Canada: Courts Give Further Direction On Due Diligence

Two recent Court of Appeal decisions, one in Ontario and one in B.C., provide considerable direction on the establishment of a due diligence defence in the context of environmental offences. R. v. Petro-Canada was released on January 29, 2003. It follows on the heels of R. v. MacMillan Bloedel, a 2002 B.C. Court of Appeal decision covering related ground.

Cause Of Contaminant Discharge Not Required

The facts in Petro-Canada are fairly straightforward. Petro-Canada had a gasoline spill resulting from a pipe failure. It attempted to assert due diligence by demonstrating that it had a number of safety systems in place to prevent pipe failure, to detect the failures and to minimize any harmful effects. However, the trial judge concluded that the due diligence defence could not be applied because there was no evidence explaining the exact cause of the pipe failure. Without that evidence, he ruled, he could not determine whether Petro-Canada had actually taken reasonable care. On appeal to the Ontario Court of Justice, Sargent J. overturned the conviction and found that unless it was patently obvious that reasonable care was not met, or unless the accused violated industry standards or statutory commitments, the defence of due diligence would succeed.

The Ontario Court of Appeal did not agree with the appeal court of first instance that the due diligence defence normally succeeds automatically, as this places a higher burden of proof on the Crown than would be appropriate for a strict liability offence and ordered a new trial. However, the Court of Appeal clarified that the accused does not have to prove how the discharge was caused in order to avail itself of a due diligence defence.

All Reasonable Care Required To Avoid Any Foreseeable Clause

The decision, at first glance, appears to make it easier for defend-ants to establish a due diligence defence, clarifying that it is available even when the exact cause of a discharge is unknown and remains unknown after the discharge. However, the Court clarified that, although the defence remains available, the accused must still "show that it took all reasonable care to avoid any foreseeable cause [emphasis added]" where the cause of the failure is unascertained. It further emphasized that, were Petro-Canada able to show exactly why the pipe failed, it "may be able to narrow the range of preventive steps that it must show to establish that it took all reasonable care".

In sum, if we suppose that factors A through Z could cause a discharge, the accused will have to show that it took all reasonable care to avoid factors A through Z from occurring. However, if the accused can pinpoint factor C as the exact cause of the discharge, it may be able to take advantage of the due diligence defence by showing only that it took all reasonable care to prevent factor C from occurring. In practice, where the cause cannot be ascertained, it is difficult to satisfy a court that all reasonable steps have been taken to avoid the discharge of a contaminant.

Discharge Must Be Reasonably Foreseeable

In R. v. MacMillan Bloedel, the B.C. Court of Appeal found that where the cause of a spill was subsequently ascertained, this broad, general due diligence did not have to be established. Like Petro Canada, R. v. MacMillan Bloedel pertained to a fuel leak. The exact cause of the leak was corrosion. The accused argued this cause was unforeseeable. The Court, in interpreting the landmark Supreme Court of Canada decision in R. v. Sault Ste-Marie, found that where the cause of the discharge is known, a two-step inquiry is appropriate. If the exact polluting incident was not reasonably foreseeable, the accused may be acquitted. Alternatively, if the accused knew or ought to have known of the existence of a hazard, liability could be avoided if the accused had taken all reasonable steps to avoid the particular event. In this case, the Court found that MacMillan Bloedel did not know and could not have reasonably known of the corrosion, which turned out to be the cause, and it mistakenly and reasonably believed that its pipes were sound. It had therefore brought itself within the first branch of the test, and the defence of due diligence was accepted.

Trying to read the cases together, if the cause of the release is not ascertainable, even after the fact, then due diligence is available but the accused may have to show that its entire process meets a due diligence test. This might be a tall order.

If the cause of the spill is ascertainable, then the accused can limit its due diligence evidence to the exact cause. Or, it can show that the exact cause was not foreseeable. Consequently, it may behoove the accused to call evidence on how the spill was caused in order to make the due diligence defence more achievable. But practically speaking, if whether or not the accused caused the spill is at issue, what accused wants to start calling evidence on how the spill occurred in order to establish a due diligence defence?

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.

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