luke dineley.ppt

Important Trends in Environmental Case Law

S. Luke Dineley, PartnerBorden Ladner Gervais LLP

BEST 2016Whistler, British Columbia

May 26, 2016

J.I. Properties Inc. v PPG Architectural Coatings Canada Inc., 2015 BCCA 472

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• Reclusive billionaire – Craig McCaw

• James Island, a private gulf island in B.C. with a 5,000 sq. ft. home, trout pond, Jack-Nicklaus designed golf course, and a mock-western town

• Purchased island for $26 million in 1994

• Now selling it for $75 million

• Former site of munitions factory

• $5.23 million in remediation costs


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• PPG (formerly ICI) manufactures explosives on the site from 1913-1988.

• In 1988, ICI decommissions munitions factory and voluntarily remediates various contaminants (TNT, DNT, lead and mercury).

• No contaminated sites regime in 1980s.

• Received a “letter of comfort” from MoE confirming that the remediation was acceptable

• Restrictive covenant advising of contamination and restricted use of land.


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• ICI sells island to a third party, Parkland Properties Inc. in 1988.

• Parkland Properties sells the island to JI Properties (aka McCaw) in 1994.

• JI Properties reviews old environmental reports, is aware of restrictive covenant on title (and remaining contamination) at the time of purchase

• Law changes in 1997

• JI Properties carries out additional remediation and obtains a CoC for residential and parkland use.


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• Remediation occurred between 2004 and 2006.

• Action commenced in 2009.

• PPG argues outside two-year limitation period (under old Limitation Act)

• Court dismisses this argument: applicable limitation period is six years (under old Act)

• Court also holds that time limit begins to run when remediation is completed, not when it begins.


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• PPG also claimed it was not a responsible person under s.46(1)(m) of the EMA

• Not a Responsible Person if the Ministry issues a CoC for a site, and another person subsequently proposes to change the use of the contaminated site and undertake additional remediation (i.e. upzone).

• PPG argues that letter of comfort = CoC.

• Court dismisses this argument: Legislation could have grandfathered “comfort letters” but did not do so.

• “Developer Pays” - unsuccessful


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• Lastly, PPG argues that remediation costs incurred by JIP were unreasonable.

• Also: remediation to residential/parkland standard was not reasonable because residential development was unlikely.

• Court (largely) dismisses these arguments as well: JIP followed advice of a qualified environmental consultant, and residential and outdoor recreation uses of property were reasonable.

• Awards JIP $4.75 million in remediation costs.


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• Court of Appeal upholds the trial judge’s ruling that a six-year limitation period applied under the old Limitation Act.

• Given that the parties had agreed that the remediation costs here began to be incurred within the six-year period before the action was started, the Court of Appeal did not need to deal with the trial judge’s findings about when the cause of action arose.

• Note that under the new Limitation Act, the applicable time limit for commencing an action is two years, from the time remediation costs are finally incurred.


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• MOE issued a total of 621 Letters of Comfort for 548 Sites

• Highest proportion of these were for Gas Station sites (177)

Victory Motors (Abbotsford) Ltd. v. British Columbia, 2015 BCSC 1230

A decision addressing how to assess the value of brownfield properties

Facts• Contaminated property in Abbottsford, migrated off site• Attempt to sell property unsuccessful, property taxes went into

arrears • Neighbouring property owner purchased property for $42,000 (likely

remediation costs of $1.5-$2M)• Structure on property renovated ($750,000 of work), but nothing

undertaken that would require permit or trigger any action under the EMA, structure leased to multiple tenants

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The Tax Man Cometh

• Value initially assessed at $975,000 ► review panel says $500,000► property assessment appeal board says $975,000

• Value was based on highest and best use…that could be achievedwithout the need to undertake remediation – as a one-storey, multi-tenanted building

• Redevelopment into the conventional highest and best use, as amulti-story structure, was discounted as it would bring with it the riskthat the owner would be required to remediate

• Appealed to the BC Supreme Court

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BC Supreme Court overturned the decision of the Board and sent the matter back to be reconsidered • Court held that the assessment “gave no meaningful recognition to

the property’s brownfield status”• Any buyer would consider brownfield status and provisions of EMA • Also ignored fact that buyer acquired property under circumstances

that made risk uniquely acceptable• No evidence of any market, highest and best use only of value to

current owner

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Burnaby (City) v. Trans Mountain Pipeline ULC, 2015 BCSC 2140

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• City of Burnaby attempted to stop the expansion of the TransMountain Expansion Project, challenging it on constitutionalgrounds.

• The Expansion Project was intended to expand the existing pipelinesystem by twinning it along approximately 1,000 kilometres of itsroute between Alberta and coastal B.C.

• The existing pipeline had a right of way in Burnaby leading tofacilities along the Burrard Inlet shoreline.

• The City argued that its bylaws controlled the routing of theExpansion Project. Trans Mountain argued that the routing of aninterprovincial pipeline was within Parliament’s exclusive jurisdictionthrough the NEB and NEB Act.

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• Supreme Court ruled that Burnaby’s bylaws were constitutionallyinapplicable with respect to a federally-regulated, interprovincialundertaking.

• The court noted that the “core of federal power over pipelines isdetermining where pipelines are located”.– The City’s two bylaws, which addressed traffic and parks

respectively, effectively gave the City the ability to stopexcavation and engineering feasibility work for the ExpansionProject. The court concluded that the City could not apply itsbylaws to impede or block the location of the pipeline or works tolocate the pipeline.

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Coastal First Nations v. British Columbia (Environment), 2016 BCSC 34

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• Gitga’at First Nation and other petitioners (“CFN”) challenged the Province and Northern Gateway Pipeline Limited Partnership (“NGP”) over the Enbridge Pipeline

• Executive Director of the Environmental Assessment Office (provincial) entered into an Equivalency Agreement with the National Energy Board (federal) to streamline the assessment process

– Clause 3: purported “to remove the need for an environmental assessment certificate” (“EAC”), pursuant to section 17 of the Environmental Assessment Act.

– EAA, section 17 deals with the issuance of an environmental assessment certificate


• CFN sought to declare the Agreement invalid, to the extent that itremoved the need for an environmental assessment certificate.

• CFN relied on two legal bases:1. Statutory interpretation: the CFN argued that while the EAA

provides authority for cooperation between the EAO and the NEBto avoid duplicating environmental assessments, the provisions donot go as far as to permit the Province to abandon its decision-making power under section 17.

2. The Province was obligated to consult with the CFN beforedeciding not to terminate the Agreement.

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• The Province argued that:• The Agreement was a permissible legislative and policy choice that also

addressed efficiency concerns (i.e. duplicating environmentalassessment processes); and

• No duty arose in relation to entering into or not terminating theAgreement

• The NGP argued that :• The petition should be dismissed because construction and operation of

the Pipeline was an “essential and vital element of a federal work andundertaking” – thus violating fundamental constitutional principles

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• CFN won court challenge.• The court concluded while section 27 granted broad discretion to the

Minister to enter into the Agreement, the Minister should not haveabdicated a decision under section 17(3).

• The court therefore held that:– the Agreement was invalid to the extent that it purported to remove the need for

an EAC, and that– the Province failed to consult the CFN on the Pipeline

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• Plaintiff (tenant) sued Federal Government (lessor) after lease over landfill on First Nations reserve terminated

• Federal Government counterclaimed for damages for breach of lease (presence of untreated leachate). Claims millions of dollars in damages and other compensation.

• Sought to add as defendant:

• director/officer of the tenant, based on Fisheries Act (s. 42) and EMA (s. 35(4) of CSR).

• environmental consultant, as operator (s. 45(1)(a) of EMA).

• Consultant argues that EMA inapplicable to reserve lands – seeks summary trial on this narrow issue.

Atlantic Waste Systems Ltd. v. Canada, 2015 BCSC 1998

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• A low threshold for adding a party:

• a possible cause of action against the proposed defendant

• just and convenient to add the party

• Constitutional question not suitable for summary trial:

• Court would be required to assume facts not yet in evidence

• Case against consultant may fail on facts; no need to consider constitutional question

• Any result would likely be appealed, placing trial date at risk

• Would not be efficient

Atlantic Waste Systems Ltd. v. Canada, 2015 BCSC 1998

Hercules Forwarding Inc. v. Ski-Hi Scaffolding Ltd., 2015 BCSC 1859

• Hercules claimed that its property was contaminated with varioussubstances by Ski-Hi, the previous owner. Hercules sought recoveryof remediation costs under the EMA.

• Prior to buying the property from another company in 2005, Ski-Hiretained the consultant to provide a site investigation report on theproperty’s environmental condition

• Report found no significant contamination in the soil andgroundwater, and concluded that the property was suitable forcommercial and industrial use.

• Consultant was aware that the report would be used in connectionwith Ski-Hi’s purchase of the property.

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Hercules Forwarding Inc. v. Ski-Hi Scaffolding Ltd., 2015 BCSC 1859• Hercules commenced claim against Ski-Hi in 2008• In 2015, Ski-Hi sought leave to file and serve a third party notice for

contribution and indemnity against its environmental consultant.• Hercules supports application• Consultant argued that it did not owe a duty of care to Hercules

because of the limitation of liability and disclaimer provisions itprovided in the Report.

• The court allowed Ski-Hi’s application to serve a third party notice.Despite the “absence of any privity in contract” between consultantand Hercules”, the liability may still extended to consultant.

• Consultant also argued there had been inordinate delay in filing thethird party claim – two employees had since left the company

• Court notes that Ski-Hi could subsequently bring a claim againstconsultant in a separate proceeding, so allows filing.

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Thank You!

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S. Luke [email protected]

604-640-4219

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