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AbitibiBowater head office in MontrealRyan Remiorz

The Newfoundland and Labrador government is appealing to the Supreme Court of Canada a Quebec court ruling on the environmental mess left by insolvent paper company AbitibiBowater Inc.

The province said the country's top court needs to determine key issues of public importance related to the Companies' Creditors Arrangement Act.

It wants to know whether a debtor's statutory duty to remove environmental contamination is "extinguished" under the CCAA, like commercial debt, it said in a notice of application.

The move to seek leave to appeal a Quebec Superior Court ruling comes about three months after the Quebec Court of Appeal refused to hear the case.

Newfoundland said the case raises three specific issues: - ensuring consistency across the country by resolving a conflict between provincial environmental law and federal bankruptcy and insolvency law; - who should bear the cleanup costs when a company is attempting to restructure; - does the CCAA give a court power to remove all hurdles under provincial law that impair a company's ability to restructure.

Newfoundland Premier Danny Williams promised in May to take the case to the high court after he conceded the province would likely have to clean up the multimillion-dollar mess left by the Montreal-based newsprint giant.

The province wants to force Abitibi to clean up five sites it ran between 1905 and 2008. They include a defunct Grand Falls-Windsor paper mill in central Newfoundland that the government expropriated in December, 2008.

The province rushed through legislation to seize Abitibi timber and water rights, along with a hydroelectric power station, after the failing company announced it was closing the paper mill.

Mr. Williams has blamed a bureaucratic foul-up for the accidental seizure of the mill and its cleanup costs.

He accused the Quebec courts of "bias" for being fixated on having Abitibi restructure.

In its notice seeking to appeal the Quebec court ruling, Newfoundland called industrial pollution one of the scourges of the modern age.

At the heart of all legislation designed to redress the effects of pollution is the "polluter-pay" principle requiring those responsible for cleaning it up.

"The point of this principle is to ensure that governments are not left footing the bill," it said, noting that the principle has been endorsed by the Supreme Court.

AbitibiBowater declined to comment on the province's latest legal move.

The company's creditors are set to vote on a restructuring plan on Sept. 14 that would allow the company to exit court protection in mid-October.

AbitibiBowater reined in its losses in the second quarter, reducing its red ink to $297-million (U.S.) in the three-month period ended June 30, compared with $510-million in the same year-ago quarter.

Revenue grew 14 per cent to $1.18-billion from $1.04-billion on higher prices for paper, pulp and wood products, though the results were negatively affected by lower prices for specialty papers.

The company has been under protection from creditors since April, 2009.

It has cut 6,000 employees and dramatically reduced its paper and wood capacity as it prepares to exit creditor protection as a lower-cost producer better able to absorb market and currency fluctuations.

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