Friday, February 12, 2016

Ontario Court of Appeal rules on contaminated lands case and Section 99(2) EPA liability

The Ontario Court of Appeal has allowed an appeal from a decision that dismissed a contamination claim by one landowner against a neighbour.  Thorco Contracting stored a large volume of petroleum hydrocarbons ("PHCs") on its property in an industrial area of Toronto for several decades.  PHCs contaminated the soil and groundwater on that property, and the contaminated groundwater flowed into a neighbouring property owned by Midwest Properties.  Midwest acquired its property in 2007 and then discovered the contamination.  It sued Thorco and its owner for damages based on nuisance, negligence and the statutory cause of action in Section 99(2) of Ontario's Environmental Protection Act.

The trial judge ruled that Midwest failed to prove that it had suffered damages because, in particular, it had not proven that the PHC contamination lowered the value of its property; it was not enough to prove the cost required to remediate the property.  The trial judge also ruled that the Section 99(2) claim was not available because the Ministry of the Environment ("MOE") had already ordered Thorco to remediate the property; an award of compensation might permit double-recovery.

The Court of Appeal overturned the trial judge's decision and granted judgment against Thorco and its owner jointly and severally in the amount of $1,328,000 based on all three causes of action.  Midwest was also awarded $50,000 in punitive damages from each defendant.

With respect to the Section 99(2) statutory cause of action, Justice Hourigan of the Court of Appeal wrote:

In my view, the trial judge erred in her interpretation and application of the private right of action contained in s. 99(2) of the EPA. This private right of action was enacted over 35 years ago and is designed to overcome the inherent limitations in the common law in order to provide an effective process for restitution to parties whose property has been contaminated. The trial judge’s interpretation of the section is inconsistent with the plain language and context of this provision; it undermines the legislative objective of establishing a distinct ground of liability for polluters. This is remedial legislation that should be construed purposively. It is important that courts not thwart the will of the Legislature by imposing additional requirements for compensation that are not contained in the statute.

With respect to the claim for damages, Justice Hourigan wrote:

Neither Tridan nor Canadian Tire involved a claim under s. 99(2) of the EPA. There is no reported case where a court has awarded damages for the cost of future remediation under this section. Nonetheless, in my view, awarding damages under s. 99(2) based on restoration cost rather than diminution in property value is more consistent with the objectives of environmental protection and remediation that underlie this provision.
This approach to damages reflects the “polluter pays” principle, which provides that whenever possible, the party that causes pollution should pay for remediation, compensation, and prevention: see Pardy, at p. 187. As the Supreme Court has noted, the polluter pays principle “has become firmly entrenched in environmental law in Canada”: Imperial Oil Ltd. v. Quebec (Minister of the Environment), 2003 SCC 58 (CanLII)[2003] 2 S.C.R. 624, at para. 23. In imposing strict liability on polluters by focusing on only the issues of who owns and controls the pollutant, Part X of the EPA, which includes s. 99(2), is effectively a statutory codification of this principle.
Further, a plain reading of s. 99(2) of the EPA suggests that parties are entitled to recover the full cost of remediation from polluters. Pursuant to s. 99(2)(a), a party is entitled to recover all “loss or damage” resulting from the spill. Section 99(1) provides that “loss or damage” includes personal injury, loss of life, loss of use or enjoyment of property and pecuniary loss, including loss of income. Section 99(2)(b) provides that a party has a “right to compensation for all reasonable cost and expense incurred in respect of carrying out or attempting to carry out an order or direction under this Part, from the owner of the pollutant and the person having control of the pollutant.” In my view, under either part of s. 99(2), polluters must reimburse other parties for costs they incur in remediating contamination.
In summary, restricting damages to the diminution in the value of property is contrary to the wording of the EPA, the trend in the common law to award restorative damages, the polluter pays principle, and the whole purpose of the enactment of Part X of the EPA. It would indeed be a remarkable result if legislation enacted to provide a new statutory cause of action to innocent parties who have suffered contamination of their property did not permit the party to recover the costs of remediating their property, given the EPA’s broad and important goals of protecting and restoring the natural environment.
Read the decision at: Midwest Properties Ltd. v. Thordarson.

Monday, February 8, 2016

OMB awards costs to Municipality where landowner's claim for expropriation compensation denied

The Ontario Municipal Board ("OMB") has awarded costs to the County of Simcoe in a case where a landowner unsuccessfully claimed compensation for injurious affection.  The OMB's decision is recounted in my blog post from June, 2015 - OMB dismisses claim for injurious affection where no taking - on merits and on basis of limitation period.

The OMB has discretion under Section 32(2) of the Expropriations Act to award costs in favour of the expropriating authority.  In this case, the County of Simcoe had incurred a discounted amount of $165,176.55 consisting of legal and appraisal costs.  The County's claim for costs was made on the grounds that, "if the Claimant had conducted itself in a reasonable and prudent manner, it would never have brought this claim and that the way in which the Claimant governed itself throughout this claim unjustifiably increased costs which otherwise could have been avoided."  The OMB's reasons also disclose that the County had actually made an offer to the landowner of $15,000 to settle after the landowner retained counsel for the matter.

The County claimed "party and party" or "partial indemnity" costs in the amount of $113,922.48.  The OMB decided that the landowner's conduct in refusing the settlement offer was unreasonable and, therefore, that it should be responsible for some of the costs of the County incurred in defending the claim.  The OMB awarded $86,943.20 to the County.

Read the decision at: Willies Car & Van Wash Limited v. Simcoe (County).

Saturday, January 30, 2016

Landowners found guilty of violating excessive fortification of land by-law through excessive surveillance equipment

In October, 2015, the Ontario Court of Justice released its decision in a case involving the fortification of property.  Many municipalities outlaw the excessive fortifying of property as it is often associated with gang or organized crime activity and may unduly intrude on the privacy of neighbours.  A husband and wife in Oshawa were charged with having applied "excessive protective elements to land", in this case video surveillance (8 cameras in front of the house, one to the south side, one on the fence at the northwest portion of the back yard and one affixed to a rear yard television antenna tower).  Various signs were also posted around the property, including one that read: "This private property & fence is enforced by video surveillance.  This is not a public thruway or thoroughfare.  Boundary line is 6" left of fence.  Resident has no permission or authority whatsoever to violate this boundary.  Persons entering this private sideyard on behalf of resident could be considered part of resident's continuance actions.  Also could be considered and served court subpoena as witnesses should action be decided or taken."

After several requests for entry to the house by a by-law officer were denied, the officer applied for and obtained a search warrant.  Inside the house, the officer observed live images from each of the 11 cameras, and determined that was possible for the antenna camera to be rotated 360 degrees and to provide a view well beyond the property of the defendants.  The officer determined that the video surveillance went well beyond "reasonable protection" that would not offend the by-law.

The defendants challenged the by-law charge first on the basis that the officer's search of their home was illegal.  Justice of the Peace Coopersmith disagreed - there was a valid search warrant.  She also disagreed with the defendants' arguments about the non-applicability of the by-law to private property:

Mr. L is prone to taking things out of context or simply does not understand the law or legal principles to which he refers.  Consequently, he draws his own unfounded conclusions.  For example, he failed to contextually understand the concept of a municipality as possessing powers of a “natural person” in exercising its authority.  He used parts of the Ontario Land Owners Association Report to ground his submission that “Fortification By-laws can only be implemented on “public properties” and not on private properties.”  I do not accept Mr. L’s submissions that fortification by-laws do not apply to private property, only to public lands. The definition of “Land” in Section 1.1(p) of Oshawa’s Fortification By-law 103-2005 does not distinguish between public and private lands.  Section 2.1 expressed the application of the By-law to all land within the City, unless it is expressly exempted by legislation.  Therefore, I find the L’s property at 1988 Walreg Drive in Oshawa is captured by the By-law’s definition of “Land”.

On the issue of what constitutes "reasonable protection", which is not prohibited by the by-law, Justice of the Peace Coopersmith said:
The term “reasonable protection” is not defined in the City’s By-law 103-2005.  Hence, applying a contextualized and plain meaning to these words, I am of the opinion that the words refer to adequate fortification that will afford the protection necessary to keep people and their property from theft or other criminal activity.  I accept that over the years the defendants experienced a break and enter into their dwelling and other incidents of vandalism to their property.  I do not find the meaning of “reasonable protection” to include protection from incidents or harassment of trivial importance, such as annoyed neighbours making faces and waving their middle fingers at the intrusive surveillance cameras aimed down the side of their home.  In a residential area, for example, the public interest in reasonable enjoyment of and privacy in one’s property is not served if excessive protective elements, such as video surveillance cameras capable of monitoring neighbours’ activities in their own homes and on their own yards, are present. 
The City’s Fortification By-Law 103-2005 serves to balance such public interest within residential neighbourhoods with the private interests of residents to protect their own property from theft or other criminal activity.  The By-Law suffices to allow people to protect themselves and their property from theft or other criminal activities, but it also limits the use of protective elements, such as video surveillance systems, to no more than is required for such protection.  In defining “Excessive Protective Elements” to capture visual surveillance equipment, including video cameras … capable of permitting either stationary or scanned viewing … beyond the perimeter of the Land”, Oshawa’s By-Law strikes a reasonable balance between private and public interests by affording its residents the right to monitor for theft or other criminal activity on their own respective properties, while serving the public interest of privacy and peaceful enjoyment by residents on properties in relatively close proximity to such video surveillance equipment.

The defendants were convicted of having violated the by-law.

Read the decision at: Oshawa (City) By-Law.

Wednesday, January 20, 2016

Natural Severance Case Being Appealed

In May, 2015, I wrote about a decision from the Superior Court of Justice in which a property was found to be severed naturally by a navigable watercourse - the Bear Creek (see Court Rules that Bear Creek was navigable in 1831).  The case is now under appeal by the Municipality and a hearing has been scheduled for February 4, 2016 in Courtroom 2 at the Court of Appeal (Osgoode Hall) in Toronto.

Saturday, January 16, 2016

GFO Appeal on Neonicotinoid Decision to be heard in March

According to the Grain Farmers of Ontario ("GFO"), its appeal of the decision rejecting its challenge of Ontario's new neonicotinoid regulations will be heard by the Ontario Court of Appeal in Toronto on March 9, 2016.

I commented on this case back in November, 2015: This challenge by GFO still strikes me as an attack on government policy, something in which the courts are loathe to interfere (as was noted by Justice Akhtar in his dismissal of the case).  GFO's news release doesn't provide any details about the "proper grounds" for the appeal(s).  We may need to wait until the appeals are heard (if they proceed) and decisions rendered to see what "proper grounds" are being advanced.

I still think GFO has a very steep hill to climb in challenging what is a policy decision of the Ontario government.  Generally, the Courts will not interfere in policy decisions of the government unless those policies were made without authority or violate some overriding constitutional or other right.  Courts will interfere where government enacts a policy but fails to follow it.  That's not likely the case here.

Wednesday, December 30, 2015

Conservation Authority planning to appeal Divisional Court decision

This relates my previous post on the Gilmor v. Nottawasaga Valley Conservation Authority decision of the Divisional Court.  It appears that the NVCA plans to appeal the decision and is seeking leave to appeal from the Court of Appeal.  This is indicated in a ruling in a related Human Rights Tribunal matter (see AG v. NVCA) commenced by one of the landowners involved.

Ontario Divisional Court rules conservation authority was wrong to apply general prohibition on development

The Gs purchased land in 2008 with a view to building a home.  Their lot, along with neighbouring 10 acre lots on which homes had already been constructed, was originally subdivided in the 1960s.  Although there was a shed, a garden and a driveway on their lot, no house had yet been built on the Gs' lot.

Long after the subdivision of the lots in the 1960s, the Gs' land was designated as a part of an environmentally protected area.  The reason for the designation was the small drainage ditch that crossed their land behind the area where they proposed to build a house.  That drainage ditch proceeds through the Gs' neighbour's land (where a house had already been built), through a culvert under a public road, and eventually to a creek that is a branch of the Nottawasaga River, the watershed of which is subject to the jurisdiction of the Nottawasaga Valley Conservation Authority (the "NVCA").

The NVCA refused to grant permission to the Gs to build their house on the fringe of a potential floodplain regulated by the NVCA.  The Gs made an application for permission to build in 2009, and provided extensive evidence establishing the lack of any adverse impact of their proposed building on flood control.  Notwithstanding this evidence, the NVCA turned down the Gs' application.  The Gs then appealed to the Deputy Mining and Lands Commissioner (the "Tribunal").  The Tribunal turned down the appeal.  The Gs then appealed to the Divisional Court.

The Divisional Court found that the CA and the Tribunal had misconstrued the law as providing for a prohibition on development within the CA's area of jurisdiction.  The Court noted: "In the present case, the public interest which the NVCA was authorized to supervise was that of flood control - this limited but important jurisdiction was not intended to be wielded to assert wider jurisdictional authority than the Legislator had conferred and it certainly does not provide a general prohibition against development."

The Divisional Court allowed the Gs appeal and directed the approval of the proposed development without conditions and without a rehearing of the application:

"Subsection 3(1) of Ont. Reg. 172/06 (hereafter the “NVCA Regulation”) required the Tribunal to assess whether the proposed development would affect flood control and several other factors.  Instead, the Tribunal interpreted the law to impose a general policy prohibiting development subject only to an exceptional discretion, and the Tribunal placed a heavy if not impossible onus on the Gs to justify an exceptional departure from the general prohibition.  In so doing, the Tribunal made the same error of law that this court corrected in the case of 3437400 Canada Inc. v. Niagara Peninsula Conservation Authority, (2012), 354 D.L.R. (4th) 756 (Ont. Div. Ct.). Properly interpreted, the NVCA Regulation does not prohibit development in designated areas; it only prohibits developments that are found to affect flood control or one of the other listed criteria (none of which were engaged in the immediate case). 
"The Tribunal (and the NVCA) incorporated within its analysis of flood control a concern for safety should there be a flood at the property, but on the evidence, the proposed development will not have any effect on flood control as such, and the evidence revealed only a very low risk to safety, even in the event of a hypothetical extreme flood of rare severity.  The Gs’ application ought to have been approved based on the uncontradicted evidence before the Tribunal, and this court has the appellate jurisdiction to grant an unconditional approval.  The Gs have other regulatory hurdles to cross before they can get final approval to complete their home.  Neither the interests of justice nor efficiency and economy of proceedings would justify requiring them to proceed through a third hearing on this matter six years after they commenced the application process." 
Read the decision at: Gilmor et al. v Nottawasaga Valley and The Township of Amaranth.

Friday, December 25, 2015

Merry Christmas!

Hard to believe - December 25th, the grass is green, the wheat is green, and it's 8 C and sunny.  Have a very Merry Christmas!