I continue to be amazed by the number of people who knowingly (or carelessly) buy a contaminated site, wrongly assuming that they will have an automatic right to successfully sue a neighbour for the cost of cleanup. What advice are they getting from the real estate and litigation bar?
I can’t think of a single case (except an outlier in Newfoundland) where an intentional purchaser of a contaminated site successfully collected the cost of cleanup after a contested trial. And yet the flood of such lawsuits continues.
The latest case was tossed out, after a summary judgment motion, on limitations grounds. In Crombie v McColl-Frontenac, 2015 ONSC 6560, the buyers knew throughout that the next door property was a former gas station. They bought the property anyway, and then sued the past and present owners of the neighbouring property. The defendants obtained summary judgment, because the contamination was already discoverable before the plaintiffs purchased their property, more than two years before they launched their lawsuit:
[30] It is obvious from my above findings of fact that the contamination issues attached to the Crombie property were a concern even at the time the initial Offer to Purchase was made…
[31] I find that by March 9, 2012, when Crombie waived the environmental clause, they had become aware of sufficient material facts to form the basis of an action. I am mindful that most of the material available to them on that date was a review of the property, but that does not make it any less actionable. It is the compilation of the material that was presented to them that armed them with sufficient knowledge at that moment to move forward with a claim. All the testing that followed simply confirmed their suspicions about what had already been reported on.
[32] Even if I am wrong on that, it is incontrovertible, on the facts as I have found them to be, that Crombie had more than a sufficient basis for an action by March 30, 2012. It is of no moment that the draft Phase II report is dated May 9, 2012. The crucial part of that report is the findings from the drilling and soil sample all of which was made available to Crombie in March 30, 2012…
The buyers tried, unsuccessfully, to avoid the limitation problem by arguing that there was a continuing discharge of contaminants from the neighbouring property. This, they argued, continually triggered a new running of the limitation period. They lost because they could not prove that any continuing flow was creating new environmental damage, on top of whatever had been there before. This is a common issue, since many old contaminant plumes have reached a steady state:
[41] I am guided by and grateful for Justice Penny’s summary of the law in relation to continuing damage:
The law is clear when a party claims a continuing nuisance, evidence of damages sustained during the limitation period is required. In the face of a limitation defence, the mere presence of contaminants in the soil or groundwater is not sufficient to found a claim for damages for continuing nuisance. Rather, there must be evidence of damage sustained within the limitation period, ML Plaza Holdings Ltd. v. Imperial Oil Ltd., [2006] B.C.J. No. 479, 2006 CarswellBC 520 (B.C.S.C.) at para. 72, aff’d 2006 BCCA 564 (CanLII)…
[44] None of the environmental reports that have been generated speak to the issue of ongoing damage.
[45] The plaintiff argues that the ongoing damage is a separate cause of action and therefore a separate and distinct limitation period applies.
[46] Given the absence of evidence in relation to the allegation of continuing damage and my inability to distinguish it as such, I am not prepared to attach an artificial limitation period to it.
[47] The limitation period in question attaches to the entire claim. There is no evidentiary foundation that would support a bifurcation of the issues.
The unsuccessful plaintiffs were ordered to pay the defendants $190,000 in legal costs.