AgriLaw: Spill Damages – When is the Ministry of the Environment Liable?

Ontario’s Environmental Protection Act (EPA) authorizes the Ministry of the Environment to participate in the investigation, control and remediation of contaminant spills to prevent or mitigate adverse effects on the natural environment. Can the Ministry be liable for damages caused by the negligent exercise of its statutory powers?

In a recent decision of the Ontario Superior Court, a landowner whose property was contaminated following an oil spill and clean up on an adjoining property commenced court proceedings against the Ministry claiming that the Ministry’s negligence in the investigation and containment of the oil spill contributed to the contamination of the landowner’s property. The oil spill on the adjoining property had occurred in 1990 but it was not until 2013 that the landowner discovered the contamination of his own property.

Upon the defendant Ministry’s preliminary motion to dismiss the court action on the basis that the Ministry could owe no private law duty of care to the plaintiff landowner in the exercise of the Ministry’s statutory powers, the court commented:

“ The defendant’s argument primarily focused on the structure of the Environmental Protection Act … and contended that the Minister was under no duty to perform any of the described duties, that these were discretionary only and gave rise to no duty of care. During oral argument, he clarified that he was relying entirely on the language of the EPA to demonstrate no private law duty of care was owed. The defendant’s position is that … the Minister owed only a public duty, not a private law duty.”

In rejecting this argument and dismissing the Ministry’s preliminary motion, the court stated:

“The applicable legislative scheme is the EPA. The purpose of the EPA is to provide for the protection and conservation of the natural environment and conveys on the Minister certain duties and powers in order to carry out the purpose of the Act …”

“There is no doubt that all of the powers under the EPA are discretionary. However, that is not, as the defendant contends, dispositive of a finding of a private law duty of care.”

“Clearly, the purpose of the EPA, in part, is to protect individuals from the adverse effects of the discharge of a contaminant into the natural environment. The plaintiff is such an individual. The EPA anticipates liability arising from breach of a private law duty of care or negligence and permits an action against the Crown. While the powers under the EPA are entirely discretionary, it cannot therefore be said that the legislative scheme entirely excludes a private law duty of care given its wide expanse and application, and its explicit acknowledgment of possible liability for negligence.”

In the case under consideration, the plaintiff alleged that the Ministry had been involved in the investigation, inspection, monitoring, decision making and approval of the spill remediation on the adjacent property; the Ministry attended meetings both on site and over the phone; and it was the Ministry that decided where to terminate the excavation of the contaminated soil at specific boundaries located on the adjacent property. In these circumstances, the plaintiff landowner pleaded that the Ministry had breached its duty of care in failing to ensure that the contamination was contained to the adjacent property and to prevent the spread of the contamination to the plaintiff’s property. The plaintiff claimed damages including the cost of removal of contaminated soil which ought to have been removed or contained.

With respect to the Ministry’s possible liability, the court concluded:

“Once the defendant embarks on a course of action (whether obliged to do so under a legislative scheme, or has chosen to do so under discretionary powers), the defendant is obliged to carry out that course of conduct without negligence. There is then a sufficient proximity for the basis of a private law duty of care …”

“In summary, the MOE decided to get involved in the oil spill on the [adjacent] property, made the decision as to where the excavation of contaminated soil should stop, erred in failing to ensure that the contaminants were contained; as a result, the plaintiff’s property became contaminated and the plaintiff sustained damages.”

Although the exercise of the Ministry’s EPA powers with respect to contaminant spills is discretionary, exercise of these powers to investigate, control and remediate contaminant spills may impose on the Ministry liability to adjacent landowners who may be adversely affected by the Ministry’s negligence.