Court File and Parties
COURT FILE NO.: 1910-13-A1 DATE: 20200306 SUPERIOR COURT OF JUSTICE - ONTARIO
RE: Albert Bloom Limited, Plaintiff AND: London Transit Commission, 1571177 Ontario Limited, 1111846 Ontario Limited and Ramsden Industries Limited, Defendants AND: Eaton Industries (Canada) Company, Third Party
BEFORE: Justice A. K. Mitchell
COUNSEL: R. Frank and T. Brook, for Eaton Industries (Canada) Company R. Cooper and M. Butkus, for London Transit Commission
HEARD: October 21, 2019
Endorsement
Overview
[1] The third party, Eaton Industries (Canada) Company (“Eaton”), brings this motion for summary judgment seeking an order dismissing the third party claim of the defendant, London Transit Commission (the “LTC”), on the basis it is statute-barred by the Limitations Act, 2002 (the “Limitations Act”).
[2] The LTC alleges that Eaton’s predecessors caused environmental contamination to the LTC’s property located at 450 Highbury Avenue North (the “LTC Property”) which is alleged to have migrated onto neighbouring properties, including the plaintiff’s property located at 455 Highbury Avenue North (the “Plaintiff Property”).
[3] The LTC issued its third party claim against Eaton on March 16, 2016. In support of summary judgment, Eaton submits that the LTC’s claim was discoverable by 2012, or at the latest, by January 2014 when it had information that its property was a source of contamination. That is, the LTC knew or ought to have known about its claim against Eaton more than two years prior to commencing the third party claim.
[4] In response, the LTC submits that it did not have evidence of actual contamination of its property until late December 2014 at the earliest and, therefore, its claim was not discoverable prior to that time. Furthermore, the LTC submits that it did exercise reasonable due diligence and inquiry prior to December 2014 and despite those efforts its claim was not discovered or discoverable.
[5] Eaton bears the onus of establishing that there is no genuine issue requiring a trial. Once that onus is met, the LTC bears the burden of establishing its claim was commenced within the limitation period.
Background
[6] The material facts are not in dispute. The following is a summary of the evidence:
Parties
[7] Albert Bloom Limited (the “plaintiff”) is the plaintiff in the main action and the current owner of the Plaintiff Property.
[8] The LTC is a defendant in the main action and the owner of the LTC Property. The LTC acquired the LTC Property in 1973.
[9] Eaton’s predecessor, Eaton Automotive Products Ltd. (“EAPL”), was a prior owner of the LTC Property. EAPL carried on automotive manufacturing operations at the LTC Property from 1949 to 1973.
[10] Ramsden Industries Limited (“Ramsden”) is a defendant in the main action and the owner of property located at 128 and 130 Oakland Avenue in London, Ontario (the “Ramsden Properties”).
The Properties
[11] The Plaintiff Property, the LTC Property and the Ramsden Properties are neighbouring properties in a semi-industrial/semi-residential area located near the intersection of Highbury Avenue North and Brydges Street in London, Ontario.
[12] The LTC Property is located to the east of the Plaintiff Property across Highbury Avenue North. The Ramsden Properties are located to the southwest of the Plaintiff Property on the same side of Highbury Avenue North.
[13] The groundwater flow across this area is in a generally westerly direction. That is, from the LTC Property located on the east side of Highbury Avenue toward the Plaintiff Property and the Ramsden Properties located on the west side of Highbury Avenue.
Evidence Relating to Discoverability
[14] On February 3, 2012, the plaintiff’s lawyer advised the LTC of its claim that the LTC Property was the cause of environmental contamination on the Plaintiff Property and provided the LTC with five environmental reports from two environmental consultants (AMEC and Church & Trought) to support its claim.
[15] The plaintiff’s lawyer expressly advised LTC’s lawyer that the environmental consultants had concluded the LTC Property was the source of the alleged contamination on the Plaintiff Property stating:
The conclusion of the consultants is that the contamination has migrated from a property to the east of 455 Highbury Ave., N., namely 450 Highbury Ave. N. owned by the London Transit Commission.
[16] On April 30, 3013 the plaintiff’s lawyer delivered a statement of claim and notice of action to both the LTC’s lawyer and Ramsden’s lawyer by email. In the covering email, the plaintiff’s lawyer states: “[l]ate last year I received instructions from my client to commence an action to avoid any limitation issues.” The plaintiff also provided the LTC with an environmental report from a third environmental consultant (Pinchin) in support of its claim.
[17] On May 22, 2013, the LTC was formally served with the statement of claim in the main action. In the statement of claim the plaintiff alleges that the LTC Property was a source of environmental contamination on the Plaintiff Property.
[18] On December 19, 2013, the plaintiff provided the LTC with an environmental report from a fourth environmental consultant (Environ) in support of its claim.
[19] In January 2014, the LTC served its statement of defence, counterclaim and cross-claim in the main action. At paragraph 8 of its pleading, the LTC alleges:
In the alternative, LTC pleads that if the [LTC Property] in any way contributed to the alleged contamination of the [Plaintiff Property], which is not admitted but specifically denied, then it was caused by the prior owner of the [LTC Property], the details of which LTC had no involvement in and has no knowledge of.
[20] The fact that Eaton’s predecessors (EAPL) used the LTC Property to manufacture automotive parts was publicly available information.
[21] Between February 2012 and January 2014, the plaintiff’s lawyer repeatedly asked LTC’s lawyer to investigate its property with respect to the alleged contamination. The LTC refused to do so. The LTC also refused to provide the plaintiff’s environmental consultants access to the LTC Property to conduct their own investigation with respect to the alleged contamination.
The Environmental Reports
[22] Four different consultants identified the historical operations of EAPL carried on at the LTC Property as:
(i) a significant environmental issue; (ii) a significant finding; (iii) a potential off-site source of contamination of the Plaintiff Property; and (iv) a potential source of volatile organic compounds (“VOC”).
[23] In January 2011, the plaintiff received a Phase II ESA report with respect to the Plaintiff Property. This report indicated that the contaminant TCE and its degradation products were present at the Plaintiff Property in concentrations exceeding the applicable standards. TCE is a VOC historically used as a degreasing agent in the automotive manufacturing industry.
[24] Further investigation of the alleged contamination was conducted by the plaintiff. The plaintiff received a groundwater delineation report in March 2011 which indicated that there was alleged contamination on the Plaintiff Property.
[25] In March 2011, the plaintiff notified Ramsden about the alleged contamination and provided Ramsden with copies of both the 2011 Phase II ESA report and the 2011 groundwater delineation report.
[26] Ramsden commissioned its own investigation of the Ramsden Properties. In August 2011 Ramsden received a Phase II ESA report for the Ramsden Properties identifying TCE as present on the Ramsden Properties in concentrations above the applicable standards. The report also concluded that the LTC Property was a potential source of the alleged contamination in part due to the westerly groundwater flow in the area of the properties and the existence of the historical automotive parts manufacturing operation formally carried on by EAPL.
[27] After receiving Ramsden’s 2011 Phase II ESA report, the plaintiff conducted further investigations. In November 2011, the plaintiff’s environmental consultant issued a letter in which it had reviewed the data and agreed with the findings in Ramsden’s 2011 Phase II ESA report that the LTC Property was a potential source of the alleged contamination.
[28] In 2013, the plaintiff commissioned two more environmental studies of the Plaintiff Property regarding the alleged contamination and provided them to the LTC. In particular, the plaintiff provided:
(a) an April 2013 supplemental Phase II ESA report which identified the automotive manufacturing activities, including degreasing, of EAPL on the LTC Property as a potential source of contamination; and (b) a December 2013 supplemental Phase II ESA report which confirmed that the Plaintiff Property was contaminated with TCE and that the source of TCE in the northern parts of the Plaintiff Property likely originated from the LTC Property.
[29] In 2013, the LTC retained an environmental consulting firm, GHD Ltd. (“GHD”).
[30] In January 2014, the plaintiff’s lawyer notified the LTC’s lawyer again requesting the LTC to undertake an investigation of its property failing which the plaintiff intended to contact the Ministry of the Environment (the “Ministry”) regarding the alleged contamination.
[31] In October 2014, the Ministry intervened and requested that the LTC prepare a Phase I ESA for the LTC Property and allow the plaintiff access to the LTC Property for the purpose of installing monitoring wells to further investigate the LTC Property for contamination.
[32] In December 2014/early January 2015, GHD conducted sampling on the LTC Property as part of the investigation requested by the Ministry. These results corroborated the results from the prior reports obtained by the plaintiff and Ramsden indicating the presence of TCE on the LTC Property in concentrations above the applicable standards.
[33] GHD also conducted its own sampling on the LTC Property in early 2015. In March 2015, GHD produced a figure showing that the groundwater flow across the LTC Property was westerly toward the Plaintiff Property which was consistent with the flow earlier identified by the plaintiff’s consultants between February 2012 and December 2013.
The Litigation
[34] On November 30, 2012, the plaintiff commenced the claim against the LTC, Ramsden and the owners of two other neighbouring properties by issuance of a notice of action. The plaintiff alleged, among other things, that the LTC Property was a source of the contamination of the Plaintiff Property.
[35] The notice of action and statement of claim were served on the LTC on May 22, 2013.
[36] In January 2014, the LTC served its statement of defence, counterclaim and cross-claim in the main action.
[37] On March 16, 2016, the LTC commenced the third party claim against Eaton alleging that Eaton’s predecessors (EAPL) contaminated the LTC Property between 1949 and 1973 through their automotive parts manufacturing operations.
Third Party Claim
[38] In the third party action, the LTC claims against Eaton:
(a) damages in the amount of $5 million; (b) contribution and indemnity under sections 2 and 3 of the Negligence Act, R.S.O. 1990, c. N.1, as amended, for any amounts for which the LTC may be found to be responsible to the plaintiff; (c) contribution and indemnity under common law and equity for any amounts for which the LTC, may be found to be responsible to the plaintiff; and (d) the costs of the main action and the third party action.
[39] At paragraph 23 of the third party claim, the LTC pleads:
- LTC has suffered and will suffer damages, costs, expenses and losses due to the contamination, including:
(a) of the anticipated costs of addressing remediation of the LTC property; (b) the anticipated cost of addressing the requirements of the Ministry of Environment and Climate Change associated with contamination of surrounding properties; (c) potential costs associated with addressing remediation and other claims involving surrounding properties, including the plaintiff’s property; and (d) the claims of the plaintiff.
Issues
[40] The issue on this motion is whether there are genuine issues requiring a trial with respect to whether the LTC’s third party claim is statute-barred by the Limitations Act.
[41] A collateral issue arises as to whether the claims pleaded by the LTC give rise to a separate independent cause of action with a corresponding separate limitation period.
The Law
Test for Summary Judgment
[42] Pursuant to r. 20.01(3) of the Rules of Civil Procedure, a defendant to an action may move for summary judgment dismissing all or part of the claim against it. If the court is satisfied there is no genuine issue requiring a trial, the court must grant summary judgment.
[43] The decision of the Supreme Court of Canada Hyrniak v. Mauldin, 2014 SCC 7 provides the governing law. Recognizing that affordable and timely access to the civil justice system is paramount, the Supreme Court of Canada has interpreted r. 20.03 to require motions judges to utilize their enhanced powers under r. 20 to weigh evidence, evaluate credibility and draw reasonable inferences where appropriate in order to expand the cases capable of being disposed of summarily without the need for costly and protracted litigation.
[44] On this motion, it is presumed that the parties have placed before the court all relevant and necessary evidence. That is, that the LTC has put its best foot forward. The LTC must lead trump or risk losing. It is assumed for purposes of this motion that no better evidence exists upon which to decide the issues. [Chernet v. RBC General Insurance Co., 2017 CarswellOnt 5952 (C.A.)] at para. 12.
Limitations Act
[45] Limitation periods exist for three purposes: (1) to promote accuracy and certainty in the adjudication of claims; (2) to provide fairness to persons who may be required to defend against claims based on stale evidence; and (3) to prompt persons who might wish to commence claims to be diligent in pursuing them in a timely fashion. Mancinelli v. Royal Bank of Canada, 2017 ONSC 7384 at para. 7.
[46] Section 4 of the Limitations Act, provides that a claim is statute-barred if an action is not commenced within 2 years following the date on which it is discovered. The central issue on this motion is the LTC’s discoverability of its claim against Eaton.
[47] When a claim is discovered is determined after applying the criteria set forth in s. 5 of the Limitations Act, which reads:
5.(1) a claim is discovered on the earlier of,
(a) the day on which the person with the claim first knew, (i) that the injury, loss or damage had occurred, (ii) that the injury, loss or damage was caused by or contributed to by an act or omission, (iii) that the act or omission was that of the person against whom the claim is made, and (iv) that having regard to the nature of the injury, loss or damage, a proceeding would be an appropriate means to seek to remedy it; and (b) the day on which a reasonable person with the abilities and in the circumstances of the person with the claim first ought to have known of the matters referred to in clause (a).
[48] Section 5(2) of the Limitations Act, creates a presumption that a cause of action is discovered on the day that the act or omission giving rise to it takes place. In the absence of proof of a different discovery date, with the onus of proof being on the LTC, the discovery date defaults to the date of the act or omission.
[49] On a motion for summary judgment involving the basic limitation period, there are additional considerations if the claim alleged to be statute-barred is a claim for contribution and indemnity. Section 18 of the Limitations Act directs that the date on which a party is served with the claim in respect of which it seeks contribution and indemnity, is deemed to be the day the act or omission took place. Specifically, section 18 of the Limitations Act provides as follows:
18(1) For the purposes of subsection 5(2) and section 15, in the case of a claim by one alleged wrongdoer against another for contribution and indemnity, the day on which the first alleged wrongdoer was served with the claim in respect of which contribution and indemnity is sought shall be deemed to be the day the act or omission on which that alleged wrongdoer’s claim is based took place.
[50] However, s. 18 does not create an absolute two-year limitation period for claims in contribution and indemnity. Rather, ss. 18 and 5(2) work together to establish a presumptive two-year limitation period for contribution and indemnity claims that starts on the date of service of the statement of claim, which can be rebutted by the discoverability principles in section 5(1) of the Limitations Act. Mega International Commercial Bank (Canada) v. Yung, 2018 ONCA 429.
[51] Section 5(1) of the Limitations Act postpones the running of the limitation period until the material facts underlying the cause of action are known, or were reasonably discoverable. Ibid., at para. 8. It is a question of fact as to what a reasonable person with the abilities and in the circumstances of the claimant ought to have known of the matters identified in s. 5(1)(a). Arcari v. Dawson, 2016 ONCA 715 at para. 9.
[52] Whether a claim has been discovered is not a question of whether a plaintiff has acquired sufficient evidence to ensure that the case will be successful at trial. That is, a plaintiff does not require evidence sufficient to prove its case at trial only that it has sufficient evidence to establish that a cause of action exists. As the Court of Appeal held in Lawless v. Anderson, 2011 ONCA 102, such an approach:
…confuses the issue of when a claim is discovered with the process of assembling the necessary evidentiary support to make the claim “winnable”. To discover a claim, the plaintiff need only have in her possession sufficient facts upon which she could allege negligence. Additional information will support the claim and help to assess the risk of proceeding but is not needed to discover the claim. Ibid., at para. 36.
[53] The claimant must act with due diligence in determining whether it has a claim. Mancinelli, supra, at para. 9. Suspicion of certain facts, or knowledge of a potential claim may trigger a due diligence obligation. Once the due diligence obligation is engaged, the issue is whether a reasonable person conducting due diligence, with the abilities and in the circumstances of the claimant ought to have discovered the claim. Crombie Property Holdings Ltd. v. McColl-Frontenac Inc. (Texaco Canada Limited), 2017 ONCA 16 (“Crombie”), at para. 42.
[54] In Crombie, the Court of Appeal found that the suspicion of a potential contamination of the appellant’s property based on a single Phase I ESA report and a draft Phase II ESA report was sufficient to give rise to a duty of inquiry for the claimant. Ibid. at para 42.
[55] Due diligence requires a claimant to actually investigate its potential claim. This obligation has been described as: “to systematically gather information, explore, probe, research, inspect, interview, inquire, study, appraise, and analyse”. Mancinelli, supra, at paras. 49 and 50. As the Court of Appeal held in Longo v. MacLaren Art Centre, 2014 ONCA 526 at para. 42 a “limitation period will not be tolled while the plaintiff sits idle and takes no steps to investigate the matters required for discovery of the claim described in section 5(1)(a)”. However, the nature and extent of the required action will depend on all of the circumstances of the case. Ibid.
Analysis
The Suitability of Summary Judgment
[56] The LTC contends that this motion for summary judgment is inappropriate and premature because the third party action cannot be resolved without detailed knowledge of the factual circumstances in the main action.
[57] I do not accept this argument. The issue on this summary judgment motion is discrete and involves a determination of whether the LTC is statute-barred from pursuing its claims against Eaton. The only issue is one of discoverability of the LTC’s claims against Eaton. The facts are not in dispute. Credibility is not an issue.
[58] As earlier noted in these reasons, the LTC has an obligation to put all relevant evidence before the court with respect to the issue of discoverability. Therefore, any factual circumstances in the main action unrelated to the discoverability of the LTC’s claims against Eaton are irrelevant to this motion.
[59] I find that there is no genuine issue requiring a trial and that a summary judgment motion is suitable for determining the issue of discoverability of the LTC’s claims against Eaton.
Third Party Claim is Presumptively Barred
[60] Pursuant to section 18 of the Limitations Act, the limitation period for the LTC’s third party claim for contribution and indemnity against Eaton is presumed to have commenced on May 22, 2013 when the LTC was served with the plaintiff’s statement of claim and notice of action in the main action.
[61] Accordingly, the LTC’s claim is presumptively barred as the limitation period expired on May 22, 2015. However, as noted in Mega International, s. 18 is not an absolute bar rather the presumption which arises is rebuttable by the LTC.
Rebutting the Presumption
(i) Actual Knowledge – s. 5(1)(a)
[62] Eaton submits that the LTC had actual knowledge of the matters in section 5(1)(a) of the Limitations Act by January 2014, at the latest. In support of its position, Eaton points to paragraph 8 of the statement of defence, cross-claim and counterclaim served by the LTC in connection with the main action in January 2014, wherein the LTC pleads that any contamination of the Plaintiff Property was caused by the LTC’s predecessors in title to the LTC Property.
[63] The LTC denies that it had actual knowledge when it served its pleading in the main action that the cause of the alleged contamination of the Plaintiff Property was the LTC Property. The LTC says that it relied on the conclusion of its consultant that the LTC Property was not the cause of the alleged contamination. The LTC says that it acquired actual knowledge only when its environmental consultant conducted testing of the soil and confirmed the existence of contaminants in the groundwater on the LTC Property. LTC says this knowledge was acquired only when the LTC’s consultant delivered its reports in March 2015.
[64] With respect to paragraph 8 of its pleading in the main action, the LTC submits it was merely standard environmental litigation boilerplate language inserted by its lawyer and did not inform the LTC’s actual state of knowledge in January 2014.
[65] At the time of pleading its defence of the main action, the LTC had received at least six environmental reports identifying the LTC Property as a potential source of the alleged contamination, five of which identified the automotive manufacturing activities of EAPL as a potential source of that contamination. The facts in Crombie involved a plaintiff purchaser suing a defendant seller for environmental contamination of the subject property. Here the “claim” of the LTC is a statutory claim under the Negligence Act for contribution and indemnity. There is no evidence suggesting the LTC has a stand-alone claim against Eaton for contaminating the LTC Property. In fact, the evidence suggests the opposite. The LTC acquired the LTC Property from EAPL in 1973. Any claim based in negligence for activities carried on by EAPL prior to 1973 would be statutorily-barred by the absolute limitation period of 15 years.
[66] The LTC appears to conflate actual knowledge of the matters in s. 5(1)(a) relating to the claims of the plaintiff in the main action with actual knowledge of the matters in s. 5(1)(a) relating to the claims of the LTC against Eaton for contribution and indemnity in the third party action. They do not equate. Only actual (or implied) knowledge of the latter is relevant.
[67] With respect to the matters in s. 5(1)(a), I find that with respect to the LTC’s claims against Eaton:
(i) the day on which the LTC first knew that the injury loss or damage had occurred was April 30, 2013 when it was provided with a copy of the issued notice of action and statement of claim naming the LTC as a defendant; (ii) the day on which the LTC first knew that the loss or damage was caused by or contributed to by an act or omission was April 30, 2013 when it was provided with a copy of the issued notice of action and statement of claim containing the allegations against the LTC as owner of the LTC Property; (iii) the day on which the LTC first knew that the act or omission was that of Eaton or its predecessor EAPL was February 3, 2012 when it was provided with environmental reports identifying the automotive manufacturing operations carried on by EAPL on the LTC Property (prior to its acquisition by the LTC) as a possible source of the contamination of the LTC Property; and (iv) the day on which the LTC first knew that, having regard to the nature of the injury, loss or damage, a proceeding would be an appropriate means to seek to remedy it was May 22, 2013 when the statement of claim and notice of action was formally served on the LTC (at the latest, the LTC knew that, having regard to the nature of the injury, loss or damage, a proceeding would be an appropriate means to seek to remedy it, was January 15, 2014 when it served its statement of defence, counterclaim and cross-claim).
With regard to this date, I note that whether an action is appropriate for purposes of s. 5(1)(a)(iv) of the Limitations Act depends on the specific factual or statutory setting of each individual case. Brown v. Baum, 2016 ONCA 325 at para. 21. In this case, the factual setting includes:
(a) the fact that a multi-party civil action involving the LTC was already underway; (b) the fact that the LTC had already retained environmental litigation counsel well prior to the commencement of the litigation; (c) the fact that despite numerous requests, the LTC had refused to investigate the allegations or allow the plaintiff access to the LTC Property to conduct testing in an effort to resolve the issue without litigation; and (d) the fact that the LTC did not engage Eaton in discussions in an attempt to resolve the issues and address potential losses;
In the context of this factual setting, the only means by which the potential losses of the LTC which it faced in the main action could be remedied, was through litigation. There is no evidence that means other than a third party claim were considered by or available to the LTC. It is important to note that the LTC not only defended the main action but commenced a counterclaim against the plaintiff and crossclaims against its co-defendants.
[68] The LTC relies on the decision in Mega International where the Court of Appeal set aside summary judgment. In Mega International the motions judge dismissed the third party claim for contribution and indemnity on the basis it was statute-barred. The facts in Mega International are easily distinguishable. The court held that the motions judge erred in failing to consider whether the claimant knew that bringing the claim was legally appropriate. The court found that the guarantor claimants’ knowledge of the main action did not equate with their discoverability of their claim against their former lawyer for professional negligence. Here, the LTC’s claim against Eaton was rooted in the fact that EAPL was a predecessor in title to the LTC Property being the alleged source of contamination - a standard basis for a claim of contribution and indemnity in the context of environmental litigation.
[69] I have found that the LTC had actual knowledge of the matters in section 5(1)(a) with respect to its claim against Eaton for contribution and indemnity by no later than May 22, 2013 and, therefore, that LTC has not rebutted the s. 18 presumption. Having made these findings, there is no need to consider whether the LTC ought to have had knowledge of these matters pursuant to section 5(1)(b) of the Limitations Act. However, both parties to the motion approached the assessment of the s. 5(1)(a) matters and s. 5(1)(b) from the perspective of whether the LTC ought to have known the LTC Property was the source of contamination of the Plaintiff Property as the basis for discoverability of its claim.
(ii) Implied Knowledge – s. 5(1)(b)
[70] For the sake of completeness, I will consider whether the LTC ought to have had knowledge of the s. 5(1)(a) matters with respect to the plaintiff’s claim against the LTC for contaminating the Plaintiff Property, by March 16, 2014 (being two years prior to the date the third party claim was commenced) pursuant to s. 5(1)(b) of the Limitations Act.
[71] Whether a reasonable person ought to have discovered the claim against Eaton by March 16, 2014 is a question of fact arising from the information available to or discoverable by the LTC. I find that a reasonable person with the abilities and in the circumstances of the LTC first ought to have known of the matters in s. 5(1)(a) by May 22, 2013.
[72] I arrive at this conclusion having regard to the following evidence which is undisputed and which I accept:
(a) the LTC was in possession of four environmental reports in February 2012 which identified the LTC Property as a potential source of contamination. Three of these environmental reports specifically identified EAPL (a predecessor of Eaton) as having had operations associated with TCE, a known contaminant; (b) Eaton’s environmental consultant opined that, taken together, the five reports reviewed by GHD in February 2012 contain sufficient information to identify the LTC Property as a likely source (among other potential sources of contamination of the Plaintiff Property); (c) The LTC’s co-defendant, Ramsden, provided an ideal comparison of how the reasonable person in the circumstances and with the abilities of the LTC would conduct themselves with respect to informing themselves and investigating the possible claim. Immediately upon receipt of the environmental reports from the plaintiff in 2011, Ramsden retained an environmental consultant to conduct an investigation of the Ramsden Properties to confirm or refute the reports prepared by the plaintiff’s consultants; (d) Despite numerous requests of the plaintiff since 2012, the LTC chose not to begin an investigation of the LTC Property until October 2014, when it was directed to do so by the Ministry. Within months of its investigation, the LTC obtained results consistent with the results of the plaintiff’s and Ramsden’s consultants obtained years earlier; and (e) The LTC had ample information available to it in its records and available to the public generally as to the nature of the operations undertaken by its predecessors in title on the LTC Property, however chose not to inform itself or investigate.
[73] I find the LTC did not act with the due diligence required of the reasonable person with its abilities and in its circumstances. The LTC chose not to be proactive in addressing the issues of environmental contamination identified by the plaintiff. Instead, the LTC chose to be wilfully blind to the information provided. Wilful blindness is not the standard of a reasonable person with respect to the discoverability of a claim.
[74] As earlier noted in these reasons, a reasonable person is required to systematically gather information, explore, probe, research, inspect, interview, inquire, study, I find appraise or analyse the available facts. Aside from retaining a lawyer and an environment consultant, the LTC did little due diligence and I find the LTC failed to act reasonably and diligently to discover its claim against Eaton.
[75] Even without a formal environmental investigation, a reasonable person in possession of the reports provided by the plaintiff would have known that the manufacturing activities of EAPL conducted on the LTC Property from 1949 to 1973 were a possible cause of the alleged contamination of the Plaintiff’s Property. In fact, EAPL was expressly identified by name in the November 25, 2010 Phase I ESA report, the supplemental Phase 2 ESA report dated April 18, 2013 and the Phase II ESA report dated January 20, 2011.
[76] The LTC submits that it was reasonable to refuse to investigate the LTC Property or allow others to investigate the LTC Property on the basis of advice they received from their environmental consultant in February/March 2012 and again in May 2013. I note that evidence of the LTC’s environmental consultant’s advice is not before the court on this motion. To the extent communications between the LTC and its litigation counsel and the LTC and its environmental consultant are before the court on this motion, same constitute hearsay and are attributed no weight.
[77] Upon being served with the plaintiff’s claim and having in their possession many reports identifying the LTC Property as a possible source of contaminant given its geographic location and the activities formerly conducted on it, LTC ought to have conducted its own investigation. In these circumstances it was not open to the LTC to simply ignore the abundance of information provided to it suggesting a predecessor in title to the LTC contaminated the LTC Property.
[78] Discoverability relates only to discovery of facts sufficient to support a claim. Discoverability does not relate to discovery of facts sufficient to prove a claim. Even assuming their own environmental consultant had provided an opinion contrary to the opinion of the consultants retained by the plaintiff and Ramsden, a reasonable person standing in the shoes of the LTC would have commenced a third party claim against Eaton to protect itself against potential liability for the claims of the plaintiff. The LTC knew their environmental consultant had merely reviewed the reports provided and had not conducted an independent investigation. The LTC knew or ought to have known that soil and ground water testing might support the allegations of the plaintiff and prove GHD’s opinion to be wrong (ultimately, GHD’s initial opinion proved to be incorrect).
[79] I find the LTC ought to have known of the matters in s. 5(1)(a) by May 22, 2013. Once served with the claim, the limitation clock began to run. Therefore, I find that the LTC has not rebutted the s. 18 presumption.
Partial Summary Judgment
[80] The LTC submits it has advanced claims independent of its claims for contribution and indemnity that are subject to a separate limitation period. The LTC argues that if successful and Eaton is granted summary judgment dismissing the LTC’s claims for contribution and indemnity, the balance of the LTC’s claims will remain. Consequently, the benefits accruing from summary judgment with respect to reduced costs and time efficiencies will be lost if partial summary judgment is granted.
[81] The LTC submits they have an independent claim for damages against Eaton based in nuisance and negligence alleging the continuing contamination of the groundwater. Alternatively, the LTC submits that in addition to their claim for contribution and indemnity with respect to damages claimed by the plaintiff, the LTC seeks contribution and indemnity from Eaton with respect to the Ministry costs and other amounts unrelated to the plaintiff’s claim.
[82] With respect to the concept of discoverability, a cause of action is discovered upon a) the suffering of damage; and b) the identification of the tortfeasor. The accrual of the cause of action is not delayed until the specific type of damage, or the full extent of damage, is known as this “would inject too much uncertainty into cases where the full scope of the damages may not be ascertained for an extended time…” Peixeiro v. Haberman, [1997] 3 SCR 549 at para. 18.
[83] LTC’s claims for damages beyond those for which it might be found liable in the main action do not create a separate cause of action triggering a separate limitation period. LTC’s claims all arise from the same alleged tortious conduct i.e., the contamination of the LTC Property by EAPL’s manufacturing operations prior to 1973. That conduct (the degreasing activities of EAPL leading to TCE’s being released into the soil) ceased long ago. In fact, the sludge pit which was the source of the contamination was removed from the LTC Property long ago. There is no continuing tort and therefore no separate cause of action/claim triggering a separate limitation period. Similarly, an increased claim for damages arising from the same tortious conduct does not trigger a new date of discovery.
[84] I find this litigation was commenced more than two years after the date on which the claims were presumptively discovered, actually discovered or ought to have been discovered by the LTC, being May 22, 2013. Accordingly, the LTC’s claims against Eaton, in their entirety, are statute-barred.
Disposition
[85] Eaton’s motion is granted. The LTC’s third party claim is hereby dismissed.
Costs
[86] As the successful party, Eaton is presumptively entitled to its costs of the motion and the third party action. Absent an agreement of the parties on the issue of costs, costs submissions shall be submitted in accordance with the following schedule:
(a) Eaton shall serve and file its costs submissions, not exceeding 10 pages in length, exclusive of any bill of costs, time dockets and case law, within 15 days; (b) the LTC’s responding submissions, not exceeding 10 pages in length, exclusive of any bill of costs, time dockets and case law, shall be served and filed within 15 days thereafter; and (c) any reply submissions, not exceeding 3 pages in length, shall be submitted 5 days thereafter.
