Court Confirms Purchasers of Contaminated Sites Face Liability for Failing to Address Historic Contamination
The Environmental Law team at Mann Lawyers enjoyed success in the recently released decision of Sorbam Investments Ltd. v. Litwack et al., 2021 ONSC 5226. The decision is of significant importance to the field of environmental law. This case clearly establishes liability against a property owner who was not the polluter and further, did not own the property at the time the pollution occurred. Prior to the release of this decision, no significant decision on the point had been handed down since 1944.
The plaintiff owned a commercial property on Woodward Drive, in the City of Ottawa. A former drycleaner operated at a commercial strip mall on an adjacent property. While attempting to sell its property in 2010, an environmental investigation was conducted of the plaintiff’s property, which disclosed tetrachloroethylene (“PCE”) and its break-down products in the groundwater at concentrations that exceeded the applicable Ministry of the Environment, Conservation and Parks (“MECP”) guidelines. These solvents are commonly used in dry-cleaning operations.
The strip mall property had been sold by the Litwack defendants to 1129892 Ontario Limited (“112Co”) in 2007. The drycleaner had operated during the Litwacks’ ownership. Prior to the sale, an investigation of the strip mall property had disclosed the presence of PCE and its breakdown products on that site. 112Co purchased the property with knowledge that it was contaminated. 112Co took no steps after acquiring the property to address the contamination.
The plaintiff sued 112Co and the Litwacks. The claim against the Litwacks was dismissed following a motion for summary judgment; that Judge having found that in the circumstances, the Litwacks could not be liable as landlords for the contamination caused by their tenant.
The action proceeded to trial against 112Co, which maintained the position throughout the litigation and at trial that the contaminants were not migrating from its property to the plaintiff’s property.
After hearing expert evidence from several engineers, Justice Ryan Bell found that the source of contaminants was located under the strip mall and that the contaminants did migrate from 112Co’s property to the plaintiff’s property, and continued to do so after 112Co was put on notice by the plaintiff in 2010. She found112Co liable in both nuisance and negligence.
Although 112C o argued that it was in the same position as the Litwacks and could not be liable, Justice Ryan Bell disagreed. Beginning in 2010, 112Co was provided with more information about the contamination than was available to the Litwacks and despite this, took no steps to address the contamination that was impacting the plaintiff’s property. Justice Ryan Bell found 112Co liable in nuisance on the grounds that an owner of land who was not responsible for the creation of the nuisance may be liable if they continue the nuisance; that is, with knowledge of the nuisance, the landowner fails to take any steps to put an end to the situation involving the nuisance.
As she found, “limiting responsibility to the ‘mere creation of the nuisance’ would have the potential to leave a plaintiff without remedy where a landowner or occupier refuses to address a continuing nuisance.” Here, 112Co took no steps at any time to address the continuing nuisance.
She also found that 112Co’s failure to take reasonable steps to address the continuing migration of contaminants of which it had knowledge gave rise to liability in negligence.
The plaintiff was awarded damages of $1,200,000.00 for diminution in value of its property and approximately $90,000.00 in engineering costs that it has incurred to address the contamination on its own property to facilitate a sale of the property.
The decision demonstrates that there is risk on a purchaser of contaminated lands who chooses to take no steps to deal with the contamination after acquisition. The purchaser cannot rely on the fact that it was not the polluter to avoid liability.