How far can no-fault liability for contaminated sites go? The
Ontario Ministry of Environment and Climate Change has
issued a cleanup order to (among others) the accountant who held a
power of attorney to sell a contaminated site for an overseas
client, and the directors of a real estate company that listed the
property for sale.
In McQuiston v. Ontario (MOECC), and a series of related cases
now before the Environmental Review Tribunal, solvents were
found in a roadside ditch that drains into a local watercourse and
into Lake Erie. Ministry staff decided that the solvents came from
a disused industrial site, at 833 Helena Street in Fort Erie. A long term
tenant had vacated the site last fall and the property owner had
put it up for sale. As the property owner's sole remaining
director lived in England, he gave a power of attorney to an
Ontario accountant to manage the sale. The accountant signed a
listing agreement with a local broker, who set up a lockbox
containing a key. The accountant and the broker therefore
controlled access to the site while it was offered for sale.
In the Ministry's view, they can issue environmental orders
to anyone who owns or owned or has or had management or control to
a contaminated site. In this case, the Ministry quickly issued an
investigation and cleanup order to all of the
Carven Petrochemical Co., the former
The former tenant's former site
The officers and directors of the
1350095 Ontario Ltd. et al, the
current property owner;
a British resident who inherited this
company from his recently deceased father;
a Canadian accountant, who accepted a
power of attorney from the absentee owner to sell the
DTZ Barnicke Niagara Limited, the
listing broker, and
Two individual directors of that
Nothing in the Order suggests that any of them knew about the
contamination before it was found on the road, or that any of them
did anything illegal.
Ontario professionals who deal with real estate do not yet seem
to understand the degree of personal risk that they face when
property turns out to be contaminated. Judging from the ERT
website, the DTZ Barnicke directors did not even appeal the order
against them. They may now face enormous liability.
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In Crombie Property Holdings Limited v McColl-Frontenac Inc. (Texaco Canada Limited), 2017 ONCA 15 (Crombie v McColl ), the Ontario Court of Appeal released an important decision regarding environmental due diligence in a real estate transaction, . . .
Last August, we reported on recent case law dealing with the difficult question of how to determine limitation periods in environmental claims. In the January 2017 Court of Appeal decision of Crombie Property Holdings Limited v. McColl-Frontenac Inc., the court overturned the trial court's decision that the case was started too late on the basis of "palpable and overriding errors".
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