In Simpson & Yan v. Chapman & Drummond (23 January 2009), the British Columbia Provincial Court dismissed a statutory cost recovery action brought pursuant to the provincial Environmental Management Act (the “EMA”) and Contaminated Sites Regulation (the “CSR”), on the ground that the claimants had failed to prove the property in question was a contaminated site within the meaning of the EMA and CSR.

The claimants purchased a residential property from the defendants and alleged that the latter failed to disclose the existence of an underground storage tank (“UST”) on the property at the time of sale, which the claimants alleged had contaminated the property.

The court held that the claimants failed to establish the property was a contaminated site within the meaning of the EMA and CSR due to the methodology employed by their environmental consultant, ALARA Environmental Health and Safety Ltd. (“ALARA”). Specifically, the court held that while ALARA had analyzed soil samples according to an extractable petroleum hydrocarbons (“EPH”) standard, this could not be used to determine whether a property was a contaminated site under the EMA or CSR, both of which contain standards based on light extractable petroleum hydrocarbons (“LEPH”), or heavy extractable petroleum hydrocarbons (“HEPH”). The court noted none of the subsequent testing results of soil samples taken from the property indicated it was a contaminated site within the meaning of the EMA and CSR.

The court also held the defendants would not have been liable even if the claimants had established the property was a contaminated site under the legislation. The defendants had carried out a home inspection at the time of their purchase in 2003 that did not reveal the existence of the UST, and the claimants relied on that inspection report rather than conduct their own inspection in 2006. That there was an “overheated” real estate market which might have resulted in the defendants selecting another buyer had the claimants insisted on their own inspection, the court held, did not change this fact.