(BY HUGO)
In Rivière-Rouge (Ville de) v. Huguet (in French), the Defendant obtains a municipal authorisation to do earthworks on his property in the riparian area of a lake. The works starts on the same day, but a municipal inspector visiting the site realises that the filling is taking place in a wetland, something contrary to the municipal regulation. The municipality immediately informs the Defendant that the authorisation is cancelled and that the work must stop at once. Despite this, the Defendant goes ahead with the earthworks during the following days despite continued warnings from the municipality.
The defendant is charged with a penal infraction in strict liability for having done work without a valid authorisation a contravention to the municipal regulation. Although municipal authorities are not bound by an authorisation granted contrary to the municipal regulation, as is the case in this instance, the municipal inspector does not have the power to stop the works under the applicable municipal regulation. Moreover, the municipal regulation does not allow the municipal inspector to revoke the authorisation. Nevertheless, an illegal authorisation does not grant an acquired right, and the infraction the Defendant faces is to have conducted works without a valid permit. The Court finds that the Defendant has no defence of reasonable diligence, as he understood that municipality asked the works to stop but he rushed to complete the works to put the municipality before a fait accompli.
Saturday, October 30, 2010
Friday, October 29, 2010
Water related risks from an insurance perspective
(BY HUGO)
A report from MARSH Canada, A Review of Water-Related Opportunities and Threats, outlines insurance issues in the sector to ensure adequate coverage. The main types of coverage discussed relate to property and general liability, environmental insurance and D&O liability insurance (p.6-7). From an insured's perspective, one question can be how the considerations related to the various risks outlined in the report (operational, litigation, regulatory, financial) have an impact on the duty to disclose. For example:
«Organizations that are heavily dependent on water supply such as beverage, energy, and agricultural producers, as well as technology manufacturers may face significant business interruption losses due to the lack of adequate water supply. As such, it is important that organizations consider this possibility when evaluating their business interruption exposure. Business interruption coverage is available on a property policy as long as the event is
caused by an insured peril.» (p.6)
This has a particular resonance in the context of sections 2408-2413 of the Civil Code of Québec. Sections 2408-2410 CCQ read as follows:
2408. The client, and the insured if the insurer requires it, is bound to represent all the facts known to him which are likely to materially influence an insurer in the setting of the premium, the appraisal of the risk or the decision to cover it, but he is not bound to represent facts known to the insurer or which from their notoriety he is presumed to know, except in answer to inquiries.
2409. The obligation respecting representations is deemed properly met if the representations are such as a normally provident insured would make, if they were made without material concealment and if the facts are substantially as represented.
2410. Subject to the provisions on statement of age and risk, any misrepresentation or concealment of relevant facts by either the client or the insured nullifies the contract at the instance of the insurer, even in respect of losses not connected with the risks so misrepresented or concealed.
From a more general perspective, the vast number of reports in various industry sectors that are currently published on diverse aspects of water and risks (see also previous blog about the CERES report on water risks in finance) illustrates the tension between inherent natural variability in hydrology and ecosystem dynamics on one hand, and increasing efforts to ensure constant and stable access to water and related natural resources as well as constant revenue streams from their exploitation on the other hand. As resources allocation and exploitation reach various peaks or thresholds, the possible impacts of related risks increase.
A report from MARSH Canada, A Review of Water-Related Opportunities and Threats, outlines insurance issues in the sector to ensure adequate coverage. The main types of coverage discussed relate to property and general liability, environmental insurance and D&O liability insurance (p.6-7). From an insured's perspective, one question can be how the considerations related to the various risks outlined in the report (operational, litigation, regulatory, financial) have an impact on the duty to disclose. For example:
«Organizations that are heavily dependent on water supply such as beverage, energy, and agricultural producers, as well as technology manufacturers may face significant business interruption losses due to the lack of adequate water supply. As such, it is important that organizations consider this possibility when evaluating their business interruption exposure. Business interruption coverage is available on a property policy as long as the event is
caused by an insured peril.» (p.6)
This has a particular resonance in the context of sections 2408-2413 of the Civil Code of Québec. Sections 2408-2410 CCQ read as follows:
2408. The client, and the insured if the insurer requires it, is bound to represent all the facts known to him which are likely to materially influence an insurer in the setting of the premium, the appraisal of the risk or the decision to cover it, but he is not bound to represent facts known to the insurer or which from their notoriety he is presumed to know, except in answer to inquiries.
2409. The obligation respecting representations is deemed properly met if the representations are such as a normally provident insured would make, if they were made without material concealment and if the facts are substantially as represented.
2410. Subject to the provisions on statement of age and risk, any misrepresentation or concealment of relevant facts by either the client or the insured nullifies the contract at the instance of the insurer, even in respect of losses not connected with the risks so misrepresented or concealed.
From a more general perspective, the vast number of reports in various industry sectors that are currently published on diverse aspects of water and risks (see also previous blog about the CERES report on water risks in finance) illustrates the tension between inherent natural variability in hydrology and ecosystem dynamics on one hand, and increasing efforts to ensure constant and stable access to water and related natural resources as well as constant revenue streams from their exploitation on the other hand. As resources allocation and exploitation reach various peaks or thresholds, the possible impacts of related risks increase.
Monday, October 25, 2010
Financial risks in water utilities: Report from Ceres
(BY HUGO)
A new report authored by Sharlene Leurig and titled «The Ripple Effect: Water Risk in the Municipal Bond Market» was published by Ceres last week.
The report studies water scarcity risks for public water and power utilities in the U.S.A and details the related financial risks. This is a very interesting read. Particularly refreshing is the section on why the model for assessing risks related to power utilities may be wrong (see p.41-42 and Annex C). You don't see such an admission often, but it is entierly consistent with the original intent: obtain the most accurate risk assessment possible rather than portray an abstract model as infallible.
A new report authored by Sharlene Leurig and titled «The Ripple Effect: Water Risk in the Municipal Bond Market» was published by Ceres last week.
The report studies water scarcity risks for public water and power utilities in the U.S.A and details the related financial risks. This is a very interesting read. Particularly refreshing is the section on why the model for assessing risks related to power utilities may be wrong (see p.41-42 and Annex C). You don't see such an admission often, but it is entierly consistent with the original intent: obtain the most accurate risk assessment possible rather than portray an abstract model as infallible.
Sunday, October 24, 2010
Québec water case law 14: Failure to obtain an authorisation to discharge waste water
(BY HUGO)
In CRI Environnement inc. v. Coteau-du-Lac (Municipalité de) (in French), the Plaintiff builds an industrial waste water treatment plant that discharges treated water containing benzene and chloroform into municipal sewers. The plant is built in 2002 and operated since 2003. However, the Ministry for Sustainable development, Environment and Parks has never issued authorisations to the Plaintiff under sections 22 and 32 of the Environment Quality Act (EQA) because the Plaintiff's discharges in the municipal sewers would exceed the municipal treatment plant's authorised maximal capacity. An additional ground for refusing to authorise the Plaintiff's discharges is that the authorisation under which the municipal treatment operates only allows treatment of grey water.
Hence, the Plaintiff incurs additional costs to transport its treated water to another treatment facility. The Plaintiff alleges that the Defendant municipality committed a fault in 2002 by failing to inform that the municipal sewers could not collect the Plaintiff's treated industrial waste water discharges. However, the Court finds that the Plaintiff's operation was always conditional on preliminary authorisations from the Ministry. The municipality has committed no fault, there is no causality link between damages claimed and the municipality's actions, and proof of the damages is insufficiently established.
The judgement presents some rules governing extra-contractual liability for municipalities and contains comments on the discretionary power of the Ministry to authorise polluting activities under the EQA.
In CRI Environnement inc. v. Coteau-du-Lac (Municipalité de) (in French), the Plaintiff builds an industrial waste water treatment plant that discharges treated water containing benzene and chloroform into municipal sewers. The plant is built in 2002 and operated since 2003. However, the Ministry for Sustainable development, Environment and Parks has never issued authorisations to the Plaintiff under sections 22 and 32 of the Environment Quality Act (EQA) because the Plaintiff's discharges in the municipal sewers would exceed the municipal treatment plant's authorised maximal capacity. An additional ground for refusing to authorise the Plaintiff's discharges is that the authorisation under which the municipal treatment operates only allows treatment of grey water.
Hence, the Plaintiff incurs additional costs to transport its treated water to another treatment facility. The Plaintiff alleges that the Defendant municipality committed a fault in 2002 by failing to inform that the municipal sewers could not collect the Plaintiff's treated industrial waste water discharges. However, the Court finds that the Plaintiff's operation was always conditional on preliminary authorisations from the Ministry. The municipality has committed no fault, there is no causality link between damages claimed and the municipality's actions, and proof of the damages is insufficiently established.
The judgement presents some rules governing extra-contractual liability for municipalities and contains comments on the discretionary power of the Ministry to authorise polluting activities under the EQA.
Saturday, October 23, 2010
Québec water case law 13: Defective septic tank
(BY HUGO)
In Thériault c. Construction Lortie inc. (in French), the Plaintiff, owner of a house in a riparian area, claims damages resulting from defects affecting the house’s waste water installation against the general contractor for having failed to fulfill its obligations to deliver a house with an adequate and functioning waste water installation. In turn, the general contractor alleges that the specialised subcontractor who built the installation is responsible for the damages. The subcontractor counters that the general contractor has imposed the choice of an inadequate installation to lower the construction costs. Moreover, the subcontractor claims that the municipality approved the inadequate installation and pressured the subcontractor into building it. The Court concludes that the general contractor is liable towards the Plaintiff, that the subcontractor has no extra-contractual liability towards the Plaintiff, and that the municipality is jointly and severally (in solidum) responsible for having failed to act in good faith and with reasonable diligence when authorising the waste water installation under the Regulation respecting waste water disposal systems for isolated dwellings.
The judgment provides some interpretative guidance with respect to the concept of «existing dwelling» in the Regulation respecting waste water disposal systems for isolated dwellings.
In Thériault c. Construction Lortie inc. (in French), the Plaintiff, owner of a house in a riparian area, claims damages resulting from defects affecting the house’s waste water installation against the general contractor for having failed to fulfill its obligations to deliver a house with an adequate and functioning waste water installation. In turn, the general contractor alleges that the specialised subcontractor who built the installation is responsible for the damages. The subcontractor counters that the general contractor has imposed the choice of an inadequate installation to lower the construction costs. Moreover, the subcontractor claims that the municipality approved the inadequate installation and pressured the subcontractor into building it. The Court concludes that the general contractor is liable towards the Plaintiff, that the subcontractor has no extra-contractual liability towards the Plaintiff, and that the municipality is jointly and severally (in solidum) responsible for having failed to act in good faith and with reasonable diligence when authorising the waste water installation under the Regulation respecting waste water disposal systems for isolated dwellings.
The judgment provides some interpretative guidance with respect to the concept of «existing dwelling» in the Regulation respecting waste water disposal systems for isolated dwellings.
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