Decision Date: April 1, 2015

Panel: Robert Wickett, Blair Lockhart

Keywords: Environmental Management Act – ss. 95(2)(b); board costs; contaminated site; remediation order; vexatious; frivolous; abusive conduct

In September 2014, the Board granted three applications for costs filed by the Vancouver Fraser Port Authority, Fibreco Export Inc. and 602534 BC Ltd., and the Director, Environmental Management Act (the “Director”), against Seaspan ULC (“Seaspan”). Those costs applications related to appeals of two decisions issued by the Director in relation to a contaminated site. In awarding costs to the applicants, the Board found that Seaspan had advanced a theory regarding the source of the contamination that it knew lacked merit, or it had not carefully assessed the strength (or lack thereof) of its theory. The Board also found that Seaspan was reluctant to clearly identify its position from the outset of the appeal process, its position changed over the years, and its expert’s report was deceptive and fundamentally and irredeemably flawed, such that Seaspan’s theory crumbled when the expert witness was cross-examined. Seaspan had then abandoned most of the grounds for its appeals. The Board concluded that Seaspan’s case was more than doubtful; it was hopeless, and the theory advanced by Seaspan at the hearing should never have been pursued. For those reasons, the Board ordered Seaspan to pay the applicants’ appeal costs pursuant to section 95(2)(a) of the Environmental Management Act (Decision Nos. 2010-EMA-005(c) and 2010-EMA-006(c)).

Given those findings, the Board requested submissions on whether Seaspan should be ordered to pay the Board’s expenses in connection with the appeals pursuant to section 95(2)(b) of the Environmental Management Act. Section 95(2)(b) provides that the Board may order a party to pay all or part of the Board’s expenses in connection with an appeal if the Board considers that the party’s conduct has been “vexatious, frivolous or abusive”.

The Board found that the purpose of section 95(2)(b) is to punish a party for vexatious, frivolous or abusive behaviour in the appeal process, rather than to compensate the Board. A high threshold of unwanted behaviour must be met before such an order will be made. Although Seaspan’s conduct could be considered frivolous or vexatious in terms of the theory it advanced regarding the alleged source of contamination, its appeals also involved a constitutional question which was not improperly advanced. Further, the Board found that Seaspan had already been punished for its conduct by being ordered to pay the applicants’ appeal costs. The Board concluded that these circumstances did not warrant ordering Seaspan to pay the Board’s costs.