A business knowingly built on shaky ground…

Submitted by Lehanna Green on April 7th, 2016

Yesterday in court…

Before I begin, I want all readers to understand that I am merely an observer and interested member of the community who wants to support the citizens of Shawnigan in their fight against the company doing business above their lake potentially causing damage to their watershed. I have no legal training and I may mix up some terms but I wanted to give our readers the gist of what happened yesterday in court in Vancouver. I have paraphrased and I might have missed some parts but here goes…

There were two parts to yesterdays proceedings. The first was an appeal of B.C. Supreme Court Justice, Brian MacKenzie’s ruling and the second was to hear reasons why the injunction handed down by Justice MacKenzie should or should not be lifted (to allow for trucks to continue bringing contaminated soil to the site).

To date it is estimated by Cobble Hill Holdings/SIA that 100,000 tonnes of soil has been brought to the site. (We don’t have numbers for the first quarter of 2016).

The permit allows for 50 times that. (50 x 100,000 tonnes).

In the first matter, the appeal hearing was held over until October but the judge heard reasons for and against lifting the injunction in the afternoon session.

Court didn’t take an afternoon break and the judge heard from all three parties right through to 4 pm.

There were approximately 30 citizens in the gallery and the judge moved the proceedings to a larger courtroom for the afternoon sessions to accommodate everyone. There were still not enough seats and people stood in the doorway and sat on the window sills down the side of the court room.

Lawyers for CHH/SIA claimed that their mining activities (which were still allowed by the lower court) were prohibited by not being able to bring new fill to the property. (This seemed perplexing to the gallery) Justice MacKenzie, in his ruling in the lower court, allowed for a continuation of mining operations but put a halt (injunction) to more fill being brought to the site. Note: it is not understood by the gallery why the company has to bring in more fill to continue with mining operations on the property. We also wonder where they are going to put more fill as they are not really ‘filling’ any holes on the property and the soil is now going to start piling up. (Remember they are still allowed, under the current permit, to bring in 100,000 tonnes a year for 50 years). Not sure where that’s going to go.

Lawyers for CHH/SIA and SIRM claimed they had 6 current contracts to accept contaminated soil that were being interfered with by the injunction and that they had 6 more bids that have been won that could potentially turn into contracts and the company will suffer financial hardship and 19 employees will lose their jobs either through displacement or layoff if they are not allowed to continue trucking in soil. Lawyers for CHH/SIA and SIRM, however, were unable to produce evidence of any contracts. They produced bonds for equipment and [man hours] but no contracts. They claimed they could be held liable for not being able to fulfill their contracts.

The subject of force majeure was discussed. (In essence, force majeure is a standard clause in a contact that accounts for when something outside of an agreed contract (major force) makes it impossible for a party to fulfill its duty to another within a contract and leaves the parties safe from being liable. In this case, the injunction would be the force majeure. Here is the Wikipedia definition:
‘… is a common clause in contracts that essentially frees both parties from liability or obligation when an extraordinary event or circumstance beyond the control of the parties, such as a war, strike, riot, crime, or an event described by the legal term act of God (hurricane, flood, earthquake, volcanic eruption, etc.), prevents one or both parties from fulfilling their obligations under the contract. In practice, most force majeure clauses do not excuse a party’s non-performance entirely, but only suspend it for the duration of the force majeure.’

It is unknown if the contracts between SIRM and their clients contained such a clause because they were unable to produce the contracts.

Lawyers for CVRD reiterated Justice MacKenzie’s decision that mining activities were allowed to continue on the site. They also talked about how SIRM (the operators of the site) knew the permit was being challenged but chose to take the risk of starting a business as receivers of contaminated soil regardless.

CVRD discussed the zoning of the site and reiterated that the current zoning does not allow for a contaminated soil dump site.

SIA/CHH lawyers tried to argue that it was out of the CVRD’s jurisdiction and that mining activities are under the jurisdiction of the provincial government not our local municipality. Because there are two types of business being run on the same property – mining and reception of soil – it becomes confusing who has jurisdiction. The writer could use some input on this.

CHH/SIA made a case for why the soil dump exists in the first place. That being there was contaminated soil from Vancouver Island being dumped (elsewhere) and there was no facility on the island to handle such material. Note: it’s been brought to the writer’s attention there are actually three other sites on the island that are set up to receive and treat contaminated soil. SIA/CHH lawyer told the judge the company (I’m paraphrasing) was doing Vancouver Island a great service by supplying such a site so that contaminated soil was not haphazardly dumped in areas that were not fitted for handling it. He made it seem as though Vancouver Island had a lot of projects producing contaminated soil that needed to be dumped which left the gallery questioning why it was that soil was being imported from projects on the mainland if this facility was created to handle the issue of no place to dump contaminated soil produced by Vancouver Island projects.

As an observer, the writer feels this argument was not adequately made by the CVRD but that could be due to a lack of time as the lawyer for SIA/CHH took up quite a bit of the afternoon session followed by the SIRM lawyers. It seemed the CVRD lawyer was pushed for time to get every point in before 3:50 when the lawyers for SIRM and SIA/CHH were given ten minutes to argue the CVRD’s submissions.

When asked by the judge if the site was safe from failing and being properly monitored, council for SIA/CHH, John Alexander, was emphatic and animated claiming it was very safe and there were lots of checks and balances in place and the Ministry of Environment ‘was all over it’. To which mostly the entire gallery broke out in coughing fits.

In claiming they stood to lose business and money invested in the project (remember the permit was in question during start-up yet they took the risk anyway) SIA/SIRM and CHH gave way to the discussion of – again I paraphrase – if you don’t have enough money to do business now, how were you ever going to reclaim / re-mediate the site and what’s going to happen to all that soil that’s there already as well as the soil you plan to bring in? If you can’t fix the mess that’s already there, how do you plan to pay for fixing it when 50x that amount is on site?

This is where the observer began feeling physically ill. The parties talked about orphan mines. Those which are simply walked away from leaving the taxpayer to foot the bill to clean up. And it seemed to this observer that we were being set up for exactly that and that it was almost posed as an ultimatum to the court. Either let us continue to make money off dumping soil on the site or we’ll have no money left to clean up the mess. (My opinion).

The judge promised a decision with her reasons by Friday, April 15th. It will be delivered verbally at 9:15 am via telephone to all interested parties.

It should also be noted that the judge informed us that the appeal in October will be heard in Victoria to better suit all interested parties. Give yourselves a pat on the back for cramming the gallery. It was noticed.

Those are my notes but there were many others in attendance (30 citizens in the gallery) and I welcome your corrections and additions.