Too Little, Too Late: Court Of Appeal Refuses To Consider New Defence In Environmental Contamination Case Of Sorbam Investments

• Published date: 18 August 2022
• Subject Matter: Environment, Litigation, Mediation & Arbitration, Environmental Law, Trials & Appeals & Compensation
• Law Firm: Lerners
• Author: Mr Jacob Damstra

In a recent appeal decision in an environmental contamination case, Sorbam Investments Ltd v Litwack, 2022 ONCA 551,¹ the Court of Appeal for Ontario affirmed the trial judgment holding the appellant 1129292 Ontario Limited liable in nuisance and negligence for migration of chemicals. The Court of Appeal upheld the trial judge's approach to assessing competing expert evidence in environmental contamination cases, the finding of a landlord liable for contamination caused by a former tenant, and a calculation of damages in environmental contamination cases. The Court of Appeal also provided useful guidance on the general rule against raising new issues on appeal, which is the focus of this blog.

Trial Decision on Nuisance and Negligence

The main issue at trial was whether contaminants had migrated from the respondent's property to the appellant's property or vice versa.² The appellant and respondent owned neighbouring properties, and prior to the appellant purchasing the property, a dry cleaning business had operated there.³ The trial judge concluded that the contaminants had migrated from the appellant's property to the respondent's property, but that the contaminants were likely from the dry cleaning business prior to the appellant's ownership.⁴

In finding the appellant liable in nuisance, the trial judge concluded that the physical damage, prolonged sale process, and decreased sale price caused by the migration met the threshold for substantial and unreasonable interference.⁵ The trial judge found that as an adjoining landowner, the appellant owed a duty of care to avoid acts or omissions that would cause harm to the respondent. She further found the appellant was negligent as it ignored a Ministry of Environment direction to investigate and address the migration of contaminants onto the respondent's property, which was not consistent with the standard of care of a reasonable landowner.⁶

The trial judge awarded damages based primarily on loss of market value to the respondent's property due to the chemical contamination and also awarded $91,307.21 for engineering expenses incurred by the respondent to obtain a risk assessment and record of site condition.⁷

Grounds of Appeal

On appeal, 1129292 Ontario Limited raised a number of grounds concerning a theory of incremental damage, ultimately arguing that the trial judge failed to properly assess whether some or all of the contamination had been caused before the appellant was aware of the issue in 2011.⁸ The...