• Establishing Environmental Damages: Key Case Law Principles
  • October 8, 2013 | Author: Gabrielle K. Kramer
  • Law Firm: Borden Ladner Gervais LLP - Toronto Office
  • How damages are assessed in the environmental law context has been a bit of “moving target” over the last decade but there are a few key principles that emerge when you take a closer look at the case law.

    Standard of Clean Up

    Tridan Developments Ltd. v. Shell Canada Products Ltd., 2002 CanLII 20789 (ON CA) is an earlier case that considers a property owner’s entitlement to remediation damages after its property became contaminated by a neighbouring site. This case establishes that a plaintiff’s entitlement to recover will depend on the facts of each case and asserts that there is no automatic right to have one’s property cleaned up to a pristine condition post-contamination.

    Pre-Purchase Knowledge

    In Cousins v. McColl-Frontenac Inc. 2006 NBQB 25, the New Brunswick Queen’s Bench appears to scale back a plaintiff’s right to damages for contamination migrating onto its land when the plaintiff was aware of the risks before purchase. Further, the court refused to award damages for a lost development opportunity based on a purely speculative approach to what could have been done with the plaintiff’s land but for the contamination.

    Material Physical Damage

    In Smith v. Inco 2011 ONCA 628 the Ontario Court of Appeal held that a plaintiff must establish that contamination causes material physical damage to the property before damages can be recovered; mere chemical alteration is not enough. The plaintiff did not argue that the the properties at issue were rendered less useful as a result of Inco’s nickel deposits, nor was there any evidence of risk to human health. As a result of this decision, defendants now argue that plaintiffs must establish “material physical damage” to be entitled to damages.

    Pre-Purchase Due Diligence

    The importance of purchasers performing due diligence prior to purchasing land was reiterated this year in Midwest v. Thordarson, 2013 ONSC 775. The plaintiff in this case sued for damages because the property it purchased was contaminated by an off-site source. The contamination existed at the time of purchase and there was no evidence that the contamination had continued to migrate and/or worsened since that time. Practically speaking, purchasers should consider conducting baseline intrusive testing upon purchase to make it easier to establish subsequent contamination claims, not just because of an on-site source, but also because of off-site contamination.

    Additional Considerations

    There are several other risks that could prevent the plaintiff from recovering damages for contamination in the environmental case law. For example, the contamination may be patent or it may not render the property unfit for use. Additionally, the consultant tasked with testing for contamination may not have been negligent and, therefore, is not liable. Finally, it can be difficult to prove causation because there are multiple defendants or because the plaintiff cannot locate the defendant. These risks make it important to obtain good technical and legal advice before purchasing land and especially in industrial areas where the risk of contamination may be higher.