A July 2, 2019, judgment of the Environmental Review Tribunal in Alizadeh v. Ontario (Environment, Conservation and Parks), 2019 CanLII 62106 (ON ERT), confirms that corporate officers and directors face a high evidentiary burden to rebut the presumption that they are properly named in an Environmental Protection Act ("EPA"), Section 18 Order.
Section 18 of the EPA provides the authority for the issuance of a Director's Order to any "person who owns or owned or who has or had management or control" of a contaminated property, requiring them to monitor, control or remediate the contamination, whether they caused it or not.
In this case, a former director of a corporation that purchased a contaminated property was named personally in a Section 18 Director's Order. The Order required the construction of a system to manage and treat toxic leachate seeping from a wood waste landfill on the property that has the potential to affect drinking water sources.
The former director appealed the Order to the Environmental Review Tribunal ("ERT"), arguing that he should be removed from the Order because:
- He was not an officer or director of the corporation when the Director's Order was issued;
- Even when he was a director, he was only a figure-head with no authority to bind the corporation on his own;
- He has no access to the property, so no ability to comply with the requirement to construct a leachate management system; and
- He is experiencing financial hardship and has no ability to pay for the work.
These arguments fall into two categories: (1) the Order is without jurisdiction because the former director never had the requisite "management or control" of the property, and (2) naming a former director who has no ability to carry-out the Order is "unfair".
Management or Control
With respect to the first issue, the ERT held, at paragraph 28, that "[w]here those with formal legal control of a corporation deny their involvement, the Tribunal puts the onus on them to make a 'convincing case'". Essentially, the ERT accepted that corporate officers and directors are presumed to be in control, and the onus is on them to prove by convincing evidence that he or she is not.
In this case, there was evidence that the former director had signed the Agreement of Purchase and Sale for the contaminated property; he had been the only point of contact between the Ministry of the Environment and the corporation with respect to the management of leachate for several years; and he had held himself out as the president of the corporation and the person making decisions on its behalf. The Tribunal found that there was not sufficient evidence to support his assertion that in all of these actions he had been acting at the express direction of another person. As such, he was unable to rebut the presumption that he had exercised sufficient management and control to be subject to a Section 18 Director's Order.
With respect to the second issue, whether it was proper to make a person subject to an Order where he has neither the ability to comply with the Order nor the money to pay for the work, the ERT reiterated that the Tribunal will only remove persons from an Order where it can be shown to advance the environmental objects of the EPA.
Relying heavily on the Ministry's "Compliance Policy" and its previous decision in Kawartha Lakes (City) v. Ontario (Director, Ministry of the Environment),  O.E.R.T.D. No. 31, the Tribunal stated, at para. 40:
In regard to issuance of orders, financial hardship on the part of the responsible person should not be accepted as a reason for not issuing an order...
The named person must demonstrate, on the balance of probabilities, that the purpose of the provision authorizing the issuance of the control document and the statute will be served...
Human health and environmental protection is first and foremost.
The ERT concluded that it would not advance the purpose of the EPA to remove the former director from the Order.
This decision re-asserts that the ERT takes a very broad view of who may be properly named in a Section 18 Order and that considerations of fairness and equity carry very little weight. Where parties wish to be removed from an Order they must demonstrate how their removal would advance the environmental protection objectives of the EPA.
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