The Environmental Review Tribunal (“ERT”) has confirmed that Orders may be issued by the Director pursuant to Section 18 of the Environmental Protection Act to current and previous directors of current and former owners or operators of sites where the other pre-requisites for the issuance of an order pursuant to Section 18 are satisfied. In Currie v. Director, Ministry of the Environment , issued on June 7, 2011, the ERT dismissed the appeal on behalf of the former directors and officers of the corporate owners of a contaminated site and found them responsible for compliance with the Section 18 order, notwithstanding that subsequent owners and corporate directors had become responsible for the site.
The ERT rejected the “fairness” argument raised by the appellants. The ERT also refused to apportion liability among the persons subject to the Order. Importantly in determining the issue of responsibility, the ERT, in determining whether or not the former directors and officers had “management and control of an undertaking of property” confirmed that the responsibility rests with the corporate directors to provide the necessary evidence to establish that they did not exercise management or control.
This ERT Decision confirms that all current and previous corporate directors and officers exercising a sufficient degree of management and control are subject to the issuance of an order in the event that the other requirements for the issuance of the Section 18 Order exist. It is unclear from the Decision as to whether or not those directors and officers would be able to rely upon due diligence or the fact that other directors and officers may have direct responsibility for managing the environmental issues. Commentators have suggested that in this regard, this Decision may conflict with the Ontario Business Corporations Act which exempts directors from liability if they exercise the appropriate care, diligence and skill that a reasonably prudent person would exercise in comparable circumstances.
For more information please see: Currie v. Director