Nutrient Management Act, 2001 Introduced

Administration and enforcement would be shared between several government ministries. The Bill proposes regulations authorizing the creation of local committees, and contemplates some kind of mediation process between these local committees and farmers to deal with disputes. It would also establish regulations to implement a scheme of training, certification, permits, licenses, approvals, plans and nutrient management strategies for farmers, manure spreaders and municipalities. Government officials would be able to make orders against farmers, who would have the right to appeal to the Environmental Review Tribunal, with further appeals to the Divisional Court. Orders and appeals could be overruled on appeal to the appropriate Minister. Farmers and manure spreaders could be ordered to pay clean-up and prevention costs under provisions similar to those in the Environmental Protection Act (EPA), with unpaid costs to be collected in the same way as municipal taxes.

Provincial officers would have powers to inspect and require co-operation similar to those provided in the EPA. Provincial officers would be able to prosecute for contraventions. The Act would also provide for administrative monetary penalties (AMP) of up to $10,000 per day for contraventions. If a person paid the AMP fine, he or she could not be prosecuted for the offence.

Ontario MOE Moves Air Emissions Regulatory Program Forward

Welcome Brownfields Changes Coming - MMAH Issues Sketchy Details

MMAH Minister Chris Hodgson announced the government's intention to introduce a Brownfields Bill "in the spring." Details are sketchy, but it sounds like the government intends to take on the major roadblocks and uncertainties that have afflicted developers and lenders. The Bill is to be a joint effort of MMAH, MOE and the Ministry of Economic Development and Trade - so it will be interesting to see whether this combination can build workable legislation that will balance these competing interests.

More progressive liability rules will be welcomed by virtually all stakeholders. It will be interesting to learn what the legislation will provide by way of "clear rules for the cleanup of brownfield sites...". Will we see more tinkering with the Guideline? It is hard to imagine. More MOE involvement would require more staff and resources, which is unlikely. Is the government moving towards a B.C. type system with administrative overseers?

Municipalities trying to sort through the current system will welcome legislative changes to "streamline and clarify planning processes." Urban municipalities have been lobbying for relaxation of the limitations on existing financial tools, providing economic leverage to encourage developers. This has worked well in the U.S., and should work well here, particularly if changes take effect in time to catch the current growth cycle in real estate development.

New Codes / Higher Fines / Director’s and Officer’s Liability

Gasoline, diesel and associated products are collectively governed by the new Liquid Fuels Regulation and the Liquid Fuels Handling Code – replacing the Gasoline Handling Code (GHC). TSSA is publishing the new Liquid Fuels Code, but it is not expected to be available until October. TSSA advises that the substance of the code remains largely unchanged. Until the new Code is published, TSSA is operating as if the GHC was in force.

Other regulations of interest to auto parts manufacturers include: Compressed Natural Gas; Fuel Oil; Gaseous Fuels; Propane Storage and Handling; Certification of Petroleum Mechanics; and Boiler and Pressure Vessels regulations. Each regulation provides for automatic adoption of new Codes whenever updates are published. Some of these Codes are published by TSSA, others by the Canadian Standards Association (CSA).

The Act, regulations and Code adoption documents are posted for download on the TSSA website . Code documents can only be purchased from the publishers: TSSA or CSA.

Court of Appeal Cuts $800K Off Tridan Damages - No Stigma If All Contamination Cleaned Up

In this case (see "The Trial Judgment" below), where the plaintiff had not sold or cleaned up, Tridan’s main claim for damages was tied directly to the loss in property value. If all the contaminants were removed from the property, full market value would be restored. At that point, the Appeal Court found, no negative impact or stigma would reduce the value, and there was no need for additional compensation. This reduced the award by $350,000.

Despite complex facts and evidence, the Court of Appeal employed a simple, site-specific economic analysis. It would cost $550,000 to remove all of the contamination (pristine). It would cost $300,000 to clean up to MOE Guideline standards. The Court accepted appraisers' evidence that if the property was only cleaned up to the MOE standards, the property value would be reduced by "stigma". The trial judge assessed the reduction in value caused by stigma as $350,000. The Court of Appeal was persuaded by the appraisers' evidence that there would be no reduction in property value if the pollution was fully removed. Therefore, the Court of Appeal stated, "the more economical route is to proceed to the pristine level at an additional cleanup cost of $250,000 with no stigma damage."

The Court of Appeal also disallowed $442,000 in prejudgment interest awarded by the trial judge. Prejudgment interest is intended to compensate a plaintiff for being deprived of damages from the date they are incurred. Here, no damages had been incurred by Tridan. It had not paid to clean up the property, nor was the business affected by the spill, and it had not tried to sell the property. Therefore, damages did not crystallize until the date of judgment.

However, from Shell's perspective, one significant loose end remains. The Court of Appeal did not help Shell out of an indemnity agreement that Shell had entered in to with Tridan's mortgagee. In order to mitigate additional damages and interest Tridan would have had to pay if the mortgagee refused to renew Tridan's mortgage, Shell agreed to compensate the mortgagee on demand. Shell asked the Appeal Court to order that the damages for clean-up be paid into court, to be paid out as Tridan cleaned up the property. The Appeal Court noted that:

• The mortgagee was not a party to the litigation;
  
  
• The indemnity agreement was not before the Court for adjudication;
  
  
• Although Tridan's damage award was based on the cost to clean up, the award really amounted compensation for loss of property value, and Tridan should not be restricted in its use of the money; and
  
  
• The Court was not willing to oversee remediation or satisfaction of the indemnity.

The Appeal Court stated that, "Shell's obligations to the mortgagee will have to be resolved in other proceedings." Lawyers, take note!

The Trial Judgment

In the controversial trial decision in May 2000, the Mr. Justice Binks had awarded neighbour Tridan some $950,000 in damages, plus about $440,000 in interest, for contamination of Tridan's property from gasoline that migrated from a spill at a Shell facility. Lawyers, appraisers, developers and contaminated land litigants have eagerly awaited the Court of Appeal's decision. Observers felt that the trial judgment had set an incorrectly high standard for contaminated site damages for several reasons:

• The trial judge required Shell to pay enough to clean up the property to "pristine" standards - significantly more costly than simply cleaning up to MOE standards suitable to commercial use;
  
  
• The trial judge gave the plaintiff an additional $350,000 in damages for "stigma" - suggesting that the stigma of former contamination would reduce the property value by about 17% even after it was cleaned up to a "pristine" state;
  
  
• The trial judge awarded pre-judgement interest going back to 1991 (the time of the spill), even though the spill did not affect the business of the car dealership on the property, the plaintiff did clean-up the property and no other damages had been incurred by the date of trial;

  The plaintiff had no obligation to clean up the property - it could invest the money paid by Shell and wait while the gasoline naturally degraded, or even clean up to less demanding MOE standards and pocket the difference.

The trial resulted from the plaintiff Tridan's demand that Shell clean up gasoline that had spilled on Shell's property around 1991 and subsequently migrated to Tridan's site. Located in Ottawa, the Tridan site was occupied by a busy automobile dealership, and the contamination had no impact on the business.

If you would like a copy of the trial or Court of Appeal decision, please email Barry Spiegel at .

Toronto Pollution Prevention (P2) Plan Summaries Due December 31, 2001

The Toronto Sewer Use By-law requires that businesses in the following sectors prepare P2 Plans and file Plan Summaries by December 31, 2001:

• Automotive – including gas stations, repair shops, transmission shops, etc.
• Photofinishing labs, including one-hour labs and outlets
• Medical – including doctors, dentists, hospitals, medical laboratories
• Dry cleaning and laundries (except coin-operated)
• Transportation – including rail, air, bus, auto
• Printing – all types - book printing, quick printing, commercial printing, screen printing, etc
• Printing ink manufacturing

A detailed breakdown of sectors and P2 Plan Summary Due Dates is laid out in Appendix 1 to the By-law (see below).

Manufacturing businesses, such as those in the chemical, plastics, petrochemical industries must submit P2 Plan Summaries by June 30, 2002.

Download copies of the Sewer Use By-law (Municipal Code 641, amendments, the P2 Planning Guidance Manual and P2 Plan and Summary Forms from the Willms & Shier Online Compliance Centre (Water and Wastewater).

NOTE: While the City will accept P2 Plan Summaries by fax, those wishing to maintain a higher level of confidentiality over their Plan Summaries should send them by mail or courier. In the event the P2 Plan Summary may disclose confidential business information, consider including confidentiality submissions under the Municipal Freedom of Information and Protection of Privacy Act.

For legal advice on complying with the Sewer Use By-law or making confidentiality submissions call Doug Petrie (416) 862-4835.

Administrative Monetary Penalties Draft Regulations Posted
Penalties Will Provide MOE With Compliance Leverage

The Ontario Ministry of the Environment has posted draft Administrative Monetary Penalty regulations with lists of fines. There are regulations for each of the EPA, the OWRA and the Pesticides Act.

The regulations fix the fines. The highest for a first offender is $4,000 per day. The regulations set higher penalties where there is a record of prior AMPs or regular convictions. Other factors may also trigger increases from the base amount. The absolute maximum penalty is $10,000 per day. AMPs can be levied for each day of an ongoing offense.

MOE has structured these penalties to be a financial lever to get companies to submit to orders or to bring operations into compliance. The regulations will give the Director discretion to reduce fines by up to 50% if the company submits to an order, has displayed due diligence, or has demonstrated mitigation.

AMPs are not equivalent to prosecutions, and the due diligence defence does not apply other than to reduce the amount of the penalty.

Prior to imposing an administrative penalty MOE must give notice of its intent and an opportunity to consult with the Director, although there are limited cases where a provincial officer can write up and deliver an AMP without prior notice.

There is an appeal to the Environmental Review Tribunal,

MOE has prepared a Compendium that explains the AMP program in general terms, which includes a table of penalties for a long list of offences.

MOE has posted a draft implementation policy describing the considerations for MOE staff in imposing AMPs and the relationship to orders, prosecutions and voluntary abatement activities. You may check the following web site with links to the regulations, the penalty schedules, the Compendium, the draft Implementation Policy and the Environmental Registry postings: http://www.ene.gov.on.ca/envision/env_reg/er/documents/2002/ra02e0001.htm

MOE will hold six regional stakeholder consultation meetings to get feedback before finalizing the program.

MOE Updates Contaminated Site Liability Policy
On October 17th the MOE posted an update to it’s Compliance Policy F-2 concerning liability of owners, former owners, landlords, mortgagees and others to clean up or pay for remediation of contaminated sites.

The MOE proposed these changes in 1997 after it lost a series of cases at the Environmental Appeal Board (now the Environmental Review Tribunal). These cases dealt with the “fairness” of clean-up orders that MOE imposed on owners, landlords, investors and mortgages – and what policies should apply to apportion liability for clean-up, or to relieve innocent parties of liability. This line of cases culminated in 1997 with the two decisions in the Karge case. (See Barry Spiegel’s article for the Lawyers Weekly entitled "Secret" MOEE Lender Liability Policy Discriminatory - Environmental Appeal Board Finds Order Coercive”.

In Karge, the Board noted that the MOE did not have a clear policy for determining and allocating clean-up liability under the Environmental Protection Act.

You can download the amendments from our Online Compliance Centre, from the section entitled “Compliance & Enforcement”. Ironically, the MOE finally posted these changes just as the Standing Committee of the Legislature reported its recommendations for the new Brownfields legislation to the House. The MOE ER posting acknowledges that the Compliance Policy will have to be changed again once the Brownfield legislation takes effect.

Court of Appeal Says MOE
Investigators Need Warrants

It is important to understand the purpose of an MOE officer's visit to your facility. Not every visit is adversarial. If you are uncertain, it is appropriate to ask the officer. If the purpose of the visit is investigation--to search for evidence of an offence--or if you are uncertain about what to do, call your environmental lawyer.

Ontario's Court of Appeal recently clarified the important distinction between inspections conducted for abatement purposes and investigations intended to obtain evidence to prosecute companies and individuals. Investigations in Ontario are usually carried out by provincial officers from the Investigations and Enforcement Branch (IEB) of MOE. However, any provincial officer can wear the investigator's hat. When an abatement officer discovers something during a routine compliance inspection that gives reasonable and probable grounds to believe that an offence has been committed, subsequent searches for evidence are "investigations" and must be conducted according to the Charter.

This distinction is increasingly relevant as the government turns up the heat under the MOE to lay more charges and obtain more convictions. This rush to put new officers in the field, and the pressure to prosecute, means that enforcers are encouraged to push the limits of their powers and come into conflict with the rights of the companies and individuals they are investigating.

In R. v. INCO Ltd., the Court of Appeal ruled that MOE investigators must obtain a search warrant or judicial order before entering premises to search and seize documents or other evidence of an offence. Once a provincial officer believes that an offence has occurred, he cannot use the wide powers of access and cooperation that environmental statutes grant for abatement inspections. Only in "exigent" (urgent) circumstances, and when looking for evidence of specific offences can investigators legitimately search and seize without consent.

The broad inspection powers in the Environmental Protection Act, and the OWRA are intended for the use of abatement officers, whose job it is to encourage compliance.

The decision arose on an appeal by INCO Ltd. from an Ontario Water Resources Act (OWRA) conviction for a spill of untreated mine effluent. (At press time the Crown had not decided whether to appeal to the Supreme Court of Canada. A decision must be made by September 2001.)

Regulatory offences can carry severe consequences for companies and individuals. Individuals and companies who are subject to investigation have the right to expect that government investigators will act in good faith, exercise respect for Charter rights and obtain search warrants or judicial sanction before conducting intrusive interviews or searches for evidence.

MOE continues to ramp up investigations and prosecutions. The MOE SWAT team is actively seeking violators as it rolls out its sector-by-sector program. Willms & Shier lawyers help companies and municipalities with potential exposure to MOE officers to develop strategies and procedures for dealing with regulators. Procedures include designating and training staff to deal with routine inspections, spill and emergency response and SWAT and IEB investigations. As the enforcement pressure increases, more companies and municipalities recognize the importance of this preparation.

MOEE To Review, Update Certificates of Approval
Protocols Posted for Updating Air, Wastewater (Sewage Works), Waste Management, Water Works

Industrial facilities in Ontario must maintain MOEE certificates of approval for a wide range of activities regulated under the Environmental Protection Act and the Ontario Water Resources Act. The MOEE has the power to require changes, and has posted notice of its campaign to review and update existing certificates of approval. On May 30, MOEE published four Protocols, describing the campaign elements for air, sewage works, waste management and water works.

Impact of Update Review

An MOEE update review can have significant and costly results. It may trigger new emission inventory or data requirements, impose new, stringent emission or discharge limits, require new monitoring and reporting obligations and capture existing unapproved sources.

An update review may also result in identification of compliance problems that could lead to MOEE orders or program approvals.

Many plant certificates of approval may be years (or even decades) old, and may be out of date due to changes in the facility or to current environmental standards. Some facilities have old equipment or processes that do not have the required approvals.

Companies may need to change processes and procedures, install new pollution control equipment, or even negotiate new program approvals or orders. Additional Certificate of Approval Fees may also apply.

The MOEE's rationale is that current certificate holders should have to meet the up-to-date standards that apply to new applicants. However, the Protocols state, "The Ministry recognizes that a balanced approach that considers both the benefits of enhanced requirements as well as the cost is important." This suggests that there may be some negotiating room where costs to meet current standards will impose hardship.

Triggers

The MOEE has identified four triggers for an update review:

1. Application by facility owner/operator to amend the certificate
2. MOEE inspection, investigation, enforcement
3. MOEE target sector review program (e.g. STAC air compliance program)
4. Review triggered by public demand under Environmental Bill of Rights.

We Recommend

Assess the likelihood that your facility will be subject to an update review. Industries processing or disposing of waste on-site are potential targets under the Waste Management Protocol. Industries that are targets of Select Targets for Air Compliance (STAC) or similar MOEE programs are more likely targets under the Air Protocol. Facilities with on-site wastewater treatment may attract reviews under the Sewage Works Protocol unless they discharge to municipal sewers. Municipalities will also be subject to the Sewage Works Protocol, and the Water Works Protocol.

When seeking minor amendments to existing certificates, be aware of the potential scope of an update review. Before submitting your application, identify unapproved equipment and processes, and consider whether they will be eligible for approval or may have to be improved or shut down - plan accordingly. This may require postponing amendment applications or planning new pollution control measures.

If your facility meets any of the triggers, you should identify any other compliance vulnerabilities and plan accordingly.

Due Diligence Planning For Updates - Negotiation With MOEE

Update reviews may result in extensive or expensive new requirements, particularly where previously unapproved sources or non-complying sources are involved.

Willms & Shier Environmental Lawyers can assist in due diligence planning prior to updates, or applications for approval by identifying and interpreting requirements of compliance legislation and regulation. Solicitor-client privileged investigations of potentially non-complying sources has often allowed our clients to activate a due diligence plan while avoiding untimely disclosure.

We are frequently able to assist clients in achieving balanced and fair results when negotiating with the MOEE. Where negotiations fail to achieve reasonable results, and where justified by costs or consequences, we can achieve acceptable results through the legal processes of appeal and judicial review.

Brownfields Regulations
MOEE Posts Municipal, Lender, Trustee Regulations For Consultation

The Environmental Registry posting (RA02E0004) summarizes the proposed impact of the regulations as follows:

Protected Actions

• The regulation would expand upon the legislated list of actions and Acts for which a municipality or their representative could not be held to be in occupation or charge, management or control of a non-municipal property and as a result be exposed to an environmental order.
• The protected actions include actions taken for fire prevention, work associated with a public utility or work undertaken by a municipality because of a person's failure to comply with an Act, regulation or agreement.
• The Acts listed in the proposed regulation, under which actions are protected from environmental orders, include the Drainage Act, Health Protection and Promotion Act, Snow Roads and Fences Act, and the Weed Control Act.

Notice Requirement

• The prescribed notice requirement is the same for municipalities, secured creditors, receivers, trustees in bankruptcy and fiduciaries.
• Notice is required to the Ministry when the municipality, secured creditor, receiver, trustee in bankruptcy or fiduciary, or their representative, becomes aware of "any danger to the health or safety of any person".
• The proposed regulation requires that notice be given to the Ministry's Spills Action Centre, within 24 hours.

Prescribe Circumstances - Municipalities

• The proposed regulation prescribes that an order can be issued against a municipality or their representative when there is a contravention of sections 27, 40 or 41 of the Environmental Protection Act. These sections are associated with the management of waste at a site.

Prescribe Circumstances - Secured Creditors, Receivers and Trustees in Bankruptcy

• The proposed regulations prescribe that compliance orders can be issued against a secured creditor, receiver or trustee in bankruptcy but only after a 90 day period. This would allow time for these parties to become aware of compliance issues and become compliant.

Notice of Abandonment

• When a receiver or trustee in bankruptcy, against whom there is an environmental order, intends to abandon a property, the proposed regulation requires written notice to a Director with the name of the receiver or trustee in bankruptcy, the date of the abandonment of the property, and an address or legal description of the property.

Reports of Investigation - Secured Creditors

• The proposed regulation provides an exemption to the legislative requirement for secured creditors to provide reports to the Ministry associated with contaminants at a property. The proposed regulation exempts reports not commissioned by the secured creditor or its representative prior to the secured creditor becoming the owner by foreclosure.

W&SEL Congratulates Essex Lawyers on New Law Firm Launch

Willms & Shier Environmental Lawyers congratulates former W&SEL lawyers Kirk Walstedt and Jim Renick on the opening of their new law practice at the site of the former Willms & Shier offices in the Town of Essex. Effective July 1, the new firm is called Walstedt Renick, Municipal & Environmental Lawyers LLP, and has acquired the W&SEL existing municipal law practice in Southwestern Ontario. We send our best wishes to Kirk and Jim in their new firm.

Willms & Shier Environmental Lawyers continues to provide environmental law representation and expertise to Canadian industrial and commercial companies, institutions, and to municipalities across Ontario.

The Safe Drinking Water Act, 2002 provides for:

• licensing and accreditation of drinking-water laboratories;
• drinking-water quality standards, including the creation of an Advisory Council on Standards;
• certification and training of drinking-water systems operators;
• the requirement of an owner’s licence for municipal drinking-water systems;
• a statutory standard of care requirement for owners and operators of drinking-water systems; and
• compliance and enforcement, including the creation of the Office of the Chief Inspector.

Absent from the Act are provisions for groundwater protection. The government has set up an Advisory Committee to consult widely towards establishing watershed-based source-protection plans, in order to respond to Justice O’Connor’s recommendation from the Walkerton Inquiry.

The statutory standard of care that will apply to municipalities, companies, directors and officers and those individuals who exercise “decision-making authority over the system” requires:

19. (1) Each of the persons listed in subsection (2) shall,

(a) exercise the level of care, diligence and skill in respect of a municipal drinking-water system that a reasonably prudent person would be expected to exercise in a similar situation; and

(b) act honestly, competently and with integrity, with a view to ensuring the protection and safety of the users of the municipal drinking-water system.

Same

(2) The following are the persons listed for the purposes of subsection (1):

1. The owner of the municipal drinking-water system.

2. If the municipal drinking-water system is owned by a corporation other than a municipality, every officer and director of the corporation.

3. If the system is owned by a municipality, every person who, on behalf of the municipality, oversees the accredited operating authority of the system or exercises decision-making authority over the system.

Offence

(3) Every person under a duty described in subsection (1) who fails to carry out that duty is guilty of an offence.

Brownfields – Proclamation of Municipality, Secured Creditor, Tax Sale Protection Takes Effect December 1, 2002
No Date In Sight For Incentives, Development, Clean-up Provisions

When these sections take effect, municipalities and lenders will no longer have to negotiate or enter into ‘standard form’ agreements to limit their liability when investigating property, taking possession of property or acting to protect the security of property. The chart below summarizes the sections of Brownfields Bill 56 that will take effect December 1, 2002. Note that the provisions for cancelling municipal taxes, the Environmental Site Registry, clean-up standards, definition of “qualified person”, Records of Site Condition and Certificates of Property Use will not take effect until regulations are drafted, and consultations are completed. We do not expect these regulations to be finalized until mid-2003 at the earliest.

Interpretations: Power of Sale, Foreclosure

The MOE responded to stakeholder comments on the Brownfields amendments in the Notice of Decision on the regulations (RA02E0004) and included the following noteworthy interpretations.

Definition of Receiver and Secured Creditor

An issue was raised concerning the interpretation of sections of the legislation that define a secured creditor and a receiver and, related to this, the issue of whether undertaking power of sale proceedings should be included in the regulated list of protected actions for secured creditors. The Environmental Protection Act states that once a person "has taken possession or control of property" he or she is a "receiver." It is, therefore, not necessary to include power of sale proceedings in the regulated list of additional protected actions (protected from environmental orders) because these actions fall within the EPA definition of a "receiver" and are protected under the general statutory protection granted to receivers.

Protections from Environmental Orders Following Foreclosure

A question was raised regarding the connection between the legislated 5 year period during which secured creditors are protected from environmental orders following foreclosure and the regulatory requirement to comply with any Act, regulations, approvals, certificates of property use, licences or permits within 90 days following foreclosure. The intent of section 168.18 of the Environmental Protection Act is to provide secured creditors with a five year period in which they are generally not responsible for past environmental problems on a site they own after foreclosure. However, within 90 days following foreclosure, a secured creditor must be in compliance with all appropriate approvals for any ongoing operations at the site.

Regulations: Summary

The MOE summarized the regulations in its Environmental Registry Notice of Decision as follows:

Protected Actions

• The regulation would expand upon the legislated list of actions and Acts for which a municipality or their representative could not be held to be in occupation or charge, management or control of a non-municipal property and as a result be exposed to an environmental order.
• The protected actions include actions taken for fire prevention, work associated with a public utility or work undertaken by a municipality because of a person's failure to comply with an Act, regulation or agreement.
• The Acts listed in the proposed regulation, under which actions are protected from environmental orders, include the Drainage Act, Health Protection and Promotion Act, Snow Roads and Fences Act, and the Weed Control Act.

Notice Requirement

• The prescribed notice requirement is the same for municipalities, secured creditors, receivers, trustees in bankruptcy and fiduciaries.
• Notice is required to the Ministry when the municipality, secured creditor, receiver, trustee in bankruptcy or fiduciary, or their representative, becomes aware of "any danger to the health or safety of any person".
• The proposed regulation requires that notice be given to the Ministry's Spills Action Centre, within 24 hours.

Prescribe Circumstances - Municipalities

• The proposed regulation prescribes that an order can be issued against a municipality or their representative when there is a contravention of sections 27, 40 or 41 of the Environmental Protection Act. These sections are associated with the management of waste at a site.

Prescribe Circumstances - Secured Creditors, Receivers and Trustees in Bankruptcy

• The proposed regulations prescribe that compliance orders can be issued against a secured creditor, receiver or trustee in bankruptcy but only after a 90 day period. This would allow time for these parties to become aware of compliance issues and become compliant.

Notice of Abandonment

• When a receiver or trustee in bankruptcy, against whom there is an environmental order, intends to abandon a property, the proposed regulation requires written notice to a Director with the name of the receiver or trustee in bankruptcy, the date of the abandonment of the property, and an address or legal description of the property.

Reports of Investigation - Secured Creditors

• The proposed regulation provides an exemption to the legislative requirement for secured creditors to provide reports to the Ministry associated with contaminants at a property. The proposed regulation exempts reports not commissioned by the secured creditor or its representative prior to the secured creditor becoming the owner by foreclosure.

Contamination Litigation
Tridan v. Shell Court of Appeal Decision Stands
Supreme Court of Canada Refuses Appeal

In Tridan the property owner was awarded damages for diminution of property value for petroleum products spilled at a next-door Shell gas station. Although the contamination migrated to the Tridan property, the contamination did not interfere with the business of the successful car dealership on the site. Despite the fact the owner did not intend to sell the property or clean it up, the Court of Appeal awarded damages for diminution of the value of the property due to the contamination in an amount equal to the projected cost of clean-up. Based on the evidence of appraisers, the Court found that if the property was cleaned up to MOE guideline standards, the property value would still be diminished by the stigma of contamination left on site. In order to compensate the owner, the Court considered whether to award a percentage of property value to compensate for the stigma, or to award the owner the cost of clean-up to "pristine." The Court settled on the lower of the two, and awarded the cost to clean up all of the contamination that came from Shell. The property could then be sold for full value.

Click here for more commentary on the Tridan decision. Download a copy of the Court of Appeal decision here.