Canada: The Tricky Business Of Limitations And Contaminated Land Claims

Last Updated: August 30 2016
Article by Paula Boutis

In May of 2016, the Superior Court of Justice delivered reasons in Valco Instruments Canada v. Imperial Oil, dismissing in part a defendant's summary judgment motion related to a contaminated land claim. The court concluded that the limitation period for a negligence claim had expired by the time the claim was brought; however, the court also concluded it could not dismiss the nuisance claim because an original cause of action arises each day that a nuisance remains unabated.

Given the expert evidence before it, the court ordered that the matter go to trial on the question of whether, and to what extent, there had been a continuing and ongoing migration of contaminating petroleum hydrocarbons from the defendants' property onto the plaintiff's property as of a particular date, and the extent of damages, if any, suffered by the plaintiff as a result. [As an aside, it's important to remember that merely having contaminants flow is not sufficient to found a claim in nuisance. There must be a substantial and unreasonable interference with the use and enjoyment of the property to find that a nuisance is occurring].

The more interesting question before the court, however, was the question of what a limitation period might otherwise have been for the negligence claim. Unfortunately, on this issue, the court did not ultimately give the guidance it could have. The court declined to answer the question of whether the purchaser's limitation period started when it purchased the property, on the basis it knew or ought to have known, by virtue of its ability to conduct due diligence on purchase, if the property was contaminated. The plaintiff in this case decided not to do conduct any due diligence related to the environmental condition of the property at the time of purchase. In the end, the court decided that in any event, by 2006 the plaintiff knew its property was contaminated, and it could not rely on a later 2009 expert report, as it sought to, as the start of the limitation period. For that reason, the court concluded the negligence claim was out of time when it was brought in 2011.

While the judge in Valco declined to determine the question of whether the limitation period starts at the time of purchase, where the purchaser fails to do due diligence investigations, the court referenced an earlier summary judgement motion, Bolton Oak Inc. et al. v McColl-Frontenac et al., for the proposition that the limitation period actually runs from before the purchase date—that is, from the date when the prospective purchaser actually knows of the contamination, even before it owns it, based on the purchaser's due diligence investigations. In our opinion, the court's commentary on the Bolton Oak decision is a misinterpretation of that decision: a cause of action cannot exist for a plaintiff regarding damage to a property that it does not yet own. We suggest the earliest the cause of action can arise is from the date of ownership. Therefore, the earliest a limitation period can start is from the date of ownership of the property.

The main issue in the Bolton decision was when the plaintiffs knew or ought to have known who had caused the contamination. In Bolton, the court concluded the plaintiffs ought to have reasonably known by conducting its due diligence who the cause of the historical contamination was by May 2006, shortly after one of the plaintiffs, Bolton Oak Inc., took title to its property. The plaintiffs in Bolton argued they could not reasonably have known until discoveries, occurring some two years later in a related action, who had caused the contamination they now complained of.

The court in Bolton  did not address the question of whether the other plaintiff in that case, Prestige Developments Inc., ought to have known many years earlier than May 2006, specifically in 2001, whether its property was contaminated, on the basis that it ought to have done its due diligence prior to taking title in 2001. It appears the issue was simply not raised by the defendant. All we know from the court's reasons is that Prestige learned of the contamination around the same time as Bolton did.

It is our view that a limitation period for a possible claim cannot run any earlier than from when one takes title to a property; by then, the purchaser has an interest in the property, and therefore can suffer losses, and knows or ought to have known through reasonable due diligence prior to purchase, that the property was contaminated by a neighbouring source, and possibly by whom. However, in light of the court's confusing comments in Valco, an owner of recently acquired contaminated land may need to consider making a claim against owners and/or former owners (as appropriate) of a neighbouring source within two years of when it reasonably knew of the contamination, not from within two years of becoming the owner of the property.

If a purchaser chooses not to do any due diligence prior to purchase, we suggest that there remains a risk that a claim may be statute barred if the purchaser determines more than two years after purchase that its property is or was contaminated by the owners of a neighbouring source. We suggest this on the basis that the purchaser ought to have known and could have known about it prior to purchase, through proper due diligence efforts. To date, however, the courts have not thoroughly considered this question.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

To print this article, all you need is to be registered on

Click to Login as an existing user or Register so you can print this article.

Paula Boutis
In association with
Up-coming Events Search
Font Size:
Mondaq on Twitter
Register for Access and our Free Biweekly Alert for
This service is completely free. Access 250,000 archived articles from 100+ countries and get a personalised email twice a week covering developments (and yes, our lawyers like to think you’ve read our Disclaimer).
Email Address
Company Name
Confirm Password
Mondaq Topics -- Select your Interests
 Law Performance
 Law Practice
 Media & IT
 Real Estate
 Wealth Mgt
Asia Pacific
European Union
Latin America
Middle East
United States
Worldwide Updates
Check to state you have read and
agree to our Terms and Conditions

Terms & Conditions and Privacy Statement (the Website) is owned and managed by Mondaq Ltd and as a user you are granted a non-exclusive, revocable license to access the Website under its terms and conditions of use. Your use of the Website constitutes your agreement to the following terms and conditions of use. Mondaq Ltd may terminate your use of the Website if you are in breach of these terms and conditions or if Mondaq Ltd decides to terminate your license of use for whatever reason.

Use of

You may use the Website but are required to register as a user if you wish to read the full text of the content and articles available (the Content). You may not modify, publish, transmit, transfer or sell, reproduce, create derivative works from, distribute, perform, link, display, or in any way exploit any of the Content, in whole or in part, except as expressly permitted in these terms & conditions or with the prior written consent of Mondaq Ltd. You may not use electronic or other means to extract details or information about’s content, users or contributors in order to offer them any services or products which compete directly or indirectly with Mondaq Ltd’s services and products.


Mondaq Ltd and/or its respective suppliers make no representations about the suitability of the information contained in the documents and related graphics published on this server for any purpose. All such documents and related graphics are provided "as is" without warranty of any kind. Mondaq Ltd and/or its respective suppliers hereby disclaim all warranties and conditions with regard to this information, including all implied warranties and conditions of merchantability, fitness for a particular purpose, title and non-infringement. In no event shall Mondaq Ltd and/or its respective suppliers be liable for any special, indirect or consequential damages or any damages whatsoever resulting from loss of use, data or profits, whether in an action of contract, negligence or other tortious action, arising out of or in connection with the use or performance of information available from this server.

The documents and related graphics published on this server could include technical inaccuracies or typographical errors. Changes are periodically added to the information herein. Mondaq Ltd and/or its respective suppliers may make improvements and/or changes in the product(s) and/or the program(s) described herein at any time.


Mondaq Ltd requires you to register and provide information that personally identifies you, including what sort of information you are interested in, for three primary purposes:

  • To allow you to personalize the Mondaq websites you are visiting.
  • To enable features such as password reminder, newsletter alerts, email a colleague, and linking from Mondaq (and its affiliate sites) to your website.
  • To produce demographic feedback for our information providers who provide information free for your use.

Mondaq (and its affiliate sites) do not sell or provide your details to third parties other than information providers. The reason we provide our information providers with this information is so that they can measure the response their articles are receiving and provide you with information about their products and services.

If you do not want us to provide your name and email address you may opt out by clicking here .

If you do not wish to receive any future announcements of products and services offered by Mondaq by clicking here .

Information Collection and Use

We require site users to register with Mondaq (and its affiliate sites) to view the free information on the site. We also collect information from our users at several different points on the websites: this is so that we can customise the sites according to individual usage, provide 'session-aware' functionality, and ensure that content is acquired and developed appropriately. This gives us an overall picture of our user profiles, which in turn shows to our Editorial Contributors the type of person they are reaching by posting articles on Mondaq (and its affiliate sites) – meaning more free content for registered users.

We are only able to provide the material on the Mondaq (and its affiliate sites) site free to site visitors because we can pass on information about the pages that users are viewing and the personal information users provide to us (e.g. email addresses) to reputable contributing firms such as law firms who author those pages. We do not sell or rent information to anyone else other than the authors of those pages, who may change from time to time. Should you wish us not to disclose your details to any of these parties, please tick the box above or tick the box marked "Opt out of Registration Information Disclosure" on the Your Profile page. We and our author organisations may only contact you via email or other means if you allow us to do so. Users can opt out of contact when they register on the site, or send an email to with “no disclosure” in the subject heading

Mondaq News Alerts

In order to receive Mondaq News Alerts, users have to complete a separate registration form. This is a personalised service where users choose regions and topics of interest and we send it only to those users who have requested it. Users can stop receiving these Alerts by going to the Mondaq News Alerts page and deselecting all interest areas. In the same way users can amend their personal preferences to add or remove subject areas.


A cookie is a small text file written to a user’s hard drive that contains an identifying user number. The cookies do not contain any personal information about users. We use the cookie so users do not have to log in every time they use the service and the cookie will automatically expire if you do not visit the Mondaq website (or its affiliate sites) for 12 months. We also use the cookie to personalise a user's experience of the site (for example to show information specific to a user's region). As the Mondaq sites are fully personalised and cookies are essential to its core technology the site will function unpredictably with browsers that do not support cookies - or where cookies are disabled (in these circumstances we advise you to attempt to locate the information you require elsewhere on the web). However if you are concerned about the presence of a Mondaq cookie on your machine you can also choose to expire the cookie immediately (remove it) by selecting the 'Log Off' menu option as the last thing you do when you use the site.

Some of our business partners may use cookies on our site (for example, advertisers). However, we have no access to or control over these cookies and we are not aware of any at present that do so.

Log Files

We use IP addresses to analyse trends, administer the site, track movement, and gather broad demographic information for aggregate use. IP addresses are not linked to personally identifiable information.


This web site contains links to other sites. Please be aware that Mondaq (or its affiliate sites) are not responsible for the privacy practices of such other sites. We encourage our users to be aware when they leave our site and to read the privacy statements of these third party sites. This privacy statement applies solely to information collected by this Web site.

Surveys & Contests

From time-to-time our site requests information from users via surveys or contests. Participation in these surveys or contests is completely voluntary and the user therefore has a choice whether or not to disclose any information requested. Information requested may include contact information (such as name and delivery address), and demographic information (such as postcode, age level). Contact information will be used to notify the winners and award prizes. Survey information will be used for purposes of monitoring or improving the functionality of the site.


If a user elects to use our referral service for informing a friend about our site, we ask them for the friend’s name and email address. Mondaq stores this information and may contact the friend to invite them to register with Mondaq, but they will not be contacted more than once. The friend may contact Mondaq to request the removal of this information from our database.


This website takes every reasonable precaution to protect our users’ information. When users submit sensitive information via the website, your information is protected using firewalls and other security technology. If you have any questions about the security at our website, you can send an email to

Correcting/Updating Personal Information

If a user’s personally identifiable information changes (such as postcode), or if a user no longer desires our service, we will endeavour to provide a way to correct, update or remove that user’s personal data provided to us. This can usually be done at the “Your Profile” page or by sending an email to

Notification of Changes

If we decide to change our Terms & Conditions or Privacy Policy, we will post those changes on our site so our users are always aware of what information we collect, how we use it, and under what circumstances, if any, we disclose it. If at any point we decide to use personally identifiable information in a manner different from that stated at the time it was collected, we will notify users by way of an email. Users will have a choice as to whether or not we use their information in this different manner. We will use information in accordance with the privacy policy under which the information was collected.

How to contact Mondaq

You can contact us with comments or queries at

If for some reason you believe Mondaq Ltd. has not adhered to these principles, please notify us by e-mail at and we will use commercially reasonable efforts to determine and correct the problem promptly.