Canada: Ontario Court Affirms Clean-Up Order Against Innocent Municipality

As appeared in Municipal Information Network.

The City of Kawartha Lakes (the "City") must clean up contamination that seeped into its municipal storm sewer system from a neighbouring basement, even though it was not responsible for causing the contamination. On May 28, 2012, the Ontario Divisional Court found that the Environmental Review Tribunal (the "Tribunal") was correct in upholding the clean-up order issued by the Director of the Ministry of the Environment.1

Facts

In late 2008, several hundred litres of furnace oil leaked from a basement of a property located in the City. The property owner's insurance company retained a consultant to begin remediation, during which it was discovered that furnace oil had entered into the City's municipal storm sewer system and culverts, and was being discharged into Sturgeon Lake. The consultant notified the Ministry of the Environment, and the Ministry, in turn, ordered the property owner to eliminate adverse effects caused by the spill and to restore the natural environment.

Section 157.1 of the Environmental Protection Act (the "Act") gives the provincial officer the power to order "any person who owns or has management or control of an undertaking or property" to take steps to "prevent or reduce the risk of a discharge of a contaminant into the natural environment from the undertaking or property" or to "prevent, decrease or eliminate an adverse effect that may result from" the discharge or presence of such a contaminant.2

By March 2009, the property owner's insurance coverage became insufficient to cover any clean-up efforts beyond the property boundary. By then, the property itself had sufficiently been remediated but contamination on the City's property still had the potential to impact Sturgeon Lake. Accordingly, in late March 2009, the Ministry issued an order against the City to take all reasonable steps to prevent discharge of the contaminant from its property. The City requested a review of this order by the Director who then confirmed the order on April 9, 2009.

The Tribunal Decisions

At the Tribunal level, the City unsuccessfully tried to argue that the clean-up order should not have been issued against an innocent party because it was unfair and contrary to the "polluter pays" principle.

In November 2009, the Tribunal granted the property owner's motion which prevented the City from leading evidence relating to the parties' fault and the reasonableness of any costs incurred in remediating the spill.3

The Tribunal heard the City's appeal in April 2010 and dismissed the case in July 2010.4 It found that the Act clearly contemplates some potential unfairness to innocent owners by "saddling" them with initial liability to carry out remediation.5 In the context of a migrating contaminant on the City's property, the appropriate action under the Act is for the City to take immediate measures to safeguard Sturgeon Lake and to leave questions about ultimate financial liability to another forum.6 The Ministry did not need to be satisfied that reimbursement to the City would be guaranteed before acting and, therefore, the clean-up order was sensible within this context.7

The Divisional Court Decision

By the time the City's appeal of the Tribunal's decision reached the Divisional Court in April 2012, it was moot as the City had already completed remediation in accordance with the cleanup order out of public interest. Both the City and the Ministry urged the Court to hear the appeal to help give guidance for future situations.

The City raised two main arguments on appeal:

(i) The Tribunal erred by limiting the City from calling evidence that spoke to the "fairness factors" when making a clean-up order.

(ii) The Tribunal breached natural justice when it refused to allow the City to lead certain evidence then held that it had not put forward an environmentally responsible solution in support of a revocation of the order made by the Director of the Ministry of the Environment.

The Divisional Court found that the Tribunal did not err and was reasonable for the following reasons:

1. Fault Not Required Consideration in Clean-Up Order

The City argued that it should have been permitted to lead evidence on who was at fault for causing the contamination. By finding this evidence irrelevant, the City argued, the Tribunal ignored earlier Divisional Court decisions with respect to fairness considerations in the Director's issuance of clean-up orders.

The Divisional Court rejected the City's argument. The Tribunal did not refuse to hear any evidence regarding the "fairness" factors. Rather, it held that if the evidence spoke to fault, that evidence was irrelevant to the decision it had to make which was to decide whether the Director's order should be confirmed. There was no need for the City to call such evidence to establish its innocence, as this was not in dispute.8

Previous decisions such as Appletex and Montague confirm that the Director may take into account the "fairness" factors in deciding whether to make an order under section 157.1 of the Act against a person who owns or has management or control of an undertaking or property. However, nothing holds that the Director must consider one or more of these factors in issuing a clean-up order.9

Section 157.1 of the Act makes no reference to fault and can be described as an "owner pays" mechanism.10 The Tribunal was entitled to guide its discretion to issue clean-up orders by following the Ministry's Compliance Policy. The policy clearly states that when a clean-up order is issued to more than one person, it is not the role of the statutory decision-maker to make findings of fault.11

To the extent that this violates the "polluter pays" principle, the Divisional Court found the Tribunal to be correct in finding that the City's complaint lies with the legislator who drafted the Act, rather than with the statutory decision-makers whose mandate is to act in accordance with the law.12 Here, the provincial officer was facing a migrating contaminant and an insolvent owner of the adjoining property where the contaminant had come from. The provincial officer acted reasonably by ordering the City – an innocent party - to do the clean-up. The Tribunal was reasonable in refusing to revoke the order by finding that the Ministry had exercised its discretion in a purposive manner consistent with the Act's purpose.13

2. Natural Justice Not Breached

The City then argued that the Tribunal breached the rules of natural justice by precluding it from leading certain evidence, then finding that the City had not led evidence of an environmentally responsible solution in support of a revocation of the clean-up order. The Divisional Court rejected this argument. The Tribunal did not preclude the City from calling evidence about how the environment would be protected if the order were to be revoked. The proposed evidence relating to fault would not assist the Tribunal in coming up with an environmentally responsible solution if it revoked the clean-up order. Accordingly, the Tribunal made no error in making this ruling.

Additional Remedies for Municipalities

When faced with seeping pollutants, innocent property owners may recover clean-up costs through civil litigation. However, municipalities also have additional remedies available to them by virtue of their municipal status. Section 100.1 of the Act allows a municipality to recover the costs for cleaning up a spill that it did not cause by issuing an order for payment to the owner of the pollutant or the person having control of the pollutant.14

In this case, the City issued cost recovery orders against the owner of the property where the contaminant originated, the fuel provider and the Technical Standards and Safety Authority.15 In 2010, the City also commenced civil litigation to recover costs from the parties. These parties appealed the City's order to the Tribunal which had the effect of staying the order. This appeal was adjourned pending resolution of the civil action. In March 2012, the Superior Court dismissed one part of the City's claim while allowing the negligence claim to continue against the insurance company, the adjuster and the environmental consultant.16

The decision serves as an important reminder to property owners that they can be ordered to undertake costly environmental remediation even if they have no part in causing the pollution in the first place. Unlike a regular property owner, however, municipalities also have additional remedies available to them by virtue of their municipal status.

Footnotes

1 2012 ONSC 2708 (Div Ct) [Divisional Court decision].

2 Ibid at para 14.

3 2009 CarswellOnt 7495, 48 CELR (3d) 95 (Env Rev Trib).

4 2010 CarswellOnt 5518, 52 CELR (3d) 273 (Env Rev Trib).

5 Ibid at para 41.

6 Ibid at paras 42-45.

7 Ibid at paras 43-45.

8 Divisional Court decision supra note 1 at paras 57, 61-62, 66.

9 Ibid at para 58.

10 Ibid at para 77.

11 Ibid at para 72.

12 Ibid at para 78.

13 Ibid at paras 79-80.

14 Ibid.

15 Ibid at para 17.

16 See Kawartha Lakes (City) v. Gendron, 2012 ONSC 2035 (Sup Ct).

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

To print this article, all you need is to be registered on Mondaq.com.

Click to Login as an existing user or Register so you can print this article.

Authors
Events from this Firm
7 Dec 2017, Webinar, Toronto, Canada

FEX Members Jeff Noble, BDO, and Caroline Abela, WeirFoulds LLP, invite you to a complimentary webinar series titled: All About Shareholders.

29 Oct 2018, Conference, Toronto, Canada

WeirFoulds Partner and co-chair, Technology and IP group will be speaking on the topic, "Artificial Intelligence (AI) and the Practice of Law. This session contains 1 hour and 30 minutes of Professionalism Content.

29 Oct 2018, Workshop, Toronto, Canada

WeirFoulds Partner Clare Burns is a Program Chair for the Conducting a Dependant Support Trial workshop hosted by The Advocates Society.

Similar Articles
Relevancy Powered by MondaqAI
Willms & Shier Environmental Lawyers LLP
 
In association with
Related Topics
 
Similar Articles
Relevancy Powered by MondaqAI
Willms & Shier Environmental Lawyers LLP
Related Articles
 
Related Video
Up-coming Events Search
Tools
Print
Font Size:
Translation
Channels
Mondaq on Twitter
 
Register for Access and our Free Biweekly Alert for
This service is completely free. Access 250,000 archived articles from 100+ countries and get a personalised email twice a week covering developments (and yes, our lawyers like to think you’ve read our Disclaimer).
 
Email Address
Company Name
Password
Confirm Password
Position
Mondaq Topics -- Select your Interests
 Accounting
 Anti-trust
 Commercial
 Compliance
 Consumer
 Criminal
 Employment
 Energy
 Environment
 Family
 Finance
 Government
 Healthcare
 Immigration
 Insolvency
 Insurance
 International
 IP
 Law Performance
 Law Practice
 Litigation
 Media & IT
 Privacy
 Real Estate
 Strategy
 Tax
 Technology
 Transport
 Wealth Mgt
Regions
Africa
Asia
Asia Pacific
Australasia
Canada
Caribbean
Europe
European Union
Latin America
Middle East
U.K.
United States
Worldwide Updates
Registration (you must scroll down to set your data preferences)

Mondaq Ltd requires you to register and provide information that personally identifies you, including your content preferences, for three primary purposes (full details of Mondaq’s use of your personal data can be found in our Privacy and Cookies Notice):

  • To allow you to personalize the Mondaq websites you are visiting to show content ("Content") relevant to your interests.
  • To enable features such as password reminder, news alerts, email a colleague, and linking from Mondaq (and its affiliate sites) to your website.
  • To produce demographic feedback for our content providers ("Contributors") who contribute Content for free for your use.

Mondaq hopes that our registered users will support us in maintaining our free to view business model by consenting to our use of your personal data as described below.

Mondaq has a "free to view" business model. Our services are paid for by Contributors in exchange for Mondaq providing them with access to information about who accesses their content. Once personal data is transferred to our Contributors they become a data controller of this personal data. They use it to measure the response that their articles are receiving, as a form of market research. They may also use it to provide Mondaq users with information about their products and services.

Details of each Contributor to which your personal data will be transferred is clearly stated within the Content that you access. For full details of how this Contributor will use your personal data, you should review the Contributor’s own Privacy Notice.

Please indicate your preference below:

Yes, I am happy to support Mondaq in maintaining its free to view business model by agreeing to allow Mondaq to share my personal data with Contributors whose Content I access
No, I do not want Mondaq to share my personal data with Contributors

Also please let us know whether you are happy to receive communications promoting products and services offered by Mondaq:

Yes, I am happy to received promotional communications from Mondaq
No, please do not send me promotional communications from Mondaq
Terms & Conditions

Mondaq.com (the Website) is owned and managed by Mondaq Ltd (Mondaq). Mondaq grants you a non-exclusive, revocable licence to access the Website and associated services, such as the Mondaq News Alerts (Services), subject to and in consideration of your compliance with the following terms and conditions of use (Terms). Your use of the Website and/or Services constitutes your agreement to the Terms. Mondaq may terminate your use of the Website and Services if you are in breach of these Terms or if Mondaq decides to terminate the licence granted hereunder for any reason whatsoever.

Use of www.mondaq.com

To Use Mondaq.com you must be: eighteen (18) years old or over; legally capable of entering into binding contracts; and not in any way prohibited by the applicable law to enter into these Terms in the jurisdiction which you are currently located.

You may use the Website as an unregistered user, however, you are required to register as a user if you wish to read the full text of the Content or to receive the Services.

You may not modify, publish, transmit, transfer or sell, reproduce, create derivative works from, distribute, perform, link, display, or in any way exploit any of the Content, in whole or in part, except as expressly permitted in these Terms or with the prior written consent of Mondaq. You may not use electronic or other means to extract details or information from the Content. Nor shall you extract information about users or Contributors in order to offer them any services or products.

In your use of the Website and/or Services you shall: comply with all applicable laws, regulations, directives and legislations which apply to your Use of the Website and/or Services in whatever country you are physically located including without limitation any and all consumer law, export control laws and regulations; provide to us true, correct and accurate information and promptly inform us in the event that any information that you have provided to us changes or becomes inaccurate; notify Mondaq immediately of any circumstances where you have reason to believe that any Intellectual Property Rights or any other rights of any third party may have been infringed; co-operate with reasonable security or other checks or requests for information made by Mondaq from time to time; and at all times be fully liable for the breach of any of these Terms by a third party using your login details to access the Website and/or Services

however, you shall not: do anything likely to impair, interfere with or damage or cause harm or distress to any persons, or the network; do anything that will infringe any Intellectual Property Rights or other rights of Mondaq or any third party; or use the Website, Services and/or Content otherwise than in accordance with these Terms; use any trade marks or service marks of Mondaq or the Contributors, or do anything which may be seen to take unfair advantage of the reputation and goodwill of Mondaq or the Contributors, or the Website, Services and/or Content.

Mondaq reserves the right, in its sole discretion, to take any action that it deems necessary and appropriate in the event it considers that there is a breach or threatened breach of the Terms.

Mondaq’s Rights and Obligations

Unless otherwise expressly set out to the contrary, nothing in these Terms shall serve to transfer from Mondaq to you, any Intellectual Property Rights owned by and/or licensed to Mondaq and all rights, title and interest in and to such Intellectual Property Rights will remain exclusively with Mondaq and/or its licensors.

Mondaq shall use its reasonable endeavours to make the Website and Services available to you at all times, but we cannot guarantee an uninterrupted and fault free service.

Mondaq reserves the right to make changes to the services and/or the Website or part thereof, from time to time, and we may add, remove, modify and/or vary any elements of features and functionalities of the Website or the services.

Mondaq also reserves the right from time to time to monitor your Use of the Website and/or services.

Disclaimer

The Content is general information only. It is not intended to constitute legal advice or seek to be the complete and comprehensive statement of the law, nor is it intended to address your specific requirements or provide advice on which reliance should be placed. Mondaq and/or its Contributors and other suppliers make no representations about the suitability of the information contained in the Content for any purpose. All Content provided "as is" without warranty of any kind. Mondaq and/or its Contributors and other suppliers hereby exclude and disclaim all representations, warranties or guarantees with regard to the Content, including all implied warranties and conditions of merchantability, fitness for a particular purpose, title and non-infringement. To the maximum extent permitted by law, Mondaq expressly excludes all representations, warranties, obligations, and liabilities arising out of or in connection with all Content. In no event shall Mondaq and/or its respective suppliers be liable for any special, indirect or consequential damages or any damages whatsoever resulting from loss of use, data or profits, whether in an action of contract, negligence or other tortious action, arising out of or in connection with the use of the Content or performance of Mondaq’s Services.

General

Mondaq may alter or amend these Terms by amending them on the Website. By continuing to Use the Services and/or the Website after such amendment, you will be deemed to have accepted any amendment to these Terms.

These Terms shall be governed by and construed in accordance with the laws of England and Wales and you irrevocably submit to the exclusive jurisdiction of the courts of England and Wales to settle any dispute which may arise out of or in connection with these Terms. If you live outside the United Kingdom, English law shall apply only to the extent that English law shall not deprive you of any legal protection accorded in accordance with the law of the place where you are habitually resident ("Local Law"). In the event English law deprives you of any legal protection which is accorded to you under Local Law, then these terms shall be governed by Local Law and any dispute or claim arising out of or in connection with these Terms shall be subject to the non-exclusive jurisdiction of the courts where you are habitually resident.

You may print and keep a copy of these Terms, which form the entire agreement between you and Mondaq and supersede any other communications or advertising in respect of the Service and/or the Website.

No delay in exercising or non-exercise by you and/or Mondaq of any of its rights under or in connection with these Terms shall operate as a waiver or release of each of your or Mondaq’s right. Rather, any such waiver or release must be specifically granted in writing signed by the party granting it.

If any part of these Terms is held unenforceable, that part shall be enforced to the maximum extent permissible so as to give effect to the intent of the parties, and the Terms shall continue in full force and effect.

Mondaq shall not incur any liability to you on account of any loss or damage resulting from any delay or failure to perform all or any part of these Terms if such delay or failure is caused, in whole or in part, by events, occurrences, or causes beyond the control of Mondaq. Such events, occurrences or causes will include, without limitation, acts of God, strikes, lockouts, server and network failure, riots, acts of war, earthquakes, fire and explosions.

By clicking Register you state you have read and agree to our Terms and Conditions