Canada: Appeal Court Confirms That Innocent Party Must Clean Up Pollution

In a decision in Kawartha Lakes (City) v. Ontario (Environment),1 on May 10, 2013, the Ontario Court of Appeal unanimously dismissed the appeal of the City of Kawartha Lakes (the City), which sought to overturn a decision of the Divisional Court. The Divisional Court had upheld a decision of the Environmental Review Tribunal (ERT), which in turn had upheld a provincial officer's order requiring the City to clean up pollution that was migrating onto the City's property from a neighbouring contaminated property and, further, through the City's property and into Sturgeon Lake. (For more information on the Divisional Court decision, see our Osler Update  here.)

Brief Facts

Fuel oil was spilled on a residential property owned by the Gendron family in December 2008. The Gendrons began remediating their property but ran out of funds. The spilled oil migrated onto and through adjacent property owned by the City and into Sturgeon Lake. Faced with the prospect of no avenue for clean-up or environmental redress, the Ontario Ministry of the Environment (MOE) ordered the City to remediate the adverse effects of the spill by means of an order under section 157.1 of the Environmental Protection Act (the EPA). Under that power, the provincial officer "may issue an order to any person who owns or who has management or control of an undertaking or property" if the officer reasonably believes that the order requirements are necessary "to prevent or reduce the risk of a discharge of a contaminant to the natural environment from ... the property." The City appealed the MOE's order to the ERT, arguing that the spill was not its fault.

The ERT ruled on a preliminary motion, prior to deciding the merits of the City's appeal, that the City could not introduce evidence showing who was at fault for the spill because the MOE's order against the City was a "no-fault" order under s. 157.1. The ERT held that evidence of blameworthiness is relevant in some cases, but would be irrelevant to the ERT's task of determining whether the MOE order should be upheld. (For more information on the ERT's ruling on the preliminary motion, see our Osler Update  here.)

Upon hearing the appeal on its merits, the ERT concluded that it was not enough for the City to rely on its status as an innocent landowner; rather, to avoid the imposition of an order, the City had to introduce evidence showing that an alternative solution would address the environmental problem at hand, even in the absence of an order against the City. The City did not introduce any such evidence. Therefore, the ERT dismissed the City's appeal and upheld the MOE's order. The Divisional Court also dismissed the City's appeal.

Arguments Made to the Ontario Court of Appeal

The Court of Appeal quickly dismissed the City's argument that the ERT erred in law by not adequately considering the polluter-pays principle: the ERT had explicitly found that the primary objective of the EPA (i.e., the protection of the environment) takes precedence over the polluter-pays principle.

The City also argued that the ERT's order excluding the City's evidence on fault was tantamount to a denial of natural justice because it prevented the City from fully making its case that it should be relieved of liability under the polluter-pays principle. The Court of Appeal agreed with the ERT and the Divisional Court that evidence of blameworthiness was irrelevant for the purposes of upholding or revoking the MOE's order because the order in this case was a no-fault order. The Court of Appeal remarked that "by inviting the [ERT] into a fault finding exercise, permitting the evidence [of fault] might even impede answering the question [of how the environment would be protected] in the timely way required by that legislative objective."2

Discussion

Several important implications may emerge from Kawartha Lakes as a result of the Appeal Court's decision to uphold the ERT's decision:

  1. Deep pockets: The MOE turned to the deepest pocket available – the City's – when the Gendrons ran out of funds to pay for remediation of its property. Despite the fact that the City was not at fault and was defenceless against the migration of contaminants caused by the negligence of an adjacent property owner, the Court sanctioned the MOE's actions by agreeing that in the case of no-fault orders, the paramount consideration is the protection of the environment, not making the polluter pay. Kawartha Lakes confirms that the MOE may turn to innocent landowners when pursuing its ultimate goal of protecting the environment, even if this leads to "unfair" outcomes against innocent parties.
  2. Heightened sensitivity to conditions on neighbouring properties: In commercial transactions whereby property will be acquired, leased or financed, purchasers, tenants and lenders all need to be more aware of environmental conditions at nearby properties. More diligence may be required to identify potential sources of contamination that are off-site, particularly on neighbouring properties that are suspected or known to be contaminated or may be subject to environmentally sensitive uses. In many circumstances, due diligence in this regard may be limited by the lack of information regarding conditions at adjacent properties. Moreover, all owners now have increased incentive to ensure that environmental conditions on neighbouring properties that might migrate onto their own property are being adequately addressed. This may lead to an increase in neighbour-on-neighbour reporting of spills.
  3. Another blow to the polluter-pays principle: The decision in Kawartha Lakes deals another blow to the polluter-pays principle. By concluding that this principle cannot trump clear legislative intent – namely, the protection of the environment, the Court has signalled that it will not give elevated effect to the concept of polluter pays. Indeed, the utility of arguing the polluter-pays principle appears to be wearing thin, given its status as not much more than a policy objective.

1   2013 ONCA 310 [Kawartha Lakes].

Kawartha Lakes at para. 20.

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
Similar Articles
Relevancy Powered by MondaqAI
Willms & Shier Environmental Lawyers LLP
Siskinds LLP
 
In association with
Related Topics
 
Similar Articles
Relevancy Powered by MondaqAI
Willms & Shier Environmental Lawyers LLP
Siskinds 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