COURT FILE NO.: CV-13-477271
MOTION HEARD: 20180912
REASONS RELEASED: 20190118
SUPERIOR COURT OF JUSTICE – ONTARIO
BETWEEN:
TRE MEMOVIA DEVELOPMENTS LTD.
Plaintiff
- and-
1491316 ONTARIO INC., ANWAR HAMDE, A.P. 1 HOUR CLEANERS LTD., AHED ANWAR HAMDE and NEJAT ADEM MENFOUT
Defendants
BEFORE: MASTER D. E. SHORT
COUNSEL: Gregory Dimitriou Fax: 905-820-7417
-counsel for the Plaintiff
Liane Langstaff Fax: 416-863-3410
-counsel for the Defendants
REASONS RELEASED: January 18, 2019
Reasons for Judgment
I. Background
[1] This is a case where an order for an inspection of a property is sought by the plaintiff, some six years after the action was commenced.
[2] In 2013, Tre Memovia Developments Ltd. (the “’Plaintiff”) brought an action against Mr. Anwar Hamde, Ms. Nejat Adem Menfout, 1491316 Ontario Inc., and A.P. 1 Hour Cleaners Ltd. (collectively the "Defendants").
[3] The Plaintiff in this 2013 action is the former owner of property municipally known at 2055 and 2057 Danforth Ave, Toronto ("Plaintiff's lands"). Prior to commencing this action it was constructing a twelve story high rise residential condominium building containing 148 residential units together with underground parking.
[4] The Defendant, 1491316 Ontario Inc, is the owner of an adjacent property ("Hamde lands") at 2061 Danforth Avenue. The Defendant, Ahmed Hamde, is the sole director and owner of 1491316 Ontario Inc. This company purchased the Hamde lands on October 17, 2001.
[5] The Defendant, A.P. 1 Hour Cleaners Ltd. (“AP1”) operates a dry-cleaning business on their property. That company has been in existence since 1979. The Defendant, Ahmed has been a shareholder in AP1 and a director since January 15, 1996. He purchased the remaining interest in AP1 in 2001.
[6] The Plaintiff is bringing a motion under Rule 32.01 for an order allowing its expert access to the Hamde lands for the purposes of conducting invasive testing to ascertain whether the soil below the Hamde lands contains chlorinated solvents, namely, PCE (Tetrachloroethylene) and TCE (Trichloroethylene), to determine whether chlorinated solvents are in the groundwater below the Hamde lands, and to determine the directional flow of the groundwater under the Hamde lands.
[7] The Defendants have declined granting access for such invasive testing at this stage in the proceeding.
II. Previous Expert Examination
[8] Initially, prior to there being any construction, the Plaintiff hired Terraprobe Inc., which is a consulting geotechnical and environmental engineering firm, to prepare a Phase 1 and a Phase 2 Environmental Site Assessments.(“ESA”)
[9] The Phase 1 ESA contains a description of current and past uses of the Plaintiff's lands and lands within a 250 meter radius. The historical occupancy records respecting the Plaintiff's lands do not list it as ever having a dry cleaning business located thereon. As well, a search of the Ecolog ERIS Ltd. data bases did not list any businesses registered as a generator of halogenated solvents.
[10] However, the ERIS data base search is said to have identified a number of listings within 250 meters of the subject property. There were only two registered generators of halogenated solvents. The adjacent property was one and the second was a dry-cleaning business located at 1984 Danforth Avenue, approximately 95 meters northwest of the Plaintiff's lands.
[11] AP1 is the adjacent property to the east and is the closest registered user of halogenated solvents to the Plaintiff's lands. The historical occupancy records for 2061 Danforth Avenue reflect occupancy information as a dry cleaning business as far back as 1968.
[12] The Phase 1 ESA report identified these two dry-cleaning businesses as potential environmental concerns. A Phase 2 Assessment was recommended to determine the quality of the soil and groundwater. In the Phase 2 ESA, soil and groundwater samples were collected. The testing revealed that in the ground water beneath the Plaintiff's lands there were elevated levels of PCE and TCE along the eastern boundary, where the dry-cleaning business at AP1 exists, and, at the western boundary of the property, which levels exceed the requirements set by the Ministry of the Environment. The investigation also detected PCE and TCE in the groundwater near the central portion of the subject lands. No impacts were detected in the soil samples analyzed.
III. “Potentially Contaminating Activities”
[13] In its August 2012 Phase One ESA report Terraprobe identified that the dry cleaning operations at 2061 Danforth Avenue, and "At Your Service Dry Cleaning Inc.", to be Potentially Contaminating Activities (PCAs) in relation to the Plaintiff's land, and subsequently identified the northeast and northwest portions of the property as Areas of Potential Environmental Concern (APECs) in relation to these PCAs.
[14] The moving party’s factum observes, with respect to the 2012 report, that:
“…VOCs were identified by Terraprobe to be the contaminants of Potential Concern relating to these PCAs/APECs. No other potential sources of VOCs were identified on or within the vicinity of the Plaintiff's Iand.”
[15] However, Terraprobe identified in its Updated Phase Two Conceptual Site Model report, impacts of two VOC compounds (PCE and TCE) in the groundwater beneath the site at seven locations. “Terraprobe inferred in its Updated Phase Two Conceptual Site Model report, the groundwater flow direction to be from the northeast towards the southwest.” [my emphasis]
[16] Subsequently, soil vapour investigation of the Plaintiff's lands was conducted to assess the potential for migration of vapours from the ground water entering into the basement of the new building. I again note that these steps were taken prior to any construction taking place,
[17] The Plaintiff’s factum asserts:
“…Figure No. 6 of this report is a: "Groundwater Contours and Flow Direction Plan". This Figure indicates that the ground water flow is in a south and westerly direction which would clearly indicate or suggest that the contamination in the ground water originated from AP1. The results of this investigation indicate exceedances of Soil Vapour Gas Tier 2 Criteria for Residential - Coarse Material Standards for Trichloroethylene at two deep probe locations (TRP MW3-12 and TRP ME5-2S-12) in the first sampling event pertaining to the groundwater.
IV. Development of the Condominium Project Proceeded
[18] The development of the Plaintiff's lands was delayed. The Risk Assessment process prevented the construction project from progressing at a normal pace. The drilling of additional boreholes in 2014 and the installation of monitoring wells after the Phase 2 ESA Report caused a delay in construction and additional costs.
[19] The moving party asserts that on September 17, 2012, notice of the contamination was given to AP1. Neither, prior to or at any time after that notice was given, did the Defendants incur the cost of conducting any soil investigation of their own lands to ascertain whether their property a source of the contamination.
[20] The Defendants never requested an opportunity to sample the fill being removed from the plaintiff’s active construction site. Similarly the plaintiff apparently chose not to take nor preserve any such samples. The position of Mr. Hamde conveyed on September 25, 2012, was that there is no reason to suspect his operations caused or contributed to PCE contamination on the Plaintiff's lands.
[21] Mr. Hamde provided the Ministry of the Environment with "Annual Reports for Dry Cleaners", for the years 2005 to March, 2012. The 2005, 2006, 2007, 2008 and 2009 Reports disclosed purchases of Tetrachloroethylene (“PERC”).
[22] Mr. Hamde operated his dry cleaning store throughout construction of the condominium project. He continued to use PERC up until March 2013, “despite the notice of contamination.” However such use does not establish any escape of the product from his property.
[23] Toronto Inspections Ltd. ("TIL") was hired to conduct a Geo-Technical Investigation at the Plaintiff's lands. This report is dated September 6, 2006. TIL was also hired to conduct a Phase II Environmental Site Assessment. This report is dated November 30, 2006. The purpose of the Phase II ESA was to determine the sub-soil and groundwater conditions on site. In 2011, TIL was hired to conduct a further Geo-Technical Investigation at the Plaintiff's lands. This report is dated June 6, 2011. The testing that was done as part of Phase II did not find chlorinated solvents in the soil or groundwater.
[24] In my view, it is significant that the plaintiff apparently was satisfied with the extent of available evidence accumulated when this action was commenced.
V. Previously Obtained Data and Experts
[25] Paul Bowen is a professional engineer and was a principal of Terraprobe Inc., he was actively involved in the construction project. Mr. Bowen provided assistance respecting the contamination issues. Mr. Bowen was to be the Plaintiff's expert; however, he retired in 2016.
[26] His retirement complicated matters as the plaintiff expected him to prepare an Expert's Report, which he never completed. As a consequence the Plaintiff hired another engineering firm, AiMS Environmental as its expert.
[27] Significantly, it appears that Bowen never recommended to the Plaintiff a site inspection be conducted of the Defendants business or property nor that an intrusive investigation of the Hamde lands be undertaken.
[28] AiMS was ultimately retained on or about August 11, 2017. AiMS desired to conduct a detailed inspection of the site to identify critical areas within the dry-cleaning business and the property. It was submitted that such an inspection would assist with the next item of their work, notably, the layout of boreholes and monitoring wells for the subsequent phase of sampling and testing. A tentative borehole plan would be developed. For such steps, an Access Agreement, with respect to the Hamde lands, would clearly need to be put in place.
[29] The Defendants consented to a site inspection and a Site Access Agreement was signed. AiMS conducted the site assessment on November 24, 2017. On January 26, 2018 AiMS put forward a proposed work plan for conducting an intrusive investigation including drilling of boreholes, monitoring wells, collection of soil and groundwater samples for the purpose of investigating possible sources of the PERC.
[30] On February 15, 2018, the Defendants advised that they were not consenting to the investigations set out in the AiMS proposal. Hence this motion.
VI. Proposed Inspection by New Expert
[31] It is my understanding that the proposed invasive testing at the Hamde lands 8 days of drilling, (with 6-8 hours of drilling per borehole) being focused mostly in the basement of the Defendant’s building, with few exterior locations. In particular, monitoring wells installed will be furnished with manhole covers. Groundwater sampling is also planned for a day or two including purging of standing water and drawing of samples. The moving part asserts that: “The fieldwork is therefore unlikely to affect the business operations of the dry-cleaner.”
[32] At some point the AiMS work plan was amended. AiMS has been able to find an experienced contractor who is able to utilize different drilling equipment for the proposed testing at the Hamde property. The amended proposal would permit deeper drilling to the location of the groundwater.
[33] In an affidavit sworn May 17, 2018, Frank Magno states that he is an officer and a director of the Plaintiff and addresses the role anticipated for his initial expert.
[34] He deposes that both before and after discoveries, he met with Mr. Bowen. The meeting dates are July 26, 2016 and November 14, 2016, and that at these meetings, Mr. Bowen agreed to provide an Expert Report:
“This Report was to address a number of important issues in the litigation;
(a) the source of the contamination in the groundwater. Mr. Bowen stated to me that he was of the opinion that the source of the contamination was A.P. 1;
(b) Mr. Bowen agreed to look for and attach to his Report photographs of the basement of A.P.1;
(c) the spoliation issue raised by the Defendants' in their Statement of Defence. In particular, he was to address the issue of the degradation of the samples taken and the Ministry of the Environment's requirement as to how long samples are to be kept;
(d) the groundwater flow direction which he stated to me to be in a south and westerly direction; and
(e) that the dry cleaning business, known as At Your Service Dry Cleaning, located at 1984 Danforth Avenue could not be the cause or the source of the groundwater contamination given its distance to the subject lands and the directional flow of the groundwater.”
[35] The affidavit further states
“Although Mr. Bowen told me of his upcoming retirement, he did not specify the date. Mr. Bowen stated to me that despite his retirement, he would still be actively involved in this matter and would be participating at the Trial as a witness for the Plaintiff. Both my solicitor, Gregory Dimitriou, and I were awaiting his report.”
[36] However, it is reported that:
“On or about June 23, 2017 …Mr. Bowen confirmed that he had retired. He also stated to Mr. Dimitriou that he would not be rendering any further assistance, not completing the report that he started, and would not be assisting at the Trial.”
[37] The resulting impact is capsulized in the following paragraph:
“36. Once Paul Bowen departed Terraprobe the relationship between myself and Terraprobe changed dramatically. It seemed as if Terraprobe did not recognize the long-standing relationship it had with Tre Memovia on the construction project and in the litigation. This resulted in a change in engineering firms.”
[38] As a consequence, shortly after their initial contact, AiMS was retained on or about August 11, 2017. Mohammed Jagani is a professional engineer and the principal of Aims. The affidavit notes:
“38. Mr. Jagani advised me that before they could do so they wanted to conduct a site inspection of the dry cleaning business and the property at 2061 Danforth Ave. Aims wanted to conduct a detailed inspection of the site to identify critical areas within the dry cleaning business and the property. The site visit would give them an opportunity to assess the appropriate drilling equipment for any invasive testing. The initial inspection would inform them of the next item of work, notably, the layout of boreholes and monitoring wells for the subsequent phase of sampling and testing. A tentative borehole plan would be developed. An Access Agreement would be put in place and then proceed with drilling soil and groundwater sampling, screening of the samples and laboratory testing.”
[39] In support of its request for a current round of testing the Plaintiff’s factum asserts:
Redevelopment of the Plaintiff's site has not penetrated, interfered or altered the hydrodynamics beneath or proximal to the site, nor has there been any other development in the vicinity of the site which may have done the same. There is no reason to believe the groundwater conditions beneath the site are in any way, shape, or form, different from those identified at the time of the original Plaintiff investigations conducted prior to 2012….
Whilst the shallow ground conditions beneath the Plaintiffs lands have changed, the ground conditions beneath the Hamde land have not. As PCE/TCE impacts in soil are persistent, such impacts (if present) will likely still remain. Accordingly, if soil impacts are found, and the hydrogeological conditions beneath the Hamde land support groundwater flow towards the Plaintiffs property, in absence of plausible PCE/TCE sources upgradient from the Hamde land, it can be concluded that the Hamde land is the most likely source of TCE/PCE groundwater impacts at the Plaintiff's lands.
[40] While I appreciate the asserted justification for further testing at this time, it seems to me the foregoing supports a conclusion that the desired searches could have been made prior to the commencement of construction and that the defendants are in no way responsible for the tactical extent of inspection decisions made on the Plaintiff’s behalf while the property was intact and undisturbed.
[41] Again, I find support for maintaining the status quo in these extracts from the plaintiff’s factum, highlighted by me, describing what was and what was not done at the time of construction:
…There are no established guidelines or requirements that would determine the number of soil samples to be taken, and there is no requirement that a certain percentage of soil be tested. The engineering firm TIL, collected soil samples from two (2) boreholes for volatile organic compounds (VOC's) analyses. Similarly, Terraprobe collected soil samples from three (3) boreholes which were tested for VOC's. The number of soil samples tested for VOC's is the number they considered sufficient based on their judgment.
The soils sampling at five (5) borehole locations by TIL and Terraprobe, was conducted at various depths at each borehole location. The borehole logs appended to their respective reports reflect the depth of the soil samples removed that were tested. …. A total of fifty-two (52) soil samples were inspected for visual and olfactory evidence of volatile hydrocarbon impacts, of which 39 were also screened for volatile hydrocarbons using portable hydrocarbon vapour detection equipment. None of the 52 soil samples collected were reported to exhibit any visual or odours suggestive of volatile hydrocarbon impacts. Also, the results of soil sample screening did not reveal elevated levels of volatile hydrocarbon vapour readings in the shallow soil samples. Based on these findings, the two (2) engineering firms did not require further soil sampling for VOC's. The Plaintiff's expert infers that there was no evidence of on-site sources of VOC's which is consistent with the site history notably that there was no usage of VOC's on-site.
If the laboratory testing of soil samples reflected VOC impacts, the soils on the Plaintiff's property would have been deemed contaminated, and additional testing would have been warranted for characterization for off-site disposal of the excavated soils at a controlled facility as hazardous or non-hazardous Certainly, [the soil] receiving site would have insisted upon additional testing of the soil. The fact that the soils exhibited no visual or olfactory impairment and had no detectable concentrations of VOCs and no other elevated levels of contaminates, enabled them to be disposed of at an uncontrolled receiving site for re-use as clean fill.
[42] These extracts indicate the extent of investigation that was done which it would seem formed the basis the Plaintiff’s cause of action as commenced in 2013. There would appear to have been a considered decision not to “dig deeper” or to look for further information relating to possible contamination which could risk discovering problems that might further delay the project.
VII. Asserted Basis for Motion
[43] The Plaintiff’s factum concludes with these assertions:
- The Plaintiff is moving for an Order under Rule 32.01. The Court may make an Order for inspection where it appears to be necessary for a proper determination in an issue in the proceeding. The Plaintiff asserts that this inspection is necessary to determining if there is chlorinated solvents in the soil and the groundwater of the Hamde lands, and to ascertain the directional flow of the groundwater beneath the Hamde lands.
THE PURPOSE OF THE INVASIVE TESTING
- The purpose of the testing is to confirm or refute that the source of the contamination is from the soil or ground water beneath the Hamde lands and to confirm the directional flow of ground water.
[44] As well, I have some difficulty in establishing the connection between an apparently unproven suspicion and the grounds asserted in the 2013 claim that defendants are to be held responsible for the manner of construction selected by the plaintiff This is particularly of some concern to me, if there was no contemporary evidence in 2013 of the alleged contamination being the responsibility by any of the defendants.
[45] Ultimately the Plaintiff’s factum asserts::
“TESTING IS NECESSARY - AN ESSENTIAL PART OF FACT FINDING
- AiMS is of the opinion that its investigation will be useful and probative of the issue of the source of the alleged contamination. The detection of such contaminants on a sample of the soils beneath the Hamde lands would be definitive proof of the impact. Confirmation that the direction of groundwater flow beneath the Hamde lands towards the Plaintiff's lands would be definitive proof that the contaminant released beneath the Hamde lands resulted in impacts on the groundwater beneath the Plaintiff's lands.
[46] On the question of “necessity” the factum continues:
- Necessity is something that can be inferred from the Motion materials or even the Pleadings. An allegation that VOCs seeped from one property to another is enough to establish necessity. On this type of Motion, it is not necessary to delve into significant details as to the actual merits of the litigation. Here, on this Motion, Terraprobe was of the opinion that the likely source of the contamination originated from the adjacent dry cleaning business. AiMS holds the same opinion. [my emphasis]
[47] I am guided in my approach to this case by Rule 1.04:
General Principle
1.04 (1) These rules shall be liberally construed to secure the just, most expeditious and least expensive determination of every civil proceeding on its merits.
Proportionality
(1.1) In applying these rules, the court shall make orders and give directions that are proportionate to the importance and complexity of the issues, and to the amount involved, in the proceeding.
[1] If “new” information which is sought to support the plaintiff’s claims was available prior to construction, having regard to the discoverability principle, it seems to me, “too late in the day” to seek fresh evidence to modify or expand the “grounds” relied upon in bringing the action in the first place, in 2013.
[48] The Defendants have raised the issue of spoliation of evidence. I do not regard this type of allegation, as was suggested, amounting to an allegation of fraud. In this instance, there is no evidence from the testing that was done by Terraprobe or TIL of the soil that there was any chlorinated solvents in the soil and there is no evidence that contamination evidence was removed or excavated. However the plaintiff acknowledges that soil “was removed not to hide evidence, but in furtherance of construction of a large condominium project.”
[49] That rational provides little solace to the defendant.
[50] The Defence alleges that when the Statement of Claim was issued the applicable limitation period had expired. The Defence points to the purchase of the property by this Plaintiff in 2010.
[51] However when the property was purchased in 2010, the only reports that existed was a TIL September 6, 2006 Geo-Technical Report and a TIL November 30, 2006 Phase 2 Environmental Report. TIL Phase 2 ESA contains information to the possible VOC's impact from the dry cleaning operation at AP1. No staining or odour in the soil samples was detected.
[52] The plaintiff asserts that the “VOC's were below lab detection.” It is submitted that there was “insufficient information in 2006 and 2010 to ascertain whether there was any VOC's in the Plaintiff's land. Further, the Defendants are applying the wrong test when it comes to knowledge as to when the limitation period starts. According to the Ontario Court of Appeal in Crombie Property Holdings Ltd, 2017 ONCA 16, 2017 ONCA16;406 D.L.R.(4th)252 it is improper to equate possible knowledge of potential hydrocarbon contamination or suspicion of such contamination with actual knowledge that the property was contaminated by hydrocarbons.
[53] But what does that say about the need for further testing now to support a cause of action here?
VIII. Defendants’ Position
[54] The Defendants’ factum points out:
Prior to commencing its action, the Plaintiff conducted intrusive investigations on its property in 2006, 2011 and 2012. Limited additional testing of the vertical extent of the contamination under the Plaintiffs Property was also undertaken in 2014. No intrusive investigations were conducted on the Hamde Property, and no request was made by the Plaintiff to access the Hamde Property for the purpose of conducting intrusive investigations prior to or at the time of the intrusive investigations conducted on the Plaintiff's Property.
In August 2017, eleven years after the Plaintiffs first intrusive investigations, almost five years after the destruction of the subsurface evidence and over four years after the Plaintiff brought its claim, the Plaintiff first sought access to the Hamde Property in order to conduct intrusive investigations on the Hamde Property.
[55] The Plaintiff's Property was made available for new development after a tragic fire in 2001 caused an explosion and destroyed the building at 2055 Danforth Avenue. One of the arsonists was killed and an accomplice was badly burned.
[56] After the fire, the buildings were demolished and fill was brought in from off-site. The Plaintiffs own consultant, Terraprobe reported that the historical placement of fill, the presence of fill stockpiles from previous demolished buildings, and “prior or current commercial or light industrial activities within the study area” were potentially contaminating activities and areas of potential environmental concern.
[57] In particular it is asserted with respect to JFC Property Inc,, a company related to the plaintiff :
“9. At the time JFC purchased the 2055 Danforth Avenue property in 1998, the property had been used for nearly twenty years as a hardware store, having been continuously rented to Woodbine Building Supply since 1978. The father of Mr. John Magno and Mr. Frank Magno owned and operated Woodbine Building Supply, and would have been familiar with the property and the neighbouring uses.”
In 2006, Toronto Inspection Ltd. ("TIL"), a geo-environmental consultant, conducted limited environmental testing of 2055 and 2057 Danforth Avenue on behalf of JFC. The environmental investigations consisted of drilling shallow boreholes. In its 2006 Phase II ESA, TIL reported that no continuous groundwater was found within the depth of its investigation. Furthermore, the 2006 Phase I and Phase II Reports were considered by TIL to be only a "preliminary" investigation "due to a very limited subsoil and groundwater data available". Consequently, TIL recommended and conducted a more extensive environmental investigation, including drilling additional boreholes and testing of soil in a 2011 geotechnical investigation.However, the Plaintiff purchased both parcels of land before these more thorough and diligent investigations were complete.
Notwithstanding the clear risk that it was purchasing contaminated land, the Plaintiff failed to test the groundwater at the Plaintiffs property for PCE or for any other chlorinated volatile organic compound, prior to acquiring the property.
Thus, the Plaintiff knew or ought to have known at the time it acquired the Plaintiffs Property, the property was contaminated. Insufficient due diligence was conducted at the time of sale regarding whether the land was suitable for condominium development and no Record of Site Condition ("RSC") was obtained. The Plaintiff failed to act as a reasonable buyer.”
[58] The Defendants therefore submit that, given that the purchase date was December 9, 2010, the limitations period for the Plaintiff to bring a claim for contamination expired on December 9, 2012. “The present claim was not brought until March 28, 2013, outside the allowed timeframe”.
[59] The resolution of that issue is best left for the trial judge. I see nothing that would enhance the request for invasive testing at this time.
IX. Defendant’s Business
[60] Mr. Hamde has worked on the premises since 1993. He became the sole owner of A.P. 1 on September 5, 2001. His evidence is that:
Dry cleaning with PCE, a product used in dry cleaning fluids, was always a very small part of Mr. Hamde's business as he generally used wet cleaning processes and made clothing alterations. By 2010, he purchased the efficient Sail Star dry cleaning machine, which further diminished the need for the PCE dry cleaning fluid.
Mr. Hamde received his last order of PCE in 2009. In March 2013, Mr. Hamde stopped using PCE altogether because he switched to a new dry cleaning machine that did not use PCE.
The PCE dry cleaning machines were located within a secondary containment drip tray capable of retaining the entire volume of dry cleaning fluid within the machine. No dry cleaning machines have ever been present on the basement level....
[61] Apparently the Magno family approached Mr. Hamde and the prior owner of the Hamde Property, Mr. DeLuca, several times throughout the years in an effort to purchase the Hamde Property for their condominium development, the last time being in 2012.
[62] The Defendants assert that it was after this last offer to purchase was not accepted, that the Plaintiff made allegations of liability in September 2012 and brought this claim in March 2013.
X. Construction Impacts
[63] Beginning in October 2012, the Plaintiff excavated the construction site in order to build the 12 story condominium. The Defendants contend that the excavation associated with the Plaintiffs construction of two levels of underground parking has almost certainly altered the geologic and hydrogeologic circumstances at the Plaintiff’s Property and the Hamde Property.
[64] The Plaintiff did not provide the Defendants with any advance notice of the excavation of the Plaintiffs Property. The Plaintiff at no point in time provided the Defendants with any proposed scope of work for the environmental investigations and at no point in time provided any opportunity for the Defendants' agents to attend, observe or take joint samples at the time of the intrusive investigations on the Plaintiffs Property.
[65] It has always been the Defendant's position that the excavation and removal of the contaminated fill constituted the destruction of evidence, or spoliation. This was noted in the Statement of Defence, served on April 25, 2013 and reiterated in the letters of the Defendants' counsel.
[66] Mr. McIelwain, the defendants’ expert opines that the Plaintiff's excavation and construction has irrevocably changed subsurface conditions, affecting the probative value of the investigation proposed by the Plaintiff.
XI. Delayed Request
[67] The Plaintiff first wrote to the Defendants' lawyer in September 2012, setting out the allegations that PCE contamination found on its property originated from the Hamde Property. The Plaintiff commenced this action in March 2013. In the years since the notification of liability and the delivery of the Statement of Claim, the Plaintiff gave no indication prior to this that it wanted to inspect the Hamde Property.
[68] The Plaintiffs first intrusive investigations were completed in 2006. “The last intrusive investigations completed prior to the destruction of evidence occurred in 2012. Limited additional testing occurred in 2014 to determine the vertical extent of the contamination under the Plaintiffs Property, but not the horizontal extent of the contamination.” The Plaintiff had those reports for several years without ever suggesting a need to inspect the Hamde Property.
[69] On June 3, 2016, then counsel to the Defendants, provided a draft Discovery Plan for the Plaintiff's review and comment. She received no comments from the Plaintiff’s counsel regarding the draft Discovery Plan and certainly no indication that the Plaintiff thought an intrusive investigation of the Hamde property was necessary to conduct discovery.
[70] The Plaintiffs request to conduct intrusive investigations on the Hamde Property was made on August 18, 2017, eleven years after the first intrusive investigation, five years after the excavation destroyed the subsurface evidence and four years after the action was brought.
[71] Quinn J. in Ontario District School Board 19 v. 553518 Ontario Ltd.), 49 C.P.C. (4th) 384 (Ont. S.C.J.), at para. 16, described the test of necessity as meaning "useful" or "probative" as follows:
"Necessity" has been held to mean "useful" or "probative of an issue" [ citations excluded]. Therefore, in my view, to establish "necessity" the moving party must show that there is a reasonable possibility the proposed test will reveal something useful for the trier of fact (that is, something which will assist the trier of fact in determining an issue in the proceeding) ...
[72] Quinn J. went on to observe that even if "necessity" is established, the court is not bound to authorize an inspection or testing, since the opening words of Rule 32.01(1) “bespeak a discretion in this regard”.
[73] For example, in Impact Demolition Ltd v. Mailey Developments Ltd, 2003 BCSC 259, 24 C.L.R. (3d) 125, at para. 24 a motion to inspect, made after the demolition and removal of the asbestos waste at issue, was not granted on the basis that it would not advance any issue in the litigation.
[74] As noted earlier in the present case, the proposed testing will not be useful or probative of the issue for which the testing has been proposed. It was Mr. McIelwain’s expert opinion that a proper evaluation cannot be completed at this stage since the Plaintiff's excavation and construction has irrevocably changed subsurface conditions.
[75] As Mr. McIelwain explained:
The soil and groundwater conditions that currently exist beneath the Plaintiff's Property are inarguably different ( and possibly significantly different) from the conditions that existed at the time of Terraprobe's findings reported in its 2012 Phase Two BSA, due to the disruption and alteration to the Plaintiffs Property associated with the redevelopment.
The redevelopment [of the Plaintiff's Property] has almost certainly altered the hydrogeologic circumstances at the Plaintiffs Property and on neighbouring properties to some radius of influence. Given the proximity of the Hamde Property to the Plaintiff's Property and the nature of the geologic and hydrogeologic conditions at both Properties, it cannot reasonably be concluded that the physical and chemical soil and/or groundwater conditions beneath the Hamde Property or the Plaintiff's Property are the same now as they were prior to redevelopment of the Plaintiff's Property.
[76] Even the Plaintiff's own consultant, Terraprobe, noted that the direction of the water table is affected by underground structures such as underground parking garages, such as that constructed by the Plaintiff. I find that proposed investigation would not be probative because the subsurface beneath the Plaintiffs Property and the Hamde Property has been substantially altered by the excavation.
[77] As Mr. McIelwain concluded, the proposed intrusive investigation of the Hamde Property and any resulting interpretations “cannot be confidently relied on to interpret historic groundwater quality, groundwater any constituent migration patterns or specific source of constituent identified in soil or groundwater during such investigation.”
[78] In my view there is good reason to conclude that the proposed intrusive investigations would not be sufficiently useful or probative because they would not definitively identify the source of contaminants at issue.
[79] In particular I note that Mr. McIelwain concluded the AiMS Proposal cannot “definitively identify the source of PCE and/or TCE impacts to groundwater at the Plaintiffs Property”.
[80] In sum, I am satisfied that the proposal to conduct the intrusive investigation on the Hamde Property is not useful or probative and will not lead to the proper determination of the issue for which it has been proposed.
[81] I find persuasive the argument that the prejudice that will be suffered by Mr. Hamde is not limited to the cost and disruption of the operations of a small business owner. An investigation of the Hamde Property after the destruction of the evidence by the Plaintiff would create an uneven playing field where the Plaintiff will have had an opportunity to conduct first-hand investigations on its own property and the Defendants' property, while the Defendants will have no such opportunity to conduct investigations of the Plaintiffs Property in an undisturbed condition.
[82] Ultimately I adopt the submission made on behalf of the Defendants:
“97. Even so, Mr. McIelwain emphasized that any conclusions by AiMS, even with the review and input of the Defendants' consultants, have one insurmountable flaw:
The insurmountable flaw in the AiMS Proposal is the practical inability to recreate the conditions that existed on the Plaintiffs Property prior to redevelopment. As such, the question of the source or sources of the PCE and TCE groundwater impact identified by Terraprobe at the Plaintiffs Property cannot be definitively resolved by findings potentially arising from the AiMS Proposal.”
XII. Laches
[83] I further am convinced the correct decision is to deny the inspection now sought, by virtue of the application of the long standing equitable doctrine of “Laches”.
[84] The Courts of Justice Act specifically preserves equitable remedies:
- RULES OF LAW AND EQUITY - (1) Courts shall administer concurrently all rules of equity and the common law.
(2) RULES OF EQUITY TO PREVAIL - Where a rule of equity conflicts with a rule of the common law, the rule of equity prevails.
[85] Black’s Law Dictionary includes these descriptions of the concept of laches:
laches (lach-iz). [Law French "remissness; slackness"] (14c) 1. Unreasonable delay in pursuing a right or claim - almost always an equitable one - in a way that prejudices the party against whom relief is sought. - Also termed sleeping on rights. …
"Early in its history, Chancery developed the doctrine that where the plaintiff in equity delayed beyond the period of the statute applicable at law, relief would be refused on the ground of laches even though no specific prejudice to the defendant was shown. Today, in most states, there are statutes of limitations applying to suits in equity. Despite these, however, the doctrine still holds that even if the delay is for a shorter period of time than that of the statute, it may still bar equitable relief if it is unreasonable and prejudicial to the defendant." John F. O'Connell, Remedies in a Nutshell 16 (2d ed. 1985).
- The equitable doctrine by which a court denies relief to a claimant who has unreasonably delayed in asserting the claim, when that delay has prejudiced the party against whom relief is sought. …
"The doctrine of laches ... is an instance of the exercise of the reserved power of equity to withhold relief otherwise regularly given where in the particular case the granting of such relief would be unfair or unjust." William F. Walsh, A Treatise on Equity 472 (1930).
[86] In my view the delay of the plaintiff to this late stage in the pre-trial proceedings meets the criteria necessary to also deny the relief sought in this case on equitable grounds.
XIII. Disposition
[87] I am therefore satisfied that the Plaintiff’s motion does not satisfy the test for overriding a property owner's rights by granting an intrusive investigation under Rule 32 at this stage of the proceeding.
[88] The Plaintiff’s motion is therefore dismissed with costs.
[89] In the circumstances, unless there were offers made which might impact on my award, I am awarding costs of this motion on a partial indemnity basis, payable by the plaintiff to the Defendants within 45 days.
[90] The parties are encouraged to agree on the quantum of costs. If no agreement is reached, Defendants’ counsel shall issue their cost submissions by January 30. Responding submissions on costs by the Plaintiff’s counsel shall be made within 15 days of receiving the Defendants’ cost submissions. All cost submissions must include a Costs Outline, should be no longer than five pages in length. The parties’ submissions including any brief reply should then be consolidated by the Defendants’ counsel and forwarded as a single package to my Assistant Trial Co-ordinator.
[91] If no costs submissions are received within sixty day from the date of release of these reasons, costs will be presumed to have been resolved between the parties.
Released: January 18, 2019
Master D. E. Short
DS/ R247