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An alleged oil spill that occurred in 1990, giving rise to extensive proceedings before the Environmental Review Tribunal (“Tribunal”) and Superior Court, took an unexpected turn earlier this year, leading the Tribunal to issue an unusual costs award.

In May 2014, the Ministry of the Environment and Climate Change (“Ministry”) issued an order against Mr. Krek, requiring him to assess and remediate groundwater contaminated from a petroleum spill that occurred on his property in 1990. Krek appealed this order

The appeal was delayed, adjourned, and then eventually dismissed when the Ministry revoked the order against Krek.

Following the dismissal of the appeal, the Sickingers installed hidden video-recording equipment on their property and recorded an individual tampering with their well. The Ministry investigated the incident and several months later recorded Knoppke pouring a red liquid into the Sickinger well. The Ministry then proceeded to issue an order against Knoppke.

Both Krek and the Sickingers filed applications to obtain compensation for their costs in relation to the original appeal proceeding. Krek and the Sickingers argued that a costs award was warranted because Knoppke’s conduct was unreasonable, frivolous, and vexatious and was motivated by bad faith.

The Tribunal allowed the applications for costs in part. Knoppke was ordered to pay $79,437.70 in costs to Krek and $14,191.96 in costs to the Sickingers. The Tribunal determined that the test for awarding costs as set out in section 17.1 of the Statutory Powers Proceeding Act had been met. The Tribunal did not accept Knoppke’s explanations for what had occurred and noted that even if it had accepted his explanations, his conduct would still be unreasonable, vexatious, and in bad faith—including for the fact that the conduct interfered with the Tribunal’s proceedings. Knoppke demonstrated full knowledge of the impact of his actions, and that his conduct was likely financially motivated.

The dispute between the three neighbours over the oil spill has also resulted in long-standing proceedings in Superior Court. In a January 2015 decision on a motion to dismiss, the Court colourfully noted that “[t]o say that this claim has had a long and tortured history would be an understatement.”

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