Canada: Levels Of Decontamination: Courts Favour The Pragmatic Approach

Last Updated: September 9 2013
Article by Michel Gagné and Jérémie-Nicolas Moisan

Most Read Contributor in Canada, September 2018

On June 12, 2013, the Québec Superior Court rendered a major decision on environmental liability: Gestion Marc Ménard inc. c. Opérations Pétroles Irving ltée1 (in French only) (Ménard c. Irving). The decision sheds an interesting light on the criteria that must guide the courts regarding soil remediation, while reaffirming the importance of examining the intended land use in order to rule on the level of decontamination to be achieved.

Summary of the Facts

In 2003, the installations of the defendant, Les Opérations Pétroles Irving ltée (Irving), a petroleum products depot located in Granby, were dismantled. Since an environmental assessment confirmed the presence of contaminated soil, Irving proceeded with the decontamination of the site up to boundary between its land from that of the plaintiff, Gestion Marc Ménard inc. (Ménard). Irving also sent Ménard a notice regarding the presence, at the limit of its property, of contaminated soil at concentrations exceeding the regulatory limit values. The land belonging to Ménard is a vacant lot located in a commercial zone.

Within the context of this case, Irving's liability was admitted. The only dispute referred to the Court was the level of decontamination to be achieved. Irving said it was willing to defray the costs of decontamination appropriate to a commercial property,2 while Ménard demanded decontamination to the criteria applicable to a residential property.3 Ménard even asked the Court to go beyond the standards prescribed in the Soil Protection and Contaminated Sites Rehabilitation Policy (Policy), to require restoration of the land to the condition in which it was found before the contamination.

Decision

The Court, after setting out the decontamination criteria prescribed in the Policy, explained that in light of the evidence, the possible use that Ménard, a buyer or a future buyer could make of the land would be commercial. The evidence also revealed that the land had been part of a commercial zone since 1975 and, according to all indications, there would not be a zoning change in the short or medium term that could allow its non-commercial use. Therefore, the Court concluded that Ménard's insistence on decontamination to the criteria applicable to residential sites was excessive and, in any case, would add little value to the land.

Regarding Ménard's argument that accepting decontamination to the criteria applicable to commercial sites would be a form of encouragement for pollution or contamination of land, the Court pointed out that decontamination based on these criteria would be evidence of adequate management of a situation resulting from negligent or heedless behaviour of another era, with which it is now necessary to live and which must be managed [TRANSLATION] "as well as possible".

Ultimately, the Court ruled in favour of the position preferred by Irving, i.e., decontamination conforming to the Policy's requirements for a commercial site.

Comments

This is an important decision, because it reaffirms that a plaintiff, within the context of this kind of litigation should not obtain soil remediation according to stricter criteria than those imposed by the use for which the land is intended.

The decision also recalls the Superior Court's decision in Église Vie et Réveil Inc. c. Sunoco Inc.4 (in French only) (Église c. Sunoco). In that case, the Superior Court had concluded that Sunoco was liable for a migration of contaminants to a neighbouring property and Sunoco had been condemned to pay the plaintiff the necessary costs for decontamination of the land. According to the plaintiff's claims, the Court had also been asked to examine the question of the stigma that might be associated with the land and impair its market value, even after the completion of the work. However, the Court refused to grant the amounts claimed by the plaintiff in this regard with a view to remediate to Level A of the Policy,5 given that the land was located in a commercial zone. The Court had refused this request, pointing out that there was no proof that the property would be affected by a stigma after the performance of decontamination work conforming to Level C of the Policy. The Court had also preferred the application of the criteria prescribed in the Policy regarding the use of the land, while reserving the plaintiff's rights in the event that, at the time it undertakes the remediation work, the applicable legislation and regulations are amended and require additional remediation work.

In this matter, the Court had also been asked to analyze the Tridan Developments Ltd. v. Shell Canada Products Ltd.6 decision of the Ontario Court of Appeal. In this case, where the defendant Shell had admitted its liability regarding the contamination of the plaintiff Tridan's land, Tridan was asking for complete decontamination of the soil to "pristine" condition, whereas Shell maintained that decontamination meeting the criteria applicable to a commercial site was sufficient. The Court awarded Tridan the decontamination costs corresponding to the "pristine" level, i.e., those relating to restoration to a condition identical to the one prevailing before the contamination, regardless of the use of the land. An important point in this decision arose from the fact that the amount of the work required to achieve "pristine" condition was far lower than the value of the compensation that could have been granted for the stigma affecting the property. The conclusion requiring a correction to "pristine" condition (without stigma) was justified by the very specific evidence that had been presented in the circumstances of this Ontario case.7

In Québec, the courts have not been inclined to accept remediation beyond the applicable criteria according to the use of the site. This approach was rejected in Église c. Sunoco, and again in Ménard c. Irving. When identifying the level of decontamination sought, the courts prefer a pragmatic approach based on the actual use for which the land is intended.

In Ménard c. Irving, the Court issued a permanent injunction, enjoining the defendant to rehabilitate Ménard's property completely at the defendant's expense. It is reasonable to question the appropriateness of issuing injunctions in such circumstances, when decontamination work is generally very complex. Needless to say, the execution of the order alone could lead to new problems between the parties and require the Court to intervene again.

One can question the issuance of an injunctive relief in a matter of soil decontamination. The Environment Quality Act8(EQA) grants the Minister vast powers to intervene if he recognizes the presence of contaminants in the environment. Division IV.2.1 of the EQA, the object of which is land protection and rehabilitation, further allows the minister to require a remediation plan and its execution. The Supreme Court of Canada, in Imperial Oil Ltd. v. Québec (Minister of the Environment),9 also reaffirmed that the minister's power to require and order the performance of a remediation plan is a broad discretionary political power. Seeking an injunction order to force soil remediation thus invite the Court to substitute itself to the legislative regime established under the EQA, which confers vast land protection and rehabilitation powers on the minister. This having been said, we should mention that Irving does not appear to have contested the request of an injunction order in this case. Therefore the value of this case as a precedent on this issue is limited.

Footnotes

1. 2013 QCCS 2799.

2. To Level C of the Soil Protection and Contaminated Sites Rehabilitation Policy, namely the maximum acceptable limit for commercial sites. Also see the Land Protection and Rehabilitation Regulation (R.R.Q. c. Q-2, r. 37). For the purposes of this text, we will only refer to the Policy.

3. To Level B of the Policy.

4. 2003 CanLII 5495 (QCCS). This case was referred to the Court of Appeal, but the outcome was the homologation of a transaction (C.A., 2004-03-19).

5. Background levels for inorganic parameters and quantification limit for organic parameters.

6. 2002 CanLII 20789 (ONCA)

7. Idem, at paragraph 17.

8. R.S.Q. c. Q-2

9 [2003] 2 S.C.R. 624

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