Canada: Extending The Limitation Period For Environmental Claims

Last Updated: November 15 2016
Article by Brendan Sawatsky


Companies operating in the oil and gas sector take note. Standard limitation periods for third party environmental claims can be extended, at the discretion of the Court, under the Environmental Protection and Enhancement Act1("EPEA").

The majority of legal actions must be started within two years from the time the injured party discovers that they have suffered a loss. However, under section 218 of the EPEA, claims regarding environmental contamination are subject to extended limitation periods. The purpose of section 218 is to extend the time period within which civil proceedings can be initiated for damages to the environment as harmful effects of contamination are not always immediately evident. A court may extend the limitation period for these types of claims "where the basis for proceeding is an alleged adverse effect resulting from the alleged release of a substance into the environment."

A recent decision from the Alberta Court of Queen's Bench, Lakeview Village Professional Centre Corporation v Suncor Energy Inc,2 provides an analysis of the factors that a court will consider when deciding whether or not to extend the limitation period in an action for environmental contamination.


In 1998, Lakeview Village Professional Centre Corporation ("Lakeview") purchased land in Calgary from Commonwealth Business Management Ltd. ("Commonwealth"). Lakeview was aware that the land had previously been owned and used as a gas station by a predecessor of Suncor Energy Inc. ("Suncor") from 1969 until the mid 1980s. Commonwealth took ownership of the land in May 1988 and by 1998 the gas station had been removed along with the underground tanks.

As a condition of its offer, Lakeview requested that Commonwealth provide information regarding the environmental state of the property including any issues with contamination of the property In response, Commonwealth commissioned a Phase II Environmental Assessment Report from a third party environmental consultant which found no evidence of significant contamination on the property and concluded no further investigation was warranted at the time.

In 2013, Lakeview received an offer to purchase the property. The buyer commissioned Phase I and Phase II Environmental Assessments which discovered environmental contamination at a level requiring remediation.

Lakeview subsequently commissioned a Phase III Environmental Assessment and began remediation work in excess of $400,000. To recuperate these costs Lakeview filed a lawsuit against the previous owners of the property, Commonwealth and Suncor.

Lakeview's claim would have otherwise been be precluded by the Limitations Act,3 so it sought an extension of the limitations period under section 218 of EPEA.


A court has discretion under section 218 and must consider a number of factors based on the information available. The factors include when the alleged adverse effect occurred, whether the alleged adverse effect ought to have been discovered by the claimant had the claimant exercised due diligence in ascertaining its presence, whether the claimant exercised that due diligence and whether extending the limitation period would prejudice the defendant's ability to maintain a defence to the claim on the merits.

In some instances, the granting of an extension under section 218 will be mixed with merit-based considerations such as the determination that the claimant has exercised due diligence. If a court makes a final determination on these issues when granting an extension it may be problematic if new facts emerge at trial. To alleviate this concern, the Court provided a two step approach to determine if an extension of the limitations period is appropriate:

  1. Is there sufficient evidence on the section 218 factors to grant an extension of the limitation period?
  2. If there is not enough evidence to make that determination, or if there is sufficient evidence but an issue for trial could be determined prematurely, has the claimant shown a good arguable case for an extension? If so, the claimant is entitled to an extension of the limitation period subject to a final determination of the issue at trial.4

This approach allows courts to extend the limitation for meritorious cases and exclude cases that are attempting to abuse the extension while acknowledging the claimant's interest to know whether or not it should pursue the claim further. When the Court applied this test to the facts it concluded that at the preliminary stage it was appropriate to grant an extension because Lakeview had a "good arguable case" which was grounded on some evidence and was not invented.5

In this case, the Court found that providing an extension under section 218 was appropriate, but made its findings subject to a final determination of the issue at trial as further evidence adduced at trial could change the analysis. The Court also found that there was no prejudice to Commonwealth or Suncor as a result of extending the limitation period as neither gave evidence to that effect. The Court also allowed the action to proceed against Commonwealth even though it did not cause or contribute to the contamination. EPEA expressly contemplates the liability of former owners for remediation in its definition of "persons responsible" for a contaminated site under section 107.

Concluding Thoughts

This decision clarifies the considerations that govern a section 218 application. Where an applicant demonstrates a "good arguable case" but there is some uncertainty regarding the evidence, the granting of an extension of the limitation period on a preliminary basis is an appropriate compromise.

Prospective buyers should be vigilant when purchasing property that may be subject to environmental contamination. It is vital that the buyer conducts sufficient environmental due diligence to ensure that it is eligible to make a section 218 application if contamination is discovered at a later time. Parties to a purchase and sale of property may wish to exclude the possibility of a section 218 application through representations expressly allocating liability for environmental contamination. However, such steps will only be effective between the parties to the purchase agreement and will not be effective in limiting the liability of past owners or protecting from actions by subsequent owners.

In addition, this case demonstrates that companies operating in industries where there is a risk of environmental contamination, such as the oil and gas industry, face some continuing uncertainty regarding third party environmental claims despite the passing of the standard limitations periods.


1. RSA 2000, c E-12.

2. 2016 ABQB 288 [Lakeview].

3. RSA 2000, c L-12.

4. Lakeview, at para 19.

5. Lakeview, at para 20.

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.

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.