Ontario’s Excess Soil Management Policy Framework

What is Excess Soil?

Ontario's Excess Soil Management Policy FrameworkExcess soil is soil that is generated in excess to requirements at a construction/development site or project (“source site”). It could include naturally occurring materials commonly known as earth, topsoil, loam, subsoil, clay, sand or gravel, or any combination thereof.

Excess soil is not needed at the source site after it has been excavated and as such, it must be moved to a new, off-site, location. Temporary storage is sometimes required before the excess soil can be brought back into the system to be used for beneficial reuse at the originating site. Alternatively, it may be sent to a new “receiving site” for permanent relocation.

The Problem

Management of excess soil has become a growing concern for municipalities, provinces, non-governmental organizations, conservation authorities and industry members largely due to a lack of clarity and a patchwork of existing legislation. There are issues associated with illegal dumping of soil, site-alteration by-laws, commercial fill operations, and the tracking of excess soil which all relate to concerns over the quality of excess soil and the overall protection of the environment, water and human health. An additional concern relates to the impact on greenhouse gas emissions which are created through the transportation of excess soil around the province.

Furthermore, much of the existing oversight for managing excess soil focuses on responsibility over “receiving sites” (sites that accept and receive excess soil and where the soil remains) as opposed to “source sites” (sites that generate excess soil). There are two main problems associated with this. Firstly, the current policy tools that apply in relation to receiving sites leave some gaps in terms of authority as there are various bodies who oversee regulation. Secondly, there is a lack of regulation over source site responsibility and management which leads to problems in terms of monitoring the tracking and re-use of excess soil.

In recognition of these concerns, the Ministry of Environment and Climate Change (“MOECC”) has finalized an Excess Soil Management Policy Framework (the “Framework”). This Framework provides principles to guide policy and program development, describes problems with existing policy and the division of current roles and responsibilities and further outlines policy needs, actions and priorities.

Purpose of the New Framework

As noted on the Environmental Registry, the proposed Framework embraces two key goals:

  1. to protect human health and the environment from the inappropriate relocation of excess soil; and
  2. to enhance opportunities for the beneficial re-use of excess soil and to reduce greenhouse gas emissions associated with the movement of excess soil.

In order to achieve these goals, the MOECC intends to build upon existing policy tools relating to excess soil management and implement sustainable practices through the use of new regulatory requirements and new standards for excess soil.

Key Features of the Framework

Some of the key features and areas of particular concern that are addressed in the framework are as follows:

  • to implement procedures aimed at increasing local re-use of excess soil in order to reduce greenhouse gas emissions and increase sustainable development;
  • to improve technical direction and establish best practices regarding standards for the reuse of excess soil;
  • to develop clear guidance to inform requirements for the sampling and analysis (i.e. testing) of excess soil;
  • to put materials, such as excess soil, back into the system for more effective reuse where it is safe to do so;
  • to move to a system which focuses on life-cycle management by placing more attention on the generators of excess soil at source sites, as they are in the best position to support its reuse;
  • to develop a new regulation under the Environmental Protection Act, R.S.O. 1990, c. E.19 requiring larger and/or riskier source sites to develop and implement excess soil management plans certified by a qualified person and made available to MOECC and local authorities;
  • to explore the potential of including the preparation of an excess soil management plan as a matter to be listed when a permit is issued before excavation;
  • to develop guidance to help ensure that proponents consider excess soil management throughout the environmental assessment process;
  • to implement a new by-law language tool as a resource for municipalities in developing or updating clean fill and site alteration by-laws; and
  • to develop educational tools respecting excess soil management at receiving sites to better inform municipalities in the development or updating of by-laws.

In addition there are proposed legislative amendments to the following Acts:

  • Municipal Act, 2001, S.O. 2001, c. 25 – an amendment to allow site alteration by-laws to apply in conservation authority regulated areas;
  • Aggregate Resources Act, R.S.O. 1990, c. A.8 – amendments to increase authority to make future regulations about record keeping on aggregate operations (i.e. fill records);
  • Environmental Protection Act, R.S.O. 1990, c. E.19
    • to amend the definition of inert fill in Regulation 347 (Waste) in order to clarify when excess soil is a waste and link this to standards for reuse; and
    • to amend the requirements under Regulation 153/04 (Records of Site Condition) relating to excess soil brought to a site, record keeping of receiving sites used and roles of qualified persons.

Implementation 

The Framework proposes a gradual implementation plan which prioritizes the contemplated actions based on feedback received throughout the consultation process. Engagement and sub-working groups will be developed which are composed of actors with key interests who can provide input on the proposed policies, technical matters, guidance and overall implementation, including coordination with external programs. The Framework outlines some proposed actions which are currently underway and discusses both short and long term goals.

Conclusion 

This Framework was developed in response to concerns regarding the oversight and management of excess soil within the current system and the need for increased protection to human health and the environment. Currently, several pieces of legislation and regulations apply to specific aspects of excess soil management and, for the most part, is not directly regulated by MOECC.

The MOECC is thus focused on providing stronger direction and outlining clear, enforceable rules which help to identify and clarify the roles and responsibilities of the various actors involved with the management of excess soil. The overall focus is to create a single, cohesive policy framework that fills the current gaps in existing legislation.

To read the final version of the Excess Soil Management Policy Framework which was released in December 2016 click here.

The content of this Blog is intended to provide a general guide to the subject matter. The information does not constitute legal advice and a solicitor and client relationship is not created.

New Risk Assessment Changes for Contaminated Sites

New Risk Assessment Changes for Contaminated SitesOn November 1, 2016, the Ministry of Environment and Climate Change (“MOECC”) announced that it will be bringing into effect an updated “Approved Model” to be used by property owners in submissions of Modified Generic Risk Assessments (“MGRA”) for contaminated sites. This reflects the first change to the MGRA scheme since 2011 and is intended to increase the number of sites that would qualify for a MGRA, thus improving brownfield redevelopment across Ontario.

Background:
The MGRA is a process that outlines a streamlined approach which adopts property specific standards for the remediation of contaminated sites that proponents must adhere to in order to file a Record of Site Condition (“RSC”). The MGRA effectively pre-approves a set of Risk Management Measures and pre-calculates the standards that would apply to the site if the measures were implemented. These pre-determined “generic” standards are intended to reflect those standards that are accepted as being protective of human health and the environment based on the proposed use of the site, potential contamination pathways and toxicity levels.

The RSC sets out the environmental condition of a property at a particular point in time, based on environmental site assessments conducted by a qualified person. An RSC must be filed in the RSC registry before property use changes in certain ways and is often considered a pre-condition for property development by banks and municipalities across Ontario. Thus, the risk assessment process involved with obtaining an RSC is fundamental to promoting brownfield redevelopment in the province.

While it was intended that the MGRA approach would allow for a more efficient, cost-effective and timely risk assessment process, in practice, only a small number of sites actually qualified. The new Risk Assessment changes introduced by the MOECC are aimed at increasing the number of qualifying sites by drawing on experiences gained since the scheme was initially introduced in 2011.

The New Model:
After consultation with experienced environmental professionals and industry representatives, the MOECC developed the new model with the following underlying purposes in mind:

  • To develop new features that will more adequately protect the environment;
  • To update model standards to reflect current scientific knowledge;
  • To promote more efficient brownfield redevelopment; and
  • To increase the number of sites across Ontario that can qualify for the streamlined risk assessment process.

As summarized on the Environmental Registry, the new features of the model are as follows:

  • Risk management measures to prevent vapours from entering buildings to protect indoor air quality;
  • Land use control measures to ensure drinking water is municipally supplied to prevent risk where groundwater is not potable (no wells);
  • Additional risk management options for capping a site;
  • Health and safety plan and a soil and groundwater management plan to protect people/ community during redevelopment;
  • Risk assessment submission form is integrated into the Approved Model and is auto-populated;
  • Standardized approach to demonstrate that there is no evidence of free product (no oil slick) on site;
  • Greater ability to utilize soil vapour sampling to help demonstrate that the site meets relevant standards; and
  • Ability to utilize new ministry endorsed Toxicity Reference Values (TRVs).

While the hope is that this new model will provide for quicker and cheaper Risk Assessments for a greater number of sites, it cannot be determined with certainty that this will be the result until the model has been implemented in practice. It is also unclear whether the model will provide for greater environmental protection while also promoting more efficient brownfield redevelopment in Ontario, though commentators and government officials appear hopeful.

For more information please review the Environmental Registry Notice by clicking here.

The content of this Blog is intended to provide a general guide to the subject matter. The information does not constitute legal advice and a solicitor and client relationship is not created.

A New Approach to Contaminated Land Disputes

A New Approach to Contaminated Land DisputesOn May 26, 2016 the Supreme Court denied leave to appeal the decision in the seminal case of Midwest Properties Ltd. v. Thordarson (“Midwest”). This denial validates the reasoning from the Court of Appeal (“CofA”) and supports the use of s. 99(2) of the Environmental Protection Act, R.S.O. 1990, c. E.19 (“EPA”), which focuses on the right to compensation for spills, as a separate, distinct ground of liability under which compensation for remediation costs can be claimed without having to prove intent, fault, a duty of care or foreseeability. The convincing judgment from the CofA, written by Justice Hourigan, reaffirms the Supreme Courts view as espoused in R v. Castonguay Blasting that environmental legislation, such as the EPA, must attract an expansive approach and generous interpretation in order to ensure adequate protection of our natural environment.

In Midwest, three overarching claims were advanced: 1) damages under s. 99(2) EPA; 2) nuisance; and 3) negligence. While the trial judge denied liability under all three causes of action, the CofA reversed this decision and confirmed that damages should be awarded for all three claims.

Briefly, the facts revolve around the contamination of two adjoining properties; one owned by Midwest, and one owned by Mr. Thordarson’s company Thorco. Thorco had stored large volumes of petroleum hydrocarbons (“PHC”) on its property for an extended period of time resulting in substantial contamination. Over the decades, Thorco had been subject to requirements under a Certificate of Approval, a number of MOE orders, as well as a court order to remove the contamination; none of which were properly adhered to. Midwest was interested in obtaining all, or part of Thorco’s property, but after learning of the contamination they decided to proceed with a Phase II Environmental Site Assessment on their own adjacent property. The Phase II report revealed contaminated soil and groundwater that exceeded MOE guidelines. An MOE order was issued to Thorco and Thordarson to cleanup Midwest’s property and Midwest brought a claim on the above-noted grounds.

On appeal, the main issues to be considered were whether the Trial Judge erred in: 1) finding that the MOE order precluded recovery under s.99(2); 2) finding that no damage under s. 99(2) was established; and 3) dismissing the nuisance and negligence claims and the claim for punitive damages. Additionally, the CofA had to consider the personal liability of Mr. Thordarson as owner of the property. Each issue will now be discussed in turn.

At trial, the Judge reasoned that s. 99(2) of the EPA cannot be interpreted to include damages for the cost of remediation where an MOE order had already been made. The MOE intervened in the appeal to contest this fact, noting that its order to remediate does not preclude recovery under s. 99(2) of the EPA. Additionally, if damages for remediation costs were ordered, the MOE agreed that it would have to withdraw its order and likely redirect it to Midwest thus eliminating the possibility for double recovery. Ultimately, the CofA determined that there is no support for the notion that a party cannot advance a claim under this section where an MOE order is already issued; the two matters are not mutually exclusive. This, it was said, would frustrate the purpose of the EPA by allowing a defendant to effectively use the order as a shield from liability. As such, the court decided to award compensation under s. 99(2) despite the existence of the order.

This raised the question of how to best assess the award of damages. Within the case law and amongst legal professionals, there are conflicting views with regard to whether damages should be assessed based on diminution in property value or the costs of remediation. In this case, Justice Hourigan held that the restoration approach is to be preferred as it aligns with the objectives of the EPA and provides a greater degree of environmental protection. Oftentimes, when property is contaminated, the costs of restoration far outweigh the relative loss of property value. This means that damages based on diminution may fail to adequately fund the cleanup process. By awarding costs of remediation, cleanup is far more likely to occur. Additionally, by forcing the defendant to pay for these costs, the firmly entrenched principle in environmental law of “polluter-pays” is upheld. Accordingly, damages were awarded in the amount of $1,328,000 based on expert evidence put forth by Midwest about the reasonable costs of remediation.

It was further held that the trial judge had erred in dismissing the nuisance and negligence claims on the basis that damage had not been established. Justice Hourigan deemed this to be a “palpable and overriding error” as the trial judge failed to consider the uncontradicted evidence of physical and material harm to Midwest’s property, which also presented a number of human health risks. Following an application of the tests for nuisance and negligence, the CofA affirmed that Midwest was entitled to damages under both claims. Given that liability was established under these claims, the CofA was able to award punitive damages to condemn the actions taken by Thorco and Mr. Thordarson. The ongoing and obvious disregard for their environmental obligations, which was clearly motivated by profit, was particularly egregious behaviour which substantiated the claim for punitive damages.

Finally, the CofA determined that the wording in s. 99(2) indicates that both the party or entity that owns the pollutant, and the person or people responsible for management and control of the pollutant, can all be held liable. Mr. Thordarson was deemed to have had control of the PHC and thus joint and several liability was imposed on Mr. Thordarson personally and on his company.

This decision and the interpretation of s. 99(2) now provides a new strategic cause of action which can be advanced in effectively all environmental claims relating to contaminated land disputes. Plaintiffs’ can now bring claims under this section based solely on evidence of contamination and, depending on the circumstances of the case, they may be able to claim the full costs of future remediation. Due to this expansive treatment of damages, it is likely that this will become a primary cause of action in many cases moving forward. This will arguably lead to an increase in reliance on expert evidence pertaining to the methods and costs of remediation. While it is remains unclear whether the courts will always award damages on the basis of remediation costs, or revert to the diminution approach, it is clear that this case has important implications within the environmental field as it provides a flexible statutory cause of action that superimposes liability over the common law.

The full case can be accessed by clicking here.
To read our summary of the previous decision out of the Ontario Superior Court which was overturned in the 2016 decision please review our June 2013 Newsletter.

The content of this Blog is intended to provide a general guide to the subject matter. The information does not constitute legal advice and a solicitor and client relationship is not created.

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Wasted Dreams

Municipalities exhaled a sigh of relief when the Ontario Court of Appeal overturned the January 2011 decision of the Superior Court of Justice in the case Biskey v. Chatham-Kent (Municipality) on November 21, 2012. This case involved a couple (the Biskey’s) who were determined to build their dream-home on a newly purchased property, however, they purchased a former dump-site.

The Biskey’s (respondents), purchased a property from a couple (the Kaminskis) which was formerly owned by the appellant, Chatham-Kent Municipality. The property was zoned for agricultural use and sold by the municipality to the Kaminskis in early 2002 for a purchase price of $35,000. Subsequently, the respondents purchased the property for $80,000 and intended to construct a new home.

At the time of purchase, the respondents were unaware that the property had previously been used as a dump and that an environmental site assessment and report was conducted on behalf of the municipality (the Jagger Hims Report) prior to the sale to the Kaminskis. The municipality disclosed the report to the Kaminskis but when the respondents purchased the property this report was never disclosed to them by the sellers or the municipality.

The respondents then applied for a building permit in 2003 and their contractor discovered that there were problematic soil conditions as a result of the properties history. They obtained a copy of the Jagger Hims Report, the Golder Report which was produced in relation to the respondents building permit application, and they also had their own engineering report produced to support this application. All of these documents contained detailed information pertaining to the previous use of the property and its appropriateness as a site to build on.

Prior to the building permit being issued by the municipality the respondents filed a claim against the municipality, the vendor, and the real estate agent for $350,000 in damages related to negligence, nuisance and negligent misrepresentation and another $100,000 for aggravated, exemplary and punitive damages. This claim was later amended to include causes of action associated with breach of contract and breach of the Environmental Protection Act, R.S.O. 1990, c. E-19 and increased to $2 million. This amount was based on environmental assessment costs, clean-up costs, and increased costs associated with construction and the diminution in property value as a result of the “stigma” associated with the property because of its prior use as a dump.

After this claim was brought forth, the respondents also received an offer from the previous owners to buy back the property for the original purchase price ($80,000). They refused this offer and instead proceeded with construction.

Prior to trial a settlement was reached with the vendors and the real estate agent. At trial, the municipality was ordered to pay damages in the amount of $386,142.82 which accounted for the additional construction costs, environmentally related costs, the reduction in value due to the stigma associated with the property, and miscellaneous costs. Chatham-Kent municipality appealed this decision and the Court of Appeal focused on the damages that were awarded.

The Court of Appeal began by noting that the respondents were fully aware that the property had previously been used as a dump prior to building. A significant amount of information (reports) was disclosed to the respondents pertaining to the fact that there would undoubtedly be additional costs associated with construction and environmental issues, and that the value of a home on such a property would be diminished due to the stigma associated with its prior use. Additionally, the respondents filed a statement of claim prior to construction which revealed that they were fully aware of these additional costs and the reduction in value. They also refused to accept the offer from the previous owners (Kaminskis) for a full refund of the original purchase price, at which point they had estimated that they had only incurred 25,000 in damages. The respondents proceeded with construction regardless.

This led the Court to agree with the municipality’s submission that the trial judge had erred in relation to the damages that were awarded for the additional costs related to construction, the environmental issues, and the reduction in value. The Court stated that:

“When the [respondents] decided to reject the Kaminski offer and to proceed with construction in the knowledge that they were building on a dump site and that they would incur added costs, any causal link with the alleged negligence of Chatham-Kent was broken… from that point forward, the [respondents] were on their own.”

Legally, the Court did not think that the respondents had any enforceable right to require the municipality to compensate them when they decided to take on the substantial risk of constructing a home on a property they knew to be contaminated as a result of its prior use. The appeal was allowed, the trial judgement was set aside, and the action was dismissed. Furthermore, the municipality was entitled to the costs associated with launching an appeal and the costs of trial. You can access the Court of Appeal decision by clicking here.

It is important as a real estate agent or vendor to note that while the settlement has not been reported, no doubt a payment was made by both the vendor and agent. In each jurisdiction across Ontario there will be a source to determine the location of landfills both closed and open. In the County of Simcoe both the Barrie District Ministry of Environment and the Corporation of the County of Simcoe have a compiled list of all landfills open/closed, private and municipal.

You should also obtain a copy of the Official Plan for the municipality in question. If you are an agent who intends to represent a vendor or purchaser of rural properties you should determine who the source of the information is and become familiar. If proper diligence is not done by the agents it is possible more than the commission on the specific property will be in jeopardy.

The content of this article is intended to provide a general guide to the subject matter. The information does not constitute legal advice and a solicitor and client relationship is not created.

Innocent Parties can Still be Held Responsible for Clean-up

In the May 28, 2012 decision of The Corporation of the City of Kawartha Lakes v. Director, Ministry of the Environment, the Divisional Court affirmed the Environmental Review Tribunal (“ERT”) November, 2009 decision. You can access an article we wrote on this decision which was published in the March 2013 issue of Municipal World Magazine by clicking here. The result was that the Ministry of the Environment (“MOE”) can order innocent parties who are NOT responsible for discharging pollution into the environment to clean-up the contamination which has impacted their own property. This decision was appealed to Ontario Court of Appeal on May 10, 2013, where the decision was upheld and the appeal dismissed.

The Court of Appeal agreed that the question was not who was at fault for the spill, but rather, whether or not the Order against the City should be revoked. To determine this, all three courts focused on the “need to serve the environmental protection objective of the legislation” rather than on the “polluter pays” principle and the finding of fault on the part of the City. This is because focusing on who was at fault would not provide any assistance in determining how the need to serve and protect the environment would be addressed if the order were to be revoked. It was decided that the proper course of action was to exclude the evidence of fault and uphold the order which would require the City to remediate the contaminated property.

It is important to note that if the City were to be able to provide some evidence of a solution which would have protected the environment the outcome of this appeal may have been different. However, the City provided no evidence of an alternative solution which would serve the environmental protection objective of the Act, leading to the decision to uphold the no fault order.

Parties subject to no fault orders are eligible under section 100.1 of the Act to seek to recover costs from parties who had some control of the pollutant. The City has taken advantage of this section of the Act, and is seeking to recover some of the costs associated with remediation from the Respondents, specifically the Gendrons (neighbours), Thompson Fuels Ltd. and the Technical Standards and Safety Authority (TSSA). This proceeding has not yet come to a conclusion.

This decision has important implications for innocent landowners. Landowners who have no control over the property from which contamination originates are exposed to substantial risk. Landowners, and especially municipalities, who own large amounts of land adjacent to potential contaminating sources need to be aware of the potential liability and keep informed. If the MOE is involved with a neighbouring property, the adjacent landowner should put the MOE on notice that they are aware there is a potential for liability if the contamination goes off-site. Therefore, you should request to be informed about everything that is going on, including what the MOE is doing to make sure the contamination is contained and properly remediated.

The full ERT 2009 decision can be accessed at: http://www.ert.gov.on.ca/files/ORD/09007o4.pdf

The full Divisional Court 2012 decision can be accessed at: http://canlii.ca/t/frhhk

The full Ontario Court of Appeal 2013 decision can be accessed at: http://canlii.ca/t/fxd71

The content of this article is intended to provide a general guide to the subject matter. The information does not constitute legal advice and a solicitor and client relationship is not created.

“Adverse Effect” Does Not Require Significant Impact on the Natural Environment

On March 16, 2012, the Ontario Court of Appeal released an important decision pertaining to the definition of an “adverse effect” under the EPA. The case, Ontario (Environment) v. Castonguay Blasting LTD, involved a situation in which the defendant (Castonguay) was charged with a violation under the EPA because of a blasting operating that went awry and resulted in the discharge of flying rock debris. This discharge caused damage to private property (specifically a house and vehicle) which was outside of the intended blasting area. Due to the company’s failure to report the incident to the MOE, the MOE charged Castonguay with a failure to meet reporting requirements under the EPA, which is an offence with a minimum $25,000 fine.

The charges were made in relation to Section 14(1) of the EPA, which sets out the offence of discharging a contaminant into the natural environment, as well as Section 15(1), which requires that such a discharge is to be reported to the MOE when it “causes or is likely to cause an adverse effect”. What was at issue in this case is whether or not it can be said that flying rock debris constitutes a discharge in the form of an environmental contaminant, and whether or not the discharge caused, or was considered likely to cause, an adverse effect to the environment, people, plants, animals and/or property.

At the time the incident occurred, Castonguay was working on a project for the Ontario Ministry of Transportation (“MTO”). The contract specifically detailed who was to be notified in the event of fly-rock being expelled out of the boundaries of the work site. Within the contract, it was not specified that the MOE should be notified of such an event, nor has the MOE ever asked companies in the blasting industry to report such events. Furthermore, Castonguay was not considered negligent as there were no errors specifically made in the blast itself, and they followed the reporting procedure as set out in the contract with the MTO. Additionally, Castonguay took responsibility for the property damage that occurred, provided full compensation to the property owners, and notified their contract administrator, who subsequently reported the event to both the MTO and the Ministry of Labour.

Both the contract administrator and Castonguay did not believe this incident resulted in the requirement to report the event to the MOE, as neither of them considered the fly-rock to be a “discharge” of a “contaminant” that was likely to have adverse impacts to the natural environment. Initially, the Ontario Court of Justice agreed with this view, and acquitted Castonguay of the charge. However, the MOE appealed this matter to the Superior Court of Justice where Mr. Justice Ray reversed this decision. A final appeal was undertaken by Castonguay to the Ontario Court of Appeal in order to set aside the conviction, however, the appeal was dismissed and the conviction was upheld in a 2-1 decision in favour of the MOE.

The dissenting judge, Mr. Justice Blair, came to the conclusion that the requirement to report an incident to the MOE only arises when there is both harm to the natural environment, as well as an adverse effect on people, plants, animals or property. He found that the fly-rock did not have anything more than a trivial or minor impact on the natural environment, that it did not constitute a “contaminant”, and that it was unlikely to cause an adverse effect for the purposes of the EPA. In his opinion, liability relating to the discharge of a contaminant was only to be triggered when that discharge amounted to something more than trivial or minimal harm to the natural environment. He went further to argue that to interpret the statute to require notification to the EPA even when an event is considered trivial, is to allow the Act “to overreach its intended mandate [as] it is not super-legislation governing every aspect of life.”

The majority, however, disagreed with this position and found that the reporting requirement can in fact be triggered even in cases where there is no significant impairment to the natural environment. This is because the EPA is intended to be interpreted broadly in order to ensure the protection and preservation of the environment. The majority position, as outlined by Mr.Justice MacPherson, was that the application of the EPA should not be restricted only to cases that involve a real threat to the natural environment, as the EPA is also concerned with various uses of the environment that can result in harm to people, animals and property.

Although it was acknowledged that in many cases, blasting rock will not result in an adverse effect, it was argued that in this case it did, because the way in which the environment was used (blasting rock into the air) resulted in harm to property. This led to the majority position that the fly-rock discharged into the natural environment from Castonguay’s blasting operation did in fact constitute a discharge of a contaminant into the air. Furthermore, that the adverse effect of this discharge was the damage to private property, which constituted an adverse effect for the purposes of the EPA.

On September 27th, the Supreme Court of Canada granted Castonguay with a leave to hear an appeal on this conviction. Overall, the decision that is made from this case may have some broad implications, particularly on how businesses approach reporting requirements under the EPA, as this decision provides a cautionary tale as to whether the EPA may apply to certain operations even when there is trivial or minimal adverse effect on the environment. The moral that can be learned from this decision is that when in doubt, companies should always be cautious and report incidents to authorities. It is also important that companies create clear policies on reporting requirements in relation to environmental law and its jurisdiction so as to avoid any potential claims.

The full case can be accessed by clicking here.

This article can also be found in our October 2012 Environmental Newsletter by clicking here.

The content of this article is intended to provide a general guide to the subject matter. The information does not constitute legal advice and a solicitor and client relationship is not created.

Innocent parties CAN be held responsible for environmental clean-up

Imagine having your property contaminated by your neighbour THEN being ordered by the Ministry to clean it up! Can it happen? Absolutely.

In the May 28, 2012 decision of The Corporation of the City of Kawartha Lakes v. Director, Ministry of the Environment, the Divisional Court affirmed the Environmental Review Tribunal (“ERT”) November, 2009 decision. The result is that the Ministry of the Environment (“MOE”) may order innocent parties who are NOT responsible for discharging pollution into the environment to clean-up the contamination which has impacted their own property.

The court confirmed the obligation for remediating the contamination rested with the property owners, and they were left to seek recourse from the party responsible for the contamination by commencing a court action.

This case started with the MOE issuing an order against the City of Kawartha Lakes (“City”) to remediate furnace oil that had impacted the City property from a local resident’s basement, and to prevent further discharge. The source of the contamination was a basement of a residence. The furnace oil entered the City’s municipal storm sewer system and culverts, and was further discharged into a lake. It was not disputed that the City was not the source of the discharge. In fact, prior to the MOE issuing this order against the City, the MOE issued an order against the homeowner. The homeowner had taken action to remediate the contamination but the contamination continued to spread to the City property.

The City appealed the order issued by the MOE against it. In its appeal, the City relied upon a previous decision, which held that property owners could be relieved of liability for cleanup orders if the owners proved they did not cause the contamination. This led to what is known as the ‘fairness factors’. Unfortunately, for the City, in this decision the ERT found that any evidence brought forward by the City to prove the landowner was responsible for the discharge of the contamination was irrelevant. The reasoning given was that:

i) the application of the fairness factors would thwart the purpose of the Environmental Protection Act to protect and conserve the natural environment;

ii) any consideration of the fairness factors must yield to the importance of responding quickly to environmental problems and furthering the purpose of the EPA;

iii) the fairness factors have been replaced by the MOE’s Compliance Policy which provides guidance to MOE staff when exercising their authority. The Policy contemplates that orders can and should be made against victimized and innocent owners with the timing and content of the order being adjustable to reflect unusual and exceptional circumstances; and

iv) the City has recourse in the courts to resolve the question of fault and liability.

The ERT held that the City could only be relieved from compliance with the order issued if they presented a solution that is fair to the environment and fair to those affected by the contamination.

This decision has significant implications for innocent landowners. Landowners who have no control over the property from which contamination may originate are exposed to significant risk. Landowner and especially municipalities who own large amounts of land adjacent to potential contaminating sources need to be aware of the potential liability and keep informed. If the MOE is involved with a neighbouring property, the adjacent landowner should put the MOE on notice that they are aware there is a potential for liability if the contamination goes off-site and, therefore, you want to know everything about what is going on, including what the MOE is doing to make sure the contamination is contained and properly remediated.

The full ERT 2009 decision can be accessed by clicking here.

The full Divisional Court 2012 decision can be accessed by clicking here.

If you have any questions pertaining to this article I invite you to contact me at shari@elliottlawyers.com.

The content of this article is intended to provide a general guide to the subject matter. The information does not constitute legal advice and a solicitor and client relationship is not created.

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Listing a Property Known to House a Grow Op?

What are Your Disclosure Obligations?

The disclosure obligations of Real Estate Agents in Ontario are unclear for what are commonly referred to as stigmatized properties. But disclosure is clearly required for one category of stigmatized properties, that being homes that were used in a grow operation. The RECO website has a notice about marijuana grow houses which states that “Brokers and salespersons are obligated to disclose any material fact about a property that they are aware of that could affect a person’s decision to buy, including if the home is a former grow op.”

There are discipline decisions available on the RECO website that confirm RECO’s position that members are required to disclose if a property was a former grow op. A decision from 2007 and one from 2011 resulted in the same penalty against the agent for failure to disclose a requirement to pay $15,000.

See the full article in the April newsletter on my website to obtain details on how to determine if a property has been the location of a former grow op by clicking here.

If you have any questions about this article, I invite you to contact me at shari@elliottlawyers.com.

The content of this blog is intended to provide a general guide to the subject matter. The information does not constitute legal advice and a solicitor and client relationship is not created.

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Stigmatized Properties – To Disclose or Not to Disclose?

I am often asked by real estate agents what do I have an obligation to disclose… murder, suicide, death…?

If the property has been the location of a murder, suicide, sexual assault or death these events are considered stigmas. Depending on the facts of each case and your individual purchaser it may or may not impact the purchase price or the purchaser’s willingness to even purchase the property.

Whether or not agents have an obligation to disclose information on stigmatized properties is unclear in Ontario. Ontario has no laws that require disclosure if a house is stigmatized. The law in Canada for purchasing homes is generally accepted as “caveat emptor” let the buyer beware. Exceptions are hiding material defects or making misrepresentations.

The seller is under no obligation to disclose any information about murders, suicides or anything negative that might have happened in the house. Realtors, however, are governed by the laws, guidelines and code of ethics imposed upon them.

Real Estate Agents in Ontario are governed by the rules and regulations imposed by the Real Estate Council of Ontario. RECO requires agents to disclose any material facts that affect the market value of the property. The Code of Ethics defines a “material fact” with respect to the acquisition and disposition of an interest in real estate, as a fact that would affect a reasonable person’s decision to acquire or dispose of the interest.

Most professionals that are writing in this area are advising agents to disclose matters that they themselves would want disclosed if they were purchasing the property as well as facts that you as the agent know this purchaser is sensitive too. For instance that the house was the scene of a sexual assault might not matter to the average purchaser but it would if the purchaser him or herself were sexual assaulted.

You only have one reputation think about this when you are interpreting your obligation against the facts of the properties you list.

Read the full summary in our April newsletter by clicking here.

If you have any questions about this article, I invite you to contact me at shari@elliottlawyers.com.

The content of this blog is intended to provide a general guide to the subject matter. The information does not constitute legal advice and a solicitor and client relationship is not created.

Nortel walks from clean-up cost of about $18 million

It is no surprise that Nortel is insolvent and seeking to restructure under the Companies’ Creditors Arrangement Act (“CCAA”). What is a surprise is the ruling this month of the Ontario Superior Court of Justice that the Ministry of Environment (“MOE”) Orders which require Nortel to perform environmental clean-up work do not take priority ahead of other obligations. Since complying with the Orders would require Nortel to expend funds the environmental liabilities are found to amount to a financial obligation and are stayed by the CCAA proceedings and therefore would be more properly addressed as a claim in the process.

Read the full summary and link to the case in our March newsletter by clicking here.

If you have any questions about this article, I invite you to contact me at shari@elliottlawyers.com.

The content of this blog is intended to provide a general guide to the subject matter. The information does not constitute legal advice and a solicitor and client relationship is not created.