Remediation

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— Dylan Gibbs

• Pumping the breaks on priority for remediation claims

• Alberta wants in on Saskatchewan’s pronoun litigation

• Court delays continue

• And Switzerland’s climate response violates human rights

CLAIM PRIORITIES

Secured creditors trump environmental litigation

Qualex v. 12-10 Capital, 2024 ABCA 115

The owner of a contaminated property puts it up for sale. Creditors want a share of the sale proceeds. Who has a stronger claim — a neighbour suing the landowner because the contamination allegedly seeped onto their land, or the lenders with registered mortgages?

In a decision that raised eyebrows for groups like the Canadian Bankers’ Association, a judge said there’s a reasonable likelihood the disgruntled neighbour would outrank the secured lenders. But the Alberta Court of Appeal cleared things up this week, saying the lower court decision “exceed[ed] the limits on the power of the judiciary to change the law.”

The application judge based his ruling on Redwater — the Supreme Court decision that confirmed the Alberta Energy Regulator’s environmental remediation claims take priority over secured creditors during bankruptcy proceedings. Since regulators get priority, the judge reasoned that the same benefit might apply to private parties:

And that led the judge to grant an attachment order, staking the neighbour’s priority claim to any sale proceeds flowing from the contaminated property.

But Redwater doesn’t go that far. According to the Court of Appeal, the neighbour’s priority claim is hopeless. Redwater didn’t create a priority for environmental claims — the decision simply upheld legislation that gives the Alberta Energy Regulatory a statutory priority. And nothing equivalent exists for private parties:

Big picture: The lower court decision made waves big enough for the Canadian Bankers’ Association to intervene as a champion for commercial certainty on appeal. Here’s how secured lenders are sleeping this week after reading the Court of Appeal’s decision:

HEARSAY ROUNDUP

Canadiana

🚨 The Supreme Court is releasing another big Indigenous law decision this week, dealing with the effect of limitation periods on breach of treaty claims. McCarthy’s has a good primer on the Court of Appeal decision, if you’re interested.

🏳️‍⚧️ Alberta is applying to intervene in the pronoun litigation headed to the Saskatchewan Court of Appeal. The government will be backing the view that courts can’t review legislation for Charter compliance after legislators use the notwithstanding clause. If you missed it, here’s a write-up on the decision under appeal.

⌛️ Filed under justice delayed and denied:

• Justice Code of Ontario’s Superior Court of Justice added to the list of scathing reviews about the federal government’s judicial appointment process. After tossing a child sexual assault prosecution delayed by the lack of judges in Toronto, Justice Code said it was “an embarrassment to the administration of justice” that the case couldn’t be tried in a reasonable time (Toronto Star).

• A North Bay judge struck a defendant’s civil jury notice, writing that the Court doesn’t have the resources to handle a lengthy and complex jury trial.

📖 You can now read Paul Daly’s detailed recap of 2023 administrative law developments relevant to energy law and regulation.

🛢️ A BC company is trying to prevent the federal government from releasing data it collected through its Greenhouse Gas Reporting Program. GCT Canada filed a judicial review application arguing that its emissions data is a trade secret.

👮 A former lawyer for the Thunder Bay Police Service was charged with obstruction and breach of trust.

Beyond the border

🌳 Just to ensure that environment-related news comes in threes, the European Court of Human Rights said Switzerland hasn’t done enough to combat climate change. The Court held that Swiss climate policy has been so lacklustre that it violates the European Convention on Human Rights.

• Article 8 of the Convention gives everyone “the right to respect for [their] private and family life, [and their] home.”

• According to the Court, that includes the right “to effective protection by the State authorities from serious adverse effects of climate change on their life, health, well-being and quality of life” (para 519).

• And it puts a positive obligation on the State “to adopt, and to effectively apply in practice, regulations and measures capable of mitigating the existing and potentially irreversible, future effects of climate change” (para 548).

The ruling, which binds 46 European countries including the UK, attracted strong criticism from a lone dissenting judge on the 17-member panel. The dissenting judge said the judgment was out of step with the Court’s prior rulings, and questioned how the Court could possibly measure whether countries have “effectively” mitigated climate change.

Canada has faced similar claims under the Charter, but so far they haven’t been successful.

THINGS NOT TO DO AS A LAWYER

Don’t steal from clients and create fake court decisions to cover your tracks. Etienne Gadbois was sentenced to just under two years in jail last week. He invoiced clients for work he never did. And when one of the clients asked questions, he sent over fabricated decisions made to look like they were issued by Ontario courts.

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