Decision Nos. 2014-EMA-007(a) and 2014-EMA-008(a)

Executive Flight Centre Fuel Services Ltd. and Danny La Sante v. Director, Environmental Management Act

Before: Environmental Appeal Board

Decision Date: February 17, 2015

Miller Thomson was successful in arguing before the Environmental Appeal Board (the “Board”) to stay a cost recovery certificate for approximately $130,000 in enforcement proceedings pending conclusion of the appeals on the merits of the certificate.

Introduction

Executive Flight Centre Fuel Services Ltd. (the “Company”) and Mr. La Sante filed separate appeals of a cost recovery certificate (the “Certificate”) issued by the Director, Environmental Management Act (the “Director”), Ministry of Environment.  The Certificate stated that the Company and Mr. La Sante were jointly and separately liable for the government’s “reasonable costs” of approximately $130,000 incurred in responding to a spill of hazardous substances into Lemon Creek on July 26, 2013.  The Company has spent over $5 million on remediation to date.  The Company and Mr. La Sante appealed the Certificate.  As a preliminary matter, they both applied for a stay of the Certificate.

What is a Cost Recovery Certificate?

Under section 80 of the Environmental Management Act, S.B.C. 2003, c. 53 (the “EMA”), the government may carry out remedial actions in response to a spill that may pose a hazard to health or the environment.  Under subsections 80(4) and (5), the Director may issue a certificate of cost recovery to the person(s) who had “possession, charge or control” of the spilled substance, requiring the person(s) to pay the cost of the government’s spill response actions regardless of liability for the spill.  Under subsection 80(6), once a certificate is served on the person(s) named in it, the amount in the certificate is a debt due to the government.  On filing in the B.C. Supreme Court, the certificate has the same effect as a court judgment for debt recovery against the person(s) named in the certificate.

Section 104 gives the Board the jurisdiction to order the stay of a certificate pending appeal.  The commencement of an appeal itself does not operate automatically as a stay.

Background Facts

On July 26, 2013, there was a spill of jet fuel into Lemon Creek.  Following the spill, allegedly affected property owners commenced class action litigation.  The Company, Mr. La Sante, and the Province are all named as defendants in that action.  As well, the Company and the Province face charges under the Fisheries Act, R.S.B.C. 1996, c. 149, in relation to the spill.

The pleadings filed in the class action allege that in July 2013, the Province was fighting wildfires in the Slocan Valley.  Pursuant to an agreement with the Province, the Company was requested to provide fuel for helicopters working out of a staging area.  A tanker truck operated by the Company and driven by Mr. La Sante turned off of Highway 6 onto a road adjacent to Lemon Creek, as directed by the Province.  This was not the route to the staging area.  After turning around, the shoulder of the road collapsed and the truck overturned.  The tanker was punctured and over 30,000 litres of jet fuel were discharged into Lemon Creek, a fish-bearing stream.

In November 2014, the Director issued the Certificate to the Company and Mr. La Sante, but not to the Province.  Both the Company and Mr. La Sante appealed the Certificate, and each applied for a stay of the Certificate.

Stay of the Certificate

The Board has the power to grant a stay of execution pending the Board’s final decision of the appeals on the merits of the Certificate.

Test for a Stay

The applicable test for a stay before the Board was set out in the 1994 Supreme Court of Canada decision inRJR-MacDonald Inc. v. Canada (Attorney General).  The applicant for a stay must demonstrate:

  1. there is a serious issue to be tried;
  2. irreparable harm will result if the stay is not granted; and
  3. the balance of convenience favours granting the stay.

1. Serious Issue

First, the Board concluded that the appeals raised serious issues to be decided, including: who had “possession, charge or control” of the spilled substance; whether there was an apprehension of bias on the part of the Director in not naming the Province in the Certificate; and whether the costs to be recovered are “reasonable”.

2. Irreparable Harm

For this part of the test, the Board found that the Company and Mr. La Sante had demonstrated irreparable harm to their interests.  If the stay was denied, the Certificate would remain in effect pending the conclusion of the appeals, during which time the Province could enforce the Certificate against both the Company and Mr. La Sante.  If the Province filed the Certificate in the B.C. Supreme Court, it would have the same effect as a judgment for debt recovery.  Since the Certificate was issued jointly and separately, the Province could seek to recover the total amount from either the Company or Mr. La Sante personally.

Requiring the payment of the Certificate at this time would imply sole responsibility for the spill on the Company and Mr. La Sante.  Although any amount paid under the Certificate could be reimbursed if the appeals are successful, the Board held that the significant damage to the Company’s business reputation and Mr. La Sante’s professional reputation in the interim would be irreparable as such harm would not be compensable.  As well, Mr. La Sante might incur significant harm to his personal finances.

3. Balance of Convenience

On the third part of the test, the Board considered the balance of convenience.  The Company led evidence that it had spent approximately $5 million to remediate the spill to date, the imminent risks have been addressed, and the clean-up is largely complete.  The Board found that a stay of the Certificate would not delay the remediation of the spill, and would not directly affect health or the environment.  The public interest served by section 80 of the EMA would not suffer significant harm from the granting of a stay.

As well, any inconvenience to the Province’s financial interests would not outweigh the risk of irreparable harm to the Company and Mr. La Sante.  There was no evidence that the Director or the Province would suffer significant inconvenience due to delay by waiting until after the appeals of the Certificate have been resolved.  Lastly, recovery of the costs under the Certificate did not appear to the Board to be an urgent matter as the spill response actions occurred in July and August 2013, and the Certificate was not issued until November 2014.

Conclusion

The applications for a stay were granted pending the Board’s final decision of the appeals on the merits of the Certificate.