Minimizing Liability Challenges Spills, Contamination, and Odours Marc McAree Environmental Law Specialist Certified by the Law Society of Upper Canada Willms & Shier Environmental Lawyers LLP www.willmsshier.com International Municipal Lawyers Association Trends and Foes: Managing Change and Risk in Municipal Law May 15, 2008 Overview Nuisance Liability Civil Action Update Class Action Trends Municipal Powers to Abate Nuisance Statutory Powers to Recover Spill Response Costs Strategies to Manage Environmental Risk 1
Nuisance Liability Private nuisance Unreasonable interference with another person s enjoyment of property Intention or fault not relevant to liability Public nuisance an attack upon the rights of the public generally to live their lives unaffected by inconvenience, discomfort or other forms of interference o Ryan v. Victoria (City) 1999 SCC Nuisance Liability Sources of nuisance liability Contamination of soil or water, odour, noise, vibration, dust, from municipal operations o E.g. operations such as WWTP, composting, landfill, road salt storage facility Property acquired by municipality Contamination from neighbour flowing through property owned by municipality o E.g. road allowance 2
Nuisance Liability Legal risks of nuisance liability? Governments can be sued Potential for class actions Insurance consequences Must respond/remediate to mitigate environmental risk Limitations Act, 2002 Civil Action Update Berendsen v. Ontario January 18, 2008, Ontario SCJ $1.7 million award against Ontario government for negligence for Disposing of waste asphalt from highway construction near water supply on dairy farm, and Failure and breach of duty to properly exercise its statutory powers of investigation and remediation of impaired farm water 3
Civil Action Update In 2001, SCC denied 6 month limitation defence under Public Authorities Protection Act SCC held that disposal of road construction waste was incidental to execution of public duty to maintain highways, and thus was an operational duty and not protected by statute Crown unsuccessfully argued that it had no duty of care where contamination did not exceed Ontario Drinking Water Objectives Civil Action Update Crown s standard of care was taken in context of its statutory powers of Highway repair and maintenance Water protection Environmental protection Court found that even in the 1960s and 1970s Crown employees should have reasonably known of the hazards of burying roadbed waste near water on a dairy farm 4
Sydney Tar Ponds MacQueen v. Ispat Sidbec Inc. Federal and Provincial Crown Corporations had owned and/or operated Sysco (steel plant) Residents claimed that governments breached a fiduciary duty by o Failing to disclose potential health and environmental information known by Canada and N.S. o Declaring that the plaintiffs homes and neighbourhood were safe to live in o Failing to act to move residents, remediate contamination SCC refused to strike fiduciary duty claim Class Action Trends Environmental class actions Now viable, several have been certified Property trumps health Except in Quebec, most successful environmental class action certifications in Canada are limited to claims for property damage Individual plaintiffs are free to pursue health claims in individual lawsuits Pearson v. INCO (nickel soil contamination) o o Municipalities released Ontario Court of Appeal Windsor v. CPR (solvents in groundwater) o Alberta Court of Appeal 5
Municipal Action to Abate Public Nuisance Newmarket (Town) v. Halton Recycling Ltd. (2006) Town applies for injunction for public nuisance Municipal Act, 2001, s.447.1 [formerly s.433] First test case under this provision Odour emissions from organic waste compost operation o > 1,000 complaints in less than 2 years Court ordered premises closed for 9 months, but judge stayed the order for 90 days to allow the company to abate odours Subsequently, the order was permanently stayed for other reasons Municipality recovered significant cost award against the company Powers to Recover Spill Response Costs Municipality can order owner/controller to pay the municipality's reasonable costs to Prevent adverse effects, restore the environment Enforced by lien on spill property where owned by owner/controller o EPA, s.100.1 6
Municipal Spill Cost Recovery Appeal municipal spill recovery orders to the Environmental Review Tribunal (ERT) Grounds of appeal limited o Was not owner or controller o Costs not related or were unreasonable ERT may allow increase in costs Two reported ERT cases from Brampton o Roughly 50% of costs claimed were agreed to be paid at mediation by spiller Delta Coatings Canada v. City of Brampton (March 14, 2007) Friends Sweets & Tandoor Restaurant v. City of Brampton (October 26, 2007) Strategies to Manage Environmental Risk Identify potential environmental risks early 2 year limitation period starts ticking as soon as potential claim is discovered Ensure that discovery of potential claim by employees is communicated swiftly to decision-makers o Train field staff to recognize suspected environmental concerns and report o Investigate and act quickly Know your operations 7
Strategies to Manage Environmental Risk Know your neighbours Act promptly to respond to complaints and anticipate problems Take control and work with stakeholders Implement genuine communications plan Keep neighbours and complainants informed about your mitigation strategy If necessary, take your plan to the regulator before the regulator imposes one on you Strategies to Manage Environmental Risk Think outside the box early in trying to resolve environmental claims Public Liaison Committee Study the problem Mitigate the impact Clean up Offer/accept property value protection Purchase/sell the impacted property Expropriate or purchase/sell buffer zone Offer/accept indemnities Small claims fund 8
Contact Information Marc McAree Phone: (416) 862-4820 mmcaree@willmsshier.com Willms & Shier Environmental Lawyers LLP www.willmsshier.com 9