On February 6, 2019, the Alberta Court of Appeal released its decision in Brookfield Residential (Alberta) LP (Carma Developers LP) v Imperial Oil Limited.[1] In this case, Brookfield owned land in South Edmonton and found out in 2010 that it was contaminated. Brookfield alleged that the contamination stemmed from Imperial's operations on the land, sixty years earlier. The question at the centre of this decision was when is it too late to sue for environmental contamination?

Background on the Law

This case focuses almost entirely on the application of section 218 of the Environmental Protection and Enhancement Act (EPEA). This section allows a judge (on application, and in certain circumstances) to extend a limitation period to commence civil proceedings for alleged environmental contamination.

In 2016, the Court of Queen's Bench in Lakeview Village Professional Centre Corp v Suncor Energy Inc.[2] developed a two-step process for determining section 218 applications:

  1. Is there sufficient evidence to grant an extension of the limitation period?
  2. If no, has the claimant shown a good arguable case for an extension?

The Court of Appeal's Decision

In Brookfield, the Court of Appeal did away with the Lakeview test, holding that section 218 applications must be decided prior to trial. Pursuant to the wording of section 218 of the EPEA, the limitation period can be extended on application. Going to trial for such applications defeats the purpose of a limitation period altogether, because it forces a defendant to go through the expense and inconvenience of a full trial for a decision when the claim itself may be statute-barred. A limitation period is intended to eliminate the distractions, expense and risk of litigation after the prescribed time has passed.

The Court then went on to consider the chambers judge's analysis of the prescribed factors in section 218.

First, the Court considered when the alleged tortious act occurred, noting that it occurred more than 60 years ago.

Second, the Court considered whether the claimant exercised sufficient due diligence in discovering the contamination. The Court of Appeal agreed with the Court of Queen's Bench – Brookfield had acted with due diligence in discovering the contamination. They had done testing consistently for years, and knowledge of the contamination only arose in 2010.

Third, and possibly most significantly, the Court considered whether extending the limitation period would prejudice the defendant's ability to defend the claim. It had been 60 years since Imperial had operated on the land. Again, the Court of Appeal agreed with the Court of Queen's Bench.  At this point, Imperial retained limited documentary evidence about the well, believing it may have turned over key documents to successors in title. Imperial would not have been able to identify the employees that were involved in drilling and operating the well and would have had difficulty finding expert witnesses. The Court also considered how the long passage of time makes it difficult to establish the proper standard of care. The standard of care is contextual, relating to the time, place and level of knowledge and understanding of the industry. Modern standards of care should not be applied with the benefit of hindsight to torts that occurred in another era. It was also noted that the fact that the Government of Alberta issued a reclamation certificate in 1968 inferred that industry standards of the day were met.

Fourth, the Court considered "any other criteria the court deems relevant", which in this case included the competing policy considerations behind the Limitations Act and the EPEA. The Limitations Act promotes timeliness, protects defendants from ancient obligations, and aims to ensure that evidence is available, and the proper standard of care is applied. On the other hand, the objective of the EPEA reflects the "polluter pays" principle, and polluters should not skirt liability just because time has passed. Additionally, environmental contamination can sometimes be difficult to detect, so a strict approach to discoverability could be inappropriate. That said, the EPEA does not "abolish" limitation periods for environmental claims, it only provides judicial discretion to extend them.  As a result, a "balancing" is required.

In weighing all of these factors, the Court concluded that the chambers judge made no reviewable error, dismissed the appeal, and declined to extend the limitation period.