Facts
Between 2004 and 2015,
The technical specifications for the fibreglass liner stated that installation below the frost line was necessary to avoid damage that can be caused by water freezing inside the pipeline.
Basis of Claim
The Defendants argued that
The chambers judge found in favour of the Defendants.
Issues Before the Court
Contribution Versus Indemnity
The Court of Appeal spent considerable time analyzing the basis of a claim for contribution versus a claim for "indemnity." It confirmed that "a true claim for contribution arises from shared liability [between the claimant and the claimee] to a third party." In this instance,
Scope of "Person Responsible" Under the EPEA
Although the definition of "person responsible" is often broadly interpreted, the chambers judge noted it is not intended to capture "everyone who was ever involved in construction of a pipeline." The chambers judge also noted that construction of a pipeline does not amount to having charge, management or control of the substances within the pipeline as required under the definition of "person responsible."
The Court of Appeal not only upheld the chambers judge's decision regarding the interpretation of "person responsible," it also noted there was no evidence the Director ever considered the Defendants liable under the EPEA as a "person responsible for the contaminated site." Finally,
Should Section 218 of the EPEA Apply to Extend the Limitation Period?
Any decision pursuant to section 218 of the EPEA must consider the purposes of both the Limitations Act and EPEA and the policy considerations underlying each act. On the one hand, the Limitations Act is an act of finality. It requires actions to be commenced within certain periods of time to protect defendants from ancient obligations and ensure disputes are resolved while evidence is still available and memories are fresh. In contrast, the EPEA invokes the "polluter pays" principle, and section 218 of the EPEA enables an extension of limitation periods to ensure that, in some circumstances, a polluter does not escape liability by the mere passage of time. Furthermore, because environmental contamination may be difficult to detect, strictly applying the "discoverability" rule under the Limitations Act to all environmental claims may result in unreasonable or unfair results.
The result is that any decision under section 218 of the EPEA requires a balancing act, where:
The judge must consider when the alleged adverse effect occurred, whether it ought to have been discovered by the claimant had the claimant exercised due diligence, potential prejudice to the defendant and, as well, "any other criteria the court considers to be relevant."
In upholding the chambers judge's decision to dismiss
Finally, the chambers judge may properly consider the relationship between the claimant and the party against whom its claim is brought, along with the facts related to the pollution — its magnitude and the events leading up to it. While the fact that the claim for contribution is from one polluter to another also does not categorically preclude a s. 218 extension from being granted, the relationship between the claimant, the claimee and the pollution is a factor that can properly be considered in exercising the chamber judge's discretion under s. 218.
...
As noted, the pipeline belonged to
Conclusion
This decision provides clarity regarding the definition of the term "person responsible" under the EPEA. It reconfirms that the definitive factor is the control over the substances that were released at the time of the release, as opposed to historical involvement in the construction or approval of the pipeline or other container in which the substances were being transported or stored.
The decision also provides additional insight into the factors the courts should consider when reviewing limitation period extension applications under section 218 of the EPEA. In many respects, these factors are quite broad, and the
Finally, although not its main focus, the decision succinctly analyzes and explains the difference between claims for contribution and indemnity claims. Such clarity will only serve to assist parties when trying to characterize the nature of their respective claims and defences thereto.
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