“In one of the scariest court decisions of recent years, the Ontario Divisional Court has ruled that innocent landowners can be held responsible to remedy contamination caused to their properties by a neighbour.” (– Bob Aaron for thestar.com)
Does that sound just to you? Not to me, either. The article from which I borrowed that quote cites a particular case that occurred in Ontario in December of 2008, in which, following the filling of the oil fuel tanks in a residential home, oil was leaked from the home’s basement, contaminating the home’s property as well as city property (the oil traveled into the storm sewers and ultimately into a nearby lake). The contamination of the surrounding city property was discovered after the homeowner informed his insurance company of the situation. When the Ministry of the Environment got wind of the contamination, an officer was sent to conduct an assessment and the homeowner was ordered to “eliminate any adverse effects” and to “restore the natural environment”. This being a costly undertaking, the homeowners insurance covered the cost of remediation work to his own property, but after a long three months, ran out prior to being able to cover the full restoration of the natural environment to the city property. The Ministry of the Environment subsequently issued an order to the city to remediate its own property.
The city went on to appeal the order to the Environmental Review Tribunal, but it was dismissed. They then further appealed to the Divisional Court, citing the fact that the property was contaminated due to no fault of their own, and the case was heard by a three-judge panel in May of 2012. Before the case was heard, however, the city had already performed the ordered task of the remediation work, rendering the appeal proceedings to determine responsibility moot. The court, however, opted to hear the appeal just the same as a means of clarifying future similar cases. It ruled that the review tribunal was accurate in its decision to not hear evidence with respect to responsibility for the oil spill – they never opposed the fact that the city was an innocent party with respect to cause of the contamination.
Bottom line: The court is upholding a law which states that even though a party might not be responsible for contamination of their property, they are responsible for the cleanup, regardless of who caused the contamination.
(In the particular case cited above, the city’s remediation costs are still at issue and the city is suing the Ministry of the Environment, the homeowner, the cleanup company (and others) to recover the costs.)
What comes into question upon hearing a case like this is insurance coverage. As most homeowner policies do not cover pollution or contamination remediation, and given that situations like this one do occur, your clients will appreciate being informed about this kind of protection.