Decision Date: January 20, 2005

Court: S.C.C., McLachlin C.J., Major, Bastarache, Binnie, LeBel, Deschamps, Fish, Abella and Charron, JJ.

Cite: 2005 SCC 1

In an appeal of a decision made by the Deputy Director of Waste Management (the “Deputy Director”) under the Waste Management Act, R.S.B.C. 1996, c. 482, (the “Act”), the Environmental Appeal Board (the “Board”) found that British Columbia Hydro and Power Authority (“BC Hydro”) could, due to the conduct of one of its predecessor companies, be named in a remediation order under the Act.  The British Columbia Supreme Court upheld the Board’s decision on judicial review.

The central issue before the Court of Appeal was whether BC Hydro could be made subject to a remediation order under the Act by reason of the conduct of B.C. Electric from 1920-1957, which resulted in a contaminated site.  The Act fixes liability for site contamination on “responsible persons”, defined to include previous owners of the site and persons who had caused the site to be polluted.  BC Hydro was created out of the amalgamation of B.C. Electric and two other companies by way of the Amalgamation Agreement, which was attached as an appendix to, and ratified by, the Power Measures Act, 1966, S.B.C. 1966, c. 38.  Under the Amalgamation Agreement, BC Hydro was to be liable for the obligations and liability of predecessor corporations “immediately before amalgamation.”

The majority of the Court of Appeal overturned the lower court order, reinstating the decision of the Deputy Director.

The appeal to the Supreme Court of Canada was allowed for the reasons of Justice Rowles, dissenting in the Court of Appeal.

Rowles J.A. held that, by virtue of the Amalgamation Agreement, BC Hydro became fixed with the liabilities to which B.C. Electric would have been subject to had it not amalgamated with the other entities.  BC Hydro conceded that, if B.C. Electric still existed, it would be a “responsible person” under the Act and, therefore, liable for the site contamination.  The Supreme Court decision in R. v. Black and Decker Manufacturing Co., [1975] 1 S.C.R. 411, and other judicial decisions, supports the conclusion that the words “immediately before the amalgamation” did not have the effect of limiting BC Hydro’s legal responsibility.  Rather, those words simply establish that, from the time of the amalgamation, the new amalgamated enterprise replaces its predecessors.  Rowles J.A. found that, had a limit on future liability been intended, much clearer language would have been required.  The effect of the amalgamation was held to continue the three prior entities as one combined entity and, upon amalgamation, BC Hydro assumed the responsibilities of each of the three entities of which it was comprised, including B.C. Electric.

Accordingly, Rowles J.A. found that the BC Supreme Court was correct in dismissing the judicial review petition and, thus, sustaining the Board’s decision.