Canada: When Is An Environmental Contamination Claim Too Old To Extend The Limitation Period?

40 to 60 years may be too old when determining whether to extend a limitation period for a negligence-based environmental contamination claim, the court recently ruled in Brookfield Residential (Alberta) LP (Carma Developers LP) v Imperial Oil Limited, 2017 ABQB 218 [Brookfield]. In Brookfield, the likelihood of prejudice to the defendant in granting an extension was significant since the alleged cause of the environmental damage occurred over 60 years ago, witnesses and documents were no longer available, and expert evidence on the standard of care at the time would be impossible to obtain.

The facts of Brookfield involved a claim brought in negligence against Imperial Oil Ltd. (Imperial) by Brookfield Residential (Alberta) LP (Brookfield) based on environmental contamination from an oil well. Imperial drilled and operated the well between 1949 and 1950, and disposed of it in either 1950 or 1954. A different owner operated the well between 1950 and 1957 and then used it for salt water disposal between 1958 and 1961, at which point the well was decommissioned and abandoned. Contamination requiring remediation was not discovered until 2010 when Brookfield was preparing the site for residential development.

Extending a Limitation Period for an Environmental Claim

Imperial sought to summarily dismiss Brookfield’s claim on the basis that the 10-year ultimate limitation period set out in the Limitations Act, RSA 2000, c L-12 had expired. In response, Brookfield sought an extension of the limitation period under section 218 of the Environmental Protection and Enhancement Act, RSA 2000, c E-12 [EPEA], which states:

218(1)  A judge of the Court of Queen’s Bench may, on application, extend a limitation period provided by a law in force in Alberta for the commencement of a civil proceeding where the basis for the proceeding is an alleged adverse effect resulting from the alleged release of a substance into the environment.

(3)  In considering an application under subsection (1), the judge shall consider the following factors, where information is available:

(a)   when the alleged adverse effect occurred;

(b)   whether the alleged adverse effect ought to have been discovered by the claimant had the claimant exercised due diligence in ascertaining the presence of the alleged adverse effect, and whether the claimant exercised such due diligence;

(c)   whether extending the limitation period would prejudice the proposed defendant’s ability to maintain a defence to the claim on the merits;

(d)   any other criteria the court considers to be relevant.

With respect to the first factor (218(3)(a)), the court decided that it did not have enough evidence to determine when the environmental damage occurred. On the second factor (218(3)(b)), the court found that there was evidence that Brookfield exercised the necessary due diligence. The court further determined under 218(3)(d) that no additional relevant factors were present. The extension of the limitation period, therefore, turned on the possibility of prejudice to Imperial.

The Role of Prejudice

The court held that extending the limitation period would cause prejudice to Imperial, and that such prejudice outweighed the other factors under section 218(3).

First, the relevant events occurred some 60 years before Brookfield commenced its action. As a result of the passage of such an extended period of time, witnesses and documents were lost:

Imperial says it cannot even point to specific missing witnesses or missing documents, and this goes to the heart of the prejudice that it will suffer if this matter proceeds. More than 60 years later, Imperial does not know who could have once spoken to these events or who could have identified the specific relevant records.

Second, as Brookfield’s claim was based in negligence, evidence of the applicable standard of care at the time was necessary. The evolution of the standard of care over time, however, would complicate matters:

Undoubtedly, close analysis might indicate that the prevailing practices were negligent, but that would appear to be the result of hindsight and a fundamentally different approach to environmental protection. … It would, in my view, be unfair to consider the appropriateness of 67-year-old practices without reliable evidence of what the practices were then.

The court held that “calling the expert evidence required to establish the standard of care 60 years later would be, in the words of our Court of Appeal, ‘impossible’”, applying authority that would indicate that 40 years may be too old as well.

In light of the passage of time, the loss of witnesses and documents, the difference in the standard of care, and the impossibility of finding experts to establish the standard of care, the court ruled that Imperial would suffer significant prejudice if the limitation period was extended. Upon balancing this prejudice with the first two factors in section 218(3), the court held that the limitation period should not be extended and granted summary judgment to Imperial.

Brookfield represents the first case concerning section 218 of the EPEA in which the court found that the claim would cause significant prejudice to the defendant. In effect, it judicially creates an ultimate limitation period for negligence-based environmental contamination claims of 40 to 60 years. Whether the same result would follow for a contamination claim not based on negligence remains to be considered–while some of the factors the court points to (loss of witnesses and documents) will be similar in such cases, the applicable standard of care and expert evidence concerning the standard of care will not be. In light of Brookfield, potential claimants should carefully assess whether a claim that arose decades ago is likely to give rise to a presumption of prejudice before advancing an application to extend the limitation period.

 The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

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About the Authors

Scott H.D. Bowers is a Corporate, Commercial, Securities and Energy Lawyer at Bennett Jones in Calgary, Alberta.  Head of Legal Research for the firm in Alberta, Scott Bower represents clients in corporate, commercial, securities and energy litigation matters. He appears before all levels of court in Canada and before disciplinary bodies and provincial securities commissions, representing corporations, governmental agencies, banks and individuals.

 

Russell J. Kruger is a Research Lawyer at Bennett Jones Calgary, Alberta.  Russell has a research-oriented practice spanning a variety of areas, including energy, construction, franchise, arbitration and other corporate and commercial matters. Russell engages in review of technical and complex questions of law, and assists with preparation of written legal argument. Russell’s research-focused practice is informed by his previous courtroom experience as a litigation associate. Russell is also an Associate American Bar Association member.

 

Stephanie Clark is a articling student at Bennet Jones.  She is a graduate of McGill law school  and  also has a B.A. from the University of Calgary.

 

 

 

 

This article was first published on the Bennett Jones website.

U.S. EPA Marketplace 2017: Procurement Opportunities for Small Business

The U.S. EPA, Office of Acquisition Management, RTP Procurement Operations Division will be hosting Marketplace 2017 in Durham, North Caroline on May 31st, 2017.  The venue for the event is the Sheraton Imperial Hotel and Convention Center.

The Marketplace event is a bi-annual regional “reverse” trade show that provides small business owners a broad-based business opportunity to meet contracting officers from over 50 large prime contractors and federal, state, and local government agencies.  Contracting officers and representatives from industry will present training sessions and answer questions on a variety of contracting topics.  The Marketplace 2017 website hosts the complete event agenda and electronic registration at http://www.sbtdc.org/events/marketplace/.

 

Nova Scotia Supreme Court Orders Clean-up of Contaminated Site

The Nova Scotia (N.S.) Supreme Court recently confirmed that polluters must clean up a contaminated site in rural community of less than 1000 people that is approximately 10 kilometres (6 miles) south of Halifax.

In the decision, the court ruled that a numbered company (3076525 Nova Scotia Ltd., referred as “307 NSL” by the court) must abide by a clean-up ordered issued in 2016 by the N.S. Department of the Environment.  The numbered company owns recycling operation and the property is contaminated.  The contamination from the property has spread into the groundwater and impacted the drinking water wells of residential neighbours.

Contaminants found in monitoring wells on the property and in neighbouring drinking water wells include uranium, lead and arsenic.  The contaminant levels exceed what is considered safe in the Canadian Drinking Water Quality Guidelines.

The numbered company had claimed that the clean-up order should not have been issued at it for a number of reasons.  The first reason being that is could not have known of the contamination with the exercise of due diligence.  Secondly, it did not receive any economic benefit when it purchased the assets of the previous owner, RDM Recycling [referred to by the court as “301 NSL”], and took over the recycling business in 2005 and the company name.  In particular, there was not any offset between the price paid and the fair market value of property.  In other words, they did not receive a discount for the purchase of contaminated property that would need to be remediated.

In the Court’s decision, it deemed the property “very polluted” and stated that for the past two decades the Province had received complaints from neighbours of the property about the deteriorating quality of drinking water in their residential wells.  During that time, from 1997 to 2005, 301 NSL, operating as RDM Recycling, ran a recycling business on the property for construction and demolition material.

In early 2000, Nova Scotia Environment (NSE) discovered stockpiles of waste material at the RDM C&D recycling site.  NSE allowed RDM to construct a one-time disposal cell on their site.  It took 4 years to complete, while the stockpiles remained, and finally in 2004 RDM finished the cell and they buried over 120,000 tonnes of stockpiled waste.

In 2005, the 307 NSL [the company appealing the existing clean-up order] took over the assets, operating name, and business operations of 301 NSL.  It did not purchase the property.  Instead, it leased the property from 301 NSL.

Government Orders for the clean-up of the property date back in 2010.  At that time, the clean-up cost was estimated at $10.6 million.  The two companies (301 NSL and 307 NSL) along with three individuals were named in the 2010 Order.  The 2016 Order before the Supreme Court replaces early Orders.  The companies have never fully complied with any of the Orders.

In its ruling, the N.S. Supreme Court dismissed the claims made by the 307 NSL and ruled that the clean-up ordered issued by the government was legitimate and must be followed.  As such, the 307 NSL must perform remediation of the property and conduct monitoring.

U.S. Army confirms PFOS/PFOA Contamination at New Jersey Base

U.S. Department of Defence officials at the Joint Base McGuire-Dix-Lakehurst have confirmed that chemicals used in firefighting foam has been found in several groundwater sources on and off the base.

The chemicals in question are perfluorooctane sulfonate (PFOS) and perfluorooctanoic acid (PFOA).  They are synthetic compounds classified that are components of Aqueous Film Forming Foam (AFFF), a type of fire-fighting foam.  AFFF is the most efficient extinguishing method for petroleum-based fires and is widely used across the firefighting industry, to include all commercial airports, to protect people and property.

PFOA and PFOS are fluorinated organic chemicals that are part of a larger group of chemicals referred to as perfluoroalkyl substances (PFASs). PFOA and PFOS have been the most extensively produced and studied of these chemicals.  They have been used to make carpets, clothing, fabrics for furniture, paper packaging for food and other materials (e.g., cookware) that are resistant to water, grease or stains. They are also used for firefighting at airfields and in a number of industrial processes.

On the base, the groundwater monitoring program consisted of testing approximately 165 groundwater monitoring wells and 28 drinking water sources.  Results of analysis from groundwater samples show that 124 wells and two drinking water sources had contamination levels of PFOS and PFOA far in excess of the U.S. EPA health advisory for the compounds.  In some samples, the PFOS/PFOA concentrations were thousands of time higher than the standard.  The highest concentration of PFOS/PFOA was 264,300 parts per trillion.

To provide Americans, including the most sensitive populations, with a margin of protection from a lifetime of exposure to PFOA and PFOS from drinking water, the U.S. EPA established the health advisory levels at 70 parts per trillion.  When both PFOA and PFOS are found in drinking water, the combined concentrations of PFOA and PFOS should be compared with the 70 parts per trillion health advisory level.

Results of analysis from groundwater samples taken from private wells off the base also showed high PFOS and PFOA concentrations.  Of 131 off-base private drinking water wells tested, three were contaminated, and one had combined PFOS/PFOA levels of 1,392 parts per trillion.

Since the 1970s, the Air Force used this foam at crash sites, in fire training areas and some maintenance hangers at active, Reserve, Air National Guard and former installations.  The Air Force is systematically testing for potential PFOS/PFOA releases in soil, surface water and groundwater U.S. Air Force-wide where AFFF may have been used.

The U.S. Air Force identified approximately 200 installations (active, Reserve, Air National Guard and closed) where firefighting foam may have been released and is conducting site inspections to confirm if releases occurred.  As of November 2016, the U.S. Air Force completed preliminary assessments for 96 percent of the 200 installations.  The U.S. Air Force is prioritizing sampling based on factors, such as; potential pathways to drinking water, depth to groundwater and potential for contam

inate to migrate off base.

Currently, the U.S. Air Force is focused identify bases where there is PFOS/PFOA contaminated drinking water.  If contamination is found in the drinking water supply, immediate action will be taken to provide an alternative drinking water source.  Furthermore, the U.S. Air Force will initiate a long-term solution for safe drinking water which may include carbon filtration systems, plume-migration control, land use control, or other measures.  Finally, the U.S. Air Force is taking measures to prevent further groundwater contamination by replacing PFOS/PFOA-containing AFFF with more environmentally responsible AFFF.

Charges Laid for Oil Spill in British Columbia

As reported by CTV News, charges have been laid against the owners of the MV Marathassa nearly two years after a leak of bunker fuel fouled the beaches of English Bay in Vancouver, but the company is trying to scuttle the case.

Documents filed in British Columbia’s provincial court show the Marathassa and Greece-based Alassia NewShips Management Inc. face a total of 10 charges including discharge of a pollutant, unlawful disposal of a substance and failure to implement an oil pollution emergency plan.

The company is also accused of depositing a deleterious substance in a way that may have allowed it to reach waters frequented by fish, as well as depositing a substance harmful to migratory birds.

In all, six charges have been laid under Canadian shipping legislation, two relate to alleged Fisheries Act violations and single charges linked to alleged violations of federal environmental laws and the Migratory Bird Act.

None of the allegations have been tested in court.

At least 2,700 litres of bunker fuel spilled on April 8, 2015, while the Cypriot-registered vessel was moored in English Bay. The ensuing miscommunication among Canadian authorities and delays in cleanup raised questions about Canada’s preparedness for oil spills at a time when the Trans Mountain pipeline expansion was being hotly debated.

A provincial court date has been set for Wednesday, but Alassia is attempting to stop the proceedings with an application for a judicial review filed in Federal Court. The company will ask the Federal Court on Tuesday to stop the provincial court hearing from taking place until a judicial review has been heard.

In court documents, it says summonses in the case were invalid because they were served to a Canadian insurance adjuster and a ship captain who has only worked for Alassia on two fixed contracts.

Alassia argues that Canadian law requires summonses to be delivered to an executive officer of a corporation or a branch, and that neither the insurance adjuster or the captain fit that description.

“This is a serious issue to be tried in that it is doubtful that either attempt to serve the applicant was valid,” the company’s Vancouver-based lawyer Peter Swanson says in court documents.

Swanson says the company will suffer “irreparable harm” if the provincial court hearing proceeds as there’s no way for the company to challenge the validity of the summons in provincial court without submitting to its jurisdiction.

Alassia is seeking an order declaring the attempt to serve the summons to be invalid, quashing and setting them aside, as well as an order prohibiting further attempts to serve the summons in a similar manner. The company is also seeking costs.

In an affidavit, Valakitsis Antonios, the ship captain who was served the summons, says he worked on a vessel associated with Alassia between April 2014 and March 2015, but he was at home in Colombia in April 2015 at the time of the spill.

He says he is currently the master of the MV Afroessa, which is owned by Afroessa Shipping Corp., and he has no long-term relationship with Alassia.

Eric Renteria, an insurance adjuster at Charles Taylor Adjusting in Vancouver, says in an affidavit that an Environment and Climate Change Canada employee did not explain why he was serving him with a summons.

He says he is not employed or otherwise associated with Alassia and hadn’t heard of the company prior to receiving the summons last month. Charles Taylor Adjusting is not a branch of Alassia, he adds.

B.C. Environment Minister Mary Polak said Thursday she couldn’t comment on the charges but she was “pleased” the federal government was taking spill response seriously.

Alassia declined to discuss the legal proceedings in a statement but thanked all those who assisted in the response.

U.S. PHMSA Issues Final Rule Harmonizing HMRs with International Standards

The U.S. Department of Transportation’s (DOT) Pipeline and Hazardous Materials Safety Administration (PHMSA) recently issued a final rule to amend the Hazardous Materials Regulations (HMR) to maintain consistency with international regulations and standards (82 Fed. Reg. 15796).

The rule incorporates various amendments, including changes to proper shipping names, hazard classes, packing groups, special provisions, packaging authorizations, air transport quantity limitations, and vessel stowage requirements.  PHMSA states that these revisions are necessary to harmonize the HMR with recent changes made to the International Maritime Dangerous Goods Code, the International Civil Aviation Organization’s (ICAO) Technical Instructions for the Safe Transport of Dangerous Goods by Air, and the United Nations (UN) Recommendations on the Transport of Dangerous Goods – Model Regulations.

Additionally, PHMSA is adopting several amendments to the HMR that result from coordination with Canada under the U.S.-Canada Regulatory Cooperation Council.  The changes took effect on March 30, 2017.

Recent Technology Advances for Effective Oil Spill Response

Collaborators from Exxon Mobil Corporation and Oil Spill Response Ltd. recently presented a conference paper at the SPE Health, Safety, Security, Environment, & Social Responsibility Conference on technology advances for effective oil spill response.

In their conference paper, they claim that there is a public perception that little has changed with respect to the tools used to clean up an oil spill.  Additionally, the media have suggested that there is a lack of research effort to improve upon techniques that are generalized as static and archaic and the question has been raised wondering why industry does not invest in new and better approaches to removing oil from the environment following a spill.

In reality, the presentation states that there have been a number of advances in all of the oil spill response tools and the and paper examines several of the demonstrated approaches as well as describes more developmental techniques that could significantly improve the ability to find and treat the thickest part of an oil slick.

Aside from not having a spill in the first place, the next most favorable outcome would be to physically collect and remove spilled oil from the environment.  While most spills occur as a single release and are usually relatively small, there are challenges associated with this, especially in the case of larger releases far from shore and during inclement weather.  With this in mind, it is important to consider all response tools that may be brought to bear in the case of a spill.

The purpose of the paper is to consider recent advances in oil spill technology and document recent work.  The paper describes in detail the following advances:

Mechanical Containment and Recovery

Enhancements have been implemented recently, e.g., higher efficiency skimmers, booms that function in faster currents, systems that allow for more efficient boom deployment in open water and in rivers, and temporary portable underflow dams for inland responses.

In Situ Burning

New containment systems have been developed and the effective operational use of ISB has been demonstrated.

Dispersants

The ability to use dispersants at depth provides an opportunity to respond to a spill as close to the source as possible, allowing for the use of less product than might be needed for a surface slick.

Surveillance, Monitoring and Targeting the Areas of Thickest Oil

A key aspect an effective response is the ability to identify the location of the thickest part of a slick, since it is often the case that the majority of the slick volume resides in a relatively small part of the area.  By identifying the areas of thicker oil, it is possible to deploy response tools to those areas specifically in order to significantly increase their encounter rate.

Novel/Additive Information

Each of the items within the oil spill response tool box will be discussed with the goal of improving awareness of the efforts of the oil spill response community to continuously improve response capabilities.

 

Russians Patent Spill Response Technique for Arctic Oil Spills

LUKOIL, the largest oil and gas company in Russia, recently announced that it has developed a new technique to respond to oil spills in the Arctic waters.  The new multi-patented technology is based on the use of bio-sorbents with cold-resistant microbial strains at contaminated salt and fresh waters.

Pilot testing proved self-destructing bio-sorbents as the most efficient tool of emergency oil spill response in north latitudes, where low temperatures and ice conditions make conventional oil containment and recovery methods ineffective.

Biosorption is a physiochemical process that occurs naturally in certain biomass which allows it to passively concentrate and bind contaminants onto its cellular structure. Using biomass in environmental cleanup has been in practice for a while.

As soon as the new oil spill response technique is approved through the state environmental expert review, it will be integrated across the company’s facilities and will become a component of LUKOIL’s biodiversity conservation plan.

Hand-held Chemical Compound Detection Device for Hazmat Situations

As reported by InsideNova , the Arlington Virginia fire department recently purchased a device that detect various chemical compounds that it claims will give them a major leg up in confronting hazardous-materials situations.

Using U.S. federal grant funds, the Arlington County government recently acquired a Gemini hand-held chemical-identification system.  Designed by Thermo Fisher Scientific, the machine is designed to allow for quick identification of unknown solids and liquids by the military and first-responders.

“Tools like this are invaluable,” said Deputy Fire Chief John Snider, who showed off the equipment at the annual meeting of the county government’s Local Emergency Planning Committee (LEPC) last week.

“It’s fast, it’s very simple – it’s easy to use,” Snider said as he showed how the system analyzed a white power – which turned out to be harmless crushed Alka-Seltzer – then used laser technology to scan and determine the components of an unknown liquid.

The device, which county officials say retails for about $90,000, has been on the market for about two years.

“Ten years ago, this level of analytical rigor and specificity was only possible inside a lab – with instruments that were far from portable,” said Maura Fitzpatrick, senior director for portable analytical instruments at Thermo Fisher Scientific, when the equipment debuted in 2015.

Having the right tools to correctly analyze and address situations is vital, Snider said.

“Things can get ramped up really quick,” he said. “Even the most simple call can be time-consuming.”

The Local Emergency Planning Committee is a sub-group of the county government’s Emergency Preparedness Advisory Commission. The annual meeting of the LEPC, mandated by law, gives county officials a chance to review the past year’s hazardous-materials incidents with committee members, and explain regional strategies for dealing with hazardous-materials situations, whether accidental or intentional.

The annual meeting “helps everyone understand what you do,” committee chair Steve Holl told fire officials.

Arlington has two hazmat-response teams, located at Fire Stations 1 and 9, with 50 members split between technicians (who receive 80 hours of initial training) and specialists (who garner 240 hours of training). Last year, county hazmat personnel responded to 80 calls, with the fire department fielding an additional 168 that were not deemed significant enough for full hazmat response.

Arlington’s hazmat units are designated by the state government to provide regional responses. But the need to dispatch crews to communities across the broader Northern Virginia area has lessened in recent years, since most local governments now how their own hazmat units embedded in public-safety agencies.

Innovation in Packaging for Dangerous Goods

The Mauser Group, headquartered in Germany, recently introduced a packaging call skINliner™ that it claims to be a barrier technology that combines the advanced barrier performance of multilayer plastic film technology (e.g. against hydrocarbons and/or oxygen) with the logistical and lifecycle benefits of rigid packaging.  The new modular packaging design provides best-in-class reuse and recyclability.

“To date, the integration of flexible liner solutions into rigid industrial packaging and their separation after use has been quite cumbersome,” explained Dr. Detlev Weyrauch, Head of Innovation and Processing at MAUSER Group, “Especially when used in combination with Rigid Composite IBC (RIBC), liner geometries do not always fit well into the rigid inner receptacle.  Today’s solutions are difficult to install and often get damaged during the phase of use.  With our innovative skINliner™ technology, we managed to overcome these obstacles.  Based on a newly developed welding technology we created a ‘perfect fit’ geometry.”

When, for example, placed in a Rigid Composite IBC, the MAUSER skINliner™ is applied like an inner skin to the IBC’s inner receptacle.  It is semi-permanently fixed to the inside of the rigid bottle and therefore no longer subject to any intensive mechanical stress during filling, handling and emptying of RIBCs. The same applies to other packaging types like plastic drums.

The new skINliner™ barrier technology has gained full UN-approval for dangerous goods and enables MAUSER to expand its comprehensive IBC product offering. In comparison to known blow-molded multi-layer EVOH-barrier IBC bottles, the MAUSER skINliner™ barrier IBC provides the same functionality with less material. Moreover, it adds barrier functionality to large volume packaging like IBC bottles where it is needed most – closest to the filling good on the inside of the container.

The new MAUSER skINliner™ adds a new level of modular design to rigid industrial packaging.  It allows customizing advanced features like barrier functionality or light protection within standard industrial packaging in the most effective way.  Positioned inside of the container and closest to the filling, it not only protects the contained material but also prevents the migration of substances to the container wall. Easily to be removed and separated from the IBC bottle, it enables mono-fractional recycling of non-contaminated polyethylene IBC bottle material.

Consistently designed for reuse and most effective material recycling, the MAUSER skINliner™ IBC incorporates state-of-the-art barrier performance without any compromise on the container material recyclability. This is why it represents future-oriented innovation in industrial packaging for a circular economy.