COURT FILE NO.: CV-12-443569 DATE: 2020/07/02 ONTARIO SUPERIOR COURT OF JUSTICE

BETWEEN:

1207717 ONTARIO INC. Plaintiff

• and - LEGGETT & PLATT CANADA CO. and GARLOCK OF CANADA LTD. Defendants

Counsel: Ryan Atkinson for the Plaintiff. Rosalind H. Cooper for the Defendant Leggett & Platt Canada Co. Irfan Kara for the Defendant Garlock of Canada Ltd.

HEARD: June 24, 2020

PERELL, J.

REASONS FOR DECISION

A. Introduction

[1] This is a motion and a cross-motion for an Order enforcing a Settlement Agreement between the Plaintiff, 1207717 Ontario Inc. (“1207717 Ontario”), and the Defendants, Leggett & Platt Canada Co. (“Leggett”) and Garlock of Canada Ltd. (“Garlock”). In the motion, the Defendant Leggett seeks a declaration that the Remedial Action Plan, as defined in the Settlement Agreement is deemed to be complete as of February 8, 2019. It seeks a mandatory Order that 1207717 Ontario take out an Order dismissing the action and the crossclaim. The Defendant Garlock supports Leggett. In its cross-motion, 1207717 Ontario seeks an Order compelling Leggett to undertake further groundwater quality testing, or in the alternative, it seeks an Order granting 1207717 Ontario access to conduct further groundwater testing. Neither party seeks to set aside the Settlement Agreement and to resume the litigation.

[2] For the reasons that follow, the motion is granted, the cross-motion is dismissed, and 1207717 Ontario’s action and the Garlock of Canada Ltd. crossclaim are dismissed without costs.

B. Procedural and Factual Background

[3] 1207717 Ontario owns a property at 80 Rutland Road, Etobicoke Ontario, where it operates a home décor manufacturing business. The adjacent property to the west, 66 Rutland Road, is owned by Leggett, which is a manufacturer of a diverse range of home and office products. 60 Rutland Road was formerly owned by Garlock.

[4] On January 9, 2012, 1207717 Ontario sued Leggett and Garlock for nuisance, trespass, and for a claim pursuant to the doctrine of Rylands v. Fletcher. 1207717 Ontario alleged that chlorine contaminants, including trichloroethylene, l-2-cis-dichloroethene and vinyl chloride, were migrating from Leggett’s property through the groundwater onto 1207717 Ontario’s property. 1207717 Ontario claimed damages of $6.0 million.

[5] 1207717 Ontario’s property and Leggett’s property were located in an industrial area. Leggett did not admit liability, and there was no consensus about the extent that the contamination may have been caused by industrial activities on other nearby properties.

[6] Several years after the action was commenced and after months of negotiations, the parties reached a settlement and signed a Settlement Agreement dated June 24, 2016.

[7] The architecture of the Settlement Agreement was that: (a) Leggett would undertake and complete one round of injections of a chemical solution in as many as 10 locations on 1207717 Ontario’s property; (b) as a Remedial Action Plan, Leggett would install a barrier between its property and 1207717 Ontario’s property to dechlorinate the migrating contaminants (the permeable reactive barrier (“PRB”)); (c) Leggett would conduct groundwater sampling of four well systems downgradient from the barrier for two years; (d) the Remedial Action Plan was not to deemed to be complete “unless and until such sampling demonstrates that downgradient concentrations of Contamination are shown to be stable or decreasing”; (e) 1207717 Ontario would not contact the Ministry of the Environment, with respect to Contamination or the work or activities conducted by Leggett; (f) 1207717 Ontario would not undertake any environmental investigations until completion of the Remedial Action Plan; (g) if 1207717 Ontario contacted the Ministry of the Environment and additional work was being required of Leggett, then 1207717 Ontario would be liable and responsible at its own cost, to complete the additional work; (h) 1207717 Ontario was permitted to retain consultants at its own expense to verify and advise on the work or activities undertaken by Leggett in relation to 1207717 Ontario’s property; (i) Leggett was responsible only for implementing the Remedial Action Plan and it was not responsible for other remedial work on the 1207717 Property or the Leggett Property; (j) within ten days of completion of the Remedial Action Plan Garlock and Leggett shall each pay 1207717 Ontario, $25,000 and (k) upon completion of the Remedial Action Plan 1207717 Ontario shall obtain a dismissal of the action and the crossclaim on a without costs basis.

[8] The pertinent provisions of the Settlement Agreement are set out below:

MINUTES OF SETTLEMENT

WHEREAS:

A. 1207717 Ontario Inc. (“1207717”) is an Ontario company that owns the property known as 80 Rutland Road, Etobicoke, Ontario (the “1207717 Property”).

B. The Defendant, Leggett & Platt Canada Go. (“Leggett”), is the owner of the property known as 66 Rutland Road, Etobicoke (the “Leggett Property”), which abuts the 1207717 Property.

C. Garlock of Canada Ltd. (“Garlock”) owned the Leggett Property from 1964 until 1995.

D. 1207717 commenced an action (the “Action”) in February 2012, bearing Court File No. CV-12443569, against Leggett and Garlock, alleging that the Leggett Property was the source of certain chlorinated volatile organic contamination (the “Contamination”) found on the 1207717 Property, Garlock, in turn, commenced a crossclaim (the “Cross Claim”) against Leggett, alleging that if Garlock were found liable to Plaintiff for the damages set forth in the Action, then Leggett must indemnity Garlock pursuant to certain contractual indemnity agreements entered into at the time Leggett’s predecessor purchased the Leggett Property front Garlock.

E. Although Leggett has denied, and continues to deny, liability to 1207717 and Garlock for any portion of (he damages alleged in the Action or the Cross Claim, Leggett has been undertaking remedial work on the Leggett Property to reduce the levels of the Contamination and to prevent off-site migration of the Contamination from the Leggett Property onto the 1207717’s Property

F. The 1207717 Property and the Leggett Property are located in an industrialized neighbourhood and there is no consensus between the parties as to what extent the Contamination alleged to be present on the Leggett Property and the 1207717 Property may have resulted from historical activities on other nearby properties.

G. 1207717, Leggett and Garlock have negotiated certain terms to settle the issues between them and resolve the Action and the Cross Claim, as set out in these Minutes of Settlement (“Minutes”),

NOW THEREFORE THESE MINUTES OF SETTLEMENT WITNESS that, in consideration of the mutual agreements and covenants herein contained and for other good and valuable consideration, the receipt and sufficiency of which are hereby irrevocably acknowledged by each party, the parties agree to settle the Action and all matters pertaining thereto as follows:

1. GENERAL

The Recitals are an integral part of these Minutes and are true and correct.

2. REMEDIAL ACTION PLAN

(a) Leggett shall, at its sole cost and expense, and no later than September 15, 2016 undertake and complete installation, substantially in accordance with the document attached as Schedule “A” of this Agreement, of a zero valent iron, or equivalent technology, permeable reactive barrier (“PRB”) on the Leggett Properly near the property boundary with the 1207717 Property to treat any Contamination that may be present in groundwater flowing from the Leggett Property onto the 1207717 Property. 1207717 shall be entitled to have access to the Leggett Property during construction and installation of the PRB to ensure that it is in accordance with the specifications outlined in Schedule “A” of this Agreement. […].

(b) Leggett shall, at its sole cost and expense, and no later than October 30, 2016 undertake and complete one round of injections of a chemical solution compatible with the PRB technology in as many as 10 locations (the “Injections”), substantially in accordance with the document attached as Schedule “A”, on the 1207717 Property to treat any Contamination in groundwater on the 1207717 Property. […]

(c) Leggett shall, at its sole cost and expense, after installation of the PRB, conduct groundwater sampling on the down gradient side of the PRB on a frequency to be determined by Leggett’s environmental Consultant over a period of two years, substantially in accordance with the document attached as Schedule "A” hereto, and the Remedial Action Plan (as defined below) shall not be deemed to be complete hereunder unless and until such sampling demonstrates that down gradient concentrations of Contamination are shown to be stable or decreasing. […]

(d) 1207717 shall cooperate with Leggett, as required, to permit Leggett to complete the work specified in this section 2(a), 2(b) and 2(c), (collectively the "Remedial Action Plan”), and shall not contact any other third parties, including the Ministry of the Environment, with respect to Contamination or the work or activities conducted by Leggett hereunder (collectively described in the “Remedial Action Plan”) and shall not undertake any environmental investigations on the 1207717 Property until completion of the Remedial Action Plan by Leggett. Should 1207717 make such contact with the Ministry of the Environment or other third parties that results in any additional work being required of Leggett, then 1207717 shall be liable and responsible to, at its own cost, complete such additional work. Notwithstanding anything contained herein, 1207717 shall be permitted to (i) retain the services of third party consultants at the expense of 1207717 to verify and advise on the work or activities undertaken by Leggett in relation to the 1207717 Property and (ii) conduct environmental monitoring of the 1207717 Property, and (iii) contact third parties if required to do so by court action or governmental and/or regulatory bodies.

(e) In conjunction with the Remedial Action Plan, Leggett shall cause all environmental consultants and other third parties involved in the implementation of the Remedial Action Plan to sign all necessary reliance letters and documents such that 1207717 may rely on all of the data and information collected in connection with the Remedial Action Plan for any purpose whatsoever, including the completion of a Risk Assessment by 1207717 to be submitted to the Ministry of Environment in support of a Record of Site Condition filing.

(f) No actions taken by Leggett, or its contractors, shall in any way constitute a trespass upon the 1207717 Property. Nor shall Leggett, for purposes of any federal, provincial, and municipal laws, regulations, by-laws, standards, requirements, ordinances, codes, policies, guidelines, orders, notices, permits, or directives, or parts thereof pertaining to environmental and health and safety matters (collectively, “Environmental Laws”), be deemed to be the owner of the 1207717 Property, or have management, charge, control or possession of the 1207717 Property, or the business of 1207717, or of any substance located on, upon, or within the 1207717 Property.

(g) Leggett is only responsible for implementing the work set forth in this Remedial Action Plan and for no other remedial work on the 1207717 Property or the Leggett Property.

(h) Leggett will not be responsible for any costs or liabilities with respect to this Remedial Action Plan to the extent such costs and liabilities are increased due to 1207717’s actions, agreements, and/or omissions, including but not limited to any costs or liabilities which can be shown to have arisen from any environmental monitoring undertaken by 1207717 and, in such event, 1207717 shall have the option to (a) be responsible for such additional costs and liabilities to the extent that its actions result in additional costs or liabilities to Leggett or (b) shall waive the requirements of section 2(g) of the Agreement.

3. PAYMENT OF MONIES

Garlock and Leggett shall each, within ten (10) days of completion of the Remedial Action Plan, pay to 1207717 the amount of $25,000.

5. DISMISSAL OF THE ACTION

(a) Upon completion of the Remedial Action Plan and satisfaction of all obligations specified hereunder (the '‘Completion Date”); 1207717 shall obtain a dismissal of the Action and the Crossclaim, on a without costs basis, by Order of the Court. […]

(b) Leggett and Garlock shall commit to execute all documents required to have the Order issued, including Consent to the dismissal;

(c) 1207717 shall take all steps necessary to issue and enter the Order dismissing the Action within twenty (20) days of the Completion Date and will provide a copy of the Order to Leggett and Oarlock within five (5) days of receipt of the Order from the Court.

(d) Until the Completion Date, the Action shall be held in abeyance and all of the parties shall execute all required consents and documentation for such purpose.

(e) In the event that any of the work and/or obligations hereunder are not satisfied as provided hereunder, or any of the terms hereunder are breached by Leggett and/or Garlock, 1207717 shall be permitted to resume the Action forthwith upon providing thirty (30) days written notice to Leggett and Garlock, during which time Leggett and Garlock shall have the opportunity to cure such non-performance or breach to prevent resumption of the Action.

12. ENTIRE SETTLEMENT

These Minutes, together with the Schedules attached hereto, constitute the entire agreement between the parties pertaining to the subject matter of these Minutes, As such, these Minutes supersede all prior agreements, understandings, negotiations and discussions, whether oral or written, of the parties and there are no representations, warranties or other agreements between the parties in connection with the subject matter of these Minutes. Further, neither party has been induced to enter into these Minutes in reliance on, and there will be no liability assessed, either in tort, contract or otherwise with respect to, any warranty, representation, opinion, advice or assertion of fact, except to the extent it has been reduced in writing and included as a term in these Minutes, By signing these Minutes of Settlement or by their counsel signing the Minutes of Settlement on their behalf, the parties severally acknowledge that they have read and understand these Minutes of Settlement, and have had the opportunity to obtain, or have obtained, independent legal advice regarding same.

[9] The Remedial Action Plan in the Settlement Agreement was based on a proposal made by Leggett’s environmental consultant, XCG Consulting Limited (“XCG”) that became a schedule to the Settlement Agreement. The schedule, among other things, addressed the creation of monitoring wells and the frequency of the water quality sampling that was to be undertaken by XCG. The schedule stated:

Re: Proposed Remedial Action Plan for Leggett & Platt Canada Go. vs. 1207717 Ontario Inc. Settlement

1. PROJECT UNDERSTANDING, PURPOSE AND USE

As requested by Fasken Martineau (Fasken) on behalf of Fasken’s client, Leggett & Platt Incorporated (LPl), XCG Consultants Ltd. (XCG) has prepared the following Remedial Action Plan (RAP), Based on discussions with Fasken and LPI, XCG understands that the objective of the proposed RAP includes construction of a zero-valent iron (ZVI)-based permeable reactive barrier (PRB) along the cast boundary of the property located at 66 Rutland Road in Etobicoke, Ontario (subject property or site), and in-situ groundwater remediation on the west portion of the property located at 80 Rutland Road in Etobicoke, Ontario, (1207717 property) using injections of amendments that are compatible with the PRB.

XCG understands that the remedial objective of the proposed PRB to be constructed onsite and proposed injection at the 1207717 property is to reduce the concentrations of Chlorinated Volatile Organic Compound (CVOC) present in the shallow groundwater on the down-gradient side of the PRB and in the west portion of the 1207717 property to meet risk-based, site-specific remedial criteria.

2. SCOPE OF WORK

2.3 On Site Remediation Activities

2.2.3 Operation of the PRB

2.4 Off-Site [1207717 Ontario Property] Remediation Activities

In order to reduce the overall mass of CVOCs present in the shallow groundwater on the west portion of the 1207717 property, XCG proposes to inject a liquid form of controlled-release, integrated carbon and ZVI source (e.g. EHC-L®) using up to shallow 10 injection wells. […]

Pressurized injections of EHC-L® solution will be completed into each of the 10 newly installed injection wells. Approximately 200 kilograms (440 pounds) of EHC-L® will be injected under pressure into each of the 10 injection wells. The volume of EHC-L® solution will be determined in the field based on the subsurface conditions.

2.5 Groundwater Quality Monitoring

2.5.1 Installations of Additional On-Site Monitoring Wells

There are currently no shallow groundwater monitoring wells located between the proposed PRB and [the boundary with 1207717 Ontario’s property] and four wells up-gradient of the proposed PRB, namely XCG-9, XGG-i 6, XGG-17, and XCG-18. In order to monitor the performance of the PRB and the quality of shallow groundwater discharging across the east property boundary, XCG proposes to install:

• Two additional shallow monitoring wells to the west (up-gradient) of the proposed PRB;
• Three additional wells within the proposed PRB; and
• Four additional shallow monitoring wells down-gradient of the PRB (i.e. between the proposed PRB and the property boundary.

2.5.2 On-Site Monitoring Activities

The initial (baseline) on-site groundwater monitoring will be completed as part of the groundwater pre-treatment activities. […]

Once the PRB is constructed and the above-described new wells are installed, the new wells will be included in the performance monitoring activities that will involve:

1. Semi-annually, during the two years following installation of the PRB, collection of groundwater samples from the nine new wells and existing wells XCG-9, XCG-l6, XCG-17, and XCG-18, plus two duplicate samples for QA/QC purposes (15 samples per sampling event) for chemical analyses for VOCs.

[10] In the settlement negotiations, Ryan Atkinson was the lawyer for 1207717 Ontario and Rosalind H. Cooper was the lawyer for Leggett.

[11] In July 2016, the PRB (permeable reactive barrier) was constructed. A 117-metre (384 feet) long by 1.5-metre (5 feet) wide trench was excavated. The trench had a depth of between 3.4 to 4.0 metres (11.2 to 13.1 feet). The depth of the trench extended to the shale in the soil. The trench was then backfilled with a mixture of 13 kilograms (12.8 imperial tons) of Daramende® and 1.135 million kilograms (1,117 imperial tons) of sand. Daramende® is pelletized controlled release carbon and zero-valent iron.

[12] Between 2016 and 2019, Leggett built the monitoring wells and undertook the monitoring required by the Settlement Agreement. There were four systems of wells. Each system was perpendicular to the PRB. In each system, one well was upgradient, one well was in the PRB, and one well was downgradient. The wells were on Leggett’s property. There were also wells on the 1207717 Ontario property.

[13] In 2017, although it took the position that it was under no obligation to do so, Leggett provided 1207717 Ontario with reports about the injection program, the installation of the barrier, and the water quality sampling that had taken place.

[14] The two-year period for testing passed, and in 2019, XCG delivered a report dated January 31, 2019 to Leggett, and on February 8, 2019, Ms. Cooper forwarded the report along with a reliance letter to Mr. Atkinson. With emphasis added, the XCG Report stated:

Re: 2018 Performance Monitoring Report for the Permeable Reactive Barrier at 66 Rutland Road, Etobicoke, Ontario

1. Introduction, Purpose, and Use

XCG Consulting Limited (XCG) has prepared this report to present the results of the performance monitoring for a zero-valent iron (ZVI)-based permeable reactive barrier (PRB) located at 66 Rutland Road in Etobicoke, Ontario (subject property or site).

The information enclosed in this report documents the field data and analytical results obtained during a period from January 2018 to September 2018 (2018 monitoring period). In addition, field data and analytical result obtained during 2016 and 2017 are also included for reference and comparison purposes.

The purpose of the groundwater quality monitoring activities described herein is to evaluate the performance of the PRB with regards to concentrations of chlorinated volatile organic compounds (CVOCs), specifically trichloroethylene (TCE), and its degradation compounds which include, cis-1,2-di chloroethylene (cis-l,2-DCE), trans-1,2-dichloroethylene (trans-1,2-DCE), and vinyl chloride (VC), hereafter referred to as the contaminants of concern (COCs), present in the shallow groundwater discharging from the subject property across the east property boundary.

4. Results

4.4 Groundwater Quality

Review of the analytical results indicated that the VOC parameters in the groundwater samples collected during the 2018 monitoring period were either below the laboratory reportable detection limits (RDLs) or were detected at concentrations below the MOE Table 3 Standards with the exception of COCs, present at select monitoring well locations, as discussed below.

Review and comparison of the analytical results for samples collected up-gradient of the PRB (‘A’ series wells) to samples collected within the PRB (‘B’ series wells) and down-gradient of the PRB (‘C’ series wells), generally indicated a drop in COC concentrations across the PRB (i.e. from up-gradient to down-gradient monitoring wells). This is especially apparent based on the results of most recent sampling event completed in September 2018 at the ‘worst case’ location, PRB-MW4A to PRB-MW4C. At these monitoring well locations, concentrations of TCE, cis-l,2-DCE, and VC were reported above the MOE Table 3 Standards in PRB-MW4A (located up-gradient of the PRB), declined below the laboratory RDLs and/or the MOE Table 3.

Standards in PRB-MW4B (located within the PRB) and PRB-MW4C (located down-gradient of the PRB).

The concentrations of cis-l,2-DCE in samples collected from PRB-MW3C on March 21 and September 17, 2018 were 1.5 and 1.9 pg/L, respectively. The MOE Table 3 Standard for cis-1,2-DCE is 1.6 pg/L. As such, the results reported in March 2018 (1.5 pg/L) were slightly below the MOE Table 3 Standard while the results reported in September 2018 (1.9 pg/L) were slightly above the MOE Table 3 Standard. However, comparison of the 2016 and 2017 analytical results for cis-l,2-DCE at PRB-MW3C, which was reported at a maximum concentration of 6.8 pg/L in September 2016, to the 2018 concentrations, indicates that concentrations of cis-1,2-DCE (and other COCs) have declined or maintained stable since 2016 (i.e. since the construction of the PRB).

5. Conclusions

The overall conclusion based on the groundwater monitoring activities completed during the 2018 monitoring period from January 2018 to September 2018, is that the PRB is successfully operating as designed as the groundwater concentrations of COCs down-gradient of the PRB are after a two-year monitoring period (from September 2016 to September 2018) are overall stable or decreasing. This conclusion is based on the following information and data:

1. The groundwater elevations observed up- and down-gradient of the PRB indicate that no significant loss of hydraulic conductivity across the PRB is occurring.
2. The construction of the PRB resulted in creating reducing and anaerobic groundwater conditions, (as indicated by the negative ORP values and DO concentrations of 0 mg/L), within and down-gradient of the PRB.
3. The concentrations of COCs in the shallow groundwater within and down-gradient of the PRB are generally lower than the concentrations of COCs measured in wells located upgradient of the PRB. Furthermore, the concentrations reported as of September 2018 (most recent sampling event) are generally lower than those reported in 2016 and 2017.

[15] Around the same time as XCG’s 2019 Report was being distributed, Garlock and Leggett respectively paid 1207717 Ontario $25,000 each. These funds are being held in trust by 1207717 Ontario’s lawyer.

[16] In February and March 2019, Leggett requested that 1207717 Ontario take steps to have the action and crossclaim dismissed. On March 29, 2019, Mr. Atkinson responded that he had sent the XCG Report to 1207717 Ontario’s consultants to determine whether the Remedial Action Plan was deemed to be complete.

[17] On March 29, 2019, Ms. Cooper immediately responded that XCG’s 2019 Report had determined that the Remedial Action Plan was complete and that under the Settlement Agreement, 1207717 Ontario did not have the right to have its consultant approve the report.

[18] Notwithstanding Ms. Cooper’s email, 1207717 Ontario retained the services of Hannah Roberts and John Fairclough of AECOM Canada Limited to review XCG’s 2019 Report. It was AECOM’s preliminary assessment that all but one of the downgradient wells demonstrated a stable or decreasing concentration of contaminants. However, there was an outlier well. In AECOM’s view that well showed rebounding and fluctuating levels of contamination and while other wells showed fluctuations, those wells were trending downward. AECOM recommended further sampling of the groundwater from the outlier well.

[19] On May 10, 2019, 1207717 Mr. Atkinson sent the following email message to Ms. Cooper:

The report was reviewed, and all the testing wells appear to feature a stable or decreasing trend for concentration of contaminants except for one of them. The outlier is well PRB-MW4A, which features rebounding and fluctuating levels of contamination. You can see for yourself in the attached report at page 9. Some of the other wells are also fluctuating but appear to be following a downward trend. It is recommended that further sampling be done to establish the trend and determine whether the measurements are merely an anomaly, or perhaps there remains a continued contamination issue. We are in the process of obtaining further details currently. Please advise us of your thoughts.

[20] Once again, on the same day, Ms. Cooper responded by email. The email stated:

My thoughts are as follows. The Agreement requires that concentrations be stable or decreasing in the downgradient wells. This makes logical sense since. If the downgradient well concentrations remain stable or decrease, we would know that the barrier is effective in preventing contamination from flowing onto your client's property. You are referring to MW4A, which is located up-gradient of the barrier and on my client's property. It measures the levels of contamination on our client's property, not your client's property, and has nothing to do with the effectiveness of the barrier or your client's property. What am 1 missing here?

[21] The email exchange between the lawyers resumed on May 22, 2019, when Mr. Atkinson sent the following message to Ms. Cooper:

Our client has been travelling on business and it has been challenging to obtain instructions on a timely basis. My notes from our call with the environmental consultants were incorrect with respect to the specific sampling well, the well that presents some concern with fluctuating concentrations on the downgradient side of the PRB membrane is the well designated as PRB-MW4C and can be found on page 9 of the report. The other downgradient wells were stable or decreasing. The recommendation is to complete further sampling on that well to determine if the fluctuations recorded are an outlier and a stable or decreasing trend can be established. Should the remedial action plan be deemed to be incomplete we will contact our client for instructions on returning the funds until such time as the remedial action plan is complete. However, it may be preferable to simply conduct some limited sampling on that one well to supplement your client's report. Please advise us of your thoughts.

[22] Ms. Cooper responded with two email messages, the first on May 22, 2019 and the second on May 24, 2019 as follows:

I strongly disagree. There is clear prejudice to our client from this delay, as the indemnity provided by our client runs from the date the remedial action plan is deemed complete. In our view, it was deemed complete on February 9, 2019 when the report was delivered confirming that the remedial objectives were achieved. Clearly, you do not agree and taking some four months to state that you disagree is prejudicial to my client.

I have now spoken with the consultant that prepared the report that was provided to you in early February. He has indicated that the results are well within expected statistical variability and maintains that the concentrations in all downgradient wells are stable or decreasing based on the results over all of the sampling rounds. With that additional information and confirmation, my client is not prepared to conduct any additional sampling and considers that the Remedial Action Plan was completed when the report was tendered. Further, the obligations of my client and that of Garlock under the agreement were satisfied when the settlement funds were provided to you and distributed by you to your client. The continued delay and refusal to obtain a dismissal of the action is a breach under the agreement. My client has agreed to permit your client to until Thursday of next week to advise whether it is in agreement and to proceed to obtain the dismissal. If we do not hear from you or if you advise otherwise, I will then proceed to enforce the agreement.

[23] On June 11, 2019, Leggett advised 1207717 Ontario that it intended to bring a motion to have the settlement declared to have been implemented and for a dismissal of the action. The parties agreed to schedule the motion for February 12, 2020.

[24] Over a half a year passed and Leggett had not served its motion material, and on January 28, 2020, 1207717 Ontario brought a cross-motion for an Order seeking that Leggett conduct additional work. It took the position that the settlement had not been completed.

[25] Leggett delivered its motion material and it objected to 1207717 Ontario’s cross-motion, which was being served on short-notice. Leggett offered to perform the work sought by 1207717 Ontario should its long-scheduled motion be dismissed. 1207717 Ontario declined the offer, and it insisted on proceeding with its cross-motion.

[26] The motion and the cross-motion came on before me, and on February 12, 2020, Leggett’s motion was adjourned to be heard together with the cross-motion on April 30, 2020. I made the following endorsement:

This is a motion by the defendants to enforce a settlement. The responding party plaintiff seeks an adjournment to bring on its own motion to enforce the settlement. The adjournment was opposed because the cross-motion need not waited to be brought on as cross-motion and because the motion raised a preliminary interpretative issue that could make the cross-motion moot. In my opinion, the prudent and proper and non-speculative approach is to hear the motion and the cross-motion together. I, therefore, shall remain seized of this matter and I adjourn the motion on the following terms:

(1) the motion and the cross-motion shall be heard together on April 30, 2020; (2) the plaintiff shall deliver its current cross-motion materials with final expert reports within 15 days; (3) the defendant may deliver responding material by March 23, 2020; (4) cross-examinations, if any, shall be completed by April 10, 2020.

Costs of this adjournment fixed at $1,500 are payable to each defendant in any event of the cause.

[27] On March 3, 2020, 1207717 Ontario delivered its cross-motion material. It included a report from AECOM Consultants dated February 13, 2020. 1207717 Ontario had retained AECOM to among other things: (1) do additional groundwater sampling on its property and (2) review and verify the results of the XCG 2019 Report. AECOM’s Report stated:

Subject: Letter Report of Additional Groundwater Sampling – 80 Rutland Road, Toronto, Ontario

The following letter report has been prepared to document the results of an additional round of groundwater sampling of existing wells at the property located at 80 Rutland Road, Toronto, Ontario (hereafter referred to as the “Site”) and identified as Figure 1 (attached). The objective of the additional groundwater sampling is to assess the current VOC concentrations in the existing groundwater monitoring wells (along the western Site boundary) after the historical installation of an off-site Permeable Reactive Barrier at 66 Rutland Road. …. Further, AECOM also reviewed and provides comments on the report titled “2018 Performance Monitoring Report for the Permeable Reactive Barrier at 66 Rutland Road, Etobicoke … dated January 31, 2019 (the 2019 XCG Report).

3.3 Groundwater Analytical Results

[…] A total of nine (9) groundwater samples, including one (1) blind field duplicate sample, one (1) trip blank and (1) field blank were submitted for laboratory analysis to measure VOC concentrations. The data presented in Table 2 indicates that all groundwater samples analyzed for VOC concentrations were below MECP Table 3 SCS with the following exceptions:

• Trichloroethylene (TCE) concentrations above MECP Table 3 SCS were measured in the groundwater samples collected from wells MW10-3 and its duplicate (DUP1), […]
• Cis-1,2 dichloroethylene (cis 1,2-DCE) concentrations above MECP Table 3 SCS were measured in groundwater samples collected from wells MW11-1, MW10-3 and its duplicate (DUP1). […]
• Vinyl chloride (VC) concentrations above MECP Table 3 SCS were measured in groundwater samples collected from wells MW11-1, MW10-3 and its duplicate (DUP1). […]

A summary of measured VOC concentrations that exceed applicable MECP Table 3 SCS is shown on Figure 2 (attached). In addition to the current analytical data, selected data from previous sampling events including results from the 2019 XCG Report has been included to show fluctuations in concentrations over time.

4. Summary of Findings

A summary of the salient findings from the supplemental investigation completed at the Site are as follows:

• Measured VOC concentrations in select wells located along the western Site boundary exceed MECP Table 3 SCS for one or more of the following parameters: TCE along with well documented reductive de-chlorination by-products cis-1,2 DCE and VC.
• As shown on Table 2 and Figure 2, there has been historical exceedances of one or more of TCE, Tetrachloroethylene (PCE), cis 1,2-DCE and Trans-1,2-Dichloroehtylene (trans 1,2 –DCE) concentrations in 80-MW-2, MW10-2, 80MW-3, MW10-3 since at least 2010 and in MW11-1 since it’s installation in 2012. From the results of the April 2019 sampling program the concentrations of the above parameters in these wells (80-MW-2, MW10-2, 80MW-3, MW10-3 and MW11-1) have generally decreased since the installation of the PRB in 2016.
• There has been historical exceedances of VC concentrations in MW10-2 (2010 to 2012), 80MW-3 (2011 and 2012), MW10-3 (2011 and 2012) and MW11-1 (2012). Since the installation of the PRB in 2016 the VC concentrations in MW10-2, 80MW-3, MW10-3 have generally decreased from the 2012 concentrations, however, VC concentrations in MW11-1 have rebound and increased since the last sampling event in 2012.

5. Review of the 2019 XCG Report

AECOM conducted a technical review …. The findings of the technical review are based on data and information provided in the [2019 XCG Report] and is based solely on the information provided in the report. AECOM has not visited the site.

From the information regarding Daramende® from the manufacturer …. Daramende® “typically provides active treatment for five or more years in these applications”, which would indicate that the PRB effective lifespan since its construction in July 2016 would be another couple of years and that the effectiveness of the RPB barrier at further reducing concentrations have likely stabilized. It should be noted that PRB barrier wall remedial approaches usually have decreasing effectiveness over the later stages of the barrier life.

[The [2019 XCG Report] reviewed and compared the analytical results from seven (7) groundwater sampling events (September 2016 to September 2018) for samples collected up-gradient of the PRB (“A” series wells) to samples collected within the PRB (“B” Series wells) and down-gradient of the PRB (“C” series wells). The 2019 XCG Report indicated a general drop in COC concentrations across the PRB (i.e. from up-gradient to down-gradient monitoring wells). However, the results do indicate fluctuations, across some wells downgradient of the PRB (PRB-MW3C AND PRB-MW4C0. The fluctuations in concentrations are further evaluated below:

7. Summary

Based on the above information AECOM provides the following summary concerning the Additional Groundwater Sampling Program completed at the Site and review of the XCG Environmental Engineers & Scientists” 2018 Performance Monitoring Report for the Permeable Reactive Barrier at 66 Rutland Road, Etobicoke, Ontario” dated January 31, 2019.

1. Measured VOC concentrations in select wells located along the western Site boundary exceed MECP Table 3 SCS for one or more of the following parameters: TCE along with well documented reductive de-chlorination by-products cis-1,2 DCE and VC.
2. In general, historical exceedances of VC concentrations in MW 10-2, 80MW-3, MW 10-3 have decreased since 2012, however, VC concentrations in MW11-1 have rebound and increased since the last sampling event in 2012.
3. It is recommended that additional information be obtained from XCG Environmental Engineers & Scientists on the installation of the PRB comprising Daramende® and sand, specifically the installation technique (slurry vs. dry application) and the expected life of the PRB. This information is required to understand if the generation of VC will continue on 66 Rutland and migrate onto the site.
4. Additional groundwater sampling should be considered at 66 Rutland at PRB-MW3C to better support the decreasing or stabilizing concentrations and applying statistical analysis to confirm those trends.
5. Additional groundwater sampling should be considered at 66 Rutland to ensure that VC concentrations in PRB-MW4B and PRB-MW4C are consistently decreasing and that no “rebound” will occur, it should be noted that these location also correspond with MW 11-1 on the Site which has a VC exceeding above the MECP table 3 SCS.

[28] Figure 2 of the AECOM Report which is entitled “Summary of Groundwater Analytical Results – Exceeding Table 3 Standards” is set out below:

[29] Leggett was provided a copy of AECOM’S report. Leggett, in turn, asked XCG to review the AECOM Report. XCG prepared a Reply Report dated March 12, 2020. The Reply Report stated:

Re: Review of Aecom Report dated February 13, 2020

1. INTRODUCTION, PURPOSE, AND USE

As requested by Fasken Martineau (Fasken) on behalf of its client, Leggett and Platt, Incorporated (LPI), XCG Consulting Limited February 13, 2020, prepared by Aecom for 1207717 Ontario Inc. (Aecom Report). As instructed by Fasken, the purpose of the review was to:

1. Assess and comment on the information and data generated by Aecom during the groundwater sampling event completed by Aecom on the property located at 80 Rutland Road in Toronto, Ontario (80 Rutland) on April 23, 2019.
2. Respond to Aecom’s review comments pertaining to XCG’s report titled Performance Monitoring Report for the Permeable Reactive Barrier at 66 Rutland Road, January 31, 2019 (XCG Report)

2. ASSESSMENT OF APRIL 23, 2019 GROUNDWATER SAMPLING EVENT

The purpose of this section is to assess and comment on the information and data generated during the groundwater sampling event completed by Aecom on April 23, 2019 on 80 Rutland. According to the Aecom Report, the purpose of the groundwater sampling activities completed by Aecom was to assess the current groundwater quality on 80 Rutland with respect to volatile organic compounds (VOCs). This assessment was stated to be done for the purpose of assisting legal counsel for 1207717 Ontario Inc., the owner of 80 Rutland, in the determination of whether or not the conditions of the settlement agreement between 1207717 Ontario Inc. and LPI have been met. It is XCG’s understanding that, as further discussed below, the conditions of the settlement agreement between 1207717 Ontario Inc. and LPI do not take into consideration groundwater quality on 80 Rutland and that the conditions of the groundwater on 80 Rutland are irrelevant for the purposes of the settlement agreement. We have nevertheless been asked to comment.

Based on the comparison of the most recent (April 2019) groundwater results to the historical groundwater results (June 2010 through April 2012), Aecom concluded that the concentrations of TCE, cis-1,2-DCE, trans-1,2-dichloroethylene (trans-1,2-DCE), and VC, hereafter referred to as the contaminants of concern (COC), plus tetrachloroethylene (PCE), in wells 80MW-2, 80MW-3, MW10-2, MW10-3, and MW11-1 have generally decreased following the installation of the PRB on 66 Rutland in July 2016.

XCG has reviewed the data summarized in Table 2 included in the Aecom Report. Based on the comparison of most recent results to the historical reports, there is evidence of significant reduction in COC concentrations in groundwater. […]

Furthermore, based on the data summarized in Table 2, there was no increase in any COC concentrations since 2012. It is noted that Aecom has stated that VC concentrations in well MW11-1 have increased since 2012. According to Table 2, the concentration of VC in 2012 was less than 2 μg/L [i.e. it was reported below the laboratory reportable detection limit (RDL) of 2 μg/L]. The concentration of VC in 2019 was reported to be 2 μg/L (the RDL in 2019 was 0.2 μg/L).

To be statistically significant, the reported concentration of an analyte must be a minimum of five times the RDL. Based on the notes included in below Table 3A in the Aecom Report, it is clear that Aecom is aware that, to be statistically significant, the reported concentration of an analyte must be a minimum of five times the RDL.

Given that the 2012 RDL was set at 2 μg/L, in order to compare the 2012 VC results to the 2019 results, the concentration of VC in 2012 would have to be at least 10 μg/L. Since the 2012 result is not statistically significant, the statement made by Aecom that the 2012 and 2019 results indicate an increase or rebound in VC concentrations in well MW11-1 is not supported by the reported analytical results.

3. RESPONSES TO AECOM’S REVIEW COMMENTS TO XCG REPORT

In addition to providing the information and data regarding the 2019 groundwater sampling event, the Aecom Report also included review comments on the XCG Report (2018 Performance Monitoring Report for the Permeable Reactive Barrier at 66 Rutland Road, Etobicoke, Ontario, dated January 31, 2019). As stated by Aecom, the purpose of their review was to “provide opinion as to the findings of the report.”

Aecom states in the conclusion that concentrations of COCs in samples collected from monitoring wells located down-gradient of the PRB installed on 66 Rutland have declined or remained stable since July 2016 (i.e. since the installation of the PRB) ,”would be better supported with additional rounds of sampling” and “applying statistical analyses to confirm” the groundwater quality trends.

The focus of Aecom’s review was concentrations of cis-1,2-DCE and VC in wells PRBMW3C and PRB-MW4C, respectively. The monitoring wells PRB-MW3C and PRB-MW4C are located down-gradient from the north portion of the PRB. The approximate locations of these two wells are shown on Figure 1.

For reference purposes the analytical results for the COCs in samples collected from wells PRB-MW3C and PRB-MW4C are summarized below in Tables 1 and 2, respectively. The concentrations of cis-1,2-DCE in well PRB-MW3C and VC in well PRB-4MWC have been highlighted.

Although the data summarized in the above tables clearly indicate decreasing concentrations of COCs, to better illustrate the changes in the concentrations of cis-1,2-DCE in well PRBMW3C and VC in well PRB-4MWC, XCG plotted the analytical results highlighted above on concentration versus time charts. The concentration versus time charts for cis-1,2-DCE in well PRB-MW3C, for VC in well PRB-4MWC, and total COCs in both wells are shown on Figures 2 and 3, respectively.

The charts were produced using Microsoft Excel software. For the purpose of these plots, the values reported below RDLs were assigned a value of zero. In order to illustrate the overall pattern (trend) for each set of the groundwater results, XCG also included a trend line, also known as a line of best fit, with each plot. The trend lines were plotted using Microsoft Excel trendline function.

Aecom has also stated that concentrations of VC in samples collected from well PRB-4MWC between September 2016 and September 2019 appear to show consistent fluctuations and a possible rebound in VC concentrations. XCG agrees that the reported results for VC have fluctuated from sampling event to sampling event. Fluctuations in groundwater analytical results are normal and a well-known fact, in particular at very low concentrations (i.e. concentrations within five times the RDL). As such, as previously discussed in Section 2 above, to be considered significant, the concentrations of analytes in groundwater samples should be greater than five times the RDL. As shown in Table 3 below, six of the seven samples collected from PRB-4MWC were reported to have VC results that were less than five times the RDL, while the seventh sample, (March 2018), was reported at 6.5 times the RDL.

Therefore, the variations (fluctuations) between the VC results reported for samples collected from well PRB-4MWC are not considered significant. As such, the statement made by Aecom that the VC results reported in PRB-4MWC indicate a possible rebound in VC concentrations is not supported by the analytical results.

Aecom recommended completion of additional monitoring events in order to better support XCG’s statement that the concentrations of COCs down-gradient of the PRB are declining or stabilizing. XCG does not agree that groundwater monitoring over longer periods is required in this case to determine trends in groundwater quality. Furthermore, as stated above, the settlement agreement was based on completing quarterly monitoring events over a period of two years (seven sampling events in total). It is also noted that, as discussed in Section 2, Aecom relied on only two data points to conclude, incorrectly, that the concentration of VC in well MW11-1 is increasing, or rebounding, as stated by Aecom.

Aecom also recommended applying statistical analyses to the data to confirm the trends. When assessing large and/or complex data sets, use of statistical analyses may be needed or required to identify data patterns or trends. However, given the small data sets available for this project (seven data points for each COC), and a lack of complexity, it is XCG’s opinion the use of simple concentration versus time plots, like those shown on Figures 2 and 3, is sufficient to clearly identify the overall decrease in COC concentrations that had occurred down-gradient of the PRB over the two-year period following installation of the PRB.

4. CONCLUSIONS

Based on the information and data summarized and discussed above, it is XCG’s opinion, that the concentrations of COCs down-gradient of the PRB are stable or decreasing based on the sampling conducted over the period of two years following completion of the PRB, as required by the terms of the settlement agreement between LPI and 1207717 Ontario Inc.

XCG Consulting Limited Thomas Kolodzieq, B.A. Sc., P.Eng., QP ESA, Senior Project Manager

[30] Because of the Covid-19 pandemic, the motion and the cross-motion were not argued in April 2020.

[31] Meanwhile, in April 2020, 1207717 Ontario contacted TD Commercial Banking to inquire about refinancing the property at 80 Rutland Road. The Bank advised that it required an updated environmental report confirming that the property has been fully remediated.

[32] Meanwhile with the motions pending, 1207717 Ontario asked AECOM to review XCG’s Reply Report, and AECOM prepared a letter response dated June 17, 2020. The letter stated:

AECOM Canada Ltd. (AECOM) is pleased to provide 1207717 Ontario Inc. a response to comments provided in the XCG Consulting Limited (XCG) March 12, 2020 letter entitled, “Review of Aecom Report dated February 13, 2020”, as requested by Atkinson Law Professional Corporation (Atkinson), legal representative for 1207717 Ontario Inc.:

The table below summarizes the analytical concentrations of cis-1,2-DCE for PRB-MW3C since the installation of the PRB in 2016 and notes fluctuations in concentrations which exceeds MECP Table 3 SCS. The XCG report suggests that concentrations of cis-1 ,2-DCE (and other COCs) have declined or maintained stable since 2016, however. Review of this information does not support this conclusion and of the seven samples collected, six exceed the MECP Table 3 SCS still exits in close proximity to the property boundary with 80 Rutland Road.

The VC chloride concentrations from September 2016 to September 2018 in PRB-MW4C appear to be showing consistent fluctuations (as seen in the table below) and a possible rebound of VC concentrations with results from 2018-03-21 exceeding the MECP [Ministry of Environment, Conservation and Parks] and Table 3 SCS.

Section 3.3 of the AECOM report indicates that there is continued groundwater exceedances of TCE, cis-1,2 DCE and VC concentrations above the MECP Table 3 SCS on the 80 Rutland Road property boundary with 66 Rutland Road.

The above information indicates that the Generic Standards (in this case the MECP Table 3 SCS) should be utilized to assess groundwater environmental results on 66 Rutland Road and when so utilized, indicate a continued exceedance of cis-1,2 DCE concentrations in PRB MW3C and fluctuations in VC in PRB-MW4C. This is supported by the groundwater analytical results obtained from 80 Rutland Road. It should also be noted that any Reportable Detection Limits (RDLs) associated with analytical results above the MECP Table 3 SCS would also be considered an exceedance of the MECP Table 3 SCS for those locations sampled.

Page 9 of the letter states that "to be statistically significant, the reported concentration of an analyte must be a minimum of five times the RDL" and that "six of the seven samples collected from PRB-4MWC were reported to have VC results that were less than five times the RDL, while the seventh sample, (March 2018), was reported at 6.5 times the RDL".

AECOM Response

XCG provides no reference for the definition of “statistically significant”. It is not clear whether the definition for “statistically significant” is derived from a Ministry of Environment, Conservation and Parks (MECP) document, some other source, or no source.

Figure 1 of the XCG report dated January 31, 2019, shows that concentrations for 3 out of the 7 VC samples for the PRB-4MWC well exceed the Table 3 MOE standard. Contrary to statements in the letter, if concentrations exceed the MOE standard, they are significant, otherwise there would be no reason to measure concentrations of contamination against that standard. The purpose of the MOE standard is to establish concentration of contamination that are considered to be significant.

In addition, the last paragraph on page 12 indicates that:

“However, given the small data sets available for this project (seven data points for each COC), and a lack of complexity, it is XCG’s opinion that the use of simple concentration versus time plots, like those shown on Figures 2 and 3, is sufficient to clearly identify the overall decrease in COC concentrations that had occurred down-gradient of the PRB over the two-year period following installation of the PRB”.

In addition, AECOM provides the following comments:

− AECOM does not agree with the “lack of complexity” comment, as justified by the inconsistent analytical results being reported in PRB-MW4C. − There are reported increases in VC concentrations over time that do not support a stable or decreasing trend description. A limited statistical analysis with a small data set is not considered representative. − An increase in the monitoring frequency may assist with determining if a stable or decreasing trend is occurring, and also whether it will continue to occur.

AECOM Canada Ltd. John Fairclough, P. Geo, Senior Project Manager

[33] 1207717 Ontario also asked AECOM whether a report could be provided to satisfy TD ’s requirements. AECOM advised that it could not provide such a report because “ there are down gradient testing wells that still contain contamination levels above the MECP standards and we therefore are not certain whether it is possible for the contamination levels on 80 Rutland to attenuate over time when there is the continued risk of more contamination flowing in from the neighbouring property ”.

[34] The motion and the cross-motion were argued by video virtual court hearing on May 24, 2020. At the return of the hearing, Leggett objected to the filing of the supplementary motion material filed by 1207717 Ontario or, in the alternative, asked that the motion and cross-motion be adjourned. I rejected Leggett’s objections and refused its request for an adjournment.

C. Discussion and Analysis

[35] The dispute between the parties is essentially a matter of interpreting the Settlement Agreement, and the parties do not disagree about the general principles of contract interpretation.

[36] Contractual interpretation is an exercise in which the principles of contractual interpretation are applied to the words of the written contract, considered in light of the factual matrix. [1] The goal of contractual interpretation is to determine the intent of the parties giving the words used their ordinary and grammatical meaning, consistent with the surrounding circumstances known to the parties at the time of formation of the contract. [2] The rules of contract interpretation direct a court to search for an interpretation from the whole of the contract that advances the intent of the parties at the time they signed the agreement. [3] In searching for the intent of the parties at the time when they negotiated their contract, the court should give particular consideration to the terms used by the parties, the context in which they are used and the purpose sought by the parties in using those terms. [4] Provisions should not be read in isolation but in harmony with the agreement as a whole. [5]

[37] In Creston Moly Corp. v. Sattva Capital Corp., [6] Justice Rothstein described the approach to contractual interpretation:

57. While the surrounding circumstances will be considered in interpreting the terms of a contract, they must never be allowed to overwhelm the words of that agreement. The goal of examining such evidence is to deepen a decision-maker’s understanding of the mutual and objective intentions of the parties as expressed in the words of the contract. The interpretation of a written contractual provision must always be grounded in the text and read in light of the entire contract. While the surrounding circumstances are relied upon in the interpretive process, courts cannot use them to deviate from the text such that the court effectively creates a new agreement.

[38] I turn to the matter of interpreting the Settlement Agreement and to the arguments of the parties.

[39] It is an adage of litigation that a good settlement is one in which both sides walk away unhappy. In the immediate case, while it is not necessary for me to make a finding one way or the other, it strikes me that the Settlement Agreement case was a very good settlement. Both sides had cause to walk away unhappy. In the immediate case, the ironic proof that the Settlement Agreement was very good is that both parties are now moving to enforce the settlement with the aim of making their rival miserable. The respective motions to enforce the settlement are untypical in that neither party wishes the alternative of a resumption of the litigation.

[40] Under the Settlement Agreement, Leggett would have been unhappy because without admitting liability and possibly not being liable for the contamination of 1207717 Ontario’s property, Leggett was obliged to undertake a Remedial Action Plan at the expense of some hundreds of thousands of dollars. The money was being spent for a Remedial Action Plan for the improvement of 1207717 Ontario’s property and the permeable barrier provided negligible, if any, value to Leggett’s property. Having done all it promised to do under the Settlement Agreement, Leggett is now confronted with 1207717 Ontario’s motion that more is required to be done under the settlement agreement.

[41] Conversely, from 1207717 Ontario’s perspective, the Remedial Action Plan, was not a source of joy and the Settlement Agreement was not an overwhelming victory for 1207717 Ontario. It too had cause to be unhappy. The Remedial Action Plan was a one-time project with no guarantee that the nuisance problem plaguing 1207717 Ontario’s property would actually be remediated. Moreover, there was nothing in the Remedial Action Plan that addressed whether the standards of the Ministry of the Environment would ever be satisfied and the Settlement Agreement provided that if 1207717 Ontario contacted the Ministry and additional work was required of Leggett, then 1207717 Ontario was liable and responsible, at its own cost, to complete the additional work.

[42] From 1207717 Ontario’s perspective another unhappiness of the Settlement Agreement, which is pertinent to the motions before the court, is the oddity or lacunae that there was no meaningful consequence for the circumstance of it never being demonstrated that downgradient concentrations of contamination had become stable or were decreasing.

[43] For the circumstance of no demonstration of the effectiveness of the barrier, all that the agreement provided was that the Remedial Action Plan was deemed not to be complete, which outcome would be of little solace for 1207717 Ontario. For the circumstance of no demonstration of a decrease effected by the permeable barrier, the Settlement Agreement did not require further testing and reporting and indeed the Settlement Agreement had only provided for semi-annual testing for the two years following the installation of the PRB; i.e., only four tests. In this last regard, it is worth noting that Leggett outperformed because it conducted seven groundwater tests.

[44] Further, in regards to the testing of the efficacy of the PRB, although the Settlement Agreement allowed 1207717 Ontario to retain consultants to verify and advise on the work or activities undertaken by Leggett, this was somewhat an arid right because Leggett was not obliged to follow the advice and the agreement was silent on a dispute resolution mechanism to resolve whether the Settlement Agreement was complete. It seems that for the circumstance of inconclusive testing results, the parties had contracted for a stalemate; the nuisance action could be neither revived nor dismissed.

[45] In the absence of an acceptance by 1207717 Ontario of Leggett’s consultant’s report that the settlement had been completed, the parties left it to the court to determine whether the groundwater “sampling demonstrates that downgradient concentrations of Contamination are shown to be stable or decreasing.”

[46] Leggett’s argument to enforce the settlement is a simple and straightforward matter of contract interpretation and application. It argues that the sampling done by XCG and set out in XCG’s 2019 Report “demonstrates that downgradient concentrations of Contamination are shown to be stable or decreasing” and that the Settlement Agreement provides that when this is demonstrated the Remedial Action Plan is deemed to be complete. Leggett’s motion to enforce the settlement is for the purpose of having 1207717 Ontario do what it promised to do, i.e. obtain dismissals of the claim and the crossclaim. As I shall elucidate below, I agree with Leggett’s straightforward argument.

[47] 1207717 Ontario’s argument is more complex. It argues that there is insufficient data to support XCG’s conclusion that would deem the Remedial Action Plan complete. 1207717 Ontario submits that Leggett’s consultant should do more sampling. It argues that the data set is incomplete as the groundwater sampling does not demonstrate that downgradient concentrations of contamination are shown to be stable or decreasing. Further, 1207717 Ontario submits that Leggett is in breach of the Settlement Agreement by failing to conduct or allow further sampling of downgradient groundwater to determine whether a pattern of stable or decreasing levels of contamination can be established.

[48] As I shall elucidate below, I disagree with 1207717 Ontario’s arguments.

[49] I begin the explanations by noting that whether further sampling of groundwater is necessary to determine whether there is stable or decreasing levels of contamination, it is not a breach of the Settlement Agreement for Leggett to refuse to do further testing. The agreement does not provide for further testing after the two-year period. The parties specified the amount of testing and the frequency of it.

[50] During oral argument, 1207717 Ontario submitted that additional testing was an implied term of the Settlement Agreement and a necessary term to give the agreement business efficacy. It is true that after a careful review of the background to the contract, a court will imply terms to a contract based on the presumed intention of the parties and to give the contract business efficacy. [7] However, a court will not imply a term that contradicts the express language of the contract. [8] Put shortly, there can be no implied term to impose an increased testing burden on Leggett when the parties have clearly expressed their intentions with respect to the amount of testing and the frequency of it. As noted above, as it is, Leggett overperformed.

[51] The opinion from AECOM misses the point that while under the Settlement Agreement, the parties could have contracted for an increase in monitoring frequency, they expressly provided for a semi-annual frequency for two years only, which as noted above XCG overperformed by providing quarterly sampling for the prescribed two years. The parties determined the measuring benchmarks and they did not provide for additional testing to confirm that the trend would continue to occur.

[52] A major weakness in 1207717 Ontario’s arguments is that its consultant, AECOM, never actually disagrees with the conclusions found in XCG’s several reports and with the exception of two well systems it accepts XCG’s conclusion. At most or at best, AECOM submits that XCG’s conclusion could and would be better supported if there were more testing. XCG’s conclusions, however, are not actually challenged and AECOM’s assignment was only to review XCG’s work and it was not retained independently to determine whether the standards of the Settlement Agreement had been satisfied. Its essential opinion is only that an increase in the monitoring frequency may assist in determining if a stable or decreasing trend is occurring and also whether it will continue to occur.

[53] AECOM also misses the point that the parties did not contract for the benchmarks to involve the Table 3 benchmarks of the MECP (Ministry of Environment, Conservation and Parks). Thus, AECOM’s critical comments that there were exceedances of the COCs (contaminants of concern) is irrelevant as to whether there was a stable or decreasing trend in the water quality sampling. Although the parties could have contracted for it, the parties did not contract for the Permeable Reactive Barrier (PRB) to be effective to reduce the COCs below Ministry standards. Rather, the parties contracted for the PRB to be monitored for two years to establish whether or not water quality was stable or decreasing in which case the Settlement Agreement would be at an end regardless whether Ministry standards had been satisfied.

[54] Ironically, AECOM’s Report, which addresses the effectiveness of the PRB in terms of the MECP Standards, concludes that the concentrations of TCE, cis-1,2-DCE, trans-1,2-dichloroethylene (trans-1,2-DCE), and VC, the contaminants of concern (COC), plus tetrachloroethylene (PCE), in wells 80MW-2, 80MW-3, MW10-2, MW10-3, and MW11-1 have generally decreased following the installation. Thus, there was significant reduction in COC concentrations in the groundwater. In turn, these conclusions from the wells on 1207717 Ontario’s property support XCG’s conclusions that there is a pattern of stable or decreasing levels of contamination because of the PRB barrier.

[55] These weaknesses in the premises of 1207717 Ontario’s arguments take most of the steam out of its argument that the language of the Settlement Agreement requires that each of the four downgradient wells must be analyzed discretely and that XCG’s Report, which provides an overall, i.e., an aggregate or combined assessment of all the well systems, does not meet the standard set by the Settlement Agreement because two of the four well systems were below the standard.

[56] I disagree with 1207717 Ontario’s argument here for two reasons.

[57] First, interpreting the language of the Settlement Agreement in the factual nexus at the time it was negotiated, in my opinion, an overall assessment was what the parties intended and thus XCG’s opinion stands.

[58] Second, I do not agree with the premise of 1207717 Ontario’s argument that there were two well systems that were outliers and below the standard set by the Settlement Agreement. Rather, I am persuaded by the evidence from the several XCG’s Reports and also from AECOM’s Report that downgradient concentrations of contamination were stable or decreasing even for these allegedly outlier wells.

[59] There was no dispute that the data from XCG’s 2019 Report indicated that downgradient concentrations of contamination were stable or decreasing for two of the four well systems being monitored, and I am persuaded that the concentration versus time charts for PRB-MW3C and PRB-4MWC, (shown above on Figures 2 and 3) prepared by XCG based on quarterly testing show that downgradient concentrations of contamination were stable or decreasing. I am not persuaded by AECOM’s comments that suggest that the concentration versus time charts are not reliable or helpful in determining whether the provisions of the Settlement Agreement have been satisfied.

[60] In this last regard, in understanding the factual nexus at the time of the contracting for the Settlement Agreement for the purpose of interpreting the language of the agreement, it should be kept in mind that the purpose of the groundwater quality monitoring was to evaluate the performance of the PRB with regards to concentrations of chlorinated volatile organic, but the PRB had a lifespan of effectiveness and thus the most that could be expected after a two-year period was stable or declining performance of the PRB. The cleansing or filtering effect of the Daramende® in the PRB would diminish over time unless the barrier was revitalized.

[61] For similar reasons, I also disagree with 1207717 Ontario’s arguments that the fluctuations in the measurements negate XCG’s opinion. In particular, I am persuaded that fluctuations in groundwater analytical results are normal and to be anticipated and fluctuations are particularly to be anticipated at very low concentrations of the analyzed contaminant, which is what was the situation in the immediate case. In other words, fluctuations are a relative or contextual factor and not an absolute one, and in the immediate case that there were fluctuations in some wells for some chemicals does not negate or contradict XCG’s 2019 Report’s conclusions.

[62] In short, I agree with Leggett’s arguments and I disagree with 1207717 Ontario’s arguments.

D. Conclusion

[63] For the reasons above, Leggett’s motion is granted, the cross-motion is dismissed, and 1207717 Ontario’s action and the Garlock’s crossclaim are dismissed without costs.

[64] In the circumstances of the Covid-19 emergency, these Reasons for Decision are deemed to be an Order of the court that is operative and enforceable without any need for a signed or entered, formal, typed order.

[65] The parties may submit formal orders for signing and entry once the court re-opens; however, these Reasons for Decision are an effective and binding Order from the time of release.

[66] If the parties cannot agree about the matter of costs for the motion and the cross-motion, they may make submissions in writing beginning with Leggett’s and Garlock’s submissions within twenty days from the release of these Reasons for Decision followed by 1207717 Ontario’s submissions within a further twenty days.

Perell, J. Released: July 2, 2020

Footnotes

[1] Sattva Capital Corp. v. Creston Moly Corp., 2014 SCC 53 at para. 50. [2] Sattva Capital Corp. v. Creston Moly Corp., 2014 SCC 53 at para. 47; Tercon Contractors Ltd. v. British Columbia (Transportation and Highways), 2010 SCC 4 at paras. 64-65; Skye Properties Ltd. v. Wu, 2010 ONCA 499 at para. 79. [3] Unique Broadband Systems Inc. (Re), 2014 ONCA 538 at paras.83-90; Consolidated-Bathurst Export Ltd. v. Mutual Boiler & Machinery Insurance Co., [1980] 1 S.C.R. 888. [4] Frenette v. Metropolitan Life Insurance Co., [1992] 1 S.C.R. 64. [5] Scanlon v. Castlepoint Dev. Corp. (1993), 11 O.R. (3d) 744 (C.A.); Hillis Oil and Sales Limited v. Wynn's Canada, [1986] 1 S.C.R. 57; McClelland and Stewart Ltd. v. Mutual Life Assurance Co. of Canada, [1981] 2 S.C.R. 6. [6] 2014 SCC 53 at para 57. [7] M.J.B. Enterprises Ltd. v. Defence Construction (1951) Ltd., [1999] 1 S.C.R. 619; Canadian Pacific Hotels Ltd. v. Bank of Montreal, [1987] 1 S.C.R. 711; Dynamic Transport. Ltd. v. O.K. Detailing Ltd., [1978] 2 S.C.R. 1072; Energy Fundamentals Group Inc. v. Veresen Inc., 2015 ONCA 514. [8] G. Ford Homes Ltd. v. Draft Masonry (York) Co. Ltd. (1984), 43 O.R. (2d) 401 (C.A.).