Back in December, 2008, Thompson Fuels filled the fuel oil tanks at the Hazel St. home of Wayne and Liana Gendron in the city of Kawartha Lakes (Lindsay). Subsequently, several hundred litres of the oil leaked from the basement of the house onto city property.
After noticing the leak, Wayne Gendron informed his insurance company. They hired D.L. Services to remediate the contamination. D.L. soon discovered that the oil had travelled into the storm sewers and was winding up in Sturgeon Lake.
When the Ministry of the Environment (MOE) heard about the spill, they sent a provincial officer to visit the site. The officer formally ordered Gendron to assess the extent of the spill, eliminate any adverse effects, and restore the natural environment.
Environmental remediation is hugely expensive. Three months later, Gendron’s insurance coverage ran out, and the ministry was notified. Since Gendron did not have the financial resources to continue the remediation work, cleanup efforts were discontinued. By this point, the Gendron property itself had been remediated, but contamination on the adjoining city property still had the potential to adversely impact Sturgeon Lake.
In March, 2009, the MOE issued an order to the city requiring it to take all necessary steps to prevent discharge of contaminant and to remediate its own property.
The city appealed the MOE order to the Environmental Review Tribunal but it was dismissed in July, 2010. The city then launched a further appeal to the Divisional Court, claiming it shouldn’t have to clean up contamination on its own property since it was an innocent party and hadn’t caused the pollution in the first place. The case came before a three-judge panel of the court last May.
The stated purpose of the Environmental Protection Act is “for the protection and conservation of the natural environment.” Under the legislation, a provincial officer may order anyone who owns property to prevent, reduce or eliminate contamination, whether or not that person caused the contamination.
Before the Gendron case got to court, the city had performed all the remediation work required, making the appeal proceedings to determine responsibility moot. In an unusual move, the court decided to hear the appeal anyway, citing the public interest in clarifying future contamination cases.
The issue for the Divisional Court was whether the review tribunal was correct in refusing to hear evidence of who was responsible for the spill. Essentially, the tribunal’s position was that it didn’t matter who caused the spill. The most important goal is to protect the environment.
Writing for the Divisional Court, Justice Harriet Sachs ruled that the review tribunal was correct and that it was reasonable for it not to hear evidence showing it was not responsible for the oil spill in the first place. At the tribunal, no one disputed the fact that the city was an innocent party when it came to the contamination.
As a result, the Divisional Court has now underscored the law that innocent parties may be forced to cover the costs of pollution caused to their land by a neighbour. The fact that the innocent party here was a municipality does not change the importance of the ruling — innocent parties are responsible for cleaning pollution on their properties, no matter who caused it.
The remediation costs of the Kawartha Lakes cleanup are still up in the air. The city is suing the MOE, the homeowners, the cleanup company and others in order to recover its costs.
The big issue here is insurance protection. Most homeowner policies exclude some or all coverage for pollution conditions, but now that the bar has been raised significantly, homeowners will be looking to their insurers for protection from a Kawartha Lakes-type scenario.
What do you think? Should innocent owners have to face bankruptcy when their neighbour causes pollution?