CONTAMINATED SITES AND THE LAW - TODAY AND TOMORROW -
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1 CONTAMINATED SITES AND THE LAW - TODAY AND TOMORROW - LLP Ronald M. Kruhlak, McLennan Ross LLP Remediation Technologies Symposium 2003 October 15-17, 2003, Banff, Alberta
2 Environmental Law Assist clients in assessing risk Can it be defined sufficiently enough to quantify? Many sites exist and claims will continue Who is responsible? McLennan Ross LLP 2
3 Law and Contamination Why is it important to you? Owner claims against previous owners third parties consultants Types of claims Private law - civil actions - contractual claims Public law - regulatory claims McLennan Ross LLP 3
4 Private Law - Civil Causes of Action Nuisance Unreasonable interference with use and enjoyment of land Rylands v. Fletcher Escape of dangerous substance due to unnatural use of land, which damages another s land Trespass Unlawful entry onto another s land Negligence Breach of duty of care and handling or storing contaminates Failure to disclose Deceit or Fraudulent Misrepresentation New representation was false or reckless McLennan Ross LLP 4
5 Private Law - Contractual Claims Representations and Warranties Patent or Latent Defects McLennan Ross LLP 5
6 Public Law - Regulatory Proceeding Alberta Environmental Protection and Enhancement Act Power to order person responsible to investigate, remediate, and Section 113 Section 125/129 When will regulatory process be used? Discretion of the Regulator Look to Guidelines McLennan Ross LLP 6
7 New Developments - Private Law Tridan Developments Ltd. v. Shell Canada Products Ltd. How Clean is Clean? Leak from gas station caused off-site impacts Issue as to extent of damages Is impacted property to be compensated for cost to clean to regulatory standards, or to precontamination state - pristine? McLennan Ross LLP 7
8 Trial Decision Court awarded damages to restore property to pristine, pre-contamination state. (Full remediation costs plus percentage for stigma.) Court of Appeal Maintained award to remediate to pristine, however dismissed award of stigma. Leave to Supreme Court denied. McLennan Ross LLP 8
9 New Developments - Public Law Lynnview Ridge McLennan Ross LLP 9
10 Former Imperial Oil Refinery Lynnview Ridge McLennan Ross LLP 10
11 1970s Tank Farm Ravine Land Spreading Present Day McLennan Ross LLP 11
12 Site Map and Borehole Locations Tanks Land Spreading Area Ravine McLennan Ross LLP 12
13 Imperial Oil Limited et al v. Her Majesty the Queen in Right of Alberta et al EPO was issued against Imperial Oil and its subsidiary, Devon Estates, to prepare and submit an interim report including: A complete delineation of the contaminates on lands Short term measures to be taken to address any imminent risks Communications and consultation plan Schedule for implementation McLennan Ross LLP 13
14 Imperial Oil Limited et al v. Her Majesty the Queen in Right of Alberta et al cont d EPO stated that the parties shall submit a remedial options report containing options to remediate all substances and adverse effects on land and provide a detailed summary of each option, and implement the approved work. Following the issuance of the EPO, the Director issued letters of direction. Certain of these letters contain specific directions as to the extent of clean up necessary. McLennan Ross LLP 14
15 Environmental Appeal Board Imperial and Devon appealed the EPO to the Environmental Appeal Board on the following grounds: The Director should have addressed the Lynnview Ridge pollution problem through the contaminated site provision, not the substance release EPO. The Director failed to name other persons responsible for the site, including: City of Calgary Soils consultant Certain implementation directions given by the Director after the EPO was issued were unreasonable. McLennan Ross LLP 15
16 Environmental Appeal Board cont d The Board recommended that the Minister: Confirm the decision to issue the substance release EPO; Confirm the decision not to name other parties; Confirm that the EPO was reasonable with respect to removal of soils; Vary the EPO to remove the need to excavate soil under driveways, patios and sidewalks; Vary the EPO to require that the work under the EPO shall be performed to the satisfaction of the Director; Direct AENV to continue to apply the substance release EPO and, if new evidence supports it, to apply a contaminated site EPO. McLennan Ross LLP 16
17 Judicial Review The Appellants then sought judicial review of the Minister s decision on the following grounds: a. Minister failed to provide reasons; b. The Minister s reliance on the Board s report was flawed as the Board breached principles of natural justice, and how it conducted the hearing; c. Unreasonable treatment of Letters of Direction McLennan Ross LLP 17
18 Queen s Bench Decision Dismissed essentially all of the challenges of the Minister and the Board, however, did direct the Minister to provide some explanation for the rejection of the Board s recommendation Court wanted to understand whether the Minister disagreed with the Board s recommendations on the merits or whether the Minister did not accept the Board had jurisdiction to make the recommendation The Minister then provided reasons McLennan Ross LLP 18
19 Queen s Bench Decision cont d The Court then provided a supplementary decision which essentially resulted in: a. EPO was confirmed b. s.113 can be used with a present or ongoing effect of a post-release c. Standard of review is patently unreasonable d. Clarification that if letters of direction are in fact substantive and enforceable, then they ought to be appealable - they are essentially new EPO s. McLennan Ross LLP 19
20 Lynnview Ridge Current Developments Two new EPO s Both under appeal to the EAB Court decision appealed to Court of Appeal McLennan Ross LLP 20
21 Significance of Decisions Directors can choose either s.113 or 129 Liability for contamination continues indefinitely Liability can result through changing standards, monitoring and detection Level of clean-up may vary from regulatory standards to complete remediation Private contractual arrangements may not be relevant to the question of who is responsible for the substance (McColl-Frontenac) McLennan Ross LLP 21
22 Significance of Decisions cont d AENV is likely to proceed in future by issuing multiple EPO s rather than one general EPO and building on it specifically through letters of direction Courts have little interest in interfering with prescribed standards of remediation Persons responsible are clearly those who had charge, management and control of the substance Patently reasonable is the standard of review McLennan Ross LLP 22
23 Person Responsible Complaints No incentive to deal with problem sites - brownfields No closure - AENV will not issue remediation certificates Rigorous requirements for deep pockets Changing standards McLennan Ross LLP 23
24 What does the future hold? Alberta Environment reviewing contaminated site provisions - allocation of costs - legislative amendments If there is a change to accommodate permanency, remediation requirements may become more severe Use a precautionary principle for liability cap Increased civil claims against consultants Challenges of remediating to regulatory standards New requirements for offsite remediation McLennan Ross LLP 24
25 What can you do to avoid liability? Limit scope of work Limit who can rely on your work with disclaimers, exclusions Spell out risks Clarify standards applied for clean-up, analysis and testing McLennan Ross LLP 25
26 Recent Decisions Involving Contaminated Sites QUESTIONS?. McLennan Ross LLP
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