CANADA Law and Practice Contributed by: Laura Duke, Will Shaw and Emma Russell, Lawson Lundell LLP
often pursued alongside claims for nuisance, negli- gence and/or trespass. 10.2 Exemplary or Punitive Damages Canadian courts of inherent jurisdiction almost always have jurisdiction to award exemplary or punitive dam- ages. However, generally speaking, courts are unlikely to award such damages unless the conduct in ques- tion is high-handed, malicious, arbitrary or highly rep- rehensible. The bar for awarding punitive damages is high, yet punitive damages have been awarded for breaches of environmental responsibilities in certain Canadian jurisdictions. 10.3 Class or Group Actions Class actions are available for environment-related civil claims. However, class actions in Canada must first be “certified” by a court in order to proceed. This process ensures that the claim raises common issues and that a class proceeding is the preferred way of resolving those issues. Few environment-related cas- es have made it past this initial threshold. 10.4 Landmark Cases Two appellate decisions, released in 2013 and 2014, confirmed that class action regimes are not often appropriate to remedy environmental harms: Canada (Attorney General) v MacQueen , 2013 NSCA 143 and Windsor v Canadian Pacific Railway Ltd , 2014 ABCA 108. Although environmental causes of action may seem to involve common issues among class mem- bers, proof of those claims is often an individual issue and therefore ill-suited to class-based determinations. With regard to contaminated sites, JI Properties Inc v PPG Architectural Coatings Canada Ltd , 2015 BCCA 472 is a leading case. This appellate decision from British Columbia provides commentary on the regulatory regime in that province, the status of pre- legislation comfort letters and due diligence by the defendants, the operation of limitation periods on environmental damage, and the scope of reasonably incurred remediation costs. The Supreme Court of Canada (SCC) has also con- firmed that environmental obligations take prece- dence over creditors’ financial claims in a bankruptcy. In Orphan Well Association v Grant Thornton Ltd , 2019
SCC 5 ( Redwater ), the SCC upheld the authority of the Energy Regulator to require bankrupt oil and gas com- panies to fulfil their environmental cleanup obligations before distributing assets to creditors. It held that end- of-life obligations, such as well abandonment and site remediation, are inherent to an oil and gas licence, and must be satisfied even in insolvency. 11. Contractual Agreements 11.1 Transferring or Apportioning Liability In general, indemnities and other contractual arrange- ments can be used to transfer or apportion liability for environmental pollution or breaches of law. How- ever, third parties – including regulators – are not likely to be bound by such agreements and are entitled to prosecute or seek compensation from the party who is liable at law. Polluters relying on such indemnities and contracts must then seek indemnification or com- pensation after the fact, which may involve filing a civil claim. 12. Contaminated Land 12.1 Key Laws Governing Contaminated Land In Canada, most contaminated sites will be under the jurisdiction of provincial or territorial environmental authorities. In general, the federal government only has jurisdiction over federal lands (a small percentage of Canada’s total lands) or potentially in certain other areas connected to federal jurisdiction. Contaminated sites are typically defined as areas of land where the soil, sediment, vapour or groundwa- ter contains a prescribed substance in quantities or concentrations exceeding risk-based criteria, stand- ards or conditions. Prescribed substances generally include hazardous substances such as sulphur, petro- leum hydrocarbons, heavy metals and chlorofluoro- carbons (CFCs). As discussed in 5.3 Key Defences , at a high level, Canadian law is based on the “polluter pays” principle and may impose liability both on former and current operators and owners of a site. In some jurisdictions,
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