Superior Court of Justice - Ontario

Date: 2021-06-21

Re: Lake Simcoe Region Conservation Authority, Applicant

And: George Murtry Eng and 2608789 Ontario Inc., Respondents

Before: Justice C. Boswell

Counsel: Colin A. Brown for the Applicant Al Burton for the Respondent

Heard: June 21, 2021

ENDORSEMENT

Overview

[1] Since 1996, George Eng has owned a 46-acre property abutting Zephyr Road in Uxbridge. The entire property falls within an area of provincially significant wetland known as the “Zephyr-Egypt Wetland Complex”, which is a part of the broader Lake Simcoe watershed. It is also an Area of Natural and Scientific Interest because of the presence of the Zephyr Creek Swamp.

[2] Mr. Eng’s property is subject to the provisions of the Conservation Authorities Act, R.S.O. 1990, c. C. 27 and the regulations made thereunder, including Ont. Reg. 179.06. The applicant’s jurisdiction under that Act covers the Lake Simcoe watershed.

[3] Pursuant to sections 2 and 3 of Ont. Reg. 179/06 (the “Regulation”), no person may undertake a development on a wetland or another area within the Lake Simcoe watershed that may interfere with the hydrologic function of the wetland without first receiving permission from the applicant.

[4] A “development” is defined by s. 28(25) of the Conservation Authorities Act and includes site grading or the temporary or permanent placing, dumping or removal of any material, originating on the site or elsewhere.

[5] It is undisputed that Mr. Eng has been excavating substantial quantities of peat, which he has been using to create and sell triple-mix. He has been bringing in substantial quantities of fill material to replace the excavated peat. He receives significant income from allowing the dumping of fill on his property.

[6] The applicant seeks a permanent injunction to stop Mr. Eng from carrying on activities in breach of the Regulation as well as significant monetary damages to compensate for the harm he has caused to the Zephyr-Egypt Wetlands Complex (the “ZEWC”). Pending the hearing of the application, a temporary injunction is sought.

[7] For the reasons that follow, an interim injunction shall issue, with immediate effect.

The Significance of the Zephyr-Egypt Wetlands Complex

[8] Jessica Chan is a natural heritage ecologist, employed by the applicant. She swore an affidavit in support of this application on June 7, 2021. Her affidavit provides background information about the ZEWC, which I accept for the purposes of this ruling.

[9] According to Ms. Chan, the ZEWC is a “conifer dominated treed swamp growing on thick organic peat soils.” Like all treed areas, it helps to regulate air quality by removing airborne pollutants. A coniferous swamp also serves to mitigate climate change by essentially sequestering and storing carbon dioxide and other greenhouse gases. It also helps to regulate floodwaters and erosion.

[10] Ashlea Brown is the applicant’s director of regulations, responsible for administering the applicant’s regulation and enforcement program. She explained, in an affidavit sworn June 7, 2021, and I accept, that peat soils are organic. They “form over centuries as a result of the slow accumulation of vegetation debris under anaerobic conditions.” She clarified that “slow accumulation” means that peat forms at the rate of about 0.5 to 1 mm per year.

The Activities of the Respondents

[11] Mr. Eng refers to himself as a “peat farmer”, though I would consider him more of a peat excavator. At any rate, he deposed in an affidavit sworn June 15, 2021, and I accept, that he mixes peat excavated from his property with manure and soil to create triple-mix, which he bags and sells. The extent of his operation is not entirely clear. He said he employs five workers on a full-time basis. And he noted that if he is prohibited from farming peat at this point in the year, there will be a shortage of triple-mix in the GTA next spring, an assertion which tends to support the inference that his operation is substantial.

[12] Mr. Eng has been under periodic surveillance by the applicant’s compliance officers over the past year or so. Officer Matthew Brown swore an affidavit in support of the application on June 7, 2021. His observations over the past year include:

(a) On May 12, 2020 he observed a dump truck make two trips onto Mr. Eng’s property. It entered the property with a full load and left empty;

(b) On May 26, 2020 he observed another dump truck enter the property with material in its box. He believes the material was deposited on Mr. Eng’s property;

(c) On August 20, 2020 he received information from the Manager of Bylaw services for the Township of Uxbridge that dump trucks were attending at Mr. Eng’s property at a rate of approximately 50 trucks per hour. He attended the property and spoke with Mr. Eng. Mr. Eng confirmed that fill was being delivered to the property. He said he was receiving 400 loads of high quality fill from a municipal road maintenance project on Warden Avenue;

(d) On October 23, 2020 he received information that a dump truck labeled “Franklin Haulage and Excavating” was observed entering the property. Upon investigation he found that the truck was rented by a company called Greenspace Construction Incorporated. He was advised by a representative of that company that they had deposited 100 loads of material to Mr. Eng’s property between October 16 and 19, 2020;

(e) On May 23, 2021 he observed some 23 loads of material being delivered to the property; and,

(f) On June 4, 2021 he executed a search warrant on the property. He observed two large excavated cavities, recent excavation of peat material which was piled, the deposit of soils and other materials originating elsewhere, piles of woody vegetation, graded or tilled land and a newly graded driveway. A dewatering pump was actively removing water from a wetland area. He also observed miscellaneous heavy equipment, including a bulldozer and excavator. And finally, he observed a soil mixer and screener with an elevated belt, which he believed was being used to create and package triple-mix.

[13] Mr. Eng does not deny that any of the activities observed by Officer Brown have been ongoing.

The Positions of the Parties

[14] The applicant expresses grave concerns about the environmental damage Mr. Eng is causing to the ZEWC. It says he has a history of non-compliance. It points to a prior prosecution it brought against him which culminated in a conviction in January 2012 for breach of the Regulation. Mr. Eng was ordered to rehabilitate the property, but he has not done so.

[15] The applicant submits that Mr. Eng is in breach of the Regulation and that his breach is flagrant. According to Mr. Brown’s affidavit, Mr. Eng told him, on August 20, 2020, that the applicant should not be able to interfere with his liberty to use his property as he sees fit and to earn a livelihood from it. Mr. Eng, the applicant contends, is flouting the law.

[16] The provisions of the Regulation serve an important public interest purpose. Mr. Eng is, in the applicant’s submission, in breach of the law and is causing significant and potentially irreparable environment harm. While the applicant has the ability to charge Mr. Eng with a provincial offence, the penalties associated with a conviction are modest and would be nothing more than a cost of doing business. The applicant submits that it requires an injunction to put a stop to Mr. Eng’s unlawful activities.

[17] Contrary to the applicant’s assertions, Mr. Eng submits that he has a demonstrated history of compliance with the Regulation. He points to a number of permits he has applied for and received in the past. And, he says, he submitted an application for a permit in 2018 that remains unprocessed.

[18] Mr. Eng denies that the applicant has demonstrated that an injunction is justified in the circumstances. He contends that the applicant has been dragging its feet, both in terms of assessing his permit application and in pursuing this application. Its procrastination tends to support the inference that it does not consider this issue to be particularly pressing – a notion he entirely agrees with.

[19] Mr. Eng urges the court to dismiss the application, or in the alternative, to adjourn it for several months to (1) allow the evidentiary record to be developed; and (2) to give the applicant sufficient time to process and respond to his outstanding permit application.

The Governing Principles

[20] The law governing interlocutory injunction applications is clear. The test was settled almost thirty years ago in RJR-MacDonald Inc. v. Canada (Attorney General), 1 [1994] S.C.R. 311. An applicant for an interim injunction must establish a three-part test:

(a) That there is a serious issue to be tried;

(b) That the applicant would suffer irreparable harm should the injunction not be granted; and

(c) That the balance of convenience favours granting the injunction.

[21] There is a consensus between the parties that the first prong of the RJR-MacDonald test is met. They agree that there is a serious issue to be tried.

[22] A number of cases have held that where a public authority is seeking an injunction to prevent the ongoing breach of a statutory term, regulation or bylaw, the second and third branches of the RJR-MacDonald test need not be satisfied in the same way as would be necessary if the applicant were a private individual. There is a presumption that the public authority is acting in the best interests of the public and a further presumption of irreparable harm where a regulatory breach is established. See, for instance, Toronto (City) v. Merit Corp., [1983] O.J. No. 466 (S.C.O.) and Schein v. Saugeen Valley Conservation Authority, [1995] O.J. No. 1543 (Gen. Div.) at para. 55.

[23] Indeed, the Court of Appeal has held that “where a municipal authority seeks an injunction to enforce a bylaw which it establishes is being breached, the courts will refuse the application only in exceptional circumstances”. See Newcastle Recycling Ltd. v. Clarington (Municipality), 2005 CanLII 46384 (ON CA), [2005] O.J. No. 5344 at para. 32. The same reasoning must, in my view, be applicable where another public authority, such as a conservation authority, is seeking an injunction to enforce its regulations.

[24] In Grand River Conservation Authority v. Ramdas, 2020 ONSC 2426, Shaw J. held, at para. 53, that injunction relief will generally follow where a conservation authority demonstrates a flagrant breach of a regulation.

[25] Counsel in this case dedicated a portion of their oral arguments to the issue of whether any regulatory breach by Mr. Eng is “flagrant”. I am, with respect, not persuaded that an injunction will only issue if a breach is “flagrant”. In some prior cases, presiding judges have described breaches as flagrant in the course of granting injunctions. But in my view, the significant fact to be established is that there is a breach of the Regulation (or bylaw as the case may be) and not that the breach is flagrant. The harm asserted in this case is that a Regulation enacted in the public interest to protect the environment is being breached. It is of little concern, in my view, whether the breach is flagrant.

Discussion

[26] The disposition of this application is relatively straightforward.

[27] I find that Mr. Eng is in breach of the Regulation. He does not have a permit to excavate peat on his property. He does not have a permit to deposit fill on his property. And he does not have a permit to regrade his property to create a new driveway. Yet he has done all of those things. The excavation and depositing of fill appear to be continuing on a regular basis.

[28] Mr. Eng’s actions may be causing irredeemable damage to a watershed area that has taken thousands of years to develop. His actions are alarming and must stop until they have been assessed by the applicant.

[29] I am not comforted by the fact that the respondent applied for a permit of some sort in 2018. While I understand his concern that he has not received a response to his application, I make two observations.

[30] First, there is some debate about whether the application related in any way to the excavation of peat or the depositing of fill. The applicant’s counsel asserts that the application related solely to the installation of a geothermal loop to heat Mr. Eng’s home. Mr. Eng’s counsel asserts otherwise. I am unable to resolve the debate because the application is not in evidence. In other words, I am unable to conclude that there is an outstanding application before the applicant for a permit authorizing the activities being undertaken by the respondents.

[31] Second, and in any event, a pending permit application is not the equivalent of having an issued permit. There is no authority for the proposition that activities requiring a permit may be carried on without a permit, so long as there is a permit application pending.

[32] The unavoidable fact is that the respondents do not have a permit authorizing them to carry out the activities they are carrying out on Mr. Eng’s lands. The law requires them to have such a permit.

[33] There is a strong public interest in ensuring that wetlands are preserved and maintained. They benefit everyone. And they are not readily replaceable. In my view, the law provides that, barring exceptional circumstances, the applicant is entitled to the injunctive relief sought on the establishment of the breach. There are no exceptional circumstances present here that would stand in the way of the granting of the injunction.

[34] It follows that I am not of the view that the applicant is required to demonstrate either irreparable harm or that the balance of convenience favours the granting of the injunction. That said, I am satisfied that both of those prongs of the RJR-MacDonald test are made out.

[35] In terms of irreparable harm, I am satisfied that the large-scale excavation of peat material from a protected wetland may cause extensive damage to a near irreplaceable environment asset. There is no “putting the genie back in the bottle” as the saying goes. Once the peat is gone, it is gone. It will take many hundreds of years to replace it. The harm in play is definitely, in my view, of an irreparable nature.

[36] Mr. Eng’s counsel argued that the applicant has not made out irreparable harm in light of a number of factors which include:

(a) The applicant has been conducting an investigation into the respondents’ activities for over a year. It has done very little in that period of time to enforce the provisions of the Regulation. It can hardly suggest, in the circumstances, that there is any urgency to this matter;

(b) The applicant is seeking damages of roughly $600,000. The monetization of the alleged harm supports an inference that it is not irreparable. Rather, that it is reparable by a damage award; and,

(c) It is not sufficient to demonstrate a breach; the breach must be flagrant. In view of Mr. Eng’s historical efforts directed at compliance, it cannot be said that any current breach is flagrant.

[37] I will address each of the respondents’ assertions in turn.

[38] First, I agree that the applicant could have moved on this situation with greater dispatch. And I also agree that the failure to do so tends to support an inference that the circumstances are not so dire and urgent as to require the imposition of an interlocutory injunction. But such an inference is overtaken in the circumstances of this case by the alarming evidence of the destruction being caused to the ZEWC. Whatever delays have occurred, the case is here now and the facts are sufficiently alarming that injunctive relief is clearly warranted.

[39] Second, I do not believe that the claim for damages in any way undermines the claim for an injunction. The applicant seeks to stop the ongoing damage to the ZEWC and, at the same time, seeks reparation – in money terms – for the damage done to date. There are both compensatory and deterrent objectives associated with the damages claim. I do not consider it inconsistent with or an impediment to the claim to an injunction.

[40] Finally, I have already indicated that I do not believe it is necessary for the applicant to establish that the respondents’ breach is flagrant. That said, I find that it is. The respondents know that they require a permit to conduct the operations they are engaged in. They know that they do not have such a permit. And yet they are openly carrying on a large scale commercial activity in breach of the Regulation and contrary to the strong public interest in the preservation of valuable wetlands. That is a flagrant breach in my book.

[41] In terms of the balance of convenience, the regulation of development on protected wetlands is a matter of great public importance. Mr. Eng is not being conclusively banned from carrying out the activities he wishes. He is simply being told to cease them until he obtains the necessary permits to do so. Moreover, if he is denied the permits he seeks, he has at least two avenues of appeal open to him.

[42] Against that strong public interest are the assertions that Mr. Eng has five employees who will lose their jobs if his activities are halted and that there will be a shortage of triple-mix in the GTA next year. I am sympathetic to Mr. Eng’s employees, but supporting them through illegal activities is not a worthy cause. I am also not persuaded that the GTA’s appetite for triple-mix can justify the unregulated destruction of a protected wetland.

[43] In the result, I am more than satisfied that the RJR-MacDonald test is made out. An injunction will issue on the terms sought. Specifically:

(a) The respondents are prohibited on an interim basis from using the property, or any portion of the property, located at Pt. Lt. 24 & 25, Con. 3 Scotts Pts 1 & 2, 40R2184, Uxbridge (having property identification number 26870-0053(LT)) and known municipally as 349 Zephyr Road, Uxbridge, Ontario otherwise than in accordance with the provisions of Ontario Regulation 179/06 passed pursuant to the Conservation Authorities Act; and,

(b) Without limiting the generality of the foregoing, the respondents are prohibited on an interim basis from interfering in any way with a wetland, including the excavation of peat material or the depositing of fill material on the said property without the prior written approval of the applicant.

[44] The parties are encouraged to agree on the issue of costs. If they are unable to agree, they may make submissions to me in writing, on a fourteen-day turnaround. Their submissions are not to exceed two pages. The applicant’s submissions are to be served and filed by July 5, 2021 and the respondents’ submissions are to be served and filed by July 19, 2021.

C. Boswell J.

Date: June 21, 2021