2008 BCSC 569 First National Properties Ltd. v. Northland Road Services Ltd.

Before: The Honourable Madam Justice D. Smith

Reasons for Judgment

Counsel for the plaintiff:	G. Letcher S. May
Counsel for the defendants:	J. Bilawich
Date and Place of Trial/Hearing:	April 4, 2008,
	Vancouver, B.C.

A. NATURE OF APPLICATIONS

[1] The corporate defendant Northland Road Services Ltd. (“Northland”), and the personal defendant directors of Northland, James Feragen and Scott LaPrairie, apply for an order pursuant to Rule 18A of the Rules of Court, B.C. Reg. 221/90, that the action commenced by the plaintiff First National Properties Ltd. (“First National”), be dismissed on the grounds that it is statute-barred by the operation of the Limitations Act, R.S.B.C. 1996, c. 266, as amended. In the alternative, the defendants apply for an order pursuant to Rule 2(7) of the Rules of Court that the action be dismissed for want of prosecution.

[2] The action was commenced on December 16, 2002. It involves a claim against Northland for the recovery of remediation costs pursuant to s. 27 of the Waste Management Act, R.S.B.C. 1996, c. 482. Northland is a highway maintenance contractor that leased property near Fort St. John from First National between 1990 and 1997. First National alleges that during that period Northland stockpiled salt that leached onto neighbouring properties. In 1992 First National and Northland received a complaint from the owner of one of the neighbouring properties. Northland retained the services of HBT Agra Limited (“Agra”), now called Amec Earth & Environmental Limited (“Amec”), to remedy the problem. First National claims the problem was not resolved and that after Northland’s lease ended in October 1997 First National incurred remediation costs to clean up the contaminated property. In this action, First National seeks to collect those costs from the corporate and personal defendants.

[3] A preliminary issue arose on the Rule 18A application as to whether a limitation defence can be determined by summary judgment in advance of a trial. This issue was recently addressed in Canada (Attorney General) v. Lameman, 2008 SCC 14, where the Supreme Court of Canada endorsed the use of the summary judgment rule for determining if an action was statute-barred. The court concluded that if an action was statute-barred, there would be “no genuine issue of material fact requiring trial”. At ¶10 and 11 it stated:

The summary judgment rule serves an important purpose in the civil litigation system. It prevents claims or defences that have no chance of success from proceeding to trial. Trying unmeritorious claims imposes a heavy price in terms of time and cost on the parties to the litigation and on the justice system. It is essential to the proper operation of the justice system and beneficial to the parties that claims that have no chance of success be weeded out at an early stage. Conversely, it is essential to justice that claims disclosing real issues that may be successful proceed to trial.

For this reason, the bar on a motion for summary judgment is high. The defendant who seeks summary dismissal bears the evidentiary burden of showing that there is “no genuine issue of material fact requiring trial”.

[Citations omitted.]

[4] In this case, the chronology of events is largely undisputed. For that reason, I am satisfied that if the within action is found to be statute-barred, there would be “no genuine issue of material fact requiring trial”. I am also satisfied the defendants’ application is sufficiently discrete that a full and complete examination of the factual matrix upon which the claim is based is not required.

B. CHRONOLOGY OF EVENTS

[5] Northland operates a highway maintenance business. In March 1990, it entered into a lease of property near Fort St. John with First National (“the Property”).

[6] In July 1992, an owner of neighbouring property complained to Northland and First National that his property had been contaminated by salt originating from the Property.

[7] Between 1992 and 1994, Northland retained a professional environmental consultant, Agra, to investigate, recommend and help implement preventative solutions. Agra initially recommended a perimeter ditch around the stockpile on the Property but that proved inadequate. Agra next recommended the installation of a liner in the ditch (the “containment structure”).

[8] In October 1993 the containment structure was built and installed. First National supported Northland’s remedial action. Agra subsequently inspected, approved and certified the containment structure.

[9] On August 16, 1994, Agra changed its name to Amec.

[10] On May 1, 1996, a solicitor for the owner of the neighbouring property wrote First National alleging ongoing contamination by salt originating from the Property. First National passed the letter on to Northland on June 7, 1996. On June 10, 1996, Northland replied to First National enclosing a chronological summary of events concerning the neighbouring property and a copy of Amec’s October 21, 1993 report to Northland indicating the apparent success of the containment structure. On June 21, 1996, First National acknowledged receipt of Northland’s letter of June 10, 1996, and its enclosures.

[11] On August 12, 1996, First National again wrote Northland regarding remediation of the alleged salt contamination. Northland did not respond to the letter.

[12] On September 16, 1997, First National wrote to Northland stating that its lease was being terminated effective October 31, 1997; that Northland had until then to remove all sand, salt and other materials it deposited on the Property; that Northland’s occupation of the property resulted in the contamination of the Property, the surrounding property owned by First National and the neighbouring complainant’s property; that First National required Northland’s proposal to restore the contaminated areas of the Property and the neighbouring complainant’s property, to their pre-contaminated state by October 31, 1997; and that after October 31, 1997, First National would take the necessary steps to remediate the Property, the neighbouring complainant’s property and recover all costs from Northland.

[13] On October 31, 1997, Northland vacated the Property. Since November 1, 1997, First National has had exclusive possession and control of the Property.

[14] On February 21, 2001, First National again wrote Northland alleging that Northland was responsible for remediation of the salt contamination of the Property and the neighbouring complainant’s property and that Northland should pay for site testing by Amec and remediation of the Property.

[15] On June 11, 2001, counsel for First National wrote to Northland repeating its claim that Northland was responsible for the salt contamination on the Property and the neighbouring complainant’s property. Counsel for Northland responded on June 21, 2001, confirming its earlier position that the alleged salt contamination had been resolved by the contamination structure installed in 1993.

[16] On December 16, 2002, First National commenced this action naming Northland and its directors, Feragen and LaPrairie in their personal capacities. It did not serve the Writ of Summons until December 2003.

[17] In the interim, on December 17, 2002, counsel for First National wrote to Northland alleging Northland had failed to remove the contaminants from the Property before the expiration of its lease and demanding that it do so by December 20, 2002. In 2003 Northland inspected the property and found only some wooden timbers that it thought might have been remnants from the former salt shed, and some barrels and tires that it believed someone else had deposited on the Property. Northland removed all of these items.

[18] After being served with the Writ of Summons, the defendants filed an Appearance to the action on December 10, 2003.

[19] First National did not file or deliver a Statement of Claim after being served with the defendants’ Appearance and the action became dormant.

[20] In 2005 the parties exchanged letters regarding the scheduling of settlement discussions. However, no meeting took place.

[21] First National completed remediation of the site in the latter part of 2006.

[22] There was no express agreement between First National and Northland that the action would be deferred for settlement discussions.

[23] On December 19, 2006, First National filed and delivered to the defendants a Notice of Intention to Proceed.

[24] On April 2, 2007, the defendants retained their current counsel who filed a Notice of Change of Solicitor.

[25] On April 3, 2007 (five years and three months after the Writ of Summons was filed), First National filed a Statement of Claim seeking a declaration that the defendants are responsible for remediation of the Property and neighbouring properties, the remediation costs incurred by First National, interest and costs.

[26] On May 1, 2007, the defendants filed a Statement of Defence and Third Party Notice against Amec. Amec filed an appearance on May 11, 2007, and a Statement of Defence to the Third Party Notice on June 1, 2007.

[27] On December 19, 2007, the defendants delivered this summary judgment application.

[28] In 1996 Northland’s Quality Control Officer moved to Peru. His current whereabouts is unknown. On October 20, 2006, Northland’s Superintendent died. Both Northland officers worked at the Property during the material times.

C. THE LEGISLATION

[29] The Waste Management Act was proclaimed on April 1, 1997. It was replaced by the Environmental Management Act, S.B.C. 2003, c. 53 (the “Act”) on July 8, 2004. The Act and its predecessor contain a number of similar provisions including the material ones to this application. In particular, the Act created a new cause of action for the recovery of reasonably incurred costs of remediation of a contaminated site.

[30] Sections 47(1) and 47(5) of the Act set out the general principles of liability for remediation:

47 (1) A person who is responsible for remediation at a contaminated site is absolutely, retroactively and jointly and separately liable to any person or government body for reasonably incurred costs of remediation of the contaminated site, whether incurred on or off the contaminated site.

(5) Subject to s. 50(3) [minor contributors], any person, including, but not limited to, a responsible person and a director, who incurs costs in carrying out remediation of a contaminated site may commence an action or a proceeding to recover the reasonably incurred costs of remediation from one or more responsible persons in accordance with the principles of liability set out in this Part.

[31] A contaminated site is defined in s. 39(1) of the Act:

“contaminated site” means an area of the land in which the soil or any groundwater lying beneath it, or the water or the underlying sediment, contains

(a) a hazardous waste, or

(b) another prescribed substance

in quantities or concentrations exceeding prescribed risk based or numerical criteria or standards or conditions.

[32] Section 39(1) of the Act also defines “person” as including “a government body and any director, officer, employee or agent of a person or government body”; “operator” as “a person who is or was in control of or responsible for any operation located at a contaminated site”; and “owner” as a person who is in possession, has the right of control, or occupies or controls the use of real property. Section 45(1) provides that a current or previous owner or operator of a contaminated site is responsible for its remediation. These definitions encompass both the corporate and personal defendants.

[33] Section 44 of the Act establishes an administrative or regulatory process in which a director or allocation panel can order remediation from a responsible person and then allocate the remediation costs between other responsible persons.

[34] Section 54 of the Act provides an alternative independent remediation procedure that effectively bypasses the regulatory process. The latter process authorizes a party who has voluntarily incurred remediation costs for a contaminated site, to commence an action for a declaration that a site was contaminated. Upon the granting of the declaration, the party can obtain an order for recovery of its reasonable remediation costs and an order apportioning those costs among other responsible persons.

[35] First National has employed the latter process in its commencement of this action.

[36] The Act does not expressly provide a limitation period for a remediation cost-recovery action. One must examine the provisions of Limitation Act, R.S.B.C. 1996, c. 266, to determine the period in which such an action must be brought.

D. THE LIMITATIONS ACT

[37] Section 3(2)(a) of the Limitation Act provides:

3(2) After the expiration of 2 years after the date on which the right to do so arose a person may not bring any of the following actions:

(a) subject to subsection (4)(k), for damages in respect of injury to person or property, including economic loss arising from the injury, whether based on contract, tort or statutory duty.

[38] If s. 3(2) does not apply, the default provisions of s. 3(5) say:

3(5) Any other action not specifically provided for in this Act or any other Act may not be brought after the expiration of 6 years after the date on which the right to do so arose.

[39] In light of these provisions, the characterization of First National’s claim is critical to the determination of which provision of the Limitation Act applies.

E. THE PARTIES’ POSITIONS

[40] The defendants characterize the action as a claim for damage to property. They submit that in pith and substance the action is a claim for environmental damage to land and rely on the definition of a “contaminated site” in s. 39(1) of the Act to support their claim. In the alternative, they submit the claim is for breach of a statutory duty to remediate contaminated property. Based on these characterizations of the nature of First National’s action, they contend that the applicable limitation period is two years from the date First National became aware of the damage to the Property, which was as early as 1992 and as late as 1996.

[41] In support of their position the defendants rely on Low v. Petro-Canada Inc., 2001 BCSC 251, in which Macaulay J. held that a claim for damages including environmental remediation costs that arose from the leakage or spillage over time of gasoline from an underground storage tank, was statute-barred after two years.

[42] First National characterizes its claim as a remediation cost-recovery action that is uniquely provided for under the provisions of the Waste Management Act and its successor provisions in the Act. It contends that as that legislation was not implemented until April 1, 1997, time does not begin to run until that date. It submits that the nature of the claim is not for damages based on tort, contract or statutory duty but is more akin to a claim for indemnity and therefore subject to the s. 3(5) six year limitation period.

[43] In support of its position, First National relies on Bramalea-Pritzker Associates v. Stephen J. Cannell Productions, [1992] B.C.J. No. 2570 (C.A.) (QL). The circumstances in that case involved an indemnification agreement for damage caused by a television stunt in a hotel’s glass-enclosed elevator. The defendant stunt operators unsuccessfully applied to have the plaintiff hotel’s action for damages dismissed as being statute-barred after two years. The dismissal of their application was upheld on appeal on the grounds that the plaintiff’s action was in the nature of a claim for indemnity under an agreement rather than for damages, and therefore was not subject to the shorter limitation period.

F. DISCUSSION

(i) Is the action statute-barred?

[44] A limitation period begins to run when the plaintiff, by exercise of reasonable diligence, discovers or ought to have discovered material facts on which a claim is based. The court in Lameman reiterated this principle as it was established in Central Trust Co. v. Rafuse, [1986] 2 S.C.R. 147 at 224.

[45] The issues in this application are: what is the cause of action, and when did it arise.

[46] The defendants submit the cause of action is for damages for environmental contamination of property or alternatively for enforcement of a statutory duty to remediate a contaminated site. They submit the cause of action arose at the latest in 1996. They say that First National was in possession of all the material facts for an environmental claim against Northland by May 1, 1996, or in the alternative by June 7, 1996, when First National wrote to Northland for details of the remedial work Northland had undertaken on the Property. Applying either the two-year or six-year limitation period, they submit that First National’s claim is statute barred.

[47] First National submits the earliest the cause of action could have arisen was April 1, 1997, when the Waste Management Act was implemented. In fact, however, it says the cause of action did not arise until First National had completed its remediation of the property in 2006. It contends the quantification of its remediation costs is a material fact that was not known until 2006 and that time did not begin to run until all the material facts were known to them.

[48] If the Court finds that the cause of action arose on April 1, 1997, it must decide which of the two limitation periods is applicable. On the other hand, if the Court decides the cause of action did not arise until 2006 after all the material facts, including the remediation costs, were known to First National, the issue is moot as the action was commenced well before the time began to run for the purpose of determining the appropriate limitation period.

[49] Workshop Holdings Ltd. v. CAE Machinery Ltd., 2003 BCCA 56, is the only appellate decision to date that has discussed the Waste Management Act. The circumstances of the case involved the developer Workshop Holdings Ltd. (“Workshop”) commencing an action against the defendant CAE Machinery Ltd. (“CAE”) which operated a brass foundry on the property between 1924 and 1941. In the action, Workshop made a claim for recovery of remediation costs it had voluntarily incurred to clean-up property it proposed to develop. The defendant applied to dismiss the action on the grounds that it had not sought a final determination under the regulatory process of the Waste Management Act before commencing its action. CAE contended that such a determination was a statutory prerequisite to Workshop’s independent cost-recovery action. The chambers judge agreed.

[50] In allowing the appeal, the court held there was no such prerequisite to an independent cost-recovery action under the Waste Management Act. In the course of addressing the requirements of the Waste Management Act, Huddart J.A., for the court, made the following comments at ¶41, 43, 44, 46, 61 and 70, regarding the legislation:

Fundamental to the new scheme were three principles: absolute liability, retroactivity, and joint and several liability, all in aid of the underlying governmental policy of “polluter-pay”…

…

… The policy underlying the new scheme is to strive to hold those who benefited economically from that contamination responsible for its remediation.

As Professors Tollefson and Belevsky noted at p. 58 of their final report “External Review of Remediation Liability Provisions: The Waste Management Amendment Act, 1993” (31 July 1996), … traditional common law analysis was thought insufficient to allocate the costs of pollution remediation properly. Limitation periods were considered to pose a significant barrier to the recovery of damages at common law for historical pollution. Contract analysis focuses only on current and immediately previous owners of a site. Negligence imposes a burden on those bringing an environmental action to establish causation as well as the failure to meet the appropriate standard of care. This is a difficult burden when contamination is the result of the activities of many businesses over many years. At page 60, they noted that the principle of retrospectivity is important to ensure the net can be cast sufficiently widely to capture all previous polluters, not just the current of penultimate owners or operators of the land.

…

The concepts of absolute and joint and several liability facilitate actions against alleged polluters, make recovery of damages from multiple defendants more likely, and remove the burden of proving causation or fault-based conduct.

…

…On a plain reading, it [now s. 47(5) of the Act] creates a statutory cause of action for any person who has remediated a contaminated site, -- defined in s. 26(1) [now s. 39(1) of the Act] to mean an area of land in which the soil or any groundwater lying beneath it, or the water or the underlying sediment, contains a special waste or other prescribed substance -- to recover its “reasonably incurred” clean-up costs from other “responsible persons”.

…

Simply put, s. 27 [now s. 47 of the Act] is not ambiguous when read alone. It does not become so when read in the context of Part 4, or its object or its purpose. It creates a new civil cause of action, entire unto itself, as a means of requiring the polluter to pay and encouraging an owner to remediate. …

[51] Workshop is authority for the proposition that s. 47 of the Act created a new statutory cause of action for the recovery of remediation costs by those who voluntarily undertake that task. In the subsequent trial (at 2005 BCSC 631), Wedge J. held that the cause of action under the Waste Management Act did not arise until the legislative scheme first created liability for a contaminated site.

[52] To the defendants, this finding may appear unfair. They rely on the comments in Lameman as to the policy behind limitation periods. In Lameman the court made reference to Wewaykum Indian Band v. Canada, [2002] 4 S.C.R. 245, 2002 SCC 79, and noted at ¶14:

The policy behind limitation periods is to strike a balance between protecting the defendant’s entitlement, after a time, to organize his affairs without fearing a suit, and treating the plaintiff fairly with regard to his circumstances. This policy applies as much to Aboriginal claims as to other claims, as stated at para. 121 of Wewaykum:

Witnesses are no longer available, historical documents are lost and difficult to contextualize, and expectations of fair practices change. Evolving standards of conduct and new standards of liability eventually make it unfair to judge actions of the past by the standards of today.

[53] These comments are apposite to the circumstances of this action. In defending the action, Northland is faced with evolving environmental standards, fading memories of potential witnesses dating back to Northland’s 1990-1997 operation at the Property, the relocation and death of material Northland employees who were responsible for managing its operations at the relevant times, and the prejudice it has experienced by its inability to obtain reasonably contemporaneous expert evidence which might have assisted its defence.

[54] However, the legislature has spoken. As Huddart J.A. in Workshop noted at ¶26, “that a court’s interpretation and application of any statutory scheme should advance not hobble the integrity of the scheme and that a legislature’s intention as to who should decide what is to be respected.” The Act authorizes governmental officials to issue remediation orders against those who, in their view, are responsible person(s) for the cleanup of contaminated lands, and permits owners or operators of contaminated sites to voluntarily clean up their properties and thereafter recover their reasonable remediation costs from other responsible persons.

[55] Section 47 creates a new statutory cause of action that is status based, not fault based. The object of the legislation is to encourage prompt remediation of contaminated sites. It does not impose a statutory obligation to remediate a contaminated site but rather provides a right to recover reasonable remediation costs from a “responsible person”, if ordered to do so by a government official or by the Court pursuant to s. 47(5). Under the Act it is not an offence to contaminate a site, only to fail to remediate if ordered to do so.

[56] The cause of action is absolute, retroactive, and imposes separate liability on all “responsible persons” that are very broadly defined. It does not limit its retroactive (i.e., retrospective) application to actions where a plaintiff’s knowledge of the material facts arose within the limitation periods provided by ss. 3(2) or 3(5) of the Limitation Act and that would have been statute-barred on April 1, 1997. Workshop confirms the Court cannot make an order for the recovery of remediation costs until those costs are known (see ¶26 and 27).

[57] In sum, I find that First National’s cause of action did not arise until April 1, 1997. While the facts upon which the action is based were conclusively known to First National as early as 1996, they were not material facts until the cause of action was created in 1997. Section 47(5) authorizes the recovery of reasonably incurred costs or remediation from responsible persons. This quantum of the remediation costs is a material fact to the cause of action and was not known until 2006. In these circumstances it matters not whether s. 3(2) or s. 3(5) of the Limitation Act applies as the time did not begin to run until the latter part of 2006, well after the action was commenced.

[58] I am supported in this conclusion by the comments of Esson J.A. in Bera v. Marr (1986), 1 B.C.L.R. (2d) 1 (C.A.), where he stated at ¶39 that the limitation period begins at the date upon which all the elements of the cause of action came into existence:

The Limitations Act, as appears from ss. 3(2) and 8(1), defines the beginning of the period of limitation as being the date on which the right to bring action arose. That must mean the date upon which the cause of action was complete; the date upon which all of the elements of the cause of action had come into existence, whether or not the person entitled to the cause of action was aware of all the facts upon which its existence depended.

[59] In the result, the defendants’ application for dismissal of the action on the basis that it is statute-barred must fail.

[60] In the alternative, the defendants apply to dismiss the action for want of prosecution.

(ii) Should the action be dismissed for want of prosecution?

[61] Rule 2(7) of the Rules of Court provide:

If upon application by a party it appears to the court that there is want of prosecution in a proceeding, the court may order that the proceeding be dismissed.

[62] The test to be applied in such an application was set out in Irving v. Irving (1982), 38 B.C.L.R. 318 (C.A.). It sets out three criteria to be met in order for the court to consider dismissing the proceedings: (i) where there has been an inordinate delay; (ii) where the inordinate delay is inexcusable; and (iii) where the delay had caused, or is likely to cause, serious prejudice to the defendant. The court went on to add that even if all three criteria are met, that does not lead to an automatic dismissal. The court must go on to consider whether in all of the circumstances “the balance of justice demands that the action should be dismissed.”

[63] Twenty years later, in Tundra Helicopters v. Allison Gas Turbine, 2002 BCCA 145, 98 B.C.L.R. (3d) 238, Esson J.A. at ¶15 described this test as a “bare bones” statement of the present law in this province.

[64] Inordinate delay is to be considered in the context of the proceedings themselves and not in relation to when the cause of action arose. On the matter of delay, Lambert J.A. in Rhyolite Resources Inc. v. CanQuest Resource Corp., 1999 BCCA 36, 64 B.C.L.R. (3d) 80 stated at ¶30:

… The interests of the good administration of justice may well require that proceedings, once begun, be pursued with reasonable expedition, even though the limitation period has not expired and new proceedings could be brought at any time before the limitation period expires. All these matters must be considered on an application to dismiss for want of prosecution brought either before or after the expiry of the limitation period.

[65] Ballance J. also discussed what constituted inordinate delay in De Cotiis v. Viam Holdings Ltd., 2004 BCSC 1301, leave to appeal to B.C.C.A. refused, CA032391 (January 24, 2005). Her comments at ¶17 were adopted in Hanna’s Construction Services Ltd. v. Blue River III, Inc., 2006 BCCA 142, where Thackray J.A. at ¶22 quoted the following passage from ¶17 in De Cotiis:

The facts peculiar to a particular case obviously impact on whether a period of delay can be legitimately characterized as inordinate. Consequently, in evaluating whether the delay in the case at hand is inordinate, reference to time periods which have been examined in other decided cases will be of marginal assistance. There is no absolute measurement of time after which a delay will automatically be treated as inordinate. In assessing the matter, the court is to apply the principles laid down in the authorities while recognizing that the facts unique to each case will have a significant influence on the outcome.

[Citation omitted.]

[66] It is clear from these comments that once an action has been commenced, the plaintiff has an obligation to proceed with diligence and expedition. In Lindholm v. Pollen (1986), 3 B.C.L.R. (2d) 23 (S.C.), Gow J. confirmed this principle at ¶16-17:

The animating principle lying back of any system of administration of justice is that litigation be proceeded with diligence and expedition. This principle is expressed in R. 1(5) that the object of the Rules of Court is to secure the just, speedy and inexpensive determination of every proceeding on its merits and echoed in s. 11 of the Charter of Rights and Freedoms, which speaks of the right to be tried within a reasonable time. A just determination can only be attained if an action is tried while the facts are still within the recollection of the witnesses. As was said in Russell v. Glassman (1959), 66 Man. R. 464 at 472:

The court is entitled to have the best evidence obtainable. Even in the simplest of cases there is often great difficulty in ascertaining the relevant facts where the testimony is recent in the memory of the witnesses, a difficulty manifestly greatly increased when witnesses are asked to remember events or circumstances which occurred four years ago.

In actions of this kind it is more than highly desirable that there be conveyed to the trial judge reliable evidence of the ambience of the alleged events. Effluxion of time here has been so great that the very substantial likelihood is that the evidence will have deteriorated to the point where it can be of little assistance to the court.

[67] The circumstances in Lindholm involved an alleged defamation. The action was subject to a two year limitation period. The alleged defamatory words were spoken in September 1982. The Writ of Summons was issued in November 1982. The successful application to dismiss the action for want of prosecution was made in April 1986.

[68] Esson J.A. in Bonaparte Indian Band v. Lakeridge Contracting Ltd., 1999 BCCA 729, 71 B.C.L.R. (3d) 217, also spoke of the impact of delay in a proceeding. In allowing the appeal and dismissing the action against the appellants, Esson J.A. offered the following observations on Rule 2(7) at ¶11:

Another purpose of the rule is, of course, to advance the public interest in litigation being conducted without undue delay. That matter was emphasized in Irving, supra, by Seaton J.A. who quoted at length from the judgment of the Court of Appeal in Allen v. McAlpine, supra, where each member of the court expressed in colourful and forceful language the reasons why excessive delay should not be condoned by the court. The difficulties are, of course, aggravated in cases in which the plaintiffs may have to resort to s. 6(4) of the Limitation Act, R.S.B.C. 1996, c. 266. As Iacobucci and Major JJ. (Lamer C.J.C. concurring) said in their dissenting judgment in Novak v. Bond, [1999] 1 S.C.R. 808, 172 D.L.R. (4^th) 385 at p. 398 (D.L.R.):

[32] It is apparent that the interpretive difficulties attending s. 6(4) can be easily remedied by the British Columbia legislature. For now, unfortunately, a section designed to temper the injustice of an absolute statute of limitations will commit the opposite but equal injustice of effectively abolishing the statute of limitations.

[69] With respect, the same comments could be made in regard to the enactment of s. 47 of the Act. This “polluter-pay” provision is designed to extend the net far and wide. Its expansive liability principle has a corresponding effect of curtailing the provisions of the Limitations Act.

[70] The third criterion for establishing prejudice was addressed in Busse v. Robinson Morelli Chertkow, 1999 BCCA 313, 63 B.C.L.R. (3d) 174. Goldie J.A., for the court, concluded that once the defendant had established the delay complained of was inordinate and inexcusable, a rebuttable presumption of prejudice arises and the onus then falls on the plaintiff to establish, on a balance of probabilities, that the defendants have not suffered prejudice.

[71] This test was later refined in Tundra where Esson J.A., for the court, stated at ¶35 to 37:

I also regard it as error in principle to dispose of the issue of prejudice by asking whether the plaintiffs had rebutted ‘the presumption of prejudice that arises in the circumstances’ and by going on to answer that question in the negative. The “presumption of prejudice” is not a presumption of law. It can be termed a presumption of fact but only in the sense, as it is put in Sopinka and Lederman “The Law of Evidence in Civil Cases”, 1974 at p. 378:

The term “presumption of fact” is used in many instances in which it is desired merely to shift the secondary burden to a particular party. When used in this sense, it means that the facts are such that a certain inference should, but need not, be logically drawn.

It is in that sense that the word “presumption” is employed in Busse v. Robinson Morelli Chertkow, supra. In considering whether the presumption of prejudice has any application in a particular case, the question properly to be asked, as stated by Goldie J.A. in para. 27 of Busse, is:

… has the plaintiff established on a balance of probabilities that the defendant has not suffered prejudice or that other circumstances would make it unjust to terminate the action?

In considering that question it may be misleading to approach it by asking whether the plaintiff offered evidence on the point. In most cases, it will only be the defendant who is in a position to offer evidence as to the existence of specific prejudice – as two of the defendants attempted to do in this case. The plaintiff often will be able only to point to the overall circumstances, including the absence of any evidence from the defendant of specific prejudice, as establishing on the balance of probabilities that serious prejudice has not been suffered.

In this case, much of the evidence which tends to prove absence of prejudice was put in the record by those defendants who sought to establish that the case against them is a weak one. It matters not who puts forward the evidence. The question remains whether, on a balance of probabilities, absence of prejudice has been established. In considering that, it must be borne in mind that in all contested law suits there is likely to be sufficient passage of time that memories erode to some extent, records may be lost, witnesses may disappear. It is no light matter to dismiss an action for want of prosecution. …

[72] I am satisfied the plaintiff’s delay in the conduct of this action was inordinate. It began with a one year delay in serving the Writ of Summons, continued with a three year delay in serving the Statement of Claim, and remained dormant between April and December 2007. It was only the defendants’ timely response to the plaintiff’s actions, each interspersed by lengthy periods of non-action by the plaintiff, that moved the proceeding along. At this stage of the action, the plaintiff has yet to provide discovery of documents, no examinations for discovery have been set and no trial date has been secured. None of this delay is attributable to the defendants.

[73] Moreover, no satisfactory explanation has been offered by the plaintiff. There was some suggestion that the delay in 2004 and 2005 was due to settlement discussions. However, no such discussions ever took place. I am satisfied that the inordinate delay caused by the plaintiff was inexcusable.

[74] The presumptive prejudice caused by the plaintiff’s inordinate and inexcusable delay is significant. It began with the creation of a new cause of action on April 1, 1997, which extended the time in which First National could bring this action. The Act provides for the imposition of liability in a remediation cost-recovery action that is absolute, retroactive, and joint and several against a broad spectrum of potential payors. This is powerful legislation that creates a “polluter pay” responsibility, regardless of fault or time, for the purpose of implementing the policy objective of cleaning up contaminated sites. The legislation also extends to both corporate and individual “responsible persons” alike. In these circumstances, I am of the view that plaintiffs who seek to rely on the advantages provided by the liability provisions of the Act have a parallel obligation to proceed with their cost-recovery actions in a diligent and expeditious manner in order to minimize the risk of prejudice to the defendants’ ability to effectively respond to their claim.

[75] In this case, the initial complaint by an owner of neighbouring property was first made in 1992. In 1993 the defendants took steps to address the complaint. Thereafter, they made their position clear that they would not accept responsibility for any further complaint of alleged contamination. First National knew of that position in 1993. The defendants reiterated their position in 1996. Their position did not change after the Waste Management Act was implemented on April 1, 1997. Yet, First National chose to wait until December 2002 before commencing the action and a further year before serving the defendants with the Writ of Summons.

[76] That delay was prejudicial to the plaintiff. If First National had commenced the action in 1997, before the defendants’ lease had ended, the defendants might have been able to take steps to further investigate and address the plaintiff’s allegation of ongoing contamination. At that time, two of Northland’s two management employees might have been able to access the effectiveness of the containment structure. By waiting until December 2003 before giving the defendants’ notice of the action, over ten years after the issue first arose and five years after the cause of action was created, First National has significantly diminished the defendants’ ability to advance their defence to the action. Moreover, by not completing its remediation of the site until 2006, First National further delayed and thereby prejudiced the defendants’ ability to pursue a limitation defence. In short, First National had the power to pursue its claim in a diligent and expeditious manner as early as 1997 and chose not to do so. That deliberate conduct has exacerbated the extent of the defendants’ prejudice.

[77] First National contends the defendants’ claims of prejudice are non-specific. However, it is reasonable to infer that First National had to have been aware of the prejudice it was creating by its lack of diligence in pursuing the action. It is reasonable to presume that evidence relevant to the issues in dispute would have degraded significantly or have been lost because of First National’s delay. This is confirmed by the specific aspects of the defendants’ claims of prejudice. Material witnesses are no longer available. In these circumstances I am satisfied the plaintiff has not established an absence of prejudice to the defendants by the inordinate and inexcusable delay.

[78] Rule 1(5) provides for the just, speedy and inexpensive determination of every proceeding on its merits. The passage of six years since the commencement of the action, with no possibility that it will be ready to proceed to trial in the near future, the lack of availability of material witnesses, the expectation of failing memories over the length of time from when the allegation first arose, and the inability of the defendants to retain relatively contemporaneous experts to address the claim of ongoing contamination, creates a significant imbalance in favour of the plaintiff that is a direct result of the plaintiff’s failure to pursue its claim in a timely manner. In my view, a just determination of the dispute is no longer assured.

[79] In the result, I am persuaded the interests of justice require the defendants’ application to dismiss the action for want of prosecution, be allowed.

[80] The parties have liberty to speak to the issue of costs.

“D. Smith J.”

Citation:	*First National Properties Ltd. v. Northland Road Services Ltd.,*
	2008 BCSC 569