Court File and Parties

COURT FILE NO.: CV-16-67267 DATE: 2022/03/15 ONTARIO SUPERIOR COURT OF JUSTICE

B E T W E E N:

George W. Drummond Limited Plaintiff – and – 595831 Ontario Inc. Defendant – and – 595831 Ontario Inc. Plaintiff/Defendant by Counterclaim – and – Paterson Group Inc. Defendant/Plaintiff by Counterclaim

Counsel: Keith A. MacLaren and Bryce Dillon, for the Plaintiff Ronald J. Boivin, for the Defendant and Plaintiff/Defendant by Counterclaim Kevin Nearing and Paige Miltenburg, for the Defendant/Plaintiff by Counterclaim

HEARD at Ottawa by videoconference: September 13, 14, 15, 16, 17, 20, 21, 22, 23, and 24, 2021

Reasons for Judgment

RYAN BELL J.

Overview

[1] In this consolidated action, [1] George W. Drummond Limited seeks judgment against 595831 Ontario Inc. (“595 Ontario”) in the amount of $327,123.62 for work performed under an alleged contract for soil remediation at 1088 Bridge Street, Manotick (the “Property”) owned by 595 Ontario. Drummond claims that 595 Ontario and Drummond agreed that Drummond would remove underground storage tanks on the Property for a fixed price and would excavate and backfill the Property on a unit rate basis. 595 Ontario directed Drummond to take instructions regarding the work to be performed from 595 Ontario’s geotechnical engineer, Paterson Group Inc.

[2] 595 Ontario maintains that there was no enforceable contract between it and Drummond. In the alternative, 595 Ontario challenges Drummond’s performance under the contract: 595 Ontario alleges that Drummond removed too much soil from the site and failed to install a poly separation layer.

[3] 595 Ontario claims indemnity from its geotechnical engineer, Paterson, for any amounts found owing by 595 Ontario to Drummond on the basis that any damages suffered by Drummond were caused by Paterson’s negligence. Paterson denies any liability to 595 Ontario and counterclaims in the amount of $20,797.94 for engineering services it provided to 595 Ontario and for which it has not been paid.

[4] Drummond called the following witnesses at trial: Paul Boyd (Drummond’s project manager for the project), Andrew Niska (Drummond’s project estimator), and Brian McNamara (Drummond’s office manager and accountant).

[5] Ian Hawkins, the principal of 595 Ontario, and his daughter Jade Hawkins (who has been managing the day-to-day operations of 595 Ontario since 2018) testified on behalf of 595 Ontario. 595 Ontario also called Michael Heeringa of the Ministry of the Environment, Conservation and Parks (“MECP”) to testify. Mike Grinnell of Terrapex Environmental Ltd. gave expert opinion evidence on behalf of 595 Ontario in the fields of environmental engineering, remediation, and contamination.

[6] Paterson’s witnesses were Carlos Da Silva (Managing Partner of Paterson at the time) and Adrian Menyhart (on site during Drummond’s excavation of the Property). Paterson also relied on the opinion evidence of George Thomas of DST Consulting, who was qualified as an expert in the fields of geotechnical and environmental engineering.

[7] In addition to the viva voce testimony, many documents were adduced in evidence. Each party relied on read-ins from the examinations for discovery.

[8] For the following reasons, I find that there was an enforceable contract for services between Drummond and 595 Ontario. I grant judgment to Drummond in the amount of $327,123.62. Paterson is not liable to indemnify 595 Ontario; accordingly, 595 Ontario’s action against Paterson is dismissed. Paterson is entitled to judgment on its counterclaim in the amount of $20,797.94.

Factual Background

Environmental concerns on the Property are identified

[9] 595 Ontario purchased the Property in February 1988. The Property had historically been operated as a retail fuel outlet.

[10] In November 2001, 595 Ontario was put on notice regarding certain environmental issues on the Property when Ultramar provided it with a Phase II environmental site assessment (“ESA”) prepared by Terrapex. As a result of the identified issues, Ultramar refused to renew its lease on the Property.

Initial contact from the MECP

[11] In September 2004, the MECP [2] sent Mr. Hawkins a letter, expressing concerns with respect to the contamination in the soil and groundwater at the Manotick Public School, located across the street to the north of the Property. The MECP referred to the Terrapex ESA and requested information relating to the Property’s previous owners and tenants, and the previous operators of the retail gas station on the Property.

[12] The MECP’s letter included a copy of an order from the Technical Standards and Safety Authority (“TSSA”) dated September 2, 2004, issued to Mr. Hawkins requiring the removal of the underground storage tanks on the Property.

Paterson is Retained by 595 Ontario

[13] In October 2004, 595 Ontario retained Paterson to complete a Phase II ESA on the Property. In its October 26, 2004 ESA, sent to 595 Ontario and to the MECP, Paterson stated “[c]ontaminated soil and groundwater in excess of the MECP Table 2 criteria will require remediation.” Paterson recommended that a groundwater monitoring and pumping program be carried out prior to the soil remediation program, to remove the bulk of the free phase gasoline present at the Property. Separately, Paterson provided a draft remedial action plan.

[14] In late 2004, 595 Ontario asked Paterson to provide a cost estimate for the remediation of the Property. The proposed remediation outlined in Paterson’s December 20, 2004 cost estimate included clearing the underground utilities, pumping and disposing of the impacted groundwater, removing the underground storage tanks, excavating the soil, and disposing of the contaminated soil offsite. The estimated cost of the work was $403,000.

[15] 595 Ontario did not authorize Paterson to proceed with its 2004 remedial action plan, notwithstanding correspondence from the MECP in November 2004 encouraging Mr. Hawkins to consider Paterson’s recommendations and a further TSSA order in 2005 ordering Mr. Hawkins to remove the underground storage tanks on the Property.

The intervening years

[16] According to Mr. Hawkins, he received “occasional letters” from the MECP requesting further action on the Property. For example, in a March 2008 letter received by Mr. Hawkins, the MECP requested that Mr. Hawkins provide copies of environmental site assessment activities, including the results of any soil and groundwater monitoring conducted by 595 Ontario in response to the 2004 ESA or the TSSA’s 2005 directions. The MECP specified that if no such remedial measures had been undertaken, Mr. Hawkins was to provide the MECP with a remedial action plan to address the hydrocarbon contamination originating from 1088 Bridge Street. The MECP requested that Mr. Hawkins provide the MECP with his written course of conduct by the end of April 2008.

[17] 595 Ontario did not authorize any remediation of the Property until 2012.

The 2012 remedial action plan

[18] In 2012, the MECP began to place further pressure on Mr. Hawkins to take remedial steps in relation to the Property. Mr. Da Silva testified that Mr. Hawkins approached him in 2012 regarding the Property. Paterson had been retained by Mr. Hawkins in the past in relation to some of his other commercial properties.

[19] In August 2012, there was a meeting with the Ottawa-Carleton District School Board, the City of Ottawa (as the owner of Bridge Street), 595 Ontario, and their respective environmental consultants. Mr. Da Silva attended the meeting on behalf of 595 Ontario and persuaded the various property owners that they, including 595 Ontario and Mr. Hawkins, were all victims of historical contamination which had occurred years before 595 Ontario owned and operated the gas station on the Property. The stakeholders each agreed that they would be responsible for cleaning up their own sites to mitigate offsite impacts.

[20] As a result of the August 2012 meeting, Mr. Hawkins authorized Paterson to prepare a remedial action plan to recover and control the continued migration of free phase product offsite. Paterson’s December 12, 2012 remedial action plan explained:

The purpose of this remedial action plan is to recover free product and attempt to mitigate the off-site migration of free product from the subject property. The method by which this will be accomplished will be through a recovery trench system, coupled with a recovery well. The recovery trench system will be constructed in the north corner of the property, near the intersection of Bridge Street and Arthur Crescent. This area of the property was targeted due to consistent findings of free product in a groundwater monitoring well located nearby.

[21] The 2012 remedial action plan included the following regarding underground storage tanks:

Underground Storage Tanks ▪ Five (5) underground fuel storage tanks are located on the subject property. The interior of all five tanks will be inspected. ▪ In the event that a significant amount of free product is encountered in any of the tanks, the free product will be removed by [a MECP] licensed contractor. ▪ Consideration will be given to two alternatives for the underground storage tanks. The tank interiors may either be thoroughly cleaned of all residual free product and left in place. At the time of re-development, the tanks will then be removed and disposed off-site. The other alternative will be to remove the tanks at this time.

[22] The 2012 remedial action plan addressed the recovery trench as follows:

Installation of Recovery Trench ▪ The trench will extend 10 m from the north corner of the property, along the property boundary on Bridge Street, and 5 m from the north corner of the property, along the property boundary on Arthur Crescent. ▪ Based on previous studies, groundwater levels range from approximately 5 to 7 m below the existing grade. Due to seasonal variations in groundwater levels, the trench should be excavated to a depth capable of capturing water during a season of lower ground water levels. ▪ In the deepest area of the trench (at the corner of Bridge and Arthur), the excavation will extend to 7.5 m below the existing grade.... ▪ Impacted soil material from the excavation will be stockpiled on site, to be re-used as backfill, whereas heavily impacted soil will be removed from the property for disposal at an approved waste disposal site.

[23] The monitoring program was described in the following terms:

Monitoring Program ▪ On a periodic basis (monthly basis during non-frozen months), the recovery well will be inspected to evaluate the thickness of the free product. ▪ When encountered, the free product will be pumped out of the trench via the recovery well. Pumping will be carried out by [a MECP] licensed contractor. ▪ If no significant quantity of free product is present in the recovery well, pumping will be postponed to the next inspection period.

[24] Under the heading “Remedial Action Plan Goals” the 2012 remedial action plan stated:

Long term goals for this property include the removal of the underground storage tanks as well as an overall redevelopment of the property. Issues of contaminated soil and water will be addressed at the time of redevelopment.

The MECP accepts the 2012 remedial action plan as an interim solution

[25] Mr. Hawkins testified that he was assured by Mr. Da Silva that the work described in the 2012 remedial action plan was the only work he would ever have to do until the Property was redeveloped. I reject Mr. Hawkins’ evidence in this regard for the following reasons.

[26] First, Mr. Hawkins’ testimony is contrary to Mr. Da Silva’s evidence. Mr. Da Silva denied making any such representation to Mr. Hawkins. As I will explain, Mr. Da Silva’s testimony in this regard is wholly consistent with the MECP’s correspondence. In addition, I reject much of Mr. Hawkins’ testimony on the basis that it was not credible. Mr. Hawkins took every opportunity when giving his evidence to malign Mr. Da Silva – for example, accusing him of bullying and threatening behaviour – and Paterson. Mr. Hawkins went so far as to suggest that Paterson provided false reports from the groundwater program in 2013. And he repeatedly pointed fingers at others as being the source of the contamination on the Property without evidence to support his claims.

[27] Second, Mr. Hawkins’ allegation is belied by correspondence he received from the MECP. Mr. Da Silva, acting on behalf of 595 Ontario, provided the 2012 remedial action plan to the MECP. Mr. Heeringa of the MECP responded to Mr. Da Silva on January 21, 2013. Mr. Heeringa provided the MECP’s technical comments on the remedial action plan and noted that the Ministry’s technical support section did not agree with the trench system as proposed. Mr. Heeringa wrote that he was “requesting that Mr. Hawkins make the necessary arrangements to implement the [remedial action plan] right away with the recommended modifications” and concluded his email by stating:

It is important to stress that while the Ministry is supportive of the [remedial action plan] (with modifications), we continue to view it as an interim measure until a more aggressive remedial strategy can be developed with input from all parties.

[28] Mr. Hawkins was copied on Mr. Heeringa’s email. The attached MECP memorandum was equally clear in stating:

The presence of product, the offsite impacts (product and/or dissolved phase) and the area not being municipally serviced, relying on the groundwater resource requires a more aggressive remedial approach (i.e. continual pumping) and the recovery trench/recovery well system should be considered an “interim solution” until such time that a more aggressive approach is undertaken. The tanks and associated dispensing equipment should be removed, product should be recovered, soil remediation should be undertaken and at a minimum, a monitored natural attenuation approach should be implemented.

[29] I find that the 2012 remedial action plan was accepted by the MECP as an interim solution until a more aggressive strategy could be adopted.

The trench and the recovery well are constructed

[30] In accordance with the 2012 remedial action plan, Drummond constructed the trench and the recovery well in April 2013. The trench was L-shaped and extended over ten metres on the northeast side and five metres along the eastern corner of the Property. Mr. Da Silva and Mr. Menyhart testified that the trench was constructed well below the groundwater table, at a depth of approximately 7.5 metres, just above bedrock. After installation, Mr. Menyhart attended at the Property to monitor the recovery well. Mr. Menyhart did not find a significant quantity of free product that would require removal by a licensed pumping contractor on any of his attendances at the Property.

The March 2015 remedial action plan

[31] In 2015, the MECP renewed its request that a more aggressive strategy be implemented on the Property. In a February 2, 2015 email from the MECP to Mr. Da Silva, copied to Mr. Hawkins, the MECP gave clear direction that a “more aggressive remedial strategy must be developed to effect remediation of 1088 Bridge Street, including but not necessarily limited to, initiating continuous groundwater pumping from the recovery well.”

[32] A March 5, 2015 email from the MECP to Mr. Da Silva, again copied to Mr. Hawkins, is to the same effect, directing that the more aggressive strategy may include but would not be limited to excavation, removal of the underground storage tanks, and collection and treatment of impacted groundwater.

[33] In response, Mr. Hawkins asked Paterson to prepare another remedial action plan. Considering his previous dealings with Paterson and for the reasons I have previously given, I do not believe Mr. Hawkins’ evidence that he was “bullied” by Paterson into proceeding with another remedial action plan.

[34] Paterson’s March 11, 2015 remedial action plan recommended:

The first step will consist of the decommissioning and removal [of] all existing underground storage tanks (USTs) and associated fuel distribution lines from the subject property. The removal and disposal of the tanks will be carried out by the contractor licensed for tank removal. The USTs will be examined once removed for signs of perforations and this information will be documented.

The second step will be to excavate and segregate clean soil from the expected zones of impacted soil and groundwater. Non-impacted soil will be stockpiled on site for re-use as backfill.

Due to the potential depth of impacts within the overburden, the excavation along the boundary wall will be limited to a slope of 1H:1V for safety concerns. Impacted material within this wedge will only be removed if it doesn’t compromise the excavation safety. Typically, a “piano key” approach can be undertaken....

Excavated soil will be environmentally screened using visual and olfactory observations as well as by means of a portable soil vapour analyser....

Impacted soil above the applicable MOE Table 3 standards will be disposed at an approved waste disposal facility. A leachate analysis of the impacted soil will be required prior to disposal....

...All impacted groundwater with a sheen or a notable free-phase product will require off-site disposal by a licenced pumping contractor.

If possible, the existing recovery trench and well system will be left in place for future monitoring and confirmation.

Backfill the excavation with non-impacted stockpiled excavated material and the balance with imported clean material and place in approximated 33 mm lifts and compact to 95% of the material’s Standard Proctor maximum dry density....

[35] As summarized in the 2015 remedial action plan, the purpose of the suggested program was to complete the source removal and lessen the potential for continued migration of hydrocarbon impacted groundwater beyond the Property’s boundaries. The primary focus was to remove the underground storage tanks and remove the surrounding impacted soil within the Property’s boundaries. The plan specifically noted that “[i]n difficult access areas, pockets of impacted soil may remain in place.”

[36] In April 2015, Paterson, on behalf of 595 Ontario, sent a memorandum to the MECP entitled “Remedial Action Plan Summary.” The summary stated that the initial intent of the remedial program was to forego the continued monitoring and product recovery programs based on implementing a more aggressive program using a “pump and treat” system. Instead, 595 Ontario opted to “carry out a source removal rather than a continued groundwater treatment program which would not address impacted soil.” In addition, a poly separation layer would be used along the Property’s boundary to prevent recontamination. Drummond was not provided with a copy of the April 2015 summary and was not made aware of Paterson’s recommendation for a poly separation layer. I accept Mr. Niska’s testimony that he had no discussions with Mr. Hawkins about the installation of a separation layer.

[37] Although intended to be placed along the Property boundary to separate the clean backfill from any residual impacted soils, the poly separation layer was not, in fact, installed as part of the remediation program. Mr. Da Silva testified at trial that the separation layer could not have been safely installed due to the depth of the excavation. There was also opinion evidence from Paterson’s expert that the installation of the separation layer would have provided negligible benefit because the groundwater would have continued to bypass the separation layer, rendering it less effective.

Drummond is engaged to perform remedial work on the Property

[38] In May 2015, Paterson contacted Drummond and asked if it would be interested in performing the remedial work on the Property: on May 20, 2015, Mr. Da Silva emailed Drummond’s estimator, Mr. Niska, and attached copies of Paterson’s 2004 ESA and the 2015 remedial action plan to assist in pricing the work.

[39] On June 2, 2015, Mr. Niska sent Mr. Hawkins an email offer to carry out the work in the 2015 remedial action plan:

Budget price to remove underground storage tanks and fill annular space with clean sand fill would be $28,000. No soil would leave site. This would be step one of Paterson Group’s remedial action plan.

Budget price to remove non-hazardous contaminated soil to a registered land fill would be $85.00/tonne. Contaminated soil disposal is dependent on it meeting the MOE and Progressive Waste Solutions criteria as a solid non-hazardous waste.

Backfill of excavation with clean sand fill would be $18.00/tonne.

[40] Paterson was not copied on this email. I accept Mr. Da Silva’s evidence that Paterson had no input into Drummond’s proposal to 595 Ontario and that Mr. Da Silva told Mr. Hawkins that he, Mr. Hawkins, would be responsible for the remediation contractor.

[41] Drummond’s witnesses, including Mr. Niska, were consistent in their testimony that Drummond could not estimate a total budget for the work to be performed (as set out in the email offer) because it was unknown at that time how much contaminated soil would have to be removed to achieve the objective of the 2015 remedial action plan. 595 Ontario also admitted [3] that “specific quantities were not known at the time of contracting.” I accept Mr. Niska’s evidence that he did not tell Mr. Hawkins that he would match a more favourable price obtained by Mr. Hawkins from another contractor. That approach would fly in the face of Mr. Niska’s evidence and 595 Ontario’s admission that the quantity of the contaminated soil required to be removed would only be known at the completion of the job.

[42] Mr. Niska testified that that he did not tell Mr. Hawkins that he would match a more favourable price if obtained and he had no discussion with him about the installation of a poly separation layer.

[43] On June 15, 2015, Mr. Hawkins emailed Mr. Niska of Drummond with a request:

Andrew,

I have received your estimate. Thank you. Just two things:

a. I want to separate the removal of the tanks (price) from the excavation and backfill price.

b. The chip wagon operator has a lease until [Labour Day] and I believe we will need all the space of the site, so shortly after that will be the time I would want to start.

[44] On June 18, 2015, Mr. Niska confirmed to Mr. Hawkins that there was no problem in separating the two items as Mr. Hawkins had requested. Mr. Niska asked that Drummond be provided two weeks’ notice before the work was to commence. Approximately three months later, on September 8, 2015, Mr. Hawkins instructed Drummond to proceed:

Andrew:

It has been a month or so since I last spoke to you on this project in Manotick. I am now prepared to move ahead and do the remediation.

Please call Carlos [Da Silva] at Paterson Group to organize a time, date and schedule of what, when and how he would like to proceed.

Ian Hawkins

[45] It is Drummond’s position that this email constituted an acceptance of the June 2015 email offer.

Drummond’s work on the Property

[46] In October 2015, directed by Paterson, Drummond excavated the site. Mr. Menyhart of Paterson determined what soil was contaminated or uncontaminated by making visual and olfactory observations and by conducting intermittent tests using a portable vapour analyser. Drummond removed the contaminated soil to a licensed landfill and reused the uncontaminated soil to backfill the site. Drummond also imported clean fill from its own “pit” to backfill the site.

[47] Drummond delivered progress invoices to 595 Ontario on the following dates and in the following amounts:

October 23, 2015 $181,351.21 October 23, 2015 $13, 517.63 October 29, 2015 $125,573.74 October 31, 2015 $5,202.52 November 30, 2015 $4,689.39 TOTAL $330,334.49

[48] The unit prices for the work as set in the invoices are consistent with the quotation. The invoices include the number of metric tons of contaminated soil removed from the Property and taken to the licensed landfill, and the amount of clean fill imported to the Property.

[49] The exhibits at trial included “weight tickets” of the loads of contaminated soil removed from the site and the sand fill delivered to the site. The weight tickets show the volume and weight of the contaminated soil excavated and delivered to the landfill and the clean fill picked up at Drummond’s pit for delivery to the site. Drummond’s office manager, Brian McNamara, testified that Drummond’s invoices match the weight tickets. This evidence was not challenged by 595 Ontario.

[50] Paterson’s January 11, 2016 final report on the completion of the work outlines the work completed by Drummond, including the removal of the underground storage tanks, the excavation of contaminated soil, and the importation of clean fill.

[51] Drummond also performed other work on the Property. Drummond’s position is that this was “extra work”, outside the scope of its contract with 595 Ontario, for which it is entitled to be paid. 595 Ontario’s position is that, if there was an enforceable contract between the parties, the work was not, in fact, “extra.”

[52] First, the original offer contemplated that Drummond would remove and stockpile clean soil on site. This was consistent with the 2015 remedial action plan, which stated that non-impacted soil would be stockpiled on site for re-use as backfill. However, once excavation commenced, there was insufficient space on the Property to stockpile non-impacted soil. The evidence at trial was that Mr. Hawkins instructed Drummond’s project manager on site, Paul Boyd, to store the soil on a neighbouring property. Mr. Boyd testified that he advised Mr. Hawkins of Drummond’s rates to stockpile the soil offsite and Mr. Hawkins instructed Mr. Boyd to proceed. The total amount owing for this additional work (and for which 595 Ontario was invoiced) is $18,720.

[53] Second, Drummond says that it performed additional work to finish the parking lot area. This work was not addressed in the original email offer. Before the remediation project, the Property was covered with asphalt. Mr. Boyd testified that he advised Mr. Hawkins during the course of the remediation project that there would be an extra charge for “granular”, that is gravel. Mr. Boyd advised Mr. Hawkins of Drummond’s rates and Mr. Hawkins instructed him to proceed. The total amount charged by Drummond for “Granular A” was $5,087.28 plus HST, and the amount for “Granular B” was $997.51 plus HST. Drummond provided 595 Ontario with two separate invoices reflecting these amounts. The weights of the granular brought to the Property are recorded in the weight tickets adduced into evidence and verified by Mr. McNamara.

[54] Mr. Boyd’s evidence that Mr. Hawkins consented to the additional work and charges was not contradicted at trial.

[55] Drummond has invoiced 595 Ontario the total net amount [4] of $327,123.62 for the work it performed. The total net amount remains outstanding.

Post October 2015

[56] Since Drummond completed the work in October 2015, Mr. Hawkins has not received any additional orders from the TSSA. In January 2017, Mr. Heeringa of the MECP advised:

...The removal of the fuel tanks and pumps is a significant milestone which will facilitate ongoing discussions with the City of Ottawa and Ottawa Carleton District School Board. The excavation of your property contributes to the collective effort to clean up the fuel contamination affecting all three properties. Since 2004, when the Ministry’s involvement with your property began, I have never indicated that any specific remedial measures you have completed will be the last effort you will ever need to make to address the environmental conditions there.

If there are any petroleum hydrocarbon (or other) impacts in soil or groundwater remaining on your property which are in excess of Ministry’s soil/groundwater standards, particularly within the unexcavated soil at the property boundary, these will need to be considered in the context of future development....If you are planning a residential development you will be required, before development, to have a qualified consultant complete and sign off on a Record of Site Condition which documents that the environmental condition of the property is suitable for the proposed residential land use.

[57] Paterson has not been paid for engineering services it provided to 595 Ontario. The amount of $20,797.94 remains outstanding.

Analysis

Was there an enforceable contract between 595 Ontario and Drummond?

[58] I find that an enforceable contract existed between 595 Ontario and Drummond. That contract consisted of Drummond’s email dated June 2, 2015 – the offer – with the specified work at a specified price. The offer was accepted by 595 Ontario when Mr. Hawkins emailed Drummond in October 2015 to proceed with the specified work under Paterson’s direction.

[59] A contractor’s quotation to perform work forms an offer and the customer’s instruction to proceed constitutes an acceptance: Rosedale Kitchens Inc. v. 2114281 Ontario Inc. et al, 2012 ONSC 3161, 15 C.L.R. (4th) 67, at para. 17; Gignac v. Move Me Again Transportation Inc., 2021 ONSC 3374, 64 C.P.C. (8th) 325, at para. 23. The parties agreed: (i) Drummond was to remove the underground storage tanks on the Property and backfill the Property under the instruction of Paterson; (ii) 595 Ontario would pay Drummond $28,000 for the removal of the underground storage tanks, and $85 per tonne for time and material to remove contaminated soil and $18 per tonne for time and material to backfill the Property.

[60] 595 Ontario’s pleading and the evidence overwhelmingly support the existence of an enforceable contract between 595 Ontario and Drummond. In paragraph 11 of the Amended Statement of Defence, 595 Ontario outlined Drummond’s offer. At paragraph 12, 595 Ontario alleged that it discussed with Drummond the pricing 595 Ontario had obtained from other sources and admitted that on the basis of “Drummond agreeing to match the competitor’s pricing on the removal pricing [$65 per tonne] 595 Ontario agreed to proceed with [Drummond] and authorized them to move ahead with the project.” There was no evidence led at trial in support of 595 Ontario’s “$65 per tonne” allegation.

[61] On November 12, 2015, 595 Ontario, through its counsel, confirmed the terms of the contract between the parties, with the price for the removal of the contaminated soil being $85 per tonne; in this correspondence, 595 Ontario alleged that there was a maximum contract price of $250,000. Ultimately, this position was withdrawn by 595 Ontario. There was no evidence led at trial that Drummond agreed to a maximum budget amount of $250,000.

[62] Finally, in the read-ins from Mr. Hawkins’ examination for discovery, Mr. Hawkins confirmed that he asked Drummond for a quote on the pricing for the project and that he advised Drummond in his September 2015 email that he was prepared to move ahead with the project and do the remediation based on the quotation Drummond had provided. In other words, there was an offer and an acceptance.

[63] Notwithstanding the pleadings and the evidence at trial, 595 Ontario continues to advance the allegation that there was no enforceable contract between the parties and argues that there was only an “agreement to agree.” 595 Ontario focuses on the use of the words “budget price” in Mr. Niska’s email and contends that there was no “clear set of terms.” Neither submission has merit.

[64] 595 Ontario submits that the words “budget price” reflect a price that was not firm, and one that was intended to be an estimate to assist Mr. Hawkins to determine the budget for his project that would lead, hopefully, to actual contract discussions. 595 Ontario suggests that Mr. Niska ought to have used the word “quote” if Drummond had intended to legally bind 595 Ontario. I disagree. A fair reading of Mr. Niska’s email leads to the inescapable conclusion that Drummond was offering to do the work specified at the prices specified. On a fair and objective reading of Mr. Hawkins’ September 2015 email, 595 Ontario accepted Drummond’s offer. Mr. Hawkins, himself, admits that he authorized Drummond to proceed with the work on the basis of Drummond’s offer. The use of the words “budget price” instead of “quote” does not render the offer something other than what it was.

[65] 595 Ontario also submits that the scope of the work to be performed by Drummond was not clearly defined and that the court would be forced to “rewrite the entire contract, specifications and all.” 595 Ontario contends that there was no acceptance because Mr. Hawkins’ September 2015 email did not refer to the “estimate” and did not accept the “offer or price”, and there was no scope of work defined.

[66] Again, I disagree. Mr. Hawkins’ September 2015 email, instructing Drummond to proceed under the direction of Paterson, is the last email in the exchange. It cannot be read in isolation from (i) Drummond’s offer – which specified the nature of the work and the price for that work – as set out in Mr. Niska’s email; (ii) Mr. Hawkins’ June 15, 2015 email in which he a) acknowledged the nature of the work by asking to “separate the removal of the tanks (price) from the excavation and backfill price” and, significantly, did not question the offered price, and b) proposed a delay in the work until after Labour Day; and (iii) Mr. Niska’s response on June 18, 2015 in which he advised there was no problem in separating the two items and asked for two weeks’ notice before the commencement of the work “so that underground utility locates can be completed.” There was no ambiguity as to the nature of the work that Drummond would perform and there was no ambiguity as to the price to be charged for the removal of the underground storage tanks, the excavation of the site, and the backfill of the site. Mr. Hawkins, himself, admits that he authorized Drummond to proceed and do the remediation on the basis set out in Drummond’s quote.

[67] Mr. Hawkins instructed Drummond to contact Paterson to, in 595 Ontario’s words, “figure out the details.” 595 Ontario contends that Mr. Hawkins’ instructions are consistent with his evidence that he wanted to ensure Paterson managed the work to keep it within the price range 595 Ontario and Paterson discussed.

[68] This argument flies in the face of the evidence and the applicable legal principles. By instructing Drummond to proceed with the work in accordance with Drummond’s offer, 595 Ontario agreed to be charged, at the specified unit rate basis, for the excavation and backfill. In interpreting a contract, the judge “must read the contract as a whole, giving the words used their ordinary and grammatical meaning, consistent with the surrounding circumstances known to the parties at the time of the formation of the contract” with the goal of ascertaining the objective intent of the parties: Sattva Capital Corp. v. Creston Moly Corp., 2014 SCC 53, [2014] 2 S.C.R. 633, at paras. 47, 49, and 59.

[69] Contrary to 595 Ontario’s contention, there was no fixed price or maximum upset limit specified in the offer. 595 Ontario has admitted that the amount of contaminated soil was unknown at the time the contract was formed: “specific quantities were not known at the time of contracting and that the charges were to be finalized based on items (a to c) above.” [5]

[70] I also reject Mr. Hawkins’ repeated testimony that Mr. Da Silva told him the work to be performed by Drummond would cost between $70,000 and $100,000. For the reasons previously given, I find Mr. Hawkins’ testimony not credible. It is denied by Mr. Da Silva. It is inconsistent with the evidence, that the total amount of contaminated soil that would have to be removed from the Property was unknown. It is inconsistent with the evidence given by Mr. Hawkins on his examination for discovery, which was read in trial. It is not believable having regard to the fact that Paterson provided 595 Ontario with a quote that estimated the cost of similar work to be $403,000.

Drummond is entitled to be paid for the work it performed

[71] With regard to the actual work performed by Drummond, 595 Ontario has raised only two complaints. First, 595 Ontario alleges that too much soil was removed from the site. Second, 595 Ontario complains that Drummond did not install a poly separation layer. I agree with Drummond that neither complaint justifies 595 Ontario withholding payment from Drummond.

[72] I find on the evidence that Drummond was not retained to assess the quality of the soil or determine what soil was to leave the site. Mr. Hawkins, on behalf of 595 Ontario, directed Drummond to take instructions from Paterson with respect to “what, when and how he [Mr. Da Silva] would like to proceed.” Mr. Hawkins admitted that Drummond was to take direction from Paterson regarding where to dig. Paterson’s representative on site, Mr. Menyhart, determined what soil was contaminated or not. Mr. Grinnell, 595 Ontario’s expert at trial, testified that Drummond did “exactly what it was hired to do.” Mr. Boyd testified that Drummond never determined independently if the soil was contaminated – that job was left to Paterson.

[73] For these reasons, I find that Drummond is entitled to be paid for the work it performed under the contract in relation to the Property.

Drummond is entitled to be paid for the additional work it performed

[74] Drummond’s position is that it performed extra work outside of the scope of its contract with 595 Ontario for which it is also entitled to be paid. 595 Ontario does not dispute that this additional work was performed, but it argues that the work was subsumed within the existing contract. I agree with Drummond.

[75] The original quote from Drummond contemplated that Drummond would remove and stockpile clean soil on site. This was contemplated as the second step of the 2015 remedial action plan: “Non-impacted soil will be stockpiled on site for re-use as backfill.” As it turned out, there was insufficient space on the Property to stockpile non-impacted soil. It was Mr. Boyd’s uncontradicted evidence (Mr. Boyd being Drummond’s project manager on site) that Mr. Hawkins instructed him to store the soil across the road on a neighbouring property, which Drummond did. Drummond invoiced 595 Ontario for the cost of this work in two invoices. At no time did 595 Ontario question these charges. I find that Mr. Hawkins, on behalf of 595 Ontario, authorized Drummond to perform this additional work. I find the total amount owed to Drummond for this extra work is $18,720.

[76] The original quote from Drummond did not include the cost to finish the parking lot area. Prior to the remediation work, the Property was covered by asphalt. Drummond was not hired to pour asphalt. Mr. Boyd testified that he advised Mr. Hawkins that there would be an extra charge for granular and advised him of the cost/tonne and Drummond’s rates. Mr. Hawkins instructed Mr. Boyd to proceed. Mr. Boyd’s evidence on this issue is uncontradicted. I find that Mr. Hawkins, on behalf of 595 Ontario, authorized Drummond to proceed with the granular work. I find the total amount owed to Drummond for this extra work is $6,084.79 (for “Granular A” and “Granular B”) plus HST.

Summary on Drummond

[77] Based on the contract between the parties and the extra work authorized by 595 Ontario and performed by Drummond, 595 Ontario owes Drummond the total amount of $327,123.62, inclusive of HST. Drummond is entitled to judgment in this amount.

Is Paterson liable to indemnify 595 Ontario?

[78] 595 Ontario alleges that Paterson should indemnify it for any amounts found owing by 595 Ontario to Drummond on the basis that any damages suffered by Drummond were caused by Paterson’s negligence. 595 Ontario relies on Mr. Grinnell’s opinion evidence in support of its contention that Paterson failed to meet the requisite standard of care, both in relation to its claim against Paterson and in defence of Paterson’s counterclaim. I therefore turn to Mr. Grinnell’s evidence.

(a) Mr. Grinnell’s evidence

[79] In considering whether Paterson met the standard of care, Mr. Grinnell was asked by 595 Ontario to provide his opinion on 24 specific items. Mr. Grinnell testified that some of these items were provided to him by 595 Ontario’s counsel. The remaining items were generated from a report Mr. Grinnell prepared for another law firm. The first four items relate to the performance of the remedial excavation work on the Property by Paterson and Drummond. I note, however, Mr. Grinnell’s repeated testimony that Drummond went to the Property and “did what they were supposed to do.” The remaining 20 items address whether Paterson failed to meet the standard of care expected of an experienced environmental consulting firm.

[80] Mr. Grinnell agreed on cross-examination that many of his opinions are tied to what he discussed with Mr. Hawkins – someone whom Mr. Grinnell described as confused at times. Mr. Grinnell also met with Ms. Hawkins. Ms. Hawkins was not involved with the Property at the relevant times.

[81] Although there is some overlap among the 24 items, it is necessary for me to discuss each because, both individually and collectively, they have informed my assessment of Mr. Grinnell’s opinion.

[82] The first item Mr. Grinnell was asked to consider was whether the segregation of soil by Drummond and/or Paterson was completed in accordance with industry standards and the requirement of the applicable remedial action plan. Mr. Grinnell opined that the amount of segregated soil and the amount of petroleum hydrocarbon impacted soil disposed of offsite were consistent with the reported depth and extent to the remedial excavation; however, Mr. Grinnell was critical of the lack of data in Mr. Menyhart’s field notes documenting sampling and screening protocols used to segregate the upper level of silty sand fill or recording where it was placed.

[83] However, I note that the site remediation report prepared by Paterson records that these soils exhibited no visual or olfactory indications of petroleum hydrocarbon contamination and that no detectable vapours were recorded in these soils.

[84] The second item considered by Mr. Grinnell was whether Drummond and/or Paterson sent non-contaminated soil offsite for disposal. Mr. Grinnell concluded that the amount of petroleum hydrocarbon impacted soil disposed of offsite “appears reasonable”; however, he suggested that the daily tallies of impacted soil “could have then been compared to the [remedial action plan] on a daily basis to ascertain how the actual quantities of impacted soil removed from the Site compared with the estimated quantities as provided in the [remedial action plan].”

[85] Mr. Grinnell’s testimony was that it was “possible” some contaminated soil remained on site and that it was “possible” some non-contaminated soil was sent offsite for disposal. Mr. Grinnell appeared to be reaching to find fault with Paterson in this regard. In formulating his view regarding daily tallies of impacted soil, Mr. Grinnell does not appear to have considered the progress invoices issued by Drummond, which include the number of metric tons of contaminated soil removed from the Property.

[86] The third item considered by Mr. Grinnell was whether Drummond and/or Paterson carried out the instructions of 595 Ontario as stated in Mr. Hawkins’ September 8, 2015 email to “organize a time, date and schedule of what, when and how he would like to proceed” in a manner consistent with industry practice and standards. Mr. Grinnell opined that Paterson did not meet the standard of care because it did not take into account that “the Owner went to great lengths to get a cost figure for the project from Paterson Group and it was advised that the job would take less than a week and in no way exceed $70,000.”

[87] In his testimony, Mr. Grinnell admitted that he did not know if Mr. Hawkins’ September 2015 instructions were carried out. On cross-examination, Mr. Grinnell conceded that he had seen no evidence that Mr. Hawkins had gone to “great lengths” to obtain a cost figure for the project and he had seen no evidence of a commitment by Paterson that the cost of the project would not exceed $70,000. I have found that no such commitment was provided by Paterson.

[88] The fourth item considered by Mr. Grinnell was whether there were any unexpected site conditions that led to the scope of the work being greater or more complicated than originally envisaged in the 2015 remedial action plan. Mr. Grinnell opined that the remedial excavation occurred largely as anticipated with the notable exception being the depth of excavation. In his view, Mr. Da Silva had an obligation to inform Mr. Hawkins once the bottom of the excavation extended deeper than anticipated and to alert him to the resulting increases in the amount of impacted soil and the associated disposal costs.

[89] Again, Mr. Grinnell’s opinion seems to be predicated on the cost of the project being capped. He does not appear to have considered the progress invoices issued by Drummond that include the number of metric tons of contaminated soil removed from the Property. Nor does Mr. Grinnell’s opinion take into account Mr. Hawkins’ admission that he authorized Drummond to proceed on a unit per tonne basis precisely because the amount of contaminated soil required to be removed would only be known once the job was completed.

[90] The fifth item considered by Mr. Grinnell was whether Paterson failed to meet the standard of care regarding the required removal of the tanks and dispensing equipment in 2012 pursuant to the TSSA order. Mr. Grinnell faults Paterson because there was no indication that Paterson informed 595 Ontario in writing of the need to comply with this requirement. Mr. Grinnell noted that while the underground storage tanks and associated equipment were removed from the Property in the fall of 2015, other investigations to delineate impacts on and offsite have not been completed and “it is not known, based on the materials reviewed, if Mr. Da Silva re-iterated the need to complete these investigations to Mr. Hawkins.”

[91] Again, in my view, Mr. Grinnell was straining to find fault with Paterson. Mr. Grinnell was unable to say what Paterson and Mr. Hawkins discussed regarding the removal of the underground storage tanks and when. The evidence at trial was overwhelming that Mr. Hawkins wanted to postpone taking any remedial action on the Property for as long as possible. Mr. Grinnell’s opinion regarding the timing of the removal of the underground storage tanks fails to account for the reality Paterson was dealing with “on the ground” – a difficult client who, throughout the process, pointed fingers at others, and refused to acknowledge the obvious.

[92] The sixth item considered by Mr. Grinnell was whether Paterson failed to meet the standard of care by not providing the client with a “suite of options” in 2012 to address the issue of offsite migration of hydrocarbon contamination. Mr. Grinnell opined that a diligent consultant “could have” provided a suite of remedial options in 2012 but noted that additional investigations would have been required to collect sufficient data to evaluate and cost each potential remedial option.

[93] In his testimony, Mr. Hawkins asserted that his Property was not the source of any offsite migration of contaminants. There is nothing in the evidence to suggest that Mr. Hawkins and 595 Ontario would have been prepared to consider any other options. All the evidence is to the contrary.

[94] The seventh item considered by Mr. Grinnell was whether Paterson failed to meet the standard of care by “failing to adequately respond to the Crossley (MECP) memo of 18 January 2013” that the trench should be pumped out on a continual basis. Mr. Grinnell opined that the trench as constructed and operated did not satisfy the MECP’s concerns and therefore, Mr. Da Silva did not meet the requisite standard.

[95] I disagree. Mr. Grinnell’s opinion assumes that Mr. Hawkins and 595 Ontario were ready, willing, and able to incur the costs associated with continual groundwater pumping. There was no such evidence. All the evidence points to Mr. Hawkins’ reluctance to incur costs in relation to the property.

[96] Also, in relation to the seventh item, Mr. Grinnell noted that Mr. Da Silva did respond to the MECP’s concern regarding the depth of the trench. In his email response to Mr. Heeringa of the MECP in January 2013, Mr. Da Silva provided four reasons why deepening the recovery trench was not feasible: (i) it would extend the base of the trench into bedrock; (ii) to achieve such excavation into bedrock, line drilling, hoe ramming and temporary shoring would be required; (iii) a partial road closure of three weeks would be required; and (iv) lowering the groundwater within the bedrock mass could create a vertical pathway, impacting the bedrock mass on and off the Property. Mr. Hawkins was copied on Mr. Da Silva’s email.

[97] Mr. Heeringa responded to Mr. Da Silva. Again, Mr. Hawkins was copied on the correspondence. Mr. Heeringa confirmed that the MECP wanted to ensure the excavation would be deep enough to intercept the groundwater table for the longest period possible throughout the year. He noted that “[i]f 8-9.5 meters below grade cannot be attained due to bedrock and associated costs, then the excavation should continue at least until bedrock is reached.” The evidence at trial was that the excavation did continue until the point where bedrock was reached. Mr. Grinnell’s opinion fails to account both for the MECP’s response to the situation and the factual evidence that Paterson encountered bedrock.

[98] The eighth item considered by Mr. Grinnell was whether Paterson failed to meet the standard of care by failing to monitor the operation of the recovery trench following its installation. Mr. Grinnell opined that a diligent consultant would have realized that the recovery trench required more than the passive approach used by Paterson in order to maintain hydraulic control and to prevent further offsite migration. In Mr. Grinnell’s opinion, Paterson should have “fully explained” to Mr. Hawkins that using the passive approach would not likely be acceptable to the MECP.

[99] Again, Mr. Grinnell’s opinion assumes that Mr. Hawkins and 595 Ontario were ready, willing, and able to incur the costs associated with continual groundwater pumping. It also incorrectly assumes that Mr. Hawkins accepts the Property as being the source of migration of contaminants.

[100] The ninth item considered by Mr. Grinnell was whether Paterson failed to meet the standard of care by failing to provide the client with a “suite of options” in response to Mr. Heeringa’s February 3, 2015 email. Mr. Grinnell opined that Mr. Da Silva ought to have presented the various options available (which were the same as those available in 2013) “as best they could.”

[101] Again, there is nothing in the evidence to suggest that Mr. Hawkins and 595 Ontario would have been prepared to consider any other options.

[102] The tenth item considered by Mr. Grinnell was whether Paterson failed to meet the standard of care by designing a remedial action plan that “failed to address the key issues presented” and failed to properly take into account the client’s needs. In Mr. Grinnell’s opinion, neither remedial action plan met the MECP’s requirements or 595 Ontario’s objectives for the Property; in his opinion, Paterson failed to meet the standard by not discussing why certain items were not included in the 2012 or 2015 remedial action plans.

[103] Again, Mr. Grinnell has failed to account for the fact that Mr. Hawkins wanted to postpone taking any remedial action on the Property for as long as possible.

[104] The eleventh item considered by Mr. Grinnell was whether Paterson failed to meet the standard of care by failing to explain to 595 Ontario that, in addition to the excavation, a pumping program would also be implemented to recover the impacted groundwater within the excavation and recovery trench. In Mr. Grinnell’s opinion, Paterson ought to have realized that excavation alone would not address the MECP’s requirement to mitigate offsite migration and Mr. Da Silva should have explained the MECP’s expectations to Mr. Hawkins before the excavation work began.

[105] This item is similar to the seventh item. I will not repeat my observations in relation to that item here.

[106] The twelfth item considered by Mr. Grinnell was whether Paterson failed to meet the standard of care by not explaining to the client that a contaminated wedge of soil would remain following the excavation. Mr. Grinnell noted that Paterson provided notice in writing, twice, that a wedge of impacted soil would remain on site. However, he suggested that there were options available to excavate vertically that, while “potentially more expensive”, would have removed the impacted material, thus mitigating further offsite migration, and eliminated the need for additional remediation prior to development. Mr. Grinnell faults Paterson for not discussing the remedial excavation approaches available with 595 Ontario.

[107] Notice of the contaminated wedge was provided. There is no evidence that Mr. Hawkins was willing to incur additional costs. Mr. Hawkins was not willing to acknowledge that the Property was the source of the offsite migration.

[108] The thirteenth item considered by Mr. Grinnell was whether Paterson failed to meet the standard of care by “simply allowing the client to rely on a brief quote from Drummond.” Mr. Grinnell was critical of Paterson and stated that Paterson should have established a scope of work that included estimated quantities and unit rates before the work began. In Mr. Grinnell’s opinion, by not doing so, Paterson’s management of Drummond did not meet the requisite standard of care.

[109] Mr. Grinnell not aware of discussions between the parties. I have found that there was an enforceable contract between Drummond and 595 Ontario that specified the work to be performed and the price for the specified work.

[110] The fourteenth item considered by Mr. Grinnell was whether Paterson failed to meet the standard of care by failing to properly “scope the work” to be performed in fulfillment of the remedial action plan. Mr. Grinnell opined that Mr. Da Silva had an obligation to ensure that Mr. Hawkins was aware of the anticipated excavation work and agreed to its implementation.

[111] Mr. Grinnell’s opinion appears to rest on the erroneous assumption that there was a cap of $70,000 on the project. There was not. There was an enforceable contract between Drummond and 595 Ontario: Drummond offered to perform the work and Mr. Hawkins admitted that he authorized Drummond to proceed.

[112] The fifteenth item considered by Mr. Grinnell was whether Paterson failed to meet the standard of care by failing to provide the excavation contractor with all the applicable documents and work specifications. While Mr. Grinnell conceded in his report that Drummond was provided with sufficient documentation and specifications to complete the remedial excavation, he faulted Paterson for allowing Drummond to complete the work without “documenting and discussing” 595 Ontario’s expectations ahead of time.

[113] Again, Mr. Grinnell’s criticisms of Paterson fail to account for Mr. Hawkins’ acknowledgement that the amount of contaminated soil required to be removed from the site was unknown at the outset of the project.

[114] The sixteenth item considered by Mr. Grinnell was whether Paterson failed to meet the standard of care by failing to undertake sufficient investigations to properly define the extent and dimensions of the contamination to inform the preparation of a detailed scope of work. Mr. Grinnell opined that an experienced environmental engineering firm would have either informed Mr. Hawkins of the cost uncertainties associated with relying on historical data or completed additional test pitting to confirm site conditions and refine the associated costs.

[115] The cost uncertainties were recognized by Mr. Hawkins. Mr. Grinnell’s suggestion that additional tests should be performed ignores the nature of Paterson’s client.

[116] The seventeenth item considered by Mr. Grinnell was whether Paterson failed to meet the standard of care by “misinforming the client about the scope of the work and likely costs.” In Mr. Grinnell’s opinion, Mr. Da Silva did not meet the applicable standard of care because he failed to provide 595 Ontario with an estimate of associated costs to implement the 2015 remedial action plan and thereby allowed 595 Ontario to incur far greater costs than originally anticipated.

[117] Mr. Grinnell’s opinion in relation to this item fails to account for the evidence at trial.

[118] The eighteenth item considered by Mr. Grinnell was whether Paterson failed to meet the standard of care by relying on visual and olfactory screening methods and vapour measurements during the excavation process. In his report, Mr. Grinnell concedes that Paterson followed established procedures and directed the excavation in a manner generally consistent with industry standards at the time. However, in Mr. Grinnell’s opinion, Paterson did not supervise the excavation in a manner consistent with industry standards in place at the time.

[119] There is no evidence that Paterson did not supervise the excavation in a manner consistent with industry standards. Mr. Grinnell conceded that Paterson followed established procedures.

[120] The nineteenth item considered by Mr. Grinnell was whether Paterson failed to meet the standard of care by failing to ensure that the segregation of the soil was completed in accordance with standards and requirements of the remedial action plan “in a verifiable manner.” Mr. Grinnell criticized Paterson for not properly characterizing the concentration of petroleum hydrocarbons in the segregated soil or documenting the location where it was re-used on site.

[121] Mr. Grinnell has conceded that Paterson followed established procedures in directing the excavation and properly relied on visual and olfactory screening methods and vapour measurements. Mr. Grinnell appears to be reaching to find fault with Paterson.

[122] The twentieth item considered by Mr. Grinnell was whether Paterson failed to meet the standard of care by failing to ensure the fill being used to restore the Property (both on site and from outside sources) met applicable standards. In Mr. Grinnell’s opinion, by not documenting the quality of fill imported to the site, Paterson did not meet the standard of care.

[123] There is no evidence to ground Mr. Grinnell’s speculation.

[124] The twenty-first item considered by Mr. Grinnell was whether Paterson failed to meet the standard of care by failing to properly supervise and manage the excavation work and contractor “when it was clear that function had been assigned to it.”

[125] I will not repeat my comments regarding the eighteenth item. There is no merit to this suggestion.

[126] The twenty-second item considered by Mr. Grinnell was whether Paterson failed to meet the standard of care because it took a total of 11 soil samples for lab analysis. In his report, Mr. Grinnell noted that the 11 soil verification samples – four from the floor and seven from the sidewalls – met the minimum verification sampling requirements as set out in the MECP’s guidance document for an excavation site of this size. [6] However, Mr. Grinnell is of the opinion that soil verification samples should also have been collected from the wedge of impacted soil that remained on site.

[127] Paterson complied with the MECP’s minimum verification sampling requirements.

[128] The twenty-third item considered by Mr. Grinnell was whether Paterson failed to meet the standard of care by failing to document the work to ensure compliance with applicable standards. With a few minor exceptions, Mr. Grinnell opined that Paterson documented the October 2015 excavation work program in accordance with ministry and industry standards for a project of this magnitude.

[129] The twenty-fourth and final item considered by Mr. Grinnell was whether Paterson failed to ensure that an upset dollar limit was set at the outset of Drummond’s work. In Mr. Grinnell’s opinion, adequate controls were not in place to monitor Drummond’s costs nor was 595 Ontario provided with regular cost updates during the project.

[130] Mr. Grinnell’s opinion is inconsistent with the evidence adduced at trial: there was a contract between Drummond and 595 Ontario and 595 Ontario received progress invoices.

[131] In summary, Mr. Grinnell proffered the opinion that Paterson and Mr. Da Silva failed to meet the standard of care by:

• allowing the underground storage tanks to remain on site until 2015;
• failing to conduct soil and groundwater investigations as requested by the MECP and the TSSA;
• installing a recovery trench without presenting other remedial options to 595 Ontario;
• failing to respond to technical concerns raised by the MECP regarding the recovery trench;
• operating the recovery trench in a manner contrary to the MECP’s expectations;
• overseeing a soil excavation program in the fall of 2015 that did not satisfy the MECP’s requirements or 595 Ontario’s needs; and
• causing 595 Ontario to dispute the value of the remedial excavation work performed by Drummond. [7]

(b) Mr. Thomas’ evidence

[132] Mr. Thomas was asked to provide his opinion on the following:

• In the preparation of the various remedial actions plans, did Paterson meet the standard of care of a reasonable and competent engineer?
• Has 595 Ontario suffered any damages as a result of Paterson’s advice?

[133] Mr. Thomas also provided evidence in relation to Mr. Grinnell’s report.

[134] In Mr. Thomas’ opinion, Paterson met the requisite standard of care. Mr. Thomas noted that the 2012 remedial action plan was prepared by Paterson, in response to the MECP’s requests to 595 Ontario. It was submitted to the MECP for review and acceptance.

[135] Mr. Thomas considered that 595 Ontario did not action the MECP’s March 2008 correspondence and that there were no documented efforts by 595 Ontario between March 2008 and June 2012 to address the contamination on the Property. The purpose of the 2012 remedial action plan, as stated in the plan, was to recover free product and attempt to mitigate the offsite migration of free product from the Property. Mr. Thomas noted that 595 Ontario was aware of the contents of the 2012 remedial action plan and its acceptance by the MECP.

[136] In Mr. Thomas’ opinion, the 2012 remedial action plan was based on the needs of 595 Ontario at the time, ensuring compliance with the repeated regulatory requests of the MECP for mitigating the immediate offsite risks emanating from the Property.

[137] Mr. Thomas observed that the 2015 remedial action plan was prepared by Paterson in response to the MECP’s requests that 595 Ontario carry out a more aggressive approach to remediation of the petroleum hydrocarbon contamination on the Property. The 2015 remedial action plan was prepared with technical input and acceptance of the MECP. Mr. Thomas noted that Paterson provided environmental site remediation program monitoring services during excavation.

[138] In reviewing Paterson’s site remediation report, Mr. Thomas observed that source removal of the underground storage tanks was successfully carried out as well as the removal of the bulk of the petroleum hydrocarbon impacted soils. In Mr. Thomas’ opinion, the installation of the poly separation layer would have provided negligible benefit with regard to preventing cross contamination migration.

[139] In Mr. Thomas’ opinion, the 2015 remedial action plan and Paterson’s role during the remediation program were completed in compliance with the MECP’s stipulated requirements. The services provided by Paterson satisfied the regulatory needs addressed to 595 Ontario at the time. Mr. Thomas opined that all works were completed in accordance with industry standard practices.

[140] Mr. Thomas opined that the risk of potential recontamination of the Property (from any residual impacted soils left in place) is negligible. He also noted that, in order to remove all impacted soils, a significant investment for shoring would have been required. He opined that it would be more practical and cost-effective to remove residual soil impacts during a future redevelopment of the Property, when a shoring system would be part of the redevelopment project.

[141] In Mr. Thomas’ opinion, the completed remedial program resulted in the betterment of the environmental condition of the Property and significantly reduced 595 Ontario’s potential liability for offsite contamination and prevented the issuance of an order for regulatory non-compliance.

(c) Assessment of the expert evidence

[142] An engineer is “bound to possess a reasonable amount of skill in the art or profession they exercise for reward, and to use a reasonable amount of care and diligence in carrying out the work which they undertake”: Dominion Chain Co. Ltd. v. Eastern Construction Co. Ltd. et al., 46 D.L.R. (3d) 28 (Ont. H.C.), aff’d, 12 O.R. (2d) 201 (C.A), aff’d, [1978] 2 S.C.R. 1346. Importantly, engineers are not held to a standard of perfection; “[t]he question is whether there has been such a want of competent care and skill, leading to the bad result, as to amount to negligence”: Dominion Chain, at p. 46.

[143] In Moura v. ECO Conservation Inc, 2018 ABQB 371, 92 C.L.R. (4th) 47, at para. 89, the court explained: (i) engineers are not obliged to perform to the standard of the most competent members of the profession unless the contract obliges them to do so; (ii) reasonable skill and care are to be judged by the standard of competence prevailing at the time; (iii) if an engineer follows the accepted body of professional opinion, even if there is opinion to the contrary, the engineer may be “guilty” of an error of judgment but not negligence; and (iv) engineers do not guarantee their work; an unsatisfactory result will not translate into negligence as long as the engineers have exercised reasonable judgment, competence, and diligence.

[144] Whether the standard of care has been met in a particular case is a question of fact: Galaske v. O’Donnell, [1994] 1 S.C.R. 670, at p. 694.

[145] On the issue of whether Paterson met the standard of care of a reasonable and competent engineer, I prefer the opinion evidence of Mr. Thomas to that of Mr. Grinnell. Beginning with the sheer number and the very pointed nature of the items Mr. Grinnell was asked to consider, I find that Mr. Grinnell overreached and attempted to find fault with Paterson’s conduct. Mr. Grinnell appeared to hold Paterson to a standard of perfection, divorced from the evidence adduced at trial. For example, his suggestion that Paterson ought to have provided regular cost updates as the work progressed failed to recognize that Paterson was not responsible for contract administration and failed to account for the fact that the remediation project on the Property was of very short duration.

[146] As a second example, Mr. Grinnell’s criticism of Paterson for “allowing” the underground storage tanks to remain on site until 2015 fails to recognize that it was 595 Ontario’s decision not to implement the TSSA’s orders for a period of years. I have already noted other examples where Mr. Grinnell’s opinion deviated from the evidence adduced at trial.

[147] By contrast, Mr. Thomas’ opinion was grounded in the evidence. His evidence was clear and cogent. I find that Paterson worked diligently to advocate on behalf of 595 Ontario to develop cost-effective solutions for the Property owner that would satisfy the MECP. I find that Paterson met the standard of care of a reasonable and competent engineer.

[148] In any event, there is no evidence that 595 Ontario suffered any damages because of Paterson’s advice. On the whole of the evidence, including Mr. Thomas’ opinion evidence, I find that the 2015 remediation of the Property resulted in the betterment of the Property’s environmental condition. The MECP has described the removal of the underground storage tanks as a “significant milestone” and there have been no orders issued by the TSSA since the work was completed in October 2015.

[149] Accordingly, I find that Paterson met the standard of care expected of a reasonable and competent engineer in the circumstances and I dismiss 595 Ontario’s claim against Paterson.

Paterson is entitled to judgment on its counterclaim

[150] Given my finding that Paterson met the standard of care expected of a reasonable and competent engineer in the circumstances, Paterson is entitled to be paid the amount of $20,797.94 for the professional work it performed for 595 Ontario.

Conclusion

[151] I grant judgment to Drummond in the amount of $327,123.62, together with prejudgment and postjudgment interest under s. 128 and s. 129, respectively, of the Courts of Justice Act, R.S.O. 1990, c. C.43.

[152] 595 Ontario’s action against Paterson is dismissed. I grant judgment to Paterson in the amount of $20,797.94, together with prejudgment and postjudgment interest under the Courts of Justice Act.

[153] As the successful parties, Drummond and Paterson are presumptively entitled to their costs of the proceedings. In the event the parties are unable to agree on costs, they may provide their submissions in writing. Drummond and Paterson are to provide their respective submissions by March 29, 2022. 595 Ontario is to provide its responding submissions by April 12, 2022. Drummond and Paterson’s submissions are not to exceed four pages, excluding any bill of costs and authorities. 595 Ontario’s responding submissions are not to exceed six pages.

[154] I wish to thank counsel for their professionalism throughout.

Ryan Bell J.

Madam Justice Robyn M. Ryan Bell

Released: March 15, 2022

[1] By order of R. Smith J. dated February 27, 2020.

[2] Known at the time at the Ministry of the Environment, and now known as the Ministry of the Environment, Conservation and Parks. For simplicity, I have used “MECP” throughout these Reasons.

[3] Amended Statement of Defence, at para. 15.

[4] Net because Drummond inadvertently overbilled 595 Ontario the amount of $2,841.48 plus HST for soil used to fill the annular space as part of the removal of the underground storage tanks. This soil was to be included in the $28,000 allocated in the email offer to the removal of the underground storage tanks.

[5] Amended Statement of Defence, at para. 15.

[6] Ministry of the Environment and Energy, Guidance on Sampling and Analytical Methods for Use at Contaminated Sites in Ontario, Table 4.1A (Toronto: Queen’s Printer for Ontario, 1996), at 16.

[7] Although identified by Mr. Grinnell as a failure by Paterson to meet the standard of care, this item appears to be an alleged outcome of Paterson failing to meet the standard of care.