On November 28, 2012, the Court of Appeal granted the City of
Kawartha Lakes leave to appeal from the Divisional Court's
decision dismissing an appeal from the Environmental Review
Tribunal. This case raises important issues on the ability of the
MOE to issue an order to an innocent property owner requiring that
owner to clean-up contamination emanating from a neighbouring
property and the principles of fairness and the polluter pays.
Several hundred litres of furnace oil leaked from the basement
of a privately owned property in the City of Kawartha Lakes. The
spilled furnace oil entered the City's municipal storm sewer
system and was being discharged into Sturgeon Lake. A Provincial
Officer issued an order to the property owner requiring the owner
to eliminate any adverse effects and restore the natural
When the owners' insurance coverage had reached its limits
and the owners advised they did not have the financial resources to
complete the clean-up, a Provincial Officer issued an order to the
City requiring the City to take all reasonable steps to prevent the
discharge of contaminants from its own property and to remediate
its own property. The Director confirmed the order with some minor
Environmental Review Tribunal Decisions
The City appealed the Director's order to the Environmental
Review Tribunal. The ERT issued two important decisions. The first
determined that the issue of fault was not relevant, given the
wording of the Environmental Protection Act, and,
therefore, did not allow the City to lead any evidence on the issue
of fault. It was acknowledged by all parties that the City was not
at fault; the City was an innocent property owner. The City wanted
to lead evidence of fault to make its case on the issue of
On the appeal of the merits, the ERT upheld the Director's
order requiring the City to clean-up the contamination. This was
the second important decision issued by the ERT, which found that
the legislation specifically contemplated making innocent owners
initially responsible for clean-up and prevention of contamination.
Any complaint about fairness was with the legislation.
Divisional Court Decision
The City appealed the ERT's decision to the Divisional Court
on a question of law. In a decision released on May 28, 2012, the
Divisional Court upheld both decisions of the ERT. The Court held
that the ERT did not err in refusing to permit evidence of fault
since the ERT is not required to determine fault under the
On the merits of the order, the Divisional Court upheld the
ERT's decision that the legislation is based on "owner
pays" rather than "polluter pays". The court agreed
with the ERT that the complaint is with the legislators that
drafted the legislation and not the statutory decision makers
acting in accordance with the mandate given under the
Issues on the Appeal
The appeal to the Court of Appeal raises important issues
regarding the principle of fairness established many years ago by
the ERT and Divisional Court. Is "fairness" dead? Does
fault not matter? How broadly can the MOE cast its net when looking
for someone to clean-up contamination?
It is interesting to note that the Divisional Court in its
reasons stated that the City was seeking to have the ERT consider
evidence about the fault of the MOE itself, among others. The
consequence of these decisions is that the MOE can use its powers
under the legislation to order an innocent property owner to
clean-up contamination even if the MOE has some fault in the first
place. The ERT will not even consider evidence of that fault and
will not determine what is fair in such circumstances. The innocent
property owner is left to pursue a remedy in an often cumbersome
and time consuming civil action, with no guarantee of recovery at
As is usual, the Court of Appeal gave no reasons for its
decision granting leave to appeal.
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