Owners of contaminated sites are sometimes reluctant to disclose
what they know, hoping to get rid of the liability with the
property. Anyone who is so tempted will want to follow what happens
in 1623242 Ontario Inc. v. Great Lakes Copper Inc., 2013 ONSC 7935
and 2013 ONSC
In this case, Wolverine Tube 1 sold a property in
Fergus, Ontario, to 1623242 Ontario Inc. ("162"),
without disclosing that its predecessor, Wolverine Ratcliffs Inc.
("Wolverine"), had contaminated the property with
PCB's. Wolverine Tube 1 took a substantial
vendor-take-back mortgage, which it assigned to a related company,
3072453 Nova Scotia Company ("307").
The Ministry of the Environment discovered the contamination and
ordered both present and past owners to remove the
Great Lakes Copper (GLC), which 162 says is also Wolverine's
successor, removed the
contaminants, but charged 162 for the clean-up.
162 says it had not agreed to pay for this.
Everyone then sued.
162 began a fraud action against Wolverine and its
successors and related companies, Wolverine Tube 1, 307, and
GLC, (collectively, "the Wolverine group"), alleging
that they conspired to induce 162 to buy the property at an
inflated price by not disclosing its contamination, and then
charged it for the clean-up with a view to re-possessing the
Property ("the fraud action"). GLC
began two construction lien actions against 162 in
Guelph, based on its refusal to pay it for the clean-up that GLC
performed ("the lien actions"). 307 began a foreclosure
action against 162 in London, based on its failure to continue
making mortgage payments ("the foreclosure action").
The purchaser, 162, successfully asked the court to consolidate
all the lawsuits, and was awarded costs. The central issue will now
be decided in the fraud action: was failure to disclose the PCB
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