Trustee Liability Under The Environmental Management Act (BC)

Land often forms a significant portion of the value of most estates in Canada, especially here in Vancouver. However, depending upon the nature of the land owned by the deceased, there may be unexpected liabilities associated with the administration of such land by a trustee under the Environmental Management Act of British Columbia and the regulations thereto (collectively, the “EMA”).

Part 4 of the EMA provides that all current and previous owners or operators of a land which is a contaminated site under the EMA are responsible for remediation of a contaminated site and as such are jointly and severally liable for the reasonably incurred costs of remediation. An “owner” is defined in the EMA as a person who is in possession, has the right of control or occupies or controls the use of land and includes a person who has an estate or interest, legal or equitable, in the land.

An “operator” is defined in the EMA as a person who is in or was in control of or responsible for any operation located on a contaminated site.

A “person” is defined to include any director, officer, employee or agent of a person.

If the deceased (either at the time of death or previously) owned or had an interest in land (whether alone or with others), was a director or officer of a company that owned or had an interest in land, was an operator on any land or was a director or officer of a company that was an operator on any land, it is important to determine if that land is or could be a contaminated site under the EMA. In addition to the potential liability of the deceased, care must also be taken to address the potential liability of the “trustee” in relation to that contaminated site so as to protect the “trustee” from personal liability.  A “trustee” is broadly defined in the EMA to include an executor, administrator, express or bare trustee, committee or other representative, guardian or attorney acting under a power of attorney.

Under the EMA, a “trustee” is designated as responsible, in his or her role as a trustee, for the remediation of a contaminated site and will be subject to a pollution prevention order in relation to such contaminated site. However, the extent of a trustee’s liability in this role is generally limited to the “extent of the trust”, i.e. the limit of the available funds for the period commencing with the trustee’s appointment and ending with termination thereof. Generally speaking, a “trustee” is not personally responsible for remediating a contaminated site unless the trustee exercised control over or imposed requirements on any person regarding the treatment, disposal or handling of a substance that caused contamination, or where the trustee was grossly negligent or guilty of wilful misconduct and such gross negligence or wilful misconduct caused the site to become contaminated.

Because of the significant costs and liabilitiehttp://www.ahbl.ca/practices/practice-areas/wills-estates-trusts/http:/www.ahbl.ca/practices/practice-areas/wills-estates-trusts/s associated with environmental remediation, trustees are well advised to examine any land forming part of the estate they are administering and to seek legal advice regarding the potential for contamination and their obligations under the EMA.

For further inquiries relating to this topic, please contact one of the lawyers in our Wills, Estates and Trusts or our Environmental practice groups.