French v. Chrysler, 2016 ONSC 793

French v. Chrysler, 2016 ONSC 793

CITATION: French v. Chrysler, 2016 ONSC 793

COURT FILE NO.: 46729

DATE: 20160202

ONTARIO

SUPERIOR COURT OF JUSTICE

B E T W E E N:

Mark French, a Trustee of the Chippewas of the Thames Land Claim Trust, on Behalf of 1317424 Ontario Inc. and Mark French, a Trustee of the Chippewas of the Thames Land Claim Trust

Plaintiffs

– and –

Chrysler Canada Inc., Benchmark Real Estate Services Canada Inc., Charles Brudenell, George Murray Shipley & Bell, Frank Fazio, RSJ Holdings Inc. and The D’Andrea Group Inc.

Defendants

Ray F. Leach and Michael A. Polvere, for the plaintiffs

Barry Bresner, for the defendant Chrysler Canada Inc., now known as FCA Canada Inc.

Adam Stephens, for the defendants Benchmark Real Estate Services Canada Inc. and Charles Brudenell

No one appearing for George Murray Shipley and Bell, Frank Fazio, RSJ Holdings Inc. and The D’Andrea Group Inc.

– and –

176695 Canada Inc., Chester Engineers, Inc. and N.A. Water Systems, LLC

Third Parties

Jennifer Fairfax and Patrick Welsh, for the third party N.A. Water Systems, LLC

No one appearing for the other third parties 176695 Canada Inc. and Chester Engineers, Inc.

HEARD: July 24, 2015

Leitch J.

1Chrysler Canada Inc. (“Chrysler”) has moved for summary judgment dismissing the plaintiffs’ claims against it in whole or in part on the basis that there is no genuine issue requiring a trial.

2In the alternative, Chrysler seeks an order striking out the plaintiffs’ claim for stigma damages as untenable at law.

Background Facts

3This action has been set for an eight-week trial commencing September 6, 2016 peremptory on all parties. On September 22, 2014 Chrysler was granted leave to bring this motion.

4This action relates to property that was owned and operated by Holmes Foundry Ltd. and Holmes Insulation Ltd. from the 1950’s to 1982 where, among other things, insulation containing asbestos was produced.

5The property is approximately 17 acres, known municipally as 200 Exmouth Street, Point Edward, Ontario (the “Property”).

6In 1981, the Property was conveyed to Canadian Fabricated Products Ltd., which subsequently amalgamated with, and continued as, American Motors (Canada) Inc. During that time, the primary industrial process on the Property was the production of ferrous castings for engine blocks.

7Chrysler purchased the Property on October 1, 1987.

8Chrysler made efforts to remediate the Property in 1988 and 1989. This action involves the plaintiffs’ claim that Chrysler’s remediation of the Property was inadequate, that Chrysler misrepresented the condition of the Property and that Chrysler’s remediation has created a stigma impacting the value of the Property.

9On September 9, 1988, Chrysler entered into an Agreement of Purchase and Sale to sell the Property to The D’Andrea Group Inc. for a purchase price of $1,200,000. This transaction closed on October 30, 1989. The terms and conditions of that sale will be discussed more fully below and are relevant to the issues on this motion.

10In February 1999, the plaintiffs entered into an Agreement of Purchase and Sale with The D’Andrea Group Inc. to purchase the Property. The Property was sold pursuant to that agreement on March 31, 1999. The terms and conditions of that sale will also be discussed more fully below as again they are relevant to the issues on the motion.

The Evidence Filed on the Motion

11Chrysler filed a motion record containing the affidavit of Ms. Sainsbury, a lawyer for Chrysler, to which was attached a number of reports and documents.

12The plaintiffs filed a five-volume responding motion record, which included: (i) an affidavit of Donald J. Pinchin, who was retained by the plaintiffs to opine on the presence, and likely extent, of asbestos on the Property, to which is attached his reports dated September 29 and October 21, 2011; (ii) an affidavit of Robert Tossell, who was retained by the plaintiffs to assess the subsurface environmental conditions at the Property and provide an opinion respecting the effectiveness of previous mediation and the estimated costs to remediate the Property to current residential land-use standards to which is attached his report dated September 29, 2011; (iii) an affidavit of Daniel E. G. Tapping, an accredited appraiser retained by the plaintiffs who provided two appraisal reports dated February 13, 2014 and May 23, 2014, which are attached to his affidavit; (iv) an affidavit of Kelly Riley referenced in more detail below to which are attached 27 documents as exhibits; and (v) an affidavit of John D’Andrea, also described in more detail below, to which is attached four documents as exhibits.

13Chrysler filed a reply motion record containing: (i) a reply affidavit of Ms. Sainsbury to which is attached further documents; (ii) an affidavit of Daniel Bunner, an expert retained by Chrysler to answer the question of whether the site decommissioning undertaken by Chrysler met with the applicable standards and followed applicable guidance documents in place in 1988 to 1989 and whether he agreed with the analysis of, and the conclusions expressed by, Mr. Pinchin, to which is attached a copy of his report dated March 22, 2012 [Mr. Bunner also reviewed the expert reports of Jim Phimister retained by the third party N.A. Water Systems Inc.]; (iii) an affidavit of Eric Chatfield, an expert retained by Chrysler to opine on the appropriateness of the sampling and its subsequent analysis discussed in Mr. Pinchin’s report and whether he agreed with Mr. Pinchin’s methodology to which is attached a copy of his report dated March 26, 2012; and (iv) an affidavit of Carol Aziz, an expert retained by Chrysler to review Mr. Pinchin’s report and provide her opinion with respect to the appropriateness of the calculations presented therein to which is attached a copy of her report dated March 22, 2012.

14I note that the plaintiffs objected to the inclusion of Mr. Phimister’s report and took the position that it ought to be disregarded on this motion, a position which they intend to also assert at trial.

15Chrysler provided a transcript brief containing copies of the transcripts of cross-examination of Chrysler’s affiants, Ms. Sainsbury, Mr. Bunner, Ms. Aziz, Mr. Chatsfield and transcripts of cross-examination of the affiants on behalf of the plaintiffs, Mr. Tossell, Mr. D’Andrea, Mr. Riley and Mr. Tapping.

16In addition, the plaintiffs filed transcript brief, as well as, 13 productions referred to in the excerpted portions of the transcripts.

The Plaintiffs’ Claim Against Chrysler

17Notice of this action was issued on March 30, 2015.

18In its Amended Fresh as Amended Statement of Claim, the plaintiffs claim general damages in the amount of $25,000,000 from Chrysler and the defendant, The D’Andrea Group Inc.

19The plaintiffs allege the following against Chrysler:

a. negligence in respect of the failure by Chrysler to properly remediate the Property; and/or

b. negligent misrepresentation and/or negligent misstatement by Chrysler that it had properly remediated the Property and/or;

c. failure to properly remediate or decommission the Property, creating a stigma, which has attached to or become associated with the Property, causing an aversion to the Property by prospective purchasers and others, resulting in a de-valuation and corresponding damages for such reduction in the amount of $6,000,000.

20In addition, the plaintiffs claim special damages against Chrysler for monies expended, inter alia, to investigate the environmental problems and to protect the Property as a result of its inability to develop and/or sell the same due to the environmental contamination in the amount of $1,500,000.

21Paragraphs 41 to 44 of the Amended Fresh as Amended Statement of Claim set out the plaintiffs’ allegations against Chrysler Canada as follows:

41.The Plaintiff pleads that the environmental contamination and the resulting damages were caused by the negligence of Chrysler Canada and the particulars of which are as follows:

(a) Chrysler Canada failed to properly remediate the Property;

(b) Chrysler Canada failed to warn subsequent purchasers of the Property of the contamination; and

(c) Chrysler Canada failed to properly supervise those in charge of remediating or decommissioning the environmentally unsound Property.

42. Chrysler Canada had a duty in law to discharge, prior to the sale of the Property, all of the environmental hazards associated with the Property or be liable to subsequent owners thereof to the extent of the damages suffered by them.

43. The Plaintiff, 131, pleads that Chrysler Canada represented or stated to the general public and the Ministry of the Environment that the Property was remediated to a residential standard when in fact such representation was untrue. 131 relied on the representation as aforesaid and contracted with The D’Andrea Group to purchase the Property on the basis that it was suitable for development and without performing the environmental searches that it would have had no representation or statement been made. As a result of which, 131, has suffered damages as claimed herein.

44. As a result of the failure of the Defendant, Chrysler Canada to properly remediate or decommission the Property, and the Defendant, D’Andrea Group’s representations that the Property was remediated the Plaintiff has been unable to sell the Property due to the stigma of its contamination. In fact, three Agreements of Purchase and Sale entered into by the Plaintiff have been aborted by the prospective purchasers due to the environmental contamination of the Property. Specifically, the Plaintiff entered into the following Agreements of Purchase and Sale dated:

(a) September 23, 2005

(b) May 15, 2006

(c) September 28, 2006

with the following Agreement purchasers respectively;

(a) Canadian Group Inc.

(b) A company not to be named, subject to confidentiality;

(c) 169579 Ontario Ltd., in trust for a company to be named

Each and every one of the aforesaid Agreements of Purchase and Sale were aborted by the prospective purchasers due to the environmental contamination of the Property and the stigma associated with such Property as a result of the contamination.

22I will set out below further details of the allegations against Chrysler presented on the motion.

The terms and conditions of the 1988 sale of the Property by Chrysler to The D’Andrea Group Inc.

23In the September 9, 1988 Agreement of Purchase and Sale with The D’Andrea Group Inc. Chrysler agreed to “do all necessary environmental clean-up of the lands and buildings, at its own expense” prior to closing. Specifically, Articles 3.01 and 3.02 of the agreement required the following:

3.01 The vendor [“Chrysler”] shall do all necessary environmental clean-up of the lands and buildings, at its own expense, prior to closing.

3.02 On or before closing, the vendor [“Chrysler”] shall obtain and provide to the purchaser [“The D’Andrea Group”], written confirmation from the Ministry of the Environment (Ontario) that the vendor [“Chrysler”] has completed the environmental clean-up according to standards presently acceptable to the ministry.

24Section 3.03 of the Agreement of Purchase and Sale stated the following:

Articles 3.01 and 3.02 shall be conditions precedent to the obligations of the purchaser to complete the purchase of the Property on the closing date, or any extension thereof as provided under Article 4.00, but, anyone or more of which conditions may be waived unilaterally by the purchaser by notice to the vendor on or before the closing date, or any extension thereof as provided under Article 4.00.

25Section 3.04 of the agreement stated that “the representations, warranties or conditions set out in article 3.00 shall not survive closing”.

What Environmental Work was Undertaken by Chrysler?

26Shortly after purchasing the Property, Chrysler decided to cease operations on the Property and commenced a decommission of the Property.

27Chrysler retained Chester Engineers Inc. (“Chester”), now N.A. Water Systems, LLC (“N.A.”) which is a third party in this action and, as well, MacLarentech Inc. which apparently no longer exists.

28In January 1989, the Ministry of the Environment (MOE) published a document entitled “Guidelines for the Decommissioning of Sites in Ontario”.

29As set out in para. 1 of these guidelines, the guidelines were prepared to provide for an efficient and effective process to decommission facilities and clean-up the environment. The guidelines “detail a process for meeting MOE requirements and outline management and technical procedures in this regard. Experience from one decommissioning or clean-up will be applied to subsequent decommissioning and clean-ups. Where possible, points in the decommissioning and site clean-up process have been identified, at which public consultation requirements and the requirements of other agencies may need to be met.”

30In s. 2 of the guidelines, the terms “decommission” and “decommissioning” were defined to mean “the mothballing, partial closure or complete closure of facilities” and the term “clean-up” was defined to mean “the restoration of a contaminated site to ensure the protection of human health and the environment.”

31The purpose of the guidelines as set out in para. 3 was to:

i. ensure that the decommissioning and clean-up of sites is completed in an environmentally acceptable manner;

ii. communicate to decommissioning and site clean-up components and the public the requirements and policies of MOE and identify potential involvement of other agencies;

iii. ensure that the decommissioning and clean-up of sites in Ontario proceeds in as efficient, fair and consistent a manner as possible; and

iv. ensure public involvement in the decommissioning and site clean-up process.

32Mr. Paul L. Hansen, a professional engineer employed by Chrysler at that time, led the decommission of the Property.

33As Chrysler submitted at the hearing of this motion, MOE monitored Chrysler’s decommissioning activities through site inspections, audits and reviews of various reports.

34Chrysler incurred $7,000,000 of expenses in relation to remediation of the Property.

What was provided to Chrysler by the Ministry of the Environment?

35Mr. D.A. McTavish, the Regional Director of the Ministry of the Environment delivered to Chrysler, to the attention of Mr. Hansen, correspondence dated November 30, 1989 which stated that it had reviewed documentation submitted by Chrysler with regard to the decommissioning of the Holmes Foundry site in Sarnia. Further, this letter stated the following:

This decommissioning has been completed in accordance to the January 1989 “Guidelines For the Decommissioning of Sites in Ontario”, and meets all other current statutory and regulatory requirements of the Ministry of the Environment.

36The letter went on to state that the attached “Statement of Decommissioning” was prepared in support of that effort. The letter also stated it was a requirement that the Statement be “placed in the registry file for the property concerned”.

37The letter concluded with the following paragraph:

The efforts of Chrysler Canada Ltd. in dealing with this complex environmental issue of restoring the Foundry site to residential standards is greatly appreciated.

38The nine page “Statement of the Environmental Decommissioning of Holmes Foundry Site” dated November 1989 and signed by Mr. McTavish (the “Statement of Decommissioning”) referenced the definitions in the guidelines described above; outlined the steps and remedial activities undertaken for Chrysler at the site; stated that “all identified hazardous wastes have been removed from the site”; that ongoing monitoring of ground water was not recommended; the “decommissioning and clean-up” was undertaken in close liaison with ministry staff who monitored the activities through site inspections, audits and reviews of reports for compliance with applicable legislation and Guidelines; that a number of agencies were involved in the decommissioning process, including the City of Sarnia, the village of Point Edward, the City of Windsor, the Medical Officer of Health Lambton County, the Ministry of Labour, the Ministry of Transportation, the Ministry of the Environment, Transport Canada, Environment Canada, the Sarnia Harbour Commission and Canadian National Railway”; and ultimately concluded as follows:

The Ontario Ministry of the Environment is satisfied that Chrysler has complied with the current “Guidelines for the Decommissioning and Clean-up of Sites in Ontario” to the extent required for residential development.

This statement is based on the information supplied by Chrysler including the details listed in the attached schedule 1. This statement is for the use of Chrysler only and it should not be construed as either acknowledgement or acceptance by the ministry of any liability for environmental problems that may arise at the site. Such responsibility rests with the responsible party(ies) according to law.

Any person who has concerns about any environmental matters related to the site should satisfy themselves as to the adequacy of the actions taken by Chrysler.

It is a condition of this statement that the statement be registered on title under the Land Registry Act.

39Schedule 1 listed 17 documents which were reviewed as part of the decommissioning.

The completion of the sale of the Property by Chrysler to The D’Andrea Group Inc. in 1989

40The Statement of Decommissioning was delivered to The D’Andrea Group Inc. prior to its purchase of the Property. The D’Andrea Group Inc. accepted this statement as satisfaction of the conditions precedent to its obligation to purchase the Property. The transaction closed on November 30, 1989.

What actions were taken and what statements were made by Chrysler in relation to the decommissioning of the Property?

41Chrysler did not register the Statement of Decommissioning on title.

42As will be discussed more fully below, the plaintiffs allege that Chrysler made representations to the public respecting its decontamination of the Property which they relied on in purchasing the Property in 1999.

43Mr. Kelly Riley, the Treaty Research Coordinator and former First Nation Chief of the Chippewas of the Thames First Nation (the “Band”) swore an affidavit in response to this motion on April 8, 2015. In that affidavit he explained that he was Chief of the Band when a 50 percent interest in the Property was purchased by the Chippewas of the Thames Land Claim Trust (the “Trust”).

44In answers to undertakings given at the examination for discovery of Mr. Mark French, the plaintiffs’ representative, it is clear that the Plaintiffs’ claim for misrepresentation is based on statements made by representatives of Chrysler at a public meeting in 1989 and in media releases and other presentations.

45Mr. Riley specifically outlined, in paras. 51, 52 and 53 of his affidavit, the representations made by Chrysler which he deposed the plaintiffs relied on as follows:

Specifically the representations made by Chrysler include:

a) A speech by Mr. R.V. Henly, P. Eng., Manager of Chrysler’s Facility Engineering Group at a public meeting on February 22, 1989, who discussed the commitment made by Chrysler to leaving an environmentally clean acceptable site for future development. In his speech, a written copy of same was included in a MacLarentech’s report entitled “Holmes Foundry Deactivation Public Meeting” … Henly, told the crowd:

i. “Chrysler Canada is committed to good environmental stewardship and we appreciated that the clean-up of this site to a high standard was going to cost a lot of money, time and effort.”

ii. “There are several levels of cleanup that can be done and each has its restrictions on the future use of the property, so it was decided that the level that Chrysler would achieve was the residential standard which is the highest level of clean-up.”

iii. “Chrysler has the expertise to produce automobiles and trucks, but we do not profess to be expert at environmental clean-ups. We know what we want, but we need advice and guidance on how to get there… It was therefore decided to retain the services of MacLarentech, a Canadian consulting engineering company in conjunction with Chester Engineering of Ann Arbour, Michigan… Suffice it to say at the moment that not only were specialists retained for the testing and studies, but contractors who are specialists or where necessary registered with the government in their field, were also retained. In the three areas of asbestos, PCB’s and soil contamination, we have been very careful, as these are of the greatest concern to everyone.”

iv. “Special attention has been given to the testing and examination of the site to ensure that the cleanup and disposal of asbestos will comply with today’s strict regulations for Asbestos Removal Regulations issued by the Department of Labour of Ontario.”

v. “As you will see and hear tonight, Chrysler Canada is taking the decommissioning and clean-up of Holmes foundry very serious. We want to leave the site in a condition that is acceptable to the community. Although Chrysler has [sic] only at the property a short time, we are making a corporate commitment of our environmental stewardship to Point Edward, Sarnia, and Ontario. We consider the residence [sic] of Point Edward and Sarnia our friends and we plan to make every effort to maintain that relationship. While the foundry is no longer in operation its role in the development of Sarnia is a historic fact and we are anxious for the property to continue to play a vital and productive role in the future.” …

b) The agenda from that meeting also had a welcoming address which was issued by Mr. Walt McCall, Manager of Public Relations for Chrysler, who, among other things “was on hand to respond to any questions relating to Chrysler’s corporate commitment to effectively undertake the Holmes Decommissioning Program” …;

c) The meeting also included a speech from R.B. German, P. Eng, Vice President of MacLarentech … whereby he advised that:

i. “…the Holmes site was in continuous use for industrial purposes for almost 70 years and contaminants have obviously accumulated on the property over this time. These pollutants have been collected in and on the buildings and are also found at and beneath the ground service at the foundry and, to a minor degree, at the sand dock at Winter Harbour. With the closing of the plant, the obvious concern, after the relief over the end of the stack omissions has worn off, is “Now What?” The answer is that Chrysler does not intend that Point Edward end up with a plot of heavy industrial land that can’t be reused. The company recognizes its responsibilities and is committed to undertaking a decommissioning programme. This programme meets all applicable regulatory and corporate guidelines for environmental remediation and protection.”

ii. “Asbestos: Detailed surveys were carried out in the various buildings on the foundry property to establish the extent of such remaining asbestos insulation on pipes, in walls and on heated equipment. Sample recovery and analysis identified a total of 14 locations containing asbestos insulation and products in the foundry, stores, warehouse, small castings and butler buildings. Some 1000 m² and 50 lineal m of asbestos insulation, as well as widespread microscopic contamination, currently undisturbed, in the old Holmes Insulation building was identified. Preparation of specifications is currently underway and asbestos removal work will begin in March, once a contractor has been selected.”

iii. “The key element in a decommissioning programme, after the removal and disposal of hazardous wastes, is the issue of soil and groundwater contamination derived from previous industrial activities on site…Site remediation at Holmes is reasonably straight forward. The programme will involve removal of soil to bring contaminant levels to below the residential criteria at the Foundry.”

d) Finally, also distributed at the public meeting is a press release from Chrysler entitled, “A message from Chrysler to the Village of Point Edward and the Sarnia-Lambton Community” … where Chrysler represented to the public:

i. “Last summer, some of you may have read or heard about the planned sale of the Holmes Foundry site. You might have assumed this meant that Chrysler’s involvement in your community had ended. In fact, September 16 marked the beginning of Chrysler’s commitment to undertake a comprehensive clean-up program in the buildings and property at large so that the land will meet Ontario standards of environmental safety. The clean-up will allow a smooth transfer of site ownership. Chrysler has taken full responsibility for foundry decommissioning and the associated property clean-up. This work is being carried out following all applicable standards set by the Ontario Ministry of the Environment (MOE).”

ii. “Chrysler intends to ensure that site is decommissioned and cleaned up to standards set by Ontario Ministry of the Environment. The ultimate goal is to render the land safe for future development by eliminating pollutants in the soil and groundwater to levels below guidelines set for residential redevelopment of industrial land.”

52. At the end of the day, these representations were made throughout the remediation process by Chrysler and was continually released by Chrysler or its agents to the local media. … Some excerpts of these articles are as follows:

i. “Rick German, general manager of MacLarentech Inc., a consultant for Chrysler here, said no one wants to repeat mistakes. The most famous example is Love Canal, he said, where people have suffered because housing built on a toxic-chemical site that wasn’t properly cleaned up.”

ii. “CHRYSLER IS (sic) committed to good environmental stewardship and we realized that the cleanup of this site would take a lot of money, time and effort,” said [Paul] Hansen. [an Environmental Coordinator with Chrysler].

53. These representations continued even after the alleged cleanup was complete whereby Mr. Paul Hansen wrote articles, gave speeches and accepted accolades from the community (Chrysler received a nomination for a conservation award from the St. Clair Region Conservation Authority). Attached hereto …is an article written by Paul Hansen whereby he wrote, “restoring the property so it can be readily used for agricultural, recreational, residential, commercial or industrial purposes…” as well as a copy of a speech that he gave at the 37^th Ontario Waste Management Conference in Toronto. [this paper entitled “the environmental decommissioning of the Holmes Foundry site” was presented June 12, 1990]

46I will discuss further in these reasons the submission of the plaintiffs that there are genuine issues for trial as to whether Chrysler made representations to the public regarding the remediation of the Property, whether such representations were negligent and whether it was reasonable for the plaintiffs to rely on them.

Background to the purchase of the Property by the plaintiffs

47In his affidavit filed in response to this motion, Mr. Riley explained how the Band developed an interest in the Property.

48In para. 11 of his affidavit, he deposed that the Band became interested in entering the gaming industry in order to acquire a licence for a charity casino or bingo facility and they retained Benchmark Real Estate Services Canada, Inc. (“Benchmark”) one of the principals of which was Mr. Charles Brudenell.

49As set out in para. 14 of his affidavit, Benchmark proposed a number of properties including the Property in question.

50Mr. Brudenell introduced John D’Andrea, president of The D’Andrea Group to the economic development officer for the Band, Mr. Dwayne Kechego. Apparently, according to para. 16 of Mr. Riley’s affidavit, Mr. D’Andrea recommended the Property as a suitable site. Mr. Brudenell specifically recommended the Property to Mr. Riley, who was then Chief. Mr. Riley deposed that Mr. Brudenell promoted the Property and advocated its purchase.

51Apparently, John D’Andrea was interested in participating in a gaming operation on the Property and as set out in para. 22 of Mr. Riley’s affidavit, Mr. D’Andrea represented to Mr. Riley and Mr. Kechego that he was “an experienced developer who could build such a facility”.

52Mr. D’Andrea proposed that he and the Trust enter into a joint venture arrangement as Mr. Riley explained in para. 23 as follows:

However, John D’Andrea, was not prepared to sell the Property outright to the Trust, but only a 50% interest therein. Thus, the terms of the Joint Venture Proposal provided that John D’Andrea, the principal shareholder of the D’Andrea Group and its President, and who was allegedly experienced in development, would provide the experience and expertise to develop the proposed joint venture, and would therefore provide …1.8 million dollars worth of value to the project either by way of 50% land contribution or by way of 50% ownership of the Joint Venture Corporation jointly owned by D’Andrea and the Chippewas.

53A new company was incorporated, 1317424 Ontario Inc. The Trust held one half of the outstanding and issued common shares in 1317424 Ontario Inc. with the remaining 50 percent of those shares owned by a company owned and/or controlled by Mr. John D’Andrea.

54Unfortunately Mr. D’Andrea had not been forthright and honest with his fellow shareholders with whom he owned the Property. In para. 25 of his affidavit, Mr. Riley outlined improper conduct by Mr. D’Andrea, which was ultimately found to be fraudulent,

Although not known to the Trust at the time, there were a number of other shareholders in the D’Andrea Group whom John D’Andrea subsequently defrauded in the sale of the 50% interest in the Property to the Trust because he retained a 50% interest through the incorporation of a numbered company. John D’Andrea’s retention of a 50% interest in the Property was unknown to the other D’Andrea Group shareholders and became the basis of a successful prosecution of John D’Andrea for fraud culminating in the sentencing of John D’Andrea by Justice John McGarry on July 11, 2002 to a term of 2 years less a day for fraud over $5,000….The Chippewas were not aware there were other investors in the D’Andrea Group other than John D’Andrea, and, as such, agreed to purchase a 50% interest in the Property under the Joint Venture Proposal.

55Mr. D’Andrea’s fraud of others, which the plaintiffs were not aware of prior to the purchase of the Property, is not relevant to the issues on this motion. However, the plaintiffs rely on his evidence in relation to their allegation that Chrysler made representations which they relied on in purchasing the Property. As counsel for Chrysler noted, this evidence, which is set out further in these reasons, is from a “convicted fraudster” and is of questionable veracity.

56The terms and conditions of the purchase of the Property from The D’Andrea Group Inc. are highly relevant to the issues on this motion and I will refer to those conditions next.

The terms and conditions of the 1999 sale between The D’Andrea Group Inc. and 1317424 Ontario Inc.

57The D’Andrea Group Inc. represented and warranted the condition of the Property as follows:

The Vendor warrants that the subject Property is free of any hazardous wastes or toxins as defined by Ontario law and that any clean-up shall be to the standards of cleanliness for the Property such that residential or commercial development shall be allowable on this site. This warranty shall survive closing and a certificate for such warranty shall be provided on closing from the Vendor. The Vendor shall also supply to the Purchaser immediately after the acceptance of this offer any environmental reports, surveys or plans in its possession. In the event that the Purchaser is not content with the results of any environmental report and provided that the Purchaser provides notice of same to the Vendor at least five days prior to the dates set for closing then the Purchaser may deem this agreement null and void and the Vendor agrees that the agreement is at an end and the Purchaser’s deposit shall be immediately returned to the Purchaser without interest. The Vendor herein authorizes any party holding the deposit in trust to return same to the Purchaser.

What was done by the plaintiffs prior to the purchase of the Property by 1317424 Ontario Inc. with respect to environmental risks?

58The Band retained Mr. Ottavio Colosimo to represent them in relation to the purchase of the Property. Mr. Colosimo swore an affidavit in December 2007, which is part of the motion materials.

59According to Mr. Colosimo’s affidavit, confirmed by the exhibits attached to his affidavit, he alerted the Band to a number of risks relating to the project.

60Firstly, in a memorandum dated January 21, 1999, Mr. Colosimo indicated that certain “questions should be asked and confirmed through independent investigation”. He specifically identified as two of these questions: “that soil tests have been conducted and there are no adverse soil conditions that may affect the development of the Property” and “that an environmental assessment has being [sic] conducted and there are no environmental concerns that may affect the Property”.

61Secondly, on February 25, 1999, Mr. Colosimo forwarded to Mr. Kechego a copy of a report dated November 30, 1989 from J. D. Norman Consultants, Inc. [who had been retained by The D’Andrea Group Inc.] and a copy of the Statement of Decommissioning along with newspaper excerpts relating to the site, all of which he had received from the solicitors for Mr. D’Andrea.

62Mr. Colosimo stated that he was not expressing an opinion as to the validity of the information “nor whether or not the site is clean for the development purposes”.

63He also stated in this letter the following: “Due [sic] the historical use of the Property, namely industrial site since the 1950s or earlier, environmental issues should be thoroughly investigated by you before you proceed with the transaction. I strongly recommend that you consult with an environmental engineer who will be acting solely for you to review this material and to make whatever other investigations that may be appropriate to satisfy yourself as to the environmental conditions of the lands”.

64Thirdly, in further correspondence dated March 3, 1999, Mr. Colosimo indicated the following under a heading “Environmental”:

As stated earlier in this report and as revealed by my search of title to the Property, and as revealed by the excerpts of the environmental reports I have received, the Property has been used for industrial uses for well over 40 years. In light of this, it is critical that you ascertain that the Property is environmentally clean for development purposes. Although time is short, it is nevertheless my recommendation that you retain an environmental engineer to assess the clean-up work which has been conducted to determine on your behalf the standards used and the procedures applied are sound and that there have been no changes in the standards applied to environmental issues from the date the Property was decommissioned on or about 1989.

65Mr. Colosimo, in his March 3, 1999 letter, went on to make an number of comments arising from the report from J. D. Norman Consultants, Inc. dated November 30, 1989 and the Statement of Decommissioning and then stated the following:

In conclusion, on the issue of the environmental condition of the Property, it is my opinion that you should retain an environmental engineer to review the issue and report to you on same.

I know that you have been told that if environmental contaminants are found on the Property then the prior owners can be held responsible for the clean-up costs. I should indicate to you however, that when Chrysler Canada sold the Property to The D’Andrea Group Inc., according to the agreement of purchase and sale, a copy of which was given to me by the vendor’s solicitor, the warranty given by Chrysler Canada regarding environmental issues merged on closing. This would in my opinion form the first line of defence if a claim was made against Chrysler Canada for clean-up costs. In any event, I cannot base my opinion on the fact that there may be recourse to prior owners through litigation. You should take appropriate cautions before you complete the transaction. Having the ability to sue prior owners is not an answer to conducting a proper investigation on environmental matters.

66Mr. Riley acknowledged receiving this advice from Mr. Colosimo and stated the following in paras. 33 and 34 of his affidavit:

Mr. Colosimo had advocated that the Trust should get an up to date environmental appraisal of the Property because of the known use as a foundry prior to its sale to the defendant the D’Andrea Group Inc. by the defendant Chrysler Canada Inc. Mr. Colosimo had advocated obtaining the environmental appraisal both in correspondence and at meetings with us.

Brudenell and Reid, the principles [sic] opinion and that Chrysler not only had cleaned up the Property pursuant to the Ministry of Environment regulations, that Chrysler still would be liable in the event that the Property turned out to be environmentally challenged.

67Mr. Riley was cross-examined on his affidavit. Mr. Riley was specifically referred to all of the correspondence from Mr. Colosimo, including the excerpts set out above.

68In relation to Mr. Colosimo’s conclusion in the letter dated March 3, 1999, Mr. Riley was asked:

MR. BRESNER: Q. And he states, quote, “in conclusion on the issue of the environmental condition of the Property it is my opinion that you should retain an environmental engineer to review the issue and report to you on same”. And my question to you Mr. Riley, is [sic] “the Trust did not do that, did it?”

A. As far as I know, I don’t believe they did. They may have relied on representations made by Benchmark.

69Further, Mr. Riley was cross-examined about his understanding or belief about Mr. Colosimo’s advice respecting the ability to pursue litigation against previous owners:

170. MR. BRESNER: Q. And I’m asking you beyond what’s on the written page, because we can all read that, from the discussions that were had with Mr. Colosimo did you understand that he disagreed with the advice you were receiving from Benchmark which I take it was don’t bother with an environmental assessment because you can always sue the prior owner?

A. Yes, it says that in my affidavit we agreed that the principals at Benchmark both advised me that Mr. Colosimo was wrong in his opinion and Chrysler had not only cleaned up the Property but did so pursuant to the Ministry of the Environment regulations, that Chrysler would still be liable in the event that the Property turned out to be environmentally challenged.

171. Q. Right and was there a discussion with Mr. Colosimo about that when he told you that in fact, that advice from Brudenell and Reid was wrong? That he disagreed with?

A. Did I have a conversation with him? I can’t recollect. I’m not sure when I had a conversation with Otto Colosimo.

70Further in his examination, Mr. Riley indicated the following:

174. Q. So clearly, if I’m understanding what you’re saying, what you’ve said in your affidavit, you relied on Brudenell and Reid of Benchmark in deciding not to accept Mr. Colosimo’s recommendation, that you do an environmental assessment prior to closing this transaction?

A. Yes, I didn’t and based on the minutes of the trustees meeting I don’t see a direction there for that.

175. Q. For the retention of an environmental engineer?

A. Yes.

176. Q. So you’re agreeing with me then that what you relied on in proceeding without an environmental assessment was the advice you received from Brudenell and Reid?

A. Yes.

71Therefore the plaintiffs ignored Mr. Colosimo’s opinions, recommendations and warnings relating to environmental risks. They did not undertake any assessments or retain any experts prior to their acquisition of the Property.

The complicating fact of a further appraisal of the Property prior to closing

72Mr. Colosimo pointed out to Mr. Kechego that The D’Andrea Group Inc. had purchased the Property from Chrysler in 1989 for $1,200,000 which included the land to be acquired by 1317424 Ontario Inc. plus another small parcel.

73Mr. Riley stated in his affidavit that Mr. D’Andrea had provided the Band with an appraisal of the Property indicating a value as at December 31, 1991 of $3 million. In his March 3, 1999 memo Mr. Colosimo observed that this appraisal had been prepared for litigation purposes for a law firm and stated it could not be relied on for any other purposes. Mr. Colosimo’s memo included a caution that this appraisal report could not be relied on to establish current value of the Property, that it was general information only and the value was based on highest and best use at that time.

74Mr. Colosimo further noted in his memo that 1317424 Ontario Inc. was to pay The D’Andrea Group Inc. $1,810,050; that the purchase price for a 50% interest in the shares on 1317424 Ontario Inc. was that same price and that the share purchase agreement stated that the value of the Property was $3,620,100 on the basis that Mr. D’Andrea was bringing “equity” into the project as one of the previous owners of the Property.

75Mr. Riley indicated in para. 31 of his affidavit that on March 16, 1999 he instructed Mr. Colosimo that the Band would “withdraw” from the Agreement of Purchase and Sale. However, the Band received a further appraisal of the Property dated March 18, 1999 prepared by RSJ Holdings Inc. indicating a fair market value as of March 16, 1999 of $4,755,000.

76Mr. Riley now believes that this appraisal, delivered within two days after he had instructed Mr. Colosimo the Band would not purchase the Property, was obtained for ulterior motives. In para. 35 of his affidavit he stated as follows:

In my view, in order to save the commission due to Benchmark on the closing of the transaction, Benchmark and Brudenell went to RSJ Holdings Inc., (formerly Lansink & McIver Limited) on or shortly before March 16, 1999 to try to obtain, at the last minute, and to save the purchase of the Property (and, their commission) an attractive appraisal of the Property.

77In any event, after receiving the appraisal, the Band proceeded to complete the purchase. As Mr. Riley explained in paras. 36 and 37 of his affidavit:

In fact, The Trust received an appraisal prepared by Ben Lansink on behalf of RSJ Holdings, which appraisal was recommended by Brudenell and Benchmark, dated March 18, 1999. By such Appraisal, the Property was appraised to have a fair market value as of March 16, 1999, of $4,755,000.00. That appraisal was received ten days prior to the closing of the transaction and within two days after I had instructed Mr. Colosimo to avoid the transaction of purchase and sale of the Property. …

On the basis of this new appraisal and the Certificate of Environmental Warranty to be received from The D’Andrea Group we instructed Mr. Colosimo to close the transaction.

78On his cross-examination, Mr. Riley made clear that the Band would not have purchased the Property unless it received the Certificate of Environmental Warranty from Mr. D’Andrea (question 207) and that the Band had the Statement of Decommissioning that had been issued by the Ministry of the Environment (question 209).

79The Property was again appraised in November 1999. As Mr. Riley deposed in para. 38 of his affidavit, “it was not until after the transaction was closed on March 31, 1999 that we became aware that the March 18, 1999 appraisal by R.S.J. Holdings was significantly inflated”.

80The plaintiffs are also pursuing a remedy in this action against Benchmark, Mr. Brudenell and RSJ Holdings Inc. I pause here to note that at the hearing of this motion, counsel for Benchmark and Mr. Brudenell made no submissions but noted that Benchmark disputes the assertions of fact made against them by the plaintiffs.

81I further pause to note here that not only have there been criminal and civil litigation against Mr. D’Andrea but the conduct of Mr. Fazio, one of the defendants in this action who acted for Mr. D’Andrea and who incorporated 1317424 Ontario Inc., has been scrutinized and questioned. Mr. Fazio was involved in disciplinary hearings of the Law Society of Upper Canada respecting his involvement in the transaction. The plaintiffs have also alleged claims against Mr. Fazio and the law firm of George Murray Shipley and Bell in this action.

The completion of the sale of the Property by The D’Andrea Group Inc. to 1317424 Ontario Inc. in 1999

82The sale of the Property to 1317424 Ontario Inc. was completed on March 31, 1999.

83On closing, The D’Andrea Group Inc. delivered to 1317424 Ontario Inc. “a Certificate of Environmental Warranty” which provided the following:

In consideration of completing the above referenced transaction and in accordance with the provisions of the Agreement of Purchase and Sale relating thereto, the vendor warrants that the subject Property is free from any hazardous wastes or toxins as defined by Ontario law and that any clean-up of the subject Property shall have been to the standards of cleanliness for the subject Property such that residential or commercial development shall be allowed on the subject site.

84Mr. Riley on his cross-examination acknowledged that the warranty from The D’Andrea Group Inc. would continue beyond the closing of the purchase transaction.

287. Q. In the middle of that paragraph it says this warranty shall survive closing and a certificate for such warranty shall be provided on closing from the vendor. Does that answer your …

A. Yes.

288. Q. So that was there from the outset, you were going to be getting this certificate that would survive closing, right?

A. Yes

85On the cross-examination of his affidavit, Mr. D’Andrea at questions 73 and 74 acknowledged that the environmental warranty he gave to the plaintiffs was a different warranty than the one obtained from Chrysler in 1989 and that, while the Chrysler warranty terminated on closing, the warranty he gave survived closing.

Are these circumstances suitable for a summary judgment motion?

86The plaintiffs take issue with Chrysler’s assertion that summary judgment is appropriate in this case. They assert that it is not in the interest of justice to resolve this litigation in a summary fashion nor will this motion provide a fair and just adjudication of the issues in dispute and there are genuine issues requiring a trial.

87They emphasize, as they set out in para. 47 of their factum, that this matter is “predominately ready to proceed to trial with most of the procedural steps necessary already completed”; the litigation has been “moving steadily forward since 2008 with all the parties working towards conducting an efficient trial”; witness lists have been exchanged; requests to admit have been served and responded to; all expert reports, other than Chrysler’s response to the stigma damages report, have been exchanged; and, document and exhibit brief preparation is well under way.

88The plaintiffs observe that Chrysler has had eight years to bring this motion; “the parties are now at the finish line of this long and arduous litigation with resources having been put toward trial preparation”; any appeal of a decision on this motion “will complicate the conduct of, or may delay the hearing of, the peremptory trial”; and “there are multiple parties and numerous counsel involved in this litigation which has a complex factual matrix where each of the parties played a crucial role in the ultimate purchase, negligent clean-up and continued contamination of the Property”.

89The plaintiffs are particularly critical that the only affidavit evidence provided by Chrysler on this motion has been from one of its counsel and there is no affidavit from Mr. Hansen, who is listed as a witness on Chrysler’s behalf at trial. They also assert that representatives from the MOE will be critical to the trial. The plaintiffs have summoned former ministry employees who were directly involved in the 1989 process and they assert that their “evidence will be critical for the court’s evaluation of the circumstances and facts of this case and the issue of negligence and the representations made by Chrysler”.

90The plaintiffs list 16 issues which they assert are genuine issues requiring a trial at para. 56 of their factum as follows:

(i) Is the Property currently contaminated?

(ii) If there is a finding that the Property is still contaminated does the Statement of Decommissioning afford any defence to Chrysler?

(iii) What is the evidence of the MOE [the Ministry of the Environment] regarding the remediation of the Property and the drafting of the terms of the Statement of Decommissioning and what is the effect of Chrysler’s failure to register it on title as was required?

(iv) Was Chrysler and its agents negligent in the remediation of the Property?

(v) Does Chrysler owe a duty of care to the plaintiffs?

(vi) Does a lack of privity of contract between Chrysler and the Chippewas preclude finding a duty of care to exist?

(vii) Does s. 99 of the Environmental Protection Act, R.S.O. 1990 c. E.19 provide the plaintiffs with a right to compensation?

(viii)Did Chrysler make representations regarding the remediation of the Property to the public?

(ix) Were these misrepresentations negligent?

(x) Was it reasonable for the Chippewas to rely on these misrepresentations?

(xi) Is Chrysler liable for the damages that flow from these misrepresentations?

(xii) Whether Chrysler is liable for failing to warn subsequent owners/occupiers of the Property of the potential continued contamination of the Property?

(xiii)What compensation are the Chippewas entitled to?

(xiv)Are stigma damages recoverable by the plaintiffs?

(xv) Are punitive damages recoverable by the Chippewas?

(xvi)Are the plaintiffs contributorily negligent?

91The plaintiffs submit that the “alleged experts”, which Chrysler relies on, are “solely academic critiques of the methodology and results of the plaintiffs’ own expert reports”. They are critical that Chrysler’s experts have never attended at, or took samples from, the Property. In any event, the plaintiffs oppose the ordering of any type of mini-trial to resolve the conflicting expert evidence.

92Mr. Riley made a passionate plea to the court that Chrysler remain in the action in his affidavit at paras. 56 and 57 as follows:

56. I firmly believe that the Chippewa deserve their day in court in order for justice to be done and that this matter cannot be resolved simply on the basis of a motion. We are simply requesting that this matter proceed to trial so that all of the evidence that the Plaintiffs have to give by viva voce can be can be heard and appreciated by the court.

57. I understand from my counsel that this matter is proceeding to trial in any event with all the remaining defendants in September 2016 and is peremptory on all parties. It is my belief on behalf of the Chippewas that it is imperative that Chrysler be one of the parties at the trial, for without the representations aforesaid made by Chrysler, the Chippewas would not be saddled with this Property.

93This perspective was similarly outlined in paras. 92 – 94 of the plaintiffs’ factum as follows:

Quite frankly, it is inconceivable to the plaintiffs that Chrysler brings this motion to dismiss this case summarily based on an affidavit from an associate at the defendants’ law firm and from alleged environmental experts who have not collected and bagged one shovel of dirt from the site. Further, Chrysler has put forward no appraisal evidence to rebut the expert opinion evidence of Dan Tapping with respect to stigma damages.

Chrysler’s actions should be addressed at a full trial and hearing of these issues. The Chippewas are simply asking this court to have this matter proceed to trial as is scheduled, as they are prepared to do, and that there be a full hearing of the issues to determine the liability of Chrysler and the other defendants in this action.

This is not a case for summary judgment. Not every case should be disposed of by this new test. This is a case where the interest of justice cries out for a full hearing of this matter with viva voce evidence and all parties involved.

94On the other hand, Chrysler’s position is that there is no genuine issue requiring a trial with respect to any of the plaintiffs’ claims against Chrysler and this motion serves as the most just, expeditious and least expensive determination of the action on its merits.

95As Chrysler notes in its Notice of Motion at para. 33, “the question whether an owner of contaminated land owes a duty to all subsequent non-immediate purchasers of that land to remediate that land regardless of whether it caused or contributed to its contamination is a question of law, as is the question of the effect of the merger of Chrysler’s environmental warranty on the closing of the sale to The D’Andrea Group and the question of whether Chrysler can be liable for stigma damages arising from contamination to which it did not contribute”.

96Chrysler’s position is that there is no evidence that it was negligent in remediating the Property; it owed no duty of care to the plaintiffs in any event; there is no evidence of any negligent misrepresentation; there was no reliance on any representations made to the public at large, and to have done so would have been patently unreasonable in the circumstances; to the best of Chrysler’s knowledge at that time, the Statement of Decommissioning was true and accurate; and lastly, there is no evidence to support a claim for stigma damages and, to the contrary, Chrysler remediated the Property to the level required by the MOE and its purchaser, The D’Andrea Group Inc.

97As earlier outlined, the plaintiffs in their responding materials on this motion, have filed reports from Dr. Donald J. Pinchin and Mr. Robert Tossell. Dr. Pinchin has concluded that the Property remains contaminated and the clean-up by Chrysler in 1989 was inadequate to meet the prevailing standards at that time. Mr. Tossell has also opined, based on samples he has taken, that the Property is currently contaminated and in 1989 the soil was contaminated beyond the acceptable parameters as of that time.

98Also as earlier outlined, Chrysler has retained a number of experts, Mr. Dan Bunner, Dr. Carol Aziz, and Dr. Eric Chatfield. In addition, the third party NA Waters Systems, LLC has retained Mr. Jim Phimister. Consideration of Mr. Phimister’s opinion on this motion is contentious and I thus I will not reference it. Chrysler’s experts criticize the methodology utilized by the plaintiffs’ experts and they opine that Chrysler met the applicable standards when it decommissioned the Property.

99The position of Chrysler in relation to this competing expert evidence is set out in para. 40 of its factum: “the expert evidence only becomes relevant if the Plaintiffs can successfully establish that, notwithstanding the doctrines of merger and caveat emptor, FCA [Chrysler] owed a duty to subsequent purchasers of the Property to remediate it to a standard beyond that required by the MOE in 1989”.

100Chrysler also asserts as set out in para. 102 of its factum that if I conclude that Chrysler owed a duty to remediate the Property to the plaintiffs and I am not satisfied that the Statement of Decommissioning is sufficient evidence that such duty was met, “the question of whether that duty was fulfilled will fall to be determined on the basis of the expert evidence filed by the parties. To the extent that there are any issues that cannot be determined based on the record presently before this honourable court, the most efficient manner by which to deal with the issues would be to call the experts to provide viva voce evidence pursuant to r. 20.04(2.2).”

101This motion and its evidentiary record raise the issue of whether there is a genuine issue for trial as to (i) whether Chrysler owes a duty of care to the plaintiffs; (ii) whether a lack of privity of contract between Chrysler and the plaintiffs preclude finding a duty of care to exists; (iii) whether s. 99 of the Environmental Protection Act provide the plaintiffs with a right to compensation; (iv) whether Chrysler made representations regarding the remediation of the Property to the public; (v) whether it was reasonable for the plaintiffs to rely on these misrepresentations; and, (vi) whether Chrysler is liable for the damages that flow from these misrepresentations?

102In other words, what must be determined on this motion is whether there is a genuine issue for trial with respect to Chrysler’s liability to the plaintiffs pursuant to the allegations in the Amended Fresh as Amended Statement of Claim.

103I disagree with the plaintiffs’ submission that it is necessary to address the question of whether there is a genuine issue as to whether (i) the Property is currently contaminated; (ii) whether the Statement of Decommissioning affords any defence to Chrysler; and (iii) whether Chrysler and its agents were negligent in the remediation of the Property.

104I am satisfied that a trial is not required to hear the evidence of the MOE regarding the remediation of the Property and the drafting of the terms of the Statement of Decommissioning. Nor is a trial required to consider “the effect of Chrysler’s failure” to register the Statement of Decommissioning on title as was required. The plaintiffs had actual notice of, and received a copy of, the Statement of Decommissioning before the Property was purchased; they were aware there was an environmental issue respecting the Property before they entered into an agreement to purchase the Property; and, they negotiated a warranty from their vendor that the Property was “free from any hazardous wastes or toxins as defined by Ontario law and that any clean-up of the subject Property shall have been to the standards of cleanliness for the subject Property such that residential or commercial development shall be allowed on the subject site”.

105The questions referencing compensation, stigma damages, punitive damages and contributory negligence must be addressed only if there are genuine issues for trial respecting Chrysler’s liability to the plaintiffs.

106Considering the issues of law that must be addressed on this motion, I do not find Chrysler’s motion record deficient because it contains only affidavits from counsel. No issue was taken with respect to the content of such affidavits.

107I turn now to address the question of whether there are genuine issues for trial with respect to the plaintiffs’ claims against Chrysler.

Is there a genuine issue for trial with respect to the plaintiffs’ claim against Chrysler in negligence? Does the doctrine of caveat emptor apply? Does Chrysler owe a duty of care to the plaintiffs? Does s. 99 of the Environmental Protection Act create a statutory duty in favour of the plaintiffs?

108In Mustapha v. Culligan of Canada Ltd., [2008] S.C.C. 27, at para. 3, McLachlin C. J. restated the well settled necessary elements for a negligence action as follows:

A successful action in negligence requires that the plaintiff demonstrate

1. that the defendant owed him a duty of care;

2. that the defendant’s behaviour breached the Standard of Care;

3. that the plaintiff sustained damages; and

4. that the damages were caused, in fact and in law, by the defendants’ breach.

109It is clear that Chrysler’s warranty to The D’Andrea Group Inc. merged on closing. The doctrine of caveat emptor provides that absent liability pursuant to an ongoing warranty a vendor of Property does not remain liable to the purchaser of that Property (see: Fraser-Reid v. Droumtsekas, [1981] S.C.R. 720).

110In Antorisa Investments Ltd. v. 172965 Ontario Ltd., Lax J. observed that the principle of “buyer beware” is a fundamental principle of common law even in relation to the issue of contamination. As she observed at para. 74:

The common law does not imply any warranty that real estate is sold at any particular state or is fit for any purpose – to the contrary, the governing principle is caveat emptor: …the courts have consistently demonstrated an unwillingness to assist purchasers who failed to heed the dictum, “buyer beware”, including those who purchase contaminated lands.

111This fundamental principle of common law makes sense. As noted by Chrysler, the proposition advanced by the plaintiffs would provide them with greater rights against Chrysler than The D’Andrea Group Inc., the party who entered into the agreement of purchase and sale with Chrysler, even though Chrysler’s representation and warranty to The D’Andrea Group Inc. was expressly stated to not survive closing. Respectfully, such a proposition makes no sense and, as noted in para. 63 of Chrysler’s factum, would “ignore centuries of jurisprudence regarding the sale of real property and the principles of caveat emptor by making a vendor responsible indefinitely into the future to successive purchasers of a property for matters for which that vendor was expressly excused by its direct purchaser”.

112The plaintiffs assert that the doctrine of caveat emptor does not apply to latent defects. However, I cannot accept the plaintiffs’ assertion that their claim is based on a latent defect in the Property. I agree with the observation of Chrysler summarized at para. 69 of its factum that the plaintiffs “were explicitly aware of the state of the Property they were purchasing from The D’Andrea Group. The plaintiffs’ own lawyers gave advice to the plaintiffs with respect to the need to retain an environmental engineer to assess the clean-up work conducted on the Property, and further advised that the plaintiffs could not look to FCA [Chrysler] for clean-up costs given the fact that the warranty provided by FCA [Chrysler] to The D’Andrea Group merged on closing”.

113The plaintiffs also argue, as stated at para. 63 of their factum, that “the law regarding the remediation of environmentally contaminated real property provides for liability tantamount to strict liability against the owner and vendor of the contaminated property who have no privity of contract or special relationship with the vendor”.

114They cite the decision of the Ontario Court of Appeal in Heighington v. Ontario, 1987 CanLII 5417 (ON SC), 60 O.R. (2d) 641, 41 D.L.R. (4th) 208 at 222 (“Heighington”), the decision of the Supreme Court of Canada in Ryan v. Victoria (City), 1999 CanLII 706 (SCC), [1999] 1 S.C.R. 201, 168 D.L.R. (4th) 513 (“Ryan”), another decision of the Ontario Court of Appeal in Berendsen v. Ontario, 2009 ONCA 845, 182 A.C.W.S. (3d) 1100 (“Berendsen”) and two other decisions Sassy Investments Ltd. v. Minovitch (1996), 21 C.E.L.R. (N.S.) 126, 64 A.C.W.S. (3d) 1245 (B.C.S.C.) (“Sassy Investments Ltd.”) and Tridan Developments Ltd. v. Shell Canada Products Ltd., 2002 CanLII 20789 (ON CA), 57 O.R. (3d) 503, [2002] O.J. No. 1 (“Tridan”) as analogous authorities for the proposition set out in para. 75 of their factum that “the issue of failure to completely remediate contaminated property is analogous to the situation of latent defects. If, as, in Heighington, Berendsen, Sassy Investments and Tridan Developments there was a dangerous or noxious contaminant which could affect the health of future occupants/owners of the property, there was a duty to fully remediate the property (in Tridan to a “pristine condition”), or else the polluter/vendor of the property is liable for the clean-up of the property, regardless of whether there is a contractual privity or special relationship with that owner/occupier”. I turn now to a consideration of those cases.

115In Heighington, the provincial government, which unknowingly sold land contaminated by radioactive soil, was not liable for breach of contract. However, the government was found liable for negligence in allowing the development of contaminated lands. Significantly, there is an important difference between the facts in Heighington and the facts in this case. The Court of Appeal upheld the trial judge's finding that the government was negligent for failing to remove radioactive material placed on a farm in the 1940s. However, how the duty was established is critical to the analysis. The court stated the following at para 5:

The Public Health Act, R.S.O. 1937, c. 299, imposed a duty on the Department of Health to take such measures as necessary to abate conditions injurious or dangerous to health: see ss. 3, 4, 78-88. At p. 653 of his judgment the trial Judge made his findings of negligence for the 1945-46 period. We would prefer to state the negligence in this way: In all the circumstances, the provincial officials were negligent in that, in breach of the Public Health Act, they failed to take reasonable steps to cause to be removed such radioactive material, including contaminated soil, as might endanger the health of future occupants of the land.

116Thus, Heighington does not support the existence of a duty under the Environmental Protection Act, R.S.O. 1990 c. E. 19. (EPA). Specifically, s. 99(2) of the EPA does not create a legislative basis that would create a duty of care (as discussed more fully below). The 1937 Public Health Act that governed the dispute in Heighington imposed a duty on the Department of Health to take necessary measures to abate conditions injurious or dangerous to health. Therefore the Heighington case is easily distinguishable from this matter

117Ryan involved an injury claim by a motorcyclist. The Supreme Court of Canada considered the defence of statutory authority in relation to a railway's use of "flangeway" gaps that were wider than the minimum set by regulation. The court concluded that the decision to exceed the minimum by more than one inch created a considerably greater risk than was absolutely necessary. The court deemed this to be a matter of discretion that was not an "inevitable result" of complying with the regulations. The present matter is quite different. In the case at bar, the defendants were not exercising a discretionary statutory power, or any statutory power for that matter.

118Berendsen is also distinguishable from the facts before the court here. In Berendsen the Ontario Ministry of Transportation ("MTO"), was acting in a private capacity when it deposited waste asphalt on a private property. Unlike the present matter, this was done pursuant to a contractual arrangement between the MTO and the property owner.

119In Berendsen at para. 72 Laskin J. states the following:

In the present case, I am not persuaded there is any evidence that the harm occurring to the Berendsens was reasonably foreseeable when Ontario deposited waste material on the dairy farm. Absent evidence, the trial judge's finding that Ontario breached the standard of care was an error of law. Since Ontario did not breach the duty it owed to the Berendsens, the Berendsens' negligence action must fail. Although this result may seem harsh in the light of what we now know about the environment, it is inappropriate to use our current knowledge to measure conduct occurring more than 30 years ago.

120Thus, the Ontario Court of Appeal was clear that the test of reasonable foreseeability relates to whether the risk of harm was reasonably foreseeable when the conduct in question occurred. The Court held that the appellant, MTO, was not negligent when it buried waste material on the respondent Berendsen's farm because there was considerable evidence that the risk of harm to the well water and to the herd was not reasonably foreseeable in the 1960s.

121I find that the plaintiffs are wrong in asserting that Berendsen stands for the proposition that a governmental authority owes a duty at large to private property owners to stop all possible environmental injuries to third parties. Such a duty of care has not been accepted by common law.

122In Sassy Investments Ltd. the Court found that the previous owner was liable for the negligent misrepresentations made to the plaintiff regarding the condition of the gas station prior to the sale. Shell, the gas supplier and a third party defendant to the action, was not liable for negligent misrepresentation. It did not make any representation about the condition of the station which a reasonable purchaser would have relied on. Shell, however, was liable for its improper training of the previous owners in measuring of tank levels and recording of information. Shell voluntarily assumed training responsibility. The plaintiff was found to be contributorily liable because it failed to conduct an independent environmental assessment.

123Further, unlike the present matter, where the warranty from Chrysler merged on closing, in Sassy Investments Ltd. there was a specific ongoing warranty. In addition, there was an indemnification clause protecting the purchaser should any of the warranties or representations be found to be untrue. There is no such indemnification clause in this case.

124Tridan dealt with the contamination of soil from a fuel spill which migrated to a neighbouring property. In Tridan the trial judge at para 1 stated the following:

The Shell property is owned by the defendant, Shell Canada Products Limited ("Shell"). As a result of the Leak, approximately nine thousand litres of gasoline escaped into the soil on the Shell property. Upon discovering the Leak, Shell notified the appropriate government authorities and took steps to repair the Leak, determine the extent of the contamination and remediate the contamination. Subsequently, in the spring of 1991, Shell removed and replaced the contaminated soil and redeveloped the gasoline station.

125In Tridan, Shell accepted responsibility as they had caused the spill and therefore the circumstances are distinct from those in issue here. As will be discussed further below, there is no allegation in the Fresh as Amended Statement of Claim that Chrysler has caused or contributed to the contamination nor is there an allegation that Chrysler was responsible for a spill or discharge during its ownership of the property.

126I agree with the proposition put forward by Chrysler in para. 70 of its factum that “given the well-established principle of caveat emptor and the lack of any warranty surviving the closing of the FCA/D’Andrea agreement, there is simply no basis on which to impose liability on FCA [Chrysler] with respect [sic] any alleged damages allegedly suffered by the plaintiffs associated with the property” unless there is a duty of care owed to the purchaser.

127I therefore next turn to the question of whether there is a genuine issue for trial as to whether Chrysler owes a common-law duty of care to the plaintiffs as a subsequent purchaser of the Property.

128I agree with the proposition put forward by Chrysler in para. 71 of its factum that “there is no reported authority which supports the proposition that a former owner of a property owes a duty of care at common-law to a subsequent purchaser of the property”.

129In Biskey v. Chatham-Kent (Municipality), 2012 ONCA 802, the Court of Appeal noted that the trial judge had found that a seller of property owed a duty to a subsequent purchaser. The court stated that given that the appeal could readily be disposed of on another ground it would make “no comment on the trial judge’s conclusion as to a duty of care and nothing in these reasons are intended to affirm” that finding.

130As a result, because the duty of care advanced by the plaintiffs has not yet been recognized, it is necessary to consider what is commonly referred to as the “Anns test” established by the House of Lords in Anns v. Merton London Borough Council (1977), [1978] A.C. 728, which has been adopted by the Supreme Court of Canada in Cooper v. Hobart, 2001 SCC 79, [2001] 3 S.C.R. 537.

131As recently stated by the Supreme Court of Canada in Knight v. Imperial Tobacco Canada Ltd., 2011 SCC 42, [2011] 3 S.C.R. 45, at para. 39:

At the first stage of this test, the question is whether the facts disclose a relationship of proximity in which failure to take reasonable care might foreseeably cause loss or harm to the plaintiff. If this is established, a prima facie duty of care arises and the analysis proceeds to the second stage, which asks whether there are policy reasons why this prima facie duty of care should not be recognized: Hill v. Hamilton Wentworth (Regional Municipality) Police Services Board, 2007 SCC 41, [2007] 3 S.C.R. 129 (S.C.C.).

132As the Supreme Court of Canada observed in Cooper v. Hobart at para. 30: “The proximity analysis involved at the first stage of the Anns test focuses on factors arising from the relationship between the plaintiff and the defendant. These factors include questions of policy, in the broad sense of that word. If foreseeability and proximity are established at the first stage, a prima facie duty of care arises.”

133The second stage of the Anns test involves the question of whether there are reasons, notwithstanding the proximity between the parties established in the first part of the test, that tort liability should not be recognized. At para. 30 of Cooper v. Hobart, the Supreme Court of Canada stated “at the second stage of the Anns test, the question still remains whether there are residual policy considerations outside the relationship of the parties that may negative the position of a duty of care. Therefore, policy is relevant at both the proximity stage and the residual policy concern stage of the Anns test.

134In order to establish a duty of care is owed in their favour, the plaintiffs must establish that the harm complained of was reasonably foreseeable; there is sufficient proximity between them as a subsequent owner of the Property and Chrysler as a one-time owner of the Property such that it would be fair and just to impose a duty of care; and, there must be no residual policy reasons for declining to impose such a duty.

135In Cooper v. Hobart, the Supreme Court of Canada at para. 33 referenced its earlier decision in Hercules Management as follows:

As this Court stated in Hercules Management Ltd. v. Ernst & Young, 1997 CanLII 345 (SCC), [1997] 2 S.C.R. 165 (S.C.C.) at para. 24, per La Forest J.:

The label “proximity”, as it was used by Lord Wilberforce in Anns, supra, was clearly intended to connote that the circumstances of the relationship inhering between the plaintiff and the defendant are of such a nature that the defendant may be said to be under an obligation to be mindful of the plaintiff’s legitimate interests in conducting his or her affairs. [Emphasis added.]

136The court observed further at para. 34:

Defining the relationship may involve looking at expectations, representations, reliance, and the property or other interests involved. Essentially, these are factors that allow us to evaluate the closeness of the relationship between the plaintiff and the defendant and to determine whether it is just and fair having regard to that relationship to impose a duty of care in law upon the defendant.

137With respect to the second stage of the Anns test, the court observed in Cooper at para. 37 that residual policy considerations “are not concerned with the relationship between the parties, but with the effect of recognizing a duty of care on other legal obligations, the legal system and society more generally. Does the law already provide a remedy? Would recognition of the duty of care create the spectre of unlimited liability to an unlimited class? Are there other reasons of broad policy that suggest that the duty of care should not be recognized?”

138In Fullowka v. Royal Oak Ventures Inc., 2010 SCC 5, [2010] 1 S.C.R. 132, 2010 CarswellNWT 10, at para. 26 the court indicated that the question of proximity is “concerned with whether the case discloses factors which show that the relationship between the plaintiff and the defendant was sufficiently close and direct to give rise to a legal duty of care, considering such factors as expectations, representations, reliance and the property or other interests involved (citations omitted). Proximity is not confined to physical proximity, but includes “such close and direct relations that the act complained of directly affects a person whom the person alleged to be bound to take care would know would be directly affected by his careless act”.

139The court observed further at para. 27 in Fullowka that in an earlier decision, Childs v. Desormeaux, 2006 SCC 18, it had noted that, “there are at least three factors which may identify the situations in which the law has recognized such duties (paras. 38 – 40). The first is that the defendant is materially implicated in the creation of the risk or has control of the risk to which others have been invited. The second is the concern for the autonomy of the persons affected by the positive action proposed … The third is whether the plaintiff reasonably relied on the defendant to avoid and minimize risk and whether the defendant, in turn, would reasonably expect such reliance”.

140Here the facts do not disclose a relationship of proximity in which failure to take reasonable care might foreseeably cause loss or harm to the plaintiffs. In other words, the relationship between Chrysler and the plaintiffs is not sufficiently proximate to impose a duty of care. Considering expectations, representations and reliance, it is not just and fair having regard to the relationship between Chrysler and the plaintiffs to impose a duty of care in law upon Chrysler. The plaintiffs purchased the Property 10 years after Chrysler sold it. The plaintiffs had the opportunity to protect themselves from harm by assessing the known environmental risk prior to their purchase of the Property. The plaintiffs were aware that Chrysler’s warranty to The D’Andrea Group Inc. did not survive the closing of that transaction. The plaintiffs secured a Certificate of Environmental Warranty from their vendor which survives the closing of their purchase transaction.

141There is no genuine issue for trial as to whether a prima facie duty of care arises in these circumstances.

142Counsel did not address one of the issues listed by plaintiffs’ counsel as a genuine issue for trial - whether there is a genuine issue as to whether Chrysler is liable for failing to warn subsequent owners/occupiers of the Property of the potential continued contamination of the Property. However, in my view for reasons analogous to those set out above, there is not genuine issue for trial in relation to that question.

143Furthermore, even if I had found there was a genuine issue for trial as to as to whether a prima facie duty of care arises in these circumstances, there is no genuine issue for trial respecting the second stage of the Anns test – the question of whether there are public policy reasons for declining to impose such a duty. The plaintiffs’ claim is to recover economic loss; this loss has arisen in a commercial context; Chrysler voluntarily remediated the Property to satisfy the contractual condition imposed by The D’Andrea Group Inc.; Chrysler’s remediation and the Statement of Decommissioning satisfied the terms of its contract with its direct purchaser; as Chrysler points out, imposing liability on Chrysler to the plaintiffs would create a disincentive to property owners to voluntarily remediate their lands; and, creating the proposed duty will create risks of indeterminate liability to an indeterminate category of people – all policy reasons to not find that Chrysler owed a duty of care to subsequent owners of the Property. (see Martel Building Ltd. v. Canada, 2000 SCC 60, [2000] 2 S.C.R.860)

144The remaining question to address in this section is whether there is a genuine issue as to whether s. 99 of the Environmental Protection Act creates a statutory duty in favour of the plaintiffs.

145Section 99(2) of the Environmental Protection Act provides as follows:

(2) Her Majesty in right of Ontario or in right of Canada or any other person has the right to compensation,

(a) for loss or damage incurred as a direct result of,

(i) the spill of a pollutant that causes or is likely to cause an adverse effect,

(ii) the exercise of any authority under subsection 100 (1) or the carrying out of or attempting to carry out a duty imposed or an order or direction made under this Part, or

(iii) neglect or default in carrying out a duty imposed or an order or direction made under this Part;

(b) for all reasonable cost and expense incurred in respect of carrying out or attempting to carry out an order or direction under this Part,

from the owner of the pollutant and the person having control of the pollutant.

146Counsel for Chrysler confirmed that during the time that Chrysler owned the Property, the corresponding section was s. 87(2) which was identical in all material respects.

147The “owner of the pollutant” is defined in Part X of the Environmental Protection Act, both in the current version and the version in force during Chrysler’s ownership of the Property, as “the owner of the pollutant immediately before the first discharge of the pollutant, whether into the natural environment or not, in a quantity or with a quality abnormal at the location where the discharge occurs”.

148“Person having control of the pollutant” is defined as “the person and the person’s employee or agent, if any, having the charge, management or control of a pollutant immediately before the first discharge of the pollutant, whether into the natural environment or not, in a quantity or with a quality abnormal at the location where the discharge occurs”.

149A “spill” is defined in Part X of both the current and previous version of the Environmental Protection Act when used with reference to a pollutant, as a discharge into the natural environment, from or out of a structure, vehicle or other container that is abnormal in quality or quantity in light of all the circumstances of the discharge.

150As Chrysler points out, there is no allegation by the plaintiffs that Chrysler caused or contributed to the contamination present at the Property nor is there any allegation that Chrysler was responsible for any “spill” on the Property.

151I agree with Chrysler that the plaintiffs’ claim in negligence against Chrysler is based on their allegation that Chrysler failed to properly remediate the Property and not an allegation that Chrysler owned or controlled any pollutants at the time they were discharged onto the Property.

152Therefore, as a result, s. 99 of the Environmental Protection Act and its predecessor s. 87 do not apply to Chrysler as it was not the “owner of the pollutant” or the “person having control of the pollutant” and there was no “spill” or “discharge” during Chrysler’s ownership of the Property.

153I turn now to address the issue of whether there is a genuine issue for trial with respect to the plaintiffs’ claim based on misrepresentation.

Is there a genuine issue for trial with respect to the plaintiffs’ claim based on misrepresentation?

154In R. v. Cognos Inc., 1993 CanLII 146 (SCC), [1993] 1 S.C.R. 87, at para. 33, the Supreme Court of Canada set out the five elements that must be satisfied in order to establish a claim in negligent misrepresentation as follows:

(i) there must be a “special relationship” between the representor and the representee;

(ii) the representation in question must be untrue, inaccurate or misleading;

(iii) the representor must have acted negligently in making the misrepresentation;

(iv) the misrepresentee must have relied, in a reasonable manner, on said misrepresentation; and

(v) the reliance must have been detrimental to the representee in the sense that damages resulted.

155In Hercules Management Ltd. v. Ernst & Young, 1997 CanLII 345 (SCC), [1997] 2 S.C.R. 165, at para. 24, the Supreme Court of Canada expanded further on the concept of special relationship as follows:

The label “proximity”, as it was used by Lord Wilberforce in Anns, supra, was clearly intended to connote that the circumstances of the relationship inhering between the plaintiff and the defendant are of such a nature that the defendant may be said to be under an obligation to be mindful of the plaintiff’s legitimate interest in conducting his or her affairs. Indeed, this idea lies at the very heart of the concept of a “duty of care”, …in cases of negligent misrepresentation, the relationship between the plaintiff and the defendant arises through reliance by the plaintiff on the defendant’s words. Thus, if “proximity” is meant to distinguish the cases where the defendant has a responsibility to take reasonable care of the plaintiff from those where he or she has no such responsibility, then in negligent misrepresentation cases, it must pertain to some aspect of the relationship of reliance. To my mind, proximity can be seen to inhere between a defendant-representor and a plaintiff-representee when two criteria relating to reliance may be said to exist on the facts: a) the defendant ought reasonably to foresee that the plaintiff will rely on his or her representation; and b) reliance by the plaintiff would, in the particular circumstances of the case, be reasonable. To use the term employed by my colleague, Iacobucci, J., in Cognos, supra at p. 110, the plaintiff and the defendant can be said to be in a “special relationship” whenever these two factors inhere.

156The plaintiffs submit that Chrysler made misrepresentations regarding the remediation of the Property and ought to have reasonably foreseen that a purchaser and subsequent owner of the Property would reasonably rely on the promises made by Chrysler, particularly taking into account what Chrysler stated at the public meeting in 1989 as more previously set out.

157The plaintiffs refer to the findings of the Ontario Court of Appeal in Black v. Lakefield (Village), 41 O.R. 3(d) 741, where the court found sufficient proximity between an developer and a municipality even though the municipality made representations to a provincial ministry and not to the developer. The court found that implicitly the representation had been made to the developer as well.

158The plaintiffs also refer to the fact that a special relationship was found to exist between a municipality and a property owner as a result of public statements made by city officials, including statements contained in a news release in Executive Holdings Ltd. v. Swift Current (City), 1984 CanLII 2233 (SK QB), [1985] 1 W.W.R. 341(Sask. Q.B.).

159In Black, the municipality advised the overseeing ministry that water service was available to the proposed subdivision and that it was not premature to subdivide the land. The ministry then approved the plan of subdivision and the plaintiff purchased the Property. The representations made by the municipality were negligent and false. The court concluded that the municipality ought reasonably to have foreseen that the plaintiff would rely on its representation and that the plaintiff's reliance was entirely reasonable. At para. 29 Goudge J.A. states:

The class of those who might rely on the representation as the respondent did is strictly limited. It is those who could seek to proceed with the subdivision of the property. Given that Lakefield was fully aware that its representation was being made in the context of a proposed plan of subdivision, it must be taken to know of the class of those who could properly complain about its misrepresentation, namely those who would seek to subdivide the property. Moreover, the representation was made for the very purpose of facilitating the subdivision of the property. It was in just this context that the respondent used the representation…

160In Executive Holdings, the court held that a city owes a duty of care to other owners when making public statements regarding property development schemes, but so long as such statements are neither erroneous nor inaccurate, an owner whose tenants commence to relocate on the basis of such statements and impending development has no claim against the city, since his loss is similar to that of any other owner where development proposals fail to materialize.

161Unlike the circumstances in Black, it cannot be said that the plaintiffs are members of a strictly limited class who might rely on Chrysler’s alleged misrepresentations. Similarly, these circumstances are distinct from those before the court in Executive Holdings where public statements were relied on by current developers of property. For essentially the same reasons that I concluded that there was no proximity and no duty of care owed to the plaintiffs by Chrysler, I am satisfied that there is no genuine issue that a “special relationship” exists between Chrysler and the plaintiffs as a subsequent purchaser of the Property.

162Furthermore, even if there were a genuine issue for trial that (i) a “special relationship” existed between Chrysler and the plaintiffs; (ii) Chrysler made a representation that was untrue, inaccurate or misleading; and, (iii) Chrysler acted negligently in making such a misrepresentation, there is no evidence that the plaintiffs relied in a reasonable manner on such misrepresentations.

163The plaintiffs’ position in essence, is outlined in paras. 54 and 55 of Mr. Riley’s affidavit as follows:

54. I can advise that these representations were made to the public at large and were within the public domain. They are a matter of public record in Sarnia, Ontario and they were well known within the local community. They were certainly brought to our attention. Quite simply, everyone in the Sarnia community was aware of Chrysler’s promise to clean up the Holmes Foundry. The Chippewas were no different. We knew of these promises. We believed the Property had been cleaned up in accordance with Chrysler’s representations. We relied on these promises when we purchased the Property in good faith and I believe that Chrysler should be made to honour these promises in this action.

55. I can honestly say that if the Chippewas would have known that these representations from Chrysler would turn out to be false, we would never have purchased the Property or got into the deal with John D’Andrea.

164Mr. D’Andrea, a “convicted fraudster” as Chrysler noted in its materials, swore an affidavit in response to this motion at the request of counsel for the plaintiffs. He deposed that he personally attended the February 1989 public information session convened by Chrysler and thus “did have first-hand information about Chrysler’s representations”.

165He went on to state in paras. 7 and 8 of his affidavit the following:

My recollection of the public information session was that Chrysler wanted to convey the general message that is was being a “good corporate citizen” by cleaning up the Holmes Foundry property which they had owned. They also wanted to assure the Sarnia residents that Chrysler would take whatever steps were necessary to ensure that the Property was cleaned and safe for the residents and Sarnia. I can further verify that this ongoing theme of Chrysler’s responsibility to the community of Sarnia and its residents was ever presence [sic] at the public information session. I can also advise that Chrysler’s representatives reiterated to me on several occasions that they would be selling me a clean Property.

Quite frankly, I would not have bought the Property if I did not believe the representations from Chrysler to myself and the promises they made at this public information session.

166Mr. D’Andrea then went on to state that he believed the representations made by Mr. Henly and Mr. German at the public information session and the representations made by Chrysler in the press release distributed at the public information session.

167Mr. D’Andrea was cross-examined on his affidavit. With respect to the representations made by Chrysler that he outlined in his affidavit, Mr. D’Andrea acknowledged that the quotations he outlined, which he alleged were representations, were provided to him by plaintiffs’ counsel and that none of the documents containing those quotations were in his files.

168Mr. D’Andrea also acknowledged that by the time the public information session had taken place, he had already agreed to purchase the Property from Chrysler and had entered into an Agreement of Purchase and Sale. Therefore it cannot be said that Mr. D’Andrea placed any reliance on what was said by Chrysler’s representatives at the public meeting in contracting to buy the Property.

169He also stated the following in answer to question 78:

Well, to the best of my knowledge they were also available that evening at these meetings, but I was in communication with these guys on site most every day during the time of the decommissioning. And I can’t quote verbatim 20 years later what they had to say, but they were basically assuring me all the way along that they were spending an incredible amount of money and they were going to do it right, and they were great corporate citizens, and they would never abandon Sarnia and Point Edward, and this is going to be the cleanest site in Sarnia. That’s what they – that’s what they assured me on a daily basis.

170In any event, Mr. D’Andrea also acknowledged on his cross-examination that he was aware that the Property was contaminated and that a clean-up was to take place by Chrysler. He further acknowledged that he had accepted the Statement of Decommissioning in satisfaction of his condition in the Agreement of Purchase and Sale that he would complete the purchase of the Property once Chrysler had provided written confirmation from the MOE that Chrysler had completed the environmental clean-up of the Property according to standards presently acceptable to the Ministry.

171Mr. D’Andrea further acknowledged that the Statement of Decommissioning noted that building and scrapped steel equipment remained on the site; that Chrysler did not demolish the building as part of the clean-up; and, that the Statement of Decommissioning stated that should environmental problems be identified during demolition of the buildings by future owners, remedial action would be required.

172In addition, Mr. D’Andrea acknowledged he also obtained his own report from J. D. Norman Consultants Inc. prior to his purchase of the Property.

173Mr. D’Andrea further acknowledged that the representations and warranties made by Chrysler respecting the environmental clean-up would not survive the closing of the transaction, which as earlier outlined was different than the Certificate of Environmental Warranty he delivered to 1317424 Ontario Inc.

174In relation to the plaintiffs’ purchase of the Property, the evidence does not establish that the plaintiffs relied on any statements made by Chrysler in connection with their purchase of the Property. As I previously set out, it was Mr. Riley’s evidence that the plaintiffs would not have purchased the Property without receiving the ongoing environmental warranty from Mr. D’Andrea.

175With respect to the misrepresentations Mr. Riley referenced at paras. 51, 52 and 53 of his affidavit, as previously set out, Mr. Riley was asked the following questions on his cross examination:

233. Q. Okay, now in your affidavit if we start at paragraph 50 under the heading Chrysler’s misrepresentations and 51 and so on, you quote from a number of documents. And you of course were not at this meeting on February 22, 1989?

A. That is correct.

234. Q. 1989 you weren’t even aware of this Property, were you?

A. 1989?

235. Q. Ten years before you bought it?

A. Correct, yes.

236. Q. And you’re not aware of anybody from the Band being present at that meeting, right?

A. I’m not aware but we do have a fairly sizeable membership of about a thousand people. I’m not aware. There may have been someone there, but I’m not sure.

237. Q. No one’s told you they were there?

A. Correct.

176Mr. Riley also acknowledged that the copy of the speech given by Mr. Henly on February 22, 1989 was produced by the lawyers for Chrysler during this litigation and Mr. Riley acknowledged that it was possible that he received that document for the first time during the course of these proceedings.

177It was put to Mr. Riley that in addition to the copy of Mr. Henly’s speech, he had obtained the copy of Mr. German’s speech and the press release because they were produced by Chrysler’s lawyers in this proceeding. He was asked at question 246, the following:

246. Q. All right, but you’ve attached these to your affidavit and many of them have my firm’s document number on them. Do you recall when you first received the documents? Was it when your lawyers put together the affidavit for you?

A. I suppose, yes. I’m trying to remember.

247. Q. To the best of your recollection that’s when you first saw these documents?

A. That and it being part of – I’m trying to recall being at meetings at the past – I can’t recall.

248. Q. Of course, I mean this lawsuit’s been going on for a number of years so I take it it’s impossible to answer precisely when you may have seen the productions of the parties?

A. Right.

178Further with respect to his assertions about the Sarnia community being aware of what Chrysler had promised he was asked the following questions:

266. Q. No, and I wasn’t suggesting that they are. And when you say everyone in the Sarnia community was aware of Chrysler’s promise to clean up the Sarnia Community, I take it you have not canvassed everyone in the Sarnia community?

A. Yes, that is true.

267. Q. So that is a bit of hyperbole and speculation on your part?

A. I think it’s a recent observation in that a major industrial complex decommissions, closed down, I think a good number of people within Sarnia would be aware of that.

278.Q. Do you know first-hand from anybody in Sarnia what they were aware of at the time?

A. Well, I didn’t ask anyone specifically about it.

282. Q. All I’m trying to get to is that that’s an assumption you’re making but you have not actually spoken to people or done any sort of investigation to determine what people in Sarnia knew or didn’t?

A. Yes, I didn’t ask anyone.

179Therefore the evidence from Mr. Riley was that he was not aware of the Property in 1989; he was not aware that any Band member attended the public information session held in 1989; the documents which form the basis for the assertion that Chrysler misrepresented the condition of the Property were produced by Chrysler’s lawyers during this litigation; the plaintiffs relied on other advice and information in deciding to purchase the Property and in particular the Band would not have purchased the Property without receiving the ongoing environmental warranty from Mr. D’Andrea.

180On this evidentiary record, I find there is no genuine issue requiring a trial on the question whether the plaintiffs relied in a reasonable manner on alleged misrepresentations by Chrysler when they decided to purchase the Property. The alleged misrepresentations were made to the public at large a decade prior to their purchase of the Property. Reliance on such representations is not reasonable in the face of the advice and warnings from their legal counsel and the environmental warranty obtained from The D’Andrea Group Inc. Further, the evidence does not support a finding that the alleged representations by Chrysler were actually relied on by the purchasers.

Conclusion

181For the foregoing reasons, Chrysler’s motion for summary judgment is granted.

182As a result, I have not addressed the alternative relief requested by Chrysler – the striking of the plaintiffs’ claim for stigma damages.

183I request that counsel endeavour to resolve the issue of costs. If necessary they may make brief submissions on the issue of costs within 60 days.

“Justice L. C. Leitch”

Justice L. C. Leitch

Released: February 2, 2016

CITATION: French v. Chrysler, 2016 ONSC 793

COURT FILE NO.: 46729

DATE: 20160202

ONTARIO

SUPERIOR COURT OF JUSTICE

BETWEEN:

Mark French, a Trustee of the Chippewas of the Thames Land Claim Trust, on behalf of 1317424 Ontario Inc. and Mark French, a Trustee of the Chippewas of the Thames Land Claim Trust

Plaintiffs

– and –

Chrysler Canada Inc., Benchmark Real Estate Services Canada Inc., Charles Brudenell, George Murray Shipley & Bell, Frank Fazio, RSJ Holdings Inc. and the D’Andrea Group Inc.

Defendants

– and –

176695 Canada Inc., Chester Engineers, Inc. and N.A. Water Systems, LLC

Third Parties