On August 29, 2013, the Minister of Sustainable Development,
Environment and the Fight against Climate Change (the
"Minister") ordered the company Les
Équipements de puissance Reliance Ltée
("Reliance") to clean up its storage site for
PCB-contaminated material in Pointe Claire, Quebec. Reliance failed
to do so, whereupon the Minister proceeded to have the site
decontaminated and secured, at a cost of $3.8 million. On
March 5th of this year, Radio-Canada
revealed1 that in connection with this matter, the
Minister had registered a notice of legal hypothec against a house
belonging to Ms. Birdie Marshall, on the basis that she was the
director and shareholder of Reliance. This matter highlights the
importance of being aware of certain rules in Quebec regarding the
environmental liability of directors and officers.
It should first be noted that the directors and officers of a
legal person are solidarily liable for the latter's
environmental liabilities, unless they establish that they
exercised due care and diligence to prevent the breach that led to
the environmental harm (section 115.50 of the Environment
Quality Act, CQLR c. Q-2, hereinafter, the
The directors' and officers' liability towards the
Minister for environmental damage can be secured by a legal
hypothec on all their movable and immovable property, as was the
case with Ms. Marshall (section 115.51 of the EQA).
In addition, the EQA creates a presumption of penal liability on
the part of the directors and officers of a legal person, unless
they establish that they exercised due diligence and took all
necessary precautions to prevent the offence (section 115.40 of the
Finally, the EQA gives the Minister the discretionary power to
refuse to issue or renew any authorization under the Act, and to
amend, suspend or revoke any such authorization, if any of the
directors, officers or shareholders of a legal person has committed
certain environmental, fiscal or criminal offences during the last
years (sections 115.5 et seq. of the EQA).
In light of the foregoing, legal persons should be careful when
selecting directors and officers. By the same token, a prospective
director should, before accepting that position, inquire into the
environmental status of the legal person's affairs. We
recommend any prospective director to check, inter alia, the
whether the legal person has implemented environmental policies
and measures to prevent the commission of offences and, more
generally, to ensure compliance with statutory and regulatory
whether the legal person has received a notice of
non-compliance, an order to comply, or a statement of offence.
Similarly, a legal person should ensure that any prospective
director or officer:
has not failed to comply with an order or injunction pursuant
to the EQA or to pay any amount owing to the Minister;
has not been found guilty of an offence under the EQA or the
has not been a director, officer or shareholder of a legal
person that has been found guilty of an offence under the EQA or
the regulations thereunder.
These are some examples of essential questions that should be
addressed when a legal person selects its directors and officers,
and such questions are all the more critical in the wake of
legislative changes and the positions recently taken by the
Given the increased prominence of environmental issues and the
implementation of the legislative measures canvassed above, legal
persons and their directors and officers should be asking the right
questions, exercising due care, and consulting if need be with
environmental law specialists.
The Imperial Oil refinery pled guilty to one offence for discharging a contaminant, coker stabilizer, thermocracked gas, into the natural environment causing an adverse effect and was fined $650,000...
Ontario's Ministry of the Environment and Climate Change continues to roll out its Climate Change Action Plan with its proposed GHG guide for projects that are subject to the province's Environmental Assessment Act.
In June, 2016, Justice Faieta of the Ontario Superior Court of Justice awarded damages of $57,712.31 plus interest against legal counsel who failed to file a claim within the required limitation period.
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