2026 ONSC 509

COURT FILE NO.: CV-19-59293

DATE: 2026-02-02

ONTARIO

SUPERIOR COURT OF JUSTICE

B E T W E E N:

DUNN AND DRUMMOND INCORPORATED

Plaintiff

• and -

FISHER ENVIRONMENT LTD., DAVOR ALEXANDER FISHER a.k.a. DAVID FISHER a.k.a. DAVE FISHER, HAMDNI TEXTILES LTD., HASSAN H. HAMDANI, ABBAS H. HAMDANI, COLONIAL CLEANERS a.k.a. COLONIAL DRY CLEANERS, LIPSIT HOLDINGS LIMITED, WILLIAM LEWIS LIPSIT 1872276 ONTARIO INC., CHRISTOPHER MICHAEL DOUGLAS, KING CENTRE PLAZA LIMITED, FRANK ORLANDO D’ALESSANDRO a.k.a. FRANK ORLANDO D’ALESSADRO a.k.a. ORLANDO FRANCO D’ALESSANDRO a.k.a. FRANK D’ALESSANDRO, SAMUEL BERGER, JANET BERGER, ENDRE KLEIN, ROSE KRIESER, SOUTHWAY PLAZAS LTD., DONALD J. TALIANO, WITTINGTON LEASED PROPERTIES LIMITED, JOHN E. LANGDON, W.S. ROBERTSON, LOBLAWS INC., WITTINGTON LEASEHOLDS LIMITED, NORMAN JOHN MUNN

Defendants

T. Farber and V. De Sousa, Counsel for the Defendants/Moving Parties, Hamdani Textiles Ltd., Hassan H. Hamdani and Abbas H. Hamdani

B. Weintraub and A. Wong, Counsel for the Defendants/Responding Parties, 1872276 Ontario Inc. and Christopher Michael Douglas

HEARD: October 14, 2025, and January 6, 2026

ENDORSEMENT ON MOTION

The Honourable Justice M. Valente

Overview

1The moving party Defendants, Hamdani Textiles Ltd., Hassan H. Hamdani and Abbas H. Hamdani (collectively, the “Hamdani Defendants”), seek an order granting summary judgment pursuant to Rules 20 and 20.01(3) dismissing the crossclaim of the responding party Defendants, 1872276 Ontario Inc. and Christopher Michael Douglas (collectively, the “187 Defendants”), for independent damages relating to subsurface contamination (the “Independent Damages Claim”) of the lands municipally known as 6585-6595 Drummond Road, Niagara Falls (the “Drummond Road Property”). In the alternative, the Hamdani Defendants seek an order pursuant to Rule 21 striking without leave to amend the Independent Damages Claim as pled in paragraphs 32 to 34 of the amended crossclaim of the 187 Defendants.

2The Hamdani Defendants further seek an order for summary judgment dismissing the 187 Defendants’ claim for equitable set off as against them in the amount of the Independent Damages Claim (the “Equitable Set Off Claim”) as pled in paragraph 4 of the 187 Defendants’ defence to amended crossclaim of the Hamdani Defendants. In the alternative, the Hamdani Defendants seek an order striking without leave to amend the Equitable Set Off Claim.

3The Hamdani Defendants submit that the 187 Defendants’ Independent Damages Claim and Equitable Set Off Claim were brought more than two years after knowledge of contamination of the Drummond Road Property came to the attention of the 187 Defendants and these claims constitute new causes of action.

4In its statement of claim, the Plaintiff seeks damages for subsurface contamination of its lands municipally known as 6175 Dunn Street, Niagara Falls. The Plaintiff’s lands are located across the street from the Drummond Road Property. The Plaintiff’s claim alleges contamination migrated from nearby lands, including the Drummond Road Property. A predecessor corporation to the Defendant, Hamdani Textiles Ltd. (“Hamdani Textiles”), owned the Drummond Road Property until 2013 when it sold the lands to the Defendant, 1872276 Ontario Inc (“187”).

5The statement of claim was served on the 187 Defendants on April 6, 2020.

6The 187 Defendants delivered their statement of defence and crossclaim on May 13, 2021. The 187 Defendants’ crossclaim included a claim for contribution and indemnity, but did not include the Independent Damages Claim. For purposes of their crossclaim, the 187 Defendants repeated and relied on the Plaintiff’s allegations against the other Defendants in its statement of claim.

7The Plaintiff amended its statement of claim on September 7, 2021. The amendments did not alter the nature or facts in support of the Plaintiff’s claims against either the Hamdani Defendants or the 187 Defendants.

8The Hamdani Defendants served their amended statement of defence and cross claim on September 28, 2022. The only amendments to their original pleading were the addition of references to the original statement of claim now being the amended statement of claim.

9The 187 Defendants served their amended statement of defence and crossclaim on September 30, 2022, along with their defence to the amended crossclaim of the Hamdani Defendants.

10In their amended statement of defence and crossclaim, the 187 Defendants plead for the first time the Independent Damages Claim in paragraphs 32 to 34 as follows:

“32. As alleged in the Amended Statement of Claim, the Dry Cleaning spilled volatile organic compounds, including PERC, into the natural environment of 6585-6595 Drummond Road prior to 187’s ownership of 6585-6595 Drummond Road. The 187 Defendants have suffered and will continue to suffer damages as a result, the particulars of which will be provided before trial.”

“33. The 187 Defendants’ losses include, but are not limited to, damages associated with all past and future environmental investigation, remediation, clean up, restoration, repair work, loss of property value, additional financing costs, lost opportunity, and/or interference with normal conduct of business and loss of good will.”

“34 the 187 Defendants’ plead that the Dry-Cleaning operators are jointly and severally liable for all damages suffered by the 187 Defendants with respect to 6585-6595 Drummond Road.”

11In paragraph 4 of the 187 Defendants’ defence to the amended crossclaim of the Hamdani Defendants, the 187 Defendants plead for the first time the Equitable Set Off Claim as follows:

The 187 Defendants plead and rely upon the doctrine of equitable set off in defence to the Amended Crossclaim. The 187 Defendants are entitled to an equitable set off in the amount of their damages associated with all past and future environmental investigation, remediation, clean up, restoration, repair work, loss of property value, additional financing costs, lost opportunity, and/or inference with the normal conduct of business and loss of goodwill at 6585-6595 Drummond Road as a result of the Hamdani Defendants’ discharge of volatile organic compounds into the natural environment of 6585-6595 Drummond Road prior to 187’s ownership of 6585-6595 Drummond Road and without the 187 Defendants’ knowledge at the time of purchase.

12The action is trial ready. On August 14, 2025, Donohue J. issued an endorsement that the action was ready for trial and would be spoken to at the November 26, 2025, assignment court. There is no evidence before me with respect to the matter’s disposition at the assignment court.

Summary of the Evidence

13Between 1984 and 2013, Hamdani, or its predecessor, owned and operated a dry-cleaning business on the Drummond Road Property.

14In 1992, Hamdani’s predecessor obtained from Arcturus Consulting a phase I environmental assessment of the Drummond Road Property (the “Arcturus Phase I Report”). The Arcturus Phase I Report concluded that the potential for environmental risk was low.

15In 2011, Hamdani hired AMEC Environmental & Infrastructure (“AMEC”), to investigate subsurface conditions of the Drummond Road Property in advance of selling the lands. On January 16, 2012, AMEC prepared a phase II environmental site assessment report (the “AMEC Phase II Report”). The AMEC Phase II Report identified volatile organic compounds in the soil and groundwater that exceeded the provincial standard of perchloroethylene (“PCE”) levels of 17ug/L and recommended further investigation.

16In the fall of 2012, Hamdani retained realtor, Gordon Wyllie (“Wyllie”), to sell the Drummond Road Property. The Defendant, Hassan Hamdani (“Hassan”), provided Wyllie with the AMEC Phase II Report.

17At the time that the Drummond Road Property was listed for sale, the dry-cleaning operation had been decommissioned and the premises were vacant.

18At the same time, the Defendant, Christopher Michael Douglas (“Douglas”) was operating a gym from rented premises down the street from the Drummond Road Property and was interested in purchasing the Drummond Road property through his corporation, 187.

19Prior to operating a gym, Douglas worked as a security guard and later sold nutrition supplements.

20Douglas retained real estate agent, Kevin Gibson (“Gibson”), to negotiate the purchase of the Drummond Road Property of behalf of 187. Douglas had never purchased a commercial property and did not have experience with environmental matters.

21Wyllie and Gibson entered into negotiations for the sale of the Drummond Road Property on behalf of their respective clients. Wyllie’s evidence is that he provided Gibson with: (1) a letter stating that the property had “an environmental issue” because it had been used as a dry cleaner and “because of the environmental issue” the seller was prepared to finance the purchase with a deposit of $50,000 to $100,000; and (2) the AMEC Phase II Report.

22On January 16, 2013, Gibson presented to Wyllie on behalf of 187, as purchaser, a draft agreement of purchase and sale.

23The final form of the agreement of purchase and sale was signed by the parties on January 21, 2013. It provided, in part, for a five-year vendor-take-back mortgage in the amount of $710,000, representing 92 percent of the purchase price. It was significant to Douglas that the down payment was only $65,000 and third-party financing was not required to fund the purchase. According to Douglas, along with the location of the Drummond Road Property, the financing provisions of the agreement were very attractive features of the transaction.

24The agreement also included a condition in favour of 187, as buyer, requiring that it be satisfied with the environmental condition of the lands and specifically referenced the “Phase II ESA Environmental Report”.

25The environment condition provides as follows:

This Offer is conditional on the Buyer reviewing the Phase II ESA Environmental Report provided by the Seller and the Buyer accepting the information on the report as satisfactory in the Buyer’s sole and absolute discretion. Unless the Buyer gives notice in writing delivered to the Seller personally or in accordance with any other provisions for the delivery of notice on this Agreement of Purchase and Sale or any Schedule thereto on or before 5:00pm January 31, 2013, that this condition is fulfilled, this offer shall be null and void and the deposit shall be returned to the Buyer in full without deduction.

This condition is included for the benefit of the Buyer and may be waived at the Buyer’s sole option by notice in writing to the Seller as aforesaid within the time period stated herein.

26On January 30, 2013, Douglas waived the environmental condition.

27Douglas’ evidence is that prior to waiving the environmental condition, he had not been provided with the AMEC Phase II Report. His real estate agent, Gibson, did give him, however, the Arcturus Phase I Report after he signed the agreement of purchase and sale.

28It is also Douglas’ evidence that in discussions with his realtor, Gibson only ever referenced the “environmental report”, and did not distinguish between a phase I and II environmental report. In any event, at the relevant time, Douglas did not appreciate the difference between the two reports and did not notice that both the agreement of purchase and sale and waiver of environmental condition referred to the “Phase II ESA Environmental Report”.

29Douglas retained a lawyer to assist in completing the real estate transaction which closed on February 28, 2013.

30On February 28, 2013, as a part of the closing documents, Douglas, on behalf of 187, signed an acknowledgment in which he acknowledged, amongst other matters:

a. having reviewed the Phase II Environmental study provided by the Vendor;

b. not providing the Phase II Environmental study to his lawyer notwithstanding his lawyer’s concerns; and

c. instructing his lawyer that he was satisfied with the Phase II Environmental study and not to make any more enquiries in this regard.

31Douglas admitted that he relied on his own judgment in reviewing the environmental report that he was given, and he waived the environmental condition in the agreement after having inspected the Drummond Road Property and having been given an opportunity to see monitoring wells on the property which he never did see.

32Douglas also admitted that he was aware of the low risk potential for contamination at the time of purchasing the Drummond Road Property, and in the event that he had the AMEC Phase II Report, he would not have proceeded with the recommended additional investigation if he did not need it to finance the purchase of the property because the AMEC Phase II Report did not suggest a “serious” problem preventing him from operating a gym.

33Following the purchase, Douglas opened his gym on January 1, 2014. He received no complaints from staff or gym members about air quality or anything else to suggest that there were environmental concerns.

34In July 2019, the vendor-take-back mortgage matured, and Douglas found himself in the position of needing institutional lender financing. All the prospective lenders required an environmental assessment of the property.

35Douglas contacted Hassan’s accountant and “right-hand man”, Syed Masroor (“Masroor”), for copies of any environmental reports that were in Hamdani’s possession. Masroor was not involved in the sale of the Drummond Road Property and did not know, what reports might be available, including the existence of the AMEC Phase II Report. After reviewing the Hamdani physical file, Masroor located and provided to Douglas a copy of the Arcturus Phase I Report.

36Because Douglas’ prospective lenders required a more current environmental assessment, Douglas engaged Oakhill Environmental to prepare a phase I report. The Oakhill Environmental phase I report (the “Oakhill Phase I Report”) was received by Douglas in August 2019. It included a review of the Arcturus Phase I Report and disclosed that a dry-cleaning business had previously operated on the Drummond Road Property and there was evidence of PCE usage on the site.

37The Oakhill Phase I Report recommended a phase II assessment given that identified the PCE usage and other staining were areas of potential environmental concern. The Oakhill Phase I Report defined “areas of potential environmental concern”, in part, as “the presence or likely presence of any hazardous substances…on a property under conditions that indicate an existing release, a past release, or a material threat of a release of any hazardous substances of petroleum products into…the ground, groundwater, or surface water of the property”.

38On August 28, 2019, Douglas asked Masroor if a phase II environmental assessment had been completed by Hamdani. In his responsive email, Masroor advised Douglas that “[a]s far as we remember there was no phase 2, completed, since phase one has no issues”.

39Douglas next retained Pinchin Environmental (“Pinchin”) to conduct subsurface investigations and to prepare a phase II assessment (the “Pinchin Phase II Report”). The Pinchin Phase II Report identified the existence of PCE, hydrocarbons and trichloroethane in high ranges. The maximum PCE concentration identified by Pinchin was manifold times the concentration identified in the AMEC Phase II Report: 16,000 ug/L as compared to the AMEC range of 40.8 to 100 ug/L.

40Pursuant to Pinchin’s recommendations, Douglas engaged it to conduct further investigations. On September 2, 2021, Pinchin delivered its Supplementary Phase II assessment which reported PCE concentrations as high as 69,000 ug/L.

41Douglas’ evidence is that he was not advised of or provided with the AMEC Phase II Report until the Moving Defendants served their affidavit of documents.

42The 187 Defendants retained Dr. Robert Watters. Dr. Watters has a Ph.D. in environmental science and environmental consulting experience. Dr. Watters was engaged to provide an opinion as to whether the known condition of the Drummond Road Property in 2013, at the time of purchase, was representative of the environmental condition later identified by Pinchin in 2020.

43Dr. Watters consulted with the risk assessment firm, Intrinsik, to determine whether the identified PCE concentrations represented a concern to indoor air quality. Dr. Watters retained Intrinsik to assist in providing his opinion because his expertise did not include an assessment of risk contamination to indoor air quality.

44Based on the advice of Intrinsik, Dr. Walters concluded that “the Site conditions at the time of acquisition, based on available data, did not represent a significant risk to human health, while the 2020/2021 results identified potential risks to human health”, Dr. Watters also admitted on cross-examination that while the extent of the contamination was different when investigated by Pinchin in 2020, the findings of soil and groundwater impacts and location were the same in 2013 and 2020.

Position of the Parties

45The Moving Defendants focused their submissions on an order for summary judgment dismissing the 187 Defendants’ Independent Damages Claim and Equitable Set Off Claim by reason that these claims were brought more than two years after the limitation period was triggered.

46The position of the Hamdani Defendants is that Douglas knew or ought to have known by the completion of the real estate purchase in February 2013 that the Drummond Road Property was contaminated. The Moving Defendants submit that Douglas received the AMEC Phase II Report in 2013 from Hamdani as part of the due diligence process for the real estate purchase. Although from Douglas’ point of view, the AMEC Phase II Report did not suggest a “serious” environmental problem, and he would not have been deterred from completing the purchase, any reasonable person in Douglas’ position ought to have known of the contamination of the Drummond Road Property and the risk of the offsite migration of contamination.

47In the alternative, the Hamdani Defendants submit that it is undisputed that Douglas knew on or about May 5, 2020, when he received the Pinchin Phase II Report, that the Drummond Road Property was polluted with volatile organic compounds that exceeded provincial standards and this conceded date of discovery of the Independent Damages Claim is still more than two years prior to the service of the amended statement of defence and crossclaim. The Hamdani Defendants further submit that none of the facts supporting the Independent Damages Claim were plead in their original statement of defence and crossclaim.

48For their part, the 187 Defendants submit that they have pled sufficient facts in their statement of defence and crossclaim to support causes of action in each of trespass, nuisance and breach of the Environmental Protection Act, R.S.O. 1990, c. E 19 as amended (“EPA”) as well as the Independent Damages Claim and Equitable Set Off Claim.

49Moreover, the 187 Defendants submit that there are genuine issues requiring a trial with respect to Douglas’ discovery of the Responding Defendants’ claims prior to May 2020. There is conflicting evidence and credibility issues with respect to material facts, the most significant of which is what information Douglas had with respect to the environmental condition of the Drummond Road Property prior to its 2013 purchase.

Guiding Legal Principles

50Rule 20.01 of the Rules of Civil Procedure, R.R.O. 1990, Reg 194, permits a party to move for summary judgment. Rule 20.04 provides as follows:

20.04(2) The court shall grant summary judgment if,

a. The court is satisfied that there is no genuine issue requiring a trial with respect to a claim or defence, or

b. The parties agree to have all or part of the claim determined by a summary judgment and the court is satisfied that it is appropriate to grant summary judgment.

(2.1) In determining under clause (2)(a) whether there is a genuine issue requiring a trial, the court shall consider the evidence submitted by the parties and, if the determination is being made by a judge, the judge may exercise any of the following powers for the purpose, unless it is in the interest of justice for such powers to be exercised only at trial:

1. Weighing the evidence;

2. Evaluating the credibility of a deponent; and

3. Drawing any reasonable inference from the evidence.

51The relevant principles pertaining to summary judgment are now well known as a result of the Supreme Court’s decision in Hryniak v. Maukdin, 2014 SCC 7 (“Hryniak”).

52When is there no genuine issue requiring a trial? Karakatsanis J. addressed this question in some detail in Hryniak. Speaking on behalf of the Court, Karakatsanis J. held that on a motion for summary judgment, the court should first determine if there is a genuine issue requiring a trial based solely on the record before it without using the fact-finding powers afforded to it in Rule 20. If after reviewing the factual record, the court is satisfied that there is sufficient evidence to fairly and justly adjudicate the dispute and that summary judgment would be timely, affordable and a proportionate procedure, then summary judgment should be granted.

53If, however, there is a genuine issue requiring a trial, the court should determine if the need for a trial can be avoided by using its powers stipulated in Rule 20.04(2.1) and (2.2). A court may, at its discretion, use those powers on the understanding that this use is not against the interest of justice. The court’s use of the stipulated powers will not be against the interest of justice should they lead to a fair result, a just result and will promote the goals of timeliness, affordability, and proportionality considering the litigation as a whole (see: Hryniak, at paras. 49-50, 66-67).

54The onus is on the moving party to show there is no genuine issue requiring a trial. However, the responding party must put its “best foot forward”. It is prohibited from saying more and better evidence will or may be available at trial. In short, the court is entitled to assume the record contains all of the evidence that the parties would present at trial (see: Simcoe Muskoka Child, Youth and Family Service v. L.V., 2019 ONSC 1208 (Div. Ct.)).

55Section 4 of The Limitations Act, 2002 SO 2002, c.24 Sch B (the “Act”) provides that a proceeding shall not be commenced in respect of a claim after the second anniversary of the date on which the claim was discovered unless the Act otherwise provides.

56Subsection 5(1) of the Act states that a claim is discovered on the earlier of,

a) The day on which the person with the claim first knew,

i. That the injury, loss or damage had occurred,

ii. That the injury, loss or damage was caused by or contributed to by an act or omission,

iii. That the act or omission was that of the person against whom the claim is made, and

iv. That, having regard to the nature of the injury, loss or damage, a proceeding would be an appropriate means to seek to remedy it; and

b) The day on which a reasonable person with the abilities and in the circumstances of the person with the claim first ought to have known of the matters referred to in clause (a).

57Subsection 5(2) provides that a person is presumed to have known the matters referred to in a clause 5(1)(a) on the day the act or omission on which the claim is based took place, unless contrary is proved.

58The Supreme Court in Grant Thornton v. New Brunswick, 2021 SCC 31 stated, “a claim is discovered when a plaintiff has knowledge, actual or constructive, of the material facts upon which a plausible inference of liability on the defendant’s part can be drawn” (at para. 42).

59In Peixeiro v. Haberman, 1997 325 (SCC), [1997] 3 SCR 549, the Supreme Court also stated while the loss must be known for the cause of action to accrue, the extent of the loss of the plaintiff need not be known (at para. 18).

60In Apotex Inc. v. Nordion (Canada) Inc., 2019 ONCA 23 (“Apotex”), Strathy C.J.O. (as he then was) made clear that pursuant to the Act, the limitation period for breach of contract does not necessarily run from the date of the breach. The breach of contract itself is only one factor to be considered in determining when a claim is discovered under the Act. “In addition to that factor, the person with the claim must also know that the ‘injury, loss or damage had occurred’ (s.5(1)(a)(i)), that it was caused or contributed to by the act or omission (s.5(1)(a)(ii)), and that the act or omission was that of the defendant (s.5(1)(a)(iii))” (at para. 86).

61Strathy C.J.O. further observed that as a result of the presumption stipulated in s.5(2) of the Act, the limitation period begins to run on the date of the breach (being the date of the “act or omission”) unless it is established that the person advancing the claim did not know one or more of the matters set out in s.5(1)(a), and that a reasonable person would not have known of those matters (see: Apotex, at para. 87).

62Although the Court in Apotex was addressing a limitation period issue within the context of a breach of contract claim, the stated principles are equally applicable to the matter before me.

63Furthermore, as the Court of Appeal also stated in Arcani v. Dawson, 2016 ONCA 715, it is incumbent upon any reasonable person with a potential claim to act with due diligence to acquire facts to be fully apprised of the material facts upon which a claim can be based (at para. 15).

64Finally, determining discoverability is a fact-specific analysis (see: Coutanche v. Napoleon Delicatessen, 2004 10091 (Ont. C.A.) at para. 22).

Analysis

65The main argument of the Hamdani Defendants is that Douglas had the AMEC Phase II Report prior to waiving the agreement of purchase and sale’s environment condition and completing the Drummond Road Property purchase. The Hamdani Defendants further submit that with the benefit of the AMEC Phase II Report, Douglas, on behalf of the 187 Defendants, knew or ought to have known that the Drummond Road Property was contaminated by the Hamdani Defendants and a claim against them for recovery of damages was appropriate in all the circumstances.

66The Moving Defendants urge this court to make the factual finding that Douglas was in possession of the AMEC Phase II Report in January 2013, based on Hassan’s evidence that he provided the report to his realtor, Wyllie; Wyllie’s evidence that he delivered it to Douglas’ real estate agent, Gibson, and Douglas’ evidence that he received an environmental assessment report from Gibson.

67The Hassan Defendants submit that this court should reject Douglas’ evidence that he only ever had the earlier Arcturus Phase I Report prior to completing the transaction, because based on the record, Wyllie only ever had the AMEC Phase II Report to provide to Douglas.

68Secondly, the Moving Defendants rely on the evidence of Douglas, who apart from admitting he received an environmental report as part of the transaction’s due diligence, signed an acknowledgment on closing confirming he had reviewed the Phase II environmental study provided by the vendor and instructed his lawyer that he was satisfied with the vendor’s Phase II study and that his lawyer was not to make further enquiries (the “Acknowledgment”). The Moving Defendants also rely on Douglas’ evidence that he made his own conclusions about how he understood the risk and accepted the risk; he was aware of the potential for contamination at the time of purchase; and if he had the AMEC Phase II Report, he would not have proceeded with the additional investigation recommended in the report unless he needed it for financing purposes.

69Based on this evidence, I am not prepared to find that by the end of February 2013, Douglas knew or ought to have known that the lands were polluted by the Hamdani Defendants and that a claim against them for recovery of damages was, in all the circumstances, appropriate. I reach this conclusion for several reasons.

70While Wyllie is resolved that he only ever provided the AMEC Phase II Report to Gibson, by email, dated September 6, 2012, Wyllie asked Hassan if he had a phase I report. Furthermore, on cross-examination, Wyllie agreed that Hassan would have provided the Arcturus Phase I Report to him, and he, in turn would have provided it to Gibson.

71In Wyllie’s email of September 6, 2012, he states to Hassan that he “will get Pat Shriner of AMEC’s approval if I have to hand [the AMEC Phase II Report] out for any reason”. There is no evidence, however, of Wyllie ever seeking AMEC’s approval for the release of its phase II report to the 187 Defendants or for any other purpose.

72In Masroor’s July 3, 2019 email to Douglas, he confirms that he found the Arcturus Phase I Report to assist with 187 refinancing and also states that, “I have asked Mr. Hamdani if he have something newer, we’ll let you know”. Then, on July 12, 2019, Masroor confirms by a second email to Douglas, “I have checked with Mr. Hamdani, he conformed [sic] we have environmental done in 1992, it was clear, then no report have done after that. Please find attached the environmental report for 1992”.

73Some six weeks later, after Douglas received the Oakhill Phase I Report, Douglas emailed Masroor on August 28, 2019, to specifically request whether Hamdani had completed a phase II assessment report. By email, dated August 30, 2019, Masroor states, “As far as we remember there was no phase 2 completed, since phase one has no issues”.

74Masroor’s August 28, 2019, email was copied to Hassan. In his responsive email of August 31, 2019 to Masroor, Hassan states “I recall there was water issue, I’m sure there was a report, it was not serious”.

75The Moving Defendants submit that I should reject as not credible, Douglas’ evidence that he did not receive the AMEC Phase II Report until receipt of the Moving Defendants’ affidavit of documents. While I do have concerns about the reliability of Douglas’ evidence given that he has no recollection of such events as when he reviewed the environmental report as a part of the transaction, when he inspected the Drummond Road Property, and no memory of reviewing the environmental condition of the agreement of purchase and sale, the credibility of Hassan and Masroor cause me to pause.

76I have these credibility concerns because Hassan states in his affidavit that he only became aware during the litigation that Masroor provided Douglas with a phase I assessment. Additionally, in his affidavit in support of the motion, Masroor states that there was only one dialogue between he and Hassan with respect to the provision of reports to Douglas. I find the two assertions difficult to accept given the email exchanges between Hassan and Masroor in July and August 2019. Furthermore, on cross-examination, instead of correcting their affidavit evidence in the face of the contradictory email evidence put to them, both witnesses maintained their original positions.

77I am also not prepared to make the discoverability finding urged on me by the Moving Defendants based on Douglas’ evidence that he reviewed an environmental report prior to completing the purchase, signed the Acknowledgement, was aware of the risk of contamination and came to his own conclusions about that risk.

78I am not prepared to make a finding that Douglas knew or ought to have known all of the elements of discoverability as stipulated in ss.5(1) of the Act because such a finding would be premised in part on a finding that Douglas had the AMEC Phase II Report in 2013, and I am not able to make that finding.

79It also does not escape me that none of the Acknowledgment, agreement of purchase and sale and waiver of environmental condition documents signed by Douglas specifically reference the AMEC Phase II Report; rather they refer to a generic “Phase II ESA Environmental Report”.

80Furthermore, the evidence upon which the Moving Defendants rely must be viewed from the lens of Douglas who at the relevant time was an unsophisticated purchaser of commercial property who did not know the difference between a phase I and phase II environmental report, and whose concern was to secure financing to complete the purchase of the Drummond Road Property. In these circumstances, I find that the record before me is insufficient to find that Douglas ought to have known all of the required elements of discoverability as early as 2013.

81The Hamdani Defendants make much of Douglas’ evidence that had he had the AMEC Phase II Report at the time of the purchase, he would not have proceeded with the report’s recommended additional testing if he did not need it to raise financing for the purchase. The Hamdani Defendants rely on this evidence to submit that even with material facts before him from which a plausible inference of liability on the Hamdani Defendants’ part might be drawn, Douglas fails to understand the due diligence obligation that is his.

82While I will not comment on the consequences of this hypothetical situation in this analysis, the submission does raise the question whether the AMEC Phase II Report is sufficient to establish material facts upon which a plausible inference of liability might be drawn? I am not certain on a balance of probabilities that it does. I am uncertain because in Hassan’s August 31, 2019 email to Masroor he states that the water issue addressed in the phase II report “was not serious” and in cross-examination, his evidence is that the AMEC Phase II Report disclosed “no issues”. There is also Dr. Watter’s opinion, an opinion challenged by the Hamdani Defendants, that at the time of the purchase the conditions of the Drummond Road Property did not represent “a significant risk to human health, while the 2020/2021 results identified potential risks to human health”.

83In short, I am unable to determine whether based on the AMEC Phase II Report alone, Douglas would have known or ought to have known of contamination at the Drummond Road Property of a sufficient level of severity that a claim against the Hamdani Defendants would be an appropriate means of seeking a remedy. I am of the view that viva voce trial evidence is required to make this determination.

84In Gillham v. Lake of Bays (Township), 2018 ONCA 667 at para. 22, the Court of Appeal held, “The common law acknowledges that trivial damages do not trigger a limitation period, since a prudent plaintiff would not bring to an action to recover a trivial loss”.

85In Crombie Property Holdings Limited v. McCall-Frontenac Inc., 2017 ONCA 16, the Court of Appeal set aside a finding on a summary judgment that the limitation period had expired on the basis that the purchaser was provided with an environmental assessment more than two years before the action was commenced. The Court found that the motion judge erred by equating knowledge of possible contamination with knowledge of actual contamination and ignoring the circumstances of the buyer’s purchase of the property.

86I am also guided by the Court of Appeal’s direction in Butera v. Chown, Cairns LLP, 2017 ONCA 783 (“Butera”), in which the Court held that summary judgment motions on issues that do not dispose of an action in its entirety are appropriate only in “rare” cases. The Court warned that granting partial summary judgment can cause delay, expense, be a waste of judicial time, and have the potential to increase the risk of inconsistent findings (at paras. 30-34).

87For these reasons the Court of Appeal held that partial summary judgment “should be considered to be a rare procedure that is reserved for an issue or issues that may be readily bifurcated from those in the main action and that may be dealt with expeditiously and in a cost-effective manner” (at para. 34).

88It is the risk of inconsistent findings that causes me the most concern in the matter before me. The Plaintiff seeks damages against the 187 Defendants in negligence and nuisance. When the 187 Defendants knew or ought to have known of the contamination of the Drummond Road Property will be an issue before the trial judge both with respect to the Plaintiff’s claim and the cross claim. Based on the record before me, I am not prepared to tie the hands of the trial judge in determining this issue or risk the troubling result of inconsistent findings.

89For all of the above reasons, I am satisfied that the Hamdani Defendants have not met their onus and the 187 Defendants have raised a genuine issue regarding a trial as to whether a reasonable person, with the abilities of Douglas and in his circumstances, acting with the required due diligence to investigate a potential claim, would have known or ought to have known in 2013 of the contamination of the Drummond Road Property and of the consequential losses as a result of the acts or omissions of the Hamdani Defendants.

90I also find that the need for a trial cannot be avoided by using the powers granted to this court by Rule 20.04(2.1) because of the conflicting evidence that cannot be resolved on the basis of a credibility assessment. Otherwise, I conclude that the use of the Rule 20.04(2.1) and (2.2) powers in the circumstances of this case will not promote the goals of timelines, affordability, and proportionality considering the litigation as a whole, including that this matter is ready for trial.

91Having found that I am unable to grant the Moving Defendants summary judgment based on what Douglas knew or ought to have know in 2013, the Moving Defendants submit that the Independent Damages Claim ought to be dismissed in any event because Douglas admits that he knew of the Independent Damages Claim when he received the Pinchin Phase II Report in May 2020, but did not crystallize the claim in a pleading until September 30, 2022, when the 187 Defendants served their amended statement of defence and crossclaim together with their defence to the amended crossclaim of the Hamdani Defendants.

92While the Independent Damages Claim was advanced as an amendment to the amended statement of defence and crossclaim in September 2022, the 187 Defendants submit that the Independent Damages Claim relies on the facts as pled in the statement of claim, which the 187 Defendants repeated for purposes of their original crossclaim, dated May 12, 2021, delivered less than two years after receiving the Pinchin Phase II Report. In other words, the 187 Defendants submit the September 30, 2022 amended pleading simply adds the Independent Damages Claim as an additional form of relief but does not assert a new cause of action based on new facts.

93In Klassen v. Beausoleil, 2019 ONCA 407 (“Klassen”), the Court of Appeal confirmed that an amendment will be statute-banned only if it asserts a new “cause of action” after the expiry of the applicable limitation period. The Court observed in Klassen, that “the case law discloses a factual oriented” approach to the concept of a “cause of action” – namely, “a factual situation the existence of which entitles one person to obtain from the court a remedy against another person” (citations omitted), (at para. 27). An amendment that simply claims additional forms of relief based on the same facts as originally plead does not amount to a new cause of action (at para. 28). The Court cited with approval a summary of the relevant principle in Paul M. Perell & John W. Morden, The Law of Civil Procedure in Ontario, 3rd ed. (Toronto: LexisNexis, 2017), at p. 186 which states:

A new cause of action is not asserted if the amendment pleads an alternative claim for relief out of the same facts previously plead and no new facts are relied upon, or amount simply to different legal conclusions drawn from the same set of facts, or simply provide particulars of an allegation already plead or additional facts upon [which] the original right of action is based (see: Klassen, at para. 29).

94The 187 Defendants submit that they rely on three causes of action and their foundational facts as alleged in the statement of claim and adopted by them in their original crossclaim to support the Independent Damages Claim. The three causes of action are nuisance, breach of the statutory provisions of the EPA, and negligence. I note that the plaintiff has alleged additional causes of action in its statement of claim, but I restrict my analysis to those identified by the 187 Defendants in their submissions.

95In my analysis of these three causes of action, I am guided by certain principles that have developed in furtherance of Rule 21. Firstly, I am reminded that the facts pleaded are to be taken as true and generously read (see: Ahmad v. Mehta, 2024 ONSC 3778, at para. 3). Secondly, courts should err on the side of permitting an arguable claim, even if novel, to proceed to trial (see: Fernandez Leon v. Bayer Inc., 2023 ONCA 629, at para. 8). Thirdly, only claims that are certain to fail should be deemed untenable at the pleadings stage (see: Rausch v. Pickering (City), 2013 ONCA 70, at para. 34).

96The Plaintiff’s allegations in nuisance are pled at paragraphs 141 to 143 inclusive of its statement of claim. The essence of the nuisance claim is that the plume of volatile organic compounds, originating from the Drummond Road Property and migrating onto and into the Plaintiff’s lands, caused it damages.

97The Court of Appeal in 1317424 Ontario Inc. v. Chrysler Canada Inc., 2015 ONCA 104 (“1317424 Ontario”), held, however, that one cannot have a claim in nuisance for the unreasonable use of one’s own land, or in other words, the interference with the use and enjoyment of the plaintiff’s land must originate outside the claimant’s lands. In its 2015 decision, the Court of Appeal adopted the conclusion of the Nova Scotia Court of Appeal in W. Eric Whelby Ltd. v. Doug Boehner Trucking & Excavation Ltd., 2007 NSCA 92, which held that regardless of who causes the nuisance, the interference with the plaintiff’s land must be indirect and not direct, meaning it must originate elsewhere than on the plaintiff’s land (see: 1317424 Ontario, at para. 6).

98Given the very clear direction of the Court of Appeal, I find after having read generously the statement of claim, it cannot support a viable damage claim in nuisances in favour of the 187 Defendants whose lands are the very source of contamination complained of.

99I turn next to the Plaintiff’s allegations of breach of the statutory provisions of the EPA and negligence.

100In paragraphs 126 to 134 inclusive of the statement of claim, the Plaintiff pleads that the Hamdani Defendants contravened ss.14, 15, 92, 93, and 99 of the EPA. The pleading includes allegations of causing or permitting the discharge of contaminants, including organic volatile compounds into the environment, failing to report the discharge of the contaminants and failing to act promptly to prevent, eliminate and ameliorate the adverse affects of the discharged contaminants. The statement of claim also seeks damages pursuant to s.99 of the EPA which sets out a statutory right to compensation for “loss or damage incurred as a direct result of the spill of a pollutant that causes or is likely to cause an adverse effect”. The right of compensation is against “the owner of the pollutant and the person having control of the pollutant”.

101I find that the Plaintiff’s allegations of statutory breach and damages claim pursuant to the provisions of the EPA apply to the 187 Defendants as they do to the Plaintiff, and therefore, lay the necessary foundation for the Independent Damages Claim articulated in the September 2022 amended statement of defence and cross claim.

102The Plaintiff’s allegations in support of its negligence claim against the Hamdani Defendants are pled at paragraphs 135 to 140 inclusive of the statement of claim. The Plaintiff’s statement of claim alleges a duty of care, a standard of care and that the standard of care was breached, all essential elements of the tort of negligence.

103Whether the duty and standard of care owed by one property owner to a neighbouring property owner are one and the same as those owed by a former property owner to its purchaser is a novel question. I have not been provided, however, with any authority to suggest that this cause of action is doomed to fail. In these circumstances, I find whether the duty and standard of care are the same in each instance is not a matter that should be decided by me at this pleadings stage, but rather on a full evidentiary record. Therefore, because the Plaintiff’s negligence claim, as adopted and relied upon by the 187 Defendants, raises an arguable, although novel, cause of action on behalf of these Defendants, I find it is supportive of the Independent Damages Claim.

104In sum, I conclude that by pleading in their original statement of defence and crossclaim that the 187 Defendants rely on the facts as pled by the Plaintiff in support of its claims of statutory breach and negligence against the Hamdani Defendants, the Independent Damages Claim is not a new cause of action raised by the 187 Defendants in September 2022; rather it is an additional form of relief advanced by the 187 Defendants in their amended statement of defence and crossclaim. In these circumstances, I find that the Independent Damages Claim is not statute-barred.

105Otherwise, if I am incorrect that the Independent Damages Claim is not barred by the two-year limitation prescribed by the Act, the Equitable Set Off Claim, nonetheless survives on condition that it satisfies the criteria for the defence of equitable set off as stipulated by the Supreme Court in Holt v. Telford, 1987 18 (SCC), at para. 33. Assuming the Equitable Set Off Claim meets this criteria, an issue not argued before me, the Court of Appeal in Grand Financial Management Inc. v. Solemio Transportation Inc., 2016 ONCA 175, leave to appeal refused [2016] S.C.C.A. No. 183, at paras. 92 to 94 (S.C.C.), made clear that equitable set-off is not precluded by a limitation period the way a claim is. The principle has a rational basis: whatever the 187 Defendants’ liability may be, their liability to the Hamdani Defendants ought to be fairly reduced by their own Independent Damages Claim against the Hamdani Defendants.

Disposition

106For the reasons stated above, the Hamdani Defendants’ motion is dismissed.

Costs

107I encourage the parties to agree on the issue of costs. In the unfortunate event, however, that the parties are unable to agree, the party seeking costs may make written costs submissions within 15 days of the release of this Endorsement, and the responding party will have 10 days after receipt of the submissions of the party seeking costs to respond. There shall be no reply. Each party’s cost submissions shall not exceed three double-spaced pages, exclusive of offers to settle, cost outlines, and authorities. All cost submissions shall be sent to my attention via my Judicial Assistants at HamiltonSopinka.SCJJA@ontario.ca. In the event that cost submissions are not received within this timeframe, the issue of costs will be considered as resolved.