Case Law Update: Alberta Court Of Appeal Confirms That A Plaintiff May Lose The Right To Sue For Historic Contamination Because Of The Passage Of Time And Procedural Requirements

On February 6, 2019, the Alberta Court of Appeal upheld the proclamation of the Alberta Court of Queen's Bench in Brookfield Residential (Alberta) LP (Carma Developers LP) ("Brookfield").1 The Court of Appeal found that the plaintiff was out of time to bring its claim forward and that an extension of the ultimate limitation period was not merited. The Court of Appeal provided further guidance about when an extension of an ultimate limitation period for historic environmental contamination may or may not be allowed.

In Alberta, there is an ultimate limitation period of 10 years from the date the claim arose regardless of when a plaintiff knew or ought to have known about the claim.2

What occurs where a plaintiff discovers historic contamination that is greater than 10 years old? We previously reported based on the Alberta Court of Queen's Bench decisions in Brookfield Residential and Lakeview Village3 that in this circumstance, section 218 of Alberta's Environmental Protection and Enhancement Act ("EPEA") allows a plaintiff to bring an application to the Court seeking an extension of the 10-year ultimate limitation period. 4

So what has changed? The Alberta Court of Appeal has confirmed that the passage of significant time may be detrimental to a plaintiff's quest to extend the ultimate limitation period, and that while EPEA section 218 is available to a plaintiff to attempt to extend a limitation period, several factors, including procedural factors, may preclude the plaintiff from succeeding in its application.5

In Brookfield, the plaintiff discovered that its property was contaminated with petroleum hydrocarbons in 2010. The defendant had previously drilled an oil well on the property in 1949 and undertook remediation work in about 1961. A Reclamation Certificate under Alberta's old legislative regime was issued for the property in 1968.6

The plaintiff brought an application asking the Court to extend the ultimate limitation period pursuant to EPEA, s. 218. The plaintiff argued before the Alberta Court of Queen's Bench that it exercised due diligence in discovering the contamination and that an extension of the limitation period would not prejudice the defendant. The Alberta Court of Queen's Bench accepted that the Plaintiff exercised sufficient due diligence,7 but otherwise disagreed with the Plaintiff, citing "significant prejudice" to the defendant.8

The Court of Appeal upheld the Alberta Court of Queen's Bench decision that the...