Canada: Appeal Court Overturns Trial Decision In Berendsen, Confirming Foreseeability Required For Historic Contamination Lawsuit

In its much anticipated decision in Berendsen v. Ontario, the Ontario Court of Appeal has granted the province's appeal from a trial decision awarding the plaintiff $2.4M in damages and prejudgment interest for historic property contamination. Reversing the trial judgment in three significant areas – causation, standard of care (foreseeability) and negligent inspection/failure to order remediation – the decision has important implications for contaminated site litigation everywhere. Most importantly, it effectively confirms the "state of the art" defence and demands that courts assess "standard of care" based upon actual evidence proving what was foreseeable at the point in time contamination is discharged or deposited, rather than what may be foreseeable today.

Background

The Berendsen case concerns ultra-trace levels of polyaromatic hydrocarbons (PAHs) and other chemicals allegedly emanating from asphalt road waste buried on a dairy farm some 40 years ago. The Ontario Ministry of Transportation (MTO) deposited the waste there in the mid-1960s, with the consent of a previous owner, as was the common practice. The most recent owners of the farm, the plaintiffs, alleged that the ultra-trace levels of PAH contaminated their well water and made it "unpalatable" to their dairy cows, reducing their water intake, decreasing milk production and doubling the cull rate of the herd.

The Ontario Ministry of Environment (MOE) started supplying clean trucked water to the farm in response to the plaintiffs complaint. However, after inspecting the plaintiffs' well water and determining that the levels of contamination were below the Ontario Drinking Water Objectives for human consumption, the MOE stopped trucking water and refused to take further administrative action (i.e., refused to order MTO to remediate).

The trial judge found that the ultra-trace levels of PAH were causing damage to the farmer and that it should have been reasonably foreseeable to the MTO 40 years ago that this would happen eventually.

The Court of Appeal reversed the trial decision in three key areas: causation, foreseeability and negligent inspection/failure to order remediation.

Causation

The Court of Appeal qualified its ruling on causation, stating that because it found in favour of the defendant (Ontario) on the standard of care (foreseeability) issue, "it is not necessary to decide whether to set aside [the trial judge's] causation finding." Nonetheless, the court devoted thirteen pages of its thirty-two-page decision on an obiter critique of the causation findings of the trial judge.

Some of the key observations made by the court included:

  1. the trial judge's wholesale rejection of the defence experts and wholesale acceptance of the plaintiffs' expert "raises concern about the objectivity of the trial judge's assessment ... of the expert evidence";
  2. the fact that the plaintiffs' expert evidence at best established harmful chemicals in the closer, older well and did not explain why the cattle refused to drink from the newer well; and
  3. the fact that the plaintiffs' expert evidence completely failed to address how contaminants could have travelled 400 feet to the new well and penetrated its "sound and impenetrable" newer casings.

In the court's view, the above difficulties

...suggest an unexplained reason, unrelated to the chemicals in the buried waste, for the cows' unwillingness to drink the Berendsens' well water.

Standard of Care

On this key aspect of its decision, the Court of Appeal reiterated the Supreme Court's test for standard of care in Resurfice Corp. v. Hanke:

Liability for negligence requires breach of a duty of care arising from a reasonably foreseeable risk of harm to one person, created by the act of omission of another.

The court concluded that "it is evident that foreseeability of harm is a crucial component of a breach of the standard of care."Applying the foreseeability requirement to the case at bar, the court observed that:


[t]o succeed in showing a breach of the standard of care in this case, the Berendsens had to show that, back in the 1960s when Ontario deposited asphalt and concrete waste on the dairy farm, harm to the cattle from this buried waste material was a reasonably foreseeable risk.

In a nutshell, the Court of Appeal agreed with the defendant that

the trial judge erred in law because there was no evidence to support her conclusion [that] MTO knew or ought to have known the quantity of the fill and the location to which it decided to dump the roadbed waste, could potentially result in toxicity to the natural water supply on the farm.

The Court of Appeal noted that no evidence was cited by the trial judge to support this conclusion, whereas extensive evidence was cited by the trial judge for the rest of her decision. As a result, the Court of Appeal held that the trial judge's "finding on foreseeability of harm is stated baldly without any supporting evidence." What was completely missing from the plaintiffs' case and "what was needed was evidence of foreseeability of harm."

Most telling, the Court noted that there was "considerable evidence going the other way –suggesting that harm to the Berendsens' well water and to its herd from the deposit of waste materials was not foreseeable in the 1960s." This included:

  • In the 1960s, the deposit of waste material was not regulated. No industry or governmental standards existed. Indeed, the evidence suggests that what occurred on this farm was a fairly common practice at the time;
  • Guidelines now exist on how close asphalt waste can be placed to wells – a minimum of 100 metres away. These guidelines, however, came into effect in the late 1980s. No guidelines existed in the 1960s;
  • The field of toxicity did not even begin to develop until the 1970s;
  • No evidence was led that in the 1960s soil geologists understood chemicals in buried waste material could migrate to well water 60 feet away;
  • No evidence was led that in the 1960s veterinarians understood water fit for human consumption could nonetheless cause harm to cattle;
  • The plaintiffs' experts could not point to a single scientific study showing that people or animals had been harmed by the level of chemicals in the Berendsens' well water. Both experts considered this case to be "unique."

In the result, the Court of Appeal concluded:

In the present case, I am not persuaded there is any evidence that the harm occurring to the Berendsens was reasonably foreseeable when Ontario deposited waste material on the dairy farm... Although this result may seem harsh in the light of what we now know about the environment, it is inappropriate to use our current knowledge to measure conduct occurring more than 30 years ago.

Negligent Inspection/Failure to Order Remediation

The trial judge found that MOE's investigation of the plaintiffs' well water was done negligently, but then went on to conclude that the defendant had a correlative duty to "eliminate the continuing harmful effects of the buried waste materials."

The Court of Appeal accepted that the Crown had made a policy decision to investigate and therefore assumed a duty of care to carry out that investigation properly. The defendant did admit that the investigation was done negligently. Nevertheless, the Court of Appeal agreed with the defendant that the breach of a duty to investigate in no way implies a breach of a duty to remediate. The court cited several reasons for this conclusion.

First, MOE's negligent investigation was causally irrelevant since the findings of the investigation (that contamination in the well water was below the Ontario Drinking Water Objectives) were ultimately justified and confirmed by the plaintiffs' own expert. Although Ontario

...undoubtedly had the discretionary power to [order remediation] ... it made a deliberate decision not to exercise that power, and it did so for a legitimate reason: the water met existing standards.

In this and other passages, the Court of Appeal appears to have said that, to the extent that there can be any inquiry into the reasonableness of a government's exercise of a discretionary order power in a civil action, the fact that contamination levels meet government standards is sufficient to render reasonable a government decision to take no action.

Second, and perhaps most importantly, the Court of Appeal's decision underscores that the power of the Director of MOE to order an environmental clean up under Ontario's environmental laws "is discretionary, not mandatory" and therefore imposes no duty of care on the government to order remediation. Distinguishing the decision in Heighington v. Ontario (1989), 69 O.R. (2d) 484, which decision was relied on by the trial judge, the court observed:

... the 1937 Public Health Act that governed the dispute in Heighington imposed a duty on the Department of Health to take necessary measures to abate conditions injurious or dangerous to health; neither the Ontario Water Resources Act nor the Environmental Protection Act imposed a duty to remove the waste material or improve the Berendsens' well water.

Conclusion

In this important decision, the Ontario Court of Appeal has effectively restored the law relating to the standard of care in historic contamination cases. For the standard of care to have been breached, there must be compelling evidence that it was reasonably foreseeable, at the time of the alleged wrongful conduct in question, that the discharge/deposit of the contamination would cause the type of harm for which damages are claimed.

The Court's decision also confirms the discretionary nature of environmental remediation orders in Ontario. Hopefully, this decision will foreclose any suggestion of expanded government liability for discretionary decisions not to issue such an order.

Jack Coop is a partner in the Litigation Department in the firm's Toronto office. The focus of his practice is environmental litigation.

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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