COURT OF APPEAL FOR ONTARIO

CITATION: Ottawa Community Housing Corporation v. Foustanellas (Argos Carpets), 2015 ONCA 276

DATE: 20150421

DOCKET: C56782

Cronk, Pepall and Benotto JJ.A.

BETWEEN

Ottawa Community Housing Corporation

Plaintiff (Respondent)

and

Peter Foustanellas, o/a Argos Carpets
, David Grimes,

Litigation
    Administrator for the Estate of Robert Grimes,

o/a
    Argos Carpets and
Argos Carpets Ltd.

Defendants (
Appellants
)

Gary G. Boyd, for the appellants

Joseph Y. Obagi and Elizabeth A. Quigley, for the
    respondent

Heard: February 17, 2015

On appeal from the judgment of Justice Douglas J.A. Rutherford
    of the Superior Court of Justice, dated February 12, 2013, with reasons
    reported at 2013 ONSC 973 and 2013 ONSC 5443.

Cronk J.A.:

[1]

This appeal arises from a dispute concerning the supply and installation
    of carpets and under pads in various residential housing units in Ottawa.  At
    issue is the trial judges holding of the carpeting contractor and its
    principal liable in fraud, and his assessment of compensatory and punitive
    damages and costs in favour of the owner of the units.

Background in Brief

[2]

The respondent, Ottawa Community Housing Corporation (OCHC), is a not-for-profit
    organization that provides subsidized social housing for low-income individuals
    in Ottawa.  The appellant, Peter Foustanellas, is the sole shareholder, president
    and director of the corporate appellant, Argos Carpets Ltd. (ACL), a
    carpeting contractor.  Robert Grimes, now deceased, was a former employee of
    ACL.

[3]

In mid-July 2004, OCHC invited competitive tenders for a one-year
    contract concerning the supply and installation of carpets and under pads in some
    of its housing units.  It eventually accepted the lowest of five tenders, a bid
    submitted by Argos Carpets (Argos) and signed by Grimes.  Argos successful
    bid, as calculated and approved by Foustanellas, contemplated a 10  15% profit
    margin for Argos.

[4]

The contract between OCHC and Argos (the Carpet Contract)
[1]
provided for a fixed charge per installed square yard of carpet and under pad,
    with no extra charge for wastage.  It also set out certain quality criteria and
    other specifications for the product and services Argos was to provide.

[5]

Neither the original Carpet Contract nor subsequent renewal contracts identified
    ACL as a party to the contractual arrangements with OCHC.

[6]

Over time, OCHC became suspicious that Argos was inflating the quantities
    of installed carpet and under pad identified in its invoices, suggesting significant
    overbilling of OCHC.  It therefore undertook a series of investigations, eventually
    concluding that Argos had engaged in systemic overbilling for carpet and under pad
    allegedly supplied and installed in OCHC units.  OCHC also concluded that, in
    many instances, the carpets furnished and the installations carried out by
    Argos were substandard, falling below the quality criteria and other specifications
    set out in the Carpet Contract.

[7]

Accordingly, in late May 2006, OCHC invoked clauses 1.6.1 and 1.6.3 of
    the Carpet Contract, described below, and provided notice that it was
    withdrawing the remaining work under the Carpet Contract from Argos.  It also withheld
    $141,724.55 in payments allegedly owing to Argos for work performed.

[8]

Litigation ensued.  ACL commenced an action against OCHC for amounts
    allegedly owing under the Carpet Contract, together with damages for wrongful
    termination and breach of contract, amongst other relief.  OCHC, in turn, sued Foustanellas,
    Grimes, Argos and ACL for damages for breach of contract and fraudulent and/or
    negligent misrepresentation, as well as punitive and exemplary damages.  The
    two actions were eventually consolidated and heard together.   OCHC was the
    plaintiff and Foustanellas, Argos, Grimes and ACL (collectively, the
    defendants) were the defendants in the consolidated action.  ACL was the named
    plaintiff, and OCHC the named defendant, by counterclaim.

Trial Judges Decision

[9]

Grimes was Argos main contact with OCHC in relation to the Carpet
    Contract.  Unfortunately, he died prior to trial.  For the purpose of the
    trial, David Grimes was added as a party defendant in his capacity as Litigation
    Administrator for Robert Grimes Estate (the Estate).

[10]

OCHC
    relied on parts of Grimes discovery evidence, which was read in at trial
    pursuant to leave granted under rule 31.11(6) of the
Rules of Civil
    Procedure
.  On his examination-for-discovery, Grimes testified that, from
    day one of the Carpet Contract, the invoices tendered to OCHC were falsely inflated
    to generate a profit margin in the range of 25  40% for Argos, as opposed to
    the 10  15% contemplated by the Carpet Contract.  According to Grimes: i) the
    falsification of the invoices was readily apparent on inspection of the
    original copies of the invoices; ii) Foustanellas examined each and every
    invoice sent to OCHC; iii) Foustanellas wanted to be sure that OCHC did not
    have its own measurements of the units that Argos was carpeting, so that OCHC
    could not determine that Argos invoices had been inflated; iv) he had been
    instructed not to disclose carpet measurements to clients; v) Foustanellas had
    instructed him to increase the mark-up on OCHC invoices in retaliation for
    OCHCs decision to install hardwood, rather than carpet, in some of the units;
    vi) an OCHC invoice showing less than a 30  35% profit margin for Argos
    wouldnt get past [Foustanellas]; and vii) Foustanellas knew that Argos was
    not complying with the Carpet Contract.

[11]

Foustanellas
    denied any knowledge of the falsified invoices.  He testified at trial that he
    left all the details of business with OCHC to Grimes and an assistant, and he
    learned of the billing improprieties only when OCHC terminated the Carpet
    Contract.

[12]

The
    trial judge rejected Foustanellas evidence virtually in its entirety.  He made
    the following key findings:

i)

since OCHC was unaware of ACLs involvement in the Carpet Contract, both
    Foustanellas and Grimes were personally liable as agents of an undisclosed
    principal, together with ACL, for any amounts owing to OCHC for breach of the
    Carpet Contract (at para. 39);

ii)

clause 1.6.3 of the Carpet Contract was neither a penalty clause nor a
    liquidated damages provision.  Rather, it relieved OCHC of the obligation of
    making further payments to Argos once the clause was properly invoked (at
    paras. 69  70);

iii)

the
    evidence overwhelmingly established that Argos breached its contract with OCHC
    by engaging in a deliberate and intentional course of falsified invoicing and
    a pervasive course of supply of sub-standard carpet product and of sub-standard
    installation (at para. 72);

iv)

Argos
    false invoicing scheme constituted fraud.  Both Grimes and Foustanellas knew
    about and were acquiescent or directly involved in carrying out the fraudulent
    scheme that resulted in overcharges to OCHC (at paras. 75, 86  87);

v)

the
    amount of the overcharges was $282,069.10, exclusive of adjustments on account
    of wastage and quality issues (at paras. 45 and 88);

vi)

OCHC
    was entitled to a 25% reduction in the total cost of carpet supplied because Argos,
    contrary to the terms of the Carpet Contract, included charges for wastage in
    its invoices to OCHC (at paras. 51 and 89);

vii)

OCHC was
    entitled to a further 20% reduction in the amount otherwise owed to Argos under
    the Carpet Contract on account of Argos delivery and installation of substandard
    quality carpet and under pad (at paras. 63 and 90); and

viii)

after applying the 25%
    wastage and 20% quality adjustments referenced above, the total amount of
    OCHCs overpayment to Argos was $633,844.65 (at para. 91).

[13]

Based
    on these findings, the trial judge held all the defendants liable to OCHC, on a
    joint and several basis, for compensatory damages in the total amount of
    $633,844.65.  He calculated this amount as follows:

i)

$282,069.10

-

for inflated quantities of
          carpet and under pad invoiced to OCHC

ii)

$206,842.36

-

for improper wastage
          charges, and

iii)

$144,933.19

-

for substandard quality
          carpets, under pad and installations.

[14]

The
    trial judge awarded the damages under items i) and ii), above, on account of
    the defendants fraudulent conduct, and the damages under item iii), above, for
    breach of contract.

[15]

The
    trial judge also awarded OCHC punitive damages, in the amount of $250,000, as
    against all the defendants on a joint and several basis by reason of the
    fraudulent scheme that he found they had perpetrated against OCHC.

[16]

In
    connection with the counterclaim, the trial judge awarded ACL damages in the
    amount of $141,724.55 for outstanding payments owed to ACL.  He directed that
    this amount be set off against any amounts recovered by OCHC from ACL.

[17]

Finally,
    the trial judge awarded OCHC its costs of the trial, on a full indemnity basis,
    in the amount of $630,475.47, payable by the defendants on a joint and several
    basis.

Issues on Appeal

[18]

Foustanellas
    and ACL appeal to this court from the trial judgment.  The Estate took no part
    in the appeal.

[19]

The
    appellants acknowledge OCHC was fraudulently overbilled in the amount of
    $282,069.10 by reason of the falsification of Argos invoices.  However, they
    maintain that Grimes was responsible for the falsified invoices, and that Foustanellas
    and ACL neither knew about nor were parties to the fraud.  Thus, the appellants
    say, the trial judge erred by finding that they participated or acquiesced in
    the fraudulent overbilling.

[20]

The
    appellants also argue: i) clause 1.6.3 of the Carpet Contract operated to limit
    the amount of damages recoverable by OCHC; ii) to the knowledge of OCHC, ACL
    alone among the defendants was the contracting party under the Carpet Contract;
    iii) the trial judge erred in reducing the amount owed to ACL under the Carpet
    Contract on account of wastage and quality issues; and iv) the trial judge
    further erred by awarding OCHC punitive damages, as well as its costs of the
    trial on a full indemnity basis.

[21]

The
    issues on appeal may therefore be framed as follows:

1)

Did
    the trial judge err by holding clause 1.6.3 of the Carpet Contract was neither
    a penalty nor a liquidated damages provision?

2)

Did
    the trial judge err by holding the appellants were parties to the fraud
    perpetrated on OCHC?

3)

Did
    the trial judge err by holding OCHC was unaware of ACLs involvement in the Carpet
    Contract?

4)

Did
    the trial judge err in reducing the amount otherwise owing to Argos under the
    Carpet Contract on account of wastage and quality deficiencies?

5)

Did
    the trial judge err in his assessment of punitive damages?

6)

Did
    the trial judge err by awarding OCHC its trial costs on a full indemnity basis?

Analysis

(1)     Clause 1.6.3 of the Carpet
    Contract

[22]

The
    appellants argue clause 1.6.3 of the Carpet Contract constitutes a penalty or
    liquidated damages provision, the effect of which is to limit the amount of any
    recovery by OCHC of damages for breach of, or other wrongdoing associated with,
    the Carpet Contract to an amount equal to the total sum outstanding and owed to
    Argos at the date of termination of the Carpet Contract.

[23]

Clause
    1.6.3 of the Carpet Contract provides:

Except in the case of insolvency, where any or all of the work
    has been taken out of the hands of the Contractor, the Contractor will not be
    entitled to any further payment, including payments then due and payable but
    not paid.

The obligation of the Owner
    to make payments will cease, and the Contractor will be liable upon demand to
    pay the Owner an amount equal to all the losses and damages incurred by the
    Owner for the non-completion of the work.

[24]

Clause
    1.6.3 must be read together with clause 1.6.1 of the Carpet Contract.  The
    latter provision states:

1.6     TAKING
    WORK OUT OF THE HANDS OF THE CONTRACTOR

.1  If the Contractor:

.1  has
    delayed in commencing or is in default in the completion of the work or any
    portion of the work, within the contract commencement and completion dates;

.2  is
    in default of diligently executing the work or any portion of the work to the
    satisfaction of the Owner, and the Owner has given notice of the default to the
    Contractor, and the notice of default has required the Contractor to put an end
    to the default or delay, and the default or delay continues for past the time
    specified in [the]

notice

after

the notice was communicated;

.3
    fails to comply with any reasonable order he may receive from the Owner or
    shall persist in any course in violation of any of the provisions of this
    contract;

.4
    has received from the Owner three written notices of default during the term of
    the contract;

.5
    has made an assignment of the Contract without the required consent of the
    Owner;

.6  shall
    submit a bid that is subsequently found to contain false or misleading
    information;

.7
    shall become bankrupt or insolvent, or compound with his creditors, or commit
    any act of insolvency;

.8  has
    substituted any material or equipment other than specified without the required
    consent of the Owner;

or for any other reason which the
    Owner deems proper, then in each and any such case, the Owner has the full
    right and power to take the whole operation, or any part of the operation out
    of the hands of the Contractor.

[25]

Clause
    1.6.1 thus permits the Owner (OCHC) to terminate the contract on the
    happening of certain events by taking all or some of the work provided for under
    the Carpet Contract out of the hands of the Contractor (Argos).  If this
    occurs for reasons other than the insolvency of the contractor, the owner is
    then entitled to invoke clause 1.6.3 of the Carpet Contract.

[26]

That
    is what transpired in this case.  After discovering the overbilling by Argos,
    OCHC provided formal notice under clause 1.6.1 that it was taking the remaining
    work under the Carpet Contract out of Argos hands, thereby terminating the
    contract.  There is no suggestion OCHC improperly invoked clause 1.6.1.  Having
    provided proper notice under clause 1.6.1, OCHC thereby also became entitled to
    rely on clause 1.6.3.

[27]

The
    contest on appeal, as at trial, concerns the proper interpretation and effect
    of clause 1.6.3.  The trial judge turned his mind to this issue and rejected
    the appellants interpretation of clause 1.6.3, described above.  He held, at
    paras. 69 and 70:

In my view, clause 1.6.3 is neither a penalty clause nor
    is it a liquidated damages provision.  No particular amount is fixed or
    stipulated.  The amount of money that OCHC might owe Argos Carpets on jobs
    completed under the contract at any given time could vary widely.  As it
    happens, at the time OCHC terminated the contract, just over $45,000 was
    payable on unpaid invoices submitted for contract installations.

Not only would a penalty or liquidated damages provision
    of that modest amount be a most doubtful probability in a business contract of
    such proportions, more compelling in my view, is that at any given time, the
    amount in play could be much larger or smaller, depending on the vagaries of
    the work.  The fact that no specified or stipulated amount is set in clause
    1.6.3 makes its characterization as a penalty clause or liquidated damage
    clause untenable.  I do not see that provision as capping or limiting what
    damages OCHC would be entitled to prove and recover.  It is, at best, to use
    Mr. Obagis words during argument, a stop the bleeding provision.  It
    relieved OCHC of having to make further payments under the contract once OCHC
    had taken the work out of the hands of Argos Carpets and terminated the
    contract.

[28]

A
    trial judges interpretation of a contractual provision is entitled to
    substantial deference by a reviewing court:
Sattva Capital Corp. v. Creston
    Moly Corp.
, 2014 SCC 53, 373 D.L.R. (4th) 393.  In this case, therefore,
    deference is owed to the trial judges interpretation of clause 1.6.3.

[29]

As
    I will explain, I agree with the trial judges interpretation of clause 1.6.3, substantially
    for the reasons articulated by him.

[30]

I
    would describe the effects of clause 1.6.3, once triggered, as twofold.  First,
    it relieves the owner (OCHC) from any obligation to make payments to the
    contractor, including in respect of unpaid receivables, pending determination
    of the owners losses and damages arising from the contractors non-compliance
    with the Carpet Contract.  Secondly, it establishes the contractors (Argos)
    liability to the owner (OCHC) for an amount equal to the owners losses and
    damages occasioned by the contractors non-completion of the work provided for
    under the Carpet Contract.

[31]

Thus,
    properly read, clause 1.6.3 functions as a stop payment provision.  It is designed
    to halt the owners contractual obligation to make any payments to the
    contractor pending determination of the owners losses and damages arising from
    the contractors breach of contract.

[32]

In
    my opinion, the trial judge correctly held that clause 1.6.3 is neither a
    penalty nor a liquidated damages clause as those clauses are recognized under
    the established case law.

[33]

The
    authorities relied on by the appellants themselves compel this interpretive
    conclusion.  For example, in
Canadian General Electric Co. v. Canadian
    Rubber Co.
(1915), 52 S.C.R. 349, cited by the appellants, Sir Charles
    Fitzpatrick C.J. noted, at p. 351: A penalty is the payment of a stipulated
    sum on breach of the contract, irrespective of the damage sustained.  The
    essence of liquidated damages is a genuine covenanted pre-estimate of damage.
    In
Elsley v.

J.G. Collins Insurance Agencies Ltd.
, [1978] 2
    S.C.R. 916, Dickson J. (as he then was), writing for a unanimous Supreme Court,
    explained that, where liquidated damages are stipulated in a contract, the
    injured party may elect to take the sum stipulated without regard to his or her
    actual loss.  Where, however, the stipulated sum is properly to be seen as a
    penalty, the injured party may only recover proven damages and the amount
    recoverable may not exceed the sum stipulated: at p. 938.

[34]

Under
    these authorities, the critical common element is that both penalty and
    liquidated damages clauses specify a stipulated sum agreed on by the parties at
    the time of contract formation.

[35]

Clause
    1.6.3 of the Carpet Contract makes no mention of a stipulated or agreed sum
    recoverable on breach, whether as a penalty or otherwise.  In other words, it does
    not stipulate a sum, whether as the amount payable on breach or as the maximum
    amount recoverable upon proof of actual damage arising from a contractual
    breach.  Instead, the clause contemplates that, on breach of the Carpet
    Contract by the contractor, the owners damages and losses require assessment
    and the owner may cease payments to the contractor pending quantification of
    those damages and losses.  As the trial judge aptly observed, at para. 69 of
    his reasons, the amount of the owners losses and damages on jobs completed
    under the contract at any given time could vary widely.  Further, the fact that
    the amount of outstanding invoices owed to the contractor may eventually be set
    off against the quantified amount of the owners losses and damages does not
    convert clause 1.6.3 into a penalty or liquidated damages provision.

[36]

Accordingly,
    I would not give effect to this ground of appeal.

(2) and (3)
    Trial Judges Factual Findings

[37]

The appellants also contest two of the trial judges central findings of
    fact.  They argue that he erred by holding: i) OCHC was unaware that ACL, a
    corporate entity, was a party to the Carpet Contract; and ii) the appellants,
    in particular Foustanellas, were parties to the fraud perpetrated on OCHC.

(i)      Lack of knowledge of
    ACLs involvement

[38]

The
    issue whether OCHC knew the Carpet Contract was with ACL, rather than an
    unincorporated entity, was important to the parties at trial because, if OCHC had
    knowingly contracted with ACL, then its recourse for the recovery of any
    damages awarded to it for breach of contract would have been confined, as a
    matter of law, to ACL.  In other words, no recourse for damages for breach of
    contract would have been available as against Foustanellas in his personal
    capacity or as against the Estate.

[39]

The
    trial judge explicitly addressed the appellants claim that OCHC was aware of
    ACLs involvement in the Carpet Contract.  He rejected this claim, finding, at
    para. 35, that the fact that Argos business, in reality, was the business of
    ACL was never brought home or made clear to OCHC.

[40]

In
    so finding, the trial judge recognized that certain insurance certificates, required
    under the Carpet Contract, identified ACL as the relevant insured.  However, he
    accepted OCHCs evidence that these documents would not have come to the
    attention of OCHC senior management.  He further found, at paras. 35  36: i)
    Argos original bid, the Carpet Contract (including the subsequent renewal
    contracts) and the numerous invoices submitted to OCHC referred only to Argos
    Carpets; ii) Argos mode of performance under the Carpet Contract did not
    identify or suggest any involvement by ACL; and iii) the evidence at trial was
    bereft of anything that would [have led] OCHC to know it was doing business
    with a corporate entity.

[41]

These
    findings were open to the trial judge on this evidentiary record.  Absent
    palpable and overriding error, which has not been demonstrated, they are fatal
    to the appellants attack on the trial judges finding that OCHC was unaware
    that Argos business was that of ACL.

[42]

Moreover,
    the trial judge found as a fact, at para. 39, that Foustanellas and Grimes
    acted throughout their dealings with OCHC as the agents of an undisclosed
    principal  ACL.
[2]
Consequently, neither individual could be shielded from personal liability on
    the basis that OCHC knowingly contracted with ACL.  In respect of the damages
    awarded to OCHC for breach of contract ($144,933.19), the trial judge also
    held, and the parties appear to have accepted at trial, that OCHC was obliged
    to elect whether to pursue recovery against the individual defendants or their
    undisclosed principal.

[43]

In
    the event, OCHC elected to seek recovery of its damages for breach of contract
    as against ACL alone.  No such election was required for the damages awarded in
    respect of the defendants fraudulent conduct.  The appellants abandoned any
    challenge to the trial judges ruling regarding the ambit of OCHCs necessary
    election at a post-trial hearing before the trial judge.

[44]

In
    all these circumstances, the appellants challenge to the trial judges finding
    on this issue is unsustainable.

(ii)     Appellants
    liability for fraud

[45]

I
    reach a similar conclusion regarding the trial judges impugned finding the
    appellants were parties to the fraud against OCHC.

[46]

The
    appellants make three submissions in support of their attack on this critical
    finding.  First, they argue the trial judge erred by refusing to allow
    Foustanellas cross-examination to proceed through an interpreter.  According
    to the appellants, this error infected the trial judges assessment of
    Foustanellas credibility, on which the finding of fraud against him was based.

[47]

I
    would reject this argument.  The trial transcripts do not support the claim
    that Foustanellas was denied the assistance of an interpreter during his trial
    testimony, that the trial judge misapprehended the substance of his evidence,
    or that the trial transcripts are incomplete or inaccurate in any material way.

[48]

Foustanellas
    is from Greece and Greek is his first language.  About two hours of his
    examination-in-chief at trial were conducted without the aid of a
    Greek-speaking interpreter.  The transcripts indicate that, on that day, the
    trial judge expressed difficulty understanding some of Foustanellas responses
    to questions posed by Foustanellas counsel.

[49]

However,
    the transcripts also reveal: i) throughout the balance of Foustanellas trial
    testimony, including his cross-examination, an interpreter present in the
    courtroom was available to assist him as needed; ii) the trial judge expressly
    ruled the interpreter was to be available to Foustanellas during his
    cross-examination, at Foustanellas option; iii) Foustanellas expressed the
    desire to testify in English, as he had throughout his examination-for-discovery;
    iv) at no point during Foustanellas cross-examination did his counsel object or
    express any concerns about his clients comprehension of the questions posed; v)
    the trial judge concluded Foustanellas did not suffer from problems
    comprehending the English language but noted, rather, he sometimes spoke with a
    heavy accent; vi) the trial judge also confirmed he would intervene if he
    experienced any difficulty in understanding Foustanellas testimony; and vii)
    Foustanellas did not profess an inability to understand the English language,
    or request the assistance of the interpreter during his cross-examination.

[50]

In
    these circumstances, no prejudice to Foustanellas having been demonstrated, I
    would reject any suggestion that trial fairness was compromised by
    Foustanellas failure to testify with the aid of an interpreter at trial, or that
    the trial judges evaluation of his credibility was tainted on this basis.  In
    my opinion, the record belies these contentions.

[51]

Second,
    the appellants submit, in effect, that the trial judge erred by placing undue
    weight on Grimes discovery evidence that Foustanellas and, through him, ACL,
    were aware of the falsified invoices delivered to OCHC.  I disagree.

[52]

The
    trial judge rejected Foustanellas evidence he was unaware of the falsification
    of the invoices delivered to OCHC.  He accepted Grimes discovery testimony
    that Foustanellas was complicit in the fraudulent overbilling scheme.  This was
    the trial judges call to make.

[53]

The
    trial judge provided detailed reasons (12 paragraphs) for his rejection of
    Foustanellas denial of any knowledge of the fraudulent invoices and his
    attempt to shift sole responsibility for the scheme onto Grimes.  He cited
    numerous examples of inconsistencies and contradictions in Foustanellas
    evidence in support of his conclusion that Foustanellas denial was
    implausible (at para. 81) and impossible to believe (at para. 86).

[54]

Further,
    the trial judges finding the appellants were parties to the fraudulent
    invoicing scheme was also supported by the evidence at trial that Foustanellas:
    i) structured Argos original bid so as to generate a 10  15% profit margin,
    whereas the invoices delivered to OCHC provided for a profit margin of 25  40%
    for Argos; ii) conducted weekly sales staff meetings, on a one-to-one basis,
    including weekly meetings with Grimes and his assistant; iii) reviewed all the
    invoices sent to OCHC prior to their delivery (unless he was absent from the
    office, in which case his dispatcher would review the invoices); iv) believed
    that he would be bankrupt if the invoice amounts contemplated by the Carpet
    Contract were in fact billed to OCHC; v) never called Grimes or his assistant
    to account after the falsified invoices were discovered, instead continuing to
    employ them and, in Grimes case, compensating him above the level of his
    earned commissions in the year the fraud was discovered; and vi) maintained
    throughout that Argos was justified in overbilling OCHC.

[55]

In
    light of this evidence, in my view, the appellants fall far short of
    establishing that the trial judges finding, at paras. 86  87, that
    Foustanellas was well aware of and acquiescent in the falsely inflated
    invoicing scheme is tainted by any palpable, let alone overriding, error.

[56]

Finally,
    the appellants argue the finding of fraud against ACL cannot stand because
    Grimes and his assistant acted without the authority of ACL and beyond the
    scope of their employment duties.  Again, I disagree.

[57]

This
    argument founders on the trial judges finding Foustanellas both knew of and
    sanctioned the fraud against OCHC.  There was no evidence Foustanellas objected
    at any point to Grimes activities.  To the contrary, the evidence indicated he
    approved the falsified invoices and insisted on a return to Argos under the
    Carpet Contract in excess of that agreed upon by the parties.  Furthermore, the
    trial judge made no finding that the actions of Grimes and his assistant were
    unauthorized or exceeded the scope of their authority.  The trial judge held that
    both Grimes and Foustanellas acted throughout as the agents of their
    undisclosed principal, ACL.  The trial judges findings are therefore
    dispositive of this ground of appeal.

(4)     Reductions
    for Wastage and Quality Deficiencies

[58]

The
    appellants also challenge the trial judges holdings that the amount otherwise
    owing to Argos under the Carpet Contract should be reduced by 25% on account of
    improper billing for wastage and 20% by reason of the provision of substandard
    quality carpet, under pad and installations.  It is unnecessary to review the
    appellants submissions on these issues in detail.  The following
    considerations defeat this ground of appeal.

(i)      Wastage reduction

[59]

First,
    the price schedule set out under the Carpet Contract clearly delineated the
    unit price for items and services to be billed to OCHC.  The Carpet Contract
    permitted Argos to charge OCHC for the amount of carpet and under pad actually
    installed in OCHC units, at a stipulated price per installed square yard.  Neither
    the price schedule nor the other terms of the Carpet Contract provided for any
    charges on account of carpet or under pad wastage on installation.

[60]

Second,
    I did not understand the appellants to challenge the legitimacy of a reduction
    in the amount owing to Argos on account of the improper billing of OCHC for
    wastage.  Rather, they argue the percentage reduction allowed by the trial
    judge was unjustified and a lower percentage reduction was appropriate.  I
    would not accede to this argument.

[61]

The
    appellants rely on Foustanellas discovery evidence, read-in as part of OCHCs
    evidence at trial, that wastage on Argos carpeting installation jobs was
    generally in the range of 10  15%.  They also submit the evidence of the
    amount of carpet and under pad shipped by Argos during the currency of the
    Carpet Contract established that 12.88% more carpet than under pad was
    delivered to OCHC.  This, they contend, was the only objective evidence at
    trial of the amount of carpet wasted or discarded in the OCHC installations.

[62]

However,
    there was evidence at trial, led by the appellants themselves, supporting the
    wastage discount employed by the trial judge.  The trial judge noted that it
    was not possible, on the evidence before him, to ascertain the precise amount
    of carpeting and under pad wastage on Argos installations at the OCHC units.
    But the appellants called Bill Damianakos, the president and owner of an ACL
    competitor, as a witness at trial.  His testimony regarding the usual amount of
    wastage in comparable OCHC residential units undercut Foustanellas discovery
    evidence on this issue.

[63]

Damianakos
    testified that his company, Adelphia Floor Surfaces Limited, had installed
    carpet in OCHC residential units after OCHC terminated its relationship with
    Foustanellas and ACL in 2006. Damianakos evidence was that, in his experience,
    the installation of carpeting in OCHC residential units could result in wastage
    of between 20%  40%.  The trial judge, as he was entitled to do, accepted
    Damianakos independent testimony and, based on it, employed 25% as a
    reasonable approximation of the wastage experienced with ACLs installations in
    the OCHC units.  This was a conservative estimate, based on the lower end of
    the wastage range identified by Damianakos.  The appellants can scarcely be
    heard to complain about the trial judges acceptance of relevant evidence that
    they elected to adduce at trial.

[64]

In
    the end, the trial judges assignment of weight to the evidence and his
    appreciation of the evidence as a whole attract great deference from this
    court.  I see no reversible error in his choice of a 25% reduction on account
    of wastage.

(ii)     Quality
    reduction

[65]

I also do not accept the appellants submission the trial judge erred by
    allowing a 20% reduction in the amount otherwise owed to Argos under the Carpet
    Contract due to Argos provision of substandard quality product and
    installations.

[66]

As
    part of its investigations into Argos compliance with the Carpet Contract, OCHC
    retained a carpet expert, Daniel W. Bernazzani, to undertake an evaluation of
    the carpet and under pad supplied and installed by Argos.  Bernazzani examined
    22 OCHC units, made detailed notes of his observations of the carpet, its
    appearance and mode of installation in each unit, and tested available samples
    of carpet and under pad.

[67]

At
    trial, OCHC relied on Bernazzanis assessment of the quality of the work
    performed and materials supplied by Argos.  Bernazzani identified a litany of
    quality deficiencies and inconsistencies in the product supplied and installed
    by Argos in the OCHC units.  He offered the opinion that the quality of the
    carpet, under pad and installation work at the examined units was of
    substantially lesser quality than that specified, leading to what he viewed as
    an anticipated 30  40% diminution in the normal life expectancy of the product
    furnished by Argos.

[68]

Contrary
    to the appellants submission before this court, the trial judge held, at para.
    59, that the selection of the units examined by Bernazzani was fair and random
    and sufficient to support a broader inference concerning the overall quality of
    the work performed and materials utilized by Argos.  This finding was also open
    to the trial judge on the whole of the evidence.

[69]

The
    trial judge also took account of reasonable wear and tear on the product
    installed in the OCHC units, as well as the negative effect on the life
    expectancy of the OCHC carpets arising from the usage characteristics of OCHC
    tenants.  Having regard to these factors, as well as Bernazzanis opinion
    evidence, the trial judge selected 20% as a fair percentage reduction on account
    of quality deficiencies in the Argos product and installations.

[70]

I
    regard the trial judges consideration of this issue as fair and thorough.  He
    addressed all the available evidence regarding the quality frailties in the Argos
    product and installations at the OCHC units, including Bernazzanis expert testimony.
    His assignment of weight to this evidence was squarely within his domain.

[71]

Moreover,
    the 20% reduction for quality deficiencies allowed by the trial judge fell well
    below the
minimum
reduction in the life expectancy of the OCHC carpets
    (30%) identified by Bernazzani as flowing from the inferior quality of the
    goods Argos had supplied and the installation services it had performed.  On
    this issue, as on the wastage issue, the trial judges conservative approach can
    only have benefitted the appellants.

[72]

In
    my view, this ground of appeal fails.

(5)     Punitive Damages Award

[73]

The
    trial judge awarded punitive damages based on his findings that the appellants,
    together with Grimes, participated and acquiesced in an intentional and
    deliberate scheme, over a significant period of time, to defraud OCHC and
    induce it to pay more for the carpet installations than was called for under
    the Carpet Contract.  On the trial judges findings, to effect their wrongful
    scheme, the defendants falsified more than 1,000 invoices delivered to OCHC.

[74]

The
    appellants do not challenge the quantum of the punitive damages awarded by the
    trial judge.  Rather, they submit the trial judge erred by awarding any
    punitive damages at all.  They say an award of this type was irrational, unwarranted,
    and disproportionate in the circumstances of this case.

[75]

I
    disagree.  I see no error in the trial judges approach to the question whether
    an award of punitive damages was warranted in this case, or in his application
    of the governing principles concerning such an award to the facts as he found
    them.

[76]

The
    trial judges reasons confirm that he was alert to the principles governing the
    decision to award punitive damages and the quantification of the proper amount
    of such an award.  He expressly referred, at para. 92, to the Supreme Courts
    affirmation in
Whiten v. Pilot Insurance Co.
, 2002 SCC 18, [2002] 1 S.C.R.
    595, at paras. 36  37 (citing
Hill v. Church of Scientology of Toronto
,
    [1995] 2 S.C.R. 1130), that punitive damages are limited to misconduct that
    represents a marked departure from ordinary standards of decent behaviour"
    and that such awards are intended to punish the defendant, rather than
    compensate a plaintiff.  Further, the trial judges reasons reveal he
    appreciated the distinction between compensatory and punitive damages, as well
    as the discrete objectives of the latter: punishment, deterrence and
    denunciation.

[77]

The
    trial judge recognized, at paras. 94  95, that a punitive damages award must
    be the product of reason and rationality and proportionate in the
    circumstances: see
Whiten
, at paras. 108  126.  He held, at paras. 96
    and 99  101:

I assess the defendants, individually and collectively, as
    bearing a high degree of blameworthiness for their fraudulent falsification of
    the amounts of carpeting installed at OCHC and the corresponding overcharging.
    It was an intentional scheme, covered up under false invoices, and carried out
    over a significant period.

An award of punitive damages must rationally relate to the
    amount fraudulently taken or the cost of the harm inflicted, without appearing
    to be a tariff or mere license fee, but without being overly punitive.

A punitive award should certainly deter Argos Carpets and any
    other trader from fraud in its trading transactions to the detriment of its
    trading partners.  It should be borne in mind that not only did Argos Carpets
    specifically harm OCHC, its unreasonably low bids kept its competitors from
    trading with OCHC and injured competition in the marketplace as well. General
    deterrence, as well as specific deterrence, must be part of the dimensions of
    proportionality.

In regard to the fifth and sixth
Whiten
aspects of an
    awards proportionality, there is nothing in the evidence to suggest that
    beyond the bounds of this judgment there will be any other civil or criminal
    penalties inflicted on the defendants for their misconduct.  I see the
    advantage gained by them through their misconduct as financial profit, on a
    significant scale, by virtue of conducting business on the basis of a
    competitive bidding process that the defendants abused.

[78]

The
    trial judge concluded that punitive damages are justified in this case.  In my
    opinion, on this record, his conclusion is unassailable.  No request for the
    reassessment of the quantum of the trial judges punitive damages award having
    been made, I would uphold the award, subject to the considerations next
    discussed.

[79]

Two
    other issues arise concerning the trial judges punitive damages ruling.  First,
    the trial judge held all the defendants liable for punitive damages on a joint
    and several basis.  With respect, the trial judge erred by awarding punitive
    damages on this basis.  Punitive damages arise from the misconduct of the
    particular defendant against whom they are awarded.  Joint and several
    responsibility for such an award therefore cannot be imposed:
Hill
, at
    para. 195.  See also, in the context of Quebec civil law,
Cinar Corporation
    v. Robinson
, 2013 SCC 73, [2013] 3 S.C.R. 1168, at paras. 120  132, in
    particular, at para. 127.   Consequently, the trial judges assignment of joint
    and several responsibility for the punitive damages he awarded cannot stand.

[80]

In
    light of this conclusion, a second issue arises: how should liability for
    payment of the punitive damages awarded by the trial judge be allocated?

[81]

During
    oral argument, OCHC took the position that, as between Foustanellas and ACL,
    Foustanellas should be fixed with liability for the full amount of the punitive
    damages award.  The appellants did not object to this proposal, nor did they
    argue that the quantum of the award should be reduced on the ground the trial
    judge also held the Estate liable for punitive damages.

[82]

On
    the trial judges findings, it is clear a high degree of moral blameworthiness
    attaches to Foustanellas for the serious fraudulent activity established by
    OCHC at trial.  It is undisputed that Foustanellas is both the sole owner and
    the directing mind of ACL.  For the purpose of the fraud against OCHC, no
    distinction need be drawn between the acts of ACL and those of Foustanellas.
    ACL was directed and controlled by Foustanellas.  ACL was merely the conduit through
    which the fraudulent activities were channelled.  In these circumstances, I
    agree with OCHCs submission that Foustanellas should remain liable for the
    punitive damages assessed by the trial judge.

[83]

The
    trial judges award of punitive damages as against the Estate poses an
    additional difficulty, however.  As mentioned earlier, the Estate is not a
    party to this appeal.  It has not challenged its liability for punitive damages
    or the other amounts awarded against it by the trial judge.  Indeed, the court
    was informed that, apart from a brief attendance by counsel for the Estate
    during the first two days of this 29-day trial, the Estate did not participate
    at trial.

[84]

None
    of the parties to this appeal raised the question whether an award of punitive
    damages may be made against the estate of a deceased individual for wrongful
    conduct of the deceased during his or her lifetime.  In their factum, the
    appellants simply submitted: [N]o retribution or deterrence will be achieved
    by an award of punitive damages as against [the Estate].  The finding that [Grimes]
    conduct amounted to a fraud is  adequate denunciation.  Subsequently, during
    oral argument, the appellants reversed their position, without explanation,
    arguing that the Estate must bear most of the responsibility for the punitive
    damages award, or at least as much as that borne by Foustanellas.  OCHC said
    only that some percentage of the punitive damages award should be allocated to the
    Estate.  It did not suggest a particular percentage or a rationale for
    allocating the award as between Foustanellas and the Estate.

[85]

The
    question whether, under Ontario law, an award of punitive damages may be made
    against, rather than in favour of, a deceaseds estate appears to be a matter
    of first impression for this court.
[3]
Following the appeal hearing, the court invited further submissions from the
    parties on this question.

[86]

In
    their supplementary submissions, the appellants argued that this court should
    hold that punitive damages cannot be awarded against the estate of a deceased person,
    as a matter of law.  OCHC, relying on
de Montigny v. Brossard (Succession)
,
    2010 SCC 51, [2010] 3 S.C.R. 64, which involved an award of punitive damages
    under the law of Quebec, maintained that punitive damages may and should be
    awarded against an estate where the award can be said to serve a rational
    purpose.

[87]

Having
    considered the entirety of the parties submissions, I conclude that it is
    unnecessary to resolve this important issue in this case.  I say this for the
    following reasons.

[88]

Punitive
    damages are intended to achieve the objectives of retribution (punishment),
    specific and general deterrence, and denunciation:
Whiten
, at para.
    94.  I would reject the proposition that none of these objectives can be met by
    an award against the Estate.  General, as well as specific, deterrence is a relevant
    consideration in determining whether an award of punitive damages is rational,
    proportionate, and warranted in a given case.  It does not necessarily follow
    that the social utility of an award of punitive damages is defeated by the
    death of the wrongdoer:
de Montigny
, at para. 50.

[89]

That
    said, in the circumstances of this case, I see no need to punish or deter the
    Estate beneficiaries for Grimes wrongful conduct when the objectives of
    punitive damages  including general deterrence  can readily be met by an
    award against Foustanellas.  I again emphasize that Foustanellas was the
    driving force behind the fraudulent scheme.  As the trial judge put it, at
    para. 84 of his reasons, he was the boss and ruled the roost.  I also take
    account of the appellants own position on this issue, detailed in their
    original factum and in their supplementary submissions to this court, that no
    punitive damages should be awarded against the Estate.

[90]

In
    all these circumstances, it is my view the punitive damages award as against
    the Estate should be set aside.  For the reasons given, such an award is
    unnecessary and would serve no rational purpose that cannot otherwise be
    satisfied by maintaining the trial judges award of punitive damages as against
    Foustanellas alone.  I do not read OCHCs supplementary submissions as arguing
    vigorously to the contrary.

(6)     Costs Award

[91]

On
    the disposition of this appeal that I propose, the appellants challenge to the
    trial judgment fails in all respects.  I note that neither at trial nor before
    this court, did the Estate seek relief from an adverse costs award.  I
    therefore see no basis for appellate interference with the trial judges ruling
    that OCHC is entitled to its costs of the trial as against all the defendants.

[92]

That
    leaves only the question of the scale of costs awarded to OCHC.  The appellants
    argue the trial judge erred by awarding costs in favour of OCHC on a full
    indemnity basis given that OCHC itself, as well as Argos, ignored many of the
    terms of the Carpet Contract.

[93]

A
    reviewing court may interfere with a trial judges discretionary costs award only
    where the award is plainly wrong, or based on an error of principle:
Hamilton
    v. Open Window Bakery
, 2004 SCC 9, [2004] 1 S.C.R. 303.  In my view, the
    appellants have failed to establish either basis for appellate intervention in
    this case.

[94]

There
    is no doubt that the costs awarded by the trial judge for this lengthy trial ($630,475.47)
    are significant.  However, the trial judge provided clear and detailed reasons
    for his costs disposition, including his ruling that full indemnity costs were
    warranted.  In so doing, he considered the applicable principles regarding the
    awarding of elevated costs.  He recognized such costs should be awarded only in
    limited circumstances involving reprehensible conduct: at paras. 14  15.  He
    noted, at para. 20, that the defendants engaged in a course of fraudulent
    conduct involving inordinate and blatant wrong-doing; that OCHC, the victim
    of the fraud, is a public housing corporation; and that ACLs success on its
    counterclaim, which OCHC conceded, was relatively minor.  To this, I would add
    that the defendants misconduct continued after the expiry of the original
    Carpet Contract.  When renewal contracts were entered into and approved by
    Foustanellas, the delivery of falsified invoices to OCHC continued until OCHC
    discovered the fraud of its own accord.

[95]

Having
    regard to these factors, it was open to the trial judge to award costs on the
    full indemnity scale.  I see no reversible error in his discretionary ruling on
    this issue.  His award is neither plainly wrong nor infected by an error of
    principle.

Disposition

[96]

Accordingly,
    for the reasons given, I would set aside the trial judges award of punitive
    damages as against ACL and the Estate.  In all other respects, I would dismiss
    the appeal.

[97]

OCHC
    was successful on appeal in respect of all issues raised by the appellants.  I
    would therefore award OCHC its costs of the appeal, fixed in the agreed total
    amount of $45,000, inclusive of disbursements and H.S.T.

Released:

APR 21 2015                                    E.A.
    Cronk J.A.

EAC                                                 I
    agree S.E. Pepall J.A.

I
    agree M.L. Benotto J.A.

[1]
Argos bid formed the basis of four separate contracts between Argos and OCHC,
    each pertaining to one of four OCHC housing districts.  The relevant terms of
    the contracts were identical.  The contracts and associated renewal contracts
    are referred to in these reasons, collectively, as the Carpet Contract.

[2]
I note that Foustanellas own counsel argued that ACL was an undisclosed
    principal.  Before trial, Foustanellas and Grimes moved to have OCHCs action
    dismissed as against them on the basis that ACL was an undisclosed principal
    and OCHC had already elected to sue ACL, thus relieving the appellants, as
    agents, of liability.  The trial judge dismissed their motion: 2010 ONSC 4370.

[3]
I do not read this courts decision in
Plester v. Wawanesa Mutual Insurance
    Co.
(2006), 213 O.A.C. 241, 269 D.L.R. (4th) 624, leave to appeal to
    S.C.C. refused, [2006] S.C.C.A. No. 315, as determinative of this issue.


COURT OF APPEAL FOR ONTARIO

CITATION: Prince Edward County Field
    Naturalists v. Ostrander Point GP Inc., 2015 ONCA 269

DATE: 20150420

DOCKET: C59008

Cronk, Juriansz and Epstein
    JJ.A.

BETWEEN

Prince Edward County Field
    Naturalists

Appellant (Respondent on Cross-Appeal)

and

Ostrander Point GP Inc., as general partner
    for and on

behalf of Ostrander Point Wind Energy LP
and

Director,
    Ministry of the Environment

Respondents (
Appellant
    on Cross-Appeal
)

Eric K. Gillespie and Erin Wallace, for
    the appellant Prince Edward County Field Naturalists

Sylvia Davis and Sarah Kromkamp, for
    the respondent the Ministry of the Environment

Neil Finkelstein, Douglas Hamilton and
    Brandon Kain, for the respondent Ostrander Point GP Inc.

John B. Laskin and Alex Smith, for the
    intervener Canadian Wind Energy Association

Stephen Hazell, for the intervener
    Nature Canada

Chris G. Paliare and Andrew K. Lokan,
    for the intervener Prince Edward County South Shore Conservancy

Heard: December 8, 2014

On appeal from the judgment of the
    Divisional Court (Justices Ian V. B. Nordheimer, Maria T. Linhares de Sousa and
    Kevin W. Whitaker), dated February 20, 2014, with reasons reported at 2014 ONSC
    974, setting aside in part a decision of the Environmental Review Tribunal,
    dated July 3, 2013.

Juriansz J.A.:

A.

introduction

[1]

On December 20, 2012, the Director for the
    Ministry of the Environment (the Director), granted the respondent, Ostrander
    Point GP Inc. (Ostrander), a Renewable Energy Approval (REA). REAs are
    granted under the
Green Energy Act, 2009
, S.O. 2009, c. 12, Sched. A
    and amendments made under the
Environmental Protection Act,
R.S.O.
    1990, c. E.19 (
EPA
). The REA granted to Ostrander permits it to
    construct and operate a wind farm consisting of nine wind turbines on a parcel
    of Crown land in Prince Edward County.

[2]

The appellant, Prince Edward County Field
    Naturalists (Field Naturalists), opposes the Ostrander project. It filed an
    appeal of the Directors decision to grant the REA, pursuant to s. 142.1(3)(b)
    of the
EPA
, claiming that the Ostrander project would cause serious
    and irreversible harm to a variety of animal and plant species and the natural
    environment, namely birds, bats, butterflies, turtles and alvar plants and the
    alvar ecosystem.

[3]

Another group, the Alliance to Protect Prince
    Edward County (the Alliance), also filed an appeal. It sought to establish
    that the project would cause serious harm to human health.

[4]

The Environmental Review Tribunal found that the
    project would not cause serious harm to human health and dismissed the
    Alliances appeal. It also rejected the submissions that the project would
    cause serious and irreversible harm to birds, bats, butterflies, and alvar
    plants and the alvar ecosystem. It did, however, conclude that the project
    would cause serious and irreversible harm to one animal species, the Blandings
    turtle. The Tribunal allowed the Field Naturalists appeal with respect to the
    Blandings turtle and revoked the REA.

[5]

The Field Naturalists appealed to the Divisional
    Court from the Tribunals dismissal of their appeal regarding serious and
    irreversible harm to birds and alvar. Ostrander and the Director appealed from
    the Tribunals finding of serious and irreversible harm to the Blandings
    turtle and its decision to revoke the REA. The Divisional Court dismissed the
    Field Naturalists appeal and allowed the appeal of Ostrander and the Director.
    It set aside the Tribunals finding of serious and irreversible harm to the
    Blandings turtle and the revocation of the REA.

[6]

The Field Naturalists were subsequently granted
    leave to appeal to this court. Ostrander cross-appeals, claiming the Divisional
    Court erred in dismissing its fresh evidence application.

[7]

The main question before this court is whether
    the Divisional Court identified the appropriate standard of review and applied
    it correctly. For the reasons that follow, I would allow the appeal in part. I
    would restore the Tribunals conclusion that the project will cause serious and
    irreversible harm to the Blandings turtle. I would, however, dismiss the
    appeal from the Divisional Courts finding the Tribunal erred in how it dealt
    with remedy. I would remit the issue of what remedy is appropriate back to the
    Tribunal to decide after giving the parties the opportunity to be heard.

B.

Factual Background

(1)

The Ostrander Project

[8]

In Ontario, a wind energy farm developer cannot
    construct a wind energy project without first obtaining an REA from the Director.

[9]

The REA issued to Ostrander, allows it to construct
    its wind farm project on a 324-hectare parcel of land known as the Ostrander
    Point Crown Land Block (the Project Site). Each turbine would require
    excavation and construction of an octagonal concrete platform 18 m in diameter.
    The platform for each turbine would be approximately 3 m in depth and would be
    anchored into the bedrock.

[10]

In addition, the project would require the building
    of 5.4 km of gravel roads on the Project Site to provide access to each of the
    nine turbines on the site during their construction and subsequently for their
    maintenance. The roads would also be open to the public for recreational
    purposes. The roads would be approximately 6 m wide with larger turnarounds. A
    gravel parking lot would also be built next to the transformer station, and
    crane pads measuring 20 x 40 m would be located next to the turbines to be used
    during construction and throughout the life of the project.

[11]

The Project Site is located on the south shore
    of Prince Edward County, one of the least developed areas of the County. It is a
    provincially significant wetland, known for its alvar vegetation. It provides
    habitat to Blandings turtle and the Whip-poor-will and serves as a migratory
    corridor for birds, bats and the Monarch butterfly.

(2)

The Blandings Turtle

[12]

Blandings turtle is a semi-aquatic, freshwater
    turtle that lives in northeastern and midwestern North America. It is spottily
    distributed in southern and central Ontario. It is currently designated as a threatened
    species under the Ontario
Endangered Species Act
,
2007
, S.O.
    2007, c. 6 (
ESA
) and the federal
Species at Risk Act
, S.C.
    2002, c. 29. The International Union of Conservation of Nature (part of the
    United Nations Environment Program) has designated the turtle as globally
    endangered. The exact size of the population of Blandings turtle at the
    Project Site, in Prince Edward County and throughout Ontario is not known.

[13]

Blandings turtles have a low annual
    reproductive output. Female turtles do not reach sexual maturity until they are
    18 or 20 years of age and not all females reproduce every year. A female turtle
    will lay 10  14 eggs once in a breeding season. Nest success is low due to
    predators, and hatchlings have a very low chance of reaching maturity. There is
    high risk of predation when they migrate from the nest to the wetland, and once
    in the wetland, it takes five to seven years to grow beyond the gape size.

[14]

Throughout its annual cycle, Blandings turtle
    uses a variety of wetland types, including emergent marshes, bogs, temporary
    pools and forested swamps. In most cases, a single wetland will not be able to
    accommodate all the turtles needs. Thus, most Blandings turtles travel
    overland and use several wetlands a year.

[15]

In the early summer, female turtles will travel
    upwards of 6 km to locate suitable nesting sites. Importantly, female turtles find
    the gravel shoulders and embankments of roadways to be particularly desirable
    nesting habitat. This increases the risk of mortality to adult females and
    hatchlings because they are easily killed by motor vehicles. Road mortality
    poses the most serious threat to Blandings turtle survival.

[16]

The Blandings turtle is also susceptible to
    predators, such as raccoons, foxes, skunks and coyotes. These predators
    typically attack Blandings turtle nests, and the threat is increased when the
    predators are able to use roadways to easily access nesting habitat.

[17]

Poaching is another serious threat to the
    Blandings turtle because it is an attractive, pleasant species and makes a
    desirable pet.

(3)

The
ESA
Permit

[18]

As part of the approval process, Ostrander was
    required to consider potential impacts of the project on species at risk and
    obtain a permit under s. 17(2)(c) of the
ESA
.
ESA
permits are
    issued by the Ministry of Natural Resources and exempt a person from the
    general prohibition on killing, harming or harassing a member of an endangered
    or threatened species and the prohibition on damaging the habitat of that
    species.

[19]

Ostrander successfully obtained an
ESA
permit
    exempting it from prosecution for killing or harming the Blandings turtle and
    the Whip-poor-will.

C.

The Tribunals reasons

[20]

The Tribunals jurisdiction to review the REA is
    found in s. 145.2.1(2) of the
EPA
, which provides:

The Tribunal shall review the decision of the
    Director and shall consider only whether engaging in the renewable energy
    project in accordance with the renewable energy approval will cause,

a)

serious harm to human health; or

b)

serious and irreversible harm to plant life, animal life or the
    natural environment.

[21]

The Tribunal conducted a 40-day hearing, in
    which it received 185 exhibits and heard testimony from 31 expert witnesses.
    Drs. Beaudry, Shilling and Edge and Ms. Gunson were called as experts to
    discuss the impact of the project on Blandings turtle.

[22]

The Tribunal concluded the project would cause
    serious and irreversible harm to the Blandings turtle population that uses the
    Project Site and surrounding area.

[23]

The Tribunals finding the project would cause serious
    and irreversible harm to Blandings turtle was not based on the construction
    phase of the project. The Tribunal was satisfied the special mitigation
    measures the respondent would undertake would adequately protect the turtle
    during that phase. However, the Tribunal concluded the continued existence of
    the access roads that would be built for the project would cause serious and
    irreversible harm after construction of the project was completed.

[24]

The scale adopted by the Tribunal defined the
    ambit of its serious and irreversible harm analysis. It considered whether the
    project would cause serious and irreversible harm to the population of turtles
    that use the Project Site and surrounding area (the Area). It did not
    consider the broader population of Blandings turtle in Ontario or Prince
    Edward County or the smaller scale of the population at the Project Site
    itself.

[25]

The Tribunal noted that this scale of population
    was used in Stantecs Blanding's Turtle Report, accorded with Dr. Edge's detailed
    description of the area, and was consistent with the area Dr. Beaudry discussed,
    which he referenced on maps during his testimony.

[26]

The Tribunal did not receive evidence of the
    exact size of the turtle population in the Area, but it accepted the evidence
    of Dr. Beaudry that the population size was likely quite small.

[27]

All the experts agreed that the continued
    existence of the roads constructed for the project risked causing serious harm
    to the turtle. They differed only about whether the proposed mitigation
    measures would prevent irreversible harm.

[28]

The Tribunal noted that the testimony of Ms.
    Gunson, Dr. Beaudry and Dr. Edge all accorded with the conclusion of the
    Stantec Report that accidental road mortality could have a significant negative
    impact on the local turtle population. Dr. Beaudry, in particular, testified
    the proposed 5.4 km of roads to provide access to each turbine would be located
    directly in the turtles critical habitat. This was particularly troubling
    considering Blandings turtles can travel upwards of 10 to 15 km per season in
    search of food, refuge, and nesting sites. He said that the likelihood that
    any turtle would cross one of the roads [in its annual cycle] is extremely
    high. The roads would also provide poachers and predators easier access to
    turtle habitat and nesting sites. Ms. Gunson testified that the access roads would
    have
indirect impacts, including habitat loss and fragmentation
    and changes to vegetation and hydrology.

[29]

While the Tribunal was mindful of the testimony
    of all the experts, it based its conclusion primarily on the evidence of Dr.
    Beaudry and Ms. Gunson. Both gave unreserved testimony that the project would
    cause serious and irreversible harm to the Blandings turtle population that
    uses the Area and that the proposed mitigation measures would not prevent that
    harm.

[30]

Dr. Beaudry testified he could give this opinion
    without knowing the exact population size at Ostrander point. He explained that
    the size of initial population would only affect the end-time when the
    population becomes extinct.

[31]

The Tribunal accepted Dr. Beaudrys testimony
    that it was unnecessary to know the exact population size to conclude the project
    would cause serious and irreversible harm. At para. 358, the Tribunal
    concluded:

There is certainly enough information for the
    Tribunal to make findings on the conservation status of the species, its life
    history traits that make it vulnerable to harm from the Project, the precise
    type of harm that the Project will cause, and the significance of this type of
    harm (road mortality and poaching) on Blandings turtle.

[32]

The Tribunal also found that the fact Ostrander had
    been granted an
ESA
permit did not determine whether the project would
    cause serious and irreversible harm to Blandings turtle. The Tribunal
    explained that before issuing the
ESA
permit, the MNR considered
    whether the project would have an overall benefit to the species as a whole in
    Ontario, whereas the Tribunal considered the status of the Blandings turtle
    population at the Area. As well, the Tribunal found the mitigation measures
    that the
ESA
permit required for the Blandings turtle would not
    adequately address the harm to the turtle in the Area.

[33]

After reviewing all the evidence, the Tribunal
    concluded that the mortality resulting from the continued existence of the
    access roads would cause serious and irreversible harm to the Blandings
    turtles at the Area:

The Tribunal finds that mortality due to
    roads, brought by increased vehicle traffic, poaching and predators, directly
    in the habitat of Blandings turtle, a species that is globally endangered and
    threatened in Ontario, is serious and irreversible harm to Blandings turtle at
    Ostrander Point Crown Land Block that will not be effectively mitigated by the
    conditions of the REA

[34]

The Tribunal revoked the decision of the
    Director to grant the REA to Ostrander.

D.

The divisional Court

[35]

The Divisional Court held that the reasonableness
    standard applied to its review of the Tribunals interpretation of the test
    under s. 145.2.1(2) of the
EPA,
as well as to the Tribunals
    interpretation of the
ESA
and its relationship to the
EPA.
The
    Court also held that Ostrander could not attack the Tribunals findings of fact
    because the right of appeal under the
EPA
was confined to questions of
    law.

[36]

The Divisional Court found that the Tribunal
    made a number of errors that made its finding of serious and irreversible harm
    unreasonable:

i.

The Tribunal dealt with serious harm and
    irreversible harm together and failed to explain its reasons for concluding
    that the harm would be irreversible;

ii.

The Tribunal concluded there would be serious
    and irreversible harm without evidence of the size of the population of
    Blandings turtle, the current level of vehicular traffic on the Area and the
    degree of increase in vehicular traffic that would result from the project; and

iii.

The Tribunal failed to give sufficient weight to
    the existence of the ESA permit, the conditions attached to that permit, the
    obligation of the MNR to monitor and enforce the permit, and the fact that the REA
    expressly required Ostrander to comply with the ESA permit.

[37]

The court also found the Tribunal erred in how
    it dealt with remedy, namely:

i.

The Tribunal failed to give the parties an
    opportunity to address the issue of the appropriate remedy and thereby violated
    the principles of natural justice and procedural fairness;

ii.

The Tribunal made a clear error of law in
    finding that it was not in a position to alter the decision of the Director, or
    to substitute its opinion for that of the Director.

[38]

The Divisional Court allowed the appeal and set
    aside the Tribunals decision.

E.

Analysis

(1)

Proper Approach on Judicial Review

[39]

Though this case involves a statutory appeal, the
    parties relied on judicial review authorities in their submissions regarding
    the proper standard of review. This was entirely appropriate.

[40]

T
he Supreme Court has
    noted that "[t]he term 'judicial review' embraces review of administrative
    decisions by way of
both application for judicial review and statutory
    rights of appeal
":
Dr. Q. v. College of Physicians & Surgeons
    of British Columbia
, 2003 SCC 19, [2003] 1 S.C.R. 226, at para. 21
    (emphasis added). Moreover, t
he standards of review
    established by the Supreme Court of Canada in
Dunsmuir
    v. New Brunswick
, 2009 SCC 9, [2008] 1 S.C.R.
    1990, apply not only to judicial review, but also to statutory appeals from
    tribunals:
First Ontario Realty Corp. v. Deng
, 2011 ONCA 54, 274 O.A.C. 338, at para. 16.

[41]

Counsel for the intervener, Prince Edward County
    South Shore Conservancy, urges this court to apply the approach outlined in
Newfoundland and Labrador Nurses Union v. Newfoundland and Labrador
    (Treasury Board)
, 2011 SCC 62, [2011] 3 S.C.R. 708.
    In that case, the Supreme Court endorsed the observation of Professor Dyzenhaus
    that deference to an administrative tribunal requires respectful attention to
    the reasons offered or which could be offered in support of [the Tribunals]
    decision. Even if the reasons do not seem wholly adequate to support the
    decision, the court must first seek to supplement them before it seeks to
    subvert them: at para. 12, citing David Dyzenhaus, "The Politics of
    Deference: Judicial Review and Democracy", in Michael Taggart, ed.,
The Province of Administrative Law
(1997), 279, at p. 304.

[42]

Counsel for Ostrander submits this court should
    apply
Alberta (Information and Privacy Commissioner) v. Alberta Teachers
    Association
, 2011 SCC 61, [2011] 3 S.C.R. 654, where the Supreme Court cautioned
    a reviewing court against reformulating a Tribunals decision in a way that casts
    aside an unreasonable chain of analysis in favour of the courts own rationale
    for the result: at para. 54, citing
Petro-Canada v. British Columbia (Workers
    Compensation Board),
2009 BCCA 396, 276 B.C.A.C. 135, at paras. 53 and 56.

[43]

In this case, I find it unnecessary to address
    the different nuances in the decisions cited to us
[1]
. The parties all recognize
    that the reviewing court must adopt a deferential approach to the Tribunals
    decision. The legislature confided to the Tribunal the question whether the
    project should be disallowed because it will cause serious and irreversible
    harm to plant life, animal life or the natural environment. The Tribunal has
    the task of the balancing the different and potentially opposing values
    involved in answering that difficult question.

[44]

On appeal the question for the court is whether
    the Tribunals decision is reasonable. In determining whether the decision is
    reasonable, the reviewing court is concerned with justification, transparency
    and intelligibility of the Tribunals reasons:
Dunsmuir,
at para. 47.
    It is sufficient if the Tribunals reasons serve the purpose of showing that
    the result falls within a range of possible reasonable outcomes.

(2)

The Tribunals Serious and Irreversible Harm
    Analysis

[45]

The Divisional Court found that the Tribunals
    analysis was faulty in law because its reasons did not reveal a separate and
    intelligible analysis on the issue of irreversible harm that this court can
    review.

[46]

The Court did not quarrel with the Tribunals
    conclusion that the issue of serious and irreversible harm must be
    interpreted on a case by case basis. However, the Divisional Court stated that
    the Tribunal did not separate out, in the course of its determination of
    whether the test was met in relation to Blandings turtle, its analysis of the
    serious harm factor from its analysis of the irreversible harm factor.
    Therefore, the Divisional Court concluded that the Tribunals reasons were not
    intelligible.

[47]

I agree with the Divisional Court that the Tribunal
    was entitled to adopt a case by case approach to the application of the serious
    and irreversible harm test. I also agree with the Divisional Court that the
    two factors address very different issues. However, it is clear from its
    reasons as a whole that the Tribunal was aware the test involved both factors. For
    example, when considering potential damage to alvar vegetation and the alvar
    ecosystem, the Tribunal conducted an analysis where it kept the two factors
    separate: at paras. 616-617.

[48]

I disagree that the Tribunal erred in failing to
    separately consider whether the project would cause irreversible harm to the
    Blandings turtle.

[49]

At the hearing before the Tribunal, all the
    parties agreed that the project would inevitably result in an increase in
    Blandings turtle mortality. There was no dispute that loss of life of a
    threatened species with a slow reproductive rate constitutes serious harm.

[50]

The Divisional Court recognized this. It said it
    was unquestionable from the evidence that was placed before the Tribunal that
    there was a risk of serious harm to Blandings turtle from the project. It
    acknowledged that [g]iven the fragile status of Blandings turtle as a
    species, it would be difficult to characterize any increase in mortality
    arising from the Project as anything other than serious. For this reason, the
    Divisional Court concluded that the real issue was whether that harm was
    also irreversible.

[51]

I agree with this observation.

[52]

In the case of the Blandings turtle, the only
    real question for the Tribunal to decide was whether the increase in mortality
    resulting from the roads would be irreversible. On my reading, the Tribunals
    reasons are entirely focused on that question. In applying the serious and
    irreversible harm test in this case, there was no need for the Tribunal to
    separately analyze what was evident and not disputed  whether the harm was
    serious.

[53]

The Divisional Court also implies the Tribunal
    could not have reasonably relied on Dr. Beaudrys opinion because he too failed
    to distinguish between serious harm and irreversible harm. In fact, the court
    suggests that the Tribunals reliance on Dr. Beaudry may have led to the
    Tribunals own failure to separately discuss irreversible harm in its
    reasons.

[54]

Dr. Beaudry did testify that he would not
    distinguish between serious and irreversible harm. However, it must be
    remembered that he defined serious and irreversible harm as something that
    can lead to a lower reproductive output or a higher mortality rate, enough so
    to lead a local population to extinction. As discussed above, there was no
    dispute that any increase in mortality arising from the project was anything
    other than serious. Dr. Beaudrys focus on a mortality rate sufficient to lead
    the local population to extinction clearly encompasses both factors.

[55]

Dr. Beaudry explained that studies have shown
    that Blandings turtle adult survivorship is estimated at 96 percent. As soon
    as there is an additional two percent decline in survivorship, the population
    starts to decline fairly quickly. This rapid decline in population would
    constitute serious and irreversible harm, or in Dr. Beaudrys words, lead a
    local population to extinction. Dr. Beaudry also indicated that a decrease in
    annual survivorship in the one to two percent range can cause the population to
    decline, but the decline would occur at a slower rate.

[56]

Dr. Beaudry was of the view that the increased
    road mortality and decrease in reproductive output caused by the project would
    be sufficient to lead to such a decline in population.

[57]

The assessment of Dr. Beaudrys testimony was a
    matter for the Tribunal, not the Divisional Court.

[58]

I conclude that the Divisional Court erred in
    finding that the Tribunal erred in failing to engage in a separate analysis of
    serious harm and irreversible harm in this case. Whether the project would
    cause serious harm required no analysis and the Tribunals analysis focused on
    whether the harm was irreversible.

(3)

Lack of Numerical Data of Population Size and Traffic
    Flow

[59]

The Divisional Court held the Tribunal could not
    conclude there would be irreversible decline in the population, without any
    data on the size of the population impacted, the extent of road mortality
    currently experienced at the site, the current vehicular traffic on the site
    and the increase in vehicular traffic that would result from the project.
    Without this information, the Divisional Court said it would not seem possible
    to determine whether the mortality rate after the project was built would fall
    inside or outside the two to five percent mortality that the population could
    sustain.

[60]

With respect, the Divisional Court erred in this
    conclusion.

[61]

First, the Tribunal had expert evidence that numerical
    data of the population level and of the increase in vehicular traffic was not
    needed to support the conclusion there would be serious and irreversible harm.
    The Tribunal accepted that evidence. As I have said, it was not for the
    Divisional Court to assess the credibility of expert evidence and conclude that
    the Tribunal should not have accepted it.

[62]

Second, the Tribunal did have some evidence of the
    magnitude of population, mortality rate and traffic volume. That evidence was
    not expressed in numbers, but numbers without context lack meaning. The number
    of Blandings turtle, no matter what that number is, satisfies the criteria for
    the turtle to be classified as threatened under the
ESA
and as
    endangered by the International Union for Conservation of Nature. Dr. Beaudry
    testified he expected the population in the Area was likely small. He added:
    I have
strong reasons to believe that the population is not large
(emphasis added).

[63]

The Tribunal also had some evidence about vehicular
    traffic on the existing and on the proposed roads. At the time of the hearing,
    the Project Site contained several kilometers of tertiary road that was
    passable only with four-wheel drive and all-terrain vehicles. The project would
    require the construction of an additional 5.4 km of roads providing access to
    each wind turbine. These access roads would be accessible by other forms of
    motor vehicle. Dr. Beaudry assumed the volume on the proposed roads would be
    low. Dr. Shilling estimated there would be, at most, a few cars a day. All
    the experts agreed that the roads would result in an increase of vehicular
    traffic within the Area.

[64]

As summarized above, Dr. Beaudry and Ms. Gunson
    explained in detail how the local population would be affected by the project
    roads. They would lead to greater turtle mortality and a consequent decrease in
    reproductive output. While Dr. Beaudry may not have used numerical measures of population,
    vehicles and traffic data and mortality rates, his testimony was based on a
    sense of the magnitudes involved. Dr. Beaudry also proceeded on what the
    Tribunal described as the best case scenario. He ignored the natural fluctuations
    due to climate or an increase in predator populations that small or thinly
    distributed populations can suffer by assuming the population would be stable apart
    from road mortality. As well, the Tribunal had the evidence of Ms. Gunson who testified
    there was no direct correlation between traffic volume and mortality.

[65]

As well, it must be remembered all the experts
    agreed that the roads would harm the turtle. They differed only about whether
    the proposed mitigation measures would prevent irreversible harm. The
    Tribunals conclusion that the mitigation measures would not be effective left it
    with unanimous expert evidence that the roads would harm the turtle and the
    evidence of Dr. Beaudry that the serious harm could not be adequately mitigated
    and would be irreversible.

[66]

The Divisional Court did say that mathematical
    precision was not required, but it seems to me the court thought it necessary the
    Tribunal be able to make calculations using quantitative orders of magnitude that
    proved that road mortality would lead to a decline in the population resulting
    in eventual extinction. I do not accept that. It was for the Tribunal to decide
    whether the qualitative indications of magnitude the experts proceeded upon provided
    an adequate base for their conclusions.

[67]

The Divisional Court also stated the Tribunal
    needed to know the turtles population size in Prince Edward County and in all
    of Ontario. There is nothing in the
EPA
to support this suggestion.
    The scale to be considered in assessing whether there will be serious and
    irreversible harm is entirely within the expert Tribunals authority to decide.

[68]

When considered in light of all the evidence, I
    am satisfied the Tribunal could reasonably accept the evidence of Ms. Gunson
    and Dr. Beaudry that the project would cause serious and irreversible harm
    without having specific numerical data on the turtles population size, the volume
    of traffic, and the rate of mortality. I am also satisfied that the Tribunals
    reasons for accepting the opinions of these experts are intelligible, and its
    conclusion there would be serious and irreversible harm falls within the range
    of reasonable outcomes and should not be disturbed.

(4)

The
ESA
Permit

[69]

The Divisional Court also found the Tribunal
    erred in failing to attach proper weight to the
ESA
permit and failing
    to adequately explain the conflict between the MNRs decision to issue the
    permit and its own conclusion.

[70]

I have no difficulty in understanding the Tribunals
    explanation of the different results. The Tribunal pointed to the evidence of
    an MNR official who testified that in granting the
ESA
permit, the MNR
    concluded that the project would bring an overall benefit to Blandings
    turtle
in Ontario
. On the other hand, the Tribunal explained it considered
    a much smaller scale of population and assessed the projects impact on the
    local population of Blandings turtle in the Area.

[71]

In any event, the
ESA
permit was not
    binding on the Tribunal. Rather the permit expressly states that it does not
    release Ostrander from the obligation to obtain permission under or to comply
    with all applicable federal, provincial and municipal laws. Hence, Ostrander
    was obliged to comply with the
EPA
s requirement that it obtain an REA
    and abide by the decision of the Tribunal if the REA were appealed.

[72]

I agree with the Tribunals comment that [a]lthough
    [Ostrander] is bound by the
ESA
Permit, a contravention of which may
    lead to prosecution under the
ESA
, for the Tribunal's purposes in this
    analysis it is simply evidence relevant to conditions to the REA, which must be
    assessed as would any other condition.

[73]

The Tribunal carefully considered the mitigation
    measures required by the
ESA
permit and concluded they were incomplete
    and would not be effective. The Tribunal exercised its independent judgment and
    found that the evidentiary value of the permit was outweighed by the expert
    evidence introduced. In doing so, the Tribunal was carrying out its distinct
    statutory mandate under s. 145.2.1(2) of the
EPA.

[74]

In my opinion, therefore, the Divisional Court
    erred by concluding the Tribunal erred in how it dealt with the
ESA
permit.

(5)

The Tribunals Approach to Remedy

[75]

After concluding that the Tribunals finding of
    serious and irreversible harm should be set aside, the Divisional Court went on
    to find that the Tribunal erred in dealing with remedy.

[76]

First, the Divisional Court found the Tribunal
    failed to accord the parties procedural fairness when it decided to revoke the
    REA without hearing from them. This remedy was of such consequence that
    procedural fairness required the Tribunal allow the parties to make
    submissions.

[77]

Second, the Divisional Court concluded the Tribunal
    erred in law by taking a limited view of its remedial jurisdiction. The
    Divisional Court focused on the Tribunals remark that it was not in a
    position to alter the decision of the Director, or to substitute its opinion
    for that of the Director. The Divisional Court said this statement was plainly
    wrong because it is clearly contradicted by the express wording of s.
    145.2.1(4)(c). Section 145.2.1(4)(c) authorizes the Tribunal to "alter the
    decision of the Director, and, for that purpose, the Tribunal may substitute
    its opinion for that of the Director."

[78]

Before addressing the appeal of the Divisional
    Courts finding the Tribunal committed these errors, it is necessary to deal
    with the cross-appeal.

(a)

Cross-Appeal

[79]

After the Tribunals decision was released,
    Ostrander took steps to obtain the MNRs agreement to lease the property at the
    Project Site to it so that it could prohibit public access to the roads
    constructed on the site. On November 15, 2013, the Minister approved an Impact
    Monitoring Plan under which the new access roads would be closed to the public.
    The
ESA
permit, which incorporates the Impact Monitoring Plan by
    reference, now requires that the new access roads be closed to the public.

[80]

On appeal to the Divisional Court, Ostrander tendered
    evidence of the steps it was taking to have the roads closed to the public as
    fresh evidence. The Divisional Court dismissed Ostranders fresh evidence application
    for two reasons. First, it found that Ostrander could have led the evidence
    before the Tribunal if it had exercised reasonable diligence. The Divisional
    Court reasoned that Ostrander knew that road mortality was an issue at the time
    of the Tribunal hearing, and it could have taken steps to lease the property
    and close the access roads prior to the end of the hearing. If it had done so,
    Ostrander could have led evidence of the roads closure before the Tribunal.

[81]

The second reason for dismissing the fresh
    evidence application was that, in the Divisional Courts view, the fresh
    evidence pertained to the facts. The Divisional Court noted that its
    jurisdiction on the appeal was limited to questions of law under s. 145.6 of
    the
EPA.
In its appeal to the Divisional Court, Ostrander argued that
    the Tribunal had made palpable and overriding errors of fact and that a
    palpable and overriding error of fact amounts to a question of law. The Divisional
    Court considered it would be unfair to allow Ostrander to advance that argument
    by changing the underlying factual evidence that was before the Tribunal.

[82]

In my view, the Divisional Court applied the
    fresh evidence test too strictly. I would not have expected Ostrander to have
    taken steps to close the roads at the time of the Tribunal hearing. The parties
    were not in a position to address remedy without knowing the Tribunals
    decision on the merits. As the Divisional Court observed later in its reasons:

There were many different attacks launched
    against the Renewable Energy Approval. There was an allegation of harm to human
    health, to Blanding's turtles, to birds, to bats, to butterflies and to alvar.
    It would, of course, be unknown to the parties whether any of these allegations
    of harm would be made out and, if so, which ones. It follows from that
    practical reality that the nature of the appropriate remedy might well vary,
    perhaps considerably, depending on the harm that was found to exist. For
    example, the appropriate remedy for harm to human health might be very
    different from the appropriate remedy for harm to alvar.

[83]

Ostrander could not reasonably have been
    expected to address the appropriate remedy in relation to each of the many
    different attacks mounted by the Field Naturalists and the Alliance.

[84]

I do not agree that the fresh evidence was
    tendered solely to address factual issues. Questions before the court included
    whether the Tribunal failed to provide the parties with procedural fairness and
    whether the Tribunal misinterpreted its statutory remedial authority. These are
    questions of law. The fresh evidence provides some illumination of these
    questions. It shows concretely what Ostrander could have contributed had it been
    accorded the opportunity to address the issue of the appropriate remedy.

[85]

I would allow the cross-appeal and admit the
    fresh evidence.

(b)

Analysis of The Tribunals Approach to Remedy

[86]

I approach the matter somewhat differently than did
    the Divisional Court but reach the same result that the Tribunal should have
    accorded the parties the opportunity to address remedy.

[87]

I am not satisfied the Tribunal made the clear
    error of law identified by the Divisional Court. I do not read the Tribunals
    reasons to suggest that, as a matter of law, it lacked the authority to alter
    the decision of the Director and substitute its opinion for that of the
    Director. That said, I find it difficult to discern what the Tribunal meant by
    this remark. For that reason I cannot regard the Tribunals decision on remedy
    to be reasonable. In addition, I agree with the Divisional Court that, in the
    circumstances of this case, the Tribunal should have allowed the parties to
    address remedy.

[88]

I begin by observing that the Tribunal was well
    aware of the terms of s. 145.2.1(4). In the title of its reasons on remedy, the
    Tribunal queried whether it should revoke the decision of the Director, by
    order direct the Director to take some action, or alter the decision of the
    Director. In para. 636, the Tribunal set out the complete text of s.
    145.2.1(4) and stated that it could do one of the following:

(a)     revoke the decision of the Director;

(b)     by order direct the Director to take
    such action as the Tribunal considers the Director should take in accordance
    with the EPA and the regulations; or

(c)     alter the decision of the Director,
    and, for that purpose, the Tribunal may substitute its opinion for that of the
    Director.

[89]

After setting out its statutory remedial
    authority, the Tribunal reviewed documents that indicated the government, as a
    matter of policy, intended that the Ostrander Crown Land Block should be
    available to the public for recreational uses. Some of the documents reviewed
    emanate from the Ministry of Natural Resources, for example the Non-Forestry
    Road-Use Management Strategy Declaration, attached to the Work Permit issued by
    the MNR and the MNRs Free Land Use Policy (PL.3.03.01). However, the REA,
    issued by the Director of the Ministry of the Environment, is not among the
    documents reviewed. In fact, the REA itself does not address whether the access
    roads should be open to the public. Perhaps what the Tribunal meant was that
    the governments road policy was beyond the authority of the Director who
    issued the REA, and the Tribunals authority to interfere with the Directors
    decision was no greater than the Directors own authority.

[90]

This, however, cannot be the case. The Tribunal
    specifically referred to the Director, saying it was not in a position to
    alter the decision
of the Director
, or to substitute its opinion for
    that
of the Director
 (emphasis added). It is apparent the Tribunal
    did not mean that the publics access to the roads was rooted in some broad
    government policy that was beyond the authority of the Director and hence its
    own. It is necessary to consider what else the Tribunal might have meant.

[91]

The Tribunal went on to say, Whether or not
    Crown land should be closed to public access in order to allow a wind
    development to proceed is a value judgment that is not within the purview of
    the Tribunal to make. It added, At its essence, it is a decision whether the
    Ostrander Point Crown Land Block will be used for wind energy generation, rather
    than current Crown land uses which do not involve road development.

[92]

These observations might suggest the Tribunal considered
    that its role did not extend to making the value judgment about which of two different
    and incompatible government policies should be given effect.

[93]

This too cannot be the meaning of the Tribunals
    remark. The Tribunal did choose between the two incompatible government
    policies. The effect of the remedy the Tribunal granted, revocation of the
    Directors decision, was to decide the government-approved wind project would
    give way to the governments policy that the Crown land should be available to
    the public for recreational use. The Tribunal must have meant something else.

[94]

Another view of what the Tribunal meant is to
    note it said it was not in a position to alter the decision of the Director,
    not that it lacked the authority to do so. This might be lead to the inference the
    Tribunal meant it lacked sufficient information about the governments
    attitudes towards its two competing government policies to exercise its legal
    authority to choose between them. If so, this would provide support for the
    Divisional Courts conclusion the Tribunal should have allowed submissions on
    remedy. The Director, in particular, was a party and could have shed light on
    the governments attitude.

[95]

I am reluctant to conclude the Tribunal made an
    obvious error of law in regard to a basic provision of its home statute, but I
    am unable to understand what the Tribunal meant in remarking it was not in a
    position to alter the Directors decision. The remark was a pivotal link in
    the Tribunals justification of its choice of remedy. The Tribunal said it was
    as a result of its remark that it revoked the decision of the Director. As I
    am unable to understand the Tribunals reasons for choosing the remedy it
    ordered, I am unable to regard the Tribunals choice of remedy as reasonable.

[96]

Whatever the Tribunal meant by the remark, it is
    clear the Tribunal either adopted a limited view of its remedial power or
    considered that it lacked the information necessary to exercise it. Whether one
    or the other, the Tribunal should have provided the parties with the opportunity
    to address remedy. The potential limitation of the Tribunals remedial power
    was a new issue that the Tribunal introduced itself. The parties might have
    provided helpful submissions on the following: the proper interpretation and
    application of s. 145.2.1(4) as it affects the scope of the Tribunals remedial
    power; the ambit of the Directors authority; the relevant government policies
    and how they intersected at the site; and the governments preferred remedy. I
    have already noted that the Director was a party before the Tribunal.

[97]

I also agree with the Divisional Court that,
    given the broad and varied range of attacks launched against the REA, it was
    not realistic to expect the parties to address the appropriate remedy at the
    end of the hearing of the merits without knowing what the Tribunals findings
    were in regard to the broad range of alleged harms. Without the contributions
    of the parties on the question of remedy, it is not surprising the Tribunal
    found itself not in a position to consider the full range of remedial
    options.

[98]

While I conclude the Tribunal erred by failing
    to allow the parties to address the scope of its remedial jurisdiction and what
    the appropriate remedy was,
I reject Ostranders
    submission that this court should exercise its jurisdiction under s. 134(1) of
    the
Courts of Justice Act
, R.S.O. 1990, c. C.43

and
permit the project to proceed in light of the fresh evidence.

[99]

In making this submission, Ostrander points out
    that the Tribunals finding of serious and irreversible harm arose from the
    fact that the new access roads could be used by public vehicles and the fresh
    evidence shows that is no longer the case. Thus, it submits there is no reason
    to send the matter back to the Tribunal.

[100]

This submission is without merit. It is inconsistent with
    Ostranders position, successful on appeal, that the parties should be accorded
    the opportunity to address remedy. As well, that the Tribunal will allow the
    project to proceed upon the roads closure should not be regarded as a foregone
    conclusion. I note the Tribunal had evidence of how the proposed access roads
    would cause harm to the turtles habitat quite apart from collisions with motor
    vehicles. Finally, the Tribunal has yet to determine the scope of its remedial
    jurisdiction in the context of this case.

F.

Disposition

[101]

I would allow the appeal in part. I would allow the appeal on the merits
    and restore the Tribunals conclusion that the project will cause serious and
    irreversible harm to the Blandings turtle. I would allow the cross-appeal and
    the fresh evidence application. I would dismiss the appeal from the Divisional Courts
    finding that the Tribunal erred in dealing with remedy. I would remit the
    matter back to the Tribunal to address remedy after giving the parties the
    opportunity to be heard.

[102]

In light of the mixed success, this is not a case for costs.

Released: April 20, 2015

(EAC)
    R.G. Juriansz J.A.

I
    agree E.A. Cronk J.A.

I agree Gloria Epstein J.A

[1]
See
Lemus v. Canada
    (Citizenship and Immigration)
, 2014 FCA 114, 372 DLR (4
th
)
    567, for a discussion of the differences between the two decisions.