Canada: Ontario Court Of Appeal Limits Historic Environmental Liability

Copyright 2009, Blake, Cassels & Graydon LLP

Originally published in Blakes Bulletin on Environmental Law, December 2009

In an important recent decision involving contaminated land, the Ontario Court of Appeal has overturned a questionable trial decision that found the Government of Ontario liable to compensate a farmer who acquired land contaminated with construction waste that originated from a provincial road project in the 1960s.

In the case of Berendsen v. Ontario, the Court reversed a 2008 trial decision (see our August 2008 Blakes Bulletin on Environmental Law: Environmental Duty of Care Lives On and On) that had decided that the Government of Ontario was liable to compensate the Berendsen family for C$1.7-million in business, property value and related damages. The Berendsen family had sued the government, as represented by the Ministry of Transportation, for having allowed certain unknown road construction contractors to deposit old concrete and asphalt waste on a farm property that the Berendsens purchased in 1981, about 20 years after the waste disposal. The original owner of the farm property agreed to the waste burial and the next owner in the line of title was also aware of the presence of the waste on the property. However, he apparently failed to disclose the presence of the waste to the Berendsens and, by the time of their purchase, the waste disposal area was overgrown with vegetation and not easily discoverable.

At trial, the evidence was somewhat confusing and resulted in some findings of fact that were questioned by the Court of Appeal. While it seemed relatively clear that within a year of the Berendsens taking possession of the farm, their cows began to suffer ill health and were reluctant to drink the farm's well water, there was conflicting or insufficient evidence that this was due to contamination originating from the road waste. The Court of Appeal was clearly concerned that the Berendsens had not established a sufficient causal link between the buried road waste, the condition of the well water and the alleged damages resulting from the cows' reluctance to drink the well water. In the end, the Court declined to set aside the trial judge's findings of fact and decided to overturn the decision on the basis that the plaintiffs had failed to establish negligence on the part of the government, as it was not foreseeable in the 1960s that the burial of the waste material on the farm would pollute the well water and cause the cows to refrain from drinking the water.

Foreseeable Risk of Harm

As the Berendsen case was based upon the common law duty of the government (and any other person) to take care or avoid negligent behaviour toward the Berendsens, it was critical for the Court of Appeal to be satisfied that, based upon the facts, the government transportation agency knew or ought to have known at the time of its actions, that the type of harm that occurred to the Berendsens was foreseeable. If it was not foreseeable, the law could not expect a defendant in the position of the agency to avoid the actions that led to the resulting harm or damage.

In the Berendsen case, the Court of Appeal could not find any evidence that, in the 1960s when the road waste was buried at the farm, it was generally known that such a practice could potentially result in groundwater contamination. In fact, the Court noted that the evidence indicated that in the 1960s land filling or burial of waste was a common practice; it was not regulated by the government; and there did not exist any industry or government standards governing the activity. The Court also noted that the trial evidence indicated that the science of toxic assessment and the toxic effect of chemicals on the environment did not begin to develop until the 1970s and there was no evidence presented at trial that the scientific or general community appreciated that waste contaminants could migrate through the ground the distances involved in the Berendsen case and adversely affect the quality of water used by domestic animals.

Ministry of Environment Not Obligated to Remediate

The Court of Appeal also rejected a second basis of liability found by the trial judge, who concluded that the government, as represented by the Ministry of the Environment, was obligated to remove the waste material once it became aware of the Berendsens' problems. This occurred in the 1980s when the Ministry of Environment began testing the Berendsens' well water after their initial complaints and, for a period of time, the Ministry made arrangements to replace the well water with alternative water supplies. This finding of liability on the part of the trial judge was likely influenced by the initial finding that the waste deposit was negligent. Notwithstanding that there were some questions concerning the way in which the Ministry of the Environment conducted its investigations of the problem, given that the water quality was ultimately found to comply with the drinking water standards that existed at the time, the Court of Appeal found that there was no obligation at law, or contained within the Ministry's enabling legislation, for it to remove the road waste material. Even if the Ministry of the Environment had positively identified that the road waste was contaminating the ground water and that the contamination was effecting the Berendsen cows, there was no legal obligation as a regulator to remove the source of contamination. Such an obligation clearly does not exist in the province's Environmental Protection Act or the Ontario Water Resources Act, which are focused on imposing environmental obligations on private citizens and corporations, not on the Ministry of the Environment.

Implications for Business Owners

So what started off as a potentially far-reaching trial decision has now been brought in line with established common law principles of civil liability. The deeppockets theory of liability that appeared to underlie the trial judge's reasoning in this case was rejected. However, the risk that one may be forced to account for past environmental acts or omissions remains, particularly if the relevant events took place closer to the present time. Certainly, by the late 1980s and early 1990s, our environmental knowledge and sensitivity had significantly changed, which makes it much more difficult to argue that during or after this time one should not have taken more care to avoid or remediate environmental contamination. Furthermore, companies owning old industrial properties that contain historical contamination are not in the same position as the Government of Ontario was in the Berendsen case.

Ontario's involvement with the Berendsen farm was not continuing. Therefore, foreseeability was only assessed against the standards of the 1960s. Ownership or occupation of land carries with it a continuing duty of care towards one's neighbours and an exposure under environmental legislation to be ordered to carry out environmental investigations and remedial work. Therefore, given the current state of our environmental knowledge and standards today, including the now common practice of carrying out environmental audits or assessments, it is more likely that a court will conclude when contamination is discovered in an old commercial property, that it is both foreseeable that historic contamination may exist and that it can cause environmental harm to one's neighbours and the environment if it is not identified and, if necessary, remediated.

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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