Decision Date: October 28, 2002

Panel: Cindy Derkaz

Keywords:  Waste Management Act – ss. 26 – definition of “operator”, “owner”, “person”, 26.5(2), 26.6, 27(4), 27.1; Contaminated Sites Regulation – s. 35; Interpretation Act – definition of “person”; cost recovery; off-site contamination; private agreement; hearing on the record

South Pacific Development Ltd. (“South Pacific”) and Imperial Oil Ltd. (“Imperial Oil”) appealed a remediation order issued by the Assistant Regional Waste Manager to address off-site contamination originating from a property where a gasoline service station had been operated. They appealed being named responsible persons, and also sought to amend the order to include Seabright Holdings No. 158 and 159 (“Seabright”).

The Board upheld the naming of South Pacific and Imperial Oil as persons responsible for remediation, and decided not to amend the order to include Seabright.

The Board cited Canadian Occidental Petroleum v. Director of Waste Management [2001], B.C.E.A. No. 9 (Q.L.), and found that the private agreements that South Pacific argued the Regional Manager should have considered pursuant to section 27.1(4)(a) of the Waste Management Act, were not clear on South Pacific’s liability for off-site contamination. Therefore, it was not feasible for the Regional Manager to determine the legal effect of the agreements when deciding to name South Pacific as a responsible person. The Board noted, however, that the agreements may still be considered by a court in a cost recovery proceeding.

The Board also found that it was not necessary for the Regional Manager to consider South Pacific’s level of contribution to the contamination, because nothing in section 27.1(4) of the Act limits responsible persons to only those persons who have contributed most substantially to the contamination. The Board found that once a person is named a responsible person, the onus shifts to that person to establish that it should be exempted under section 26.6. South Pacific did not provide submissions on whether it was entitled to exemption.

Imperial Oil argued that it should not be included in the order because there was not enough evidence to determine that leakage from storage tanks, while Imperial Oil owned the source property, contributed to the off-site contamination. The Board found that it was reasonable for the Regional Manager to conclude that there had been leakage, and that, in any event, Imperial Oil was a responsible person by virtue of its former ownership of the source property.

Imperial Oil also argued that an indemnity clause in a lease agreement should have been considered, under section 27.1(4)(a), when the Regional Manager decided to include it in the order. The Board found that section 27.1(4)(a) only applies to agreements respecting liability for remediation between or among responsible persons, and that the clause in question was only a broad, standard indemnity provision.

Finally, the Board found that Seabright, as the current owner of the source property, is a person responsible for remediation. However, the Board found that remediation would not be expedited by naming Seabright to the order. The Board noted that the failure to include a responsible person in an order does not prevent any person, who incurs costs in carrying out remediation, from recovering those costs through cost recovery proceedings.

The order was upheld and the appeals were dismissed.