Claim for contamination damages against MOECC allowed to proceed

In September, 1990, an oil spill occurred on a property owned by Shell.  The spill released approximately 9,000 litres of oil, and clean-up measures were undertaken.  Nearly 23 years later, in the spring of 2013, a neighbouring landowner whose property was 100 feet away from Shell's property became aware of the spill.  The landowner had the soil and groundwater on his  own property tested for contamination;  testing confirmed that his property was contaminated with petroleum and that the source of the contamination was the Shell property.

The landowner has since sued the Ontario Ministry of the Environment (now the "MOECC") for negligence on its part in the clean-up of the original Shell spill.  The landowner alleges that the MOECC is liable for damages because it "decided to get involved in the oil spill on the Shell property, made the decision as to where the excavation of contaminated should stop, erred in failing to ensure that the contaminants were contained; as a result the plaintiff’s property became contaminated; and the plaintiff sustained damages."

In response to the lawsuit, the MOECC brought a motion to strike the claim against it on the basis that it is "plain and obvious" that there is no reasonable cause of action that can be sustained against the MOECC.  The argument by the Ministry was that it owed no duty of care to the neighbouring landowner.  The Ministry argued that it was under no duty to perform any of the tasks described in the Environmental Protection Act, as they were discretionary only.  Therefore, any failure to perform those tasks could not form the basis of a negligence claim.

In deciding the motion, Justice Ray of the Superior Court of Justice accepted that the powers of the MOECC under the Act are discretionary, but ruled that the fact that the powers were discretionary did not preclude a finding that the MOECC owed the neighbouring landowner a duty of care.  As noted by Justice Ray:

Once the [MOECC] embarks on a course of action (whether obliged to do so under a legislative scheme, or has chosen to do so under discretionary powers) the [MOECC] is obliged to carry out that course of conduct without negligence.  There is then a sufficient proximity for the basis of a private law duty of care.

The MOECC's motion to strike was dismissed and the negligence claim against the MOECC is allowed to proceed.

Read the decision at: Swaita v Her Majesty the Queen in Right of Ontario (Environment).

Neighbour loses claim for damages from biosolid application on field next door

The Plaintiff in this case sued her neighbour over concerns that her well water had been contaminated by the agricultural field application of municipal sewage waste or biosolids.  The neighbour actually leased the land to a farm operation, so he commenced third party claims against both his tenant (the farm operation) and the company that applied the biosolids.  The Plaintiff's claims were based on nuisance and negligence.

Justice Heeney of the Ontario Superior Court of Justice dismissed the Plaintiff's claim on the basis that the application of biosolids did not cause the Plaintiff's well to become contaminated.  Put another way, the Plaintiff failed to prove, on a balance of probabilities, that the application of the biosolids caused contamination of the well.  In his decision, it was not necessary for Justice Heeney to address the question of who might be liable for what.

Evidence in this case was heard over 6 days of trial, and included testimony concerning the application of the biosolids.  The application project had been approved by the Ministry of the Environment ("MOECC") following extensive soil testing and other measures.  The biosolids were to be applied to 90 acres of wheat stubble.  The Plaintiff had a 14-foot dug well just a few feet north of the southerly boundary of her property, in close proximity to the neighbouring field.  On the day that the biosolid application commenced, the Plaintiff said water from her shower was "brown and stinky", and smelled like "vomit material".

The Plaintiff's water was tested following the application of the biosolids.  There was some detection of coliform, but there had been positive readings of coliform in the well water prior to the biosolid application project.  No e.coli was detected.  The absence of e.coli in the water was, in Justice Heeney's opinion, the single most significant fact in the case.  There was opinion evidence that, if biosolids had entered the well, there would have been a very high level of e.coli in the water that would have been detectable when the water was tested.  E.coli is specifically used in water testing as "being the most accurate indicator of fecal contamination - sewage or fecal contamination".  Justice Heeney concluded that the biosolid application did not contaminate the Plaintiff's well.

Read the decision at: Marshall v. Shaw.

Court of Appeal overturns summary judgment, allows historical contamination claim to proceed

D Corp. owned a property that was used as a gas station until 2004.  C Ltd. purchased a nearby property on April 10, 2012 and, on April 28, 2014, commenced an action against D Corp. and the former owners of D Corp.'s property for damages resulting from hydrocarbon contamination.  The contamination was alleged to have migrated from D Corp.'s property to C Ltd.'s property.

After the exchange of pleadings (the Statement of Claim and Statements of Defence by the parties), the Defendants moved for summary judgment to dismiss C Ltd.'s claim on the basis that the applicable limitation period had expired.  They asserted that C Ltd.'s claim had been discovered more than 2 years prior to the commencement of its action.  The judge hearing the motion granted the dismissal, finding that C Ltd. had become aware of sufficient material facts by March 9, 2012.  Alternatively, the motion judge held that C Ltd. had a sufficient basis for an action by March 30, 2012 when soil and groundwater sampling results were made available to C Ltd.  In the further alternative, the motion judge found that, even if C Ltd. did not know about drilling results showing contamination until May, 2012 (i.e. within 2 years of the commencement of the action), C Ltd. should have known of its claim but did not exercise due diligence.

Also, the motion judge rejected C Ltd.'s suggestion that there was a continuing tort that suspended the operation of the limitation period.  The judge saw no evidence that there was ongoing damage or nuisance.  Where there is such ongoing damage or nuisance, the limitation period will not act to bar a claim entirely since the tort (the wrong being done by the party causing the contamination) is ongoing.  The limitation period might still act, though, to limit how far back the claimant's damages claim can extend (i.e. the damages might still be limited to those sustained no more than 2 years before the commencement of the action).

The Court of Appeal reversed the dismissal of the action.  It found that the motion judge was wrong to find that C Ltd. knew or ought to have known of its claim for contamination damages more than 2 years prior to commencing the action.  First, C Ltd.'s knowledge of potential contamination or its suspicion (based on a Phase I ESA) should not have been equated with actual knowledge that its property was contaminated.  Second, the Court of Appeal found that the motion judge improperly ignored relevant circumstances surrounding C Ltd.'s purchase of its property (which was part of a multi-property purchase involving 22 properties).  The Court found that once C Ltd. had waived its conditions on the purchase, it was not reasonable to expect C Ltd. to have sought out information about potential contamination (the test results it obtained in May, 2012); by that point, C Ltd. was bound to complete the purchase of the property.

In making its decision, the Court of Appeal did not rule on C Ltd.'s continuing tort argument.

Read the decision at: Crombie Property Holdings Limited v. McColl-Frontenac Inc. (Texaco Canada Limited).

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.

Court dismisses UST contamination claim where previous owners plead ignorance

The Ontario Superior Court of Justice granted summary judgment to the Defendants in a property contamination claim.  The Plaintiff in the case purchased a property and then discovered significant environmental contamination that it was forced to remediate.  The Defendants said they knew nothing of the contamination. 

The property deal was completed in June, 2001.  Over two years later, in September, 2003, the Ministry of the Environment (MOE) received a drinking water complaint about wells located near the property.  It was determined that gasoline had leaked from underground storage tanks (USTs) on the property, and the Plaintiff was ordered by the MOE to remediate the property at significant cost.

The Defendants denied any knowledge that the property contained USTs, and denied the existence of any facts from which they ought reasonably to have understood there to be USTs.  They also denied the existence of any environmental contamination of the property during their period of ownership (1991 to 2001).

This was a motion for summary judgment in which the Plaintiffs had to demonstrate that there were genuine issues requiring a trial - otherwise the action would be dismissed on a summary basis without a trial.  The Plaintiff suggested that there were a number of issues requiring trial: 1) whether the property was in compliance with all laws at the time it was sold (as required by the terms of the Agreement of Purchase and Sale); 2) the state of the Defendants' knowledge about the USTs and any leaks; 3) the strict liability regime imposed by Section 99 of the Environmental Protection Act; and, 4) the effect of spoliation of evidence, given that the Defendants had destroyed business records.

The Court considered these issues and concluded: 1) there is no evidence that the property was not in compliance with environmental laws at the date of sale - there was no evidence to show that the contamination pre-dated the sale of the property (no expert report was provided); 2) there was virtually no evidence on which a finding could be made that the Defendants knew about the USTs when the property was sold; 3) Section 99 of the EPA could not be relied upon since there was evidence to show, even on a balance of probabilities, that the Defendants had ownership or control of the pollutant immediately before the first discharge (which is a prerequisite to liability under that section of the Act); and, 4) the Plaintiff failed to satisfy the Court that the business records destroyed would be of relevance to the claim.

Read the decision at: Gagnon & Associates Inc. v. Genier et. al.

Dead lawn points to neighbour's herbicides, but standard of proof not met

The Plaintiff in a Saskatchewan small claims suit alleged that the Defendant applied a substance in the back alley next to his property that caused damage to the Plaintiff's lawn.  The judge hearing the case was satisfied on a balance of probabilities that a substance from the back alley did migrate to the Plaintiff's lawn, either through run-off or leaching, and killed it.  This finding was supported by viva voce testimony, an investigation report, and photographs.  However, the judge was not satisfied on a balance of probabilities that the Defendant had anything to do with putting the substance into the back alley or that the substance came from the Defendant's property.

Of course, the judge accepted that the Plaintiff's suspicions about the Defendant's involvement were not unwarranted.  The Defendant was employed by a crop production services company and the Plaintiff's wife had seen the Defendant dump liquid in the back alley.  The Defendant told the Plaintiff that he has used glyphosate and Ally, and may have "mixed one a little strong".  The Defendant's yard is directly across the back alley from the Plaintiff's yard, and the alley slopes from the Defendant's yard to the Plaintiff's yard.  And there was no plant kill in any other yard in the area.

In spite of this circumstantial evidence, the judge did not find for the Plaintiff.  There was no evidence of what substance had actually killed the Plaintiff's lawn, and no samples had been taken from the back alley to test for chemicals in that area.  The Plaintiff suggested that the cost of testing for numerous substances until the correct one was found would be prohibitive, but it appears to have left the Plaintiff without the evidence necessary to prove the claim.

The Court dismissed the Plaintiff's claim, but (perhaps tellingly) made no order as to costs. 

Read the decision at: Charbonneau v Statchuk.

Court awards $3.6 million for contamination clean-up and $1.115 million for out-of-pocket costs

The Ontario Superior Court of Justice has awarded a property owner $3.6 million to clean-up petroleum hydrocarbon contamination from a neighbouring property, along with more than $1.115 million to cover out-of-pocket costs already expended in connection with the contamination.  Following a 12-day trial in Goderich and London, Justice Lynne Leitch found that underground storage tanks (USTs) at a concrete supply company's property were the source of contamination that had migrated onto a neighbouring commercial property.  She ruled that the defendant landowner was responsible to return the neighbouring landowner to the position it was in prior to the wrong committed.

The plaintiff landowner advanced its claims on the basis of the doctrine in Rylands v. Fletcher/Strict Liability, Nuisance, Negligence and Trespass.  The plaintiff's property was vacant until 1997 when a retail store operation was constructed there, and the evidence was that there had been no other use of the property prior to 1997.  The defendant's property was used for the production and sale of ready-mix concrete product, and the defendant also operated a fuel outlet on the property from the 1950s until 2012.  Original USTs were removed in 1989 and replaced by new USTs.   Justice Leitch noted, "It is fair to say that [the Defendant] used gasoline for many years with questionable UST system monitoring and maintenance practices and poor record keeping."

In 2007, the plaintiff landowner planned to build its own gas bar as part of its retail operation, and investigated the proposed site.  It was then that petroleum hydrocarbon contamination was detected.  From that point forward, the plaintiff undertook interim remediation steps and eventually commenced its action against the defendant landowner to recover the costs of the clean-up of its property.

Expert evidence was called by both parties, with the defendant's expert focusing on an opinion that the source of the contamination was, in fact, the plaintiff's property.  However, there was no evidence of soil contamination in the area where the defendant's expert postulated that a spill had occurred.  Considering all of the evidence, Justice Leitch concluded that the contamination came from the defendant's property: "There is no question that until 1989 leaded gasoline was stored on the "Defendant" Property in single-walled steel tanks, which were susceptible to corrosion and did not have a leak detection system."  She found the defendant liable on the basis of strict liability, nuisance, negligence and trespass.

What I find to be most interesting about the decision is the issue of damages.  Justice Leitch agreed with the plaintiff that it should be awarded $3.6 million, which is the estimated cost of remediation, including soil and groundwater remediation.  In addition, she awarded out-of pocket costs already incurred, bringing the total damages award up to about $4.8 million.  However, I was not able to see any reference in the decision to the actual value of the Plaintiff's property.  Although the Plaintiff did include a claim for loss of property value in its lawsuit, it did not pursue that claim at trial.  In reading the decision, I was expecting to see a discussion of the cost of the proposed remediation in relation to the value of the property as part of an analysis of the reasonableness of the damages award.  Perhaps the value of the property (including the retail operation) was so much greater than the cost of remediation that it was simply taken for granted that the cost of remediation was reasonable.

Read the decision at: Canadian Tire Real Estate Ltd. v. Huron Concrete Supply Ltd.

Divisional Court upholds OMB on question of reduction in market value for contamination

The City of Toronto appealed an OMB decision awarding more than $3.3 million for market value on the expropriation of a contaminated property.  The property in question was the former site of a soft drink manufacturing plant; the expropriation was required in order to install an underpass at Dufferin Street in Toronto beneath a rail corridor.  Through testing, a City consultant had identified various contaminants on the property, including vinyl chloride (VC) and tetracholorethylene (TCE).

Although there was no requirement to remediate the property, the City's expert witness at the OMB hearing suggested that remediation might be warranted based on a risk assessment and that the cost of remediation of the TCE would be $355,000.  To deal with the VC, a $40,000 upgrade to basement ventilation would be required.  As a consequence of these findings, the City's appraiser estimated that market value of the property should be subject to a reduction of $580,000.

The OMB accepted the evidence of the landowners that there was no risk to human health or to the environment from the presence of the contaminants and that no remediation was needed.  However, the OMB did deduct $20,000 from the market value for air sampling and $10,000 for the drilling of additional bore holes. 

The City appealed the market value award (as well as an award of business losses) arguing that the OMB should have deducted something for the contamination because the land was not "pristine" and that the OMB erred in relying on 2009 environmental standards when the valuation date for the expropriation was in 2005.  The Divisional Court ruled that it was reasonable for the OMB to reject the City's expert's evidence about a "potential 'ball park' worst case scenario" concerning the contamination.  There was no basis on which to find that the market value should be reduced on account of the contamination present.  Also, the Divisional Court found that the landowners' expert witness testified on the basis of standards that were available in 2005, even if he made reference to the 2009 standards as well.

The Divisional Court dismissed the City's appeal and awarded the landowners' costs of $25,000.

Read the decision at: City of Toronto v. Simone Group Properties Limited.

Enbridge Line 6B Citizens' Blog

Click here to visit a blog by "concerned landowners affected by the Enbridge 'replacement' project": Line6B Citizens' Blog.  Recall that Enbridge's plan for its Line 6B pipeline in Michigan (related to the Kalamazoo River spill) is to abandon about 75 miles of pipe in place and to construct new pipe in a new easement next to it.  The new easement will be obtained by expropriation where agreement is not reached with the landowner.

NTSB Report: Enbridge Control Room Failure and the Kalamzoo River Spill

An excerpt from a recent report of the National Transportation Safety Board paints a picture of the surprising goings-on in the Enbridge Edmonton Control Centre while Line 6B was spewing oil into the Kalamazoo River system:

Operator B2 said he has never seen this problem before and that it was interesting. Operator B2 stated that the situation looked liked a leak, and Operator B1 stated that they could pump as much as they wanted but could never over pressurize the pipeline. Operator B2 stated that eventually the oil has to go somewhere. Operator B2 said that it seemed as if there was something wrong about the situation. Operator B2 said to Operator B1 'whatever, we're going home and will be off for few days.' Operator B1 stated they were not going to try this again, not on their shift

Andrew Nikiforuk discusses the report and its findings about Enbridge's operations in this article called: "Spill Crisis: 'Whatever, we're going home'".

What does Enbridge have to say about the report?  Enbridge suggests in a press release on its website: "Enbridge appreciates the hard work and due diligence of the National Transportation Safety Board (NTSB) relating to the July 2010 leak.  We have been actively working with the NTSB and immediately reviewing and addressing concerns as they have been raised ... Until the final report is published, we do not intend to pre-empt those findings by commenting on specific details."

Not surprisingly, the findings of the NTSB on the failures in its control centre, which would have been known to Enbridge from the time of the 2010 leak, were not included in any of the information filed by Enbridge in support of its Line 9 Flow Reversal Project application. 

Privacy Commissioner deals with concerns about disclosure of contamination data

The Ontario Information and Privacy Commissioner has recently issued a decision upholding an earlier decision by the Ministry of the Environment (MOE) to release partial records related to an ongoing contamination situation in Cambridge, Ontario.  According to the decision, trichloroethylene (TCE) leaked from a facility into neighbouring properties, contaminated local groundwater and may have posed a health hazard due to the movement of contaminant vapours from the groundwater into the basements of nearby homes.

The MOE received a request for access to information about the contamination, including all test results and reports on remediation in the possession of the MOE.  A decision was made to disclose some of the documents and information requested, but without any homeowner names except where a release had been provided.  At least one homeowner challenged the decision, as did the company responsible for the contamination and clean-up. 

The Commissioner declined to prevent the disclosure of property information on the basis that it was personal information.  The argument was made that property identification information could be used to obtain the names of property owners and was, therefore, personal information.  The Commissioner disagreed:

I also wanted to address the appellant and affected person’s arguments that the individual homeowners would be identifiable from a disclosure of their addresses or other location information using publicly available resources. The fact that the names of individual owners could be determined by a search in the registry office or elsewhere does not convert the municipal address from information about a property to personal information. In Order PO-1847, former Adjudicator Katherine Laird noted that, in the context of a discussion about correspondence concerning possible land use, “…where records are about a property, and not about an identifiable individual, the records may be disclosed, with appropriate severances, notwithstanding the possibility that the owners of the property may be identifiable through searches in land registration records and/or municipal assessment rolls.”

The Commissioner also rejected the argument that disclosure of the information would result in undue financial loss for the homeowners involved:

I accept that the stigma of environmental contamination can result in the lowering of property values and may affect the ability of property owners to sell their properties in the free market. However, in this case, I find that the appellant has not provided me with detailed and convincing evidence that the disclosure of these records could reasonably result in undue loss to the homeowners. Firstly, as the ministry notes, the media has already reported of the contamination in the community. The records contain these newspaper reports. Secondly, from my review of the records, I find that there has already been some public disclosure of the test results to the homeowners and businesses in the community. And finally, I agree with the ministry’s representations that the information in the records including test results and remediation reports, provide a clearer picture of those properties that have been properly remediated to ministry standards. I am not persuaded that disclosure of these records would result in undue loss to the homeowners in the community.

Read the full decision at: Ontario (Environment) (Re).

When innocent parties are held liable for environmental contamination

The Ontario Divisional Court has recently released a decision affirming the authority of the Ministry of the Environment to hold a party liable for clean up of contamination even though that party was not at fault.  As the Court explained: "The appeal centres on the question of what are the appropriate considerations in making a clean-up order under the Act, against an owner of contaminated land who had no responsibility whatsoever for the contamination."

Several hundred litres of furnace oil had leaked from the basement of a privately owned property located in the City of Kawartha Lakes.  The oil seeped onto property that the City owned and from there had the potential to adversely affect Sturgeon Lake. The Ministry of the Environment (MOE) ordered the private property owners to remediate the damage. The owners, who had limited financial resources, made an insurance claim, but their insurance funds ran out before remediation could be completed on the City property. The MOE then ordered the City to clean up the contamination on its property and to prevent discharge of the contaminant from its property.

The City appealed the order to the Environmental Review Tribunal (ERT), which refused to allow the City to call evidence directed at proving the City's innocence and determining who was actually at fault for the contamination.  The Divisional Court upheld this decision of the ERT, finding that earlier decisions of the ERT related to fairness (e.g. it would not be fair to hold an innocent party responsible for the costs of clean up) had been supplanted in large part by the MOE Compliance Policy. 

The Compliance Policy states that the "fact that an owner of a contaminated site may have purchased it without notice of the presence of contamination is irrelevant to the purpose of the Ministry legislation [the Environmental Protection Act] and generally will not be considered by the statutory decision-maker to be grounds for relieving that owner from liability under a control document."  According to Section 2 of the Policy, an innocent or "victimized" owner will not be relieved of liability.  If an exceptional or unusual circumstance existed, the timing and content of such an order could be varied - but not whether the order should be issued in the first place. 

The Divisional Court also rejected the argument of the City that the ERT's decision violated the "polluter pays" principle and, therefore, that the decision could not stand.  The Court instead pointed to Section 157.1 of the Environmental Protection Act, which it says "can be accurately described as an 'owner pays' mechanism".  The section makes no reference to fault.  It gives the provincial officer the discretion to make an order against an owner if the officer reasonably believes that the order is necessary or advisable to protect the environment.  The ERT had found that the MOE had acted reasonably in making the order against the City, and the Divisional Court agreed.

Read the decision at: The Corporation of the City of Kawartha Lakes v. Director, Ministry of the Environment.

Plains Midstream complains that some media using images from 2011 spill, not the latest spill

Plains Midstream Canada cautions the public on its website that, "You may have seen some shocking images circulating over the last couple days.  While we appreciate that images are an important part of telling a story, some of them are incorrect.  We have seen images online, on t.v. and in the news that are not related to the Rangeland pipeline incident at all, such as images that depict oil saturated wetlands and oil slicks.  Some of the images depict the Rainbow pipeline spill from 2011 ... We have contracted both photographers and videographers to create a visual portrait of the release site."

A spill of light sour crude oil into a tributary of the Red Deer River near Sundre, Alberta was discovered on June 7.  Preliminary estimates suggested a release of between 1,000 and 3,000 barrels of oil into the environment.  Plains Midstream is warning residents that "water drawn directly from the Red Deer River north of Sundre to the Gleniffer Reservoir should not be used for human or animal consumption".  Plains Midstream is still cleaning up from last year's 4.5 million-litre oil leak in a remote area northeast of Peace River.

Farmer recovers damages from trucker for fertilizer contamination of canola

The Provincial Court of Saskatchewan has ruled in favour of a farmer who claimed damages against a trucking firm after a load of his canola was discounted by a feed processor due to fertilizer contamination.  There were five loads of canola being trucked to Cargill.  The fourth load was rejected because it was contaminated with fertilizer.  The canola then had to be sold to the feed processor at a discount.

The issue in the case was this: was there proof on a balance of probabilities that the trucking company contaminated the fourth load of canola taken from the Plaintiff's farm?  The Court found that there was proof.  The Court rejected a claim that the contamination came from a fertilizer bin on the Plaintiff's farm.  The farmer was granted judgment in the amount of $5,936.68.

Read the decision at: Zuchkan v Biggar Transport (2006) Ltd.

NEB issues Hearing Order for Pipeline Abandonment Costs Estimates

The National Energy Board (NEB) has issued a Hearing Order in the LMCI Stream 3 proceeding dealing with pipeline abandonment cost estimates.  An oral hearing will be convened to consider the reasonableness of the costs estimates presented by each Group 1 company (including Enbridge, TransCanada, etc.)  The following timetable of events is included in the NEB's Order:

Although landowners and other interested parties will be able to participate as intervenors, no participant funding is being made available. 

Read the Hearing Order at: MH-001-2012.

Who owns abandoned pipelines?

A few years back, David Howell, Senior Right-of-Way Agent, International Right-of-Way Association, Houston, TX, wrote a frightening article about landowners and the ownership of abandoned pipelines.  Howell had received a call from a Texas landowner who was facing a $51,000 cost to remove 300 metres of abandoned oil pipeline from his property to allow for development.  The company has walked away from the line, but retained ownership and refused to allow Howell to hire his own contractor to remove the pipe at a cost of no more than $1,500.  Of course, the $1,500 quote was based on an assumption that the company had properly purged the line of contaminants, etc. 

Many landowners are worried about the day when they will become responsible for abandoned pipelines on their properties.  However, what happens when the pipeline company walks away (i.e. ceases operations and escapes any regulatory control), but retains ownership?

Read Howell's article at: Who owns abandoned pipelines?

Ontario hog farmer's fine and jail sentence stayed pending appeal

A judge of the Ontario Court of Justice has stayed the sentence handed down to an Oxford County farmer ealier this month pending an appeal.  The farmer was convicted on charges related to a manure spill (see previous post).

Read about the stay decision at: betterfarming.com.

Van Boekel Hog Farms Fined $345,000 For Manure Spills

WOODSTOCK – On January 12, 2012, Eric and Yvonne Van Boekel, Van Boekel Hog Farms Inc. and Van Boekel Holdings Inc. were fined a total of $345,000 for pig manure spills that resulted in adverse effects to residents and impairment of water quality. Mr. Van Boekel also received 30 days of jail time.

The Court heard that the companies own two hog farms in Oxford County and that the ministry responded to complaints of pig manure spills on both farms. The ministry observed significant spills and noted that the spills had discharged into the Thames River and Sweets Creek. The ministry also determined that the flow manure application system that was being used to spread manure on fields was not being operated in accordance with the Nutrient Management Act.

The companies and the Van Boekels were charged following an investigation by the ministry’s Investigations and Enforcement Branch.  The companies and the Van Boekels were fined a total of $345,000 plus victim fine surcharges (25% surcharge). Mr. Van Boekel also received 30 days jail time concurrent to be served on weekends plus two years probation.

Read the Better Farming story on the case at: Oxford farmer slapped with huge fine, jail time.

NEB posts summary of abandonment estimates filed by pipeline companies

The National Energy Board has posted a "Summary of Group 1 Companies Physical Information Filed", setting out data related to the mode of pipeline abandonment proposed by Group 1 companies (large pipeline systems) that filed cost estimates with the NEB.  The chart provided juxtaposes the total km contained in pipeline systems against the km of pipeline that companies propose to remove upon abandonment.  The contrast is pretty striking.  At least in agricultural areas, companies propose to remove almost no pipe.  CAEPLA had proposed that cost estimates should be based on a conservative assumption of 100% removal.  Even the NEB had proposed 20% removal as the assumption to be used.  The pipeline industry obviously disagreed. 

Trans Mountain Pipeline LP ordered to pay $250,000 after oil spill

The Trans Mountain Pipeline is 1,050 kilometres in length and has a diameter of 610 millimetres, which is about 24 inches, for most of that length. The Trans Mountain Pipeline can transport approximately 300,000 barrels of oil per day and can transport different products in batches rather than being limited to transporting one product type at a time.  It has been in operation since 1953 and crosses the provincial boundary between Alberta and British Columbia.  Since it is an interprovincial pipeline, it is regulated pursuant to the federal National Energy Board Act and the National Energy Board Pipeline Crossing Regulations and is subject to the oversight of the NEB.

Trans Mountain has recently been ordered to pay $250,000 after the pipeline was damaged during excavation work, resulting in an oil spill.  A civil engineering company working for the City of Burnaby applied to Trans Mountain under Section 112 of the NEB Act for permission to excavate near the pipeline to complete works for a City storm sewer project.  A crossing agreement was signed and then the engineering firm retained a construction company to carry out the work.  During construction, no preconstruction meeting was scheduled or held between the construction company and Kinder Morgan, the pipeline company acting as agent for Trans Mountain. 

The Foreman for the construction company reviewed a services map in conjunction with the project plans and determined that the planned construction work would conflict with the location of the pipeline.  Kinder Morgan was advised of the potential conflict and requested to attend to locate and mark the pipeline in the area of the discrepancy.  An inspector attended and located the pipeline, the location being consistent with the newly provided service map and inconsistent with the project plans prepared by the engineering firm and approved by Kinder Morgan. 

Eventually, construction was being carried out on the site without the presence of an inspector from the pipeline company.  No complete location of the pipeline was requested and no preconstruction meeting was held.  Later, an excavator operator was widening the trench for the installation of an additional manhole when he pierced the pipeline.  Pursuant to this training, the excavator operator attempted to cover the puncture in the pipe with the bucket of his excavator in order to contain the escape of oil.  This led to a second puncture. 

In handing down its sentence, the Court noted:

There was no benefit which flowed to any of the defendants from the pollution here. The spill was, on the contrary, an accident which could and should have been avoided. Culpability for each of the defendants is at the low end of the spectrum. A combination of small errors by each party created the event. There were misunderstandings, there were erroneous assumptions, but there was not even what might be referred to as real negligence and there was certainly no deliberate wrongdoing. Care was taken, but not enough care.

The Court imposed fines of $1,000 on each of the three companies involved - the engineering firm, the construction company and Trans Mountain.  In addition, each company was ordered to pay $149,000 to the Habitat Conservation Trust Foundation.  Trans Mountain was ordered to pay another $100,000 to the B.C. Common Ground Alliance for the purpose of "identifying parties engaged in construction or excavation, organizing and planning DigSafe BC! workshops, and raising awareness about damage prevention for those undertaking excavations near underground utilities."

Read the sentencing decision at: R. v. B. Cusano Contracting Inc. et al.