Executive Summary: Key Legal and Evidentiary Issues

• The court considered whether a motion judge's decision refusing summary judgment and refusing to strike pleadings was interlocutory or final for appeal purposes.
   
• Two limitation periods were at issue: one tied to the moving parties' 2013 purchase of the property and another tied to a 2020 environmental report.
   
• Rule 21 principles governed the motion judge's determination that the Independent Damages Claim was not statute-barred.
   
• Ambiguous wording in a related costs decision was found insufficient to override the clear finding in the motion judge's reasons.
   
• Bifurcating the appeal between the Independent Damages Claim and the Equitable Set Off Claim was rejected due to the risk of inconsistent outcomes.
   
• Costs of $10,000, all-inclusive, were ordered in favour of the responding parties.
   

Facts of the case

Dunn and Drummond Incorporated brought an underlying action alleging that its land was contaminated by a neighbouring property. That neighbouring property had originally been owned by the responding parties, who sold it to the moving parties in 2013. The plaintiff commenced its claim in 2019. In response, the moving parties served a statement of defence and crossclaim against the responding parties seeking contribution and indemnity. In September 2022, the moving parties served an amended statement of defence and crossclaim that added an independent damages claim against the responding parties (the "Independent Damages Claim") or, alternatively, a claim for equitable set-off (the "Equitable Set Off Claim"). The responding parties then moved for summary judgment and, in the alternative, to strike certain pleadings on the basis that the moving parties' claim was statute-barred. Both branches of that motion were dismissed by the motion judge. The responding parties appealed, and the moving parties brought this motion to quash the appeal on jurisdictional grounds.

Policy and legislative provisions at issue

The dispute centred on two distinct rules under the Rules of Civil Procedure, R.R.O. 1990, Reg. 194. The summary judgment branch of the motion was governed by rule 20, under which the motion judge found a genuine issue requiring a trial as to whether the contamination was, or ought to have been, discovered in 2013 (the "2013 limitation issue"). The alternative request to strike pleadings concerned whether the moving parties knew or ought to have known of the contamination upon receiving an environmental report in May 2020 (the "2020 limitation issue"), and this branch was decided under rule 21. At paragraph 104 of his reasons, the motion judge found that the Independent Damages Claim "is not statute-barred," and at paragraph 105 he further held that, even if incorrect on that point, the Equitable Set Off Claim would nonetheless survive.

Reasoning and analysis

On the motion to quash, the moving parties argued that the decision below was interlocutory rather than final, pointing to the motion judge's separate costs decision, which deferred costs of the motion "in the cause." They submitted that this reflected an understanding that no issue had been finally resolved, relying on a statement in the costs decision indicating that the result of the motion had not determined the limitation issue between the parties as it related to the Independent Damages Claim and the Equitable Set Off Claim. The court found this costs-decision language ambiguous, since it was unclear whether it referred to the summary judgment outcome on the 2013 issue or to the rule 21 finding on the 2020 issue, and held that this ambiguity could not displace the clear language in the motion judge's reasons on the motion itself. The court clarified that the proposed appeal did not concern the 2013 limitation issue, but rather the 2020 limitation issue decided under rule 21, which turned on whether the amended pleadings disclosed a new cause of action or merely restated the existing one. Because the motion judge's conclusion on the Independent Damages Claim was final, the court held that an appeal from that determination properly lay to the Court of Appeal. It also declined to bifurcate the appeal between the Independent Damages Claim and the Equitable Set Off Claim, finding the two issues closely related and better heard together to avoid the risk of inconsistent decisions.

Ruling and overall outcome

The court rejected the moving parties' argument that the motion judge's decision was interlocutory and dismissed the motion to quash the appeal, allowing the responding parties' appeal to proceed. The responding parties were the successful party on this motion and were awarded costs from the moving parties in the agreed amount of $10,000, all-inclusive.