Shawnigan Residents Association v. Director, Environmental Management Act, Cobble Hill Holdings Ltd. and Environmental Appeal Board

File Number:
BCSC 107  

Decision Date: January 24, 2017

Court: B.C.S.C., Justice Sewell

Citation: 2017 BCSC 107

The Shawnigan Residents Association (the “Association”) sought a judicial review by the BC Supreme Court of a decision issued by the Board in 2015. The Association is a registered society whose members live in the vicinity of Shawnigan Lake, northwest of Victoria, BC.

Cobble Hill Holdings Ltd. (“CHH”) owns a parcel of land (“Lot 23”) within the Shawnigan Lake watershed. Lot 23 is the site of a rock quarry operated by South Island Aggregates Ltd. (“SIA”). CHH leases Lot 23 to SIA.

In 2010, SIA began investigating the possibility of developing a contaminated soil landfill and treatment facility on Lot 23. Active Earth Engineering Ltd. (“Active Earth”) acted as SIA’s “qualified professional” for the purposes of seeking a permit under the Environmental Management Act (the “EMA”) for the proposed landfill and facility. Active Earth drafted SIA’s permit application, and prepared a technical assessment report (“TAR”) in support of the application. The TAR characterized the geological and hydrogeological conditions on Lot 23, which were key to assessing the potential for environmental impacts arising from the proposed contaminated soil landfill. The TAR also discussed the operations and design of the proposed soil treatment facility.

In 2011, the permit application and TAR were submitted to the Ministry of Environment (the “Ministry”) for review. The Ministry’s review and public consultation process resulted in changes to the facility design, including added protections. During the review process, SIA and CHH requested that a permit be issued to CHH rather than SIA.

In 2013, the Ministry’s Director, Environmental Management Act (the “Director”), issued a permit authorizing CHH to discharge refuse to the ground and effluent to an ephemeral stream from a contaminated soil treatment facility and landfill located on Lot 23. The permit also authorized a water treatment system and settling pond. The permit contained numerous conditions including requirements to submit further information to the Director before commencing operations at the facility.

The Board received four appeals against the permit, including an appeal by the Association.

The Board heard the appeals together, and considered the evidence that was considered by the Director as well as new evidence. The Board received numerous technical reports, and heard from 29 witnesses including nine who were qualified to give expert evidence. The appellants were concerned that allowing contaminated soil deposits on Lot 23 presented too many environmental risks, which neither the facility design nor the characteristics of Lot 23 could overcome. In particular, the appellants were concerned about the risk of contamination of groundwater wells, water bodies, and wetlands. The appellants argued that the geology and hydrogeology of Lot 23 presented too many uncertainties to be confident that contaminants would not enter the environment and pose a threat to drinking water and fish habitat. All of the appellants sought an order rescinding the permit.

In addition, the Association argued that the Director lacked the jurisdiction to issue the permit, due to limitations in a letter of delegation setting out his powers, and the Director exceeded his jurisdiction by issuing the permit without considering two Ministry policies as required by the delegation letter.

On March 20, 2015, the Board issued a decision confirming the permit subject to additional conditions.

The Board rejected the Association’s argument that the Director lacked jurisdiction or did not comply with the conditions of his delegation letter. In addition, the Board held that the Director properly considered the information that was available to him, made appropriate investigations, and applied relevant policies in an unbiased manner. The Board found that the Director was aware that Active Earth was acting as an “advocate” for the permit application. However, the fact that Active Earth was an advocate for the application, that its original TAR was revised in response to Ministry questions and concerns, and that it was still owed money by CHH, did not disqualify it from being a “qualified professional.” The Director took a prudent and cautious approach to reviewing the information, and conducted a rigorous analysis including a comprehensive investigation of the site. The Director did not solely rely on the information provided by Active Earth, and he took care to consider contrary information. Taking into account the conditions in the permit, and all of the evidence, the Board found that the facility, as designed and permitted, would protect the environment and human health, subject to certain additional conditions.

The Association sought a judicial review of the Board’s decision. The Association raised a number of issues, including: whether the Director had jurisdiction to issue the permit; whether the Board acted fairly; whether fresh evidence should be admitted; and, whether there is a reasonable apprehension that the Board was biased.

The Court first considered the standard of review that applied to the Board’s decision. The Court found that the Board’s interpretation of its home statute, the EMA, is generally reviewable on a reasonableness standard. However, the Court found that the issue of whether the Board acted fairly did not require determining the appropriate standard of review, because this issue was a question of procedural fairness.

The Court agreed with the Board that the Director had jurisdiction to issue the permit. The Court also found that there was no apprehension of bias on the part of the Board.

However, the Court decided that the Board acted unfairly in its procedures with respect to the admission of opinion evidence. The Board’s Procedure Manual adopted the general evidentiary rule that a witness may not give opinion evidence unless that witness has special knowledge that permits him or her to give an opinion on a matter. The Court found that the Board applied the policies in its Procedure Manual to the evidence tendered by Association, but not to the evidence provided by government staff. In its decision, the Board held that it would be inappropriate to qualify government staff as experts because they were not independent. However, the Board relied on the opinion evidence of government staff in reaching its conclusions. As a result, the Association was deprived of procedural safeguards in the Procedure Manual with respect to notice of their evidence. Given the Court’s findings on the fairness issue, it was unnecessary to decide whether the Board’s decision was unreasonable.

In addition, the Court found that evidence which was unavailable to the Board should be admitted for consideration by the Court, despite the general rule in judicial reviews that a court will only consider the information that was before the tribunal whose decision is under review. The Court held that this was an exceptional case, because the fresh evidence was relevant to the independence of the qualified professional who designed the facility. Specifically, the fresh evidence established that, from almost the outset of the plan to pursue the facility until after the judicial review was commenced, Active Earth had an ownership interest in the facility. In the process of seeking a permit under the EMA, a “qualified professional” is expected to provide unbiased and sound information. Active Earth and CHH compromised the integrity of the approval process under the EMA, and the appeal process, by failing to disclose Active Earth’s ownership interest in the facility. The Board and the Director ought to have been made aware that the facility design and the TAR were prepared by professionals who were not independent and who stood to profit from the facility. Moreover, CHH’s principals provided false and misleading evidence to the Board about the nature of Active Earth’s interest in the project, and about the financial arrangements between Active Earth and CHH.

Based on the fresh evidence, the Court stated that it would not have hesitated to set aside the permit and remit it back to the Director for reconsideration. However, to uphold the integrity of the appeal process, it was in the interest of justice that the Board reconsider its decision with the benefit of the fresh evidence.

Accordingly, the matter was remitted to the Board for reconsideration in accordance with the Court’s reasons.