$5.3M In Fines Against Sunrise Propane And Directors For Fiery Propane Explosion

On January 25, 2016, the Ontario Court of Justice (OCJ) imposed $5.3 million in fines plus victim fine surcharges (VFS) on Sunrise Propane Energy Group Inc., 1367229 Ontario Inc. (collectively, Sunrise Propane) and its two directors. The fines were for, among other things, discharging contaminants into the natural environment and failing to comply with a Provincial Officer's Order. The discharge resulted from an explosion and subsequent fire that occurred at Sunrise Propane's storage facility.

The Sunrise Propane incident, its unfortunate consequences and the magnitude of fines demonstrate that:

the definition of a discharge and what constitutes an "adverse effect" under the Environmental Protection Act (EPA) continues to expand, preventative systems and emergency response plans are important to satisfy environmental, health and safety obligations, industries involved in activities that may be hazardous for workers and/or the environment need to ensure regular communication among corporate directing minds, employees, external contractors and relevant regulators, and directors and officers can be personally liable where their company fails to comply with a ministerial Order and their company does not use the appeal mechanisms available. Facts- the Explosion

Prior to the explosion, Sunrise Propane's Downsview facility in Toronto often engaged in on-site truck-to-truck transfers of propane. In truck-to-truck transfers, big non-metered trucks pump propane into a metered truck. This has the legal effect of unlicensed on-site propane storage.

In 2006, the Technical Standards and Safety Authority (TSSA) issued a Director's Public Safety Order prohibiting truck-to-truck transfers of propane, unless the facility was licensed as a bulk plant. To obtain a license as a bulk plant and continue its business at the same level, Sunrise Propane required an expanded licensed fixed tank storage capacity.

After a number of delays, Sunrise Propane's contractor began installing a larger capacity tank in June 2008. During the installation, Sunrise Propane's facility continued to conduct truck-to-truck transfers.

On August 10, 2008, a series of explosions occurred at Sunrise Propane's facility during a truck-to-truck transfer of propane, causing contaminant discharge from fuel tanks.

On August 13, 2008, the Ministry of the Environment (MOE, now Ministry of the Environment and Climate Change, MOECC) issued a Provincial Officer's Order specifying control and...