Judgment day

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The Telegram

“Mr. Speaker ... the judge, who is the Honourable Gascogne, or whatever he is, Gascon or whatever he is, the Great Gatsby or whatever his name is, anyway, at the end of the day in the Quebec Court, is obviously not too ... the honourable judge in Quebec obviously has no time for Newfoundland and Labrador, and what he has done has gone beyond his constitutional competence.

“Because if you read the appeal, which was filed by the government of Newfoundland and Labrador, he did not have the statutory or constitutional competence to do what he did, and he made palpable and overriding errors of fact. You can rely on him if you want to. I would not.”

That’s then premier Danny Williams in the House of Assembly in May 2010, belittling a Quebec judge for a ruling that said the Newfoundland government could not push its environmental claims for tens of millions of dollar against Abitibi ahead of other creditors.

The provincial government had argued that, when it came to environmental claims, the province wasn’t acting as an ordinary creditor — and it reviewed scores of former Abitibi sites across the island, coming up with more than $100 million in claims.

Williams might not have relied on that Quebec judge, but Friday, the Supreme Court of Canada did, ruling that when environmental claims can be put in a dollar amount, they constitute financial claims, and that the province had to get in line with every other creditor.

The court ruled seven to two on the issue, arguing that if the environmental claims took precedence, the financial responsibility would essentially be shifted from the polluter — in this case, Abitibi — to its creditors, who would take a substantial financial hit for cleaning up someone else’s mess. In other words, third-party creditors would be responsible for the costs.

A snippet of the judge writing for the majority of the panel makes the logic pretty clear: “As deferential as courts may be to regulatory bodies’ actions, they must apply the general rules. … The broad approach serves not only to ensure fairness between creditors, but also to allow the debtor to make as fresh a start as possible after a proposal or an arrangement is approved.”

That’s especially so because the province’s demands were not made in isolation: “The seizure of Abitibi’s assets by the province, the cancellation of all outstanding water and hydroelectric contracts between Abitibi and the province, the cancellation of pending legal proceedings by Abitibi in which it sought the reimbursement of several hundreds of thousands of dollars, and the denial of any compensation for the seized assets and of legal redress are inescapable background facts in the judge’s review,” the majority of judges said.

Now, this is not to say that the province wasn’t justified in trying to recoup cleanup costs from Abitibi. The problem is, perhaps, that they should have been seeking those cleanup costs long before Abitibi went into bankruptcy protection. The sites involved include a whole host of grandfathered wood sites that had been closed years before — and presumably should have been cleaned up long ago, too. There is no doubt that the government could have enforced its environmental cleanup orders if those orders had been fully issued before Abitibi sought court protection from its creditors. Regardless, the end result is the same. The honourable Gascogne or Gascon or Great Gatsby, it turns out, was on the right path.

The government of this province wasn’t.

Organizations: Supreme Court of Canada

Geographic location: Abitibi, Quebec, Newfoundland and Labrador

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Recent comments

  • danny
    December 12, 2012 - 16:11

    There should be many permanently red faces around the province for blindly supporting our little dictator while he burnt bridges, money and options for us all. Nope...sainthood. Can we survive yet another egotisitical stooge? We'll very likely find out in due time.

  • Scott Free
    December 10, 2012 - 07:49

    Little Man Dan was the lead on this file; and, as an intrepid lawyer, he couldn't be wrong by expropriating Abitibi assets. And, I remember then Ministers of the Clown, Johnston saying "the polluter pays"; and Dunderdale, "they'll be prosecuted to the fullest extent of the law". The effects of the Danny Damage Era will be felt for generations to come. This monumental boondoggle will cost hundreds of millions in cleanups, legal fees and future settlements. Thanks Dan bye, adding to your legacy.

  • Voter with a memory
    December 09, 2012 - 20:05

    I remember when our premier was the minister responsible for expropriation and she screwed up by expropriating the mill site. All she was supposed to expropriate was the land where the wood and power assets were. Then when her screw up reached the house, I remember her standing in the House saying "They will pay"...this is only one reason we refer to our premier as "Blunderdale"...she screws up. Let's not forget that the real reason that there is an environmental issue is because there was no monitoring or requirement for compliance by Blunderdale or the ministers that preceded her. Don't blame the judges...the real fault lays at the House, and in this case, specifically on our premier.

  • Ed Power
    December 09, 2012 - 12:16

    Gee, if only we had had some highly skilled and experienced lawyers sitting on the Government side of the House to draft and review this Legislation, then this expensive $100 million dollar oversight might have been avoided. Anyway, all that is in the past. With our newly elected government's hand on the tiller, I am quite confident that nothing like this could ever happen with any Muskrat Falls related legislation.....

  • Aunt Lizzie
    December 08, 2012 - 13:29

    The consequences of Danny Williams' boorish, bullying, rash behaviour continue to plague Newfoundland and Labrador, and will for years to come. I hope people in this province are finally starting to see just how destructive Williams' approach to governing really was, so we never elect anyone like him again.

  • Maggy Carter
    December 08, 2012 - 13:26

    When 'can't stop laughing' stops - then maybe he'll start crying when he realizes just how much of his income will be sucked up by government for decades to come in order to pay for colossal blunders like the accidental expropriation of the Abitibi mill in Grand Falls. In fact our whole post-confederation history can be characterized as one long stumble from blunder to blunder - including and especially perhaps confederation itself. Among the notables are the cod fishery, linerboard, Come-by-Chance, Abitibi, Upper Churchill and what promises to be the biggest blunder of all, Muskrat Falls. But don't let that stop you from getting a good laugh out of it TImmy or Johnny or your other imaginary friends that post on-line under instructions from the high command on the eight floor. As for your continued nonsense that Liberal appointed judges are responsible for this, yet another of premier Danny Dunderdale debacles, who do you think you're kidding. Liberal appointed judges are getting rare as hen's teeth. Since coming to power, your idol Stevie Harper has replaced them with no fewer than 439 senior court judges of his own choosing. Time government shills like yourself started giving the public credit for a little more intelligence.

  • can't stop laughing
    December 08, 2012 - 11:29

    can't wait to hear from the liberal/ndp mp's in the province. they will probably blame harper for the court ruling, but wait a minute. wasn't it liberal prime ministers who appointed these judges/friends to the bench in the first place?

    • W McLean
      December 08, 2012 - 21:43

      Not that it has any bearing on the outcome of this, or any other decision , but, for the record, four of the Justices who heard this case were appointed by Harper, one by Mulroney, three by Chrétien, and one by Martin.

    • cynic
      December 09, 2012 - 17:29

      You know, there's a country to the south of us where they believe the whole world is divided into Liberals and Conservatives, and each group thinks the other is not only the enemy, but is irredeemably evil. We're a bit more politically sophisticated in this country, but Harper doesn't really like that. It's one of the ways we're different from the Americans, and Harper, being ashamed of anything about Canada that isn't American, feeds it. You seem to have bought into the whole idea s well, so much so that I have to wonder if you're one of the people employed by the Conservative Party to keep tabs on what's said on lists like this and post things intended to denigrate the poster and add some glitter to the Harper image. (Yeah, yeah, I know all the parties do it, and I think it's pretty small of all of them, don't even bother going there). Sorry,iold man, but we're not Americans. We have multiple parties in this country, and most of us don't fit on comfortably in either the Liberal or Conservative camp. If you want your politics simplified into nothing more than Right versus Left, you might want to consider moving to the US. If not, take pride in being Canadian and the things that make us Canadian, like not falling for the fear mongering and reactionism that is so much a part of American politics.

  • Maurice E. Adams
    December 08, 2012 - 08:53

    The Supreme Court seems to have considered this to be--- a "no brainer". Now who is it that likes to use that phrase when speaking of Muskrat Falls? -- not a 100 million dollar poorly thought out decision this time --- but a $10 billion one.

    • John in Whitbourne
      December 08, 2012 - 16:05

      Why not call it twenty billion or forty billion? We can make up any arbitrary amount because after all the alternatives are free right? Any excuse to take a shot at MF.

  • W Bagg
    December 08, 2012 - 07:52

    So Masrhall says it's great we expropriated AB, or we wouldn't get the good assets along with the polluted ones, so I guess we'll sell the ones (good ones) we expropriated. Any buyers?