Executive Summary: Key Legal and Evidentiary Issues

• Whether the plaintiffs should be granted leave under Rule 48.04 to bring a motion for an adjournment after the action was set down for trial
• Extent to which a Phase II Environmental Site Assessment is necessary, relevant, and fair to complete the evidentiary record on alleged petroleum hydrocarbon contamination of the plaintiffs’ well water
• Balancing prejudice and fairness between the plaintiffs’ need for complete environmental evidence and the County’s interest in avoiding delay and changes to litigation strategy
• Proper test under Rule 48.04(1): whether a substantial or unexpected change in circumstances is required versus whether the interlocutory step is “necessary in the interests of justice”
• Application of adjournment principles under Rule 52.02, including proportionality, efficient use of trial time, and the overarching objective of deciding the real matters in dispute on their merits
• Treatment of alleged financial hardship and prior discovery conduct in assessing whether the plaintiffs are legitimately seeking an adjournment or attempting to gain tactical advantage

Background and factual context

The case arises from the purchase by the plaintiffs, Jason Robert Krug and Stephanie Lynn Burbridge, of a residential property on Halyk Crescent in Norfolk County, Ontario, which was supplied by well water. The plaintiffs entered into an agreement of purchase and sale on September 4, 2017, to buy the property from John and Shauna McMorrow for $469,900. The realtor who assisted the plaintiffs was Shawn MacDonald, employed by Re/Max Twin City Realty Inc. Notably, the agreement was not conditional on obtaining a Ministry of Health water certificate confirming the potability of the well water. Shortly after closing, the plaintiffs noticed that the well water had a petroleum odour and appeared discoloured. In March 2018, they retained Watters Environmental Group Inc. to conduct water testing. A report dated April 11, 2018, concluded that the well water contained high concentrations of petroleum hydrocarbons, that the contamination was consistent with waste from service garages, and that the water failed to meet Ontario Drinking Water Quality Standards and the Safe Drinking Water Act, 2002. A separate laboratory certificate of analysis dated March 23, 2018 similarly showed high concentrations of petroleum hydrocarbons in the water. The plaintiffs then investigated the historical use of the property. They discovered that a motor garage, including a gas station and pump island, had operated on the site from about 1951 to 1977. In 1976, the then owners, the Halyks, applied to rezone the land, along with other parcels, from commercial use to a residential subdivision, and the County approved the rezoning. The rezoning materials indicated that the existing dwelling would remain, most of the land was vacant except for a dwelling, service garage and gas pumps, and that the service garage and gas pumps would be removed. By the time the property was sold to the McMorrows in March 2012, the garage, gas station and pump island had been demolished. After purchasing, the McMorrows installed a well and applied to the County for a building permit, which was issued in 2013, enabling them to construct the residence that the plaintiffs later purchased and now occupy.

Claims against the County and other defendants

The plaintiffs issued their statement of claim on September 5, 2018, naming multiple defendants: the McMorrows as vendors, MacDonald and Re/Max Twin City Realty Inc. as the real estate professionals, and The Corporation of Norfolk County as the municipal authority. Against the County, the plaintiffs’ central theory is regulatory and environmental in nature. They rely on Part I, section 2 of O. Reg. 153/04 under the Environmental Protection Act to argue that, because the property’s last actual use was commercial and the proposed use was residential, the County had a statutory obligation to obtain a Record of Site Condition (RSC) from the McMorrows before issuing the 2013 building permit. Had an RSC been required, the plaintiffs contend that both a Phase I and Phase II Environmental Site Assessment (ESA) would have been carried out before residential occupation, revealing contamination and preventing the situation in which they now find themselves. In their pleading, the plaintiffs allege that the County knew or ought to have known that decades of garage operations made it foreseeable that contaminants would leach into the soil and groundwater and harm the well water, that it was negligent in approving demolition and a building permit without requiring environmental assessments, and that the value of their property has been diminished and they have been damaged by contaminated well water. The County, in its defence, denies that the well water is contaminated, denies any duty or negligence, and puts the plaintiffs to strict proof of contamination and damages. The other defendants face claims sounding in misrepresentation, negligence and related real estate–based duties arising from the sale of the property, though they did not oppose the adjournment motion that is the subject of this decision.

Procedural history leading up to the adjournment motion

From 2018 through 2021, the parties exchanged affidavits of documents, conducted examinations for discovery, and answered undertakings. Third party proceedings by the McMorrows against other real estate actors were commenced and later discontinued. Re-examinations for discovery involving the plaintiffs and the County were contemplated for December 2022 but in fact took place in May 2023. On June 7, 2023, the plaintiffs set the action down for trial—a significant procedural step that, under Rule 48.04 of the Rules of Civil Procedure, generally precludes further interlocutory steps absent leave of the court. The matter then became entangled in case management issues. In February 2023, the County moved to have the action placed under case management, with the consent of all parties. An order to that effect was made only on June 28, 2024, after the plaintiffs had already learned in early 2024 that the action had been struck from the trial list in August 2023 due to non-attendance at a trial scheduling date. The action was reinstated to the trial list by consent order on April 2, 2024. In January 2025, the court advised the parties that the earlier order placing the matter under case management had been issued in error and that the action would not be case managed after all.

Efforts to fund environmental assessment and mediation

The plaintiffs’ evidence was that they initially expected case management and possible settlement discussions to facilitate contributions from the defendants to pay for a Phase I and Phase II ESA, which they described as expensive, with estimated costs in the range of $65,000 to over $100,000. When it became clear no case management judge would be assigned, they requested private mediation, hoping at minimum to secure funding for the assessment work. All parties agreed to mediation, which took place on June 27, 2025, but it was unsuccessful. Following the failed mediation, the plaintiffs concluded that the defendants would not contribute to the ESA costs. They then resolved to commission the assessments themselves, engaged an environmental consulting and engineering firm, and sold personal assets to fund the work. As of the motion hearing, a Phase I ESA had been completed, identifying five areas of potential environmental concern, with a plan to drill seven exterior boreholes and one interior borehole as part of the Phase II ESA. Drilling was scheduled to start on September 15, 2025, and the Phase II report was expected to take four to six months to finalize. On July 14, 2025, the plaintiffs asked the other parties for consent to adjourn the trial to allow completion of the Phase II ESA and finalization of the report. By July 30, 2025, the County confirmed that it would not consent; on July 31, 2025, the other defendants indicated they would not oppose the adjournment. A pre-trial conference was held on August 13, 2025, and the motion for adjournment followed.

The County’s opposition to leave and adjournment

The County opposed both leave to bring the motion and the adjournment itself. It argued that Rule 48.04 barred the plaintiffs from taking further steps after setting the matter down for trial unless there had been a substantial or unexpected change in circumstances, relying on the line of authority flowing from Hill v. Ortho Pharmaceutical (Canada) Ltd. The County maintained that no such change had occurred: the plaintiffs had known for years they needed expert evidence on contamination and yet delayed retaining experts and obtaining ESAs. In its view, the true purpose of the adjournment request was to repair perceived weaknesses in the plaintiffs’ case at the last minute. The County also invoked Rule 31.07, contending that it was improper for the plaintiffs to rely on Mr. Krug’s affidavit evidence about employment and financial hardship where he had refused to answer questions on those topics at discovery. From the County’s perspective, this amounted to “tailored” evidence inconsistent with the purposes of discovery. Further, the County submitted that granting the adjournment would prejudice it by forcing a late shift in litigation strategy and effectively turning the proceeding into fresh litigation based on new, more expansive theories of liability and damage grounded in the forthcoming ESA reports. It pointed to existing case law emphasizing that adjournments sought close to trial are generally disfavoured when they risk waste of court resources and added costs, and stressed the competing public interest in the efficient, orderly resolution of civil disputes.

The plaintiffs’ position on necessity and fairness

The plaintiffs contended that the ESA reports were essential to fairly prosecute their claims and present the best available, objective evidence concerning contamination, causation and quantum. They argued that the Phase I and Phase II ESAs represent the most reliable method to confirm the presence of petroleum hydrocarbons in the well, link contamination to historic uses, quantify environmental damage, and support their loss claims. They maintained that their delay in funding the ESA work stemmed from genuine financial hardship and a reasonable belief that defendants might share in the cost, particularly through case management or mediation. The plaintiffs further submitted that the core issues in the litigation—contamination of the well water, regulatory duties on the County and resulting damages—had always been pleaded. In their view, the ESAs would not transform the case into something new but would provide more complete and scientifically grounded evidence on longstanding issues. They therefore asked the court to exercise its discretion under Rules 48.04 and 52.02 in the interests of justice by granting leave to bring the motion and adjourning the November 2025 trial dates until the Phase II ESA report was completed.

The governing legal principles on post-set-down motions and adjournments

Justice MacNeil reviewed the two competing approaches to Rule 48.04(1) identified by the Ontario Court of Appeal in Horani v. Manulife Financial Corporation. Some authorities require a substantial or unexpected change in circumstances such that refusing leave would be manifestly unjust; others hold that leave may be granted where the interlocutory step is necessary in the interests of justice, even absent such a change. For purposes of this motion, the court adopted the latter, more flexible approach and accepted that it could grant leave if doing so was necessary in the interests of justice. The decision also canvassed Rule 48.07, which deems all parties ready for trial once the action is on the trial list, and Rule 52.02, which empowers a judge to postpone or adjourn a trial “on such terms as are just.” Relying on Bhimji Khimji v. Dhanani, the court set out the key factors in deciding whether to adjourn a trial: the overarching goal of justly determining the real matters in dispute; prejudice to the plaintiff if the adjournment is refused; prejudice to the defendant if it is granted; the length of the adjournment and disruption to the court’s schedule; and the adequacy of the explanation for seeking adjournment.

Application of the principles to the parties’ positions

In applying these principles, the court framed the matter as one of fairness and balance at trial. The judge accepted the plaintiffs’ position that the ESA reports were needed to properly and fully present their case on contamination and damages. Without a Phase II ESA, the plaintiffs would be seriously prejudiced, as they would be forced to proceed without what the court recognized as highly relevant and useful scientific evidence bearing directly on central issues in dispute. Conversely, the judge found no evidence that the County would suffer non-compensable prejudice if the adjournment were granted. The question of whether the well water was contaminated and how that might affect value and damage had always been live in the pleadings. The County had already retained its own expert, BlueFrog Environmental Consulting Inc., which had opined in an April 30, 2025 report that the water supply well at the site had not been contaminated with petroleum hydrocarbons. The judge reasoned that, while the County might need a further or updated report responding to the plaintiffs’ Phase II ESA, this was a natural part of adversarial litigation on an environmental causation issue and did not fundamentally alter its litigation strategy. The existence of an established defence expert and report mitigated any claimed prejudice.

Assessment of timing, delay and financial hardship

On timing and delay, the adjournment sought was limited: the plaintiffs requested only that the trial be adjourned until the Phase II ESA report could be completed, with drilling already scheduled to begin in mid-September 2025. The motion was not brought on the eve of trial in a way that would cause a block of trial time to go unused; the court was satisfied that other matters could fill the November 2025 sitting. Additionally, the other defendants did not oppose the adjournment, leaving only the County in opposition. While the County criticized the plaintiffs for waiting too long to commit to funding the assessments and for not raising financial hardship earlier, the judge accepted that, in hindsight, those steps might ideally have been taken sooner. However, the evidence showed that it was only after mediation failed in June 2025 that the plaintiffs realized there would be no contribution from the defendants. From that point on, they moved promptly to retain an environmental firm and arrange funding, including the sale of personal assets. The court accepted Mr. Krug’s evidence that the plaintiffs are not wealthy and that the ESA work represented a significant financial decision, undermining any suggestion that the motion was purely tactical.

Rejection of tactical motives and findings on leave

Justice MacNeil rejected the County’s contention that the plaintiffs were seeking to “unilaterally control” the trial date or to avoid discovery obligations. There was no indication they were trying to delay the trial for its own sake or gain improper advantage. Rather, the plaintiffs were attempting to ensure that the trial judge would have the best available evidence on a highly technical environmental question. In these circumstances, the court held that granting leave under Rule 48.04 to bring the adjournment motion was appropriate because the interlocutory step—completing the ESA work and introducing the resulting report—was necessary in the interests of justice.

Outcome on the motion and treatment of costs

Ultimately, the court exercised its discretion to both grant leave and adjourn the trial. The plaintiffs’ motion to adjourn the trial, which had been scheduled for the sitting from November 17 to December 12, 2025, was granted to permit the Phase II ESA to be undertaken and a final report prepared. The plaintiffs were thus the successful party on the motion. On costs of the motion, the judge noted that although the plaintiffs had succeeded, the relief was an indulgence that benefited only them. For that reason, the court was inclined not to award them costs despite their success. However, recognizing that there might be relevant information not fully canvassed, the judge encouraged the parties to agree on costs. Failing agreement, a timetable was set for brief written costs submissions by March 31, 2026, after which, if no submissions were filed, the court would deem the issue resolved and would not determine costs. No specific monetary amount was fixed or ordered for damages, costs or any other financial award in this decision. Accordingly, while the plaintiffs succeeded in obtaining the adjournment, the total amount of any eventual damages, costs or other monetary relief in their favour cannot be determined from this ruling.