The recent decision of the British Columbia Supreme Court
(Court) in Dolinsky v. Wingfield may allow those who
have to clean up contamination on their lands to obtain those costs
from the responsible parties before actually doing the work. This
approach under the Environment Management Act (EMA) is
different from previous decisions and practice, where money had to
be spent first and then recovered from those responsible. Given the
significant costs often associated with remediation, this could
provide a better option for those facing cleanup and its costs, but
could also place an earlier potential burden on those facing these
Gina Dolinsky found oil contamination at her house and after
protracted investigations, environmental consultants identified the
source as an old, underground oil tank located on her
neighbour's property. Some of the contamination was remediated,
but more was required, which the consultant prepared a plan for,
together with the estimated costs and a 50-per cent contingency.
Ms. Dolinsky did not complete the remaining work, but rather
commenced a legal action against those responsible to recover the
money already spent, along with the estimated costs to complete the
COURT AWARDS FUTURE COSTS
The EMA casts a broad net on those considered responsible to
remediate contamination and includes those who have an interest in,
or control over, the lands. In this case, it also included a person
who was not the registered owner, but who was shown to have
controlled contractors on the property. The EMA allows a person who
has incurred remediation costs to recover those "reasonably
incurred costs" from responsible persons. In the past, courts
have interpreted the cost recovery provisions as requiring that the
remediation costs be incurred first, before a court can make an
order. In this case though, the Court said that the EMA only
requires "some costs of remediation" to be incurred
before an award can be made for future costs. Given that the
consultant had set out the scope of the remaining remediation with
a cost estimate, the Court ordered those responsible to pay to Ms.
Dolinsky the estimated future remediation costs, including the
The Court based its decision on the wording in the EMA that
those responsible are to indemnify for remediation costs. The Court
ordered the estimated costs to be paid in advance and held in trust
by Ms. Dolinsky's lawyer on her undertaking not to release the
funds except upon proof that the costs were actually incurred and
subject to an analysis that they were reasonable. Any money not
spent was to be returned to the responsible persons. The Court said
that this approach was preferable to awarding a specific amount at
the time of trial, which could result in a windfall for either of
the parties, depending on what the actual cost was.
REASONABLENESS OF FUTURE COSTS
The Court said that if the property was remediated by an
appropriately qualified environmental remediation specialist in
accordance with the usual standards, the remediation costs would
generally be assumed to be reasonable.
This Court's approach will likely encourage those who have
incurred some remediation costs, which includes any investigation
and consultant costs, to seek an order from the courts for the full
cost of remediation, without first incurring all of those costs.
For those who are the victims of contamination, this may alleviate
some of the significant financial burden in carrying out
remediation. But for those who are responsible persons under the
EMA, it means that there may be a more aggressive pursuit of legal
actions to fund the remediation.
As a practical matter, this means that those who seek such court
orders will require an appropriately qualified specialist to
investigate and delineate the contamination and to prepare a
remediation plan with a defensible cost estimate. Those receiving
such an order will want to have their own specialists review and
critique any remediation plan and estimate and monitor the
remediation and review the costs incurred to ensure that they are
all reasonable and recoverable.
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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