Order TLF03-001 - Lands Protection Act Investigation Orders

Docket: TLF00115
Order TLF03-001

IN THE MATTER of an alleged violation of the Prince Edward Island Lands Protection Act by Walter E. Wells.

BEFORE THE COMMISSION

on Friday, the 4th day of April, 2003.

Ginger Breedon, Chair
Weston Rose, Commissioner
Anne Petley, Commissioner

Order

Contents

Appearances & Witnesses

Reasons for Order

1. Introduction

2. Discussion

3. Findings

4. Disposition

Order

Appearances & Witnesses

1.    Special Counsel:

Roger B. Langille, Q.C.

Investigation Officer:
Derek D. Key, Q.C.

2.    For the Respondent:

Walter E. Wells

Counsel:
David W. Hooley, Q.C.

Reasons for Order

1.  Introduction

[1]      This is a hearing convened by a Review Panel of the Island Regulatory and Appeals Commission ("Commission") to consider the landholdings of Walter E. Wells (the "Respondent"), pursuant to sections 15 and 15.1 of the Prince Edward Island Lands Protection Act (the "Act") and Commission Rule R98-1, with respect to the requirements under the Act concerning the right to use, possession or occupation of land.

[2]     Under section 15 of the Act, the Commission may request information and conduct an investigation for the purpose of determining whether a person or corporation has contravened the Act or its regulations. Section 15.1 of the Act provides that the Commission may impose a penalty where a person or corporation has contravened the Act.

[3]     On November 30, 2000 the Commission appointed an investigation panel. On December 15, 2000, the investigation panel appointed Derek D. Key, Q.C. as the Investigation Officer in this matter. Mr. Key's final report, dated April 25, 2001, was filed with the Commission on May 7, 2001.

[4]     On August 24, 2001, the Commission appointed a Review Panel pursuant to subsection 9(2) of Rule R98-1.

[5]     On October 3, 2002, the investigation panel appointed Roger B. Langille, Q.C. as Special Counsel to present the investigation to the Review Panel.

[6]     A pre-hearing conference was held on January 8, 2003 to prepare for the hearing and set a hearing date.

[7]     The hearing was held on March 10, 2003. The Review Panel heard evidence and argument from both Special Counsel and David W. Hooley, Q.C., Counsel for the Respondent.

[8]     Section 15.1 of the Act provides for the imposition of a penalty of not more than $10,000.
2. Discussion
Agreed Statement of Facts

[9]     Special Counsel and Mr. Hooley presented the following Agreed Statement of Facts to the Review Panel:

1. By Order in Council Number EC220/88 dated May 12, 1988, Walter E. Wells was granted:

(a)     permission to acquire approximately 1,195.87 acres in Kings and Queens Counties from the Estate of William B. Wells; and

(b)    a permit to acquire an aggregate land holding in excess of the maximum permitted by clause 2(a) of the Lands Protection Act, amounting to 1,195.87 acres (from the Estate of William Wells) and 227 acres held in the name of W.B. Wells Limited of Amherst, Nova Scotia.

2. On July 22, 1997, Walter Wells filed with the Island Regulatory and Appeals Commission a Disclosure Statement indicating an aggregate land holding of 2,664.63 acres for the calendar year 1996.

3. On December 31, 1997, Walter Wells filed a Disclosure Statement for the calendar year 1997, indicating an aggregate land holding of 2,664.63 acres.

4. December 30, 1998, Walter Wells filed a Disclosure Statement for the calendar year 1998, indicating an aggregate land holding of 2,664.63 acres.

5. By Order in Council Number EC1999-124 dated March 2, 1999, Council authorized Walter E. Wells to continue to have an aggregate land holding in excess of 1,000 acres subject to the divestiture schedule set out therein and provided that Walter Wells ensure the amount of land held in excess of 1,000 acres shall at all times prior to divestiture be leased to another person or corporation. The schedule requires 832.08 acres to be divested within five years, a total of 1,331.32 acres divested within seven years and a total of 1,664.15 acres be divested within nine years.

6. At no time subsequent to Order in Council EC1999-124 has Walter Wells leased out any of the subject land holdings.

7. On December 15, 2000, Derek Key was appointed to investigate the land holdings of Walter E. Wells.
8. On December 22, 2000, David Hooley, on behalf of Walter Wells, filed a Disclosure Statement for the calendar year 1999, indicating an aggregate land holding of 2,664.15 acres.
9. In the course of his investigation, Mr. Key, by letter dated March 2, 2001, wrote Walter Wells requesting documentation relating to his leasing out. The Registered Mail package was returned to Mr. Key marked "unclaimed".

10. On April 5, 2001, Mr. Hooley, on behalf of Mr. Wells, wrote Mr. Key and advised that it was Mr. Wells' position that the PEI Lands Protection Act and Regulations were unconstitutional to the extent that they would require Mr. Wells to reduce his land holdings.
11. The final report of Derek Key, dated April 25, 2001, was filed with IRAC on May 7, 2001.
12. On July 18, 2001, David Hooley wrote a letter to Derek Key, indicating among other things, that due to a typographical error, the acreage for parcel number 122978-00 at Peakes is shown as 102.00 acres in 1999, whereas the same parcel was shown correctly as 102.50 in 1998.
13. On August 16, 2001, Sandy Foy wrote a letter to David Hooley, indicating that the acreage for parcel #122978 has been revised to 102.50 as per Mr. Hooley's instructions.
14. On October 4, 2001 David Hooley, on behalf of Walter Wells, filed a Disclosure Statement for the calendar year 2000, indicating an aggregate land holding of 2,664.65 acres.

15. On January 2, 2002, David Hooley wrote a letter to Sandy Foy with an enclosed Declaration Statement for the calendar year 2001, indicating an aggregate land holding of 2,664.65 acres.
16. On February 8, 2002, Sandy Foy wrote a letter to David Hooley acknowledging receipt of Walter Wells' Land Holding Disclosure Statement for the calendar year 2001, indicating an aggregate land holding of 2,664.65 acres.

17. By letter dated November 27, 2002, Roger Langille, Q.C., as Special Counsel to present the investigation and alleged violations, wrote Mr. Hooley, solicitor for Mr. Wells, advising of the alleged violations of the Lands Protection Act.
18. On December 4, 2002, David Hooley, on behalf of Walter Wells, wrote a letter to Sandy Foy with an enclosed Declaration Statement for the calendar year 2002, indicating an aggregate land holding of 2,664.65 acres.

19. On January 30, 2003, Sandy Foy wrote a letter to David Hooley acknowledging receipt of Walter Wells' Land Holding Disclosure Statement for the calendar year 2002, indicating an aggregate land holding of 2,664.65 acres.

20. By letter dated February 21, 2003, Mr. Langille advised Mr. Hooley that the alleged violation of 15.1(1)(b) of the Lands Protection Act is in relation to Mr. Wells' failure to lease out land held in excess of 1,000 acres.

21. The documents referred to in the List of Documents, as well as the Respondent's documents, will be admitted into evidence before the Panel without formal proof thereof.

Position of Special Counsel
[10]    Special Counsel submits that the evidence, including the Agreed Statement of Facts, reveals that the Respondent has violated the Act in a number of respects, specifically:

Contrary to s.10(2) of the Act, the Respondent failed to file with the Commission, by December 31, 1999, a disclosure statement pertaining to the 1999 calendar year;

Contrary to s.10(2) of the Act, the Respondent failed to file with the Commission, by December 31, 2000, a disclosure statement pertaining to the 2000 calendar year; and

Contrary to s.15.1(1)(b) of the Act, the Respondent failed to comply with the condition to lease out lands in excess of 1000 acres, forming part of the divestiture schedule contained in the permit granted by the Lieutenant Governor in Council to the Respondent, dated March 2, 1999, being EC1999-124.

[11]    In response to an argument advanced at the hearing by the Respondent's Counsel, Special Counsel submits that the enforcement remedies under subsections 12(2) and 15.1(1) are distinct procedures under the Act. Special Counsel notes that the introductory words of subsection 15.1(1) are introduced by a clear notwithstanding clause, "Notwithstanding any other provision of the Act...". If the process envisioned in subsection 15.1(1) of the Act were contingent on the process contained in subsection 12(2) serving as a prerequisite, clear wording to this effect would be required. The notwithstanding clause makes it clear that the process contained in subsection 15.1(1) of the Act may operate independently from that described under subsection 12(2). Subsection 12(2) does not contemplate a decision of the Commission being referred back for a penalty.

[12]    Special Counsel submits that there must be respect for the Act. Accurate and timely disclosure by landowners is integral to the effective operation of the Act. While the Respondent is correct in saying that he did not increase his land holdings following the issuance of EC1999-124 by Executive Council, this is not an acceptable defense. The Commission must send a signal to the public that violations of the Act cannot and will not be sanctioned. If the penalty imposed is too modest and perceived as "just a cost of doing business", the public may feel that non-compliance is an option.    On the other hand, this hearing is the first of its kind, and the Commission may reflect this by imposing a lesser penalty than would be imposed in the next case, as the public will now have notice that the Commission is prepared to enforce the penalty provisions under subsection 15.1(1) of the Act. While it is commendable that the Respondent is now taking active steps to come into compliance with the Act, it cannot be overlooked that he has had four years to do this and Commission staff had warned him as far back as September 29, 2000 of the possibility of a penalty.
Position of the Respondent
[13]    Mr. Hooley advised the Review Panel that the Respondent acquired some of his current landholdings in 1984 upon the passing of his late father. The Respondent had also begun to acquire his own blueberry land prior to this time. All of the Respondent's land holdings were acquired lawfully, and thus the Respondent has difficulty understanding why he is required to dispose of some of his land. As noted in paragraph one of the Agreed Statement of Facts, EC220/88 dated May 12, 1988 permitted the Respondent to hold in excess of 1000 acres without imposing any conditions.

[14]    Mr. Hooley stated that generally speaking, at common law legislation cannot be interpreted retroactively or retrospectively if it would interfere with vested property rights. While the Canadian Charter of Rights and Freedoms does not specifically address property rights, it does not serve to derogate pre-existing common law property rights. These rights have existed at common law since the time of the Magna Carta and were extended to British North America, and thus Canada, by the Royal Proclamation of 1763. However, the Respondent recognizes that asserting his vested property rights could involve a lengthy and expensive battle in the courts. Therefore, he is prepared to come into compliance with the Act and act upon the lease out condition contained within EC1999-124. It is anticipated that a corporation with a family trust will be in place by March 31, 2003 to meet the lease out condition. Therefore, it is submitted that this is not an appropriate case for a penalty.

[15]    With respect to the two alleged violations under subsection 10(2) of the Act, the Respondent did ultimately file a disclosure statement and there was no change in his aggregate land holdings in each case. In subsequent years he did file his disclosure statements on time. Therefore, a penalty would not be appropriate for either case of late filing of a disclosure statement.

[16]    Mr. Hooley submitted on behalf of the Respondent that before the Review Panel may impose a penalty, the Commission's investigation must be referred to the Minister under section 12 of the Act to issue an Order. Then, if the Order is not complied with, the Review Panel may issue a penalty pursuant to subsection 15.1(1). As this matter has not been referred to the Minister, the Review Panel should not impose any penalty.

[17]    Before the Review Panel would impose a penalty, it is also submitted that there ought to be a public education initiative through advertisements and press releases to advise that the Commission intends to impose penalties on those persons or corporations who are found to be in violation of the Act.

[18]    Given the above factors, it is submitted that the Review Panel should not impose a penalty.
3.         Findings
[19]    The Review Panel has considered all the documentation on file as well as the oral submissions of Special Counsel and the Respondent's Counsel. From a review of the Agreed Statement of Facts, and the oral submissions of Mr. Hooley, it would appear that, notwithstanding a discussion concerning a possible legal challenge on constitutional grounds, the Respondent has now conceded that he has contravened the Act. Given the evidence on file and the Agreed Statement of Facts, the Review Panel finds that the Respondent has contravened the Act, the particulars of which were set forth in paragraph [10].

[20]    In considering what, if any monetary penalty to impose, the Review Panel has carefully examined the Act, and in particular the following provisions:

10. (1) The Minister or the Commission may request any person or corporation believed to have an aggregate land holding

(a)   in the case of a person, of more than 750 acres; or

(b)   in the case of a corporation, of more than 2,250 acres,

to make a land holding disclosure statement in the form prescribed in the regulations.

(2) Without prejudice to subsection (1), any person or corporation having an aggregate land holding in excess of the limit specified in subsection (1) shall, not later than December 31 of each year, file a disclosure statement with the Commission.

    ...

12. (1) Where he has reasonable and probable grounds to believe that any person or corporation has contravened section 2, 4, 5, 5.3, 6.1, or 6.2 of this Act, the Minister may issue an order requiring that person or corporation

(a)   to reduce his aggregate land holding to the maximum permitted by section 2;

(b)   to make application for and obtain any permit required by section 4 or section 5; or

(c)   repealed by 1998,c.79,s.12.

(2) Where any person or corporation fails to comply with an order of the Minister under subsection (1) within three months of the date on which the order is served, the Minister may apply to a judge of the Supreme Court, who shall enforce compliance with this Act and may make one or more of the following orders:

(a)   an order declaring null and void any instrument or document by which a land holding is or may be had in contravention of this Act;

(b)   an order for the sale of the land holding held in contravention of this Act and the distribution of the proceeds from the sale to such persons as may be entitled thereto;

(c)   an order directing the registrar to cancel the registration of a deed of conveyance or other document registered under the Registry Act R.S.P.E.I. 1988, Cap. R-10;

(d)   an order to return any consideration given under an instrument or a document made in contravention of this Act;

(e)   an order for possession of the land holding to be given to such persons as may be entitled thereto;

(e.1) an order declaring null and void a permit issued pursuant to subsection 6.1(2);

(f)    an order respecting costs;

(g)   such other order as may be necessary to give effect to the provisions of this Act or as to him seems just. 1982,c.16,s.13; 1995,c.22,s.16; 1998,c.79,s.12.

...

15. (1) The Minister, the Commission or any person authorized by the Minister may request information and conduct an investigation for the purpose of determining whether a person or corporation has contravened this Act or the regulations.

                   ...

15.1 (1) Notwithstanding any other provision of the Act, a person or corporation that

(a) has contravened section 2, 4, 5, 5.3, 6.1 or 6.2 ;

(b) fails to comply with a divestiture schedule or any other condition of a permit issued pursuant to section 6.1;

(c) fails to make a land holding disclosure statement when requested to do so under subsection 10(1);

(d) fails to file a disclosure statement pursuant to subsection 10(2);

(e) fails to comply with a demand under subsection 15(2);

(f) fails, neglects, omits or refuses to do any act or thing required of that person or corporation by this Act, the regulations, any order of the Commission or any order of the Minister; or

(g) violates this Act, the regulations, any order of the Commission or any order of the Minister

is liable to a penalty imposed by the Commission of not more than $10,000.

(2) Each day during which a prohibited activity subject to a penalty pursuant to subsection (1) is continued gives rise to a separate liability to a penalty imposed by the Commission not exceeding $500 for each day.

          ...

[21]    The Review Panel rejects the argument submitted by Respondent's Counsel to the effect that before the Review Panel may impose a penalty, the Commission's investigation must be referred to the Minister under section 12 of the Act to issue an Order. Section 12 speaks to a different category of remedies than subsection 15.1(1), which focuses solely on a monetary penalty. In addition, subsection 15.1(1) applies "Notwithstanding any other provision of the Act..." Therefore, the Review Panel finds that it has the jurisdiction to impose a monetary penalty on the Respondent.

[22]    With respect to the quantum of penalty, the Review Panel must balance the several factors spoken to by Special Counsel and Respondent's Counsel. On the one hand, the Respondent has contravened the Act and these contraventions are not trivial. On the other hand, the Respondent has indicated that steps are underway to bring his land holdings into compliance with the Act and with the lease out condition required under EC1999-124.

[23]    The Review Panel believes the Respondent's contraventions of the Act are serious and require penalties that reflect this fact. Accordingly, the Review Panel imposes the following penalties:

A penalty of $300, payable to The Island Regulatory and Appeals Commission, for the failure of the Respondent to file both the 1999 and 2000 calendar year disclosure statements by December 31 of each year.

A penalty of $7000, payable to The Island Regulatory and Appeals Commission, for the failure of the Respondent to comply with the condition to lease out lands in excess of 1000 acres, said condition forming part of the permit granted to the Respondent by the Lieutenant Governor in Council dated March 2, 1999, being EC1999-124. This penalty shall be reduced to $1500 if the Respondent has, on or before April 30, 2003, filed with the Commission proof that is satisfactory to the Commission that he is in compliance with said condition before or as of April 30, 2003.

In the event that the Respondent remains in contravention of the Act, specifically the lease out condition contained in EC1999-124, as of May 1, 2003, the Commission shall impose a daily penalty of $100 payable to The Island Regulatory and Appeals Commission, said daily penalty to commence on May 1, 2003 and continue thereafter for as long as the Respondent remains in said contravention, pursuant to sub-section 15.1(2) of the Act.

[24]    Further, the Review Panel wishes to remind the Respondent that he is required to follow the divestiture schedule set out under EC1999-124.
4.         Disposition
[25]    An Order setting out the penalties imposed by the Review Panel will therefore issue.

Order

WHEREAS an investigation occurred into the land holdings of the Respondent, Walter E. Wells, as authorized under section 15 of the Prince Edward Island Lands Protection Act;

AND WHEREAS, a Review Panel of the Island Regulatory and Appeals Commission considered the matter at a public hearing conducted in Charlottetown on March 10, 2003;

AND WHEREAS the Review Panel has found the Respondent to have contravened the Prince Edward Island Lands Protection Act and has issued its findings in this matter in accordance with the Reasons for Order issued with this Order;

NOW THEREFORE pursuant to the Island Regulatory and Appeals Commission Act and the Prince Edward Island Lands Protection Act

IT IS ORDERED THAT

1.     The Respondent hereby pay a penalty of $300 for two contraventions under 10(2) of the Prince Edward Island Lands Protection Act;

2.    The Respondent hereby pay a penalty of $7000 (to be reduced to $1500 upon filing, on or before April 30, 2003, proof satisfactory to the Commission that he is in compliance with the lease out condition contained in a permit granted by the Lieutenant Governor in Council to the Respondent, dated March 2, 1999, being EC1999-124) for a contravention under 15.1(1)(b) of the aforementioned Act.

3.     The penalties ordered in 1. and 2. above be paid to the Island Regulatory and Appeals Commission on or before May 1, 2003.

4.     In the event that the Respondent remains in contravention of 15.1(1)(b) of the Act as of May 1, 2003, the Commission shall impose a daily penalty of $100 payable to The Island Regulatory and Appeals Commission, said daily penalty to commence on May 1, 2003 and continue thereafter for as long as the Respondent remains in said contravention, pursuant to 15.1(2) of the Act.

5.    The monthly total of the penalty ordered in 4. above shall be paid to the Island Regulatory and Appeals Commission on the last day of each month.

DATED at Charlottetown, Prince Edward Island, this 4th day of April, 2003.

BY THE COMMISSION:
Ginger Breedon, Chair

Weston Rose, Commissioner

Anne Petley, Commissioner

NOTICE

Section 12 of the Island Regulatory and Appeals Commission Act reads as follows:
12. The Commission may, in its absolute discretion, review, rescind or vary any order or decision made by it or rehear any application before deciding it.

Parties to this proceeding seeking a review of the Commission's decision or order in this matter may do so by filing with the Commission, at the earliest date, a written Request for Review, which clearly states the reasons for the review and the nature of the relief sought.

Sections 13.(1) and 13(2) of the Act provide as follows:
13.(1) An appeal lies from a decision or order of the Commission to the Appeal Division of the Supreme Court upon a question of law or jurisdiction.

(2) The appeal shall be made by filing a notice of appeal in the Supreme Court within twenty days after the decision or order appealed from and the Civil Procedure Rules respecting appeals apply with the necessary changes.