Decision Date: July 29, 2003

Court: B.C.C.A., Rowles, J. Prowse, J. Newbury, J.

Cite: Vancouver Registry No. CA027158

In an appeal of a decision by a manager 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 Board’s decision was upheld in the British Columbia Supreme Court.  BC Hydro appealed to the British Columbia Court of Appeal.

The central issue in the 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.  BC Hydro was created out of the amalgamation of B.C. Electric and two other companies under a special Act that permitted them to amalgamate “in any manner”.  Under the Amalgamation Agreement, which was appended to the Power Measures Act, 1966, BC Hydro was to be liable for the obligations and liability of predecessor corporations “immediately before amalgamation.”  Following the amalgamation, an Order in Council “recommended” that B.C. Electric “be declared to be dissolved.” The question in the appeal was whether BC Hydro inherited the responsibility under the Act for B.C. Electric’s actions.

Section 26.5 of 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.  Counsel at the appeal agreed that if B.C. Electric still existed, it would be a “responsible person” for the purposes of the Act.  However, counsel disagreed with respect to whether, by virtue of the amalgamation, BC Hydro was fixed with “responsibility” under the Act, and whether the Act operated retroactively to result in B.C. Electric’s having been a “responsible person” immediately before the amalgamation.

The majority of the Court (Newbury and Prowse JJ.A.) held that under the unusual terms of the amalgamation, and following the plain and ordinary meaning of the Amalgamation Agreement, that BC Hydro had assumed only those liabilities of B.C. Electric that were liabilities immediately before the amalgamation.  The majority also held that the Act operates retrospectively, not retroactively. Therefore, B.C. Electric had not been liable “immediately before the amalgamation” and BC Hydro could not be said to be a “responsible person” for purposes of the Act by virtue of B.C. Electric’s activities between 1920 and 1957.

The dissenting judge (Rowles J.A.) found that, by virtue of the amalgamation, and on an application of R. v. Black and Decker Manufacturing Co., [1975] 1 S.C.R. 411, B.C. Electric’s liabilities “flowed through” to BC Hydro, and that the words “immediately before the amalgamation” were not “words of limitation.”  Rowles J.A. did not address the question of retroactive versus retrospective operation of the Act.