



COURT OF APPEAL FOR ONTARIO

CITATION: Gendron v. Doug C. Thompson Ltd. (Thompson Fuels),
    2019 ONCA 293

DATE: 20190412

DOCKET: C64188 & C64191

Hourigan, Miller and Paciocco JJ.A.

C64188

BETWEEN

Wayne
    Allan Gendron

Plaintiff (Respondent)

and

Doug C. Thompson Ltd. operating as Thompson
    Fuels
,
Technical Standards and Safety Authority
, and Les Reservoirs
    DAcier de Granby Inc.

Defendants (
Appellant
/
Respondent
)

C64191

AND BETWEEN

Wayne
    Allan Gendron

Plaintiff (Appellant)

and

Doug C. Thompson Ltd. operating as Thompson
    Fuels
,
Technical Standards and Safety Authority
, and Les Reservoirs
    DAcier de Granby Inc.

Defendants (
Respondents
)

Albert Wallrap and Daniel Cook, for the appellant Thompson
    Fuels

Adam Grant and Michelle Legault, for the respondent
    Technical Standards and Safety Authority

Martin Forget and Eric J. de Man, for the respondent
    Wayne Allan Gendron

Heard: February 5, 2019

On appeal from the judgment of Justice Robert Charney of
    the Superior Court of Justice, dated July 17, 2017.

Hourigan J.A.:

I. Overview

[1]

On December 18, 2008, Thompson Fuels delivered 700 litres of fuel oil to
    two oil tanks located in the basement of a home owned by Wayne Gendron. Almost
    immediately oil began to leak from one of the tanks. Mr. Gendron discovered the
    leak approximately one hour after the oil was delivered and spent the night
    collecting it in Tupperware containers. He thought he had collected all of the
    leaking oil. He was incorrect.

[2]

Hundreds of litres of oil leaked and drained through a crack between the
    basement wall and the floor. From there, it drained under Mr. Gendrons house,
    where some of it remained and soaked into the soil. The rest of the oil made
    its way through a drainage system under the house and into the citys culvert,
    which carried it into nearby Sturgeon Lake.

[3]

Over the next several months, a massive remediation project was
    undertaken as a consequence of the leak. Nearly $2 million was spent on
    remediating both the contaminated land in the surrounding area and the damage
    to Sturgeon Lake. Mr. Gendrons house was demolished as part of the effort to
    remove contaminated soil.

[4]

Mr. Gendron sued in negligence against Thompson Fuels, his fuel supplier
    and service technician, the Technical Standards and Safety Authority (the
    TSSA), which is the administrative authority responsible for regulation and
    enforcement of fuels in Ontario, and Les Reservoirs DAcier de Granby Inc.
    (Granby), the manufacturer of the oil tanks.

[5]

Granby settled with Mr. Gendron shortly after the trial began, signing a
Pierringer
agreement that, in return for Granbys settlement, released
    Granby from the action and removed the risk that co-defendants might have to
    pay Granbys share of damages if Granby could not do so. At the conclusion of a
    27-day trial, the trial judge found that Thompson Fuels was negligent but that
    the TSSA was not. He also found that Mr. Gendron had been contributorily
    negligent and apportioned liability as follows: Mr. Gendron 60% at fault and
    Thompson Fuels 40% at fault. Thompson Fuels was ordered to pay Mr. Gendron
    $864,628 in damages and $465,000 in costs. Costs of the trial were also awarded
    to the TSSA in the amount of $150,000.

[6]

In a post-trial ruling on several motions, the trial judge held that
    Thompson Fuels did not have a right of set-off against the amount paid by
    Granby to Mr. Gendron under the
Pierringer

agreement. A second
    costs award arising out of the post-trial ruling was also made.

[7]

Thompson Fuels and Mr. Gendron have initiated separate appeals. Thompson
    Fuels has appealed from the trial decision, the post-trial ruling, and the
    costs awards. Mr. Gendron and the TSSA are respondents to this appeal. Mr.
    Gendron has appealed from the trial decision only. Thompson Fuels and the TSSA
    are respondents to that appeal. Granby has taken no part in the appellate
    proceedings. The two appeals were heard together.

[8]

These reasons explain why I would not substantively interfere
    with the decision of the trial judge. This was a complex case filled with
    complicated issues of liability, statutory interpretation, and damages. The
    trial judge provided thoughtful, detailed, and considered reasons supporting
    his judgment. They are a model of clarity and are substantively correct, except
    for a small adjustment I would make to the amount of damages awarded. I would otherwise
    dismiss both appeals.

II. Facts

[9]

In 2000, a furnace supplied by an underground outdoor oil tank heated
    Mr. Gendrons home. In the summer of 2000, Mr. Gendron, with the assistance of
    two casual labourers, removed the underground storage tank. In November 2000, Mr.
    Gendron purchased two new Granby aboveground indoor tanks.

[10]

Installation
    of oil tanks by a qualified oil burner technician (OBT) was both the law and
    industry practice and standard in 2000. Only a person holding an OBT
    certificate was authorized to install aboveground oil tanks. Mr. Gendron did
    not have a qualified OBT install his oil tanks. Instead, he and a friend installed
    the tanks side-by-side in his basement even though they were not licenced to do
    so.

[11]

The
    oil tanks were installed very close to the exterior wall of the basement, approximately
    one half inch or less at various points due to irregularities in the
    insulation. The sides of the two tanks were also very close together,
    approximately one inch apart. These conditions made proper inspection of the
    tanks virtually impossible.

[12]

The
    two oil tanks were twinned, meaning that they were joined by a two-inch
    transfer pipe that had a T connection leading to the furnace. One tank would be
    filled and the oil would flow from that tank through the transfer pipe to the
    other tank, so that an equal amount of oil would end up in both tanks. Mr. Gendron
    did not install a shut-off valve for each oil tank.

[13]

In
    November 2001, Thompson Fuels became Mr. Gendrons fuel supplier. The back of
    the Customer Service Agreement signed by Mr. Gendron included terms excluding
    Thompson Fuels from liability for inspection and maintenance of the oil tanks and
    for injury or damage to any person or property resulting from the existence,
    operation, or non-operation of any oil-burning installation at the property.

[14]

On
    June 27, 2001, the Ontario government enacted

Fuel Oil
, O. Reg.
    213/01 (the Regulation), which prohibited fuel oil distributors like Thompson
    Fuels from supplying fuel oil to a tank unless the distributor had inspected
    the furnace and fuel oil tanks and was satisfied that their installation and
    use complied with the Regulation. The Regulation further stipulated that if the
    state of repair, mode of operation, or operating environment of the oil tanks
    did not meet the requirements of the Regulation, this would constitute an
    unacceptable condition. If the unacceptable condition posed an immediate
    hazard, the distributor would be obliged to immediately shut-off the system
    (referred to as tagging-out) and cease supplying fuel oil to the tank. In
    absence of an immediate hazard, the tanks would have to be tagged out at the
    conclusion of a notice period not to exceed 90 days.

[15]

In
    2001, the TSSA standards required that at least once per year all fuel oil
    tanks had to be inspected for leaks. The TSSA later announced in 2002 that
    distributors would have to conduct a basic inspection by May 1, 2004, and a
    comprehensive inspection by May 1, 2007.

[16]

On
    February 27, 2002, Thompson Fuels sent an OBT to Mr. Gendrons home to
    investigate a no-heat problem. That technician did not testify at trial. His
    invoice indicated that he was there for three hours, but it did not specify
    that any inspection took place. At trial, Thompson Fuels claimed a
    comprehensive inspection was performed on this visit, but was unable to locate
    an inspection report for that date despite the requirement to retain such a
    report.

[17]

Thompson
    Fuels conducted additional service calls at Mr. Gendrons home on October 25,
    2006, January 22, 2007, February 19, 2007, and November 8, 2007. The invoices
    for those service calls all indicated that the last inspection occurred on
    February 27, 2002. Therefore, no inspections were conducted during those
    service calls. There was no evidence that testing for the presence of water in
    the tanks was ever performed by any of the Thompson Fuels OBTs who conducted
    the four service calls in 2006 and 2007.

[18]

At
    approximately 4:15 p.m. on December 18, 2008, Thompson Fuels delivered 700
    litres of fuel oil to Mr. Gendrons home. As mentioned above, shortly
    thereafter one of the tanks began to leak. Mr. Gendron arrived home from work
    about one hour after the oil was delivered and smelled oil coming from his
    basement. He went downstairs and observed oil on the basement floor. He
    examined the tanks to find the source of the leak, but could not find any holes.
    In order to better examine the leaking tank he cut a hole in the wall on the
    far side of the tank. He saw that oil was leaking, apparently coming from the
    end of the tank against the external insulated wall. However, he could not see
    the hole because the end of the tank was tight against the insulation. Mr.
    Gendron collected the leaking oil and filled seven jerry cans of 25 litres each.

[19]

The
    cause of the leak was internal corrosion, referred to as Microbiologically
    Influenced Corrosion (MIC), caused by the build-up of water and sludge inside
    the incident tank, which, combined with microbes, resulted in the production of
    sulphur and organic acids within the tank. These acids lead to corrosion from
    the inside, which resulted in perforation of the tank. The evidence showed that
    once corrosion begins it progresses at a rate of 210 mm per year. Mr. Gendrons
    leaking tank was only 2 mm thick, meaning that the perforation in the tank
    could possibly have taken one year or less.

[20]

Some
    of the water in the tank was the result of condensation. Mr. Gendron did not
    keep his tank full, which would increase the amount of condensation that
    accumulated in the tanks. However, condensation was not the only source for the
    accumulation of water in the leaking tank. There was evidence that Mr. Gendron
    likely introduced water and microbes into the leaking tank when he filled the
    tanks with less expensive stove oil, either because the water and microbes were
    in the stove oil or because they were in the jerry cans he used to fill the
    tanks.

[21]

Except
    for the small amount of oil on the basement floor (which he cleaned up with a
    rag), Mr. Gendron thought that he had succeeded in collecting all of the oil in
    the tanks by the early morning hours of December 19, 2008. He went to sleep and
    called Thompson Fuels at approximately 3:00 p.m. that afternoon. There was
    evidence that it would have taken approximately 6 hours for the first 500
    litres of fuel oil to leak from the tank. During the first hour, 110 litres
    would have leaked out. As a result, most of the oil likely leaked out while Mr.
    Gendron was attempting to manage the leak using Tupperware containers.

[22]

When
    Mr. Gendron called Thompson Fuels, he did not call to report the leak, but to complain
    that Thompson Fuels had not delivered the full 700 litres of oil he had
    ordered. He believed that he had mopped up or collected all of the oil that had
    leaked from the tank, and this could not possibly have amounted to 700 litres.
    He was irate because he was being charged for 700 litres of furnace oil that he
    believed had not been delivered.

[23]

Thompson
    Fuels immediately sent a service technician to Mr. Gendrons house to inspect
    the leak. The technician calculated that approximately 600 litres of fuel oil
    had leaked. He advised Mr. Gendron that he was required to report the spill to
    the Ministry of Environment (the MOE) Spills Action Centre. Mr. Gendron did
    not do so. Thompson Fuels called the Spills Action Centre to report the leak at
    4:22 p.m. and advised them that the house fronted on to Sturgeon Lake. The
    Spills Action Centre called Mr. Gendron at 4:37 p.m. to ask about the leak. It told
    him that they would write a report to forward to the TSSA, but that they did
    not know when the TSSA would investigate.

[24]

The
    report was sent to the TSSA technical desk and to the MOE. A fuel safety
    inspector first reviewed the report on December 22, 2008. After a visual
    inspection conducted the same day, the TSSA inspector estimated that
    approximately 450 litres of oil had leaked from the tank and had likely
    migrated through a gap where the concrete floor met the foundation wall. He
    looked around outside but did not see any oil and did not ask Mr. Gendron any
    questions about drainage on the property. Mr. Gendron did not inform him that
    there was a drainage pipe running around the foundation of the home that
    emptied into the city culvert.

[25]

The
    TSSA inspector prepared a TSSA Order on December 24, 2008. The order required Mr.
    Gendron to obtain a professional assessment report that delineates the full extent
    of all petroleum impacts to both soil and groundwater within 120 days. The
    order did not explicitly require Mr. Gendron to perform remediation.

[26]

Mr.
    Gendron reported the matter to his insurer on December 29, 2008. The insurer
    retained an independent adjuster and remediation contractor, DL Services
    (DLS). DLS noted that the furnace oil had entered the storm drain and culvert
    and from there entered Sturgeon Lake. On December 30, 2008, DLS notified the MOE
    that oil had entered Sturgeon Lake. The MOE ordered Mr. Gendron to undertake
    remediation. DLS carried out the remediation until May 6, 2009, when Mr. Gendrons
    off-site insurance coverage was exhausted. The cost of the off-site remediation
    ultimately reached $1,833,848.85.

[27]

DLS
    also carried out on-site remediation at Mr. Gendrons property. Based on the
    recommendation of a structural engineer that it would not be structurally sound
    to provide temporary support to Mr. Gendrons home during the excavation of
    contaminated soil under the basement floor, the home was demolished on May 12,
    2009. A total of 1,558.49 tonnes of contaminated soil was removed. On-site
    remediation lasted until July 20, 2009.

[28]

When
    Mr. Gendrons insurance coverage was exhausted, the MOE ordered the City of
    Kawartha Lakes (the City) to complete the remediation. On June 15, 2010, the
    City used its powers under s. 100.1 of the
Environmental Protection Act
,
R.S.O. 1990, c. E 19 (the 
EPA
) to order compensation from Mr. Gendron,
    the TSSA, and Thompson Fuels. The s. 100.1 order required them to pay
    $471,691.44 to the City for its costs and expenses incurred in cleaning up the leak.

[29]

Mr.
    Gendron, the TSSA, and Thompson Fuels each appealed the order to the
    Environmental Review Tribunal (ERT). The appeals by the TSSA and Thompson
    Fuels were withdrawn following a settlement with the City, and only the appeal
    by Mr. Gendron proceeded to hearing. On June 30, 2016, the ERT allowed Mr. Gendrons
    appeal in part and reduced the s. 100.1 order to $313,005.08.

[30]

Mr.
    Gendron sued Thompson Fuels on July 15, 2009. The claim was amended on November
    9, 2010 to add the TSSA and Granby as defendants. He sought $2 million in
    damages and alleged that each defendant had acted negligently. On November 7,
    2016, the trial judge heard a motion by Mr. Gendron to amend his claim to add a
    claim for $313,005.08 for contribution and indemnity against the defendants in
    accordance with s. 100.1(6) of the
EPA
. That provision permits a party
    that is the subject of a s. 100.1 order to claim contribution and indemnity
    against another person who could properly have been subject to a s. 100.1
    order. The motion was granted.

III. Decisions Below

(i)

Trial Judgment

[31]

The trial judge found that Thompson Fuels breached its duty of
    care by failing to perform a comprehensive inspection of Mr. Gendrons fuel oil
    tanks prior to May 1, 2007 and by failing to test the tanks for water during
    its service calls in 2006 and 2007. He also found that when Thompson Fuels
    performed its service calls in 2006 or 2007 it should have tagged-out Mr. Gendrons
    tanks because it was not possible to inspect the non-outlet end of the tanks,
    and this constituted a non-immediate hazard that had to be corrected before
    Thompson Fuels could deliver fuel. The trial judge rejected Thompson Fuels
    argument that the exclusion clauses in the Customer Services Agreement signed
    by Mr. Gendron exclude liability on its part.

[32]

With respect to the TSSAs liability, the trial judge found that
    when the inspector conducted the inspection on December 22, 2008, he owed Mr. Gendron
    a
prima facie
duty of care to conduct the inspection with reasonable
    care. But the trial judge noted that he was provided no evidence of the
    standard of care required of a TSSA inspector. Therefore, he could not find
    that either the TSSA inspection or the subsequent delineation order fell below
    the standard of care. The trial judge also rejected Mr. Gendrons claim that
    the TSSA was negligent by breaching its duty under a Memorandum of
    Understanding between the TSSA and the MOE (the MOU), and by failing to advise
    Mr. Gendron to contact his insurer.

[33]

As noted, Granby settled with Mr. Gendron shortly after the trial
    began. Nevertheless, since Thompson Fuels was only to be held liable for its
    proportionate share of the damages, the trial judge assessed Granbys share of
    liability. On the basis of the industry standards that existed in Canada when
    Granby manufactured Mr. Gendrons tanks in 1999, the trial judge found that
    Granby was not negligent in the manufacture of the leaking tank and did not, at
    that time, know of the risk of corrosion. With respect to whether Granby had a
    duty to warn consumers about the risk of corrosion, the trial judge held that
    since Granby only sold to wholesalers, Granby would only have had a duty to
    warn fuel distributors and installers, which it did through education seminars
    and guidelines it published. He therefore dismissed the claim against Granby.

[34]

With
    respect to contributory negligence, the trial judge accepted that Mr. Gendron
    was negligent by reason of the improper installation of the fuel oil tanks, failure
    to maintain the tanks by having them inspected annually, improper introduction of
    water into the tanks, and failure to promptly report the leak.

[35]

On
    the issue of quantum of damages, the trial judge concluded that DLS had, by and
    large, acted reasonably and that its remediation actions were not unnecessary
    as the defendants claimed. There was one exception. DLS charged a 16% for
    administration and overhead amounts on all of their costs. The trial judge held
    that for work performed by DLS, as opposed to an independent contractor, this
    amounted to double billing. He therefore reduced the damages payable by
    Thompson Fuels to reflect the 16% administrative fee added to work performed by
    DLS. He rejected the argument that DLS could have surgically removed the
    contaminated soil under the basement floor instead of demolishing Mr. Gendrons
    home, but did reduce the amount claimed for the replacement cost to rebuild the
    home from $545,244.25 to $476,594.25.

[36]

The
    trial judge accepted the argument that DLS failed to delineate fresh fuel oil
    from historical contamination or to properly delineate the extent of
    contamination when excavating the soil in and around the home. As a result, he
    found that an excessive amount of soil was excavated. Accordingly, he reduced
    the damages attributable to excavating, hauling, and disposing of this
    contaminated soil by 50%.

[37]

With
    regard to Mr. Gendrons s. 100.1(6)
EPA
claim for contribution and indemnity,
    the trial judge rejected the argument that the claim was statute-barred. However,
    he concluded that Mr. Gendron could not bring a s. 100.1 claim for contribution
    and indemnity against Thompson Fuels because it was not an owner or person
    having control of the pollutant within the meaning of s. 100.1(1) of the
EPA
.

(ii)

Post-Trial Ruling

[38]

Following trial, the parties appeared before the trial judge to
    address three issues: (1) whether Thompson Fuels has a right of set-off so that
    its liability for damages would be reduced by the amount paid by Granby to Mr. Gendron
    pursuant to their partial settlement agreement; (2) Mr. Gendrons r. 59.06(1)
    motion to vary the judgment; and (3) Thompson Fuels r. 59.06(1) motion to vary
    the judgment. Both r. 59.06(1) motions were dismissed.

[39]

With regard to the set off argument, the trial judge found that the
    result was dictated by this courts decision in
Laudon v. Roberts
,
    2009 ONCA 383, 249 O.A.C. 72, and held there was no right of set off because
    Mr. Gendron would not receive double recovery.

IV. Issues

[40]

The
    issues raised in these appeals and my conclusion on each issue may be
    summarized as follows:

1.

Did the trial judge err in assessing Thompson Fuels
    liability?

The trial
    judge made a series of factual findings and findings of mixed fact and law that
    were open to him on the evidence. His reasons on the issue of Thompson Fuels liability
    evince a proper understanding of the principles of negligence, including
    causation. He also properly exercised his gatekeeper function in admitting
    expert evidence. Finally, the trial judge correctly concluded that Thompson
    Fuels could not avoid liability on the basis of its standard form contract.

2.

Did
    the trial judge err in assessing the TSSAs liability?

The trial
    judge was correct in concluding that the TSSA owed Mr. Gendron no private law
    duty of care, other than conducting an inspection with reasonable care.

As the trial judge noted, neither Mr. Gendron nor
    Thompson Fuels tendered any expert evidence regarding the standard of care of a
    prudent TSSA inspector
.
In these circumstances, Mr.
    Gendron and Thompson Fuels failed to meet their onus to establish liability on
    the part of the TSSA.

3.

Did
    the trial judge err in finding Mr. Gendron contributorily negligent, or in
    assessing the extent of such negligence
?

The trial
    judge properly found that Mr. Gendron failed to take the steps of a reasonably
    prudent homeowner in the circumstances. The evidence does not support Thompson
    Fuels argument that the trial judge should have found Mr. Gendron
    contributorily negligent for failing to disconnect a drain.

4.

Did
    the trial judge err in his apportionment of liability?

The trial
    judge carefully considered the comparative blameworthiness of the parties and
    concluded that the majority of the responsibility for the loss was Mr.
    Gendrons. The apportionment of damages is a very fact specific exercise, which
    is entitled to significant deference. There is no basis for appellate
    interference with the trial judges apportionment of liability.

5.

Did
    the trial judge err in his assessment of damages?

The trial
    judge conducted a detailed analysis of the remediation costs both on and off of
    Mr. Gendrons property, mindful that damages should be awarded on the principle
    that best ensures that the environment is returned to its pre-contamination
    condition. The assessment of damages was correct, save for one adjustment. The
    trial judge erred in awarding damages to pay out a line of credit secured against
    the property. That was a betterment and cannot stand.

6.

Did
    the trial judge fail to provide adequate reasons?

The trial
    judge wrote 79 pages of reasons wherein he meticulously considered both the
    evidence and the legal issues at play. His reasons are logically coherent,
    thoughtful, and clearly stated. There is no merit in this submission.

7.

Did
    the trial judge err in failing to reduce the amount awarded against Thompson
    Fuels by the amount of the Granby settlement?

The trial
    judge correctly concluded that there was no double recovery until Mr. Gendron
    had been fully compensated for his loss. This decision is consistent with the policy
    objectives underlying
Pierringer
agreements.

8.

Did
    the trial judge err in dismissing the EPA, s. 100.1 claim for contribution and
    indemnity against Thompson Fuels?

The trial
    judge properly rejected Mr. Gendrons argument that Thompson Fuels was the
    owner of the oil immediately before the leak or that it had charge, management
    or control of the oil immediately before the first discharge. Thus, a claim for
    contribution and indemnity under the
EPA
was unavailable.

9.

Did
    the trial judge err in his costs awards?

There is no
    basis for appellate interference with the trial judges costs award. In his
    costs endorsement the trial judge properly rejected the arguments that are once
    again advanced on appeal.

V. Analysis

(1)

Thompson Fuels Liability

[41]

Thompson
    Fuels takes issue with virtually every aspect of the trial judges analysis of
    its liability. The grounds of appeal may be divided into two categories: (i)
    errors of fact or of mixed fact and law; and (ii) errors of law. These grounds
    of appeal are considered below.

(i)

Errors of fact or of mixed fact and law

[42]

Thompson
    Fuels submits that the trial judge erred in making two purely factual findings.
    The first was that Mr. Gendron did not move the tanks. The second was and that
    a comprehensive inspection of the tanks did not occur.

[43]

The
    finding related to the movement of the tanks was fully supported by the
    evidence. The leaking tank was boxed in on four sides by the foundation wall,
    wood paneling wall, drywall, and the other tank. This tight configuration is
    inconsistent with the movement of the tanks as Thompson Fuels alleges and
    anchors the trial judges finding in the evidence.

[44]

Thompson
    Fuels renews its submission from trial that a comprehensive inspection of the
    tanks was carried out when its OBT completed a clean and service at Mr.
    Gendrons house on February 27, 2002. This was another factual finding open to
    the trial judge on the evidence. The OBT did not testify and Thompson Fuels
    failed to maintain a record of the alleged comprehensive inspection, as it was
    required to do.

[45]

Next,
    Thompson Fuels submits that given that Mr. Gendron stated that the fill pipe
    was always in the non-leaking tank, the water could not have entered it and
    caused the hole. Further, it argues that an OBT would test for water by
    removing the gauge and dipping for water and because the only fuel gauge was
    located on the non-leaking tank, the leaking tank would not have been tested.

[46]

There
    is no merit to these submissions. The evidence established that there was water
    in both tanks. Although there was no fuel gauge on the leaking tank, there was
    an opening at the top of that tank that could have been used to test for water.

[47]

Thompson
    Fuels further submits that the trial judge erred in finding that the industry
    standard applicable at the relevant time required water testing of indoor
    tanks. Paul Thompson, Thompson Fuels owner, and Perry German, one of Thompson
    Fuels OBTS, both gave evidence tending to support the opposite conclusion.

[48]

Notwithstanding
    the foregoing, there was evidence upon which the trial judge could conclude
    that water testing was the industry standard. It is clear that by the early
    2000s the danger of water increasing the risk of internal corrosion was well
    known in the industry. Indeed, Granbys educational material from 2003-2004
    described water as the tanks #1 enemy. Another one of Thompson Fuels OBTs,
    Geoff Richardson, testified that there was no difference between indoor tanks
    and outdoor tanks when testing for water, and that such tests were routine on
    deliveries and service calls. Thus, there is no basis to interfere with the
    trial judges finding about the industry standard.

[49]

Thompson
    Fuels also submits that the trial judge erred in finding that the oil tanks
    were installed too close to the exterior walls, as the
Installation Code
    for Oil-Burning Equipment
(the
Code
) applicable at the time of
    installation did not require any clearance for tanks from exterior walls. When
    a later version of the
Code
imposed new clearance requirements, the
    existing tanks were grandfathered in. Leaving aside the regulatory
    requirements, however, the trial judge correctly found that the leaking tank
    was boxed in and could not be inspected. That finding was supported by
    photographs in evidence, which clearly show the tanks were too close to the
    wall, and by Mr. Gendrons testimony that he had to cut away drywall to view
    the source of the leak.

[50]

With
    respect to the issue of shut-off valves, Thompson Fuels makes two submissions.
    First, it argues that at the time of installation of Mr. Gendrons tanks, there
    was no express requirement in the applicable
Code
for two shut-off
    valves for a twinned tank system. However, while the requirement may not have
    been express, the
Code
provided that a shut-off valve was to be
    installed in the fuel line as near as practicable to the exit from the supply
    tank. This implies that if there were two tanks, each tank would require a
    shut-off valve. Therefore, there was a sufficient evidentiary basis to support
    the trial judges finding that the leaking tank required a shut-off valve.

[51]

The
    second argument is that the trial judge erred in finding that the alleged
    non-compliance with the shut-off valve requirements caused or contributed to
    the oil leak where there was no evidence to support that finding. Further, Thompson
    Fuels argues that there was no evidence that a reasonable homeowner would know
    the potential function of a valve to stop oil flow between cross-connected
    tanks during a leak. However, the trial judge explicitly found that
    non-compliance with shut-off valve requirements did
not
cause the leak.
    He observed, nevertheless, that the non-compliance contributed to the extent of
    the damages, because it did not allow the non-incident tank to be shut off
    after the leak was discovered. That action would have prevented the oil inside
    the non-incident tank from leaking through the twinned incident tank. The trial
    judge finding that Mr. Gendron (or professionals, if they had been called in
    time) could have used the valve for this purpose is entitled to deference.

(ii)

Legal Errors

[52]

Thompson
    Fuels first alleged legal error is that the trial judge failed to exercise his
    gatekeeper function with respect to the opinion evidence of Mr. Gendrons
    expert Robert Smith. However, there was no objection taken to Mr. Smiths
    qualifications at trial. In addition, there was nothing in his testimony that
    would reasonably require intervention by the trial judge, unlike the situation
    in
Bruff-Murphy v. Gunawardena
, 2017 ONCA 502, 138 OR (3d) 584 at paras.
    63-67. Contrary to Thompson Fuels position, the fact that Mr. Smiths opinion
    on whether a tank should be tagged out as a hazard was not accepted in another
    recent case is of limited relevance to the determination of the issues in the
    present case:
Bruff-Murphy

at paras. 30 to 32.

[53]

Thompson
    Fuels next argues that the trial judge erred in failing to apply the elements
    of negligence and in not providing a proper causation analysis. Specifically,
    it submits that he did not explicitly assess the reasonableness of Thompson
    Fuels actions. It further argues that a comprehensive inspection in or around
    February 2002 would not have discovered any non-compliance that would have
    caused or contributed to the leak.

[54]

I
    would not give effect to this ground of appeal. There was ample evidence to
    establish that Thompson Fuels frequently and flagrantly breached the Regulation
    and thereby breached the standard of care. Thompson Fuels delivered fuel oil on
    over 50 occasions when it was prohibited from doing so because there had been
    no comprehensive inspection. This is not merely technical non-compliance, as
    it is argued. Nor is ignoring obvious violations and failing to tag out a tank
    in an unacceptable condition. Had Thompson Fuels conducted a comprehensive
    inspection in 2002 or at any point when the tanks should have been tagged out,
    it would have conducted a test for water. The trial judge found that, in the
    specific circumstances of this case, Thompson Fuels breached the standard of
    care by failing to test for water in either 2006 or 2007, because the water had
    accumulated over a lengthy period and would have been detected. It was the
    presence of water that ultimately caused the MIC.  The trial judges conclusion
    that these breaches caused the leak reveals no error.

[55]

The
    final alleged legal error is the failure of the trial judge to apply the
    contractual exclusion clause in the customer service agreement signed by Mr. Gendron.
    The exclusion reads as follows:

Thompson
Fuels
    is not responsible for the inspection and/or maintenance of any fuel oil tank
    located on the premises.

Thompson
Fuels
    shall not be liable for any injury or damage to any person or property
    resulting from the existence and operation or non operation of any oil burning
    installation at your premises. Further
Thompson
Fuels shall not be liable for any
    damage caused by furnace failure while your residence is vacant nor for any
    special or consequential damages resulting from the failure to perform its
    obligations under this contract.

[56]

The
    trial judge cited
Tercon Contractors Ltd. v. British Columbia (Transportation
    and Highways)
,
2010 SCC 4, [2010] 1 SCR 69, at paras. 122-23, for the
    proper analytical approach to determining the enforceability of exclusion clauses:

[122] The first issue, of course, is whether as a matter of
    interpretation the exclusion clause even
applies
to the circumstances
    established in evidence. This will depend on the Courts assessment of the
    intention of the parties as expressed in the contract. If the exclusion clause
    does not apply, there is obviously no need to proceed further with this
    analysis. If the exclusion clause applies, the second issue is whether the
    exclusion clause was unconscionable at the time the contract was made, as
    might arise from situations of unequal bargaining power between the parties (
Hunter
,
    at p. 462). This second issue has to do with contract formation, not breach.

[123] If the exclusion clause is
    held to be valid and applicable, the Court may undertake a third enquiry,
    namely whether the Court should nevertheless refuse to enforce the valid
    exclusion clause because of the existence of an overriding public policy, proof
    of which lies on the party seeking to avoid enforcement of the clause, that
    outweighs the very strong public interest in the enforcement of contracts.
    [Emphasis in original.]

[57]

The
    trial judge proceeded to apply the
Tercon
analytical framework. He
    first determined that the exclusion clause was not engaged in the circumstances
    of the case. The clause purported to exclude liability for Thompson Fuels
    failure to perform obligations imposed by the contract, but the obligation to
    perform an inspection prior to May 1, 2007 was imposed by the Regulation.

[58]

Further,
    analogizing to non-delegable duty cases, the trial judge held that under the
    third
Tercon
enquiry it would be contrary to public policy to allow a
    fuel distributor to use an exclusionary clause in a consumer contract to escape
    liability for failing to perform obligations imposed by law as a precondition to
    supplying fuel to that consumer. However, he noted that had the comprehensive
    inspection been carried out as required by law, the exclusion clause might have
    operated to exclude liability for Thompson Fuels negligence in the performance
    of its contractual obligations.

[59]

Thompson
    Fuels argument on appeal is that the trial judge erred in finding that the
    comprehensive inspection was not completed. In addition, it submits that the
    exclusion clause was not contrary to public policy; rather, it was a legitimate
    effort to limit Thompson Fuels liability as the
quid pro quo

for
    low-cost fuel delivery and no heat service. Further, the consequences of any
    non-compliance with regulatory obligations are distinct from liability in a
    tort action. Thompson Fuels submits that it is permissible to contract out of
    liability for a civil action and that this case is a civil action, not a
    regulatory proceeding.

[60]

For
    the reasons outlined above, I conclude that it was open to the trial judge to find
    that no comprehensive inspection had occurred. Accordingly, Thompson Fuels had failed
    to meet its regulatory obligation. That failure is the centrepiece of the case
    against Thompson Fuels. The trial judge correctly found that the exclusion
    clause does not expressly exclude liability for non-compliance under the Regulation.
    Exclusion clauses are to be strictly construed, and the burden is on the party
    relying on it to prove that it is applicable in a particular case:
Bow
    Valley Husky (Bermuda) Ltd. v. Saint John Shipbuilding Ltd.
, [1997] 3
    S.C.R. 1210, at para. 28;
Braun Estate v. Zenair Ltd.
, [1998] O.J. No.
    4841 (C.A.) at para. 10. There is nothing in the wording of the exclusion
    clause that references Thompson Fuels regulatory obligations.

[61]

In
    addition, I agree with the trial judges analysis of the third
Tercon
enquiry. Thompson Fuels argument that the exclusionary clause applies because this
    is a civil action and not a regulatory proceeding is without merit. The trial
    judge found civil liability on the part of Thomson Fuel on the basis of
    repeated regulatory violations. The trial judge was correct to conclude that it
    would be contrary to public policy to permit a fuel distributor to escape its
    legal obligation to conduct a comprehensive inspection as a precondition for
    supplying fuel to a customer.

(2)

TSSA Liability

[62]

There were two specific allegations of negligence made against
    the TSSA at trial. The first was that it failed to conduct an immediate and
    proper inspection of the site on December 22, 2008. The second was that the
    delineation order of December 24, 2008 was not adequate to address the urgency
    of the situation. In addition, it was alleged that the TSSA breached a general
    duty of care to Mr. Gendron in the circumstances.

[63]

Relying on
Ingles v. Tutkaluk Construction
, 2000 SCC 12,
    [2000] 1 SCR 298, the trial judge held that the TSSA inspector owed Mr. Gendron
    a
prima facie

duty of care to conduct his inspection with
    reasonable care. The trial judge noted that he was provided no evidence of the
    standard of care required of a TSSA inspector. Therefore, the trial judge
    concluded that he could not find that either the TSSA inspection or the
    subsequent delineation order issued on December 24, 2008 fell below the
    standard of care that would be expected of an ordinary, reasonable, and prudent
    inspector in the same circumstances.

[64]

The trial judge also found that causation had not been proven,
    noting that even if the 120-day deadline specified in the delineation order was
    negligent, Mr. Gendron failed to prove that such negligence caused or
    contributed to the damages because there was no evidence that a reasonable
    delineation order would have avoided or reduced the damages.

[65]

The trial judge then considered whether the TSSA owed Mr. Gendron
    any further private law duty of care. Specifically, he analyzed
whether the TSSA owed any such duty pursuant to its
    mandating statute, the
Technical Standards and Safety Act 2000
,
S.O.
    2000, c. 16
,
or
the MOU.

[66]

The trial judge found that the statutory role of
    the TSSA

was the protection of public safety and the environment and that
    it was not geared to the protection of an individual property owner.
Further,
    he found that the MOU did not impose on the TSSA a private law duty of care to Mr.
    Gendron, because it was an inter-agency agreement regarding their potentially overlapping
    responsibilities for the reporting, assessment, and management of oil spills.
    Finally, he found that the TSSA had no legal obligation to advise Mr. Gendron
    to call his insurer, as it owed him no duty of care in that regard.

[67]

On appeal, Thompson Fuels and Mr. Gendron make essentially the
    same arguments they unsuccessfully asserted at trial. They submit that the trial
    judge erred by not finding that the TSSA breached its duty of care to Mr.
    Gendron and the public to reasonably inspect the property, monitor for any
    contamination escaping off site,
issue an order for
    remediation as required,
and ensure that Mr. Gendron took reasonable
    steps to protect the environment. I would not give effect to any of these
    arguments.

[68]

As
    noted above, there was no evidence tendered regarding the standard of care of a
    prudent TSSA inspector or the reasonable time period for compliance with an
    order
. The failure to lead such evidence is fatal to the
    claims against the TSSA in this case. Therefore, the trial judge did not err in
    concluding that he could not find that the TSSA inspection or order fell below
    the standard of care.

[69]

I
    likewise see no error in the trial judges conclusion that neither the
Technical
    Standards and Safety Act
nor the MOU imposed any private law duty of care.
    Nothing in the wording of the legislation or the MOU is indicative of any
    private law duty of care. The act outlines general public obligations
to promote and protect public safety and the
    environment. Likewise, the MOU is an operational document designed to ensure
    that the TSSA and MOE work cooperatively and effectively in carrying out their
    mandates.

(3)

Contributory Negligence

[70]

Both
    Mr. Gendron and Thompson Fuels submit that the trial judge erred in his
    analysis of contributory negligence. First,
Mr. Gendron submits
    that given that Thompson Fuels did not raise any issue when servicing the
    tanks, it was reasonable for him to assume that their installation was
    compliant.

I reject this
    argument. Mr. Gendron chose to install the tanks on his own without
    professional assistance as was required by law. The responsibility for the
    inadequacies with the installation cannot completely be foisted on Thompson
    Fuels.

[71]

Mr. Gendron also argues that the trial judge erred in finding that the
    use of jerry cans to fill the tanks with stove oil was negligent and fell below
    the standard of care of a reasonably prudent person. In my view, that finding was
    open to the trial judge on the evidence and was consistent with Mr. Gendrons general
    practice of finding ways of reducing costs without regard to the safety of his
    actions.

[72]

The
    trial judge also found that Mr. Gendron was negligent in failing to have the
    tanks regularly inspected. On appeal, Mr. Gendron argues that, because OBTs
    from Thompson Fuels attended for service calls on five occasions, he did not
    need to arrange for additional inspections. I find no error in the trial
    judges finding that a reasonable person in the particular circumstances of
    this case would have obtained more thorough inspections of the tanks.

[73]

At
    trial, Thompson Fuels argued that Mr. Gendron was also negligent because he did
    not disconnect a big O drainage pipe that connected his house to the city
    culvert and did not bring it to the attention of any professional. On appeal,
    Thompson Fuels submits that the trial judge erred in rejecting this argument.
    The trial judge noted that there was no evidence that the drainage pipe was
    illegal or contrary to municipal standards. He also found that a reasonable
    person in Mr. Gendrons position would not be expected to know that the big O
    drain should be immediately disconnected. These were findings open to the trial
    judge on the evidence and I see no basis to interfere with them.

[74]

This
    leaves the issue of the trial judges analysis of the mitigation efforts made
    by Mr. Gendron. This is a ground of appeal asserted both by Mr. Gendron and
    Thompson Fuels. The trial judge is criticised by Mr. Gendron for
holding that he was contributorily negligent for failing to promptly
    report the leak. He submits that the trial judge failed to properly consider his
    efforts to mitigate the loss and his genuine belief that he was succeeding in
    collecting all of the leaking oil. Further, the trial judge is said to have erred
    in relying on ss. 92(1) and 2 of the
EPA
to
    find that Mr. Gendron was required to immediately report a leak to the Spills
    Action Centre, given that there was no evidence that he knew or ought to have
    known that the oil was escaping into the natural environment.

[75]

In
    contrast, Thompson Fuels submits that the trial judge erred in failing to find that
    Mr. Gendrons 12-day delay in starting the remediation process was a breach of the
    standard of care, arguing that if Mr. Gendron had acted reasonably and sought
    professional help right away, the leak would have been contained. Further, it
    submits that the trial judge erred by not addressing Mr. Gendrons failure to
    mitigate in breach of s. 93 of the
EPA
.

[76]

I
    would not give effect to these arguments. Mr. Gendrons conduct in response to
    the spill was fully considered by the trial judge. He properly found that Mr.
    Gendron failed to take the steps of a reasonably prudent homeowner in the
    circumstances. This finding was amply supported by the evidence, including his
    failure to contact the Spills Action Centre or Thompson Fuels 24/7 emergency
    hotline. This was not a minor occurrence. These were large-capacity tanks that
    were leaking oil. It was not the time for a do-it-yourself solution. Homeowners
    have an obligation to protect the environment and must act prudently and
    responsibly. Mr. Gendron did not. The trial judge did not err in so finding.

[77]

It
    is difficult to understand the submission made by Thompson Fuels that the trial
    judge did not consider Mr. Gendrons delay in acting and his failure to
    mitigate. To the contrary, the trial judge accepted Thompson Fuels submission,
    noting that Mr. Gendrons delay in reporting the oil leak and obtaining
    professional help resulted in increased damages that could have been averted if
    he had reported the leak as soon as he discovered it, rather than trying to
    deal with it on his own. That is clearly a finding that Mr. Gendron failed to respond
    promptly or to mitigate and the trial judge would have been mindful of that
    finding in apportioning liability. There is no merit in Thompson Fuels argument
    to the contrary.

(4)

Apportionment of Liability

[78]

Thompson
    Fuels submits that the portion of liability assigned to Mr. Gendron by the
    trial judge was too low, given that he was involved in repeated patterns of negligent
    conduct. It argues that the 60% liability assigned to Mr. Gendron shows that
    the trial judge failed to properly weigh the totality of Mr. Gendrons
    blameworthy conduct. In addition, Thompson Fuels submits that there are strong
    policy reasons to attribute fault to homeowners who fail to take reasonable
    steps to protect the environment and public safety.

[79]

Thompson
    Fuels argues that the decision in
Brown v. Davis & McCauley Fuels Ltd.
,
    2010 ONSC 4674, is most analogous. There, the plaintiffs were found 90%
    contributorily negligent since they had discovered a slow leak but did not take
    any active measures to fix the leak or clean up the spill. Thompson Fuels
    submits that Mr. Gendron should be found wholly or at least 90% at fault.

[80]

Mr.
    Gendron also appeals the apportionment of liability. He submits that substantially
    more fault should be attributed to Thompson Fuels because it failed to comply
    with its statutory obligations. He also argues that Thompson Fuels reliance on
Brown
is misguided because he had responded promptly to the leak. Mr. Gendron
    relies on
Appleyard v. Earl
(2009)
,
90 C.L.R. (3d) 49, where
    the service technician was held 70% liable and the homeowner 30% contributorily
    negligent. He submits that Thompson Fuels liability should have been fixed at
    a minimum of 70%.

[81]

This
    was another issue that was carefully considered by the trial judge. He concluded
    that Mr. Gendrons contribution was not a minor inadvertent lapse, but a series
    of actions that contributed to the leak and increased the damages. Mr. Gendron
    was found to be negligent in the installation of the oil tank, his failure to
    maintain the tank, and his failure to promptly report the leak. More
    significantly, the trial judge found that Mr. Gendron negligently introduced
    water into the incident tank.

[82]

With
    respect to Thompson Fuels, the trial judge found that it was negligent in its
    failure to conduct the legally required comprehensive inspection. He found that
    Thompson Fuels shared with Mr. Gendron responsibility for the fact that there
    was only a single shut-off valve. Further, Thompson Fuels should have
    tagged-out the oil tank when it conducted its maintenance visits in 2006 and
    2007, particularly because one end of the tank was not available for visual
    inspection. However, the trial judge went on to find that this was not a case
    in which the homeowner relied on the expertise of the distributor. He concluded
    that, Mr. Gendron thought that he could handle things on his own and that he
    had matters under control.

[83]

I see no error in the trial judges
    apportionment analysis. He considered the comparative blameworthiness of the
    parties and concluded that
the majority of the responsibility for the
    loss lay with Mr. Gendron. That was a finding that is entitled to considerable
    deference:
Ingles v. Tutkaluk Construction Ltd.
, 2000 SCC 12, [2000] 1
    S.C.R. 298, at para. 57;
Treaty Group Inc. v. Drake International Inc.
,
    2007 ONCA 450, 86 O.R. (3d) 366, at para. 29.
Although a body
    of accumulated case law can provide broad guidance about the appropriate range
    of contributory negligence in a given factual context, the apportionment of
    liability remains a highly fact-specific exercise that is not an exact science:
Snushall v. Fulsang
(2005), 78 O.R. (3d) 142
    (C.A.), at para. 33;
Treaty Group Inc. v. Drake International Inc.
(2005), 15 B.L.R. (4th) 83 (Ont. S.C.), at para. 74.

There is no basis for appellate
    interference with the trial judges apportionment of liability.

(5)

Damages

[84]

Thompson
    Fuels submits that the evidence at trial indicated that there was pre-existing
    contamination on Mr. Gendrons property from the old underground oil tank, the
    public roadway area, and the lake, the latter being due to a spill from the
    nearby marina. However, according to Thompson Fuels, DLS cleaned up the
    property to the non-detect standard, not to background levels of
    contamination, as required.

[85]

The
    trial judge conducted a detailed analysis of the remediation costs both on and
    off of Mr. Gendrons property. He did so mindful of the instruction from this
    court in
Midwest Properties Ltd. v. Thordarson
, 2015 ONCA 819, 128 OR
    (3d) 81, at para. 63 that damages should be awarded based on the principle that
    best ensures that the environment is returned to its pre-contamination
    condition. Trial judges should be careful not to award damages for remediating
    existing contamination. However, it is often difficult, if not impossible, to
    delineate between pre-existing and new contamination. Courts should not
    discourage proper remediation efforts.

[86]

The
    trial judge did not find that there was any pre-existing contamination outside
    Mr. Gendrons property. He did find, however, that DLS had to quickly respond
    to an emergency situation that required immediate efforts to remediate the
    lake. He was not persuaded that DLSs ensuing efforts were unreasonable or not
    reasonably related to the leak from Mr. Gendrons house. The trial judges
    findings do not reveal a palpable and overriding error

[87]

By
    contrast, the trial judge found that there was evidence of excessive
    remediation on-site. For example, the evidence established that there was a
    reasonable possibility that oil from the old outdoor tank had contaminated the
    soil. DLS sampled soil near the house and at the outer excavation limits, but
    did not take samples in between. It did not prepare a forensic analysis to get
    a chemical fingerprint of the spill to ensure that it could identify the
    contaminant by source. In addition, in its preliminary Assessment Report, DLS
    admitted that chemicals found at low levels at certain boreholes had not been attributed
    to the subject leak. Given this evidence, the trial judge appropriately reduced
    the damages attributable to excavating, hauling, and disposing of the
    contaminated soil by 50 percent.

[88]

Thompson
    Fuels further submits that the rebuilding costs awarded for Mr. Gendrons home
    are unreasonable and result in betterment. Thompson Fuels argues that the
    original home was not compliant with the building code, while Mr. Gendrons new
    home is. It is submitted that the trial judge erred by not recognizing this as
    a betterment.

[89]

The
    trial judge noted that Mr. Gendron adduced detailed evidence regarding the
    estimated cost of rebuilding the house as close as possible to its condition
    prior to the leak. Thompson Fuels called no contradictory evidence. In
    particular, there was no evidence regarding the value of complying with building
    code requirements or on whether it is more expensive to build a home that meets
    the building code requirements than one that does not. Thus, the trial judge did
    not err in finding that no betterment had been established on this basis.

[90]

The
    second betterment issue relates to a line of credit that was secured against
    the home prior to the leak. As part of the estimate on the cost to replace the
    home, a figure was included to payout an existing line of credit. The trial
    judge impliedly accepted this as an appropriate component of the rebuilding estimate.
    On appeal, Mr. Gendron justifies this amount on the grounds that the lender had
    the right to request repayment as a result of the demolition of the house, and
    did so. He argues therefore that this cost flows from the leak and is thereby compensable.

[91]

I
    disagree. In calculating damages, the court was obliged to put Mr. Gendron in the
    position he would have been in but for the leak, less his contributory
    negligence. By compensating him for the repayment of the line of credit, the
    trial judge violated this controlling principle. As a consequence of awarding
    these damages, Mr. Gendron was placed in a better position than he was in
    before the leak. Prior to the leak he owned a home that was encumbered with a
    line of credit. As a result of the trial judges decision, he now owns a home
    of essentially the same value that is not encumbered by a line of credit. This
    is an obvious betterment. The damages should be reduced to deduct the payment
    of the line of credit.

(6)

Adequacy of Reasons

[92]

Thompson
    Fuels submits that the trial judges reasons are inadequate. Trial judges are
    required to provide reasons that inform the parties, the appellate court, and
    the public the result of the case and how the judge reached his or her
    conclusion:
Dovbush v. Mouzitchka
, 2016 ONCA 381, 131 O.R. (3d) 474,
    at para. 22;
R. v. Sheppard
, 2002 SCC 26, [2002] 1 S.C.R. 869, at
    para. 24.

[93]

It
    would appear, at least in this court, that inadequacy of reasons has become a
    boilerplate ground of appeal. When a legal or factual error is not readily
    apparent, often an allegation is made that the reasons are inadequate in order
    to add heft to what is otherwise a weak appeal. Minor omissions are seized upon
    as significant deficiencies in the judges reasoning process. Appellants then argue
    that, try as they might, they just cannot understand what the judge was
    thinking or how he or she got to the result.

[94]

This
    case represents perhaps the high water mark of this unfortunate trend. After a
    27-day trial with multiple issues, the trial judge wrote 79 pages of reasons.
    The number of pages is not necessarily a reflection of an adequate decision.
    But in this case, the trial judge meticulously considered both the evidence and
    the legal issues at play. His reasons are logically coherent, thoughtful, and
    clearly stated.

[95]

The
    specific complaints are entirely without merit. For example, the suggestion
    that trial judge did not consider Mr. Gendrons failure to mitigate is
    contradicted by the plain wording of his reasons. There is a difference between
    being unable to understand a trial judges reasons and being wilfully blind as
    to their meaning. This is an example of the latter.

[96]

The
    other complaint is that Mr. Gendrons credibility and reliability were
    undermined at trial and the trial judge failed to provide adequate reasons because
    he did not expressly assess Mr. Gendrons credibility and reliability
.
A trial judge has the
    freedom to craft his or her reasons as he or she fits as long as they meet the
    practical imperatives mentioned above. This was not a trial were credibility
    played a significant role. The trial judge was not obliged to deal with every
    alleged inconsistency in Mr. Gendrons evidence. He was required to deal with
    the issues raised and make transparent and understandable findings. The trial
    judge did that and much more.

(7)

Pierringer
Agreement

[97]

A
Pierringer
agreement is used in multi-party litigation when one or
    more defendants, but not all of them, wish to settle with the plaintiff. These agreements
    permit a settling defendant to be released from a lawsuit under certain
    specific terms, leaving the remaining non-settling defendants to continue in
    the proceeding. Under the terms of a
Pierringer
agreement, a plaintiff
    may only seek recovery from the non-settling defendants on a several liability
    basis instead of a joint and several liability basis. The practical result is
    that settling defendants are no longer involved in the litigation and the
    remaining non-settling defendants are responsible only for the loss they
    actually caused.

[98]

In
    the present case, Mr. Gendron settled with Granby shortly after the start of trial
    and the parties entered into a
Pierringer
agreement. The trial judge
    properly considered whether Granby was liable for any part of the loss. He
    dismissed the claim against Granby in its entirety. That ruling has not been
    appealed.

[99]

Thompson
    Fuels submits that the trial judge erred by failing to reduce the amount
    awarded against it by the amount of the Granby settlement, or, alternatively, by
    failing to reduce the total damages by the settlement amount before applying
    the allocation of fault. It argues that Mr. Gendron will receive unfair
    compensation if he receives more than the damages awarded to him based upon the
    negligence of the defendants. According to Thompson Fuels, Mr. Gendron can only
    recover damages and interest in the total amount of $901,747, being 40% of
    total assessed damages, and any compensation above that amount is unfair.

[100]

Mr. Gendron takes the
    position that double recovery does not occur until he receives compensation in
    excess of his total loss, being $2,161,570. Until he receives more than what he
    has lost, Mr. Gendron argues, he cannot be considered to have been unfairly
    compensated.

[101]

In his ruling on
    post-trial motions, the trial judge noted that the application of the principle
    against double recovery is straightforward in cases in which no contributory
    negligence is attributed to the plaintiff. The trial judge considered a number
    of cases submitted by the parties, but none of them expressly considered the
    impact of a finding of contributory negligence on
Pierringer
agreements.

[102]

The trial judge relied
    on this courts decision in
Laudon
. In that case, the plaintiff
    entered into a modified Mary Carter agreement that had many of the features
    of a typical
Pierringer
agreement. The plaintiff had been injured in a
    boating accident and reached a settlement agreement with one defendant in the
    amount of $365,000. At trial, the jury awarded total damages of $312,021. The
    plaintiff was found to be 11% liable, the settling defendant 50%, and the
    non-settling defendant 39%. Thus, the plaintiff was awarded a net judgment of
    $277,698 (89% of $312,021) and the judgment against the non-settling defendant
    was $121,688 (39% of $312,021). The trial judge refused to deduct the amount
    paid to the plaintiff by the settling defendant, and ordered the non-settling
    defendant to pay the full $121,688.

[103]

This court allowed the
    appeal, finding that the trial judge had permitted double recovery. Critically
    for present purposes, the court deducted the settlement amount from the total
    damages award ($312,021), not the net damages award ($277,698):
Laudon
,
    at para. 55. However, the settlement amount in that case was so high that the
    distinction between these two approaches did not need to be considered. Under
    either approach there would be double recovery.

[104]

The trial judge
    considered himself bound by the methodology employed by this court in
Laudon
,
    which, in his words, infers that the principle of avoiding double recovery is
    based on the damages caused by the defendant(s) without reference to the
    plaintiffs contributory negligence (if any). He concluded his analysis by
    stating, Provided a plaintiff does not recover more than the total loss caused
    by the defendant(s) (without reference to the plaintiffs contributory
    negligence) there is no double recovery. In the result, the trial judge
    declined to reduce the amount awarded at trial by the amount paid under the
Pierringer
agreement.

[105]

Subsequent to the trial judges decision, the Alberta Court of Appeal
    released
Canadian Natural Resources Ltd. v. Wood Group Mustang (Canada)
    Inc.
, 2018 ABCA 305, 76 Alta. L.R. (6th) 1
.
That case involved a
    buried 32 km emulsion pipeline. Despite the fact that the pipeline had a life
    expectancy of 30 years, it failed after about three months of operation. In the
    litigation that ensued the plaintiff sued multiple parties and entered into
Pierringer
agreements with two of the defendants. At trial, the settling defendants were
    held to be partially responsible for the damages and it turned out that in both
    cases the plaintiff settled for less than it would have been entitled to had it
    proceeded to trial against those defendants. The trial judge awarded total
    damages of $45.425 million but found the plaintiff to be 50 percent contributorily
    negligent.

[106]

On appeal, the Alberta
    Court of Appeal considered several issues related to the
Pierringer
agreements.
    Justice Slatter, writing for the majority, provided detailed reasons why the
    court declined to depart from its earlier decision in
Bedard v. Amin
,
    2010 ABCA 3, 17 Alta LR (5th) 225, where it held that a settling plaintiff must
    account to a non-settling defendant for any recovery in excess of its actual
    damages.

[107]

Justice Slatter then
    considered the question of whether, in determining if the settling plaintiff
    has been overcompensated, one measures the plaintiffs recovery against its
    total loss, or only against that portion of the loss that was not caused by its
    contributory negligence. His analysis of this issue was as follows:

[149] The trial judge found that CNRL [the plaintiff] suffered
    damages of $45.425 million, but also found that CNRL was 50% contributorily
    negligent. As a result, CNRL was only able to recover one-half of its losses
    from the settling and non-settling defendants. CNRL argues that no issue of
    overcompensation under the
Pierringer

agreements arises until
    it has recovered
all
of its losses, including those for which it was
    contributorily negligent:
Gendron v Doug C. Thompson Ltd.
(
c.o.b.
    Thompson Fuels
)
, 2017 ONSC 6856 (CanLII) at para. 45.

[150] In principle, this argument has merit. CNRLs settlement
    with Shaw Pipe and Flint Field Services had as much to do with CNRLs
    responsibility for the damage, as it did with those defendants responsibility.
    Any notional over settlement or under settlement with the settling defendants
    might relate to a miscalculation of CNRLs responsibility. If the notional over
    settlement was a result of an underestimation of CNRLs responsibility, that
    could not properly be characterized as any sort of double recovery. CNRL
    suffered the damage in question, and received compensation for that damage, but
    until it recovered 100% of its damages it would not be overcompensated so as to
    engage the rule in

Ratych v Bloomer
.

[151] It would be ironic if the non-settling tortfeasor, IMV
    Projects, was entitled to credit for the over settling with the settling
    defendants, but the contributorily negligent tortfeasor, CNRL, was not.
    Likewise, if the plaintiff over settled against one defendant, but under
    settled against another, there would be no justification for giving the
    non-settling defendant any credit until the plaintiff was fully indemnified for
    its losses.
Sable Offshore

confirms that plaintiffs should be
    encouraged to settle multiparty claims, even if they are contributorily negligent.
    The settling but contributorily negligent plaintiff in a
Pierringer

arrangement should not have to give credit to the non-settling defendant
    until it is fully indemnified for its losses. [Emphasis in original.]

[108]

I agree with and adopt
    that analysis. In addition, I would add the following. The terms of a
    settlement agreement typically reflect many factors, including an assessment of
    potential liability and of the legal costs associated with proceeding to trial.
    A settlement amount could also include elements that are more difficult to
    quantify. For example, in the commercial context, costs associated with lost
    management time devoted to the trial or lost potential revenues if the
    plaintiff and the defendant contemplate a future business relationship may be
    significant factors. Thus, it is not always a simple matter to determine
    whether the plaintiff has been overcompensated by reason of a partial
    settlement. In any event, courts should encourage settlements and responsible
    plaintiffs who reach a settlement agreement should not be punished by reason of
    the fact that they appear to have reached a settlement for an amount greater than
    what the court ultimately awards.

[109]

Pierringer
agreements have their origin in American jurisprudence, specifically
the decision of the Supreme Court of Wisconsin in

Pierringer
    v. Hoger
, 124 N.W.2d 106 (1963). It is helpful therefore
    to consider the U.S. case law.

[110]

The states of Minnesota and North Dakota have formally followed the
    Supreme Court of Wisconsins lead:
Shantz v. Richview, Inc.
, 311 N.W.2d 155 (Minn. 1980);
Bartels v. City of
    Williston
, 276 N.W.2d 113 (N.D. 1979). Similar
    arrangements have been sanctioned by other courts in the United States in
    specific circumstances: see e.g.
McDermott, Inc. v. AmClyde
, 511 U.S. 202 (1994) (in federal admiralty cases).
Without
    attempting to provide a comprehensive account of U.S. jurisprudence in this
    area, a review of American jurisprudence on the issue of set-off is enlightening.

[111]

The
    cases from these jurisdictions indicate that, although the liability of a
    non-settling defendant is limited to its proportionate share of fault, the
    non-settling  defendant generally does not enjoy a further right of set-off
    against the amount of the settlement:
McDermott
, at
    p. 221;

Shantz
,

at p. 156;
McDonough
    v. Van Eerden
, 650 F. Supp. 78, 81 (E.D. Wis. 1986). The
    courts specifically contemplate that a
Pierringer
agreement for more than the settling defendants share of fault may
    result in a windfall for the plaintiff:
Rambaum v. Swisher
, 435 N.W.2d 19, 23 (Minn. 1989).
That is not the law in
    Canada, but two of the policy considerations underlying this rule are
    instructive in this case.

[112]

First,
    the American courts recognize the benefits in encouraging settlements and
    protecting the bargain the plaintiff and settling defendant have reached. In
Unigard
    Ins. Co. v. Ins. Co. of N. Am.
, 516 N.W.2d 762, 766 (Wis. Ct. App. 1994),
    the court observed that a settling defendant
purchases an
    unspecified portion of the total liability, and takes the chance of paying too
    much or too little for its peace of mind. The First Circuit has commented that
    
Pierringer
releases equitably distribute the
    risks of settlement among the parties, by imposing the risks on parties who
    bargained for those risks:
Austin v. Raymark Indus., Inc.
, 841 F.2d 1184,
1190-91
(1988).
Several
    U.S. courts have accordingly considered it inequitable to allow
the non-settling defendant to profit from the settlement agreement
    by obtaining a set-off:
Rambaum
, at p. 23;
Anunti v.
    Payette
, 268 N.W.2d 52, 56 (Minn. 1978).
Courts
    have noted that allowing set-off would discourage settlement not only for
    plaintiffs but also for non-settling defendants, who would stand to gain the
    benefits of settlements at the end of trial. As the
Rambaum
court
    noted, allowing set-off would mean that settling parties could no longer
    settle piecemeal such that the
Pierringer
would be effectively
    dismantled: at p. 23.

[113]

The
    second factor underlying the rule against set-off is that it is considered fair
    to the non-settling defendant. Depending on the apportionment of liability at
    trial, the
Pierringer
agreement may turn out to benefit the plaintiff
    or the settling defendant. But the non-settling defendant will always be
    required to pay the proportion of damages precisely commensurate to its own
    fault. As a result, it should be no concern to the non-settling defendant how
    much the plaintiff received from the settling defendant:

Shantz
at p. 156.

[114]

Although
    the rule in Canada is different, Canadian courts have not been indifferent to
    these considerations. In
Ratych v. Bloomer
, [1990] 1
    S.C.R. 940, for instance, the Supreme Court cautioned against double-recovery,
    but it allowed for insurance proceeds not to be set off on the principle that
    plaintiffs should not be deprived of bargained-for contractual benefits: at
    paras. 45, 53. In
Ashcroft v. Dhaliwal
, 2008
    BCCA 352, 83 B.C.L.R. (4th) 279, at para. 28, the Court of Appeal for British
    Columbia noted the public interest in encouraging settlements but balanced it
    with the rule against double recovery. The
Bedard
court recognized the element of unfairness in a non-settling
    defendant reaping the benefits of the settlement, but considered that the
    Canadian policy against double-recovery was fair in a broader sense because it
    allowed the plaintiff to be fully compensated: at para. 16. In light of similar
    considerations, the court held in
Canadian Natural Resources Ltd.

that 
The rule against overcompensation should be applied
    generously in favour of the settling plaintiff, by accepting that there is in
    fact no overcompensation until the plaintiff is fully indemnified: at para.
    148.

[115]

I agree with the
    policy analysis described above about fairness to the non-settling defendant
    and encouragement of settlements. A
Pierringer
agreement is by its
    nature a contract to which the non-settling defendant is a stranger. Absent
    double compensation, a non-settling defendant should not be able to rely on the
    benefits of that agreement beyond the guarantee that it will not be required to
    pay more than its share of the liability. By taking this approach, a plaintiff
    who may have been contributorily negligent will be encouraged to attempt to
    settle.

[116]

For the foregoing
    reasons, I would dismiss this ground of appeal.

(8)

Contribution and Indemnity

[117]

Mr. Gendron submits that the trial judge erred in not finding that
    Thompson Fuels was liable for its proportionate share of the $313,005.08 Mr. Gendron
    was ordered to pay pursuant to s. 100.1(1) of the
EPA
.

[118]

Section 100.1 of the
EPA
gives a municipality the right to issue orders against the the owner of the
    pollutant or the person having control of the pollutant within the meaning of
    the
EPA
. The trial judge rejected Mr. Gendrons argument that Thompson
    Fuels was the owner of the oil immediately before the leak. In his view,
    pursuant to s. 19, Rule 5 of the
Sale of Goods Act
, RSO 1990, c S.1, Mr.
    Gendron became the owner of the oil upon delivery, rather than when payment
    for the oil was processed approximately five hours after delivery.

[119]

Consequently,
    Gendrons s. 100.1 claim for contribution and indemnity could only succeed if
    Thompson Fuels had the charge, management or control of a pollutant
    immediately before the first discharge. In the trial judges view, the key
    phrase was immediately before. He interpreted this phrase to mean that there
    can be no intervening act between charge, management or control and the
    discharge of the pollutant. In his view, Thompson Fuels lost control of the oil
    upon delivery, and therefore did not have control immediately before the
    first discharge. He therefore dismissed the claim for contribution and
    indemnity.

[120]

I agree with the trial
    judges analysis. He properly applied the provisions of s. 100.1 to the facts
    of this case. Thompson Fuels could not be the owner of the fuel or have control
    of the fuel once it had delivered the fuel to its customer.

(9)

Costs

[121]

Thompson Fuels seeks
    leave to appeal the award of costs against it. It submits that the trial judge
    failed to properly apply a reduction of costs for the allocation of fault, the
    impugned conduct of Mr. Gendron, and the partial settlement paid by Granby. The
    trial judge is also said to have erred by failing to consider the offers to
    settle before trial.

[122]

Costs awards are entitled
    to considerable deference. Appellate courts will set aside a costs award on
    appeal only if the trial judge has made an error in principle or if the costs
    award is plainly wrong:
Hamilton v. Open Window Bakery Ltd.
,
2004 SCC 9, [2004] 1 S.C.R. 303, at para. 27.

[123]

This is not a case
    warranting interference by this court. The trial judge specifically considered
    the apportionment of fault and the negligence of Mr. Gendron. He rejected the
    submission that Mr. Gendrons costs should be apportioned on the same
    percentage basis as his liability. This decision was well within the trial
    judges discretion in fixing costs and there is no basis for appellant
    interference. I would also reject the submission that there should be a reduction
    in Mr. Gendrons costs as a consequence of the Granby settlement for the same
    reasons detailed above considering the impact of the
Pierringer
agreement.

[124]

The trial judge found that
    Thompson Fuels came nowhere close to beating its offer to settle for a $300,000
    contribution to a $650,000 total settlement amount. Therefore, he decided that rule
    49.10 for adjustment of costs in light of settlement offers did not apply. Having
    made a woefully inadequate offer to settle, Thompson Fuels cannot seriously
    contend that the trial judge erred in not reducing costs as a consequence of
    the offer.

VI. Disposition

[125]

For the foregoing
    reasons, I would dismiss the appeals save for a reduction in the damages equal
    to the amount paid in relation to Mr. Gendrons line of credit. As there has
    been divided success, I would not award costs for the appeals.

Released: B.W.M. April 12, 2019

C.W.
    Hourigan J.A.

I
    agree. B.W. Miller J.A.

I
    agree. David M. Paciocco J.A.


