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NO. Under the Ontario Environmental Protection Act, a director of the Ministry of the Environment has the power to issue orders to former owners of the property. Consequently, if the contamination migrates off-site or otherwise poses a health or safety risk, the director can, and usually does, issue orders to the former owners, even though the current owner has assumed all liability. The only recourse for the vendor is to seek to recover any costs incurred in complying with the order under the indemnity. If the purchaser has not cleaned up the property, chances are there will be no recovery under the indemnity. (B) The vendor. The question highlights the dilemma posed by RSCs for many parties to real estate transactions. The Ontario Environmental Protection Act only requires an RSC in limited circumstances, specifically circumstances involving certain categories of change of use. This transaction is not one of those. But purchasers, and lending institutions, increasingly require an RSC as a form of insurance policy. RSCs are expensive and time-consuming to obtain, with the result that many vendors are reluctant to provide them unless legally required to do so. As a practical matter, however, in order to complete a transaction, vendors may be required to provide an RSC even if the EPA does not require one. YES. Under the Environmental Protection Act, every officer and director of a corporation has a duty to take all reasonable care to prevent the corporation from contravening an order under the act. Failure to carry out that duty is an offence. Consequently, if the company does not comply with the cleanup order, officers and directors can be personally prosecuted. The director can also issue the cleanup order to the officers and directors of the company. FALSE. Under the Environmental Protection Act, no plant, structure, equipment, apparatus, mechanism, or thing that may discharge a contaminant into the air can be altered or replaced without an approval. This prohibition applies even if the proposed modification will reduce emissions. Often, current approvals will allow some flexibility, but a certificate of approval issued 10 years ago is highly unlikely to permit such changes without obtaining an amendment or a new environmental compliance approval. NO. O. Reg. 222/07 provides that the MOE may grant a reduction in one component of an AMP if, at the time of the contravention, there was an EMS in place. However, that regulation requires that the EMS meet the standard specified in the regulation, and that the EMS has been audited, within the preceding three years, by an independent auditor who meets the standards specified in the regulation. NO. The report should have been provided to the company's directors as well. In the absence of a report, the directors may be exposed to a charge, under s. 194 of the EPA, for breach of their duty to take all reasonable care to prevent the company from discharging or causing or permitting the discharge of a contaminant in breach of the environmental compliance approval. YOUR RANKING? One or less correct: might be time to brush up Two correct: not bad, but some further work needed Three or four correct: very well done, but not perfect Five correct: impressive Six correct: excellent FEEDS LEGAL 16 • APRIL 2012 LegalFeeds_IH_Dec_11.indd 1 INHOUSE Canadian Legal News Powered by A daily blog of & 12-01-11 8:16 AM 1 2 3 4 5 6 canadianlaw Canadian Law yermag.com/legalfeeds yer Law Times

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