Soleimani v. Rolland Levesque: Involvement of the Ministry of Environment, Conservation and Parks May Not Toll Limitation Period

Introduction

On August 22, 2019 a notice of abandonment of appeal was filed with the Ontario Court of Appeal in the case of Soleimani v Rolland Levesque[1] ("Soleimani"). This leaves intact the decision of Justice Hackland who held that the involvement of the (then) Ministry of the Environment (now the Ministry of Environment, Conservation and Parks) (the "Ministry") in the investigation and remediation of ground water contamination is not the type of process that tolls a limitation period under subsection 5(1)(a)(iv) of the Limitations Act, 2002 (the "Act")[2]. The Ministry process did not have a reasonably ascertainable end date, nor would it eliminate the need for litigation and, thus, did not apply to extend the limitation period.

Background to the Claim

As part of a refinancing in 2010, the plaintiffs learned of petroleum hydrocarbon contamination in the ground water on their property. The plaintiffs' consultant determined that the impacts were migrating from the defendants' neighbouring automotive repair facility, where there were several known underground storage tanks dating from the 1950s. The plaintiffs immediately retained a lawyer who put the defendants on notice of the plaintiffs' intention to pursue a claim for damages resulting from the contamination.

The plaintiffs also then contacted the Ministry who, over the next eight years, required the defendants to prepare work plans and undertake significant investigative and remediation work at their own expense at the defendants' property, including requiring the defendants to confirm the source of the contamination, contain any leaking tanks and remove contaminants. The plaintiffs' lawyer did not communicate further with the defendants between 2011 and May 2014; and, throughout that time, one of the plaintiffs dealt directly with the Ministry in an attempt to reduce costs.

On May 27, 2014, the plaintiffs' lawyer again advised the defendants that they were going to commence an action for damages in connection with the contamination. The defendants took the position that the plaintiffs' claim was statute-barred, stating that the limitation period had expired under the Act in November of 2012. The plaintiffs retained a new lawyer and initiated a negligence claim against their prior counsel.

Almost four months later, on September 19, 2014, the plaintiffs’ new counsel issued a notice of action, followed by a statement of claim seeking, inter alia: a) damages for losses and expenses resulting from the contamination; b) a declaration that the defendants were responsible for the contamination; c) an order requiring the defendants to take all appropriate and necessary measures at their cost to prevent any further migration of contaminants to the plaintiffs' property; d) stigma damages for post-remedial loss in value of the plaintiffs' property; and e) full recovery of the plaintiffs' legal and other professional costs and expenses incurred in investigating and remediating their site.  The defendants defended and counterclaimed for damages of $1.5 million for remediation costs, $1 million for the diminution of value of their own property and $100,000 for engineering and consulting costs with respect to their property.

The defendants moved for summary judgment on the basis of the limitation defence. The plaintiffs defended the motion claiming that, given the ongoing involvement of the Ministry, they did not know that a court proceeding was the appropriate means to remedy their losses, relying on s. 5(1)(a)(iv) of the Act, and, thus, no limitation period had been missed. The plaintiffs’ original counsel intervened on the motion.

When is a Proceeding the "Appropriate Means" to Remedy a Loss?

Section 5(1) of the Act provides when a claim is discovered and starts the running of the limitation period. A plaintiffs' claim is discovered on the day on which the plaintiff knew or ought to have known the four elements set out in subsection 5(1)(a)(i)-(iv) of the Act:

5(1) a claim is discovered on the earlier of:

(a)  the day on which the person with the claim first knew,

(i) that the injury, loss or damage had occurred,

(ii) that the injury, loss or damage was caused by or contributed to by an act or omission,

(iii) that the act or omission was that of the person against whom the claim is made, and

(iv) that, having regard to the nature of the injury, loss or damage, a proceeding would be an appropriate[3] means to seek to remedy it. (emphasis added)

It is presumed that the limitation period commences on the date the act or omission that led to the loss occurred, unless the plaintiff can prove to the contrary, with the plaintiff bearing this onus[4].

Subsection 5(1)(a)(iv) of the Act has been characterized as an exception to the discovery of the claim as it essentially postpones the running of a limitation period beyond the date when the plaintiff knows it has suffered loss because of the defendants' actions[5] in circumstances where the plaintiff does not yet know that a court proceeding would be an appropriate means to remedy its loss. This "appropriate means" exception did not form part of the previous limitation statute nor the common law and was apparently included in the 2004 amendments to the Act "to promote court efficiency by deterring unnecessary litigation"[6].

The type of situation that will give rise to a plaintiff being entitled to claim that a court proceeding is not yet the "appropriate means" to remedy its losses has been the subject of a significant number of appeal decisions, the ratios of which were summarized in the decision of the Ontario Superior Court of Justice in the insurance case of Western Life Assurance Company v Penttila[7]. While the court in that case identified eight factors to consider when making this determination, the two most critical to the Soleimani decision were: (1) if a statutory dispute resolution process offers an adequate alternative remedy and that process has not yet fully run its course, then it is premature for a party to bring a court proceeding to seek a remedy; and (2) courts should be wary of allowing a party to delay the commencement of proceedings simply for tactical reasons.[8]

In addition, the Court of Appeal has noted that the determination of when a court action is the appropriate means to remedy losses is a contextual analysis that depends on the specific factual or statutory setting of each individual case[9] and must take into consideration the nature of the plaintiff's injury, loss or damage[10]. Courts specifically do not want to engage in a determination of when communications break down between the parties by looking to the tone and tenor of their correspondence"[11]. Instead, courts have consistently held that, if the plaintiff seeks to rely on the exhaustion of some alternative dispute process to delay the limitation period starting, the end date of that alternative process must be reasonably ascertainable[12].

The Involvement of the Ministry did not Toll the Limitation Period

In the Soleimani case, the Ontario Superior Court focused on the circumstance where an alternative proceeding was underway and determined that the involvement of the Ministry in the investigation and remediation of the underlying groundwater contamination of the defendants' property did not engage subsection 5(1)(a)(iv) of the Act. The court held that the plaintiffs discovered that a court proceeding would be an appropriate means to remedy their loss in November 2010 when they were told by their consultants that, in their view, the defendants' property was most likely the source of the contamination. As a result, the court granted the defendants' request for summary judgment, dismissing the claim on the basis that it was statute-barred under the Act[13]. Several considerations led to this ruling.

In order for the limitation period to be tolled by some alternative process, "the end or conclusion date must be reasonably ascertainable" by considering the "statutory context governing the process and the factual nature of the dispute"[14]. When examining the Ministry process, the court noted that the Environmental Protection Act (the "EPA") does not provide a dispute resolution process or mechanism. There are no timelines for its review to occur, nor certainty about what its involvement will entail: each step the Ministry takes is at its discretion. Thus, the court could not reasonably determine when the Ministry's involvement might end, signaling the start of the limitation period, with reference to the EPA[15]. At the time of the judgment, the Ministry had been involved for over eight years, with no certainty as to the timing or resolution[16].

Moreover, the court noted that the Ministry does not have any statutory authority to address all of the relief sought by the plaintiffs in their claim. For example, the Ministry could not grant reimbursement of consulting costs, require compensation to be paid for stigma damages or provide a declaration of responsibility. Thus, the Ministry process would not result in the plaintiffs' claim being unnecessary. 

The court reiterated, citing from several Court of Appeal cases that preceded it, that "the choice of the alternate administrative process cannot be based simply on tactical considerations"[17]. Here, the court found that the plaintiffs' engagement of and reliance on the Ministry was "manifestly a tactical decision"[18], despite noting that it was a "wise economic choice" (since the Ministry directed the defendants to investigate and remediate much of the contamination at their expense).

There was no discussion in the case regarding the effect of any continuing migration of contaminants on the limitations' argument, although the court did note that the last of the underground storage tanks was removed in 2017. In addition, there was no analysis provided with respect to why the plaintiffs ultimately decided to commence the claim in September 2014 – when the Ministry was still very much involved and, arguably, had not come to the end of the "alternative process" on which the plaintiffs were relying to extend the limitation period under the Act.

The Appeal

A notice of appeal was filed by the plaintiffs’ original counsel, as intervenors, but was subsequently withdrawn in late August 2019. One of the grounds included in the notice of appeal was the concern about the impact on the court system in Ontario if every environmental dispute must be commenced within two years of learning of the contamination, even when the Ministry is involved in investigating and remediation efforts are ongoing. This is not a new idea; it has been suggested many times over the years that a separate set of rules should apply to environmental matters given the often lengthy time that is required for these matters to be resolved.

Conclusion

In the circumstances of this case, the involvement of the Ministry in dealing with contaminated property cases was not found to extend or toll a limitation period under subsection 5(1)(a)(iv) of the Act. The court held that the Ministry process followed here simply does not have a clearly ascertainable end date and is unlikely to eliminate litigation between property owners in its entirety. It is unclear whether the outcome would have been the same if the Ministry had issued a Director's Order to the defendants that imposed an obligation to remediate the plaintiffs' property. Such an order usually includes set time limits for the completion of the work required. In such a circumstance, the plaintiffs may have been able to determine whether the completion of the work would eliminate their need for a claim. That being said, a Director's Order can be appealed and certain work can be the subject of a stay, which creates uncertainty when ascertaining the end date. We will watch with interest for cases interpreting subsection 5(1)(a)(iv) of the Act in the environmental context to see if the decision in Soleimani will apply in other fact scenarios that may arise. 

About the author

Julia Schatz is a partner at in the litigation group of Bennett Jones LLP in Toronto. The author would like to acknowledge the contribution to this article of Venetia Whiting and Andrew Chachula.

Any article or other information or content expressed or made available in this Section is that of the respective author(s) and not of the OBA.