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ENVIRONMENTAL LIABILITY - Contaminated land - Site remediation

Tuesday, May 25, 2021 @ 9:19 AM  


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Appeal by Victory Motors and Jansen Industries and cross-appeal by Super Save from an order allocating costs of environmental remediation between the parties. Jansen owned two contiguous parcels of land with commercial use buildings situated thereon. Victory owned a former gas station site across from the Jansen site that was operated for approximately 50 years until 1994. Thereafter, contaminants migrated from the Victory site to the Jansen site. The contamination was exacerbated by Victory’s failure to empty and remove underground gasoline storage tanks. Jansen commenced an action against Victory. Victory subsequently commenced an action against the various gas station operators. Jansen and Victory engaged an engineering company for remediation and obtained certificates of compliance under the Environmental Management Act. The engineering company’s costs were $259,218 for the Victory site and $136,488 for the Jansen site. At trial, Victory and Jansen sought recovery of the engineering costs and legal fees associated with remediation. Victory sought costs of removing the underground storage tanks and other incidental costs. The trial judge awarded the engineering costs and declined all other recovery. The judge assessed responsibility for the Victory site at 45 per cent to Victory, 35 per cent to Super Save, and 20 per cent to non-parties to the appeal. Responsibility for the Jansen site was allocated 50 per cent to Super Save, 30 per cent to Victory, and 20 per cent to non-parties. The judge found that Victory and Jansen failed to establish a basis for recovery of legal fees as costs of remediation. Victory and Jansen appealed and Super Save cross-appealed.

HELD: Appeal allowed in part and cross-appeal dismissed. The trial judge erred in allocating a higher percentage of responsibility to Victory on the basis it obtained the benefit of the certificate of compliance for its site, as allocation on such basis was inconsistent with the Act’s purpose of encouraging remediation. That issue was remitted to the trial judge for redetermination. Under s. 47 of the Act, remediation legal costs were recoverable, whereas litigation legal costs in respect of remediation proceedings were awarded and assessed as per the Supreme Court Civil Rules. Here, the appellants led no evidence regarding remediation legal costs and thus the trial judge properly concluded that there was simply no basis for recovery under that head of relief. Super Save’s cross-appeal from the award of costs failed to establish any error in the conclusion that its settlement offer was not one that ought reasonably to have been accepted given the scope of the release sought. The conclusion that the parties should bear their own costs was entitled to deference given the appellants’ substantial success on the remediation claims.

Jansen Industries 2010 Ltd. v. Victory Motors (Abbotsford) Ltd., [2021] B.C.J. No. 599, British Columbia Court of Appeal, R.J. Bauman C.J.B.C., D.F. Tysoe and E.A. Bennett JJ.A., March 29, 2021. Digest No. TLD-May242021002