Decision Date: February 5, 2015

Court: B.C.S.C., MacKenzie J.

Citation: 2015 BCSC 154

Lynda Gagne, Charles Claus, Skeena Wild Conservation Trust (the “Trust”) and Lakelse Watershed Stewards Society (the “Society”) applied to the BC Supreme Court for an order awarding them costs in a judicial review of a decision of the Board. They sought an order requiring Rio Tinto Alcan Inc. (“Rio Tinto”) to pay their costs associated with the judicial review.

In April 2013, Ms. Gagne, Mr. Claus, the Trust, and the Society were among a group of eight appellants who appealed a decision issued by the Director, Environmental Management Act (the “Director”), amending a permit held by Rio Tinto. The permit authorizes Rio Tinto to discharge effluent, emissions, and waste from a smelter located in Kitimat, BC. Among other things, the amendment allowed an increase in the smelter’s maximum daily emissions of SO2 (sulphur dioxide).

After the appeals were filed, Rio Tinto challenged the appellants’ standing to appeal the permit amendment. Rio Tinto submitted that the appellants were not “persons aggrieved” by the amendment within the meaning of section 100(1) of the Environmental Management Act (the “Act”). The Board requested written submissions from all parties on the preliminary issue of standing.

In a decision issued in October 2013 (Lynda Gagne et al v. Director, Environmental Management Act (Decision Nos. 2013-EMA-005(a) and 007(a) through 012(a)), the Board found that two of the eight appellants had standing to appeal as “persons aggrieved” by the permit amendment. The Board held that the other six appellants, including Ms. Gagne, Mr. Claus, the Trust and the Society, had not established that they were “persons aggrieved” by the amendment, and therefore, they had no standing to appeal.

Ms. Gagne, Mr. Claus, the Trust and the Society filed a petition with the BC Supreme Court for a judicial review of the Board’s decision. The petitioners argued that the Board had acted in a procedurally unfair manner when its staff requested that Rio Tinto provide copies of certain documents that both Rio Tinto and the appellants had cited and partially quoted in their submissions. The petitioners argued that this was unfair because the deadline for written submissions had closed, and the petitioners were not given an opportunity to make further submissions regarding the documents, contrary to the Board’s Procedure Manual.

In March 2014, the Court issued its decision in Gagne v. Sharp, 2014 BCSC 2077 [Gagne #1]. The Court first considered the degree of procedural fairness owed by the Board in light of the rules of natural justice. The Court concluded that the key question was whether the Board complied with its own Procedure Manual, and not whether the petitioners had suffered any prejudice. The Court held that the Board was required to rigorously comply with its Procedure Manual. The Procedure Manual provided that, in deciding appeals, the Board would not request further information from a party without providing the other parties with notice and an opportunity to make submissions regarding that information. The Court found that, although there was no intentional misconduct by any party, the Board’s request for documents from Rio Tinto was a breach of its Procedure Manual, and this breached the petitioners’ right to procedural fairness. The Court also held that the Board had applied the “balance of probabilities” standard of proof to the question of standing, and this standard was too rigorous. The Court held that appellants should only have to demonstrate on a prima facie basis that they are “persons aggrieved” when their standing is being decided as a preliminary matter. Finally, the Court concluded that any determination the Board makes regarding standing is entitled to deference from the courts, and a standard of “reasonableness” should be applied by the courts. Accordingly, the Court directed the Board to reconsider whether the petitioners had established, on a prima facie basis, that they are “persons aggrieved,” based on the submissions and information before the Board when the preliminary hearing on standing had concluded.

In a decision issued in April 2014 (Lynda Gagne et al. v. Director of the Environmental Management Act, Decision No. 2013-EMA-005(b), 008(b), 011(b), and 012(b)), the Board reconsidered the four petitioners’ standing, in accordance with the Court’s directions in Gagne #1. The Board found that they had failed to establish, on a prima facie basis, that they were “persons aggrieved” by the amendment.

Ms. Gagne and Mr. Claus filed a petition with the BC Supreme Court for a judicial review of the Board’s reconsideration decision. On October 31, 2014, the Court issued oral reasons [Gagne #2] finding that the Board had properly considered and implemented the Court’s directions in Gagne #1. In addition, the Court confirmed that the Board’s interpretation and application of section 100(1) of the Act is entitled to deference from the courts. The Court found that the Board had clearly considered all of the submissions and evidence before it, and had provided detailed reasons as to why, on reconsideration, the petitioners failed to establish on a prima facie basis that they are “persons aggrieved.” The Court dismissed the petition, and ordered that each party would bear their own costs.

Meanwhile, the issue of costs in Gagne #1 remained outstanding. In late 2014, the Court received written submissions on the costs issue from the four petitioners and Rio Tinto. The petitioners sought special costs against Rio Tinto on the basis that Gagne #1 was an exceptional public interest case. Alternatively, they sought ordinary costs against Rio Tinto on that basis that they were the successful party in Gagne #1.

In February 2015, the Court dismissed the petitioners’ application for costs. First, the Court considered whether the petitioners were entitled to ordinary costs. The Court noted that the BC Supreme Court Rules provide that costs must be awarded to the successful party unless the Court orders otherwise, and “success” in this context has been defined as substantial success. The Court found that the notion of substantial success is useful in cases where a party raises multiple issues and seeks multiple remedies, but is only partially successful. Turning to the circumstances in Gagne #1, the Court noted that the petitioners had asked the Court to apply a different test for standing than the Board had applied, and they had requested an order directing the Board to grant them standing. The petitioners had also argued that the Board’s decisions with respect to standing are not entitled to deference from the courts. However, the Court had rejected those submissions, and the petitioners were only successful on relatively straightforward issues which led to the Court granting the alternate remedy they sought. Overall, the petitioners were unsuccessful on a number of significant issues, and they did not get the primary remedy they sought. Consequently, the Court held that the petitioners were not substantially successful; at best, they had mixed success. As such, they were not entitled to ordinary costs.

In addition, the Court found that even if it had concluded that the petitioners were successful, the circumstances in Gagne #1 did not warrant an exceptional order of special costs. In particular, the Court held that, although the petitioners could be described as public interest litigants, the emission of sulphur dioxide is a concern for all members of the public, two appellants had standing to appeal the permit amendment regardless of the outcome of the judicial review, and the issues on which the petitioners were successful were not sufficiently novel or of broad importance that an order for special costs would be appropriate.

On conclusion, the Court ordered that the parties should bear their own costs in relation to Gagne #1.