of the belief that Nathan was in charge of Glenfred’s activities. Further, he communicated that belief to Nathan, and Nathan did not correct that impression. The fact that Mr. Manoucheri believed that Nathan was in charge of Glenfred is not a finding that Nathan was in charge of Glenfred’s activities.
[50] The Designee’s finding that Nathan had demonstrated “classic attributes of management over an extended period of time with multiple regulators and customers” is also not a finding that it was Nathan, not Fred, who was making the decisions concerning Glenfred’s activities in relation to the wells. It is also not a finding that Nathan had the ability to influence Fred in relation to those activities.
There was no evidence sufficient to justify a finding that Nathan had decision making authority or the power to influence Fred’s decisions
[51] While it is not the function of a reviewing court to reweigh the evidence before the decision-maker, a decision will not be reasonable unless it is justified with regard to the facts before the decision maker. In other words, if there is no evidence to support a conclusion, the conclusion cannot stand. As put by the Supreme Court in Vavilov at para. 126, “…a reasonable decision is one that is justified in light of the facts.”
[52] In this case, the direct evidence was that it was Fred who made the decisions concerning Glenfred. Moreover, Fred was not a man who could be influenced by others when it came to those decisions.
[53] There is evidence that Nathan assumed certain responsibilities in relation to Glenfred and the wells, including reading meters with respect to the wells and interacting with regulators on issues concerning those wells. There is no evidence that it was Nathan who made the decisions on the issues he was communicating about or that he had the power to influence Fred to make the decisions that were made with respect to those issues.
[54] There is evidence that the regulators believed that Nathan was in charge of Glenfred’s day to day operations, but there is no evidence that Nathan ever advised them that this was the case.
[55] The fact that Nathan’s cell phone number and email were used in relation to Glenfred does not mean that he was a decision maker with respect to Glenfred’s activities, especially in view of the unchallenged evidence as to Fred’s discomfort with technology.
[56] With respect to customers, the evidence was clear that after his father fell, Nathan read the meters once a month. This indicates nothing about decision making authority. One customer testified that Fred told him that he would have to consult Nathan with respect to the purchase of a well, but the evidence is that Nathan was consulted by his father for information purposes only – to see if the rules would allow the wells to be sold. He was not consulted with a view to having Nathan decide whether the well should be sold. The same customer testified that Nathan shut off his well and put a lock on it, but again Nathan’s evidence was that this was at the direction of his father and there was no evidence to refute this.
[57] It is uncontroverted that Nathan had no legal basis for exercising decision making authority over Glenfred’s activities. He had no formal role with the company. There was no evidence that Fred had delegated any decision making authority to Nathan. There was also no evidence that Nathan had the power to influence Fred with respect to his decisions regarding Glenfred. In fact, the evidence was that Fred was a man who could not be influenced.
[58] In the absence of evidence to support a finding that Nathan had the legal or de facto power to make decisions with respect to Glenfred’s activities or the ability to strongly influence the person who did have that legal power (Fred), it was unreasonable for the Designee to find that Nathan was an operator and therefore liable for remediating the environmental damage that Glenfred had caused.
Conclusion
[59] For these reasons, I find that the Designee’s decision is unreasonable and must be set aside.
[60] Where a decision is found unreasonable, the ordinary course is to remit the matter to the decision maker for reconsideration. However, remedial discretion must also be guided by other concerns, including “the goal of expedient and cost-efficient decision making”: Vavilov, at para 140. The Supreme Court made clear in Vavilov that a court may, in its discretion, decline to remit a matter where it determines in the course of its review that a particular outcome is inevitable and that remitting the case would serve no useful purpose: at para. 142. In view of the absence of evidence on the crucial issue, I decline to remit the decision back for a rehearing. The result is inevitable.
[61] In accordance with the agreement of the parties, the Respondent, as the successful party on the motion to admit fresh evidence is entitled to its costs, fixed in the amount of $3000.00. The Appellant, as the successful party on the application, is entitled to his costs, fixed in the amount of $9000.00.
Sachs J
I agree _______________________________
Hebner J
I agree _______________________________
Released: 20240919 Davies J
2024 ONSC 5016
DIVISIONAL COURT FILE NO.: DC-22-00000166-00JR
DATE: 2024/09/XX
ONTARIO
SUPERIOR COURT OF JUSTICE
DIVISIONAL COURT
Sachs, Hebner and Davies JJ
BETWEEN:
Nathan Reicheld
-and-
His Majesty the King in Right of Ontario as Represented by the Minister of Natural Resources and Forestry
REASONS FOR JUDGMENT
Released: 20240919