R. v. Kalia Resources Corp., 2023 BCPC 176

Citation: R. v. Kalia Resources Corp. 2023 BCPC 176 Date: 20230731 File No: 36408-1 Registry: Fort St John IN THE PROVINCIAL COURT OF BRITISH COLUMBIA REX v. JOSEPH KITZKE AND KALIA RESOURCES CORP. REASONS FOR JUDGMENT OF THE HONOURABLE JUDGE D.T. REEVES Counsel for the Crown: G. McDonald and S. Cassell Counsel for the Defendant: C. Leggett Place of Hearing: Fort St. John , B.C. Date of Hearing: March 29, 30, 31, April 6, and October 18, 2022 Date of Judgment: July 31, 2023

Introduction [ 1 ] Mr. Kitzke is the sole shareholder and directing mind of Kalia Resources Corp., a company located in Fort St. John and in the business of pumping, transporting and then disposing of domestic human waste from local residential properties. Following an investigation by area Conservation Officers, charges were laid and this court conducted a voir dire regarding a number of alleged Charter breaches. That decision, R. v. Kalia Resources , 2022 BCPC 304 was released on October 18, 2022 and I will not recount the facts found again here. On November 10, 2022, Mr.

Kitzke on behalf of himself and Kalia Resources Corp. entered a guilty plea to the first count of the information for unlawfully introducing or causing or allowing to be introduced into the environment waste produced by a prescribed activity or operation, contrary to sections 6(3) and 120(3) of the Environmental Management Act . Mr. Kitzke stands before the court today for sentencing. [ 2 ] As a sentence, the Crown is seeking a fine of no more than $80,000 including a mandatory 15% victim fine surcharge, with 10 years time to pay, plus an order that for five years Mr.

Kitzke shall not use the Kalia lagoon system located at the property for commercial purposes absent being lawfully licensed. Counsel for Mr.

Kitzke joins the Crown in recommending the five year prohibition on non-licensed used of the Kalia lagoon system, however citing collateral issues including administrative penalties resulting from other business activities, pending civil forfeiture actions by the Province regarding the sewage-vacuum truck seized, local public notoriety that resulted from these proceedings and the attendant loss of business income, counsel seeks a fine of $5,000 plus the victim fine surcharge, payable over 5 years. [ 3 ] For the reasons I will set out below, I am sentencing Mr.

Kitzke, and through him Kalia Resources Corp, as follows: a fine of $35,000 plus Victim of Crime Surcharge payable over 10 years, and the 5 year prohibition jointly recommended. [ 4 ] In arriving at this sentencing decision I considered the underlying facts upon which this guilty plea was entered as set out in my Kalia decision, as well as the following: 1. Additional facts as provided by Crown and Counsel; 2. Applicable sentencing case law 1. Additional facts as provided by Crown and Counsel [ 5 ] By consent a

summary of business records, communications with Northern Health, administrative penalty decisions and admissions were provided for me to consider, as well as an outline of the background of the Kalia business enterprise . The property upon which Kalia and Mr. Kitzke operate was originally engineered for the purpose of providing a septic lagoon system serving the Charlie Lake Elementary School, and rated to accept no more than 22.7 Cubic Meters of domestic waste per day. The property was permitted to accept this volume of waste under a permit issued by the Provincial Ministry of Health.

Due in large part to the existence of the licensed lagoon system, when Charlie Lake regional municipality switched to a central sewage system and thus no longer required the lagoon system, Mr. Kitzke’s mother purchased the property in order to support his business of pumping out area residential sewage and safely disposing of it. [ 6 ] Some time after purchasing and using the property for the disposal of domestic wastewater, Mr.

Kitzke was informed that upon transfer of the property the pre-existing permit was missing and no longer valid, and thus he was no longer permitted to dump third-party domestic human waste into the lagoon system. Mr. Kitzke commissioned Golder Associates who performed a detailed soils and hydrogeological assessment of the site and lagoon facility, and in a technical report confirmed that the lagoon system could continue to safely accept up to the designed volume of domestic human waste per day. Mr. Kitzke also performed additional work to the lagoon system in order to ensure it remained safe to use.

Despite this, the Province determined that it was the responsibility of the Ministry of the Environment pursuant to the Environmental Management Act , SBC 2003, c53 , and not the Ministry of Health, to issue the sought after commercial permit, which the MoE declined to do for undisclosed reasons in 2016. Following this, Mr. Kitzke elected to continue using the lagoon system for the purpose of supporting his commercial enterprise of pumping, transporting and disposing of residential human waste within the Charlie Lake and Fort St.

John area, knowing he was in breach of the regulations. [ 7 ] It was conceded that over the period covered by the charge, Mr. Kitzke and Kalia Resources avoided paying approximately $118,000 in waste discharge fees that otherwise would have been collected by using the regional commercial dumping station. This involved gross revenue of over $180,000 from 1,305 clients, and a volume of 1.29 million litres, or 129 cubic meters, of human waste product that was improperly dumped into the Khalia septic lagoon system. I pause here to note that there is no evidence that Mr.

Kitzke ever exceeded the daily safe limit into the lagoon system, and having accepted the Golder report I do not find that human domestic waste was ever introduced into the environment unsafely – it was however handled contrary to the governing Acts and Regulations. 2. Applicable sentencing case law [ 8 ] Offences and Penalties under the EMA are set out at Division 1 of

Part 10, and at s.120(3) prescribes that a person who contravenes s.6(3) commits an offence and is liable on conviction to a fine not exceeding $1,000,000 or imprisonment for not more than 6 months, or both. [ 9 ] The BC Court of Appeal in R. v. Brown , 2010 BCCA 225 adopted the reasoning found in R. v. Terroco Industries Ltd ., 2005 ABCA 141 as the leading case regarding the sentencing p rinciples engaged by environmental offences.

These sentencing principles require a “special approach” which includes examining the degree of culpability, any prior records or incidents involving the authorities, acceptance of responsibility, damage or harm done to the environment due to the offending behaviour, and deterrence ( Terroco at para

34). Deterrence remains a key component of sentences for breaches of environmental protection statutes, and when the maximum finesunder an environmental statute are high, it is a message that low or nominal fines do not meet the goal of the statutes (Terroco para 53,54). [10] With regards to culpability, Mr. Kitzke knowingly and repeatedly dumped domestic human waste into the Kalia lagoon systemover the period charged, involving over 1,300 customers and 1.29 million litres of domestic human waste.

The Crown suggested, and Iaccept, that the culpability for what otherwise would be an egregious pattern of flagrant disregard for provincial regulations regarding thesafe disposal of this waste is somewhat reduced. This is due to the confusing, bureaucratic and frankly frustrating manner by which twoprovincial ministries, Health and the Environment, were unable to determine how a pre-existing permit to use the very same septiclagoon system went missing, much less provide guidance to Mr. Kitzke on necessary steps for him to regain such a permit. Mr.

Kitzkegrew frustrated with this inept response and acted on his own, thus is culpable. I do note however, he commissioned an engineeringreport to confirm the suitability of the lagoon system, then took additional steps to further ensure he would comply with any provincialrequirement. Notwithstanding his efforts and expenses, the province failed to engage in a meaningful way. In all the circumstances Ihave heard, this does mitigate his actions. [11] Mr.

Kitzke had no prior enforcement convictions or administrative actions regarding his domestic waste disposal activities, andhas accepted responsibility for his actions through this guilty plea. I also accept his expression of remorse to this court through counsel. Inote as well, while reviewing what if any harm to the environment was caused or placed in jeopardy, that no real environmental harmwas created. Mr. Kitzke used a well-prepared lagoon facility that he had confirmed would meet or exceed provincial requirements andhad done just that for decades while servicing the local elementary school.

This was not an offence of introducing domestic human wastedirectly into the environment – this offence falls closer to an administrative offence than such conduct. His conduct was serious, howevernot as serious as it could have been. [12] The Crown suggested I consider in guidance the sentence imposed in the case of Brown, which involved a couple that clearedland and otherwise intentionally impaired approximately 8,000 square meters of fish habitat.

The Appeal court held that havingdetermined a restoration order which was estimated at $50,000 - $100,000 to remediate the damage was not suitable in thecircumstances, a substantial fine was required and upheld a fine for $30,000 despite the fact the family had a gross annual income ofapproximately $60,000.

In that instance the couple had been warned not to act as they did and were found to have clearly flouted thesewarnings, with significant environmental damage resulting. [13] I was also provided the case of R. v. 1760957 Alberta Ltd. and Radium Resort Group Ltd, Cranbrook 33115-2-C (B.C.P.C.),where two extra-provincial companies were convicted of permitting fires that released noxious substances into the atmosphere. Thecompanies were fined a total of $200,000 and directed to publish the fine amount and the underlying facts in a local newspaper.

In settingthis fine Judge Sheard noted the offences were negligent, not intentional; carried out in the face of warnings; but that the company fullycomplied with the investigation and made efforts to assist affected residents; however that some harm had been done to the environmentand area residents. The court held that these fines, while significantly less than the maximum allowed under the Act, were more than alicencing fee for illegal activity or the cost of doing business given the size and financial means of the company. [14] I was urged to consider as well the criminal sentencing case of R. v.

Pham, 2013 SCC 15. That case involved consequences of asentence that had been imposed at trial, which as a collateral consequence would place Mr. Pham’s immigration status in jeopardy. Thecourt held that collateral consequences are any consequences that impact the particular offender which flow from the sentence imposed,and may be taken into account as personal circumstances as an application of the sentencing principles of individualization and parity,and possibly rehabilitation (para 11).

Nevertheless, consideration of collateral consequences remains a matter of discretion for thesentencing judge (paras 12, 14). I am urged here to accept as collateral consequences an administrative penalty for $30,000 levied againstMr. Kitzke due to the fire that was burning on his property, which remains under appeal. I am also urged to consider that the provincialDirector of Civil Forfeiture has applied to seize the sewage truck used in this offence, which has an estimated value of $29,000. Lastly Iam told that Mr.

Kitzke’s revenue has been drastically reduced as the result of this offence and attendant notoriety and loss of customers,and he has been forced to sell off personal and corporate assets to get by. Although not disputed by the Crown, I do note that Mr.

Kitzkehas failed to provide any evidence of these losses aside of a self-generated income statement for the period June 1, 2020 – February 1,2021, and January to May 2023. [15] Having considered the law as set out in Pham, I do accept as collateral consequences the likely loss of the sewage truck, as wellas public notoriety and loss of customers, that resulted from this offence. Mr.

Kitzke however knew full well the nature of what he wasdoing and the risk that offence related property might be subject to forfeiture, just as he knows the local attitudes and proclivity for gossipin the community, and thus I give reduced weight to them. As for the administrative penalty resulting from the fire, it flows from actsdistinct from this offence and I gave minimal weight to that. [16] I did find another case of assistance, given that the Crown has not alleged any actual harm resulted to the environment as theresult of this offence. In R. v. Valley Paper Cycle Ltd.

Et al, 2006 BCPC 188 upheld at HMTQ v. Ambrosi, 2008 BCSC 886, thedefendant ran a landfill business and accepted large quantities of gypsum that was supposed to be recycled rather than simply stored. Inresponse to concerns over alleged over-storage of gypsum, the Storage of Recyclable Material Regulation, BC Reg 133/92 was madewhich prohibited storing more than 1,000 tonnes of gypsum for periods in excess of 6 months unless indoors. When the company, andMr.

Ambrosi as its directing head, were convicted of flagrantly breaching that regulation, the defendant argued that as no harm had beendone to the environment any penalty imposed should be nominal (para 12). At paras 14 – 20 the court discussed this argument, and beganby conceding that in the past technical or “paper offences” including the failure to obtain a permit or comply with a licensing conditionor order, saw courts imposing minimal penalties.

Valley Paper Cycle at para 15 noted however that this tendency was reversed in R. v.Gulf Canada Corporation (NWT TC), where the early novel and faddist approach to environmental protection thathad commenced in the 1960s, was now properly considered a serious national and international concern. Deliberate permit violations,even absent harm to the environment, were characterized as a harm inflicted upon the process of environmental protection, as it involvedundermining legislative goals and objectives, and engendered disrespect for the law (Gulf Canada at p. 267).

As a result, any fineimposed “must be such as to encourage respect for the law and compliance with its requirements in the future. It must be cheaper tocomply [with the law]… [the fine] must be meaningful to the defendant.. [and] secure the defendant’s attention to its obligation, and, if italso fixes some attention upon the defendant, so much the better” (p. 271).

[ 17 ] In aggravation, first I find the duration and number of instances of violating the EMA by improperly dumping domestic human waste into an unapproved site. I also find it aggravating that this was done for a commercial purpose and with full knowledge of and intent to avoid the regulatory oversight Mr. Kitzke was well aware of. As in Brown at para 19 , this was a clear flouting of the law as Mr. Kitzke knew the regulatory process involved however once he became frustrated with the government inaction he took matters into his own hands. [ 18 ] In mitigation I find that firstly, Mr.

Kitzke has accepted full responsibility for his actions through his guilty plea. This is somewhat tempered as he did not fully cooperate with the investigation and this cannot be described as an early guilty plea, however I do find remorse in his actions. I also accept in mitigation the fact that he confirmed via the Golder report, and then further took remediation steps to ensure compliance, that the lagoon system he was dumping into was safe to accept the volume of domestic human waste that he dumped. Thus the level of harm or potential harm to the environment was very low. As well, Mr.

Kitzke had no prior involvement with environmental enforcement actions prior to the day of this incident. And lastly, I do take note of the failure by two provincial ministries – the ministry of the Environment and of Health – to address the situation that in part they helped create – land was sold to Mr. Kitzke’s mother with a pre-existing facility capable of doing exactly what he wished to do and did.

Through administrative error the prior permit was lost, and by bureaucratic intransigence and inertia neither ministry appeared capable of reissuing a new permit, or providing a reason for not permitting this activity. 3. Sentence [ 19 ] Having considered the aggravating and mitigating circumstances, and the collateral consequences of my sentence as outlined above, I will be sentencing Mr. Kitzke to a fine as urged by both the Crown and counsel for Mr. Kitzke. Pursuant to EMA s. 120(3), Mr. Kitzke shall pay a fine in the amount of $35,000 plus a 15% Victim of Crime Surcharge.

This fine and surcharge shall be payable over 10 years. [ 20 ] Also, pursuant to s. 127(

a) of the EMA : 5 year Probation Order Term with the following condition: For a period of five years you will not use the lagoons located at 12459 273 Road, Charlie Lake, British Columbia, for a commercial purpose unless you have a permit from the appropriate government agency. ______________________________ The Honourable Judge D.T. Reeves Provincial Court of British Columbia