MOE Wins: Kawartha Lakes Must Pay

Author:Dr. Dianne Saxe
Profession:Dianne Saxe Professional Corporation, Saxe Law Office

The City of Kawartha Lakes has lost its appeal of the Ministry of the Environment cleanup order for a spill.Kawartha Lakes was the innocent victim of a domestic fuel oil spill. The homeowner's insurer started a cleanup, but abandoned the work when the policy was exhausted. The oil migrated through municipal sewers to the municipal lakefront. The Ministry then ordered the City to pay for the remaining cleanup of oil on municipal property. This was the first case in years to put a huge financial burden on a clearly innocent spill victim.

The City appealed the order, on the ground that it was an innocent victim of the spill, not a polluter, and that the cleanup Order should be directed to those actually at fault. The Environmental Review Tribunal, and now the Divisional Court, agreed that the City was in all respects innocent, and "had no responsibility whatsoever for the contamination" of its property.

Unfortunately for municipal taxpayers, the City's innocence was not relevant. The Director was entitled to focus the Order purely on having the spill cleaned up, for the protection of the natural environment. Issues of fault, fairness and compensation should be left to the civil courts, they said.

In making this finding, the court formally allowed the Ministry of the Environment to abandon the "fairness" doctrine most famously adopted in the Appletex case:

[26]      ...Appletex commented on the absence of legislative or policy guidance as to how provincial officers were to exercise their discretion under the Act.  Since Appletex, the Ministry has filled that vacuum by publishing a Compliance Policy (the "Compliance Policy") the stated purpose of which is "to provide guidance to Ministry staff in exercising their authorities under statutes administered by the Ministry of the Environment" (Compliance Policy, May 2007, page i.)

[27]      The Compliance Policy makes it clear that if there are two or more persons who can be named in an order under s. 157.1, it is not up to the provincial officer issuing the order to apportion liability as amongst the various orderees. Each orderee is generally considered to be jointly and severally liable under the order and it is to be left to the parties to sort out the apportionment of liability amongst themselves.

[28]       The Compliance Policy also contains a specific provision dealing with "victimized" or innocent owners. According to that provision, current owners, innocent or not, should be named in an...

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