Canada: An Unreasonable Defence? Costs Applications Before The Environmental Review Tribunal

The recent decision of the Environmental Review Tribunal in CCCTE v. Ontario (Environment and Climate Change) provides a useful reminder about the basic principles and test to be applied by the Tribunal in connection with an application for costs.  Importantly, the decision gives some comfort to those mounting a defence to an appeal that, even if ultimately unsuccessful in the appeal, such conduct is not in and of itself unreasonable conduct sufficient to ground a costs award.

Background

In CCCTE, an appeal was brought before the Environmental Review Tribunal in connection with certain conditions of an Amended Environmental Compliance Approval issued by the Ministry of the Environment and Climate Change in relation to the closure of a landfill owned by Waste Management of Canada Corporation ("WMC"). Party status in the hearing was sought and obtained by the Mohawks of the Bay of Quinte (the "MBQ").

The hearing of the appeal took place over 19 days in April and June 2015.  

The Cost Application 

Following the issuance of the Tribunal's decision in April 2016, an application for costs in the amount of approximately $445,000 was brought by the MBQ against WMC.  The MBQ application was dismissed by the Tribunal.

To read the Tribunal's decision in full click here.

The Tribunal's Authority to Award Costs is Limited

The Tribunal reaffirmed the Tribunal's authority to award costs in relation to an appeal under the Environmental Protection Act arose solely from section 17.1 of the Statutory Power and Procedure Act and it is prohibited from ordering costs unless the conduct or course of conduct of a party has been unreasonable, frivolous or vexatious or a party has acted in bad faith.1  The Tribunal noted this limited authority is emphasized by Rule 225 of the Tribunal's Rules of Practice and Practice Directions such that it is expected that costs will be awarded only in the rare case where a party's conduct warrants such an award.

Application of the Three-Stage Framework from Baker

In considering whether it had The Tribunal adopted and applied the three-stage framework identified by the Tribunal in Baker v. Ontario (Ministry of the Environment) in determining whether to grant costs.2  The three stages are as follows:

  1. The Tribunal must first determine whether a Party has engaged in unreasonable, frivolous, or vexatious conduct or acted in bad faith.
  2. If so, the Tribunal then considers whether to exercise its discretion to award costs.
  3. If the Tribunal exercises the discretion to award costs, the Tribunal then exercises its further discretion in determining the appropriate amount of the cost award.

The Tribunal's decision focused on the first stage of this framework and in particular, an assessment of whether WMC's conduct and/or course of conduct was unreasonable.3

What is Unreasonable Conduct?

To assess whether WMC's conduct was unreasonable, the Tribunal adopted the conclusion in Baker that it must consider whether WMC's conduct interfered with the Tribunal's ability to secure the just, most expeditious and cost-effective determination of the proceeding.  It also adopted the reasoning in Baker that:

... First, it is the adjudicator who must measure the actual impact of the impugned conduct, or course of conduct, on the course of the proceeding, which includes consideration of the impact of the conduct on other parties.  Secondly, "unreasonableness" must be assessed in terms of the circumstances which were known at the time the impugned conduct occurred, or the time over which an impugned course of conduct transpired.  For conduct to be unreasonable, a party must make an improper decision to act, of fail to act, during the course of the proceeding.  A decision can only be improper if the impropriety was clear in the circumstances at time the decision was made.  Thirdly, an assessment as to whether conduct is unreasonable does not turn solely on whether the impugned conduct negatively affected another party.  Similarly, the Tribunal may objectively find a party's conduct to be unreasonable, even though the party perceived it to be reasonable because it served the party's individual interests at the time.4

Particular emphasis was placed by the Tribunal in the decision on the principle that for conduct to be unreasonable "a party must have made an improper decision to act, or fail to act, during the course of the proceeding."5

The Tribunal found there was no indication that WMC engaged in any of the types of conduct listed in Rule 225 or any other conduct of the nature that the Tribunal would consider unreasonable.6  Consequently, as the MBQ failed to satisfy the first stage of the Baker framework, the MBQ's application was dismissed.7

Importantly, as part of its reasons, the Tribunal expressly rejected the MBQ's submission that "WMC should not have defended itself in these proceedings, and instead should have agreed to the MBQ's requested from the beginning."  The Tribunal went on to confirmed that it "is not unreasonable or (unusual) for a responding party to an appeal before the Tribunal to mount a defence to the appeal" and "it was not unreasonable conduct for WMC to respond in this appeal by defending its position, engaging in mediation and ultimately proceeding to a hearing on the outstanding issues." 8

Another important aspect of the Tribunal's decision is its discussion regarding its consideration of the parties' conduct at the Tribunal-assisted mediation.  In particular, the Tribunal found that:

In this case, there is no question that the discussion of the issues in mediation is intended to be confidential.  Rule 157 provides that all documents submitted and all statements made at a Tribunal-assisted mediation are confidential and without prejudice.  Rule 158 further provides that, if the parties to mediation do not settle a matter in its entirety, the hearing will take place without reference to the information disclosed during the mediation, except with the prior consent of all parties.  Parties to mediation, while attempting to reach agreement, may ultimately take different views, and proceed to a hearing.  This is common in litigation, and the Tribunal finds that it is not indicative of unreasonable conduct.9 [emphasis added]

Notably, the Tribunal found guidance in this respect in the decision of the Ontario Divisional Court in Saltsov v. Rolnick where the Court held that:

... Without probing into without prejudice discussions, it is [...] neither possible nor desirable to assess the reasonableness of positions taken by the parties or whether the time spent in attempting to find resolution was reasonable.  In short, the mediation process is neither subject to nor amenable to supervision by the Court.10

Key Points

In our view, this decision re-affirms several key points related to costs applications before the Tribunal:

  1. The Tribunal's authority to award costs is limited by statute and it is prohibited from ordering costs unless the conduct or course of conduct of a party has been unreasonable, frivolous or vexatious or a party has acted in bad faith.  The Tribunal will award costs only in rare cases.
  2. The three-stage framework in Baker will be applied by the Tribunal in determining whether to award costs.  Further, the considerations and conclusions of the Tribunal in Baker with respect to unreasonable conduct continue to act as the guide for the Tribunal's assessment of the conduct alleged to form the basis for a costs award.
  3. While Rule 225 contains a non-exhaustive list of conduct the Tribunal can consider in assessing whether a party's conduct is unreasonable, the list provides guidance to the Tribunal as to the nature of the conduct that could be considered unreasonable.
  4. Neither the mounting of a defence to an appeal by a responding party (even if ultimately unsuccessful) nor the taking of different positions at mediation while attempting to reach agreement are not in and of themselves indicative of unreasonable conduct.

Footnotes

1 CCCTE v. Ontario (Environment and Climate Change) reasons for order issued May 3, 2017 at paras 44-45 ("CCCTE").

2 Ibid at para 47.

3 As noted the Tribunal noted in paragraph 97, the MBQ made no submissions alleging that WMC had engaged in conduct that was frivolous or vexatious, or that WMC acted in bad faith.

4 CCCTE, supra note 1 at para 98.

5 Ibid at para 99.

6 Rule 225 of the Tribunal's Rules of Practice and Practice Directions provides a non-exhaustive list of  the types of conduct that the Tribunal may consider in making a determination on a costs application including: failing to attend a hearing, failing to co-operate, changing a position without notice, introducing an issue or evidence not previously mentioned, failing to act in a timely manner, failing to comply with the Rules or procedural orders, causing unnecessary adjournments or delays, failing to prepare adequately for hearings, failing to present evidence, continuing to deal with irrelevant issues, asking questions or acting in a manner that the Tribunal determined to be improper, failing to make reasonable efforts to combine submissions with parties of similar interest, acting disrespectfully or maligning the character of another party, and knowingly presenting false or misleading evidence.

7 Since the MBQ satisfy the first stage of the Baker framework, the Tribunal did not go on to assess the remaining two stages of the Baker framework.

8 CCCTE, supra note 1 at paras 110-111.

9 Ibid at para 109.

10 Ibid at para 108 citing Saltsov v. Rolnick, 2010 ONSC 6645 at para 18.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

To print this article, all you need is to be registered on Mondaq.com.

Click to Login as an existing user or Register so you can print this article.

Authors
Events from this Firm
14 Sep 2017, Seminar, Birmingham, UK

Has Cloud replaced traditional outsourcing models? We will compare cloud to outsourcing, consider whether they have effectively become the same thing for many solutions and assess some of the advantages and disadvantages of each model.

18 Sep 2017, Seminar, London, UK

Our annual event as part of the London Design Festival is now in its fifth year. We would be delighted if you are able to join us again.

21 Sep 2017, Seminar, London, UK

Has Cloud replaced traditional outsourcing models? We will compare cloud to outsourcing, consider whether they have effectively become the same thing for many solutions and assess some of the advantages and disadvantages of each model.

 
In association with
Up-coming Events Search
Tools
Print
Font Size:
Translation
Channels
Mondaq on Twitter
 
Register for Access and our Free Biweekly Alert for
This service is completely free. Access 250,000 archived articles from 100+ countries and get a personalised email twice a week covering developments (and yes, our lawyers like to think you’ve read our Disclaimer).
 
Email Address
Company Name
Password
Confirm Password
Position
Mondaq Topics -- Select your Interests
 Accounting
 Anti-trust
 Commercial
 Compliance
 Consumer
 Criminal
 Employment
 Energy
 Environment
 Family
 Finance
 Government
 Healthcare
 Immigration
 Insolvency
 Insurance
 International
 IP
 Law Performance
 Law Practice
 Litigation
 Media & IT
 Privacy
 Real Estate
 Strategy
 Tax
 Technology
 Transport
 Wealth Mgt
Regions
Africa
Asia
Asia Pacific
Australasia
Canada
Caribbean
Europe
European Union
Latin America
Middle East
U.K.
United States
Worldwide Updates
Check to state you have read and
agree to our Terms and Conditions

Terms & Conditions and Privacy Statement

Mondaq.com (the Website) is owned and managed by Mondaq Ltd and as a user you are granted a non-exclusive, revocable license to access the Website under its terms and conditions of use. Your use of the Website constitutes your agreement to the following terms and conditions of use. Mondaq Ltd may terminate your use of the Website if you are in breach of these terms and conditions or if Mondaq Ltd decides to terminate your license of use for whatever reason.

Use of www.mondaq.com

You may use the Website but are required to register as a user if you wish to read the full text of the content and articles available (the Content). You may not modify, publish, transmit, transfer or sell, reproduce, create derivative works from, distribute, perform, link, display, or in any way exploit any of the Content, in whole or in part, except as expressly permitted in these terms & conditions or with the prior written consent of Mondaq Ltd. You may not use electronic or other means to extract details or information about Mondaq.com’s content, users or contributors in order to offer them any services or products which compete directly or indirectly with Mondaq Ltd’s services and products.

Disclaimer

Mondaq Ltd and/or its respective suppliers make no representations about the suitability of the information contained in the documents and related graphics published on this server for any purpose. All such documents and related graphics are provided "as is" without warranty of any kind. Mondaq Ltd and/or its respective suppliers hereby disclaim all warranties and conditions with regard to this information, including all implied warranties and conditions of merchantability, fitness for a particular purpose, title and non-infringement. In no event shall Mondaq Ltd and/or its respective suppliers be liable for any special, indirect or consequential damages or any damages whatsoever resulting from loss of use, data or profits, whether in an action of contract, negligence or other tortious action, arising out of or in connection with the use or performance of information available from this server.

The documents and related graphics published on this server could include technical inaccuracies or typographical errors. Changes are periodically added to the information herein. Mondaq Ltd and/or its respective suppliers may make improvements and/or changes in the product(s) and/or the program(s) described herein at any time.

Registration

Mondaq Ltd requires you to register and provide information that personally identifies you, including what sort of information you are interested in, for three primary purposes:

  • To allow you to personalize the Mondaq websites you are visiting.
  • To enable features such as password reminder, newsletter alerts, email a colleague, and linking from Mondaq (and its affiliate sites) to your website.
  • To produce demographic feedback for our information providers who provide information free for your use.

Mondaq (and its affiliate sites) do not sell or provide your details to third parties other than information providers. The reason we provide our information providers with this information is so that they can measure the response their articles are receiving and provide you with information about their products and services.

If you do not want us to provide your name and email address you may opt out by clicking here .

If you do not wish to receive any future announcements of products and services offered by Mondaq by clicking here .

Information Collection and Use

We require site users to register with Mondaq (and its affiliate sites) to view the free information on the site. We also collect information from our users at several different points on the websites: this is so that we can customise the sites according to individual usage, provide 'session-aware' functionality, and ensure that content is acquired and developed appropriately. This gives us an overall picture of our user profiles, which in turn shows to our Editorial Contributors the type of person they are reaching by posting articles on Mondaq (and its affiliate sites) – meaning more free content for registered users.

We are only able to provide the material on the Mondaq (and its affiliate sites) site free to site visitors because we can pass on information about the pages that users are viewing and the personal information users provide to us (e.g. email addresses) to reputable contributing firms such as law firms who author those pages. We do not sell or rent information to anyone else other than the authors of those pages, who may change from time to time. Should you wish us not to disclose your details to any of these parties, please tick the box above or tick the box marked "Opt out of Registration Information Disclosure" on the Your Profile page. We and our author organisations may only contact you via email or other means if you allow us to do so. Users can opt out of contact when they register on the site, or send an email to unsubscribe@mondaq.com with “no disclosure” in the subject heading

Mondaq News Alerts

In order to receive Mondaq News Alerts, users have to complete a separate registration form. This is a personalised service where users choose regions and topics of interest and we send it only to those users who have requested it. Users can stop receiving these Alerts by going to the Mondaq News Alerts page and deselecting all interest areas. In the same way users can amend their personal preferences to add or remove subject areas.

Cookies

A cookie is a small text file written to a user’s hard drive that contains an identifying user number. The cookies do not contain any personal information about users. We use the cookie so users do not have to log in every time they use the service and the cookie will automatically expire if you do not visit the Mondaq website (or its affiliate sites) for 12 months. We also use the cookie to personalise a user's experience of the site (for example to show information specific to a user's region). As the Mondaq sites are fully personalised and cookies are essential to its core technology the site will function unpredictably with browsers that do not support cookies - or where cookies are disabled (in these circumstances we advise you to attempt to locate the information you require elsewhere on the web). However if you are concerned about the presence of a Mondaq cookie on your machine you can also choose to expire the cookie immediately (remove it) by selecting the 'Log Off' menu option as the last thing you do when you use the site.

Some of our business partners may use cookies on our site (for example, advertisers). However, we have no access to or control over these cookies and we are not aware of any at present that do so.

Log Files

We use IP addresses to analyse trends, administer the site, track movement, and gather broad demographic information for aggregate use. IP addresses are not linked to personally identifiable information.

Links

This web site contains links to other sites. Please be aware that Mondaq (or its affiliate sites) are not responsible for the privacy practices of such other sites. We encourage our users to be aware when they leave our site and to read the privacy statements of these third party sites. This privacy statement applies solely to information collected by this Web site.

Surveys & Contests

From time-to-time our site requests information from users via surveys or contests. Participation in these surveys or contests is completely voluntary and the user therefore has a choice whether or not to disclose any information requested. Information requested may include contact information (such as name and delivery address), and demographic information (such as postcode, age level). Contact information will be used to notify the winners and award prizes. Survey information will be used for purposes of monitoring or improving the functionality of the site.

Mail-A-Friend

If a user elects to use our referral service for informing a friend about our site, we ask them for the friend’s name and email address. Mondaq stores this information and may contact the friend to invite them to register with Mondaq, but they will not be contacted more than once. The friend may contact Mondaq to request the removal of this information from our database.

Security

This website takes every reasonable precaution to protect our users’ information. When users submit sensitive information via the website, your information is protected using firewalls and other security technology. If you have any questions about the security at our website, you can send an email to webmaster@mondaq.com.

Correcting/Updating Personal Information

If a user’s personally identifiable information changes (such as postcode), or if a user no longer desires our service, we will endeavour to provide a way to correct, update or remove that user’s personal data provided to us. This can usually be done at the “Your Profile” page or by sending an email to EditorialAdvisor@mondaq.com.

Notification of Changes

If we decide to change our Terms & Conditions or Privacy Policy, we will post those changes on our site so our users are always aware of what information we collect, how we use it, and under what circumstances, if any, we disclose it. If at any point we decide to use personally identifiable information in a manner different from that stated at the time it was collected, we will notify users by way of an email. Users will have a choice as to whether or not we use their information in this different manner. We will use information in accordance with the privacy policy under which the information was collected.

How to contact Mondaq

You can contact us with comments or queries at enquiries@mondaq.com.

If for some reason you believe Mondaq Ltd. has not adhered to these principles, please notify us by e-mail at problems@mondaq.com and we will use commercially reasonable efforts to determine and correct the problem promptly.