You may have followed the Albert Bloom Limited v. London Transit Commission, 2021 ONCA 74 (CanLII) case earlier this year. It was a fairly small settlement but it was a complicated case involving several parties over decades and centered on trichloroethylene (TCE) contamination that occurred in the 1940s.
The lessons from the case (that is summarized below), are about being proactive when you are provided evidence of contamination emanating from your property. Additionally, some lawyers point to the importance of due diligence when responding to new claims ensuring that limitation periods for third-party claims are not missed. We provide additional thoughts at the end of this blog.
Below is a condensed timeline of the events in this case. This is provided by Lerners LLP (For a more detailed look at this case, follow any of the hyperlinks provided in this blog).
Timeline of Events
- In 1973, London Transit Commission (“LTC”) acquired property formerly owned and used by Eaton Industries (Canada) Company for automotive parts manufacturing from 1949 to 1973 (the “LTC Property”).
- In 2011, neighbouring property owners, Albert Bloom Limited and Ramsden Industries Limited conducted an environmental site assessment and became concerned with Trichloroethylene (“TCE”) contamination on their properties. The Phase I and Phase II Environmental Site Assessment (“ESA”) Reports identified that the LTC Property was a potential source of the contamination.
- On February 3, 2012, Albert Bloom advised LTC that it had discovered environmental contamination migrating from the LTC Property. Albert Bloom provided LTC with five ESA Reports, three of which identified Eaton’s historical activities as a potential source of the contamination.
- On April 30, 2013, Albert Bloom delivered a Notice of Action and Statement of Claim to LTC along with another environmental report. The pleadings were formally served on May 22, 2013.
- From 2012 to 2014, Albert Bloom repeatedly asked LTC to investigate the potential contamination on the LTC Property.
- On December 19, 2013, Albert Bloom provided LTC with a further environmental report supporting its claim.
- In January 2014, LTC delivered a Statement of Defence and Crossclaim, specifically pleading that any alleged contamination was caused by the prior owner of the LTC Property.
- In 2014, the Ministry of Environment and Climate Change (“MOE”) was notified, investigated, and ordered LTC to take certain actions. In response to MOE requests, LTC undertook testing in early 2015 which revealed that Eaton had previously operated a sludge pit on the LTC Property.
- On March 16, 2016, four years after LTC was first notified of the contamination by Albert Bloom’s lawyer and nearly three years after it was served with Albert Bloom’s Statement of Claim, LTC commenced a third-party claim against Eaton for contribution and indemnity.
Finally, the motion judge granted summary judgment and dismissed LTC’s third party claim against Eaton. She concluded that LTC had actual knowledge of the matters in s. 5(1) (a) of the Limitations Act with respect to the claims against Eaton by no later than May 22, 2013. In the end, LTC paid Eaton $25,000.
An Environmental Scientist from Dragun collecting a representative sample (Photo Credit: Dragun Corporation).
It’s an interesting case with complicating factors and some questionable decisions made along the way.
Law Firms’ Conclusions
There were several law firms who offered opinions with respect to this case, including those below:
Borden Ladner Gervais LLP in their commentary of this case stated, “This decision highlights the importance of due diligence when responding to new claims ensuring that limitation periods for third party claims are not missed. Environmental lawsuits raise distinct factual issues, but the underlying legal principles remain the same for all claims for contribution and indemnity. The decision also reminds litigants that pleading choices which may seem harmless when made can have unintended effects on a party’s legal rights at a later stage.”
As McCague Borlack said in conclusion of their summary of this case, “This case highlights the importance of being proactive when an environmental claim arises. Failing to act when provided evidence of potential contamination arising from your property can lead to serious issues when trying to hold the proper parties accountable.”
Final Thoughts
The importance of virtually all internal environmental decisions takes on new meaning in our society today. Environmental, Social, and Governance (ESG) disclosures are becoming more commonplace. In some cases, financial institutions may require such disclosures. Annual reporting to government agencies is also more common (e.g., US Securities and Exchange Commission).
ESG and other environmental management decisions are increasingly important to stakeholders. Further, when it comes to liability, the environmental regulatory trend is to name responsible corporate officers, those with decision making ability, as the “designated felon” (tongue in cheek).
Being proactive with environmental issues has always been good advice, perhaps now more than ever.
If you need help with an environmental issue, feel free to contact our Windsor office at 519-948-7300. You can also email our senior project manager, Christopher Pare’, P.Geo.
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