Court Rejects Environmental Consultant's Third Party Claim Against Prior Owners/Occupants

On March 22, 2018 the Ontario Superior Court of Justice in MVL Leasing Ltd. v CCI Group Inc. 2018 ONSC 1800 granted Rule 21 motions striking third party claims brought by an environmental consultant who was being sued by a purchaser of property for professional negligence and breach of contract. The lawsuit alleged that the plaintiff was led into closing the sale by the consultant's Phase 1 and Phase 2 Environmental Site Assessments. The property turned out to be contaminated. The consultant in turn alleged that the contamination was caused by one or more businesses operated by the third parties. The consultant requested contribution indemnity from the third parties on 6 different grounds: nuisance, loss or damage caused by a spill pursuant to s.99 of Ontario's Environmental Protection Act, the occupier's duty under the Occupiers' Liability Act to ensure the safety of persons entering upon the property, negligence, liability under the Negligence Act and unjust enrichment. The consultant argued that if found liable in the main action, it would have incurred pecuniary losses as a direct result of the spill, those damages being the plaintiff's remediation costs and or the decrease in the property's value.

Court's Reasons for Rejecting the Third party Claims

The nuisance claim was rejected on the basis that the consultant did not own, occupy or possess the property, or any adjacent or nearby property impacted by the alleged contamination. The s.99 EPA claim was only available where the damages were directly caused by the spill and that was not the case. The occupier liability claim was rejected because the consultant suffered no damages as a result of entering the property in question. With respect to the negligence claim, the Court refused to impose a new duty of care upon the third parties. There was no proximity in the relationship between the consultant and the third parties. The potential economic harm to the...