Decision Date: January 19, 2010

Panel: Alan Andison

Keywords:  Environmental Management Act – s. 104; preliminary decision; stay application; RJR-MacDonald Inc. v. Canada (Attorney General) (1994), 111 D.L.R. (4th) 385 (S.C.C.)

Worthington Mackenzie Inc. (“WMI”) and Daniel Alexander White appealed a decision and certificate issued by the Director, Environmental Management Act, Ministry of Environment.  The decision and certificate address the reasonableness of, and responsibility for, costs of the spill response actions incurred by the Province of British Columbia (the “Province”) at the Mackenzie Pulp Mill (the “Mill”), located in Mackenzie, BC.  The Director concluded that WMI and Mr. White are jointly and severally liable for the Province’s costs of $4,485,505.

WMI and Mr. White appealed against the Director’s decision and certificate on the basis that: the Director made errors in determining the reasonable costs of the spill response actions; the Director erred in concluding that Mr. White should be jointly liable for the Province’s costs; and, the proceedings before the Director were unfair due to a reasonable apprehension of bias.  Shortly after the appeal was filed, WMI and Mr. White applied to the Board for stay of the Director’s decision and certificate, pending a decision from the Board on the merits of the appeal.

In determining whether a stay ought to be granted, the Board applied the three-part test set out by the Supreme Court of Canada in RJR-MacDonald Inc. v. Canada (Attorney General).  With respect to the first stage of the test, the Board found that the applicants had raised serious issues to be tried which were not frivolous, vexatious or pure questions of law.

Regarding the second part of the test, the Board found that the applicants had provided sufficient evidence to establish that their financial interests would suffer irreparable harm pending the outcome of the appeal, unless a stay was granted.  In particular, the Board found that, although the applicants did not provide detailed information about their respective financial situations, they provided affidavit evidence which supported their claims that they would suffer irreparable harm if a stay was denied.  Specifically, WMI provided evidence that it would be put out of business if a stay was denied, and Mr. White provided evidence that he would suffer irrevocable damage to his business reputation if a stay was denied.  Although there was evidence that each of the applicants was already in financial difficulty due to circumstances beyond the Director’s decision and certificate, the evidence showed that denying a stay would cause them further financial harm, and at least some of that harm could not be remedied by damages if their appeal is successful.

Turning to the third part of the test, the Board found that the balance of convenience weighed in favour of granting a stay.  The Board held that the prejudice to the applicants’ interests, if a stay was denied, outweighed the prejudice to the Province’s interests if a stay was granted.  Denying a stay would cause irreparable harm to the applicants’ financial interests, whereas granting a stay would not cause harm to the environment or human health, nor would it cause significant prejudice to the Province by delaying its ability to collect its reasonable costs of the spill response actions.

Accordingly, the application for a stay was granted.