Ardmore Properties Inc. v Sturgeon School Division No. 24, 2022 ABKB 674

Court of King’s Bench of Alberta Citation: Ardmore Properties Inc. v Sturgeon School Division No. 24, 2022 ABKB 674 Date: 20221012 Docket: 1603 09928 Registry: Edmonton Between: Ardmore Properties Inc. Plaintiff - and - Sturgeon School Division No. 24 and Her Majesty the Queen in Right of Alberta Defendants _______________________________________________________ Reasons for Decision of the Honourable Justice James T.

Neilson _______________________________________________________ [ 1 ] The Plaintiff, Ardmore Properties Inc. (“Ardmore”) filed an application for injunctive relief on June 4, 2018, requesting as follows: An order that the Defendant, Sturgeon School Division No. 24, shall be enjoined from and cease adding effluent of any kind to the sewage lagoon located at the north end of the grounds of the Sturgeon Composite High School and shall forthwith take steps to empty, remediate and reclaim said sewage lagoon and surrounding affected lands. [ 2 ] In its Statement of Claim originally filed on June 3, 2016 and the Amended Statement of Claim filed September 16, 2016, the

Plaintiff seeks, in addition to the injunctive relief, damages for loss of profit due to inability to develop the Ardmore Lands (the “Lands”) in the amount of $32,000,000.00, or alternatively, loss of profit due to resulting delay and development of the Lands in the amount of $6,400,000.00 for each year that development of the Lands is delayed commencing April 2014, or alternatively, damages for diminution in the value of the Lands in an amount to be proven at trial, as well as the cost of remediation and reclamation of the Lands and consulting fees. [ 3 ] Her Majesty the Queen in right of Alberta was named as the second Defendant in the action.

The Plaintiff discontinued its claim as against Her Majesty the Queen in 2017. [ 4 ] The Defendant Sturgeon School Division No. 24 (the “School Division”) disputes the application for injunctive relief, and has brought a cross-application for

summary judgment as against the Plaintiff, asserting that the action is barred by the Limitation of Actions Act , R.S.A. 2000, c. L-12 . Also, the action against the School Division is framed in trespass, nuisance, negligence, and strict liability ( Rylands v Fletcher ). The School Division asserts that there is no merit in the tort claims against it.

Background Facts [ 5 ] The School Division is responsible for the operation of the Sturgeon County Composite High School that was constructed in the early to mid 1970s. [ 6 ] At that time, a wastewater sewage lagoon was constructed to the north of the school and within the property owned by the School Division. The lagoon was designed to receive sewage effluent from the properties.

Solids would be settled out and other contents would evaporate or seep into the ground water through a clay liner. [ 7 ] Sewage lagoons are commonly used in rural areas being developed where there is no connection to a municipal sanitary sewer system. They are regulated by the Wastewater and Storm Drainage Regulation , AR 119/95, pursuant to the Environmental Protection and Enforcement Act , R.S.A. 2000 c E-12 ss. 66 and 68 . [ 8 ] Ardmore owns the Lands abutting the School Division property to the north of the sewage lagoon.

It acquired these Lands on or about October 28, 2009 with the intention of ultimately developing the land for residential use. The land was and continues to be zoned for agricultural use. Ardmore has leased out the Lands each year for agricultural use. [ 9 ] Since the 1970s, other properties have been using the sewage lagoon.

These include the School Division’s Namao Elementary School, and other properties that are not joined in this litigation: Namao United Church, Namao Community Hall and daycare, Namao Museum and Archives, Namao Community Agricultural Society, Namao Fire Hall, a store and at least two residences. [ 10 ] Ardmore asserts that seepage from the lagoon has introduced contaminants into its property, causing damage to the soil and reduction in the value of the Lands. Ardmore alleges that contamination seeping from the lagoon is restricting its ability to develop the Lands for residential use.

However, the subtext for this litigation is that, pursuant to the Municipal Government Act , Subdivision and Development Regulation , AR 43/2002, s. 19 , a development permit will not be issued for residential dwellings that lie within 300 metres of a sanitary sewage lagoon. This set-back extends into the southern portion of the Lands. It is this 300 metre limit that has prevented Ardmore from applying to re-zone the Lands for residential development.

The Lands were and are zoned for agricultural use which is not affected by the 300 metre limit. [ 11 ] Although this is the subtext for Ardmore’s litigation against the School Division, the 300 metre limit is prescribed by legislation. It is not specifically pleaded against the School Division because it is not actionable against it. [ 12 ] From time to time, there have been requests that the School Division lands be connected to the municipal sanitary sewage system. However, the School Division is not able to fund such a project within its budget to provide school facilities.

Funds have never been forthcoming in this regard from other levels of government and the sewage lagoon continues to operate to this date. The regulator has approved and continues to approve the operation of the lagoon, pursuant to the Wastewater and Storm Drainage Regulation . The Application for Injunctive Relief The Three Part Test A Strong Prima Facie Case [ 13 ] In the case of R v Canadian Broadcasting Corporation , 2018 SCC 5 , the unanimous Court summarized the three part test to be applied by the Court in considering an application for an interlocutory injunction, at para. 12:.

In Manitoba (Attorney General) v. Metropolitan Stores Ltd. and then again in RJR — MacDonald , this Court has said that applications for an interlocutory injunction must satisfy each of the three elements of a test which finds its origins in the judgment of the House of Lords in American Cyanamid Co. v. Ethicon Ltd. At the first stage, the application judge is to undertake a preliminary investigation of the merits to decide whether the applicant demonstrates a “serious question to be tried”, in the sense that the application is neither frivolous nor vexatious.

The applicant must then, at the second stage, convince the court that it will suffer irreparable harm if an injunction is refused. Finally, the third stage of the test requires an assessment of the balance of convenience, in order to identify the party which would suffer greater harm from the granting or refusal of the interlocutory injunction, pending a decision on the merits. [ 14 ] The first stage of the test would apply in circumstances where the Plaintiff seeks a prohibitive injunction, whereby the Defendant is prevented from doing something pending resolution at trial.

However, in Canadian Broadcasting Corporation the Court

went on to consider the test to be applied at the first stage of the analysis where the Plaintiff seeks a mandatory injunction, requiring the defendant to do something positive. In these circumstances, the plaintiff must establish a strong prima facie case, as stated in para. 15: In my view, on an application for a mandatory interlocutory injunction, the appropriate criterion for assessing the strength of the applicant’s case at the first stage of the RJR — MacDonald test is not whether there is a serious issue to be tried, but rather whether the applicant has shown a strong prima facie case.

A mandatory injunction directs the defendant to undertake a positive course of action, such as taking steps to restore the status quo, or to otherwise “put the situation back to what it should be”, which is often costly or burdensome for the defendant and which equity has long been reluctant to compel. Such an order is also (generally speaking) difficult to justify at the interlocutory stage, since restorative relief can usually be obtained at trial.

Or, as Justice Sharpe (writing extrajudicially) puts it, “the risk of harm to the defendant will [rarely] be less significant than the risk to the plaintiff resulting from the court staying its hand until trial”.

The potentially severe consequences for a defendant which can result from a mandatory interlocutory injunction, including the effective final determination of the action in favour of the plaintiff, further demand what the Court described in RJR — MacDonald as “extensive review of the merits” at the interlocutory stage. [ 15 ] The application by Ardmore seeks extraordinary relief that would require the School Division to cease the operation of the sewage lagoon and to empty, remediate and reclaim the lagoon and surrounding affected Lands.

The only option for the School Division, should the Court require these steps to be taken, would be to connect its property to the County’s sewer system. This would require significant amounts of funding from other sources not within the School Division’s budget, and would affect not only the School Division, but the other properties that are currently using the sewage lagoon for their effluent. Ardmore seeks, therefore, a mandatory injunction. [ 16 ] As I will outline later in these reasons in consideration of the Defendant’s application for

summary judgment, the Plaintiff has not made out a “strong prima facie case” in the first stage of this analysis. A Claim not Compensable in Damages [ 17 ] As the Statement of Claim and Amended Statement of Clam set out, the Plaintiff is seeking large amounts of damages for the alleged breaches by the School Division under various tort theories. Therefore, the Plaintiff cannot assert that its claims are not compensable in damages if the injunctive relief is not granted.

Balance of Convenience [ 18 ] Ardmore has known about the sewage lagoon, and the development restrictions caused by the 300 metre legislated setback from the lagoon, since before or at the time it purchased the property.

Since that time, the Lands have been leased out by Ardmore for agricultural purposes in accordance with the Lands’ current zoning. [ 19 ] The effect of this injunctive relief, if granted, would open the possibility for Ardmore to apply for re-zoning that would permit residential property development, with the lagoon being de-commissioned, the land reclaimed and a connection being made to the municipal sanitary sewer system.

All of this is far-reaching for the benefit of the Plaintiff beyond the current status quo, but would be of considerable hardship and expense to the Defendants. [ 20 ] On the other hand, the School Division, and other neighboring properties using the sewage lagoon, would be profoundly affected if the requested injunctive relief were granted. The Plaintiff submits that the Court could grant a reasonable period of time for the Defendant to shut down the sewage lagoon and connect the properties to the municipal sewar system.

However, this would create great inconvenience, to say the least, as well as substantial cost drawing on funds currently not available in the School Division’s budget and could only come, if at all, from other levels of government. [ 21 ] The Courts are reluctant to grant an injunction where the layer of public interest is significantly affected: Kristel Homes Ltd. v Edmonton (City of) , 2001 ABCA 317 at para. 9 ; Morrow v Zhang , 2008 ABQB 125 at para. 14 . [ 22 ] Decommissioning the sewage lagoon would have profound effects on the School Division, requiring the closure of its schools at lest temporarily, denying education to students and employment to staff.

Similarly, access to the sewage lagoon would be denied to the other properties connected to it for their effluent. [ 23 ] Furthermore, Ardmore has not provided an undertaking as to damages. A meaningful undertaking as to damages would provide the Defendant with immediate recourse should the Plaintiff be unsuccessful at trial, or only partially successful. As the Alberta Court of Appeal ruled in 864789 Alberta Ltd. v Haas Enterprises Inc. , 2008 ABCA 420 at para. 20 : Interlocutory injunctions are “rarely given without an undertaking as to damages, and sometimes security to back it up.

Absence of a meaningful one drastically tips the balance of convenience.” [ 24 ] The balance of convenience clearly rests in favor of the School Division in respect of the requested injunctive relief. [ 25 ] I find that, in its application for injunctive relief, Ardmore has not demonstrated a strong prima facie case for reasons that will follow. Nor has it established that its claim would not be compensable in damages, nor that the balance of convenience weighs in its favor. The application for injunction is therefore dismissed. Cross- Application for

Summary Judgment

[26] Rule 7.3(1)(

b) of the Rules of Court provides that, “a party may apply to the Court for a

summary judgment in respect of all orpart of a claim on one or more of the following grounds....(

b) there is no merit to a claim or part of it.” [27] In Hryniak v Mauldin, 2014 SCC 7, the Supreme Court of Canada called for a “shift in culture” with respect to the resolutionof litigation. In particular, at paragraph 49, the Court set out a three-part test for when

summary judgment is an appropriate procedure: There will be no genuine issue requiring a trial when the judge is able to reach a fair and just determination on the merits on a motion forsummary judgment. This will be the case when the process (1) allows the judge to make the necessary findings of fact, (2) allows thejudge to apply the law to the facts, and (3) is a proportionate, more expeditious and less expensive means to achieve a just result. [28] In Weir-Jones Technical Services Incorporated v Purolator, 2019 ABCA 49 the majority of the Alberta Court of Appealexpanded on the principles enunciated by the Supreme Court in Hryniak v Mauldin, as they apply to applications for

summary judgmentpursuant to Rule 7.3. [29] In order to succeed on a

summary judgment application, the applicant must, first of all, establish the facts supporting theapplication on a balance of probabilities. To this end, in referring to the phrase “no merit” to a claim, the Court of Appeal interprets thatphrase to mean “no real issue”, Weir-Jones at para 31. [30] In

summary judgment applications, there is no symmetry of burdens on the parties: ...The party moving for

summary judgment must, at the threshold stage, prove the factual elements of its case on a balance ofprobabilities, and that there is no genuine issue requiring a trial. If the plaintiff is the moving party, it must prove “no defence”. If thedefendant is the moving party, it must prove “no merit”. The resisting party need not prove the opposite in order to send the matter totrial. The party resisting

summary judgment need only demonstrate that the record, the facts, or the law preclude a fair disposition, or, inother words, that the moving party has failed to establish there is no genuine issue requiring a trial Weir-Jones at para 32. [31] [16] Related to the issue of “standard of proof” is the “burden of proof” in

summary dispositions. The Court stated in Weir-Jones as follows at paragraph 35: The moving party has the burden of establishing that, considering the facts, the record, and the law, it is entitled to

summary judgmenton the merits of the case, and that there is no genuine issue for trial. The resisting party then has an evidentiary burden of persuading thecourt that there is a genuine issue requiring a trial, or in other words that the moving party has not met that aspect of its burden. Theultimate burden remains on the moving party to establish that there is no genuine issue requiring a trial, and that a fair and justadjudication is possible on a

summary basis. The resisting party can meet its evidentiary burden by challenging the moving party’sentitlement to

summary judgment (based on gaps or uncertainties in the facts, the record, or the law, etc.), or by raising a positivedefence (such as a limitations defence). A dispute on material facts, or one depending on issues of credibility, can leave genuine issuesrequiring a trial. As noted, infra para. 37, the resistance to

summary judgment must be grounded in the record, not mere speculation.Sometimes the resisting party can succeed by demonstrating that the complexity of the issues makes the case unsuitable for

summarydisposition, or in other words that there are genuine issues requiring a trial. [32] Ultimately, the Court must be satisfied with the fairness of the process, that

summary judgment is a suitable means to achievea just result in the circumstances. [33] In this case, the record is sufficiently developed for the Court to consider

summary judgment as the means for resolving theaction. The record consists of affidavit evidence and exhibits submitted by both parties, including expert opinion evidence, as well asquestioning on affidavits. [34] In this case, the Defendant asserts that the grounds have been established to warrant an order for

summary judgment in itsfavor. The School Division asserts that the action must fail because: (

a) the action was commenced out of time pursuant to ss. 3(1)(

a) and 3(1)(

b) of the Limitations Act, R.S.A. 2000 c L-12; and (

b) the evidence and law do not establish a meritorious claim against it under the tort theories advanced by the Plaintiff. Expiry of the Limitation Periods

a) The Two Year Discoverability Limitation Period [35] Section 3(1)(

a) of the Limitations Act requires a party to seek a remedial order within two years after the date on which thePlaintiff first knew, or in the circumstances, ought to have known that: (

a) the injury for which the Plaintiff seeks the remedial order has occurred; (

b) the injury was attributable to the conduct of the Defendant; and (

c) the injury, assuming liability on the part of the Defendant, warrants bringing a proceeding. [36] As the general rule, a cause of action arises for the purpose of a limitation period when the material facts upon which thecause of action is based have been discovered or ought to have been discovered by the Plaintiff by the exercise of reasonable diligence:DeShazo v Nations Energy Company Ltd., 2005 ABCA 241 at paras. 31, 32 and 36; Central Trust v Rafuse, (SCC),

[1986] 2 SCR 147 at para. 89. [37] As part of its analysis, the Court must consider the knowledge of the Plaintiff when it could have, in light of thecircumstances, reasonably brought the action: Condominium Plan 9421549 v Main Street Developments Ltd., (ABKB), 2004 ABQB 962 at paras. 55, and 56. [38] According to the Alberta Court of Appeal, s. 3(1)(a)(

i) of the Limitation Act “links immunity with the discoverability of theinjury, not the discoverability of a cause of action for any injury”: Sun Gro Horticulture Canada Ltd. v Abe’s Door Service Ltd., 2006ABCA 243 at para. 11. In s. 1(

e) of the Limitations Act, “injury” is defined to mean personal injury, property damage, economic loss,non-performance of an obligation, or in the absence of any of these, breach of a duty. [39] In this case, the injury alleged by the Plaintiff is the contamination of the Lands resulting from the lagoon allegedly leakingwaste water with contaminants onto the Lands. [40] The principals of the Plaintiff had actual knowledge of the existence of the lagoon prior to acquiring title to the Lands.

ThePlaintiff could have made enquiries to determine any issue with respect to seepage from the lagoon and any possible contamination of theLands before acquiring title. [41] In any event, the Plaintiff did commission a report by P.

Machibroda Engineering Ltd., an environmental engineeringconsulting company retained to investigate suspected seepage into the lands. [42] The Machibroda report was received by the Plaintiff in January 2012 and forwarded to the School Division by Ardmore’sconsultant Al-Terra Engineering Ltd. on January 16, 2012, expressing concern with alleged leakage of the lagoon. [43] These concerns were repeated by Ardmore’s former president, Helmut Hinteregger who wrote to the School Division on April18, 2013 reiterating concern with alleged leakage from the lagoon, among other things.

Helmut Hinteregger also communicated withAlberta’s Ministry of Education on February 11, 2014 specifically alleging effluent from the lagoon leaking on to the Lands. [44] The Defendant denies that leakage was from the lagoon was contaminating the Lands, but the issue is whether the Plaintiffhad the perception that an injury was being caused by leakage from the lagoon onto the Lands. Therefore, I find that the limitation periodbegan to run, pursuant to s. 3(1)(a), at the latest, on or about February 11, 2014.

Accordingly, the Statement of Claim originally filed onJune 3, 2016 was filed after the expiry of the two year discoverability period.

b) Ten Year Ultimate Limitation [45] The Defendant also asserts that this action is barred by s. 3(1)(b), that provides an action will be statute barred “ten years afterthe claim arose”.

Section 1(

a) of the Limitations Act defines a “claim” as a matter giving rise to a civil proceeding in which a claimantseeks a remedial order. [46] The Alberta Court of Appeal in Stuffco v Stuffco, 2006 ABCA 317 at para. 40, ruled that a “claim” refers to the “facts givingrise to the injury or offence for which a remedial order is sought”.

Therefore, the ultimate ten year limitation period begins to run fromthe alleged wrongful act having occurred, not from when the Plaintiff suffered an “injury” as with the two year limitation period basedon discoverability. [47] The Defendant asserts that the ten year ultimate limitation period began to run many years before the Plaintiff acquired title tothe Lands. [48] The Plaintiff alleges that contamination of the Lands emanated from the wastewater lagoon. If so, then the ten year limitationperiod would have commenced when the lagoon was commissioned and began to seep effluent into the environment.

The Plaintiff pointsto a “fin-shaped” wet area at the south end of its property, north of the lagoon, being the location of contaminated soil. It is thePlaintiff’s allegation that this wet-zone was caused by the seepage from the lagoon. Hence, the basis for its claim of contamination byeffluent from the lagoon. [49] The Defendant does not concede that seepage from the lagoon created this “fin-shaped” area, or that seepage evercontaminated the Lands.

I note that, the darker tone of the wetland portion is identified in aerial photographs in 1985, and remains therein subsequent photographs in 1990, 1994 and 2015 as stated by the Plaintiff’s expert J. Paul Ruffell in his report of May 30, 2018. Thesize of this darker zone has actually decreased over time. [50] I find that, assuming that the lagoon functioned as intended, seeping into ground water, giving rise to a claim against theSchool Division, then the ultimate limitation period expired at least since 1985, more than 20 years before this action was commenced.

Ifanything, the cause of action, if any, likely expired two years after the cause of action arose, pursuant to the predecessor statute, theLimitation of Actions Act, R.S.A. 1980, c L-15, s. 51(f). “Fresh Damage” [51] The Limitations Act provides in s. 3(3)(a), that for the purpose of subsection (1)(

b) a claim or any number of claims based onany number of breaches of duty, resulting from a course of conduct or a series of related acts or omissions, arises when the conductterminates or the last act or omission occurs. [52] However, under s. 3(1)(b), an action will be statue barred “ten years after the claim arose”. It is important to distinguish abreach of duty from continuous damage to the Lands. As stated by the Alberta Court of Appeal in Brookfield Residential (Alberta) LP(Carma Developers LP) v Imperial Oil Limited, 2019 ABCA 35 at para. 6:

...while the damage to the land is continuous, that does not mean that there is a continuous breach of duty that would start the limitation period running anew every day: Wewaykum Indian Band v Canada , 2002 SCC 79 at para. 135 , [2002] 4 SCR 245; Champagne v Sidorsky , 2018 ABCA 394 at para. 12 . That approach would effectively mean that there is no limitation period in play with respect to damage to real property.

The breach of duty occurred whenever the land was contaminated, and the limitation period started to run as soon as that contamination was reasonably discoverable. [ 53 ] The School Division retained Margaret Allen of Matrix Solutions Inc., a professional engineer and professional geoscientist with approximately 30 years of experience in the environmental industry. Ms. Allen, in a series of affidavits, provided her expert analysis regarding the impact of subsurface seepage from the lagoon on the Ardmore Lands. [ 54 ] She concluded, among other things, that:

a) the Ardmore Lands have been in a stable state for decades preceding Ardmore’s acquisition; and

b) the lagoon is not contaminating the Ardmore Lands. [ 55 ] Ms. Allen noted that the “fin shaped” wet area on the Ardmore Lands pre-dates the lagoon, as shown by aerial photographs.

The lagoon had been designed to seep at an appropriate rate that can be handled by natural soil conditions and appears to be functioning as intended. [ 56 ] Water seeping in the subsurface appears to be travelling predominantly along historic natural flow pathways and drainage features on the west of the lagoon, rather than towards the “fin shaped” wet area directly north of the lagoon. [ 57 ] The natural drainage channel constitutes a “watercourse” pursuant to the Public Lands Act , R.S.A. 2000, c P-40 s. 3 and the Environmental Protection and Enhancement Act , R.S.A. 2000, c E-12 s. 1 . [ 58 ] As provided in the Public Lands Act , the beds and shores of naturally occurring watercourses are vested in the Crown.

This includes the naturally occurring watercourse, and any surface water or ground water that found its way into the drainage channel. This

interpretation of the legislation is supported by the Alberta Court of Appeal in Erik v McDonald , 2019 ABCA 217 , holding that s. 3 of the Water Act vests ownership of water in Alberta in the Crown, and s. 3 of the Public Lands Act vests ownership of the land covered by water in the Crown. The Lands occupied by the drainage channel are essentially carved out of Ardmore’s title.

The water flow channel is not on Ardmore’s Lands. [ 59 ] Any discharge made from lagoon pipes, as alleged by the Plaintiff but denied by the School Division, would have been discharged into the drainage channel vested in the Crown. [ 60 ] Furthermore, there is no evidence in the record of any surface discharge from the lagoon over its berms or in any manner. [ 61 ] In addition, there is no evidence of any “contaminants” having any adverse affect on the Ardmore agricultural lands. [ 62 ] As found by Ms.

Allen, the only lagoon water parameter exceeding the guidelines referenced in the Machibroda (2012) report are total dissolved solids (TDS). The expert report by Tetra Tech commissioned by the Plaintiff, asserted that their geophysical results indicate ground water is mixing with lagoon seepage to create the area of higher soil conductivity north of the lagoon. In reviewing the data presented by Tetra Tech, Ms.

Allen noted that the lagoon fluid and monitoring well at the northwest corner of the lagoon, showed comparatively low TDS concentrations, indicating that seepage from the lagoon is likely mainly occurring in the northwest direction toward this monitoring well. Furthermore, monitoring wells within the area of higher soil conductivity show TDS concentrations two to three times that of the lagoon, indicating that lagoon water is not mixing with ground water toward the northeast to the same extent as it is in the drainage area to the northwest. In

summary, ground water chemistry indicates minimal lagoon water seeping north toward the area of higher soil conductivity compared to historical preferential pathways toward the drainage channel along the west of the lagoon. [ 63 ] In addition, Ms. Allen cited a regional scale ground water report available for the area encompassing the lagoon. This report shows that naturally elevated TDS concentrations, several times the concentration in the lagoon water, are prevalent in this area on a regional scale.

These comparatively higher TDS concentrations in the monitoring wells northeast of the lagoon in the area of relatively higher conductivity are therefore likely from a natural source that predates the lagoon. [ 64 ] Ms. Allen concludes that the results of ground water quality standard observations indicate that regulators do not consider them to be contaminants of concern in ground water and there would be no implications on land use. The code of practice for wastewater systems using a waste water lagoon has standards for using lagoon water for irrigation.

The parameters tested by Machibroda (2012) met these irrigation standards. [ 65 ] Ms. Allen concludes that lagoon water does not appear to be affecting the adjacent property owned by Ardmore. [ 66 ] I accept the opinions of Ms. Allen based on the evidence presented in her opinion reports. [ 67 ] Ardmore has been leasing the lands to a third party for agricultural use. There has been no reduction in the rents paid to Ardmore.

No damages have been established that could be attributable to seepage from the lagoon in any event. [ 68 ] The evidence here establishes on a balance of probabilities, that there has been no fresh damage of “contamination”, or any damage at all, suffered by the Plaintiff within the limitation period. Only “fresh damage” that occurred within the limitation period can be potentially compensable: ML Plaza Holdings Ltd. v Imperial Oil Limited , 2006 BCCA 564 at para. 12 . [ 69 ] I find, therefore, that the Plaintiff’s action is barred under ss. 3(1) (

a) and 3(1) (

b) of the Limitations Act .

The Plaintiff has Failed to Establish the Elements of the Torts being Claimed [ 70 ] In the Plaintiff’s Amended Statement of Claim, at paras. 19 to 22, Ardmore asserts claims against the School Division based on the torts of trespass, nuisance, strict liability (the rule in Rylands v Fletcher ) and negligence. The Defendant asserts that the elements of each of these torts have not been made out in the record before this Court. [ 71 ] Paras. 23 to 27 of the Amended Statement of Claim contain allegations related to purported legislative duties that the school division may have.

However, none of those pleadings give rise to any cause of action for a breach of legislation against the School Division.

Trespass [ 72 ] Para. 19 of the Amended Statement of Claim alleges that the School Division’s conduct in acquiescing or permitting a known hazardous substance to enter onto the Ardmore Lands constitutes a trespass to property, by directly interfering with the Plaintiff’s land without lawful excuse or justification. [ 73 ] The key element to establish a trespass in law must be direct interference. [ 74 ] Trespass is defined in Smed v Priddis Greens Golf & Country Club , 2011 ABQB 5 citing professor GHL Fridman at para. 47, as follows: Trespass to land consists of entering upon the land of another without lawful justification, or placing, throwing or erecting some material object thereon without the legal right to do so.

Such interference must be direct rather than consequential. To constitute trespass the defendant must in some direct way interfere with the land possessed by the plaintiff. ... [ 75 ] In the Smed decision, at para. 48 , the distinction was made between direct and indirect interference, citing Professor Philip H. Osborne, at para. 48: There are a number of essential elements to the tort of trespass to land. The intrusion onto the land must be direct. ... The element of directness diminishes the power of trespass of land to deal with some environmental pollution.

Oil spills that wash onto the plaintiff’s land, waste that is carried down rivers to the plaintiff’s land, and herbicides, pesticides, and airborne pollutants that drift in the wind to the plaintiff’s land are likely to be regarded as indirect interferences with land. Damage caused by indirect interference may be actionable as a nuisance. [ 76 ] In the record before this Court, there is no evidence that the School Division has directly interfered with the Plaintiff’s lands and this directness element cannot be met in trespass. There is no overland flow or discharge from the lagoon onto the Plaintiff’s lands.

Any seepage from the lagoon, as designed, is handled by the natural soil conditions and through historic drainage features. In the absence of evidence of direct interference, the action by the Plaintiff based on trespass must be dismissed.

Nuisance [ 77 ] Para. 20 of the Amended Statement of Claim alleges that, in allowing contaminants to escape onto the Ardmore Lands, the School Division created a nuisance and continued to create a nuisance which unreasonably and substantially infringes upon the Plaintiff’s right to use and enjoy its Land and has caused damage to the Ardmore Lands. [ 78 ] The Supreme Court of Canada in Antrim Truck Centre Ltd. v Ontario (Transportation) , 2013 SCC 13 , stated at para. 19 that to support a claim in nuisance, a Plaintiff must show there has been an interference with their use or enjoyment of their land that is both substantial and unreasonable.

A substantial interference with property is one that is non-trivial. Where this threshold is met, the inquiry proceeds to the reasonableness analysis, which is concerned with whether the non-trivial interference was also unreasonable in all of these circumstances. [ 79 ] The issue here is the alleged contamination of the Lands by the effluent emanating from the lagoon. As stated previously, the 300 metre setback in relation to residential development of the Lands is not actionable and does not form any part of the nuisance analysis.

The alleged nuisance must be assessed in relation to the past and current use of the Lands for agricultural purposes. [ 80 ] As stated previously, there is no evidence of “contamination” of the Ardmore Lands affecting its agricultural use. Sewage wastewater lagoons commonly service rural developments that are not connected to a municipal sewer system. In addition, the size of the “fin shape” wet area has actually been decreasing in the period 1994 to 2017. This wetland has not been used for agriculture in any event.

The evidence does not demonstrate any substantial interference with the Ardmore Lands. [ 81 ] Although I find that there has been no substantial interference based on the record, I also find that, even if there had been, I also consider whether such interference was unreasonable in the circumstances. In the Antrim decision, supra at paras. 53 and 54, the Supreme Court sets out factors that are often considered in the balancing exercise that forms part of the unreasonable analysis. These include:

a) the severity of the interference;

b) the character of the neighborhood;

c) the utility of the Defendant’s conduct (ie the public good); and

d) the sensitivity of the Plaintiff [ 82 ] I have found that the interference, if any, would in any event be minimal and not substantial in any way. [ 83 ] As for the character of the neighborhood, the Ardmore Lands are zoned for agricultural use. The lagoon services the School Division’s high school and elementary school as well as other properties in the vicinity. Ardmore had chosen to purchase its Lands knowing that the lagoon existed. The School Division has no other option for treating the effluent from its property.

The decommissioning of the lagoon would have a substantial affect on the existing character of the neighborhood. Sewage wastewater lagoons commonly service rural developments that are not connected to a municipal sewer system. [ 84 ] There is no question that the lagoon is important, providing an essential service to the high school, elementary school and several other properties in the neighborhood.

The Court must take into consideration the social utility that the lagoon provides. [ 85 ] Furthermore, the Plaintiff’s sensitivity to the lagoon does not relate to any alleged interference with the Lands’ use for agricultural purposes. Rather, referring again to the subtext of the litigation, the Plaintiff desires that the lagoon be decommissioned so that it may be in a position to apply for rezoning of the Lands for residential development.

This is the real issue for Ardmore, as it may impact the potential profitability of their desire to develop the land for residential use. [ 86 ] There is no basis, on the record, for a finding of liability in nuisance against the Defendant. Strict Liability (Rylands v Fletcher) [ 87 ] In para. 21 of the Amended Statement of Claim, the Plaintiff alleges that the School Division controls the lands from which the contamination emanates. The damages resulting from the contamination were reasonably foreseeable.

The school division is strictly liable pursuant to the rule in Rylands v Fletcher , (1865, 159 E.R. 737 (Eng Exch) ) for all damages occasioned by the contamination of the Ardmore Lands. [ 88 ] The Alberta Court of Appeal considered the general principle from the decision in Rylands v Fletcher , in its decision Windsor v Canadian Pacific Railway Ltd. , 2014 ABCA 108 at para. 17 . The landlord who allowed unusual dangerous substances to escape from their lands would be liable to their neighbors for any resulting damage. The liability under this principle is exceptional in that it is “strict”.

Liability does not depend on a finding of negligence or other fault.

Accordingly, the principle is narrow, and efforts to expand this cause of action have been resisted. [ 89 ] Considering the test, the Court must decide whether the Defendant may defend “extraordinary”, “special” or “extra hazardous” use of its lands; that the Defendant brought onto its land something that was likely to do mischief if it had escaped; whether there has been an “escape” of a substance that has migrated or moved from the Defendant’s land to the Plaintiff’s land and the risk associated with the accidental and unintended consequences of engaging in an activity; and that damage was caused to the Plaintiff’s property as the result of the escape. [ 90 ] In this case, the record does not show that the School Division has made an “extraordinary”, “special” or “extra hazardous” use of its land.

The lagoon was required to service the School Division’s properties and is governed and approved by provincial regulation. At the present time, there is no other feasible alternative to the lagoon for dealing with sewage effluent from the properties. [ 91 ] In addition, there has been no “escape”, meaning some sort of unintended mishap or accident; Windsor v Canadian National Railway , supra , at paras. 22-23. In this case, any seepage from the lagoon is in accordance with its design.

It is operating as intended and is not causing any pollution or creating an adverse affect. [ 92 ] Lastly, the Plaintiff has not suffered, in the record before the Court, any damage to the Lands. They have been and continue to be used for agricultural purposes as they are currently zoned. [ 93 ] There is no basis, in the record, for a finding against the Defendant of strict liability and damages under the Rylands v Fletcher principles.

Negligence [ 94 ] In para. 22 of the Amended Statement of Claim the Plaintiff alleges that the School Division owed a duty of care to the Plaintiff to ensure that contaminants originating from the School Division lands, and the lagoon located thereon would not escape onto or contaminate the Ardmore Lands. The School Division breached said duty of care, and the contamination, and the resulting damages and loss, were caused by the negligent or intentional acts or omissions of the School Division the particulars of which are as follows:

a) causing or allowing the Ardmore Lands to become contaminated;

b) failing to properly monitor and maintain the lagoon;

c) failing to exercise reasonable care and control with respect to the contaminants;

d) failing to prevent the continuing escape of the contaminates or to take reasonable means to contain and remove said contaminants;

e) failing to appropriately respond to the leakage and the contamination after it had been made aware of it; and

f) such further and other particulars as may be proven at trial.

[ 95 ] Paras. 23 and 27 of the Amended Statement of Claim allege that the School Division has breached certain legislative provisions in relation to the lagoon. However, such breaches have not been established, and in any event, the allegations do not make out any cause of action against the School Division in private law or otherwise. [ 96 ] In general, a land owner owes a duty to a neighboring land owner not to contaminate their property. This general proposition is not disputed by the School Division.

However, the Defendant contends that, on the facts of this case, there is no breach of the duty of care, and furthermore, the Plaintiff has not suffered any damages as the result of any alleged breach of duty. [ 97 ] As stated previously, the Defendant’s expert, Margaret Allen, whose opinions I have accepted, concluded that there are no pollutants escaping the lagoon that would adversely affect the Ardmore Lands. Furthermore, the data showed that the ground water on the Ardmore Lands meets the standards for irrigation, applicable to the Ardmore Lands that are zoned agricultural and leased for farming.

Ardmore’s expert, Mr. Ruffell, has not identified any contamination from the lagoon exceeding the applicable regulatory criteria. [ 98 ] The lagoon was constructed with a natural clay liner. It is designed to seep at an appropriate rate that can be handled by the natural soil conditions. The evidence shows that it is functioning as intended.

On the other hand, Ardmore has not provided any evidence showing that the lagoon is not operating as intended and as approved by the regulators. [ 99 ] Furthermore, although I find that the School Division has not been in breach of any duty it owes to the Plaintiff, the record establishes that Ardmore has not suffered any damages resulting from any alleged seepage of contaminants into its Lands. The Lands continue to be used for agricultural purposes. The “fin shaped” wetlands, although decreasing in size over time, have not historically been used for agricultural purposes.

In any event, the evidence does not establish that contaminants have been migrating into the “fin shaped” wetlands from the lagoon. [ 100 ] The record does not establish the basis for a finding of breach of duty and resulting damages as against the Defendant. Conclusion [ 101 ] Reverting to the application by the Plaintiff for injunctive relief, the Plaintiff has not established, as reviewed in these reasons, that it has made out a “strong prima facie case” in the first stage of the test for injunctive relief. [ 102 ] Furthermore, in relation to the application for

summary dismissal, the Defendant School Division, at the threshold stage has proved the factual elements of its defence on a balance of probabilities. The Defendant has established that the Plaintiff’s claim is now barred by ss. 3(1) (

a) and 3(1) (

b) of the Limitations Act , and furthermore, that there is no merit to the claims against them under the tort theories advanced by the Plaintiff. There is no merit to the Plaintiff’s claim nor is there a genuine issue for trial. On the other hand, the Plaintiff has not demonstrated that the record, the facts or the loss preclude a fair disposition of the case on a

summary basis. I find that

summary judgment in favour of the Defendant is a fair and just result. [ 103 ] The claim against the Defendant School Division is dismissed. [ 104 ] The Defendant School Division is entitled to its costs of the injunction application, its application for

summary judgement and for the action otherwise. If the parties are unable to agree on costs, then written submissions may be made to me within sixty (60) days of the release of these reasons for decision. Heard on the 4 th and 17 th days of February, 2022. Dated at the City of Edmonton, Alberta this 12 th day of October, 2022. James T. Neilson J.C.K.B.A. Appearances: Mark Kirwin Kirwin LLP for the Plaintiff

David J. Risling and Sean Parker McLennan Ross LLP for the Defendants