Canada: "Polluter Pays" Wins The Day: BC Court Of Appeal Decides Significant Contaminated Sites Case

The BC Court of Appeal has upheld a trial decision that requires the historical polluter of James Island to pay the current landowner $4.75 million for monies spent remediating a contaminated site on the island.  This award is the largest of its kind under BC's Environmental Management Act ("EMA").  The decision is significant for reinforcing that the concept of "polluter pays" under BC's contaminated sites legal regime is paramount, despite the polluter's attempts to negate or reduce its liability by pointing to its prior efforts to remediate James Island before selling it in 1988. 

In J.I. Properties Inc. v. PPG Architectural Coatings Canada Ltd., the plaintiff J.I. Properties Inc. argued at trial that it should recover all of its reasonably incurred remediation costs against the defendant and historical polluter PPG Architectural Coatings Canada Inc. ("PPG").  The trial court agreed, awarding $4.75 million.  For a summary of the trial decision, please see our previous bulletin.

PPG appealed this decision to the BC Court of Appeal, which affirmed the trial decision, and decided that:

  • PPG's 1988 letter of comfort from the Ministry of Environment was not equivalent to a certificate of compliance under the EMA, and therefore did not shield PPG from the broad liability for remediation costs found under the EMA;
  • the trial judge's allocation of 100% of the remediation costs to the polluter was not an error, and the appellant's 1988 letter of comfort did not impact that allocation; and
  • the limitation period for cost recovery actions under the 1996 Limitation Act is six years.

Each of these points are expanded upon below:

Remediations Prior to EMA Regime Do Not Assist in Avoiding Liability

On appeal, PPG argued that it had remediated James Island in the 1980s before selling it to a third party, and obtained a 1988 comfort letter from the Ministry of Environment for that remediation.  The 1988 comfort letter confirmed PPG had remediated the historic industrial area of the island to standards accepted by the Ministry at that time.  PPG claimed that its 1988 comfort letter should be treated as a certificate of compliance under the EMA, and that, as a result, it should be exempt from liability under section 46(1)(m) of the EMA

Section 46(1)(m) allows an otherwise responsible person to avoid liability if a certificate of compliance is issued for a site, and afterward the site is remediated with a "change in use" of that site.  Section 46(1)(m) has not been considered in detail before by the courts. 

The BC Court of Appeal rejected PPG's attempt to rely on section 46(1)(m), and instead agreed with the trial judge, finding that PPG's 1980s remediation and 1988 comfort letter did not immunize it from liability under the EMA.  The Court noted that in 1997, contaminated sites law "radically" changed in BC with the introduction of the current EMA regime.  It further held that PPG's 1988 comfort letter was not akin to a certificate of compliance under the EMA, the latter being a statutory instrument only available to persons who remediate contaminated sites in compliance with the EMA's prescriptive conditions.  PPG's remediation in the 1980s did not meet those prescriptive standards.  The Court also noted a transition provision in the regulations allowed persons who had remediated sites prior to April 1, 1997 to obtain a certificate of compliance, "but only if the requirements of...the Act are otherwise satisfied".  The Court agreed with the trial judge that the legislature did not intend to immunize parties like PPG from liability under the EMA "even though such persons may have attempted to clean up the property in good faith and with input and approval from the relevant Ministry officials at the time".

In rejecting PPG's claim under section 46(1)(m), the Court's reasoning is clear that unless a polluter's remediation complies with the prescribed standards of the EMA and a certificate of compliance was obtained, the polluter will still be caught by the EMA, even if they received assurances from the Ministry of Environment that their remediation was adequate at that time.

"Developer Pays" Not Applied in this Case, but Betterment Could be Argued Later

The BC Court of Appeal also upheld the trial judge's decision to allocate 100 percent of the reasonably incurred remediation costs to PPG, pursuant to the principle of polluter pays.  The Court rejected PPG's argument that the "developer pays" principle, which PPG said was found in s. 46(1)(m), should reduce PPG's allocation to zero.  The Court noted that s. 46(1)(m) acts as a defence to liability, but does not independently address the allocation of liability (different sections of the EMA govern allocation).  This finding is important for clarifying what factors are relevant to allocation of remediation costs under the EMA regime.

Although the Court rejected PPG's argument that J.I. Properties should bear all of the costs of remediation because its remediation was voluntary and it had notice of the contamination on the island, the Court left open the possibility of a claim of "windfall" or "betterment" if the facts support it.  In this case, there was no evidence to support PPG's claim that J.I. Properties obtained a discount on its purchase price, or otherwise benefited from the contamination. 

The Court also acknowledged that J.I. Properties was itself caught by the EMA's prescriptive regime, which required it to address any contamination on the site before it could subdivide.  The Court agreed with J.I. Properties that PPG should not be permitted to raise as a consideration of unfairness consequences that are the "direct result of the working of the interlocking statutory scheme".

In reaching these conclusions, the Court affirmed that the purpose of the contaminated sites legislation is to encourage the timely remediation of contaminated sites. The EMA regime accomplishes this, in part, by requiring owners to remediate before they can subdivide, rezone, or obtain permits for their land, and allowing them to sue through the statutory cost recovery action to recover their reasonably incurred remediation costs from persons responsible for the contamination.  The fact that an owner remediates to obtain subdivision, rezoning or permits otherwise restricted by the EMA regime does not, on its own, impact the allocation of liability.

PPG's case for betterment failed for want of proof.  However, should the facts support it in a future case, if a defendant can point to betterment that a plaintiff receives as a result of conducting a remediation, it remains open that the allocation of liability may shift to the plaintiff, in part or whole, due to this betterment.

Six Years to Bring a Cost Recovery Action (under the old Limitation Act)

The Court of Appeal also agreed with the trial judge that the appropriate limitation period for a cost recovery action under the 1996 Limitation Act is six years.  The Court agreed that a cost recovery action is a sui generis cause of action that is not for damages or for breach of contract, tort, or statutory duty, and as a result is governed by a six-year limitation period.

Due to the introduction of a new Limitation Act in 2013, this finding is limited in application only to cost recovery cases commenced prior to the coming into force of the new Act on June 1, 2013.

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.

Similar Articles
Relevancy Powered by MondaqAI
In association with
Related Topics
Similar Articles
Relevancy Powered by MondaqAI
Related Articles
Related Video
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
Registration (you must scroll down to set your data preferences)

Mondaq Ltd requires you to register and provide information that personally identifies you, including your content preferences, for three primary purposes (full details of Mondaq’s use of your personal data can be found in our Privacy and Cookies Notice):

  • To allow you to personalize the Mondaq websites you are visiting to show content ("Content") relevant to your interests.
  • To enable features such as password reminder, news alerts, email a colleague, and linking from Mondaq (and its affiliate sites) to your website.
  • To produce demographic feedback for our content providers ("Contributors") who contribute Content for free for your use.

Mondaq hopes that our registered users will support us in maintaining our free to view business model by consenting to our use of your personal data as described below.

Mondaq has a "free to view" business model. Our services are paid for by Contributors in exchange for Mondaq providing them with access to information about who accesses their content. Once personal data is transferred to our Contributors they become a data controller of this personal data. They use it to measure the response that their articles are receiving, as a form of market research. They may also use it to provide Mondaq users with information about their products and services.

Details of each Contributor to which your personal data will be transferred is clearly stated within the Content that you access. For full details of how this Contributor will use your personal data, you should review the Contributor’s own Privacy Notice.

Please indicate your preference below:

Yes, I am happy to support Mondaq in maintaining its free to view business model by agreeing to allow Mondaq to share my personal data with Contributors whose Content I access
No, I do not want Mondaq to share my personal data with Contributors

Also please let us know whether you are happy to receive communications promoting products and services offered by Mondaq:

Yes, I am happy to received promotional communications from Mondaq
No, please do not send me promotional communications from Mondaq
Terms & Conditions (the Website) is owned and managed by Mondaq Ltd (Mondaq). Mondaq grants you a non-exclusive, revocable licence to access the Website and associated services, such as the Mondaq News Alerts (Services), subject to and in consideration of your compliance with the following terms and conditions of use (Terms). Your use of the Website and/or Services constitutes your agreement to the Terms. Mondaq may terminate your use of the Website and Services if you are in breach of these Terms or if Mondaq decides to terminate the licence granted hereunder for any reason whatsoever.

Use of

To Use you must be: eighteen (18) years old or over; legally capable of entering into binding contracts; and not in any way prohibited by the applicable law to enter into these Terms in the jurisdiction which you are currently located.

You may use the Website as an unregistered user, however, you are required to register as a user if you wish to read the full text of the Content or to receive the Services.

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 or with the prior written consent of Mondaq. You may not use electronic or other means to extract details or information from the Content. Nor shall you extract information about users or Contributors in order to offer them any services or products.

In your use of the Website and/or Services you shall: comply with all applicable laws, regulations, directives and legislations which apply to your Use of the Website and/or Services in whatever country you are physically located including without limitation any and all consumer law, export control laws and regulations; provide to us true, correct and accurate information and promptly inform us in the event that any information that you have provided to us changes or becomes inaccurate; notify Mondaq immediately of any circumstances where you have reason to believe that any Intellectual Property Rights or any other rights of any third party may have been infringed; co-operate with reasonable security or other checks or requests for information made by Mondaq from time to time; and at all times be fully liable for the breach of any of these Terms by a third party using your login details to access the Website and/or Services

however, you shall not: do anything likely to impair, interfere with or damage or cause harm or distress to any persons, or the network; do anything that will infringe any Intellectual Property Rights or other rights of Mondaq or any third party; or use the Website, Services and/or Content otherwise than in accordance with these Terms; use any trade marks or service marks of Mondaq or the Contributors, or do anything which may be seen to take unfair advantage of the reputation and goodwill of Mondaq or the Contributors, or the Website, Services and/or Content.

Mondaq reserves the right, in its sole discretion, to take any action that it deems necessary and appropriate in the event it considers that there is a breach or threatened breach of the Terms.

Mondaq’s Rights and Obligations

Unless otherwise expressly set out to the contrary, nothing in these Terms shall serve to transfer from Mondaq to you, any Intellectual Property Rights owned by and/or licensed to Mondaq and all rights, title and interest in and to such Intellectual Property Rights will remain exclusively with Mondaq and/or its licensors.

Mondaq shall use its reasonable endeavours to make the Website and Services available to you at all times, but we cannot guarantee an uninterrupted and fault free service.

Mondaq reserves the right to make changes to the services and/or the Website or part thereof, from time to time, and we may add, remove, modify and/or vary any elements of features and functionalities of the Website or the services.

Mondaq also reserves the right from time to time to monitor your Use of the Website and/or services.


The Content is general information only. It is not intended to constitute legal advice or seek to be the complete and comprehensive statement of the law, nor is it intended to address your specific requirements or provide advice on which reliance should be placed. Mondaq and/or its Contributors and other suppliers make no representations about the suitability of the information contained in the Content for any purpose. All Content provided "as is" without warranty of any kind. Mondaq and/or its Contributors and other suppliers hereby exclude and disclaim all representations, warranties or guarantees with regard to the Content, including all implied warranties and conditions of merchantability, fitness for a particular purpose, title and non-infringement. To the maximum extent permitted by law, Mondaq expressly excludes all representations, warranties, obligations, and liabilities arising out of or in connection with all Content. In no event shall Mondaq 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 of the Content or performance of Mondaq’s Services.


Mondaq may alter or amend these Terms by amending them on the Website. By continuing to Use the Services and/or the Website after such amendment, you will be deemed to have accepted any amendment to these Terms.

These Terms shall be governed by and construed in accordance with the laws of England and Wales and you irrevocably submit to the exclusive jurisdiction of the courts of England and Wales to settle any dispute which may arise out of or in connection with these Terms. If you live outside the United Kingdom, English law shall apply only to the extent that English law shall not deprive you of any legal protection accorded in accordance with the law of the place where you are habitually resident ("Local Law"). In the event English law deprives you of any legal protection which is accorded to you under Local Law, then these terms shall be governed by Local Law and any dispute or claim arising out of or in connection with these Terms shall be subject to the non-exclusive jurisdiction of the courts where you are habitually resident.

You may print and keep a copy of these Terms, which form the entire agreement between you and Mondaq and supersede any other communications or advertising in respect of the Service and/or the Website.

No delay in exercising or non-exercise by you and/or Mondaq of any of its rights under or in connection with these Terms shall operate as a waiver or release of each of your or Mondaq’s right. Rather, any such waiver or release must be specifically granted in writing signed by the party granting it.

If any part of these Terms is held unenforceable, that part shall be enforced to the maximum extent permissible so as to give effect to the intent of the parties, and the Terms shall continue in full force and effect.

Mondaq shall not incur any liability to you on account of any loss or damage resulting from any delay or failure to perform all or any part of these Terms if such delay or failure is caused, in whole or in part, by events, occurrences, or causes beyond the control of Mondaq. Such events, occurrences or causes will include, without limitation, acts of God, strikes, lockouts, server and network failure, riots, acts of war, earthquakes, fire and explosions.

By clicking Register you state you have read and agree to our Terms and Conditions