Section 99(2) Of Ontario Environmental Protection Act Is A Powerful Remedial Tool To Seek Compensation For Historical Spills: Huang v. Fraser Hillary's Limited, 2017 ONSC 1500

The Ontario Superior Court of Justice recently considered and applied s. 99(2) of Ontario's Environmental Protection Act, R.S.O. 1990, c. E.19 ("EPA") to find liability and award damages for historical contamination caused by the spill and migration of solvents used in dry-cleaning from 1960-1974. Following the recent leading decision on s. 99 in Midwest Properties Ltd. v. Thordarson,1 Justice Roger's decision in Huang v. Fraser Hillary's Limited2 provides clarity to the interpretation and application of this section which provides a civil cause of action between private parties, irrespective of fault or negligence, for the spill of a pollutant.

Specifically, and significantly, in Huang, Roger J. held that the right to compensation provided for in s. 99(2) of the EPA applies to spills that occurred prior to the "Spills Bill" amendment to the EPA (which contains the statutory right of compensation) coming into force in 1985. Although Huang dismissed the plaintiff's claims in negligence, trespass, and Rylands v. Fletcher,3 the decision signals that the statutory right to compensation contained in s. 99(2) of the EPA will continue to be interpreted broadly and provide a powerful tool for plaintiffs seeking compensation for contaminated sites.

FACTS

Eddy Huang purchased two adjacent properties in Ottawa in 1978 intending to develop them in the future. Mr. Huang's properties neighboured Fraser Hillary's Limited (FHL), a dry cleaning business that had been in operation since 1960. On approaching his bank to obtain a mortgage to develop the properties, the mortgage specialist required Mr. Huang to obtain a Phase I Environmental Assessment on his properties. The Phase I ESA revealed likely presence of contamination by tetrachloroethylene ("PCE" or "PERC") and trichloroethylene ("TCE") - chemicals found primarily in dry cleaning solvents. A subsequent Phase II ESA recommended excavating and disposing of the contaminated soil or the installation of a barrier system. Due to the contamination, Mr. Huang's bank would not advance any funds for development or renew his existing mortgage.

Mr. Huang brought a claim for damages against FHL and David Hillary, the president and sole director of FHL and owner of an adjacent residential property, seeking significant damages for remedial and related expert expenses for the soil and groundwater contamination. Mr. Huang alleged five potential causes of action: (1) nuisance; (2) negligence; (3) liability under s...