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Too Little, Too Late: Court Of Appeal Refuses To Consider New Defence In Environmental Contamination Case Of Sorbam Investments – Environmental Law



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In a recent appeal decision in an environmental contamination
case, Sorbam Investments Ltd v Litwack, 2022
ONCA 55
1,1 the Court of Appeal for Ontario affirmed
the trial judgment holding the appellant 1129292 Ontario Limited
liable in nuisance and negligence for migration of chemicals. The
Court of Appeal upheld the trial judge’s approach to assessing
competing expert evidence in environmental contamination cases, the
finding of a landlord liable for contamination caused by a former
tenant, and a calculation of damages in environmental contamination
cases. The Court of Appeal also provided useful guidance on the
general rule against raising new issues on appeal, which is the
focus of this blog.

Trial Decision on Nuisance and Negligence

The main issue at trial was whether contaminants had migrated
from the respondent’s property to the appellant’s property
or vice versa.2 The appellant and respondent owned
neighbouring properties, and prior to the appellant purchasing the
property, a dry cleaning business had operated there.3
The trial judge concluded that the contaminants had migrated from
the appellant’s property to the respondent’s property, but
that the contaminants were likely from the dry cleaning business
prior to the appellant’s ownership.4

In finding the appellant liable in nuisance, the trial judge
concluded that the physical damage, prolonged sale process, and
decreased sale price caused by the migration met the threshold for
substantial and unreasonable interference.5 The trial
judge found that as an adjoining landowner, the appellant owed a
duty of care to avoid acts or omissions that would cause harm to
the respondent. She further found the appellant was negligent as it
ignored a Ministry of Environment direction to investigate and
address the migration of contaminants onto the respondent’s
property, which was not consistent with the standard of care of a
reasonable landowner.6

The trial judge awarded damages based primarily on loss of
market value to the respondent’s property due to the chemical
contamination and also awarded $91,307.21 for engineering expenses
incurred by the respondent to obtain a risk assessment and record
of site condition.7

Grounds of Appeal

On appeal, 1129292 Ontario Limited raised a number of grounds
concerning a theory of incremental damage, ultimately arguing that
the trial judge failed to properly assess whether some or all of
the contamination had been caused before the appellant was aware of
the issue in 2011.8 The Court of Appeal observed that
this was a new theory of defence not raised in the pleadings, or at
trial.

Pleadings and Evidence Presented at Trial

The Court of Appeal started by analyzing the appellants’
pleadings. The appellants’ denied liability in their pleadings,
in addition to introducing a cross-claim against the respondent.
However, the appellants’ pleadings did not raise the issue of
incremental damage.9

The Court of Appeal then analyzed the evidence at trial and
found that the issue of incremental damage was not
raised.10 Both parties had expert witnesses for the
movement of the contaminants, but the appellant did not ask any
questions in their examination-in-chief or cross-examination
relating to when the migration occurred.11 The appellant
also did not question the respondent’s expert witness on
damages to determine when the property’s market value
decreased.12

The appellant directed the Court of Appeal to a brief passage in
its closing statement from the trial where it stated that if it
were found liable, then the appellant should not be found
responsible for all the damages since the property was contaminated
when the appellant bought it. The Court of Appeal determined that
this was “too little, too late” since the appellant did
not plead the position.13

Conclusion of the Court of Appeal

The Court of Appeal concluded:

An appeal is not a forum for an appellant to advance a
fundamentally different case than was advanced at trial. In the
circumstances of this case, where the appellant did not plead or
lead evidence at trial to support the arguments now raised, it is
not appropriate for this court to exercise its discretion to allow
the appellant to raise the new theory on appeal. It would be unfair
to the respondent, and the evidentiary record from the trial is
wholly inadequate to consider the issues: Kaiman v. Graham, 2009 ONCA 77, 245
O.A.C. 130
, at paras.
18-24
; Frohlich v. Ferraro, 2017 ONCA 978, 85
R.P.R. (5th) 175
, at para.
5
.14

This decision provides an important reminder that new issues
cannot be raised at the appeal level. In order to be fair to both
parties, an issue-whether a cause of action or theory of
defence-must be pleaded and addressed at trial to be considered by
the Court of Appeal. This will ensure that the other party has a
chance to respond to the arguments, and there is a complete
evidentiary record for the Court of Appeal to consider when making
a decision.

Footnotes

1. Sorbam Investments Ltd v Litwack, 2022
ONCA 551
.

2. Ibid, para
5
.

3. Ibid, para
4.

4. Ibid, paras
6-7
.

5. Ibid, para
8
.

6. Ibid, para
9
.

7. Ibid, para
10
.

8. Ibid, para
12
.

9. Ibid, paras
14-15
.

10. Ibid, para
16
.

11. Ibid, para
17-18
.

12. Ibid, para
21
.

13. Ibid, para
22
.

14. Ibid, para
23
.

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

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