Decision Date: November 24, 2000

Court: B.C.S.C., Mr. Justice D. Tysoe

Cite: Vancouver Registry No. L001638

Beazer East, Inc. (“Beazer”) and Atlantic Industries Limited (“Atlantic”) applied for judicial review of the decision of the Environmental Appeal Board (the “Board”) in Appeal No. 98-WAS-01(b), where the Board upheld the decision of the Assistant Regional Waste Manager (the “Manager”) to name Beazer and Atlantic as responsible persons in a remediation order issued under the Waste Management Act (the “Act“). The remediation order concerns a property located in Burnaby that was contaminated as a result of a wood treatment operation that took place on the site between 1931 and 1982. Atlantic was the operator of the wood treatment business, and Beazer is the “parent corporation” of Atlantic by virtue of owning a controlling interest in Atlantic’s shares.

Beazer claimed that the Board erred when it found that: (i) Beazer was a responsible person by virtue of being a previous owner and operator of the site, (ii) Beazer was not entitled to an exemption on the basis that it was a person who provided assistance or advice respecting remediation work, and (iii) the Manager had not improperly exercised his discretion in naming Beazer to the remediation order.

Atlantic claimed that the Board erred by: (i) failing to consider equitable grounds, (ii) failing to relieve Atlantic of liability on the basis of private agreements, (iii) failing to find an abuse of process by the provincial Crown, (iv) failing to find that the Board has jurisdiction to stay the remediation order pending the outcome of the cost recovery/allocation process, and (v) failing to find that the Manager had not properly exercised discretion in naming Atlantic to the remediation order.

The Court applied the pragmatic and functional test to determine the appropriate standard of review to apply to the Board’s decision. The Court considered the purpose of the Act, which is to prevent pollution and to provide for remediation of contaminated sites, and found that a higher degree of deference is owed to the Board where the nature of the problem is one of mixed fact and law. However, the Court noted that the Act does not contain a privative clause and that the issues of statutory interpretation in this case do not engage the Board’s expertise, which point toward according a lower degree of deference. As a result, the Court found that the Board should be held to a standard of correctness for questions of law, such as the interpretation of a statutory provision, and a standard of reasonableness simpliciter for questions of mixed law and fact, such as the application of the legal test to the facts.

The Court found that the Board was correct in finding that Beazer was a responsible person on the basis that it was a previous operator of the site, but not on the basis that it was a previous owner. The Court, in finding that the Board erred in its interpretation of “owner,” stated that the meaning of the phrase “right of control of…the use of real property” in the definition of “owner” referred to a legal right. The Court noted that a parent corporation does not have the legal right to control a subsidiary’s use of assets, even though it may have an ability to control the subsidiary through other means (because the parent corporation can change the directors, who can change the officers, etc.) As such, the Court determined that the Board erred in finding that Beazer had a “right of control” of Atlantic’s use of assets as a result of Beazer’s requirement to approve Atlantic’s property leases, as this was not a legally enforceable right.

The Court determined that the Board was correct when it found that the phrase “in control of…any operation” in the definition of “operator” related to factual control of an operation, and not actual control of day to day operations. However, the Court noted that the Board may have erred in interpreting the phrase “responsible for…any operation” in the definition of “operator” too narrowly to only refer to legal authority over an operation. In the end, the Court did not interfere with the Board’s finding that Beazer was a responsible person by virtue of being a previous operator of the site. The Court also determined that the Board was correct in finding that the statutory exemption from liability for persons providing assistance or advice respecting remediation work did not apply to Beazer.

With respect to Atlantic’s claims, the Court upheld the decision of the Board on all grounds. The Court found that the Board did not fail to consider equitable factors, and that the Board was correct when it restricted the interpretation of “private agreements” to mean only existing, legally enforceable agreements. The Court also found that there was no abuse of process by the provincial Crown, that it was not unreasonable to name Atlantic to the remediation order, and that the Board was correct in deciding that it had no jurisdiction to stay the remediation order pending the outcome of the cost recovery/allocation court proceedings.

The petition was dismissed, and the parties were invited to make submissions on costs.