Canada: British Columbia Court Of Appeal Adheres To "Polluter Pay" Principle

On November 20, 2015, the British Columbia Court of Appeal ("BCCA") demonstrated a steadfast adherence to the "polluter pays" principle underlying the Environmental Management Act (the "EMA"), by  dismissing the appeal in JI Properties Inc v PPG Architectural Coatings Canada Ltd, 2015 BCCA 472. The BCCA decision concerned the allocation of liability for the cost of the environmental remediation of a small island (the "Island"), located just off the Saanich peninsula that was the site of an explosives manufacturing plant for most of the 20th century. Portions of the Island were contaminated with lead, mercury, trinitrotoluene, dinitrotoluene, and other hazardous substances.

PPG Architectural Coatings, originally known as ICI Canada Inc. ("ICI"), owned the Island and operated the explosives plant from 1954 to 1985. After ICI closed down the plant, it made remediation attempts on the Island. As there were no prescribed standards for remediation at the time, ICI consulted with the Ministry of Environment ("MOE") to determine the allowable levels of pollutants. The MOE issued a "comfort letter" acknowledging that ICI had remediated the polluted portions of the Island to the agreed upon levels, and stated that it did not perceive any further environmental concern. ICI then registered a restrictive covenant on the Island, prohibiting any owner from using the industrial areas for residential purposes.

JI Properties ("JIP") acquired the Island in 1994 with knowledge of the restrictive covenant, the contamination, and the Island's history as an explosives plant. Subsequently, the Waste Management Act (a statutory predecessor to the EMA) and Contaminated Sites Regulation ("CSR") came into force. This regulatory scheme provided specific standards for allowable contamination, and established how liability for contamination is allocated and apportioned. From 2004 to 2006, JIP further remediated the contaminated areas on the Island to meet the newly prescribed standards, and then, in 2009, JIP brought a lawsuit against ICI under the EMA to recover its remediation costs from ICI.

Supreme Court Decision

At the trial of the lawsuit, the British Columbia Supreme Court ("BCSC") ordered ICI to pay JIP $4.75 million as compensation for the costs of remediation. The trial judge ruled both JIP and ICI were "responsible persons" under the EMA, but allocated 100% of the liability to ICI. For a more detailed account of the findings at the BCSC, see our earlier post on that decision here.

Grounds of Appeal

At the appeal, ICI argued it was not responsible for remediating the site pursuant to an exclusion under section 46(1)(m) of the EMA, which provides an exemption from liability to a person who was a responsible person for a contaminated site for which a certificate of compliance ("CoC") was issued and for which another person subsequently proposed or undertook to change the use of the contaminated site. ICI argued the comfort letter was equivalent to a CoC. ICI also claimed that even if it was responsible for the cost of remediation, the trial judge should have adopted a "developer pays" principle, wherein a developer (i.e. JIP) is to pay the costs of additional remediation when the developer: is fixed with all material knowledge of past contamination and remediation; chooses to change the use of the land; and provides additional remediation to allow that change of use.

Further, ICI argued the trial judge failed to correctly apply the prescribed principles for allocating liability, because he did not consider common law and equitable defences, justness, and fairness, or JIP's potential to profit from the remediation.

Finally, ICI argued that JIP's action was statute barred by the now-repealed Limitation Act, and the trial judge incorrectly applied the six-year limitation period instead of the two-year period.


The BCCA largely agreed with the trial judge's reasoning and upheld the trial judge's conclusion that ICI was ineligible for the exemption from liability under section 46(1)(m) of the EMA because the comfort letter did not meet the statutory definition of CoC. If the legislature intended to exempt persons who cleaned-up industrial pollution before the current regime was implemented, then it  would have expressly stated so. The BCCA disagreed with ICI's contention that section 46(1)(m) embodies a "developer pays" principle that applies to the allocation of liability for remediation costs. While the BCCA agreed that section 46(1)(m) incorporates a principle of liability, the section operates as a defence and applies solely to the determination of whether a party is liable, and not to how liability is allocated.

The BCCA further concluded that the trial judge properly considered all prescribed principles relevant to the allocation of liability and there was no evidence to suggest that a windfall profit had accrued to JIP. Had there been adequate evidence showing that JIP purchased the property at a discount on account of the pollution, and had it experienced a significant increase in value as a result of the remediation, it would have factored into the judge's allocation of liability. No such evidence existed. This suggests that the "developer pays" principle may be successfully argued in future allocation of costs, assuming a proper evidentiary basis exists to do so.

Finally, the BCCA affirmed the BCSC's ruling that JIP's action was subject to a six-year limitation period under the now-repealed Limitation Act.

To view original article, please click here.

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.

To print this article, all you need is to be registered on

Click to Login as an existing user or Register so you can print this article.

In association with
Up-coming Events Search
Font Size:
Mondaq on Twitter
Register for Access and our Free Biweekly Alert for
This service is completely free. Access 250,000 archived articles from 100+ countries and get a personalised email twice a week covering developments (and yes, our lawyers like to think you’ve read our Disclaimer).
Email Address
Company Name
Confirm Password
Mondaq Topics -- Select your Interests
 Law Performance
 Law Practice
 Media & IT
 Real Estate
 Wealth Mgt
Asia Pacific
European Union
Latin America
Middle East
United States
Worldwide Updates
Check to state you have read and
agree to our Terms and Conditions

Terms & Conditions and Privacy Statement (the Website) is owned and managed by Mondaq Ltd and as a user you are granted a non-exclusive, revocable license to access the Website under its terms and conditions of use. Your use of the Website constitutes your agreement to the following terms and conditions of use. Mondaq Ltd may terminate your use of the Website if you are in breach of these terms and conditions or if Mondaq Ltd decides to terminate your license of use for whatever reason.

Use of

You may use the Website but are required to register as a user if you wish to read the full text of the content and articles available (the Content). You may not modify, publish, transmit, transfer or sell, reproduce, create derivative works from, distribute, perform, link, display, or in any way exploit any of the Content, in whole or in part, except as expressly permitted in these terms & conditions or with the prior written consent of Mondaq Ltd. You may not use electronic or other means to extract details or information about’s content, users or contributors in order to offer them any services or products which compete directly or indirectly with Mondaq Ltd’s services and products.


Mondaq Ltd and/or its respective suppliers make no representations about the suitability of the information contained in the documents and related graphics published on this server for any purpose. All such documents and related graphics are provided "as is" without warranty of any kind. Mondaq Ltd and/or its respective suppliers hereby disclaim all warranties and conditions with regard to this information, including all implied warranties and conditions of merchantability, fitness for a particular purpose, title and non-infringement. In no event shall Mondaq Ltd and/or its respective suppliers be liable for any special, indirect or consequential damages or any damages whatsoever resulting from loss of use, data or profits, whether in an action of contract, negligence or other tortious action, arising out of or in connection with the use or performance of information available from this server.

The documents and related graphics published on this server could include technical inaccuracies or typographical errors. Changes are periodically added to the information herein. Mondaq Ltd and/or its respective suppliers may make improvements and/or changes in the product(s) and/or the program(s) described herein at any time.


Mondaq Ltd requires you to register and provide information that personally identifies you, including what sort of information you are interested in, for three primary purposes:

  • To allow you to personalize the Mondaq websites you are visiting.
  • To enable features such as password reminder, newsletter alerts, email a colleague, and linking from Mondaq (and its affiliate sites) to your website.
  • To produce demographic feedback for our information providers who provide information free for your use.

Mondaq (and its affiliate sites) do not sell or provide your details to third parties other than information providers. The reason we provide our information providers with this information is so that they can measure the response their articles are receiving and provide you with information about their products and services.

If you do not want us to provide your name and email address you may opt out by clicking here .

If you do not wish to receive any future announcements of products and services offered by Mondaq by clicking here .

Information Collection and Use

We require site users to register with Mondaq (and its affiliate sites) to view the free information on the site. We also collect information from our users at several different points on the websites: this is so that we can customise the sites according to individual usage, provide 'session-aware' functionality, and ensure that content is acquired and developed appropriately. This gives us an overall picture of our user profiles, which in turn shows to our Editorial Contributors the type of person they are reaching by posting articles on Mondaq (and its affiliate sites) – meaning more free content for registered users.

We are only able to provide the material on the Mondaq (and its affiliate sites) site free to site visitors because we can pass on information about the pages that users are viewing and the personal information users provide to us (e.g. email addresses) to reputable contributing firms such as law firms who author those pages. We do not sell or rent information to anyone else other than the authors of those pages, who may change from time to time. Should you wish us not to disclose your details to any of these parties, please tick the box above or tick the box marked "Opt out of Registration Information Disclosure" on the Your Profile page. We and our author organisations may only contact you via email or other means if you allow us to do so. Users can opt out of contact when they register on the site, or send an email to with “no disclosure” in the subject heading

Mondaq News Alerts

In order to receive Mondaq News Alerts, users have to complete a separate registration form. This is a personalised service where users choose regions and topics of interest and we send it only to those users who have requested it. Users can stop receiving these Alerts by going to the Mondaq News Alerts page and deselecting all interest areas. In the same way users can amend their personal preferences to add or remove subject areas.


A cookie is a small text file written to a user’s hard drive that contains an identifying user number. The cookies do not contain any personal information about users. We use the cookie so users do not have to log in every time they use the service and the cookie will automatically expire if you do not visit the Mondaq website (or its affiliate sites) for 12 months. We also use the cookie to personalise a user's experience of the site (for example to show information specific to a user's region). As the Mondaq sites are fully personalised and cookies are essential to its core technology the site will function unpredictably with browsers that do not support cookies - or where cookies are disabled (in these circumstances we advise you to attempt to locate the information you require elsewhere on the web). However if you are concerned about the presence of a Mondaq cookie on your machine you can also choose to expire the cookie immediately (remove it) by selecting the 'Log Off' menu option as the last thing you do when you use the site.

Some of our business partners may use cookies on our site (for example, advertisers). However, we have no access to or control over these cookies and we are not aware of any at present that do so.

Log Files

We use IP addresses to analyse trends, administer the site, track movement, and gather broad demographic information for aggregate use. IP addresses are not linked to personally identifiable information.


This web site contains links to other sites. Please be aware that Mondaq (or its affiliate sites) are not responsible for the privacy practices of such other sites. We encourage our users to be aware when they leave our site and to read the privacy statements of these third party sites. This privacy statement applies solely to information collected by this Web site.

Surveys & Contests

From time-to-time our site requests information from users via surveys or contests. Participation in these surveys or contests is completely voluntary and the user therefore has a choice whether or not to disclose any information requested. Information requested may include contact information (such as name and delivery address), and demographic information (such as postcode, age level). Contact information will be used to notify the winners and award prizes. Survey information will be used for purposes of monitoring or improving the functionality of the site.


If a user elects to use our referral service for informing a friend about our site, we ask them for the friend’s name and email address. Mondaq stores this information and may contact the friend to invite them to register with Mondaq, but they will not be contacted more than once. The friend may contact Mondaq to request the removal of this information from our database.


This website takes every reasonable precaution to protect our users’ information. When users submit sensitive information via the website, your information is protected using firewalls and other security technology. If you have any questions about the security at our website, you can send an email to

Correcting/Updating Personal Information

If a user’s personally identifiable information changes (such as postcode), or if a user no longer desires our service, we will endeavour to provide a way to correct, update or remove that user’s personal data provided to us. This can usually be done at the “Your Profile” page or by sending an email to

Notification of Changes

If we decide to change our Terms & Conditions or Privacy Policy, we will post those changes on our site so our users are always aware of what information we collect, how we use it, and under what circumstances, if any, we disclose it. If at any point we decide to use personally identifiable information in a manner different from that stated at the time it was collected, we will notify users by way of an email. Users will have a choice as to whether or not we use their information in this different manner. We will use information in accordance with the privacy policy under which the information was collected.

How to contact Mondaq

You can contact us with comments or queries at

If for some reason you believe Mondaq Ltd. has not adhered to these principles, please notify us by e-mail at and we will use commercially reasonable efforts to determine and correct the problem promptly.