Canada: Monetary Administrative Penalties: Administrative Tribunal Of Quebec Rules On Due Diligence Defence And Past Failures To Comply

In a decision dated February 11, 2015,¹  the Administrative Tribunal of Quebec (the Tribunal) confirmed an October 1, 2013 decision of the Bureau de réexamen des sanctions administratives pécuniaires (office established to review monetary administrative penalties in Quebec) of the Ministry of Sustainable Development, Environment and the Fight Against Climate Change. That decision upheld the imposition of an  monetary administrative penalty (MAP) for a violation that occurred on November 9, 2012, namely the emission of dust in a residential neighbourhood contrary to Section 20 of the Environment Quality Act (Act).²

It is the first time the Tribunal has ruled on the admissibility of the due diligence defence in relation to the MAP regime of the Environment Quality Act, although that defence has been raised previously by citizens in the context of that regime. The Tribunal's decision also addresses the matter of past failures that the ministry may consider when determining whether an MAP can be imposed.

The facts

The facts leading to the MAP are not in dispute. Excavation René St-Pierre inc. operates a site in Quebec City where cement concrete, asphalt cement and bricks are converted into backfill. The certificate of authorization issued by the ministry for the site primarily covers the grinding, crushing and transportation by truck of materials and the unloading of materials in the seven backfill areas. The site, which operates from Monday to Friday, can accommodate between 200 and 400 trucks, which use the site's two access roads daily.

To mitigate the dispersal of dust, Excavation René St-Pierre inc. contracted to have tanker trucks spread water on the access roads and loading and backfill areas under a service agreement. An Excavation René St-Pierre inc. employee was responsible for managing dust on the site and would decide, the day before or in the morning, whether tanker trucks were needed, based on weather forecasts and his observations.

On the day of the alleged failure, an inspector from the ministry came to the site in response to a complaint by residents. A dust cloud originating at the site and reaching the residential neighbourhood was then observed. The employee responsible for dust management was not present at the site but called in a tanker truck after the inspector's visit.

Due diligence defence

Excavation René St-Pierre inc. argued that the MAP was unfounded because the company had demonstrated due diligence by taking appropriate measures to prevent the release of contaminants. According to the company, since the MAP would carry a similar stigma to a criminal conviction because of the publicity associated with the public register, such a defence ought to be admitted. The Tribunal indicated that since such a defence is associated with the right to be presumed innocent guaranteed by Section 11 (d) of the Canadian Charter of Rights and Freedoms³ in criminal proceedings, the stigma argument amounted to associating the MAP regime with the penal regime. The Tribunal maintained that one could not claim to apply Section 11(d) of the Charter to the MAP regime without first sending notice of intent beforehand to the Attorney General,⁴ which was not done in this case.

However, the Tribunal recognized that the "reasonable, prudent and diligent person" defence that exists in civil law could be applied in the case of MAPs. Indeed, the Act respecting administrative justice, which governs proceedings before the Tribunal, provides that a "party may plead any ground of law or fact relevant to the determination of his rights and obligations."⁵ In addition, the Environment Quality Act does not exclude a defence based on the measures taken to prevent a failure and even includes the measures taken to remedy the failure in the criteria the ministry must be guided by in deciding to impose an MAP.⁶ As for the general framework for applying MAPs, the version that was in effect when the MAP was handed down restricted the circumstances in which preventive measures could be considered. Such restrictions, however, are not found in the version of July 2013, which still applies today. In any case, the Tribunal was of the opinion that the ministry, in rendering a decision, cannot determine which grounds of defence are possible in respect of an MAP using the general application framework or on a case-by-case basis.

The Tribunal therefore applied the "reasonable, prudent and diligent person" defence to the facts of the case at issue and found that Excavation René St-Pierre inc. had not acted as a reasonable, prudent and diligent person would have done in the same circumstances, as such a person would have taken the necessary precautions to avoid the failure to comply with the Environment Quality Act. In fact, the Tribunal determined that Excavation René St-Pierre inc. had a duty to prevent, know about and monitor the contamination that it caused. Under its certificate of authorization, it should have taken the necessary measures to ensure that the dust generated by its operations did not have the effects proscribed by Section 20 of the Environment Quality Act, which it did not do in this instance.

Previous failures to comply

The Environment Quality Act requires the ministry to develop a general framework for applying MAPs,⁷ which must include, among other things, the criteria it must be guided by when it decides to impose an MAP. One such criterion provided for in the Act is the repetitive nature of the failure.

In its decision, the Tribunal first looked at the actual or expected consequences of the failure. It noted that the ministry's inspector did not provide any explanation for his assessment of the failure; the impact on public health had not been demonstrated because the length of exposure, load and effects of the dust on the public were not documented; and the professional opinion of the public health directorate did not deal specifically with the alleged failure. The Tribunal therefore reviewed the ministry's assessment and qualified the consequences of the failure as minor instead of moderate owing to the absence of evidence in this regard.

The general application framework in effect when the MAP was imposed on Excavation René St-Pierre inc. stated that an MAP could be imposed in the event of a failure with minor consequences if "[translation] a failure of the same nature was observed during a previous inspection." The Tribunal therefore reviewed the alleged previous failures of Excavation René St-Pierre inc.

First, the Tribunal established that, because previous complaints, notices of offence and notices of non-compliance do not constitute indisputable evidence of a failure, citizens must be informed when such complaints and notices are considered in the decision to impose an MAP so that they have an opportunity to assert their rights with respect to previous failures by demonstrating to the Bureau de réexamen des sanctions administratives pécuniaires and the Tribunal that the complaints or notices are unfounded. Moreover, such complaints and notices must be included in the file that the minister is required to provide to the Tribunal and the citizen.⁸ Evidence relating to a previous notice of offence that was introduced at the time of the hearing before the Tribunal was therefore dismissed by the Tribunal because Excavation René St-Pierre inc. had not been informed that the notice was a basis for the alleged MAP. The Tribunal also dismissed the past complaints because Excavation René St-Pierre inc. had not been notified of those, either, and because the evidence showed, further, that not all of them were founded.

However, Excavation René St-Pierre inc. had obtained a prior notice of offence under an access-to-information request prior to sending its observations to the Bureau de réexamen des sanctions administratives pécuniaires and the Tribunal determined that it could take that failure into account, which allowed it to uphold the MAP imposed.

It is worth noting that the current version of the general framework for applying MAPs is more specific when it comes to previous failures that may be considered when an MAP is imposed for a failure with minor consequences.

Conclusion

This Tribunal decision therefore confirms that a citizen has grounds of defence, akin to the due diligence defence, when an MAP is imposed. The citizen may therefore produce evidence that it has taken the necessary precautions to avoid a failure to comply with the Environment Quality Act as a reasonable, prudent and diligent person placed in the same circumstances would have done. The citizen will have to establish that not only does it know about and monitor the contamination potentially generated by its operations, but also that sufficient measures are in place to prevent such contamination.

This decision also clarifies the ministry's obligations when it takes past failures into consideration in deciding to impose an MAP. Citizens must be informed of past failures so that there is an opportunity to raise a defence in respect of them, as well.

Footnotes

1 Excavation René St-Pierre inc. c MDDELCC, 2015 QCTAQ 02386.

2 CQLR, c Q-2.

3 Part 1 of The Constitution Act, 1982 [Schedule B to the Canada Act 1982 (UK) c 11].

4 Section 112 of the Act respecting administrative justice (CQLR, c J-3) and Section 95 of the Code of Civil Procedure (CQLR, c C-25).

5 Section 137 of the Act respecting administrative justice.

6 Subsection 115.13 (3) of the Environment Quality Act.

7 Second paragraph of Section 115.3 of the Environment Quality Act.

8 Section 114 of the Act respecting administrative justice.

Norton Rose Fulbright Canada LLP

Norton Rose Fulbright is a global legal practice. We provide the world's pre-eminent corporations and financial institutions with a full business law service. We have more than 3800 lawyers based in over 50 cities across Europe, the United States, Canada, Latin America, Asia, Australia, Africa, the Middle East and Central Asia.

Recognized for our industry focus, we are strong across all the key industry sectors: financial institutions; energy; infrastructure, mining and commodities; transport; technology and innovation; and life sciences and healthcare.

Wherever we are, we operate in accordance with our global business principles of quality, unity and integrity. We aim to provide the highest possible standard of legal service in each of our offices and to maintain that level of quality at every point of contact.

Norton Rose Fulbright LLP, Norton Rose Fulbright Australia, Norton Rose Fulbright Canada LLP, Norton Rose Fulbright South Africa (incorporated as Deneys Reitz Inc) and Fulbright & Jaworski LLP, each of which is a separate legal entity, are members ('the Norton Rose Fulbright members') of Norton Rose Fulbright Verein, a Swiss Verein. Norton Rose Fulbright Verein helps coordinate the activities of the Norton Rose Fulbright members but does not itself provide legal services to clients.

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.