How far can no-fault liability for contaminated sites go? The Ontario Ministry of Environment and Climate Change has issued a cleanup order to (among others) the accountant who held a power of attorney to sell a contaminated site for an overseas client, and the directors of a real estate company that listed the property for sale.
In McQuiston v. Ontario (MOECC), and a series of related cases now before the Environmental Review Tribunal, solvents were found in a roadside ditch that drains into a local watercourse and into Lake Erie. Ministry staff decided that the solvents came from a disused industrial site, at 833 Helena Street in Fort Erie. A long term tenant had vacated the site last fall and the property owner had put it up for sale. As the property owner’s sole remaining director lived in England, he gave a power of attorney to an Ontario accountant to manage the sale. The accountant signed a listing agreement with a local broker, who set up a lock-box containing a key. The accountant and the broker therefore controlled access to the site while it was offered for sale.
In the Ministry’s view, they can issue environmental orders to anyone who owns or owned or has or had management or control to a contaminated site. In this case, the Ministry quickly issued an investigation and cleanup order to all of the following, jointly:
- Carven Petrochemical Co., the former tenant;
- The former tenant’s former site manager;
- The officers and directors of the former tenant;
- 1350095 Ontario Ltd. et al, the current property owner;
- a British resident who inherited this company from his recently deceased father;
- a Canadian accountant, who accepted a power of attorney from the absentee owner to sell the property;
- DTZ Barnicke Niagara Limited, the listing broker, and
- Two individual directors of that broker!
Nothing in the Order suggests that any of them knew about the contamination before it was found on the road, or that any of them did anything illegal.
Ontario professionals who deal with real estate do not yet seem to understand the degree of personal risk that they face when property turns out to be contaminated. Judging from the ERT website, the DTZ Barnicke directors did not even appeal the order against them. They may now face enormous liability.