ONTARIO

SUPERIOR COURT OF JUSTICE

LINDSAY COURT FILE NO.: 111/10
DATE: 20120330

B E T W E E N:

The Corporation of the City of Kawartha Lakes

Christine G. Carter, for the plaintiff

Plaintiff

• and -

Wayne Gendron, Liana Gendron, Doug C. Thompson Ltd., Her Majesty the Queen in Right of Ontario, Technical Standards and Safety Authority, D.L. Services Inc., R. Ian Pepper Insurance Adjusters Inc., Farmers Mutual Insurance Company and Les Reservoirs D’Acier de Granby Inc.

William G. Scott for the defendants, Farmers Mutual Insurance Company, Paul Tushinski, Esq., for the defendant Doug C. Thompson Ltd., operating as Thompson Fuels, H. Klein for the defendant, Ian Pepper Insurance Adjusters Inc, Tamara Farber and John R. Tidball for the moving party, D.L. Services Inc. No one appearing for the defendants: Her Majesty the Queen in Right of Ontario, the Technical Standards and Safety Authority, Les Reservoirs D’Acier de Granby Inc.

Defendants

HEARD: January 12, 20 and Feb 13 th , 2012

MacDougall, J.

REASONS FOR RULING

Background

[ 1 ] On December 18, 2008 the defendant Thompson Fuels (Thompson) delivered approximately 700 litres of furnace oil to the home of the defendants Wayne and Liana Gendron (the homeowners).

[ 2 ] On the same day, Wayne Gendron determined that the oil was leaking from the furnace oil tank. He notified Thompson, which in turn notified the defendant, the Technical Standards and Safety Authority (TSSA). TSSA visited the site on December 22, 2008 and issued a remediation order.

[ 3 ] On December 29, 2008 the homeowners reported the spill to their insurers, the defendant, Farmers Mutual Insurance Company (Farmers).

[ 4 ] On December 30, 2008 Farmers assigned the matter to the insurance adjuster, the defendant R. Ian Pepper Insurance Adjusters Inc. (Pepper).

[ 5 ] Pepper consulted the defendant, D.L.Services Inc. (DLS) to investigate the cause of this spill and assess its remediation.

[ 6 ] On December 30, 2008, DLS determined that oil had migrated onto adjoining property and had entered Sturgeon Lake. On the same day DLS notified the Ministry of the Environment (MOE). The plaintiff has joined Her Majesty, the Queen in Right of Ontario as a party defendant.

[ 7 ] DLS provided a preliminary estimate that the cost of remediation would exceed the homeowners’ $1 million policy limits with Farmers.

[ 8 ] From January to June 2009, DLS was actively engaged in remedial activities both on the homeowners’ property and off-site involving various measures in and on the shoreline of Sturgeon Lake.

[ 9 ] On or about March 20, 2009 DLS and Pepper notified the MOE that the homeowners’ policy limits had been exhausted.

[ 10 ] On March 23, 2009, the MOE issued an order for the plaintiff, The City of Kawartha Lakes (the City) to remediate the contaminated public property.

[ 11 ] In response to the issuance of the Provincial Officer’s order against the City, the City commenced an appeal before the Environmental Review Tribunal which was subsequently dismissed. The City has sought judicial review of the Tribunal’s decision in the Ontario Divisional Court which is still outstanding.

[ 12 ] The City initiated investigative and remedial efforts on its property and retained the services of Golder Associates Ltd. on or about March 29, 2009.

The Court Action

The Plaintiff’s Claim

[ 13 ] On July 30, 2010 the City commenced this action against multiple parties, including:

• the Gendron's, [the homeowners];
• Thompson Fuels [the fuel supplier];
• Her Majesty the Queen [the Minister of Environment];
• TSSA, [the province’s Technical Standards and Safety Authority];
• DLS [the remediation contractor retained by Farmers and/or Pepper to remediate the spill at the Gendron property];
• Pepper [the insurance adjuster retained by Farmers to provide adjusting services in connection with the spill];
• Farmers [the Gendron’s insurers]; and,
• Granby [the fuel tank manufacturer]

[ 14 ] For our purposes at this point, the relevant portion of the plaintiff’s Statement of Claim are:

Paragraph 1:

The plaintiff claims:

(a) compensation in the amount of $1 million from the owner of the pollutant and persons having control of the pollutant pursuant to section 99 of the Environmental Protection Act, R. S. O. 1990, c.E 19 for costs incurred in remediating the oil spill originating from 93 Hazel St., Dunsford, Ontario.(The homeowners’ property)

(b) Recovery of all costs incurred in remediating the oil spill originating from 93 Hazel St., Dunsford, Ontario;

Paragraph 39:

The defendants, as the owners of the pollutant or the persons having control of a pollutant that is spilled and that causes or is likely to cause an adverse effect, are jointly and severally liable to the City in that they failed, and continue to fail, to carry out their duty pursuant to section 93 (1) of the EPA, i.e. "forthwith to do everything practicable to prevent, eliminate and ameliorate the adverse affect and to restore the natural environment", which duty became effective immediately upon the Defendants’ knowing, or when they ought to have known, that a pollutant was spilled and was causing or was likely to cause an adverse effect.

Paragraph 40:

The defendants Gendrons, Thompson Fuels and Les Reservoirs d’acier de Granby Inc. are strictly liable in nuisance. The Gendron defendants, the TSSA, Thompson Fuels, DLS, Ian Pepper, the MOE, and Les Reservoirs d’acier de Granby Inc. are also liable in negligence for causing the spill or failing to respond to the spill in a timely manner causing the City to incur remediation costs.

Paragraph 41:

The City had no opportunity to prevent the furnace oil from making its way into Sturgeon Lake, whereas Thompson Fuels, the homeowner, TSSA and the Ministry of the Environment were all aware that a spill occurred on private property and could/should have ensured that the spill remained contained on private property.

Paragraph 42:

Each of the homeowner, Thompson fuels and/or the manufacturer of the tank bear responsibility for causing the spill.

Paragraph 43:

Each of the homeowner, Thompson Fuels, the homeowners’ insurance adjuster, the Ministry of the Environment and TSSA had an opportunity to prevent the fuel oil from reaching Sturgeon Lake, greatly reducing the remediation costs and virtually eliminating the need for an order being issued against the taxpayers of the City.

[ 15 ] Farmers served its Statement of Defence and by way of Notice of Motion dated November 14, 2011. Farmers brought a Summary Judgment motion, returnable January 12, 2012, requesting the dismissal of the City's claim against Farmers, including all across-claims.

[ 16 ] By way of a Notice of Cross-motion dated December 15, 2011, the City moved to amend its Statement of Claim to include Farmers in paragraph 40, and to add the words “and/or cost efficient” so the amended paragraph would read:

The defendants Gendrons, Thompson Fuels and Les Reservoirs d’acier de Granby Inc. are strictly liable in nuisance. The Gendron defendants, the TSSA, Thompson Fuels, DLS, Ian Pepper, the MOE, Farmers Mutual and Les Reservoirs d’acier de Granby Inc. are also liable in negligence for causing the spill or failing to respond to the spill in a timely and/or cost efficient manner causing the City to incur remediation costs.

[ 17 ] Subsequently, DLS and Pepper also brought motions for Summary Judgment seeking an order that the City’s claim against them also be dismissed.

[ 18 ] The parties have not conducted Examinations for Discovery and the exchange of documents has not been completed.

(Full decision text continues exactly as in the source…)

“The Honourable Mr. Justice B. MacDougall”

DATE RELEASED: March 30, 2012