Order No. P.930422
IN THE MATTER of the Island Regulatory and Appeals Commission Act, Stats. P.E.I. 1991 Chapter 18; and the Petroleum Products Act, R.S.P.E.I. 1988, Cap. P-5.1;
- and -
IN THE MATTER of an application made by Duffy Construction Ltd. for an initial petroleum products license in respect of the Kinkora Service Station (last operated by Roger R. LeBoeuf) located at KINKORA, P.E.I.
Thursday, the 22nd day of April, A.D., 1993
BEFORE
Linda Webber, Chairman
John Blakney, Vice-Chairman
Anne McPhee, Commissioner
Decision and Order
Table of Contents
Appearances and Witnesses
Decision
I. Introduction
II. Evidence on Behalf of the Applicant
III. Evidence on Behalf of the Opposing Interveners
IV. Findings
(Jurisdiction, Record of Performance/Fitness, Location/Physical Accessibility, Market Assessment, Volume of Sales, Other)
Order
Appearances and Witnesses
Participants in the hearing held on 10, 11 and 12 February 1993 and the parties for whom they appeared were as follows:
FOR APPLICANT, DUFFY CONSTRUCTION LTD., & SUPPORTING INTERVENERS:
Counsel:
Bernard St. C. McCabe, Q.C., Bernard McCabe & AssociatesWitnesses:
Philip Noonan, Noonan Fuels, Albany
Leonard J. Keefe, Administrator, Community of Kinkora
Geoff Dobinson, Kinkora (Prop. Kinkora Country Kitchen)
Howard D. Bowie, Accounts Executive, Imperial Oil Limited
Robert Duffy, Vice-President, Duffy Construction Ltd.
Raymond Smith, Newton - Vice-Chairman, Kinkora Area Business Commission
Joseph L. Shreenan, Kinkora (representing several petitioners)
Austin Roberts, Kinkora
Raymond Kelly, Kinkora
Roger R. LeBoeuf, Kinkora
Leslie Smith, Kinkora (supported licensing but expressed some concerns with respect to repairing of heavy equipment)FOR OPPOSING INTERVENERS:
DAWSON ENTERPRISES LTD., MIDDLETON
BENJAMIN H. READ, ROSS' CORNER SERVICE STATION
MILTON C. DRUMMOND, FREETOWN SERVICE STATION
ERIC W. ROGERSON, MIDDLETON GROCERY
ALAN VINCENT, BORDEN SERVICE STATIONCounsel:
James W. Gormley, Stewart McKelvey Stirling ScalesWitnesses:
Eric W. Rogerson, Middleton Grocery
Greg Dawson, Dawson Enterprises Ltd.FOR THE COMMISSION:
H. Doris Pursey, Director - Petroleum Division
Harry MacDonald, Assistant to Director - Petroleum Division
Douglas R. Drysdale - CounselRECORDING SECRETARIES:
Faye Weeks
Heather Walker
Decision
I. Introduction
By application dated 5 November 1992 and received by the Commission on 17 November 1992, Duffy Construction Ltd. applied to the Commission for a petroleum products license for manned motor fuels dispensing in conjunction with automotive bay service at the Kinkora Service Station, P. E. I., last operated by Roger R. LeBoeuf.
The Applicant completed its application on 8 December 1992, and it was publicly advertised by "Notice of Application" dated 14 December 1992, with a closing date for the filing of interventions either in support of or in opposition to being fixed at 11 January 1993. Following this date, there having been several interventions both in support of and in opposition to the licensing requested, the Commission reviewed the application and determined that a public hearing be scheduled to commence on 10 February 1993 at 9:00 a.m. Said hearing was publicly advertised by "Notice of Hearing" dated 19 January 1993. This hearing commenced as scheduled and was reconvened on 11 February 1993 at 9 a.m. and again on 12 February 1993 at 11 a.m. A total of ten witnesses (several of whom had previously written supporting interventions) testified in support of the application of Duffy Construction Ltd., who was represented by Bernard McCabe, and one further witness, while supporting the licensing of the site as a motor fuels outlet, raised concerns relative to the proposed expansion into heavier equipment repair which could result in some loss of enjoyment of his nearby property. Five opposing Interveners were registered and these were represented by James W. Gormley, who called two witnesses in opposition to the granting of the requested license. A complete listing of those appearing can be found on page 3 of this Decision entitled "Appearances and Witnesses".
A total of forty-three exhibits were entered in this hearing. In his closing remarks, James Gormley, Counsel for the registered opposing Interveners, raised concerns relative to the jurisdiction of the Commission to determine this matter in view of Planning Act Regulations which became effective on 26 December 1992. The hearing adjourned on 12 February 1993 at approximately 2 p.m. with the matter to be taken under advisement by the Commission.
II. Evidence on Behalf of the Applicant
Bernard McCabe, Acting for the Applicant, called several witnesses in support of the application.
The first witness was Philip Noonan, Proprietor of Noonan Fuels, a Distributor of Imperial products in the Summerside and surrounding area. Mr. Noonan gave testimony with regard to the past operation of the Kinkora Service Station and supported the licensing of the outlet.
The next witness was Leonard J. Keefe, resident and recently appointed Administrator of the Community of Kinkora. Mr. Keefe spoke on behalf of the Community and noted that the Community Council fully supported the application, as was indicated in a letter earlier forwarded to the Commission and signed by the former Administrator, Patrick Holland.
Geoff Dobinson, proprietor of the Kinkora Country Kitchen, a restaurant located next door to the site, gave evidence in support of the application and indicated that the two operations would complement each other, and that he proposed to be employed at the outlet as he is a qualified diesel mechanic and welder. Mr. Dobinson and his wife Linda had also earlier written to the Commission in support of this application setting forth their reasons for so doing.
Howard D. Bowie, Accounts Executive of Imperial Oil Limited, proposed suppliers of the outlet, was the next witness in support of the application. Mr. Bowie advised the Commission that he was of the opinion that the outlet would sell somewhere in the vicinity of 500,000 litres of gasoline and provide good quality mechanical services through the two bays connected with this outlet in addition to these sales. It was his opinion that as this is the only outlet in Kinkora, that it would provide the residents of the community with a much needed service.
Robert Duffy, Vice-President of Duffy Construction Ltd., and proposed operator of the outlet, gave detailed evidence with respect to the proposed operation, and confirmed the information given in his file. During examination by Mr. Blakney, Mr. Duffy assured the Commission that the back lot of the outlet would not be used as a parking lot for heavy duty construction equipment, but that due to the size of the front doors, some vehicles that they would like to service could not enter the bay. As a result, a larger door had been installed at the back of the bay to accommodate these larger vehicles. Mr. Duffy confirmed that he would be hiring at least one mechanic to operate the bays in addition to gasoline sales.
Raymond Smith, Vice-Chairman of the Kinkora Area Business Commission, confirmed the information given in a letter dated 8 February 1993 filed earlier with the Commission. This letter indicates that the Kinkora Area Business Commission fully supports the Applicant in its efforts to reopen the Kinkora Service Station.
Joseph L. Shreenan, a long-time resident of Kinkora, attended the hearing to give evidence in support of the licensing of the outlet. Mr. Shreenan had previously forwarded a letter to the Commission outlining support, which letter contained an additional forty signatures.
Austin Roberts, who with his family operates a farm in Kinkora, also presented evidence in support of the application. He spoke of the convenience of having an outlet nearby where parts and fuel could be purchased, as well as the ability to have service work performed on the several vehicles owned by his family. He indicated that the Applicant is well liked and well respected in the community, very knowledgeable in business and successful in other enterprises in which it is involved. Mr. Roberts expressed the opinion that residents of Kinkora should be able to access such services readily and indicated that he felt the outlet would be well supported.
Raymond Kelly, who also had written to the Commission in support of the application, verbally confirmed his support for the reopening of the outlet. He testified that in order to get oil changes done, obtain repairs and inspections on farm machinery, etc., that a six-mile round trip was necessary since this outlet closed.
Roger R. LeBoeuf, former owner and operator of the Kinkora Service Station, gave evidence to the effect that he felt the outlet was needed in the area, and that it would be viable under the proposed new management. He stated that he had ceased to operate the site for personal reasons, and that it could have been successful if he could have put more of himself into its operation, as personalized service was valued by the citizens in the community. He felt that he had turned down bay work due to his inability to do the work properly, and that he felt there was a great potential in the area for such work.
Leslie Smith, next-door resident to the site, supported the relicensing of the outlet, but expressed some concern relative to the proposed repairing of heavy equipment and machinery, which he felt might be stored on the lot and operated late at night causing him and his family some loss of enjoyment of their property.
III. Evidence on Behalf of the Opposing Interveners
James W. Gormley called two witnesses on behalf of the five registered Interveners who filed in opposition to the application. These Interveners were Dawson Enterprises Ltd., Middleton; Benjamin H. Read, owner and operator of Ross' Corner Service Station; Milton C. Drummond, owner and operator of Freetown Service Station; Eric W. Rogerson, operator of Middleton Grocery and Alan Vincent, operator of Borden Service Station.
The first witness was Eric W. Rogerson, operator of Middleton Grocery, a motor fuels outlet which is licensed under the Petroleum Products Act, which outlet is owned and supplied by Irving Oil Limited and leased to Mr. Rogerson. The second witness was Greg Dawson of Dawson Enterprises Ltd., a business involved in sales of used cars and trucks, muffler repairs, licensed inspection station for cars and heavy equipment, auto salvage, parts and repair services. This business is not licensed under the Petroleum Products Act.
Mr. Rogerson operates a convenience store in conjunction with gasoline sales, and does not offer automotive bay service. He took over the outlet in July of 1989 while the Kinkora Service Station was being operated, and in the past three years has had volumes exceeding one million litres. Several exhibits were filed during Mr. Rogerson's testimony, which exhibits formed the basis for examination and cross-examination.
Mr. Dawson gave evidence with respect to his own operation, and the detrimental effect he felt it would have should the Duffys reopen the Kinkora Service Station. Mr. Dawson felt that a percentage of his present business would be lost to the outlet, and he had concerns in this regard. Mr. Dawson also raised concerns respecting the visibility of the outlet from the highway, and tendered into evidence pictures he had taken during the period in which this hearing was held.
At the conclusion of the hearing and in his closing remarks, Mr. Gormley apprised the Commission of a concern he had with respect to the Commission's jurisdiction to hear and rule on the application before it in view of certain Planning Act Regulations.
III. Findings
The Commission has considered the jurisdictional question raised by Mr. Gormley whereby he submitted that the Commission lacks jurisdiction to consider the application before it, since regulations under the Planning Act prohibit certain types of development without prior approval, including development carried out by the Applicant in this case, and prior approval had not been obtained.
Mr. Gormley referred to excerpts from Part IX of the Planning Act Regulations, and to certain other provisions of those regulations. In particular, he relied on regulations 78(1), (4), and (5). He argued that Kinkora has been within a "special planning area" as contemplated by those regulations since an amendment became effective on December 26, 1992.
Bernard McCabe countered this argument by contending that these regulations do not apply to Kinkora. Following the hearing, he developed this argument through correspondence to our Counsel dated February 15, 1993, which was apparently copied to Mr. Gormley, as a letter dated February l8, 1993 was forwarded to Commission Counsel by Mr. Gormley which referred to this correspondence.
The Commission notes that Planning Act Regulation 4, subsection 1 was not referred to by Mr. Gormley. On its face, this subsection appears to exempt Kinkora from the restrictions referred to by Mr. Gormley. None of his references indicated any legislative intention to override that exemption. As a result, while there is a physical area established as a special planning area, and Kinkora appears to fall within that area, our view is that there are no existing regulations which apply to the situation before us.
In our view, then, special planning area regulations in Part IX of the Planning Act Regulations do not apply to Kinkora, and, consequently, Duffy Construction Ltd. has not failed to comply with a legal requirement to obtain development approval.
Overall, the Commission was impressed with witnesses for the Applicant and with the community support evident at the hearing. The law requires us to consider the public interest, convenience and necessity when reviewing an application for a Petroleum Products retail license, and this is often a difficult task. The widespread community support given to the Applicant in this case assisted us greatly in our review, especially because it gave us the opportunity to hear from and question many of the people who would be directly affected by the operation. These witnesses clearly showed a demand for the proposed service, as did the evidence of Robert Duffy on behalf of the Applicant. Mr. Duffy noted that he began to think about opening this outlet only after he was approached by a number of residents who wanted him to do so, pointing out how inconvenient it was not to have an outlet in the community.
Even the evidence of the Applicant's past contributions to the community--through its other businesses--was helpful in assessing the Applicant's ability to operate an outlet that would be of benefit to the area.
The location of the outlet was raised by the opposing Interveners both in terms of its purported nearness to existing operations and in terms of potential accessibility problems. Evidence of traffic patterns and needs of people in the area would lead us to conclude that the nearest outlets do not meet the perceived needs of people in Kinkora. As for the physical accessibility of the lot, while it is not ideal, a retail gasoline outlet operated on that lot for years without any problem, accessibility has been somewhat improved, and the speed limit in front of the lot should enable entrance and exit without incident. We were told that tractor-trailers will not be using that lot for parking and so the special problems that would be created by those vehicles will be avoided. We point out that safety is always a matter of concern to the Commission and should the use change so as to create a safety problem, the license's renewal could be denied.
The evidence of potential sales volumes appears reasonable for the area and the operation as a whole would appear to be viable.
Evidence of recent improvements to the Community also suggest that the community will support new enterprises and that the need for services is again beginning to grow.
As for the concerns of Mr. Leslie Smith about potential noise and excessive traffic, we note that in general Mr. Smith supported the operation of a retail outlet and found no problem in the past with the operation of a retail outlet at that site. As well, with respect to the concerns of both Mr. Smith and Mr. Dawson, we point out that the Applicant could operate the bays at the outlet--including the repair of large machinery--without any license from us.
The addition of gasoline dispensing does give us some jurisdiction over the overall operation, however, and to this extent we would expect that the operation would not be excessively noisy or hazardous, and would be carried out in compliance with the Petroleum Products Act and all applicable by-laws of the Community of Kinkora.
Of course, in considering this matter, the Commission had also to look at what effect the licensing of this outlet might have on the opposing Interveners. It was considered that the Middleton Grocery would be most affected by the licensing of this site, and a review of the volumes generated at this outlet was made. Mr. Rogerson, in his own testimony, noted that he felt that it was necessary for him to sell 900,000 litres of product to run a successful outlet. By his own admission, he could lose some volume to the Kinkora outlet and still remain viable. It was noted from Exhibit 19 entitled "Approximate Gasoline Volumes in Litres- 5 Year Period - Outlets within 12 Km. of Kinkora", which covered the years 1987 to and including 1991, that Mr. Rogerson's highest gasoline sales were recorded in 1990 (1,021,342 litres), and during the same year the Kinkora Service Station was operating and sold 320,000 litres. In 1991, the Kinkora Service Station operated only part of the year and sold 105,629 litres, while the Middleton Grocery sold l,018,340 litres of gasoline. It was also noted by the Commission that these two outlets are located on entirely different routes. Route 225, on which the Kinkora Service Station is located, has been upgraded, and evidence was given to the effect that traffic volumes have increased significantly since that time.
Some volume would obviously be gained from the outlets of the other licensed Interveners, but to a lesser degree. Overall, the evidence would not suggest such detriment to other operators as would either seriously jeopardize those other outlets or overcome the public interest, convenience and necessity found to justify the proposed new outlet.
Therefore, the application is approved in accordance with the Order appended hereto.
Order
THE COMMISSION HEREBY ORDERS:
1) That the application of Duffy Construction Ltd. dated 5 November 1992 for an initial petroleum products dealer's license with respect to full-serve motor fuels dispensing in conjunction with automotive bay services at the Kinkora Service Station be approved, conditional on the outlet being operated in accordance with the application and verbal evidence given at the public hearing, and conditional on all operating requirements being met prior to the issuance of a Petroleum Products License.
2) That the access to the back yard area of the outlet be posted with "No Parking" signage and that this right-of-way be kept clear in order to provide appropriate visibility to vehicle operators entering and exiting the outlet.
3) That pump nozzle fees be paid prior to the issuance of the license.
4) That the approval contained in this Order is valid for four months from the date of issue.
DATED at CHARLOTTETOWN this 22nd day of APRIL, A.D., 1993.
BY THE COMMISSION:
Chairman
Vice-Chairman
Commissioner
