What remedy do I have if a Phase 1 ESA report was inaccurate?

A Phase 1 environmental site assessment looks at whether contaminants may be present; the Ontario Ministry of the Environment, Conservation and Parks describes the work it requires as a records review, interviews and a site reconnaissance. Ontario’s Environmental Protection Act defines it as an assessment of property conducted in accordance with the regulations, by or under the supervision of a qualified person, to determine the likelihood that contaminants have affected land or water on, in or under the property. If you later find it was wrong, the useful questions are who prepared it, who engaged them and how much time you have.

Who prepared it and who engaged them

Start with the engagement letter. If the seller commissioned the report, ask whether the consultant agreed that you may rely on it, and whether that is in writing, such as a reliance letter. The Ontario Act defines a qualified person as someone who meets the qualifications prescribed by the regulations, so ask which professional prepared or supervised the report and whether a professional body oversees that person. The report’s method and findings are for an independent qualified person to review, not for this page.

The time limit

Ontario’s Limitations Act, 2002 sets a basic period of two years from the day a claim is discovered. Under section 5 a claim is discovered on the earlier of the day the claimant first knew, and the day a reasonable person with the claimant’s abilities and in the claimant’s circumstances first ought to have known, of the matters listed there. Section 15 adds a separate cut-off at the 15th anniversary of the act or omission, subject to the exceptions in that section. British Columbia’s Limitation Act also uses two years from discovery, subject to that Act. Section 17 of the Ontario Act says there is no limitation period for an environmental claim that has not been discovered; the Act defines that as a claim based on an act or omission that caused, contributed to or permitted the discharge of a contaminant into the natural environment that has caused or is likely to cause an adverse effect. Ask your lawyer which rule fits yours.

Where the purchase agreement fits

If you bought the business or its land, check whether the agreement contains environmental representations or an indemnity from the seller. See what environmental checks are needed before buying and what environmental liabilities come with a business. If a record of site condition was filed for the property in Ontario, the Ministry of the Environment, Conservation and Parks says the protection from certain orders that the filing creates does not apply if the filed record contains false or misleading information or certifications, so ask whether one was filed.