



COURT OF APPEAL FOR ONTARIO

CITATION: Crombie Property Holdings Limited v.
    McColl-Frontenac Inc. (Texaco Canada Limited), 2017 ONCA 16

DATE: 20170111

DOCKET: C61311

Rouleau, van Rensburg and Miller JJ.A.

BETWEEN

Crombie Property Holdings Limited

Plaintiff (Appellant)

and

McColl-Frontenac Inc. (formerly known as Texaco
    Canada
Limited), Imperial Oil Limited, 172965 Canada Limited, Avondale
Stores Limited, Dimtsis Dentistry Professional Corporation,
and John Doe

Defendants (Respondents)

Peter C. Wardle and James Gibson, for the appellant

Lana J. Finney and Alexi N. Wood, for the respondents
    McColl-Frontenac Inc. (formerly known as Texaco Canada Limited), Imperial Oil Limited
    and 172965 Canada Limited

Linda C. Phillips-Smith, for the respondent Avondale
    Stores Limited

Barry Weintraub and Conner Harris, for the respondent
    Dimtsis Dentistry Professional Corporation

Heard: October 25, 2016

On appeal from the judgment of Justice Kelly P. Wright of
    the Superior Court of Justice, dated October 22, 2015, with reasons reported at
    2015 ONSC 6560.

van Rensburg J.A.:

A.

Overview

[1]

The appellant Crombie Property Holdings Limited (Crombie) brought an
    action for damages resulting from the contamination by hydrocarbons of a property
    located at 150 Main Street East, Grimsby (the Crombie Property). The
    appellant became the owner of the Crombie Property on April 10, 2012. The
    contamination was alleged to have migrated from an adjacent property located at
    146 Main Street East (the Dimtsis Property), which had been used as a gas
    station until 2004.

[2]

The defendants to the action  the respondents in the appeal  are the
    owner (Dimtsis Dentistry Professional Corporation), former owners
    (McColl-Frontenac Inc., Imperial Oil Limited and 172965 Canada Limited) and
    former lessee (Avondale Stores Limited) of the Dimtsis Property.

[3]

The action was commenced by notice of action issued on April 28, 2014.
    The parties exchanged pleadings. In its statement of claim the appellant
    asserted that it was not aware of soil and groundwater contamination at its
    property that had migrated from the Dimtsis Property until September 17, 2012.
    In their statements of defence the respondents pleaded that the claims asserted
    by the appellant had been discovered more than two years before the action was
    commenced and were therefore barred by the
Limitations Act, 2002
, S.O.
    2002, c. 24, Sched. B
.
The respondents moved for summary dismissal of
    the action based on the limitations defence.

[4]

The motion judge granted the motion. She concluded that the appellant
    had become aware of sufficient material facts to form the basis of the action
    by March 9, 2012. In the alternative, she held that Crombie had more than a
    sufficient basis for an action by March 30, 2012 when soil and groundwater
    sampling laboratory results were made available to Crombie (and showed
    exceedences of regulatory criteria). In the further alternative the motion
    judge stated that, even if Crombie did not know about the drilling results
    until May 2012, when it received a draft Phase II environmental site assessment
    (ESA) report that appended the results, the appellant ought to have known of
    its claim against the respondents, and did not exercise due diligence. Finally,
    the motion judge rejected the appellants contention that there was a
    continuing tort that would suspend the operation of a limitation period, as
    there was no evidence from the appellant of ongoing damage or nuisance. As the
    claims asserted in the action were statute-barred, the motion judge granted the
    motion for summary judgment and dismissed the action.

[5]

For the reasons that follow I would allow the appeal. The
    motion judge made two palpable and overriding errors when she found that Crombie
    knew or ought to have known of its claim in relation to the Crombie Property more
    than two years before it commenced the action. First, the motion judge equated
    Crombies knowledge of potential hydrocarbon contamination, or suspicion of
    such contamination (that was based on the information generated by a Phase I
    ESA) with actual knowledge that the Crombie Property was contaminated by
    hydrocarbons. Second, the motion judge erred in ignoring the relevant
    circumstances of Crombies purchase of the property  its involvement in a
    multi-property transaction and its waiver of all conditions (not just an
    environmental condition for the Crombie Property) on March 8, 2012. These errors
    were material to her conclusion that Crombie had knowledge of its claim by
    March 9, 2012, based on its suspicions of contamination, and her alternative
    conclusion that Crombie knew or ought to have known of its claim when
    laboratory results from the Phase II subsurface investigations were available
    at the end of March 2012.

[6]

As I would allow the appeal on this basis, it is unnecessary
    to consider the alternative argument that the motion judge erred in refusing to
    find evidence of continuing migration of contaminants that would extend the
    limitation period.

B.

Facts

[7]

The Dimtsis Property was historically used as a gasoline service station.
    The site was decommissioned in 2004 and a substantial amount of contaminated
    soil was removed. Testing in 2007 confirmed that soil and groundwater
    conditions at the property met the applicable Ministry of the Environment
    (MOE) standards. The MOE acknowledged a Record of Site Condition in 2008.
    Under applicable law, the acknowledgment confirmed that the property complied
    with environmental regulations.

[8]

The appellant offered to purchase the Crombie Property in 2012, as part
    of a transaction involving the acquisition of 22 commercial properties. The
    purchase was subject to various conditions, including that the purchaser be
    satisfied as to the environmental condition of the properties. Crombie hired Stantec
    Consulting Ltd. (Stantec), an environmental consulting firm, to assist with
    its environmental due diligence. Stantec completed a Phase I ESA for each
    property. A Phase I ESA consists of a review of available records, interviews
    with relevant persons and a site visit, but does not include any subsurface
    drilling or soil or groundwater sampling. Its purpose is to identify evidence
    of potential or actual environmental contamination.
[1]


[9]

The Phase I ESA on the Crombie Property was conducted in February 2012.
    It included a review of five historical environmental reports. The reports (copies
    of which were provided to Crombie by February 29, 2012) described the results
    of Phase II ESAs (soil and groundwater sampling) carried out in 2003 and 2004;
    the results of a soil remediation program undertaken in 2004 (for contamination
    by volatile organic compounds (VOCs)); and a review of the environmental
    status of the property in December 2005 (the Pinchin Report).

[10]

The
    Pinchin Report stated that concentrations of PHC F1-F4 (petroleum hydrocarbon
    fractions) were relatively elevated in groundwater sampled in two monitoring
    wells, but generally showed marked decreases over the earlier sampling. Pinchin
    noted that there were no MOE standards for PHC, that the dissolved PHC
    concentrations were only marginally above the potable water standards and that
    the PHC concentrations appeared to be decreasing. Based on this, Pinchins opinion
    was that the remaining PHC concentrations were not considered a significant
    environmental concern, and that no further environmental assessment was
    warranted.

[11]

Stantecs
    Phase I ESA identified potential contamination of the property by the historic
    gas station at the adjacent property as well as potential contamination from an
    active dry cleaner located nearby. In its report (delivered March 20, 2012),
    Stantec summarized the historical reports. With respect to potential
    hydrocarbon contamination, the Phase I ESA report stated that levels of PHCs
    identified in the Pinchin Report would not have met 2012 site condition
    standards for benzene and PHC F1 and F4 fractions. However, as Stantec later stated
    in its draft Phase II report, due to changes in analytical methods, previously
    analyzed total petroleum hydrocarbon (TPH) concentrations could not be directly
    compared against the applicable site condition standards.

[12]

Stantec
    recommended a Phase II ESA to evaluate soil and groundwater conditions at the
    Crombie Property for VOC and hydrocarbon contamination.

[13]

On
    March 8, 2012 Crombie waived all conditions for the purchase transaction,
    including environmental conditions, such that it was required to complete the
    purchase of all 22 properties. Crombie completed its purchase of the
    properties, including the Crombie Property, on April 10, 2012.

[14]

The
    subsurface work at the Crombie Property began on March 14, 2012. Crombie
    initially authorized analysis for VOCs only however, as Stantec reported in its
    draft Phase II ESA report, during the subsurface sampling, petroleum hydrocarbon
    odours were noted in a monitoring well near the property boundary. Stantec noted
    that following discussions with Crombie, soil and groundwater samples from this
    location were also analyzed for petroleum hydrocarbons.

[15]

A
    draft Phase II ESA report was submitted to Crombie by Stantec on May 9, 2012.
    Attached to the report were laboratory test results dated March 23, 2012 for
    groundwater and March 30, 2012 for soil. The test results showed that petroleum
    hydrocarbons in certain soil and groundwater samples exceeded MOE site
    condition standards.

[16]

The
    final Phase II ESA report was provided to Crombie on September 17, 2012.

[17]

On
    April 28, 2014 Crombie commenced its action for damages for nuisance, strict
    liability, trespass, breach of statute and negligence as a result of the
    contamination by petroleum hydrocarbons of soil and groundwater at the Crombie
    Property.

[18]

The
    respondents moved for summary judgment to dismiss the action on the basis that
    the appellants claims were statute-barred pursuant to the
Limitations Act,
    2002.


[19]

In
    support of the motion the respondents submitted the affidavit of Jeff Carson,
    an environmental engineer employed by Amec Foster Wheeler Environment &
    Infrastructure, and retained by Dimtsis, that attached his report (the Carson
    Report).
[2]
The Carson Report reviewed and explained the various historical environmental
    reports and the Stantec Phase I and Phase II ESA reports, and the information that
    was available to Crombie and its consultant based on such documents. In
    relation to the soil and groundwater laboratory results, Mr. Carson noted
    that they were reported by the laboratory on March 23 and 30, 2012. He stated, [I]t
    is common industry practice to update clients with field and analytical data
    once received, especially when critical deadlines, such as property transaction
    decisions, are imminent.

[20]

In
    response to the motion for summary judgment the appellant relied on the affidavit
    of Brady Landry, Crombies Director of Acquisitions and Dispositions. Mr.
    Landry deposed that his department was responsible for due diligence for the 22
    property transaction. He described how Crombie had a weekly telephone call in
    which environmental issues were discussed, and based on which due diligence summaries
    were prepared and updated. His affidavit attached copies of communications
    within Crombie and with Stantec. As of February 20, 2012, Stantec had informed
    Crombie that a gas station was located at the Dimtsis Property, which had been
    remediated, that a dry cleaner was present on another neighbouring property and
    that groundwater flow was not yet determined. As of February 27, 2012 the
    summary indicated a draft Phase II ESA was to be completed by April 9, 2012,
    with verbal results by March 23, 2012.

[21]

Mr.
    Landry deposed that, in the next status call following the waiver of conditions,
    Stantec was advised that the Phase II ESA was no longer considered urgent. He
    explained that there was no reason to incur additional expense for rush
    laboratory analysis and report preparation. As a result, Crombie ceased to have
    Stantec provide regular updates. Mr. Landry deposed that the Crombie Property
    was not discussed with Stantec between March 13, 2012 and closing or
    afterwards. He also stated that it was only on receipt of the draft Phase II
    ESA report on May 9, 2012, that Crombie learned that there was hydrocarbon
    contamination at the Crombie Property. Mr. Landry was not cross-examined on his
    affidavit.
[3]


C.

Decision of the Motion Judge

[22]

The
    motion judge concluded that the appellants claims were readily available and
    discoverable well before April 28, 2012, two years before its notice of action
    was issued. She found that Crombie was aware of Stantecs concerns outlined in
    its Phase I ESA report and its recommendation to conduct subsurface testing.
    She concluded that groundwater sampling results were available and showed
    exceedences on March 23, 2012, while soil sample results were available and
    showed exceedences on March 30, 2012.

[23]

The
    motion judge concluded (at para. 31 of her reasons) that, by March 9, 2012,
    when Crombie waived the environmental conditions, they had become aware of
    sufficient material facts to form the basis of an action.

[24]

The
    motion judge went on to hold, that if she were wrong in that conclusion,
    Crombie had more than a sufficient basis for an action by March 30, 2012 (at
    para. 32). She stated that, while the draft Phase II report was dated May 9,
    2012, the crucial part of that report was the findings from the groundwater and
    soil samples all of which [were] made available to Crombie [by] March 30, 2012.
    She concluded that [i]t is difficult to believe that Crombie did not know
    about these results given that they were directing and presumably paying
    Stantec to go ahead with the further testing (at para. 32). The motion judge
    rejected the evidence of Mr. Landry, that Crombie did not know of the test
    results until May 2012. She found that the subsurface test results would have
    been made available to Crombie during what she described as a crucial time
    period. The motion judge referred to the fact that Crombie had ongoing
    communication with Stantec and was verbally advised of the results of the Phase
    I ESA report well before its March 20, 2012 release date. From this, at para.
    35, she inferred that:

It only makes sense that they also had ongoing communication
    with Stantec prior to the Phase II report. Given the serious nature of the
    investigation and the results that flowed from it, it is difficult to believe
    they were not given that information by March 30, 2012. Even if they did not
    request it, one would think Stantec would have made it available to them.

[25]

The
    motion judge concluded that, even if Crombie did not know about the sample
    results until May 2012, it ought to have known and did not exercise due diligence
    (at para. 40).

[26]

As
    for the appellants argument that there was continuing environmental damage in
    respect of which the limitation period had not run, the motion judge rejected
    the claim as not supported by any evidence. She noted that none of the environmental
    reports that were generated spoke to the issue of ongoing damage. Therefore,
    she was not prepared to attach a separate limitation period to any such claim
    (at paras. 41-47).

[27]

The
    motion judge concluded that [c]ertainly by the time [Crombie] acquired the
    property on April 10, 2012, [it] knew or ought to have known through reasonable
    diligence, all of the material facts needed to discover its alleged cause of
    action (at para. 49). She therefore dismissed the action as statute-barred.

D.

Positions of the Parties

[28]

The
    central issue on appeal is whether the motion judge made a palpable and
    overriding error, or erred in principle, when she concluded that the appellant
    knew or ought to have known it had a cause of action against the respondents more
    than two years before it commenced its action.

[29]

The
    appellant says that the motion judge erred:

1.

in finding that it knew of its claim by March 9, 2012, which was prior
    to its acquisition of the property and before it knew that there was
    contamination exceeding applicable standards;

2.

in concluding in the alternative that it had a sufficient basis for an
    action by March 30, 2012, inferring without evidence, that Crombie had, by
    then, received the results of soil and groundwater testing;

3.

in concluding in the further alternative that Crombie ought reasonably
    to have known that it had a cause of action, a finding that ignored the
    relevant circumstances of Crombies purchase and environmental due diligence; and

4.

in dismissing the claim based on continuing migration of contaminants
    where the moving parties had not provided any evidence to support this basis
    for the motion.

[30]

The
    respondents assert that the motion judges findings are entitled to deference.
    They argue that the finding of whether a claim has been discovered is a question
    of fact, or mixed fact and law, and that the evidence at the summary judgment
    motion supported the motion judges decision in all respects.

E.

Analysis

(1)

Standard of Review

[31]

The
    Supreme Court of Canada in
Hryniak v. Mauldin
, 2014 SCC 7, [2014] 1.
    S.C.R. 87, at para. 81, established the standard of review on appeal of a
    summary judgment. The court stated that, [w]hen the motion judge exercises her
    new fact-finding powers under Rule 20.04(2.1) and determines whether there is a
    genuine issue requiring a trial, this is a question of mixed fact and law,
    reviewable only for a palpable and overriding error, unless there is an
    extricable error in principle. Further, the question whether a limitation
    period expired prior to the commencement of an action is typically a question
    of mixed fact and law and therefore subject to review on a palpable and
    overriding error standard:
Longo v. MacLaren Art Centre Inc.
, 2014
    ONCA 526, 323 O.A.C. 246, at para. 38. A palpable and overriding error is an
    obvious error that is sufficiently significant to vitiate the challenged
    finding of fact:
Longo
, at para. 39
.

[32]

In
    my view, and as I will explain, the decision in this case reflects such errors.

(2)

Framing the Limitations Issue

[33]

In
    order to obtain a summary dismissal of the action, the moving parties were
    required to establish that there was no issue requiring a trial about their
    limitation defence. The specific issue was whether Crombies claim in respect
    of the environmental contamination of its property was discovered within the
    meaning of s. 5 of the
Limitations Act, 2002
before April 28, 2012.

[34]

Section
    5(1) of the
Limitations Act, 2002
provides that a claim is discovered
    on the earlier of:

(a) the day on which the person with the claim first
    knew,

(i) that the injury, loss or damage had occurred,

(ii) that the injury, loss or damage was caused by
    or contributed to by an act or omission,

(iii) that the act or omission was that of the
    person against whom the claim is made, and

(iv) that, having regard to the nature of the
    injury, loss or damage, a proceeding would be an appropriate means to seek to
    remedy it; and

(b) the day on which a reasonable person with the
    abilities and in the circumstances of the person with the claim first ought to
    have known of the matters referred to in clause (a).

[35]

The
    limitation period runs from when the plaintiff is actually aware of the matters
    referred to in s. 5(1)(a)(i) to (iv) or when a reasonable person with the
    abilities and in the circumstances of the plaintiff first ought to have known
    of all of those matters:
Longo
, at para. 41. The knowledge sufficient
    to commence the limitations clock has been described as subjective knowledge
    or objective knowledge. The prospective plaintiff must have known or ought
    reasonably to have known of the material facts necessary for a claim. It is
    reasonable discoverability and not the mere possibility of discovery that
    triggers a limitation period:
Van Allen v. Vos
, 2014 ONCA 552, 121
    O.R. (3d) 72, at paras. 33 and 34.

[36]

The
    central issue in this case, as framed by the parties, is when the appellant knew
    or ought reasonably to have known that the Crombie Property was contaminated by
    hydrocarbons, and in particular whether that occurred before April 28, 2012.
    This is how the injury, loss or damage component of s. 5(a)(i) was
    characterized. The fact that the appellant would have known that the source of
    the contamination was the prior use of the adjacent property as a gas station (the
    cause of the injury, loss or damage under s. 5(a)(ii)) was not seriously
    challenged. Nor did the appellant assert that any delay in commencing the claim
    resulted from the need to determine the identity of the individual respondents
    in relation to the Dimtsis Property (s. 5(a)(iii)) or in not knowing that a
    proceeding would be an appropriate means to seek a remedy (s. 5(a)(iv)).

[37]

As
    indicated, the motion judge decided to allow the motion and dismissed the claim
    as statute-barred after she concluded that the appellants claims were readily
    available and discoverable well before April 28, 2012.

[38]

As
    I will explain, the motion judge, in concluding that Crombie knew about its
    claim by March 9, 2012, and knew or ought to have known about its claim by
    March 30, 2012, made two palpable and overriding errors.

(3)

Equating Suspicion of Contamination with Actual Knowledge of
    Contamination

[39]

The
    motion judge concluded that by March 9, 2012, when Crombie waived the
    environmental clause,
[4]
(and before any subsurface testing had occurred) it knew of sufficient
    material facts to form the basis of an action. As noted earlier, the material
    fact in question in this case was that the Crombie Property was contaminated by
    hydrocarbons.

[40]

The
    motion judge did not point to any evidence that Crombie had actual knowledge of
    the hydrocarbon contamination at the Crombie Property at that time. Rather, she
    referred to material that was available to Crombie from a review of the
    property (presumably the draft Phase I ESA results reported by Stantec) and
    the compilation of material that was presented to them (presumably the historical
    environmental reports Crombie received on February 29, 2012). Indeed, the
    motion judges findings of fact at para. 29 of her reasons indicate only that,
    by early March 2012, Crombie was aware of Stantecs concerns of potential
    contamination by petroleum hydrocarbons related to the former gasoline station
    on the Dimtsis Property.

[41]

Any
    information available to Crombie at that time about actual contamination at the
    Crombie Property, was historical. At its highest, in relation to hydrocarbon
    contamination, the Pinchin Report revealed the presence of hydrocarbons in
    groundwater in 2005 that were marginally above potable water standards and
    appeared to be decreasing, leading Pinchin to recommend no further
    investigation. It was not evidence of contamination of the property over six
    years later, nor was it interpreted as such by Stantec, Crombies environmental
    consultant. Indeed, the purpose of the Phase II drilling and sampling program
    recommended and undertaken by Stantec, was to determine whether or not the soil
    or groundwater at the Crombie Property was contaminated.

[42]

That
    the motion judge equated Crombies knowledge of possible contamination with
    knowledge of actual contamination is apparent from her statement that [a]ll
    the testing that followed simply confirmed [Crombies] suspicions about what
    had already been reported on (at para. 31). It was not sufficient that Crombie
    had suspicions or that there was possible contamination. The issue under s.
    5(1)(a) of the
Limitations Act, 2002
for when a claim is discovered, is
    the plaintiffs actual knowledge. The suspicion of certain facts or knowledge
    of a potential claim may be enough to put a plaintiff on inquiry and trigger a
    due diligence obligation, in which case the issue is whether a reasonable
    person with the abilities and in the circumstances of the plaintiff ought
    reasonably to have discovered the claim, under s. 5(1)(b). Here, while the
    suspicion of contamination was sufficient to give rise to a duty of inquiry, it
    was not sufficient to meet the requirement for actual knowledge. The subsurface
    testing, while confirmatory of the appellants suspicions, was the mechanism by
    which the appellant acquired actual knowledge of the contamination.

[43]

Finally,
    I note that the motion judge stated that the appellants claims were available
    and discoverable well before April 28, 2012. While not determinative, this
    suggests that the motion judge adopted too low a threshold for discoverability
    and did not focus on what was necessary to her analysis: she was required to
    determine when the appellant had actual knowledge of the elements of its claim,
    and in particular that the property was contaminated by hydrocarbons, and when
    a reasonable person with the appellants abilities and in its circumstances,
    ought to have known of the contamination. The fact that contamination was there
    to be discovered was of course not sufficient to start the limitations clock.

[44]

For
    these reasons, I conclude that it was a palpable and overriding error for the
    motion judge to equate knowledge of potential contamination with knowledge of
    actual contamination.

(4)

Failing to Consider Relevant Circumstances: the Transaction Context

[45]

The
    motion judge concluded in the alternative that Crombie had knowledge of the
    material facts sufficient for its claim when the subsurface test results were
    available to Stantec (which she assumed was by the end of March). The groundwater
    and soil sampling results from the laboratory were dated March 23 and 30, 2012.

[46]

If
    the subsurface test results were sufficient to confirm that the Crombie
    Property was contaminated (which is a reasonable conclusion), it was not
    sufficient that the results were available. The question was when Crombie had
    knowledge of the test results.

[47]

First,
    the motion judge stated that, although the draft Phase II report containing the
    findings from the soil and groundwater sampling was not provided to Crombie until
    May 9, 2012, [i]t is difficult to believe that Crombie did not know about these
    results given that they were directing and presumably paying Stantec to go
    ahead with the further testing (at para. 32). The fact that Crombie was
    directing and paying Stantec, however, was not sufficient to ground the
    conclusion that Crombie knew about the test results as soon as they were
    reported by the laboratory to Stantec.

[48]

Second,
    the motion judge concluded that, because Stantec had verbally reported to
    Crombie the results of the Phase I ESA during the due diligence period it only
    [made] sense that they would have continued to do so when it received the
    laboratory results. In rejecting Mr. Landrys evidence that Crombie received no
    status updates from Stantec between March 13 and April 12, 2012, after the
    waiver of conditions, the motion judge stated that the suggestion that Crombie
    ceased to have communication with Stantec during this crucial time period
    made no sense and that she did not accept it:

Given the serious nature of the investigation and the results
    that flowed from it, it is difficult to believe they were not given that
    information by March 30, 2012. Even if they did not request it, one would think
    Stantec would have made it available to them. (at para. 35)

[49]

The
    problem with this reasoning is that it ignores completely the circumstances of
    the multi-property transaction Crombie was involved in, the due diligence
    process and the waiver of conditions. Nowhere in her reasons did the motion
    judge refer to the fact that Crombie was involved in purchasing 22 properties. This
    was part of the context in which Crombies knowledge ought to have been assessed,
    and the failure to mention such circumstances was an important omission. Further,
    although the motion judge referred to March 9, 2012 as the date when Crombie
    waived conditions and proceeded with the purchase of the property (later she
    referred to this as a waiver of the environmental condition), she did not
    factor Crombies waiver of conditions into her assessment of its conduct.

[50]

That
    the motion judge ignored these circumstances is apparent in her reference to the
    crucial time period (presumably the period for due diligence in the
    transaction) as continuing even after the waiver of conditions. Once the
    conditions were waived, there was no urgency to confirming whether the Crombie
    Property was contaminated, as Crombie was required to close the purchase. It
    was unreasonable for the motion judge to draw an inference about Crombies
    knowledge of the test results without considering such circumstances.

[51]

This
    error also affected the motion judges conclusion that Crombie ought reasonably
    to have known of its claim when the test results were available, and that the
    failure to ask for the results was inconsistent with reasonable diligent conduct.
    Section 5(1)(b) of the
Limitations Act, 2002
asks when a reasonable
    person with the abilities and in the circumstances of the person with the claim
    first ought to have known of the elements of the claim; in this case the fact
    of the hydrocarbon contamination. Determining whether the plaintiff has acted
    reasonably will include an analysis of not only the nature of the potential
    claim, but also the particular circumstances of the plaintiff:
Longo
,
    at para. 43.

[52]

Again,
    in arriving at her conclusion that Crombies claim was reasonably discoverable,
    the motion judge did not consider the relevant and important circumstances of
    the multi-property transaction and its waiver of conditions. What the motion
    judge ought to have considered, was whether, a reasonable person in Crombies
    position, after the waiver of conditions, would have sought out and obtained
    the laboratory results before April 28, 2012.

[53]

Accordingly,
    it was a palpable and overriding error for the motion judge to fail to take
    into consideration the multi-property transaction and Crombies waiver of
    conditions, in her assessment of what Crombie knew or ought to have known about
    hydrocarbon contamination at the property two years before it commenced its
    action.

(5)

The Conclusion that the Limitation Period Is Not Extended Because of a Continuing
    Tort

[54]

In
    addition to asserting that the hydrocarbon contamination was not discovered
    until May 2012, the appellant argued that there was a continuing tort, in
    respect of which the limitation period would continue to run. The appellant contends
    that the motion judge erred in concluding that, because there was no evidence
    of continuing migration of hydrocarbons from the Dimtsis Property, no separate
    limitation period would attach to such claim. The appellant says that it was up
    to the moving party to put forward evidence that there was no continuing
    migration of contaminants, before the appellant was required to respond. This
    was because the statement of claim alleged continuing migration. The appellant
    relies on
Sanzone v. Schechter
, 2016 ONCA 566, 402 D.L.R. (4th) 135, where
    this court noted that a moving party seeking summary judgment has the burden of
    persuading the court that there is no genuine issue for trial and it is only
    after the moving party discharges its evidentiary burden that the burden shifts
    to the responding party to prove that its claim has a real chance of success
    (at para. 30).

[55]

In
    view of my conclusions with respect to the palpable and overriding errors that
    informed the motion judges analysis of the limitations issues, it is
    unnecessary to address this issue, and I decline to do so.

F.

Disposition

[56]

For
    these reasons, I would allow the appeal and set aside the dismissal of the
    appellants action. I would award Crombie its costs of the appeal fixed at $29,194.19,
    inclusive of disbursements and applicable taxes and payable jointly and
    severally by all respondents.

Released: P.R. January 11, 2017

K. van Rensburg J.A.

I agree Paul Rouleau J.A.

I agree B.W. Miller J.A.





[1]
Canadian Standards Association, Standard Z768-01 (R2006) (Phase I Environmental
    Site Assessments).



[2]
Although Mr. Carson offered an opinion as to whether a reasonable person with
    the abilities and in the circumstances of Crombie ought to have known prior to
    April 28, 2012 all the facts alleged in the statement of claim, the motion
    judge during oral argument noted that this was a matter for the court and not
    for expert opinion and that she would disregard it. All counsel on appeal
    agreed this was the correct approach and the respondents did not seek to rely
    on this opinion.



[3]
In their factums the respondents referred to their
efforts to
    cross-examine Mr. Landry, who resides in Nova Scotia, and suggested that there
    had been a lack of co-operation by the appellant in facilitating the
    cross-examination in Ontario or by videoconference. However, there was no
    motion under rule 34.07 to determine the location of the examination or to
    conduct the examination by videoconference. In any event, in argument on the
    appeal counsel for the respondent Dimtsis stated that there had been no need to
    cross-examine Mr. Landry.



[4]
The actual date of waiver of the conditions was March 8, 2012, as noted earlier
    in these reasons.


