Environmental consultant's negligence claims for failing to
clean up contaminated sites continue to multiply. The Ontario
Superior Court recently allowed a professional negligence
lawsuit to go ahead against an Ontario environmental consultant, XCG, despite a long
delay, which, according to XCG, was causing it
In 3 Dogs
Real Estate Corporation v. XCG Consultants Limited, 2014
ONSC 2251, the plaintiff bought residential property for renovation
after an allegedly successful cleanup by XCG. Part way through the
renovation, more contamination was found. XCG went back in and
completed the cleanup, but the process delayed the renovation and
resale of the property by about 18 months. The delay allegedly
pushed the plaintiff close to insolvency. They started an
environmental consultant's negligence lawsuit against XCG for
economic loss, but let it languish for two years with no progress,
due to insufficient funds.
After two years' delay, the court issued a status
notice. XCG argued unsuccessfully that the claim should be
dismissed. The court allowed the plaintiff to proceed, on a new
schedule, on the grounds that:
XCG's negligence was (allegedly) the primary cause
of the delay in the renovation, which in turn was
(allegedly) the primary cause of the plaintiff's lack of funds,
which in turn caused the delay in the litigation; and
XCG had not adequately proved that it had suffered
prejudice from the delay. Although it claimed, plausibly,
that it had incurred additional financial costs such as elevated
insurance premiums and reporting costs, and increased difficulty
competing for new work, due to the litigation, the court ruled that
"no examples, details, books of account, invoices or financial
statements were used to substantiate any of these statements. I
again find these statements to be conjecture and speculation."
Claims that XCG had lost touch with a relevant former
employee and the employees of a subcontractor were similarly
dismissed as insufficient, in the absence of clear evidence that
efforts had been made to find the missing witnesses.
XCG also argued that the case should be dismissed because
it was commenced too late; Ontario has a two-year statute of
limitations. However, the limitations issue had not been raised
promptly when the lawsuit was commenced. Judge MacLeod –
Beliveau decided that the relevant facts were not clear enough to
be decided on a status motion and deferred the limitations issue to
a subsequent motion or the trial.
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