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Her Majesty The Queen in Right of the Province of Newfoundland and Labrador v AbitibiBowater Incorporated, Abitibi Consolidated Incorporated, Bowater Canadian Holdings Incorporated, Ad Hoc Committee of Bondholders, Ad Hoc Committee of Senior Secured Noteholders and U.S. Bank National Association (Indenture Trustee for the Senior Secured Noteholders)

Country/Territory
Canada
Type of court
National - higher court
Date
Dec 7, 2012
Source
UNEP, InforMEA
Court name
Supreme Court of Canada
Seat of court
Ottawa
Judge
LeBel, Deschamps, Fish, Abella, Rothstein, Cromwell; Moldaver; Karakatsanis; McLachlin
Reference number
2012 SCC 67
Language
English
Subject
Waste & hazardous substances, Legal questions
Keyword
Liability/compensation Polluter pays principle Ecosystem preservation
Abstract

In this case, the defendant is a pulp and paper manufacturer which has been operating in the province of Newfoundland for over a century and who decided to close some of its paper mills in 2005 and 2008. The Newfoundland and Labrador House of Assembly reacted by passing a legislation expropriating the defendant from all its assets in the province. After the expropriation took place, the Newfoundland government realized that he also had expropriated the defendant’s environmental liabilities and consequently issued remediation orders against the defendant on the basis of the Environmental Protection Act (EPA) compelling the defendant to clean up various sites. But before the orders were issued the defendant filed for protection from its creditors under the Companies ‘Creditor Arrangement Act (CCAA)

The Government of Newfoundland sought appeal in front of the Superior Court of Quebec and argued that EPA’s orders were non- monetary and thus were not falling within the scope of the CCAA. The Judge of first instance dismissed the appeal and considered that it the EPA’s orders issued by the Government of Newfoundland had to be considered as being part of a normal relationship between a creditor and a debtor and consequently, were falling under the CCAA. The province filled an appeal at the Quebec Court of Appeal which upheld the decision of the first instance.

Finally, the province of Newfoundland brought the case in front of the Supreme Court. The judges of the supreme court recognized the polluter pays principle but noted that the defendant did not have any control anymore on the polluted site. Consequently, the province will have to perform the remediation work and therefore the order fall within the definition of a creditor with a monetary claim. Consequently, the debtor is protected by the CCAA proceeding.

Full text
Newfoundland.pdf
Website
scc-csc.lexum.com