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Environmental consultant’s negligence claims for failing to clean up contaminated sites continue to multiply. The Ontario Superior Court recently allowed a professional negligence lawsuit to go ahead against an Ontario environmental consultant, XCG, despite a long delay, which,  according to XCG, was causing it unfair prejudice.

In 3 Dogs Real Estate Corporation v. XCG Consultants Limited, 2014 ONSC 2251, the plaintiff bought residential property for renovation after an allegedly successful cleanup by XCG. Part way through the renovation, more contamination was found. XCG went back in and completed the cleanup, but the process delayed the renovation and resale of the property by about 18 months. The delay allegedly pushed the plaintiff close to insolvency. They started an environmental consultant’s negligence lawsuit against XCG for economic loss, but let it languish for two years with no progress, due to insufficient funds.

After two years’ delay, the court issued a status notice. XCG argued unsuccessfully that the claim should be dismissed. The court allowed the plaintiff to proceed, on a new schedule, on the grounds that:

  1. XCG’s negligence was (allegedly) the primary cause of the delay in the renovation, which in turn was (allegedly) the primary cause of the plaintiff’s lack of funds, which in turn caused the delay in the litigation; and
  2. XCG had not adequately proved that it had suffered prejudice from the delay. Although it claimed, plausibly, that it had incurred additional financial costs such as elevated insurance premiums and reporting costs, and increased difficulty competing for new work, due to the litigation, the court ruled that “no examples, details, books of account, invoices or financial statements were used to substantiate any of these statements. I again find these statements to be conjecture and speculation.” Claims that XCG had lost touch with a relevant former employee and the employees of a subcontractor were similarly dismissed as insufficient, in the absence of clear evidence that efforts had been made to find the missing witnesses.

XCG also argued that the case should be dismissed because it was commenced too late; Ontario has a two-year statute of limitations. However, the limitations issue had not been raised promptly when the lawsuit was commenced. Judge MacLeod – Beliveau decided that the relevant facts were not clear enough to be decided on a status motion and deferred the limitations issue to a subsequent motion or the trial.

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