Monthly Archives: November 2015

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