EPEA v. Limitations Act: Test Set By Alberta Court For Extending Limitation For Environmental Claims

The Alberta Court of Queen’s Bench has set the “test” to be followed in s. 218 applications pursuant to the Environmental Protection and Enhancement Act, R.S.A. 2000, c. E-12 (“EPEA”) in its May 19, 2016 decision in Lakeview Village Professional Centre Corporation v Suncor Energy Inc, et al 2016 ABQB 288.

Background

The plaintiff had purchased lands in the Lakeview subdivision of Calgary in 1998. The plaintiff was aware that a gas station was formerly on the site. This raised concerns of potential contamination of the lands; however, an initial environmental assessment found no significant contamination.

A number of years later, in 2013, the plaintiff received an offer to purchase the lands, prompting another environmental assessment. This assessment found contamination at a level that required remediation of the lands, including the removal of piping, concrete and soil. The plaintiff has spent approximately $400,000 on remediation to date, with further costs expected.

The Action

As a result of these remediation costs, the plaintiff wishes to recoup some or all of these costs from former owners of the lands, including the successor of the gas station operator and the vendor of the lands who commissioned the first environmental assessment (Suncor and Commonwealth Business Management Ltd. (“Commonwealth”)).

The Problem

Normally, the Plaintiff’s action would be out of time under the Limitations Act, R.S.A. 2000, c. L-12, as the contamination / sale of land occurred well past the 10-year ultimate limitation period. However, there is a provision in EPEA that permits a judge to extend the limitation period in some cases.

The Law

Section 218 of EPEA provides that a judge may extend a limitation period where the basis for the action arises out of a “release of a substance into the environment”. The purpose of this extension is that sometimes, contamination may not be identified for several years.

Where an application is made, s. 218 does identify a list of things for a judge to consider: (a) when the alleged adverse effect occurred; (b) whether the alleged adverse effect ought to have been discovered by the claimant had the claimant exercised due diligence in ascertaining the presence of the alleged adverse effect, and whether the claimant exercised such due diligence; (c) whether extending the limitation period would prejudice the proposed defendant’s ability to maintain a defence to the claim on the merits; (d) any other criteria the court considers to be relevant.

However, there was little in the way of case law on this issue, and there was no “test” to guide the court in considering these types of applications. In particular, does a court decide conclusively in these applications whether the limitation period should, or should not be extended? Or, can the court make a preliminary determination giving plaintiffs the green light to go ahead to trial, where the limitation argument may surface again?

The New Test

Ultimately, Justice Martin created a two-step approach for use in s. 218 applications:

  1. Is there sufficient evidence on the s. 218 factors to grant an extension of the limitation period?
  2. If there is not enough evidence to make that determination, or if there is sufficient evidence but an issue for trial could be determined prematurely, has the claimant shown a good arguable case for an extension? If so, the claimant is entitled to an extension of the limitation period subject to a final determination of the issue at trial.

The court reasoned that this approach respects the purpose of s. 218 while acknowledging the legitimate interest of a claimant to know whether to spend further resources on their claim. It also allows the court to extend the limitation period for obviously meritorious s. 218 cases or to weed out cases that are attempting to “abuse the system”.

The Decision

Lakeview was successful in its application and may now proceed with a claim against Suncor and Commonwealth.

The court found that the “adverse effect” may have been as early as 1969, through to as late as 2013, and that this time frame is “not so long ago that it would be unfair to allow the action to proceed against either party”.

Further, the court determined (on a preliminary basis only) that Lakeview had exercised due diligence when purchasing the property from Commonwealth. Lakeview had made it a condition of its purchase that Commonwealth provide information on the environmental status of the property. Commonwealth had commissioned its own environmental assessment which concluded that there was no evidence of significant contamination and no further investigation would be warranted.

The court found no prejudice to Suncor or Commonwealth as neither had presented any evidence that an extension to the limitation period would prejudice their ability to maintain a defence on the merits.

Finally, Commonwealth had attempted to argue that s. 218 only applied to parties that had caused or contributed to the contamination of the lands and as it was only an owner of lands (between Suncor and Lakeview), s. 218 did not apply.

The court, however, found that the wording of s. 218 is broad. Its opening paragraph refers to civil proceedings “where the basis for the proceeding is an alleged adverse effect”. The basis of Lakeview’s action is determining liability from the fallout of an alleged adverse effect. In addition, EPEA also contemplates the liability of a former owner for remediation in its definition of “persons responsible” for a contaminated site:

SECTION 107
Interpretation and application

107 (1) In this Part,

(c) “person responsible for the contaminated site” means

(i) a person responsible for the substance that is in, on or under the contaminated site,

(ii) any other person who the Director considers caused or contributed to the release of the substance into the environment,

(iii) the owner of the contaminated site,

(iv) any previous owner of the contaminated site who was the owner at any time when the substance was in, on or under the contaminated site,


[Emphasis added]

As such, the court found that this case was one contemplated by s. 218, where the harmful effects of contamination were not evident for a number of years, due diligence was shown, and there was no prejudice to the defendants. Accordingly, the court extended the limitation period for Lakeview’s claim and has allowed this matter to proceed to trial.

James Early

Ontario’s Neonicotinoid Law Survives Appeal

In October 2015 I reported on how Ontario’s neonicotinoid law, which dramatically reduces the number of acres planted with corn and soybean seeds coated with a class of pesticides known as neonicotinoids, was to remain in place despite a challenge to that law by the Grain Farmers of Ontario (“GFO”).

As you probably know, there are strong links between neonicotinoids and bee colony collapses, and neonicotinoids are known as being toxic to bees.

In that post, I referenced the fact that the GFO was “reviewing its legal options”, and the GFO ultimately opted to appeal the Ontario Supreme Court’s decision.

Well today, I’m pleased to report that the appeal was heard, and dismissed, by the Ontario Court of Appeal (the “Court”). For a full review of the decision, just click here.

At the appeal, the GFO raised two issues. It submitted that the motion judge erred in finding that:

(1) Ontario Regulation 139/15 made under the Pesticides Act, R.S.O. 1990, c. P.11 (“the Regulation”) does not limit the farmers’ property rights; and

(2) the relief sought is not the determination of rights through the interpretation of a regulation.

In dismissing the appeal, the Court did find that the Regulation narrows the farmers’ range of legally permitted options of treated seeds, and so affects the farmers’ rights. However, the limitation of a right does not, standing alone, create a justiciable issue (an issue that can be tried in a court of law).

The GFO argued that the justiciable issue in this case was found in r. 14.05(3)(d) of the Regulation, which provides:

“(3) A proceeding may be brought by application where these rules authorize the commencement of a proceeding by application or where the relief claimed is,

(d) the determination of rights that depend on the interpretation of a deed, will, contract or other instrument, or on the interpretation of a statute, order in council, regulation or municipal by-law or resolution;”

However, the Court noted that this rule was a procedural rule, and is not a mechanism whereby a person could simply challenge the wisdom or fairness of a governmental action. The Court agreed with the reasoning of the motion judge, citing the Alberta Court of Appeal in Trang v. Alberta (Edmonton Remand Centre) which provided:

“Private litigants are not entitled to use the courts as an indirect method of altering public policy decisions, especially those involving the expenditure of public funds. Just because a private party has a sincere concern about the validity of a public policy does not entitle him or her to litigate its legality: Canadian Council of Churches v. Canada (Minister of Employment and Immigration). As a corollary, the superior courts are not to use their powers to grant generally worded declarations as a method of controlling or influencing governmental operations.”

In the result, Ontario’s neonicotinoid law remains, and its bees are safer for another day.

James Early

Calgary SDAB Quashes Inglewood Bird Sanctuary Development Permit

The Development Authority of The City of Calgary (“Development Authority”) had approved a development permit for a new community recreation facility located on a site known as the Inglewood Bird Sanctuary (“Sanctuary”). The Sanctuary is a Regional Park in Calgary’s Park system and the site id designated Major Public Open Space.

The Appellants in this matter (SDAB2015-0159 (Re), 2015 CGYSDAB 159 (CanLII)) were the Inglewood Community Association and Nature Calgary. These two organizations challenged the approval of the development permit for an ‘outdoor classroom’ on the grounds that:

(a) necessary stakeholders were not circulated and/or consulted before development permit filing; and

(b) facilities at the Bird Sanctuary may be well need to be augmented but the location and design can be considerably improved in a way that is not prejudicial to the sensitivity of the Bird Sanctuary.

In particular, the appellants contended that the location of the proposed development was in contravention of the Municipal Development Plan, the Urban Parks Master Plan, the Natural Area Management Plan, the Biodiversity Strategic Plan, and the Inglewood Bird Sanctuary Master Plan.

The Sanctuary has a Federal Migratory Bird Sanctuary designation which confers special significance that helps to protect it from potentially destructive whims of a local community. It hands the Sanctuary a wider purpose and establish it as a keystone migratory bird habitat within the patchwork of international conservation areas (Inglewood Bird Sanctuary Master Plan, page 51). In the City’s Natural Area Management Plan the Bird Sanctuary is listed as a “Special Protection Natural Area”. It is listed as having the characteristics of “high overall sensitivity, provincial/regional significance and highly productive habitat”.

The Development Authority argued that the Inglewood Bird Sanctuary Master Plan, Calgary Urban Park Master Plan and Natural Area Management Plan are not relevant to the development at hand and, therefore, outside of the Board’s jurisdiction. The Board, however, disagreed, finding that section 35(a) of the Land Use Bylaw refers to “plans and policies affecting the parcel” and, further, that this section applies to policies of statutory and non-statutory plan documents of The City of Calgary. The section is not limited solely to statutory plans.

The Board placed, what it termed, “pivotal weight” on point 4.8 of the Biophysical Impact Assessment, which states:

“4.8       Environmentally Significant Areas

The Sanctuary is within the provincial ESA # 289. This ESA includes the Bow River Valley and is of national significance as it encompasses unique landforms, observations of species of concern, important wildlife habitat, intact riparian areas and headwater streams, and large natural areas (Fiera Biological Consulting Ltd. 2009).

The Sanctuary is considered “Special Protection Natural Area” by The City of Calgary with the Natural Environment Park designation. This designation is meant to describe areas of high environmental sensitivity, including high wildlife habitat quality and primarily native vegetation (City of Calgary 1984). In particular, the balsam popular forests of the Sanctuary are of high conservation value (City of Calgary 1994). The Inglewood Bird Sanctuary is also listed as a Federal Migratory Bird Sanctuary under the Migratory Bird Sanctuary Regulations (Government of Canada 1994).

[…]

In the Board’s view this statement astutely described the importance of the “Special Protection Natural Area”. The Sanctuary was found to be an area of a high environmental sensitivity, including high wildlife habitat quality and primarily native vegetation. This was a significant factor considered by the Board.

Further, the Board was persuaded on the significance of the Sanctuary by the fact that it is protected as a Federal Migratory Bird Sanctuary under the Migratory Bird Sanctuary Regulations which, to the Board, spoke volumes about the unique status of the Sanctuary and the special environmental significance of it.

Finally, the Board cited the evidence of famed environmental educator Brian Keating, and the Canadian Parks and Wilderness Society (“CPAWS”) as corroborating that evidence, wherein Mr. Keating stated:

“The Sanctuary needs to be respected for the purpose intended: the preservation of some of the best and most diverse bird habitat within the City It is a preserve we need to protect as a sanctuary, a celebration of high-quality, critical riparian wildlife habitat. More structures will only degrade, not enhance the small treasure of Calgary”.

As a result, therefore, the Board overturned the decision of the Development Authority to approve the development permit, and declared that permit null and void.

James Early

Residential Contamination

While we often think of environmental litigation as dealing with significant oil spills, climate change, pollutants being lost from tailings ponds or to challenge government decisions to drastically alter a landscape, more common are the little events, like ones that can occur around your home. That was the case in Jerabek v. Scotia Fuels Ltd. 2015 NSSC 283.

In this case, some homeowners, on the advice of their home inspector, engaged their fuel oil supplier, Scotia Fuels Ltd. (“SF Inc.”) to replace their fuel oil tank in the furnace room of their residence. It was determined that the fuel tank was defectively installed by SF Inc., and an oil spill, consisting of approximately 25 litres of oil, had contaminated the ground below the residence, and reached the first chamber of septic tank which was then excavated and removed.

SF Inc. accepted full responsibility for the incident and assured the homeowners that their house would be made whole again through remediation work without any need to involve SF Inc.’s insurer. Despite this, however, the cleaning work performed by SF Inc. did not fully eliminate the oil smell in the residence. After completion of the remediation work, SF Inc. took the position that any continuing indoor air quality problem at the residence was not associated with the spill of fuel oil and, therefore, terminated its involvement with the residence.

Unfortunately, despite the remediation work, the homeowners could still detect a faint yet persistent hydrocarbon odour in the residence and retained company to conduct further air quality tests. After testing, the company recommended that the residence be cleaned by DLS Group, specialists in hydrocarbon decontamination. After cleaning, the hydrocarbon odour in the residence was fully eliminated. However, the cleaning cost the homeowners over $100,000.00, plus other expenses associated with the spill.

The homeowners brought a successful action for damages, alleging that the spill caused by SF Inc. led to the hydrocarbon smell, its remediation efforts were insufficient, and it then abandoned its remediation efforts. After a thorough review of the evidence, and an analysis of the law of causation in negligence, the Court found in favour of the homeowners, stating that:

““but for” causation is a factual inquiry into what likely happened. Scientific proof of causation is not required.

“…it is more likely than not that the root cause of the faint but persistent hydrocarbon odour complained of was the adherence of fuel oil vapours which permeated certain building materials and household contents during the initial remediation work.” My emphasis.

The homeowners were awarded damages of $166,399.49. The Court found that SF Inc. had an obligation to restore the residence to the same odour-free state that it was in before oil spill occurred.

James Early

Yukon Court of Appeal Decide on #ProtectPeel Watershed Land Use Plan

The Yukon Court of Appeal (the “Court”) has found that the Yukon Government (“Yukon”) failed to honour the letter and spirit of its treaty obligations with respect to the Land Use Planning Process for the Peel Watershed. The Court also found that Yukon failed to reveal its extensive plan modifications, and failed to provide the requisite details or reasons in support of its general comments on the plan which, ultimately, left Commission ill equipped to advance the Land Use Planning Process.

However, the Court did allow Yukon’s appeal, in part.

First, a quick recap

As I wrote on here in February, 2014, on December 2, 2009 a Recommended Peel Watershed Regional Use Plan (the “Plan”) was submitted to Yukon by the Peel Watershed Regional Planning Commission (the “Commission”). In the Plan, the Commission recommended that 80.6% of the Peel Watershed be given a high degree of protection as designated Special Management Areas. Those areas included heritage management, fish and wildlife management, watershed management and general environmental protection.

Following a series of consultations, and following some proposed modifications by Yukon, a Final Recommended Plan was released by the Commission on July 22, 2011, which designated approximately 80% of the Peel Watershed as “Conservation Area”. Approximately two-thirds of the Conservation Area were designated Special Management Areas, and the remaining portions were designated Wilderness Areas.

Following the Commission’s Final Recommended Plan, Yukon commenced a consultation process that lasted into February, 2013.

Ultimately, on January 20, 2014, Yukon announced its approval of a regional land use plan (the “Land Use Plan”). It was vastly different to the Final Recommended Plan. Instead of protecting close to 80% of the Peel Watershed, the Land Use Plan, in fact, leaves about 71% of the Peel Watershed unprotected.

Legislative Background

The Land Use Plan was being created as part of a consultation framework, which included the following provisions:

“11.6.2 Government, after Consultation with any affected Yukon First Nation and any affected Yukon community, shall approve, reject or propose modifications to that part of the recommended regional land use plan applying on Non-Settlement Land.

11.6.3 If Government rejects or proposes modifications to the recommended plan, it shall forward either the proposed modifications with written reasons, or written reasons for rejecting the recommended plan to the Regional Land Use Planning Commission, and thereupon:

11.6.3.1 the Regional Land Use Planning Commission shall reconsider the plan and make a final recommendation for a regional land use plan to Government, with written reasons; and

11.6.3.2 Government shall then approve, reject or modify that part of the plan recommended under 11.6.3.1 applying on Non-Settlement Land, after Consultation with any affected Yukon First Nation and any affected Yukon community.”

These sections have proved to be the main issues in this litigation.

Remedy Sought, Trial Decision

Because of the alleged breaches by Yukon, the Plaintiffs had asked for a declaration that the (unmodified) Final Recommended Plan was the final, binding land use plan for the Peel Watershed. However, at trial, the plaintiffs scaled back their request and sought an order quashing Yukon’s Final Plan and remitting the process to s.11.6.3.2 for Yukon to make its final modifications.

The Plaintiffs were successful at trial and obtained the scaled back remedy that they had sought.

Appeal

Yukon appealed on two main grounds: first that it had not breached Yukon First Nation Final Agreements (“Final Agreements”); and second, if it had breached the Final Agreements, the land use planning process should have been returned to the 11.6.2 stage, and not the 11.6.3.2 stage.

Yukon succeeded on its latter argument. It argued that it is an established principle that a breaching party should be put in the position it occupied prior to its breach, so it can “perform constitutionally what the court deemed to be unconstitutional”. In other words, if the Development and Access Modifications (proposed by Yukon under s. 11.6.2) were invalid, Yukon should be returned to s. 11.6.2 so it can articulate its priorities in a valid manner.

The Plaintiffs argued, in response, that the process should be remitted to the point of Yukon’s breach, which was not s. 11.6.2 but s. 11.6.3.2. To that end, the Plaintiffs argued that three of Yukon’s Modifications under s. 11.6.2 were valid. Although the Development and Access Modifications were invalid, that does not mean they breached the treaty; it means only that they had no effect, and in particular that they could not later be imposed over the objections of the First Nations under s. 11.6.3.2. Accordingly, the Plaintiffs argued, Yukon’s breach occurred at s. 11.6.3.2 (when Yukon imposed an entirely new plan) rather than at s. 11.6.2. Remitting the process to s. 11.6.2 would repeat stages of the process that had been lawfully conducted. The plaintiffs submitted that it was inconsistent with the honour of the Crown for Yukon to argue that it should be permitted to reconsider the proposals it made years ago in December 2009.

Despite the Plaintiffs arguments, the Court found that the appropriate remedy for Yukon’s failure to honour the process was to return the parties to the point at which the failure began. The Court found that it was Yukon’s failure to properly exercise its right to provide modifications that derailed the dialogue essential to reconciliation as envisioned in the Final Agreements. This derailment of the dialogue was where Yukon’s failure began, and marks the point to which the process has now been returned. That point is s. 11.6.2.

So, what does this mean?

The trial judge had remitted the process to the stage of s. 11.6.3.2 for Yukon to consult and then make its final modifications to the Final Recommended Plan. The trial judge had ordered that Yukon’s final modifications had to be based upon the original response that Yukon had made pursuant to s. 11.6.2. The trial judge reasoned that remitting the process to the stage of s. 11.6.2 would take the Commission “back to the drawing board” and permit Yukon “to benefit from its flawed process”. It would amount to an endorsement of Yukon’s treaty breaching conduct.

The Court of Appeal, however, disagreed with these sentiments. First, the Court found, remitting the matter to the s. 11.6.2 stage would not permit Yukon “to benefit from its flawed process”; it would allow the process to unfold as it was meant to.

Second, the Court restated that the matter should be returned to the point of the breach. The trial judge found the breach to be at the stage of s. 11.6.3.2 when Yukon proposed a wholly new plan not based upon modifications it proposed at the stage of s. 11.6.2. However, the Court disagreed. It found that this was “a selective view of matters”. A more compelling argument, it found, could be made in support of the submission that the “breach” began when Yukon did not properly set out its detailed modifications at the stage of s. 11.6.2. That, the Court found, was the the status quo ante, or state that existed before the breach, to which the “breaching” party should be returned to allow it to perform its duties appropriately.

The Court added that it is a status quo ante which best serves the goals of achieving reconciliation as the remedy crafted by the trial judge would put in place a plan that emerged from a flawed process, which does not serve reconciliation.

In practical terms, therefore, rather than the Yukon being simply able to approve, modify or reject that part of the Land Use Plan that was recommended pursuant to 11.6.3.1, it can instead return to 11.6.2 to undertake more consultation with Yukon First Nations and approve, reject or propose modifications to the land use plan as a whole.

Essentially, the Court has rewound the clock six years and given Yukon another chance to attempt to significantly water down the protections that the Peel Watershed would have benefited from under the Final Recommended Plan.

It remains to be seen whether any further appeals (to the Supreme Court of Canada) will be filed, or whether all parties will return to December 2, 2009 and re-do the last several years of consultations and modifications.

One thing remains clear, however, the Court reaffirmed that Yukon failed to honour the letter and spirit of its treaty obligations with its First Nations people with respect to the Land Use Planning Process for the Peel Watershed. Further, Yukon’s own plan, which would have protected less than 30% of the Peel Watershed from development, remains quashed.

James Early

Ontario’s Neonicotinoid Law To Remain In Place

CBC and Better Farming are reporting that the Ontario Superior Court has upheld a provincial regulation to dramatically reduce the number of acres planted with corn and soybean seeds coated with a class of pesticides known as neonicotinoids, which are toxic to bees.

The regulation had been under challenge by the Grain Farmers of Ontario and a decision on the application, which was heard on September 28, 2015, was reserved by the Ontario Supreme Court. It is understood that this may not be the last word on this matter and Grain Farmers of Ontario is “reviewing [its] legal options”.

According to the Ministry of Environment and Climate Change, the new provincial requirements are intended to support the government of Ontario’s target to reduce the number of acres planted with neonicotinoid-treated corn and soybean seed by 80 per cent by 2017.

Banning the use of neonicotinoids has been a hot topic for the environmental movement for the past couple of years. For example, both Environmental Defence, and the David Suzuki Foundation, have called for complete bans on neonicotinoid use on the basis of studies which have shown and link between neonicotinoid pesticide use and escalating honeybee colony losses.

The decision follows on the heels of a US decision in September, 2015 where a US court overturned federal approval for a new  neonicotinoid formulation called sulfoxaflor. In that decision, the US court found that the Environmental Protection Agency had relied on “flawed and limited” data, and its green light was unjustified given the “precariousness of bee populations”.

It is time for an outright ban, country-wide, in Canada.

James Early

Ontario’s Great Lakes Protection Act

Today, October 7, 2015, Ontario passed the Great Lakes Protection Act (the “Act“). The Act is designed to strengthen Ontario’s ability to keep the Great Lakes and St. Lawrence River clean, as well as to protect and restore the waterways that flow into them.

According to the provincial government’s news release, the Act enables the province to address significant environmental challenges to the Great Lakes, including climate change, harmful pollutants and algal blooms. The Act will also:

  • Establish a Great Lakes Guardians’ Council to provide a collaborative forum for discussing and gaining input on issues and priorities relating to the Great Lakes.
  • Allow the Ministry of the Environment and Climate Change to set environmental targets and enable communities to address local problems.
  • Require the establishment of monitoring programs on a number of water quality indices where needed, as well as regular public reporting.
  • Require consideration of Traditional Ecological Knowledge in decisions made about the health of the Great Lakes if offered by First Nations or Métis communities.
  • Enshrine Ontario’s Great Lakes Strategy the province’s action plan on the Great Lakes, as a living document to be reviewed every six years and reported in the legislature every three years.

This is extremely positive news given the declining health of the Great Lakes, particularly with regard to recent toxic algal blooms and the availability of clean drinking water for those people reliant on the Great Lakes’ fresh water supply.

According to Environmental Defence, who has championed this Act for a number of years, the Act will lead to:

  • Empowered communities through consultation and new opportunities for involvement;
  • Consideration of traditional ecological knowledge in research and decision-making;
  • Provincial commitment to meeting targets that will reduce or eliminate harmful pollutants and address algal blooms; and
  • Accountability, through improved monitoring and reporting.

The Great Lakes basin is home to 98 per cent of Ontario’s population, 95 per cent of its agricultural lands, 80 per cent of its power generation capacity and 75 per cent of Canada’s manufacturing sector. Additionally, Ontario has 10,000 kilometres of Great Lakes and St. Lawrence shoreline, the longest freshwater coastline in the world. This is reason enough to celebrate the passing of the Great Lakes Protection Act.

James Early