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Owners of a contaminated site are often too optimistic about their “rights” to compensation. Sometimes, chasing compensation for contamination just throws good money after bad.

For example, Terrim Properties Ltd. wanted to build a gaming centre in Castlegar, B.C.  Their loan fell through when the groundwater proved to be contaminated, likely due to historic gasoline migration from a neighbouring property now owned by Sorprop.  Terrim sued Sorprop and another neighbour, in nuisance and under the BC environmental statute. The lawsuit was a complete failure: Terrim Properties Ltd. v. Sorprop Holdings Ltd.

Terrim’s statutory claim had no basis. Under the BC Environmental Management Act (EMA), an action for remediation may only be heard by a court after a site is officially found to be contaminated, by a government “director”.  In this case, no director had ruled that any of the properties were officially contaminated sites, so Terrim’s claim for remediation was barred.  In any event, Terrim had not pleaded a statutory cause of action.

Terrim’s nuisance claim had to be abandoned, because Sorprop had not itself brought any gasoline onto its property.

“[18]        During the hearing, counsel for Terrim conceded that Terrim was not pursuing its claim in nuisance. That makes sense, because the evidence did not disclose that any of the defendants had brought onto their properties (or allowed to accumulate on their properties) any substance that, having escaped into the affected property, thus contaminated it. In this respect see Rylands v. Fletcher (1868), L.R. 3 H.L. 330 (H.L.). The Act makes provision for situations such as this (i.e. for the liability of a subsequent owner of land from which has escaped a contaminant) but the aggrieved property owner must follow the procedure prescribed by the Act. As noted above, I do not have the jurisdiction to deal with the situation here.”

Terrim then tried to argue that Sorprop had been negligent in failing to discover and deal with the contamination, since old reports about the contamination of the Sorprop property were on record with the Ministry of the Environment. Unfortunately, Terrim had not pleaded its case in negligence. In addition, Terrim had sold the property to another party.

Terrim’s claim was completely dismissed, and Terrim must now pay legal costs to the defendants.


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