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									                             Environmental Review
                             Tribunal
                                                                               Case No.: 09-048

                                       Krek v. Director,
                                 Ministry of the Environment
       In the matter of an appeal by Alex Krek filed June 29, 2009 for a Hearing before
       the Environmental Review Tribunal pursuant to section 140 of the Environmental
       Protection Act, R.S.O. 1990, c. E.19, as amended, with respect to Director’s
       Order Number 3502-7RSLD5-1 issued by the Director, Ministry of the
       Environment, on June 16, 2009 under sections 157.3(5) and 157.3(6) of the
       Environmental Protection Act, requiring that a consultant be retained, and a Site
       Conceptual Model be produced respecting remediation of contamination resulting
       from a Spill of heating oil at 1033 Bayview Point Road, in the Lake of Bays,
       District Municipality of Muskoka, Ontario; and

       In the matter of a Motion for directions heard on September 30, 2010 at
       10:00 a.m. in Hearing Room 16-3, 655 Bay Street, Toronto, Ontario.


Before:                               Paul Muldoon, Vice-Chair

Appearances:

Dennis M. O’Leary            -        Counsel for the Appellant, Alex Krek

Sylvia Davis                 -        Counsel for the Director, Ministry of the Environment

Thomas Corbett               -        Counsel for the Other Parties, Thomas and Ingeborg
                                      Sickinger

Dieter Knoppke               -        Other Party, on his own behalf




Dated this 25th day of March, 2011.
Environmental Review Tribunal Order:                                                       09-048
Krek v. Director,
Ministry of the Environment


                                Reasons for Decision

Background:

Provincial Officer’s Order No. 3502-7RSLD5, dated May 21, 2009, was issued to Alex Krek
(the “Appellant”) under the Environmental Protection Act (“EPA”) requiring the Appellant to
retain a consultant and to produce a Site Conceptual Model with respect to the remediation of
contamination resulting from a spill of heating oil at 1033 Bayview Point Road, in the Lake of
Bays, District Municipality of Muskoka, Ontario (the “Site”). According to the Provincial Officer’s
Report dated May 21, 2009, approximately 3,500 litres of heating oil were discovered to have
leaked from an above ground storage tank at the Site in June of 1990. Over the following years,
impacted soils were excavated and removed from the Site and a groundwater remediation
system was installed at the Site. The Report notes that, in July, 1991, petroleum contamination
was found in a newly drilled water supply well at an adjacent property north of the Site. A civil
suit by an adjacent property owner was initiated and the lawsuit settled with the monies going to
the property owner for remediation costs. The Report states that, in the fall of 2003, the owner
of the property north of the Site reported petroleum contamination and that the MOE confirmed
that contamination remained on the Site and on land adjacent to the Site.

The Provincial Officer’s Report states that, on September 5, 2006, Provincial Officer’s Order No.
4564-6SRK63 was issued to the Appellant due to the lack of progress with the remediation
efforts. The Order required the development of a Remedial Action Plan (“RAP”), which would
outline the steps necessary to clean up the lands impacted by the spill. On
September 21, 2006, the Order was confirmed by Director’s Order No. 8450-6TRPFV.

The Provincial Officer’s Report states that the Director’s Order was appealed to the
Environmental Review Tribunal (the “Tribunal”) and the settlement agreement was confirmed on
February 16, 2007. The effect of the settlement agreement was to require a RAP, but extend
the compliance timelines.

In May, 2007, a RAP was submitted to the Ministry of the Environment (“MOE”) with respect to
the Site. According to the Provincial Officer’s Report, the Appellant proceeded on a voluntary
basis with implementation of the preliminary phases of the RAP. The MOE wrote to the
Appellant on December 18, 2008 requesting the production of a Site Conceptual Model
(“SCM”), a step anticipated by Phase I of the RAP. As of May 19, 2009, such a Model had not
been provided to the MOE. The Report notes that it is the MOE’s position that a SCM is
required in order to decide on the type and feasibility of additional clean-up efforts.

On May 28, 2009, the Appellant requested a review of Provincial Officer’s Order No. 3502-
7RSLD5. The Director issued Director’s Order No. 3502-7RSLD5-1 (“Director’s Order”) on

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Krek v. Director,
Ministry of the Environment

June 16, 2009 confirming the Provincial Officer’s Order although the Director amended two of
the compliance dates.

On June 26, 2009, Dennis O’Leary, Counsel for the Appellant, filed a Notice of Appeal with the
Tribunal on behalf of Mr. Krek. Further background concerning this proceeding can be found in
the Tribunal’s Orders dated August 4, 2009, August 26, 2009 and November 24, 2009. In its
Order dated August 26, 2009, Thomas and Ingeborg Sickinger were granted Party status in the
proceeding. The Tribunal also ordered that the Preliminary Hearing would continue by
teleconference on October 26, 2009 in response to a request by Sylvia Davis, Counsel for the
Director, and Mr. O’Leary in order to allow the Appellant to gather the necessary technical
information and determine the cost of developing the SCM.

Teleconferences were also held on December 17, 2009 at 10:00 a.m., March 1, 2010 at
4:45 p.m., March 30, 2010 at 10:00 a.m., May 14, 2010, at 10:00 a.m. and June 23, 2010 at
10:00 a.m.

During the teleconference discussions, the Appellant and the Director informed the Tribunal that
a settlement had been reached in the matter. The thrust of the settlement is that the Appellant,
pursuant to the Director’s Order, undertook a SCM that had been reviewed by the Director and
found to be in substantial compliance with the requirements in the Director’s Order. Mr.
O’Leary, with concurrence from the Director, informed the Tribunal that he was bringing a
Motion to withdraw the appeal under Rule 200 of the Tribunal’s Rules of Practice. The
Sickingers state that they oppose the withdrawal of the appeal on the grounds that the
settlement does not meet the test under Rule 200. The Sickingers argue that the SCM is
substantially deficient and that the Tribunal should exercise its authority to require remedial
measures at the Site. Thomas Corbett, Counsel for the Sickingers, stated that he was intending
to adduce evidence at the Motion to withdraw brought by the Appellant pertaining to whether the
SCM has to meet certain information requirements in Ontario Regulations 153/04 and 511/09,
evidence of remediation efforts that have taken place at the Site and various other documents
and information. Both the Director and the Appellant argued that such evidence is not relevant
to the Motion to withdraw.

On July 8, 2010, Dieter Knoppke wrote to the Tribunal requesting Party status in this
proceeding. During a teleconference on August 19, 2010, Mr. Knoppke’s request for status was
discussed, as well as procedural issues associated with the upcoming Motion to withdraw. In
particular, the Parties were seeking directions from the Tribunal with respect to the proposed
Motion to withdraw the appeal by the Appellant in light of the settlement agreement. The
Parties sought direction from the Tribunal as to what was the appropriate test under Rule 200 of
the Tribunal’s Rules of Practice and what evidence is relevant under that Rule. Both
Mr. O’Leary and Ms. Davis sought direction in light of the fact that the evidence sought to be
introduced by Mr. Corbett would be contested and subject to lengthy cross-examination.


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Environmental Review Tribunal Order:                                                         09-048
Krek v. Director,
Ministry of the Environment

In its Order dated September 16, 2010, the Tribunal granted Mr. Knoppke Party status in this
proceeding. The Order also stated that the Parties were to make submissions as to the relevant
test under Rule 200 of the Tribunal’s Rules of Practice and the appropriate evidence with
respect to that test on September 30, 2010 at 10:00 a.m. in Hearing Room 16-3, 655 Bay
Street, Toronto, Ontario. The Order also scheduled the Motion to withdraw the appeal for
October 26, 2010.

During the submissions made on September 16, 2010, the Parties agreed that the Motion to
withdraw should be heard on January 12 and 13, 2011. On December 13, 2010, Ms. Davis
wrote to the Tribunal inquiring whether there would sufficient time to prepare for the Motion
under Rule 200. The Parties agreed that an adjournment was appropriate and the Tribunal,
with the consent of the Parties, scheduled the Motion to be heard on May 5 and 6, 2011.


Issues:

The Parties in this proceeding requested direction from the Tribunal with respect to the following
two issues:

   1. What is the appropriate test for determining whether the Tribunal should accept the
      withdrawal of an appeal or continue on with the hearing on the merits under Rule 200 of
      the Tribunal’s Rules of Practice; and

   2. What evidence is relevant in light of that test?

Relevant Rule:

       200.    Where there has been a proposed withdrawal of an appeal not agreed to
               by all Parties, the Tribunal shall consider whether the proposed
               withdrawal is consistent with the purpose and provisions of the relevant
               legislation and whether the proposed withdrawal is in the public interest.
               The Tribunal shall also consider the interests of Parties, Participants and
               Presenters. After the consideration of the above factors, the Tribunal
               may decide to continue with the Hearing or issue a decision dismissing
               the proceeding.


Discussion and Analysis:

Appellant’s Submissions

Mr. O’Leary states that this case, simply put, is about a fuel tank leak at Mr. Krek’s cottage on
the Canadian Shield that occurred around 1990. The implications are that the property is
situated on fractured rock and has posed remediation problems for many years.

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Environmental Review Tribunal Order:                                                           09-048
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Ministry of the Environment

He states that the MOE has been directly involved in the remediation efforts including
inspection, water testing, and reviewing the report from consultants. During the mid-1990s, he
states, remediation efforts were made at the Site and it was anticipated that the “problem had
been dealt with.” However, he states that, in 2002, Mr. Knoppke, Mr. Krek’s neighbour,
detected fuel in his well and commenced a lawsuit. He states that the lawsuit was settled and
part of that settlement was that Mr. Knoppke’s rights with respect to this issue have been
extinguished.

In 2000, he states, the Sickingers, other neighbours of the Appellant, launched their lawsuit after
discovering contaminated water in their well. Pursuant to a MOE Order, the Sickingers are
receiving water delivery paid for by Mr. Krek. Mr. O’Leary states that these issues are “not on
the table.” He submits that there has been a long history with respect to this issue with the
involvement of many experts and the MOE.

Mr. O’Leary states that, in September 2006, Mr. Krek was ordered by the MOE to prepare a
RAP and part of that work was done. In the most recent Director’s Order dated June 16, 2009,
a SCM was ordered to be undertaken. He states that Mr. Krek’s insurer, Unifund, has spent
approximately $850,000 of the $1 million liability limit on this matter thus far. Hence, Mr. Krek
appealed the Director’s Order to make the Parties aware that there is only $150,000 left in the
policy and there are no other funds available for the clean-up. Mr. O’Leary submits that the
Sickingers’ legal action is an attempt to find another party to sue.

With respect to the Director’s Order, he states that the SCM is the “next logical step in the
evolution” of the clean-up, that is, to consolidate all of the information available to date in order
to determine the next steps. He states that it is apparent that the Director is aware of the limited
resources now available to address the issues at the Site.

He states that his clients submitted a draft SCM for comment and the MOE responded with
comments. He states that his client then made revisions and the Director made a finding that
the SCM is in compliance with the Director’s Order. Mr. O’Leary summarizes his arguments as
follows:


       The subject matter of this proceeding is the Appellant’s proposal for the
       withdrawal of an appeal given the Appellant’s compliance with the Order under
       appeal. The Order related to the gathering and review of information for the
       purposes of providing a report which provides costs estimates and
       recommendations in respect of the various remedial options available. There is
       no suggestion that the data or information exists which has not been reviewed by
       Stantec for purposes of the Model. There is, therefore, no question about
       whether Mr. Krek has fully complied with the Director’s Order. There is no
       suggestion that compliance with the Director’s Order is not in the public interest,
       or that avoiding a costly and possibly a protracted hearing is also not in the public
       interest.

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Environmental Review Tribunal Order:                                                        09-048
Krek v. Director,
Ministry of the Environment

Mr. O’Leary argues that the Director has accepted the SCM as being in compliance with the
Director’s Order. He submits that the Sickingers are asking the Tribunal to expand the
Director’s Order and thereby impose a significant new burden on the Appellant. He submits that
the Sickingers are, in effect, critical of the Director for failing to have included in the Order a
requirement that Mr. Krek proceed to implement one of the several remedial options which are
evaluated in the SCM. Mr. O’Leary states that any further action by the Director is premature
until she has received and reviewed the SCM and the recommendations of the qualified
consultant. He argues that the Sickingers are attempting to change the nature of this
proceeding from one dealing with the appropriateness of the Director ordering the Appellant to
provide data and an expert analysis of available remedial options, to a hearing about the
remedial options considered by the expert. He argues that the Sickingers are attempting to turn
the appeal to a “review of the remedial options articulated in the Model versus what this appeal
was all about, namely, the appropriateness of proceeding with a Model in the first place.”

Mr. O’Leary argues that there are only certain monies left and once this money has been
expended, there will not be any money to address other issues raised by the neighbours.

The Appellant relies on the submissions of the Director in terms of the relevant test under Rule
200 of the Tribunal’s Rules of Practice. He argues that guidance for the test under the
Tribunal’s Rules of Practice can be found in Uniroyal Chemical Ltd. v. Ontario (Ministry of the
Environment) (1992), 9 C.E.L.R.(N.S.) 151 (Ont. E.A.B.)(“Uniroyal Chemical”). In that case, he
argues, the relevant questions are whether there has been a weakening of the Order, the
original Order should be enlarged or changed or whether the Director has fettered his or her
discretion.

He argues that there is no basis to enlarge the Director’s Order. He argues that this is not an
appeal about who is at fault for the spill. He states that the subject matter is not which remedial
options in the SCM should be chosen, but the practicability of whether the SCM should be
carried out in the first place.


Submissions by the Director

Ms. Davis argues that the case, Uniroyal Chemical, outlines the appropriate test under Rule 200
of the Tribunal’s Rules of Practice. In that case, she states, the Environmental Appeal Board
noted that the normal result of withdrawing an appeal is that the original Order or Decision of the
Director remains intact and in effect and hence, there is no prejudice to the public or to other
parties from the withdrawal of an appeal. She submits that the Board goes on to state that there
is a possibility of prejudice if the withdrawal is part of a settlement which undermines or
weakens the original Order or Decision of the Director, or if the Board has a right to change the
original Order or direct the Director to take further action, and the withdrawal deprives other
parties of the opportunity to attempt to persuade the Board to do so. Finally, there may be

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Environmental Review Tribunal Order:                                                       09-048
Krek v. Director,
Ministry of the Environment

prejudice if the Director has somehow fettered the discretion to make further Orders or
Decisions needed to protect the environment.

She relies on RPL Recycling & Transfer Ltd. v. Ontario (Ministry of the Environment), [2006]
O.E.R.T.D. No. 13, (Div.Ct.) at paras. 18-20 for the position that the extent of the Tribunal’s
jurisdiction to alter or expand the Order is limited to the subject matter of the appeal. She
argues that the caselaw establishes that the Tribunal can only “fine tune” the Order within
reasonable limits. She argues that Re C.H. Lewis (Lucan) Ltd. and Director of Environmental
Approvals and Project Engineering for the Ministry of the Environment, (1985), 50 O.R. (2d) 23
(Div. Ct.) held that the Tribunal cannot accept evidence that does not pertain to the subject
matter of the proceeding.

She states that the Sickingers could bring evidence that either the consultant retained was not
qualified or that existing data that should have been used was not. In terms of the evidence
with respect to expanding the Director’s Order, Ms. Davis argues that the Tribunal can only
consider questions of public interest and the protection of the environment, and hence, any
evidence regarding issues outside of the scope of the appeal is inadmissible.

She argues that all of the evidence Mr. Corbett wants to put forward is irrelevant. She argues
that Mr. Corbett filed a number of Notices of Allegation and what he is asking in those Notices is
completely unconnected to the subject matter of this Hearing, namely, the requirement for a
SCM. She states that the Director’s Order is an interim order and there may be further orders
issued.

Ms. Davis lists a number of categories of evidence Mr. Corbett wants to submit and argues that
all of the evidence is irrelevant with respect to the subject matter of the appeal. She provides an
example of a document Mr. Corbett wants to adduce titled “Additional Facts” which she states
reads as a pleading from a court action and is focussed on the finding of fault. She points out
that Mr. Corbett wants to introduce evidence stating that the SCM is inconsistent with
Regulation 153/04. However, she argues, the regulation does not take effect until July, 2011
and it pertains to a totally different purpose, namely, Environmental Site Assessments for the
redevelopment of brownfields. She argues that, nevertheless, the SCM would meet the
requisites of a Phase I Environmental Site Assessment since it is a consolidation of all of the
information available. At any rate, she argues that there are different types of SCMs.

She explains that the Director ordered a SCM because the Appellant submitted a RAP in 2007
pursuant to a requirement in a 2006 Provincial Officer’s Order and a SCM was a component of
the RAP. The Director issued an Order because the SCM was not filed with the MOE. She
states that there is nothing in the RAP that specifies what a SCM is, or how it should be
completed. She states that the clear implication from the RAP is that a SCM is needed in order
to assess any further remedial options.


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Environmental Review Tribunal Order:                                                          09-048
Krek v. Director,
Ministry of the Environment

She argues that whether third party consultants made matters worse through their attempted
remediation efforts is not a matter for the Tribunal, but a matter to be dealt with through a civil
action. She states that Mr. Corbett is saying that the SCM must be far more complete. She
states that it may be that the Director will identify gaps and an Order may be made to fill those
gaps.

Ms. Davis states that, the Director, when considering the MOE’s Statement of Environmental
Values (“SEV”), has to keep in mind that this is an Interim Order and as such, the Order was not
designed to cover all eventualities as contemplated in the SEV.


Submissions by the Sickingers

Mr. Corbett states that Rule 200 has evolved since the Uniroyal Chemical decision. In
considering the issues addressed in Rule 200, Mr. Corbett states that the SCM “is virtually
useless to a determination of appropriate remediation strategy.” He states that, according to the
SCM, there is insufficient information provided “to support any course of remedial action,” and
thus, the MOE should use institutional controls to prohibit groundwater use in some undefined
areas.

Mr. Corbett summarizes the argument made by Ms. Davis as follows: The Director can make a
new Order to address remediation of the Site and the new Order would be subject to an appeal
if the Parties in this matter do not think the Order goes far enough.

He states that the thrust of this argument is that the only purpose of the SCM is to find remedial
options. He submits that the SCM is so inadequate it does not achieve this purpose. He argues
that the Director could take action now by requiring more and better data and even requiring
remedial action. Although the Director could issue another Order requiring remedial measures,
as suggested by Ms. Davis, the Director could also do nothing.

Mr. Corbett states that the Uniroyal Chemical case clearly acknowledges that the Tribunal does
have the power “to enlarge or expand an Order before it to the extent necessary to protect the
public.” Mr. Corbett submits that the subject matter of the appeal relates to what information is
required to properly inform options for further remedial measures. He states that it is necessary
to examine both the Director’s Order and its background. He states that on reviewing that
material, it is clear that the SCM is being developed to allow the Director to determine the next
steps for remediation. The problem, he argues, is that the SCM, as submitted by the Appellant
and the Director, does not have sufficient information that would allow the Director to assess the
next steps. He argues that the subject of the proceeding is the development of a SCM that
would allow or provide the basis to determine the next remedial steps. He argues that the SCM
should not be limited to the use of existing data and that the Tribunal can and should order that
additional data is needed and required.

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Environmental Review Tribunal Order:                                                          09-048
Krek v. Director,
Ministry of the Environment

Mr. Corbett states that the EPA provides for remediation of contaminated sites and provides for
a Record of Site Condition. He states that Regulation 153/04 defines “environmental site
assessments” and considers appropriate site condition standards. He argues that the proposal
of institutional controls because there is insufficient information to establish a remediation
approach is inconsistent with the requirements of Regulation 153/04. Mr. Corbett states that
evidence on the inadequacy of the SCM in light of Regulations 153/04 and 511/09 (which
amends Regulation 153/04 effective July 1, 2011) should be found relevant in this proceeding.

He states that other evidence anticipated to be produced at the Hearing includes the extent of
free phase contamination; evidence of the impact of pumping/ injection on groundwater
gradients and flow and how it could have contributed to spreading pollution; the use of
institutional controls versus other forms of remediation and an appendix to his submissions that
outlines a number of “additional facts.”

Mr. Corbett submits that the MOE’s SEV is relevant. He argues that the acceptance of the SCM
offends the “precautionary principle” mandated by the SEV. He argues:


       The proposed acceptance of the Site Conceptual Model, which leads to no
       remediation, is entirely inconsistent with the application of the SEV. How does
       this Order and the Site Conceptual Model address any of (1) protecting the
       environment (2) the principle of polluter pays for cleanup and (3) rehabilitation of
       the environment and the (4) precautionary principle.

Mr. Corbett argues that because the SCM does not conform to the SEV, it is not in the public
interest and that evidence on the inadequacy of the conceptual model in general and in
particular with respect to the SEV, should be allowed.

Mr. Corbett also argues that the Director is required to consider the Sickingers’ common law
rights including their rights as reflected in the concepts of trespass, nuisance and negligence.
Mr. Corbett contests Mr. O’Leary’s statement that there is only $150,000 left to pay in the
insurance policy since those limits are irrelevant if Unifund, the insurer, is an actor that
negligently contributed to the spread of contamination through their failed remediation efforts.


Mr. Knoppke’s Submissions

Mr. Knoppke submitted that there has been a problem at the Site for over 20 years and that
remediation should not be delayed. He states that the SCM does not give adequate weight to
certain information and that additional information should be used in the SCM. He states that
the SCM is only a report and not a model or means to determine the next remedial steps.




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Environmental Review Tribunal Order:                                                        09-048
Krek v. Director,
Ministry of the Environment

Findings:

The following two questions must be determined:

   1. What is the appropriate test for determining whether the Tribunal should accept
      the withdrawal of an appeal or continue on with the hearing on the merits under
      Rule 200 of the Tribunal’s Rules of Practice; and

   2. What evidence is relevant in light of that test?

Findings on Issue #1:     The Test under Rule 200


The challenge in making findings on Issue # 1 is that portions of the argument presented are at
times addressing the merits of the Motion to withdraw. Hence, the Tribunal will only focus on
the submissions made by the Parties that are relevant to the two questions above, and reserve
consideration on other submissions until the Motion to withdraw is argued at a later date.


The Test under Rule 200

Rule 200 of the Tribunal’s Rules of Practice states that the Tribunal shall consider whether the
proposed withdrawal is consistent with the purpose and provisions of the relevant legislation
and whether the proposed withdrawal is in the public interest. The Tribunal must also consider
the interests of Parties, Participants and Presenters.

None of the Parties seriously disputes that the starting point for the understanding of the factors
to be considered under Rule 200 was laid out in the Uniroyal Chemical decision. In that case,
the Environmental Appeal Board dealt with a similar situation and asked the following question:


       Can the Board refuse the applicants leave to withdraw their appeals?

       The normal result of withdrawing an appeal is that the original Order or Decision
       of the Director remains intact and in effect. Thus, there will normally be no
       prejudice to the public or to other parties from the withdrawal of an appeal.

       However, the possibility of prejudice will arise in the following circumstances:

           1. If the withdrawal is part of a settlement which undermines or
              weakens the original Order or Decision of the Director,

           2. If the Board has a right to change the original Order or direct the
              Director to take further action, and the withdrawal deprives other
              parties of the opportunity to attempt to persuade the Board to do
              so. This would be of particular concern where, prior to the
              withdrawal the Board had heard evidence that the Order which
              continues in effect is inadequate to protect the environment, or

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Krek v. Director,
Ministry of the Environment

           3. If the Director has somehow fettered his discretion to make further
              Orders or Decisions needed to protect the environment.

A number of cases have endorsed the Uniroyal Chemical decision stating that there are a
variety of considerations to take into account in determining the acceptability of a settlement
agreement under the Tribunal’s Rules. CanRoof Corp. v. Ontario (Ministry of the Environment),
[2008] O.E.R.T.D. No. 33, RPL Recycling & Transfer Ltd. v. Ontario (Director, Ministry of the
Environment) (2006), 21 C.E.L.R. (3d) 80 (Ont. Env. Rev. Trib.), Giampaolo v. Ontario (Director,
Ministry of the Environment (2010), 52 C.E.L.R. (3d) 296 (Ont. Env. Rev. Trib.) and Johnson v.
Ontario (Ministry of the Environment), [2006] O.E.R.T.D. No. 5 at para. 54.

The Tribunal finds that, in light of the wording of Rule 200 and the jurisprudence that has
reviewed that Rule, the Tribunal must consider whether the proposed withdrawal is consistent
with the purpose and provisions of the relevant legislation and whether the proposed withdrawal
is in the public interest and it must consider the interests of Parties, Participants and Presenters.
In reviewing these factors, the Tribunal agrees with the findings in Johnson at para. 48:


       …, the Tribunal finds that the general principles set out in Uniroyal Chemical are
       still largely applicable today. In particular, the Tribunal agrees that it has the
       jurisdiction to continue the Hearing but that it is not obligated to do so in every
       circumstance. That is, the decision of the Tribunal in this regard is discretionary.
       In determining whether to proceed with a Hearing, the Tribunal finds that it must
       consider the relevant principles and findings set out in Uniroyal Chemical in the
       context of its current Rules, the applicable legislation, and the circumstances of
       this case.


Issues in Applying Rule 200 Test to this Proceeding

In this matter, it appears that the issue focuses on circumstance no. 2 as described in the
Uniroyal Chemical decision, namely, whether the Tribunal has a right to change the original
Order to take further action and allow the parties the opportunity to persuade the Tribunal to do
so.

If the Tribunal is being asked to change the original Order, the issue of jurisdiction arises
requiring the Tribunal to determine the extent to which it has authority to alter the Director’s
Order. In this matter, Mr. Corbett is arguing that the Tribunal should issue an Order to change,
amend or add to the Director’s Order to either require that further information be included in the
SCM or that remediation requirements be added to the Order. Hence, the first issue to address
is whether the Tribunal has jurisdiction to grant these requests. The second issue to determine
is whether the Tribunal should exercise its discretion should the Tribunal find it has jurisdiction
to do so.



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Environmental Review Tribunal Order:                                                          09-048
Krek v. Director,
Ministry of the Environment

As stated in the Johnson case, the Tribunal recognizes that it has “relatively wide authority in an
appeal to determine what should be done in accordance with the EPA” based on the wording of
section 145.2 of the EPA. Despite this wide authority, the RPL Recycling & Transfer Ltd. case,
at para. 20, notes that the jurisdiction of this Tribunal to change the original order is constrained
by a number of factors, including: the subject matter of the proceeding, the underlying powers
that the Director may exercise in accordance with the Act and regulations, and the purposes of
the legislation. As noted in the RPL Recycling & Transfer Ltd. case at paras. 18-20:

       The scope of an appeal is informed by section 145.2 of the Environmental
       Protection Act (“EPA”), which describes the role of the Tribunal in hearings such
       as this one:

               145.2 Subject to sections 145.3 and 145.4, a hearing by the
               Tribunal under this Part shall be a new hearing and the Tribunal
               may confirm, alter or revoke the action of the Director that is the
               subject-matter of the hearing and may by order direct the Director
               to take such action as the Tribunal considers the Director should
               take in accordance with this Act and the regulations, and, for such
               purposes, the Tribunal may substitute its opinion for that of the
               Director.

       As per the terms of section 145.2 of the EPA, the Tribunal is not overly
       constrained in its approach to dealing with an issue. While it can simply confirm,
       alter or revoke the Director’s action (which is how the role of the Tribunal’s
       predecessor Environmental Appeal Board was described in the EPA until 1981),
       it can also, because of the “new hearing” provision, go beyond those options that
       were considered by the Director and fashion a new solution by substituting its
       opinion for that of the Director (see: Uniroyal Chemical Ltd., Re (1992), 9
       C.E.L.R. (N.S.) 151 (Env. Appeal Board) at 168-170). This is in keeping with the
       Tribunal’s role under statutes that have broad public interest mandates.

       However, as indicated in section 145.2, the Tribunal does not have limitless
       jurisdiction to deal with any environmental matter affecting the parties to a
       proceeding. Its jurisdiction is constrained by the subject matter of the
       proceeding, the underlying powers that the Director may exercise in accordance
       with the Act and regulations, and the purposes of the legislation. The limits of the
       subject matter of a proceeding are informed by such factors as the nature of the
       original action of the Director, the scope of the appellant’s appeal, and any
       procedural determinations of the Tribunal regarding the proceeding’s scope. As
       is clear from the second half of section 145.2, within this realm, the Tribunal can
       clearly go beyond what the Director may have done. However, in so doing, the
       Tribunal’s actions must still remain within the overall subject matter of a
       proceeding.

In short, the Tribunal has relatively wide authority to determine what should be done with
respect to the “subject matter” of the hearing. However, even with respect to matters within the
subject matter of the appeal, the Tribunal must be cognizant of the implications and burdens of

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Environmental Review Tribunal Order:                                                       09-048
Krek v. Director,
Ministry of the Environment

imposing new or more stringent requirements on appellants. As noted in Uniroyal Chemical, at
page 11,


       If the mere fact of appealing an order left an applicant vulnerable to an even
       more stringent and costly order, this would create a high level of uncertainty.
       While this possibility would undoubtedly deter some frivolous appeals, it might
       also deter people from bringing meritorious ones….

       As we have indicated, an applicant should retain substantial control over its
       appeal, including the right to withdraw the appeal. The mere fact of appealing an
       Order should not leave an applicant open to a substantial worsening of its
       position.


What is the Subject Matter of the Proceeding?

What then is the “subject matter” of this proceeding? Ms. Davis states that the Director and the
Appellant want the appeal withdrawn on the basis that the requirements contemplated under the
Director’s Order have been undertaken. They argue that this is not a case where there have
been changes or alterations to the Director’s Order; instead, all aspects of the Director’s Order
have been complied with to the satisfaction of the Director.

More specifically, Ms. Davis argues that the subject matter of the proceeding in the present
case is defined by an order requiring the creation of a SCM using existing data. Mr. O’Leary
argues that the subject matter of the proceeding is as follows:


       …the Appellant’s proposal for the withdrawal of an appeal given the Appellant’s
       compliance with the Order under appeal. The Order related to the gathering and
       review of information for the purposes of providing a report which provides cost
       estimates and recommendations in respect of various remedial options available.

Mr. O’Leary goes on to state that the “Sickingers clearly seek to make this proceeding
something which it is not, namely, a review of remedial options articulated in the Model versus
what this appeal was all about, namely, the appropriateness of proceeding with a Model in the
first place.”

Mr. Corbett argues that the Director and the Appellant take too narrow a view of the “subject
matter of the proceeding” and states that:


       Clearly, the subject matter of the hearing is the nature of a Site Conceptual
       Model appropriate to a consideration of future remedial measures. This is
       specifically stated in the Director’s reasons for the Order. The Site Conceptual
       Model does not fulfill that object. It therefore reflects an approach that is
       inconsistent with the purpose and provisions of the relevant legislation.

                                                13
Environmental Review Tribunal Order:                                                          09-048
Krek v. Director,
Ministry of the Environment

Mr. Corbett submits that the subject matter relates to what information is required to properly
inform options for further remedial measures. Hence, he takes a very expansive view of the
subject matter of the appeal and suggests that, expressly or impliedly, the Tribunal has the
jurisdiction to broaden the Director’s Order to:

       (a)     require certain additional remedial measures, although not specifically
               outlined in detail; and

       (b)     provide an interim water supply to the Sickingers by which a continuous
               flow of treated water is provided to them pending remediation.

       (c)     include the creation of a SCM that includes not only existing data (as
               required in the Director’s Order) but a range of new information that would
               be needed as if the model sought would conform to the kind of model
               contemplated under Regulations 153/04 and 511/09, and include at least:

               (i)     quantification of the contaminant released and its source;

               (ii)    a thorough description of the hydrogeology and
                       contaminant migration pathways;

               (iii)   an analysis of the driving forces for the migration of the
                       contaminants;

               (iv)    identification of all of the actual and potential receptors;
                       and

               (v)     the extent of free phase contamination.

The starting point to determine the subject matter of this proceeding is the requirement for a
SCM outlined in the Director’s Order. Item No. 3 states that:


       By no later than July 31, 2009, provide the issuing Provincial Officer a written
       copy of a Site Conceptual Model (Model) produced by the Consultant using the
       relevant information from all presently existing report and studies dealing with the
       Site and adjacent properties that have been impacted by the Spill and containing,
       but not necessarily limited to the following:

               a.      a list of the sources reviewed to produce the Model;

               b.      a description of the properties whose features are described by
                       the Model;

               c.      in relation to those properties described at Item no. 3(b) of this
                       order, a detailed description and review of groundwater flow, the
                       fracture system of the bedrock, the hydrogeological properties of
                       the bedrock, the distribution of the petroleum hydrocarbon
                       contamination, variations in lake levels and any other information


                                                 14
Environmental Review Tribunal Order:                                                            09-048
Krek v. Director,
Ministry of the Environment

                       relevant to decisions to be made as to the type and feasibility of
                       future remediation efforts; and

               d.      detailed recommendations for future Spill remediation measures
                       including evaluations of cost, feasibility and likely effectiveness of
                       those recommendations if implemented.

The justification for the Order is given by the Director in the Director’s Order. The justification
provides some insight into the nature of the requirements. The Director states that:

       … I am aware that Ministry Technical Support and the issuing Provincial Officer,
       after reviewing all of the information thus far available, including the most
       recently collected in 2007 and 2008, do not agree with Jacques Whitford’s
       assertion that the Model is no longer necessary because further remedial
       measures are not warranted.

       It has been, and remains, the Director’s position, on advice from Ministry
       Technical Support personnel and the Provincial Officer who issued the Order,
       that the determination as to whether or not everything practicable has been done
       to remediate the Spill can not be made until a Site Conceptual Model has been
       produced.

A review of the nature and the purpose of the requirements in the Director’s Order and the
Director’s justification for the SCM indicates that the Director positions the SCM as a tool or
mechanism in order to assess future remedial options. In effect, the Director is asking for a
reality check on what has been done, what information exists and what remedial options are
possible in the future with respect to the Site.

There does not seem to be any discussion in the Director’s Order or anywhere else that the
Director is prepared and able to require remedial measures at this time. It appears quite the
opposite. The SCM would be a step in the process for the Director to consider what other
measures, if any, would be the subject of an Order. The Notice of Appeal filed by the Appellant
is another factor to be considered in determining what is the subject matter of the appeal. The
grounds to challenge the Director’s Order pertain to the Appellant’s view that “incurring costs in
excess of $25,000 to generate a conceptual model is not practicable…”. It appears that the
Appellant is of the view that it is not worthwhile to continue active remediation steps due to the
inaccessibility of residual free product remaining in the bedrock. The appeal is premised,
therefore, on the debate as to whether the SCM is needed or worthwhile. The focus is not on
what remedial measures should be undertaken now or in the future. It is not on whether the
SCM, as required, is too onerous. Instead, the subject matter of the appeal relates to whether
the SCM should be required at all, as opposed to Mr. Corbett’s submission that it is whether the
Director’s Order should be broadened or added to in terms of requirements for further
information or the inclusion of remediation measures.




                                                 15
Environmental Review Tribunal Order:                                                       09-048
Krek v. Director,
Ministry of the Environment

The Tribunal finds that the subject matter of the proceeding relates to the development of a
SCM that would assist the Director in reviewing remedial and other options with respect to the
Site.


Implications for the Sinkingers’ Request to Expand Order to Include Remediation Measures

The Tribunal recognizes the strong views put forth by both the Sickingers and Mr. Knoppke that
remediation should be ordered immediately in light of the long history of this matter. However,
the Tribunal does not have the authority to require remedial measures in the circumstances of
this case in light of what the Tribunal finds to be the “subject matter” of the proceeding. The
Tribunal accepts Ms. Davis’s submissions that the SCM is not meant to be the last step in the
process, but a tool to determine next steps. The Director retains the discretion to order further
remediation measures and, according to Ms. Davis, the Director intends to consider such
measures.


Implications for the Sinkingers’ Request to Expand Order to Include Additional Information in the
SCM

As noted above, Mr. Corbett is asking the Tribunal to expand or enlarge the scope of the SCM
with respect to certain information requirements and to require remediation efforts. While
expanding the Director’s Order to include remedial efforts is beyond the jurisdiction of the
Tribunal according to the subject matter of this particular proceeding, a more difficult issue is
whether the requirements or the scope of the SCM should be widened.

Mr. Corbett, in effect, is arguing that the SCM is completely inadequate for its purposes and as
such, is inconsistent with the EPA. One of the matters the Tribunal is required to consider
under Rule 200 of the Tribunal’s Rules of Practice is whether the settlement agreement, which
includes the completion of a SCM, is consistent with the relevant legislation. The Tribunal at
this time will not assess whether the SCM is consistent with the EPA. This matter is reserved to
argument at the Hearing of the Motion to withdraw.

Similarly, Mr. Corbett argues that the SCM, as presently undertaken, is inconsistent with, or
does not conform to the principles or policies within various aspects of the MOE SEV. Again,
this is a matter that the Tribunal is required to consider in the context of the various
considerations under Rule 200.




                                                16
Environmental Review Tribunal Order:                                                         09-048
Krek v. Director,
Ministry of the Environment

Implications for the Sinkingers’ Request to Expand the Order to Include a requirement for an
interim water supply to the Sickingers

The Tribunal finds that it does not have jurisdiction to make orders requiring further remedial
measures at this time in light of what the Tribunal finds to be the subject matter of this
proceeding. An order to include an interim water supply would seem to fall within this category.


Findings on Issue #2:      The Relevant Evidence for the Motion under Rule 200


Mr. Corbett is seeking to introduce evidence that the other Parties are claiming to be irrelevant
to the subject matter of the proceeding. More specifically, he is seeking to introduce evidence:

      to demonstrate the inadequacy of the SCM in light of the requirements under
       Ontario Regulations 153/04 and 511/09;

      to understand the impact of pumping and injection on groundwater gradients and
       flows

      to discuss institutional controls versus other forms of remediation;

      relating to Sickingers’ current situation; and

      to recount the circumstances surrounding the spill from 1990 to the present.

Evidence on the inadequacy of the SCM in light of the Regulations 153/04 and 511/09

Mr. Corbett is proposing to introduce expert evidence in order to establish that the SCM is
inadequate in light of the requirements of Regulations 153/04 and 511/09 that pertain to site
remediation. In effect, Mr. Corbett is arguing that more information should be required to be
included in the SCM. Both Mr. O’Leary and Ms. Davis argue that the requirements for
Environmental Site Assessments in Regulations 153/04 and 511/09 are irrelevant to the SCM
as required in the Director’s Order.

The Tribunal has already noted that it will reserve the determination of whether further
information should be included in the SCM until the Motion to withdraw Hearing. Hence, the
Tribunal finds that whether those Regulations are relevant in the first place, and if relevant, are
complied with, is a matter of argument and possibly further evidence. In effect, their relevance
relates to whether the settlement agreement is consistent with the relevant legislation. The
Tribunal finds that Mr. Corbett can adduce evidence with respect to the relevance of
Regulations 153/04 and 511/09.




                                                 17
Environmental Review Tribunal Order:                                                       09-048
Krek v. Director,
Ministry of the Environment

Evidence of the impact of pumping and injection on groundwater gradients and flows

The Tribunal has made a finding that the subject matter of this proceeding pertains to the
development of a SCM that would assist the Director in reviewing remedial and other options
with respect to the Site.

The Tribunal finds that the thrust of the Director’s Order is to develop a SCM using existing
data. Based on that model, it is anticipated that the Director will determine the next steps in
terms of remediation. Mr. Corbett proposes to introduce evidence that seeks to outline the
“impact of pumping/injection on groundwater gradients and flow- including the injection of
lakewater into the hydrofractured wells on the Krek property.” It would appear he is intending to
argue that the Director should broaden the scope of the Order and to argue that additional
persons connected to past remediation efforts should be added to the Director’s Order.

Mr. Corbett has not established that evidence relating to previous remediation efforts is relevant
to the subject matter of the proceeding. How is this evidence relevant to the development of a
SCM that would assist the Director in assessing future remedial options? What relevance does
this evidence have in relation to whether a SCM should be undertaken at all?

The SCM already recognizes that pumping and injection did take place and that the measure
“was shut down due to high water conditions in the re-injection wells.” Hence, it remains
unclear to the Tribunal as to why this information is pertinent to the subject matter of the
proceeding since it would appear that the consultant drafting the SCM, the Appellant and the
Director already have some understanding of the issue. The Tribunal, therefore, finds that
evidence relating to the impact of pumping and injection on groundwater gradients and flows is
not relevant for the purposes of the Motion Hearing.


Institutional controls versus other forms of remediation

Mr. Corbett argues that the conclusions of the SCM favour institutional controls over other forms
of remediation. Mr. Corbett disagrees with the conclusions and argues otherwise. However,
the Tribunal must ask, what existing information was not included in the SCM that he now seeks
to include to argue against the recommendations in the SCM? The subject matter of the
proceeding does not relate to what remedial measures are appropriate but rather to whether the
development of a SCM would assist the Director in reviewing remedial options. Hence, the
Tribunal finds that evidence relating to what new or different remediation methods should be
ordered at this time is not relevant for the purposes of the motion Hearing.




                                                18
Environmental Review Tribunal Order:                                                       09-048
Krek v. Director,
Ministry of the Environment

Additional facts set out on pages 13 and 14 regarding the Sickingers’ current situation and
“additional facts” appended to Mr. Corbett’s submission

Mr. Corbett proposes to introduce evidence outlining, in effect, the negative impacts on the
Sickingers arising from the contamination of groundwater. Also, attached to his written
submission, Mr. Corbett has included six pages of “additional facts” that provide a detailed
history and background from 1990 to the present. The “additional facts” describe the civil
litigation related to the Site, what remediation measures have taken place, the involvement of
insurers, among other issues. Both the Director and the Appellant oppose the introduction of
“additional facts” because they are not relevant to the subject matter of the proceeding and they
would require a detailed response.

It may be that there are specific paragraphs within the “additional facts” section of the
submission that are relevant to the subject matter of the proceeding. However, the Tribunal
finds that Mr. Corbett has not provided the basis for the Tribunal to make a finding on how much
of this information is relevant to the development of a SCM that would assist the Director in
reviewing remedial and other options with respect to the Site.

Hence, the Tribunal does not find that evidence with respect to the Sickinger’s current situation
or the appended “additional facts” to be, in general, relevant for the purposes of the Motion
proceeding. The Tribunal, however has not heard argument with respect to the relevance of
specific paragraphs within the “additional facts” appendix. Hence, Mr. Corbett could bring a
motion to request that some specific sections of the appendix be adduced and the Parties could
make submissions with respect to that request.


Other Evidence

Mr. Corbett is intending to make a number of arguments in support of his position that the
settlement agreement in this matter should not be approved by the Tribunal. For example, Mr.
Corbett argues the inadequacy of the SCM based on the requirement for the Director to
consider the MOE’s SEV. It is not apparent to the Tribunal as to what evidence, if any, Mr.
Corbett proposes to introduce with respect to this issue. It would appear that, for the most part,
the issue could be dealt with through legal argument. Hence, the Tribunal does not need to
make a finding with respect to this issue.




                                                19
Environmental Review Tribunal Order:                                                       09-048
Krek v. Director,
Ministry of the Environment


                                            Order

The Tribunal orders that:

   1.      The Motion to withdraw will be heard on May 5 and 6, 2011 at 10:00 a.m. in Hearing
           Room 16-3, 655 Bay Street, Toronto, Ontario.

   2.      The Tribunal finds that, with respect to the Motion to withdraw, the subject matter of
           the proceeding is the development of a SCM that would assist the Director in
           reviewing remedial and other options with respect to the Site.

   3.      Evidence submitted in support of the Parties’ submissions with respect to the Motion
           to withdraw is limited to evidence relevant to the subject matter of the proceeding.


                                                                   Motion to Withdraw Scheduled
                                                                   Procedural Directions Ordered




                                                                        Paul Muldoon, Vice-Chair

Appendix A – List of Parties




                                               20
Environmental Review Tribunal Order:                                             09-048
Krek v. Director,
Ministry of the Environment

                                                                             Appendix A

                                       List of Parties

Parties:

Appellant:                        Alex Krek

Counsel for the Appellant:        Dennis M. O’Leary
                                  Aird & Berlis LLP
                                  181 Bay Street, Suite 1800
                                  BCE Place, Box 754
                                  Toronto, ON M5J 2T9

Director:                         Cindy Hood
                                  Director, Sections 157.3(5) and 157.3(6)
                                  Environmental Protection Act

Counsel for the Director:         Sylvia Davis
                                  Legal Services Branch
                                  Ministry of the Environment
                                  135 St. Clair Avenue West, 10th Floor
                                  Toronto, ON M4V 1P5

Other Parties:

                                  Thomas and Ingeborg Sickinger

Counsel for the Other Parties:    Thomas Corbett
                                  Advocates Lawyers LLP
                                  16th Floor, One London Place
                                  London, ON N6A 5R8

                                  Dieter Knoppke
                                  R.R.#1 Group Box 23
                                  Dwight, ON P0A 1H0




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