862590 Ontario Ltd. et al. v. Petro Canada Inc. et al., [2000] O.T.C. 176 (SupCt)

• Judge: C. Campbell, J.
• Court: Superior Court of Justice of Ontario (Canada)
• Case Date: March 10, 2000
• Jurisdiction: Ontario
• Citations: [2000] O.T.C. 176 (SupCt)

862590 Ont. Ltd. v. Petro Can. Inc., [2000] O.T.C. 176 (SupCt)

MLB headnote and full text

Temp. Cite: [2000] O.T.C. TBEd. MR.088

862590 Ontario Limited and 865628 Ontario Limited (plaintiffs) v. Petro Canada Inc., Acres International Limited and Arcturus Environmental, a division of Arcturus Diversified Holdings Incorporated (defendants)

(Court File No. 95-CU-93853)

Indexed As: 862590 Ontario Ltd. et al. v. Petro Canada Inc. et al.

Court of Ontario

Superior Court of Justice

C. Campbell, J.

March 27 and May 23, 2000.

Summary:

Azman, a real estate agent, concluded that a property being sold by Petro Canada would be an attractive site for a variety of commercial operations. Azman was aware that the property had been the site of a bulk plant with aboveground petroleum storage tanks. He obtained from Petro Canada an environmental consultant's report and a letter from the Ministry of the Environment (MOE) which confirmed that, based on the report, there did not appear to be any environmental concerns regarding the property. Azman arranged the property's purchase through a numbered company (590). 590 was allegedly unable to resell the property due to environmental contamination. 590 alleged Petro Canada and its consultants concealed the contamination, and sued for the cost of clean-up, lost profit and consequential losses.

The Ontario Superior Court dismissed the action, holding that the plaintiffs had not relied on the consultants' report as such; the reliance, if any, on their part with respect to the environmental state of the land was on the MOE (which was no longer a party to the action at the time of trial). Petro Canada had done nothing fraudulent or intentionally deceptive. The plaintiffs had made a conscious decision not to retain their own consultant, as the other prospective purchasers had, since they had only anticipated reselling the property rather than occupying it. The plaintiffs had also failed to demonstrate a real loss in that the current value of the land, less the cost of clean-up, was still significantly higher than the purchase price. The court further held that the unfounded allegations of fraud in this case warranted the imposition of solicitor and client costs in favour of Petro Canada.

Contracts - Topic 1541

Formation of contract - Duty to disclose - General - See paragraphs 288 to 312.

Damages - Topic 201

Entitlement - Requirement of loss - See paragraphs 362 to 414.

Fraud and Misrepresentation - Topic 6

Fraudulent misrepresentation (deceit) - General principles - What constitutes deceit or fraudulent misrepresentation - See paragraphs 313 to 340.

Fraud and Misrepresentation - Topic 11

Fraudulent misrepresentation (deceit) - General principles - Deceit by silence - See paragraphs 313 to 361.

Fraud and Misrepresentation - Topic 2508

Misrepresentation - General principles - Negligent misrepresentation - See paragraphs 341 to 361.

Fraud and Misrepresentation - Topic 2566

Misrepresentation - Representations - Particular statements - Quality of land - See paragraphs 341 to 361.

Fraud and Misrepresentation - Topic 2707

Misrepresentation - What constitutes misrepresentation - Falsity by silence - See paragraphs 341 to 361.

Fraud and Misrepresentation - Topic 2830

Misrepresentation - Defences - No detrimental reliance (damages) - See paragraphs 362 to 414.

Fraud and Misrepresentation - Topic 4165

Practice - Costs - Failure to prove allegation of fraud - See paragraphs 416 to 458.

Practice - Topic 7243

Costs - Party and party costs - Offers to settle - Effect of failure to accept - See paragraphs 416 to 458.

Practice - Topic 7462.1

Costs - Solicitor and client costs - Entitlement to solicitor and client costs - Unproven allegations of dishonest or improper conduct - See paragraphs 416 to 458.

Practice - Topic 7470

Costs - Solicitor and client costs - Entitlement to solicitor and client costs - Unproved allegation of fraud - See paragraphs 416 to 458.

Sale of Land - Topic 1904

The contract - Duties of seller - To disclose quality defects - See paragraphs 313 to 361.

Sale of Land - Topic 6216

Completion - Seller's duties - General - Known defects - See paragraphs 313 to 361.

Torts - Topic 8990

Duty of care - Particular relationships - Negligent words - Failure to supply advice - See paragraphs 341 to 361.

Cases Noticed:

Toronto-Dominion Bank v. Leigh Instruments Ltd. (Bankrupt) et al. (1998), 63 O.T.C. 1; 40 B.L.R.(2d) 1 (Gen. Div.), affd. (1999), 124 O.A.C. 87; 45 O.R.(3d) 417 (C.A.), refd to. [para. 314].

Continental Insurance Co. v. Dalton Cartage Co. et al., [1982] 1 S.C.R. 164; 40 N.R. 135, refd to. [para. 318].

BG Checo International Ltd. v. British Columbia Hydro and Power Authority (1990), 4 C.C.L.T.(2d) 161 (B.C.C.A.), affd. [1993] 1 S.C.R. 12; 147 N.R. 81; 20 B.C.A.C. 241; 35 W.A.C. 241, refd to. [para. 320].

Rainbow Industrial Caterers Ltd. et al. v. Canadian National Railway Co. et al. (1988), 54 D.L.R.(4th) 43 (B.C.C.A.), affd. [1991] 3 S.C.R. 3; 126 N.R. 354; 3 B.C.A.C. 1; 7 W.A.C. 1, refd to. [para. 323].

Brownlie v. Campbell (1880), 5 App. Cas. 925 (H.L.), refd to. [para. 323].

Abel v. McDonald, [1964] 2 O.R. 256 (C.A.), refd to. [para. 324].

Browne v. Dunn (1893), 6 R. 67 (H.L.), refd to. [para. 334].

Sevidal v. Chopra (1987), 64 O.R.(2d) 169 (H.C.), refd to. [para. 336].

Sorensen v. Kaye Holdings Ltd., [1979] 6 W.W.R. 193 (B.C.C.A.), refd to. [para. 336].

Tony's Broadloom & Floor Covering Ltd. et al. v. NMC Canada Inc. et al. (1996), 95 O.A.C. 358; 31 O.R.(3d) 481 (C.A.), refd to. [para. 337].

688350 Ontario Ltd. v. Piron, [1994] O.J. No. 2844 (Gen. Div.), refd to. [para. 338].

Queen (D.J.) v. Cognos Inc., [1993] 1 S.C.R. 87; 147 N.R. 169; 60 O.A.C. 1, appld. [para. 341].

Royal Bank of Canada v. Burgoyne (1996), 152 N.S.R.(2d) 150; 442 A.P.R. 150 (C.A.), refd to. [para. 344].

Hercules Management Ltd. et al. v. Ernst & Young et al., [1997] 2 S.C.R. 165; 211 N.R. 352; 115 Man.R.(2d) 241; 139 W.A.C. 241, refd to. [para. 345].

Anns v. Merton London Borough Council, [1978] A.C. 728; [1977] 2 W.L.R. 1024; [1977] 2 All E.R. 492 (H.L.), refd to. [para. 345].

Ingles v. Tutkaluk Construction Ltd. (2000), 251 N.R. 63; 130 O.A.C. 201 (S.C.C.), refd to. [para. 345].

Spinks v. Canada (1996), 195 N.R. 184; 134 D.L.R.(4th) 223 (F.C.A.), refd to. [para. 347].

McGeek Enterprises Ltd. v. Shell Canada Ltd. (1991), 6 O.R.(3d) 216 (S.C.), refd to. [para. 358].

Murano et al. v. Bank of Montreal et al. (1998), 111 O.A.C. 242; 41 O.R.(3d) 222 (C.A.), refd to. [para. 419].

Bloom (Albert) Ltd. et al. v. Bentinck (Township) et al. (1996), 1 O.T.C. 1; 29 O.R.(3d) 681 (Gen. Div.), refd to. [para. 421].

Bank of Montreal v. Ewing (1986), 59 C.B.R.(N.S.) 156 (Ont. C.A.), refd to. [para. 424].

131843 Canada Inc. v. Double "R" (Toronto) Ltd. (1992), 7 C.P.C.(3d) 15 (Ont. Gen. Div.), refd to. [para. 425].

S. & A. Strasser Ltd. v. Richmond Hill (Town) et al. (1990), 45 O.A.C. 394; 1 O.R.(3d) 243 (C.A.), refd to. [para. 442].

Statutes Noticed:

Gasoline Handling Act Regulations (Ont.), Reg. 439, sect. 18 [para. 353]; sect. 24 [para. 356].

Rules of Civil Procedure (Ont.), rule 49.10 [para. 444]; rule 49.13 [para. 441]; rule 57.01(1) [para. 445].

Authors and Works Noticed:

Carthy, J.J., Millar, W.A.D., and Cowan, J.G., Ontario Annual Practice (1999-2000), rule 49 commentary [para. 448].

Parell, False Statements (1996), 8 Adv. Q. 232, p. 242 [para. 322].

Sopinka, John, Lederman, Sidney N., and Bryant, Alan W., The Law of Evidence in Canada (2nd Ed. 1999), pp. 158 [para. 319]; 954 [para. 333].

Waddams, S.M., The Law of Damages (Looseleaf Ed.), pp. 5-18, para. 5.430 [para. 381]; 5-20, para. 5.470 [para. 380]; paras. 5.52, 5.54, 5.56 [para. 410].

Counsel:

Ian F.H. Rogers, Q.C., and Joanna Rainbow, for the plaintiffs;

Robert Falby, Q.C., and Tamara Farber, for the defendant, Petro Canada Inc.;

Bonnie Tough, for the defendant, Arcturus Environmental.

This case was heard on January 5, 6, 10 to 15, 17 to 21, 25 to 28, 31 to February 3, and March 10, 2000, by C. Campbell, J., of the Ontario Superior Court, who released the following reasons for decision on March 27 and May 23, 2000.

Please note: The following judgment has not been edited.