Off-Site Contamination: Are you responsible for the cleanup?

Posted by on Nov 28, 2018 in Blog | 0 comments

Who pays for the assessment and remediation of contamination in Ontario, especially when that contamination has migrated off site?  If you said it’s the responsible party, you are only partly right.

Who pays and how to best protect yourself and your company has been a subject we have discussed several times in the past (see these blogs on environmental liability issues).

Whether the responsible party, the existing owner, or tenants at the property pay (for example when groundwater or vapour contamination moves off site) was central to a case decided earlier this fall.

Off-Site Contamination from Decades Past

Briefly, Hamilton Beach was ordered by the then Ontario Ministry of Environment and Climate Change (MOECC), now the Ministry of Environment, Conservation, and Parks (MECP), to delineate off-site contamination that occurred at a site they occupied in Picton, Ontario.  The contamination, however, was caused between 1962 and 1973 by a former company, Proctor Silex.  At the time they took occupancy of the site, Hamilton Beach was unaware of the off-site contamination.

According to the court documents, “There has been no manufacturing on the Property since 1975.  It has been used as a warehousing and distribution facility since then.  In 2008, Hamilton Beach Brands Canada Inc. (‘HBBC’) employees noticed a substance seeping through the floor of the building on the Property.  Subsequent investigations by MOECC determined that the Property and some off-site properties are contaminated with concentrations of ‘Contaminants of Concern’ that exceed Ministry standards.”

Environmental liability, as we are reminded yet again, is not an insignificant consideration. Limiting your exposure to potential costly, and at times extremely costly, environmental liability requires careful and deliberate planning.

Environmental liability, as we are reminded yet again, is not an insignificant consideration.

Hamilton Beach Brands Canada

In the summary below, section 18 of the Environmental Protection Act is the no-fault absolute liability provision that allows the MECP to order historical contamination to be investigated, delineated, and remediated.

Here is some more background, courtesy of lawyer Marc McAree at Wilms Shier.

In Hamilton Beach Brands Canada, Inc. v Ministry of the Environment and Climate Change, the orderees challenged the broad scope of the Director’s no-fault section 18 Order.  The orderees argued, inter alia [among other things], that Section 18 orders are “absurd.” … the Ontario Divisional Court upheld the MECP’s jurisdiction to issue no-fault Orders requiring off-site soil and groundwater investigations.

The upshot in Ontario is that the MECP has jurisdiction to issue EPA, section 18 Orders to compel owners, former owners, occupiers and former occupiers to investigate off-site regardless of whether the Orderees were or are perpetrators of the contamination that migrated and/or continues to migrate off-site.

A Fundamentally Important Case

Some indication as to the importance of this case is the following from Law Times:

Clifford Cole, a partner with Gowling WLG in Toronto, who represented Hamilton Beach in the case at the Divisional Court, says it’s a fundamentally important case that has not been considered before.

Cole and co-counsel Natalie Mullins say the key issue is the responsibility of a person who is not at fault to address historic [sic] off-site contamination they did not cause or permit.

“We feel that the brownfield protection is undermined as a result of the decisions of the Environmental Review Tribunal and the Divisional Court,” says Cole, adding that it implies that a s. 18 order to address historic [sic] off-site contamination can be issued against an owner or tenant even where a record of site condition has been filed for the property.

Environmental groups, too, were vested in the outcome of this case.  According to the environmental group, Waterkeeper, “The implications of the court’s decision will fundamentally affect the implementation of the Environmental Protection Act in Ontario.”  How this “fundamentally affects” environmental liability issues going forward may be a significant consideration for company’s legal and environmental departments.

Limiting Environmental Liability

Environmental liability, as we are reminded yet again, is not an insignificant consideration.  Limiting your exposure to potential costly, and at times extremely costly, environmental liability requires careful and deliberate planning.  Make sure you are getting advice, legal and technical, from “seasoned” advisors.

Whether you are buying or selling commercial/industrial property or taking steps to “maintain” environmental compliance (and minimize future liability), we can help.  Dragun Corporation has more than three decades of experience, and our associates are sought after by companies around the world to help them solve complex environmental issues. For more information about how we can help you, contact me at 519-979-7300, ext 114.