• Polluter Always Pays; Don’ t They?

  • Published September 15th 2015
    by Bill Leedham, QP, CESA

    One of the questions I hear often from clients and property owners is “If we didn’t cause contamination, why should we worry about responsibility for it?” Fairness and common sense dictates that the responsible polluter should be held accountable; however, recent court rulings and ministerial orders show this is not always the case. The scenarios below demonstrate that apparently “innocent” third parties should indeed be worried.

    The case of McQuiston v. Ontario (MOECC) involves solvent contamination caused by a former tenant who had vacated an industrial property. The polluting industrial tenants were issued a ministerial order for investigation and remediation; but so were several others, including the accountant holding power of attorney to sell the property for the absentee landlord; the listing real estate broker; and the directors of the realty brokerage. The regulator considered the accountant and realtors to be responsible as they controlled access during the property sale.

    Legal battles continue for an Ontario municipality stuck with close to $500,000 in cleanup costs related to off-site contamination. The 2009 upgradient spill of furnace oil, for which the polluter initiated an insurance funded cleanup; subsequently migrated through adjacent City owned property to impact land further downgradient. The City of Kawartha Lakes was directed to contribute to cleanup costs when remedial costs exceeded the limits of insurance, and to prevent further off-site impacts. The Ministry argued that even though the City was an innocent third party, protection of the environment was paramount, and the City could attempt to recoup their costs through litigation. As of 2015, the City’s legal costs escalate and their appeal of the order remains unheard while the case drags its way through the civil courts.

    In 2014, a Nova Scotia company lost their appeal of a ministerial order which imposed liability for off-site contamination it did not cause (IMP Group International Inc. v. Nova Scotia (Attorney General). IMP Group purchased an industrial property and later discovered PCE contamination caused by two prior Site owners. The contamination was reported to the Ministry and on-site remediation was initiated by IMP, based on their consultant’s recommendations. The Ministry rejected the remedial plan and ordered IMP (and not the prior owner/polluter) to conduct further off-Site investigation and remediation, as one prior owner was now defunct and the other was considered only partly to blame. The order against IMP was upheld on appeal and the Ministry’s actions were considered to be within a “range of possible acceptable outcomes.”

    For consultants and owners, these regulatory orders and legal decisions make the issue of environmental liability even more confusing and unpredictable. Often, the best advice a consultant can give to a property owner subject to a regulatory order is to consult with a qualified lawyer specializing in environmental law.