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iii) the fairness factors have been replaced by the MOE’s Compliance Policy which provides guidance to MOE staff when exercising their authority.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.