Audit, Compliance and Risk Blog

B.C. Court Rejects Director’s Plea That Manager Was Responsible For Environmental Damage

Posted by Ron Davis on Mon, Apr 27, 2015 founder and principal of Northland Properties Corp. (“Northland”), Bob Gaglardi and his son, Tom Gaglardi, the president of Northland were found guilty, along with Northland, of two counts of “unlawfully carrying on a work or undertaking that resulted in the harmful alteration, disruption or destruction of fish habitat along the foreshore of Kamloops Lake” contrary to the federal Fisheries Act (R. v. Northland Properties Corp., 2014 BCPC 251 (BC Prov. Ct.). The charges related to land clearing and placing of fill on seven of Northland’s properties. The Crown alleged the work was performed unlawfully by Northland’s servants and under the direction of the Gaglardis. Both Northland and Tom Gaglardi denied they intended to cause the resulting damage to fish habitat, pleading that “the project supervisor for the work, Jim Parks, exceeded the directions he had been given on the project regarding landscaping.” They did admit that they had failed to be duly diligent in supervising the project, resulting in the damage to the fish habitat. Bob Gaglardi pleaded he was only briefly and peripherally involved in the project and thus, was not guilty. The Court held that there was sufficient reasonable doubt to acquit him on the charges.

With respect to Northlands and Tom Gaglardi, the Court found that the work was done on Gaglardi property where an existing building was extended and renovated; that Northland’s employees were involved in the direction of the work and the project was closely supervised from Northland’s head office. There was evidence that a grading plan used on the project had emanated from the head office and that Tom Gaglardi had been involved in the building of the dock and boat ramp that had led to some of the damage. The Court found that “evidence has persuaded me to the standard of proof beyond a reasonable doubt that Jim Parks was substantially carrying out the will of these parties when he cleared out the vegetation and used fill material to level the lots, so causing the damage complained of.” The Court concluded the following regarding the defendants’ plea of lack of intent: “I conclude that if Tom Gaglardi and Northland did not intend the harm to fish habitat that resulted with this project, they certainly did nothing to inform themselves of their obligations or to engage in processes that might have presented challenges or hampered progress. There was an element of willfulness here, a desire to get the job done and, if necessary, to seek forgiveness later.” As a result, both Northland and Tom Gaglardi were found guilty of both charges. Both were fined $5,000 each and ordered to pay an additional $60,000 each to the British Columbia Conservation Foundation under a community service order (R. v. Northland Properties Corp., 2014 BCPC 268 (BC Prov. Ct.).

Directors of a corporation engaged in land development should undertake risk mitigation by engaging in an assessment of potential environmental obligations arising from the development of their properties.

STP has recently published an update to its publication Directors' Liability in Canada and also publishes the following related guides:

Like What You've Read? Subscribe to Our Blog Now

About the Author
Ronald Davis is an associate professor emeritus at the Peter A. Allard School of Law, University of British Columbia. He obtained his Bachelor of Laws degree from the Faculty of Law, University of Toronto in 1990, graduating as that year’s silver medalist. He was called to the Ontario Bar and practiced law in Toronto for 10 years before returning to graduate studies at the University of Toronto. See for a full bio of Ronald Davis.

Picture Credit: Jane Dunne, Senior Editor, Specialty Technical Publishers

Tags: Corporate Governance, Business & Legal, Environmental risks, Environmental, Canadian