Illustrating the adage that an indemnity is only as good
as the person giving it, a recent case from the Ontario
Environmental Review Tribunal demonstrates the serious exposures a
vendor may encounter when contaminated property is sold subject to
a contractual indemnity without adequate security.
In Superior Fine Papers Inc. v. Director, Ministry of the
Environment  O.E.R.T.D. No. 22, the vendor had entered into
an agreement to sell a paper manufacturing site with known
environmental issues. The business was sold as a going concern, but
the transaction was structured so that the vendor paid the
purchaser $4.5 million to acquire the site and assume all but a
specified number of obligations. This assumption of liability was
duly documented in an Environmental Indemnity. The purchaser took
the money, failed to clean up the site, and subsequently went into
receivership. Along came a new buyer, who paid for the property and
even assumed the obligations of the Indemnity, but who also failed
to complete the clean-up claiming lack of funds. The MOE issued an
order naming the original vendor, the first purchaser (who did not
appeal), and the impecunious buyer.
In a decision accompanied by lengthy reasons, the Tribunal
considered the jurisdictional and fairness arguments put forward by
the parties, and upheld the order with some modifications. With
respect to the original vendor, who would be put in the position of
paying for the clean-up twice, the Tribunal found that the fact
that the vendor had paid another party to remediate the site did
not relieve the vendor of its statutory liability exposure as a
prior owner and operator of the site, observing that the vendor had
failed to secure the performance of the remediation when it knew,
or ought to have known of its own continuing statutory liability
The Imperial Oil refinery pled guilty to one offence for discharging a contaminant, coker stabilizer, thermocracked gas, into the natural environment causing an adverse effect and was fined $650,000...
Ontario's Ministry of the Environment and Climate Change continues to roll out its Climate Change Action Plan with its proposed GHG guide for projects that are subject to the province's Environmental Assessment Act.
In June, 2016, Justice Faieta of the Ontario Superior Court of Justice awarded damages of $57,712.31 plus interest against legal counsel who failed to file a claim within the required limitation period.
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