Gagné, Lavallée, Baudouin

Appeal from a judgment of the Superior Court dismissing an application to annul a transaction, claiming damages, and seeking orders for injunctive relief. Dismissed.

In 2004, the parties made a transaction pursuant to which the respondent undertook to decontaminate the groundwater at the appellant’s site caused by the migration of contaminants from its own land. They disagree on the contaminants covered by the obligation to decontaminate and on the target to be reached. The appellant also claims to have suffered prejudice due to the unreasonable delay in performing the work.

The trial judge found that the obligation to decontaminate was indeed performed because only perchloroethylene (PCE), not its by-products, was covered by the transaction. In addition, the environmental threshold that the parties had agreed to comply with, that is, that of the Résurgence dans les eaux de surface ou infiltration dans les égouts ([translation] resurgence in surface water or sewer infiltration) (RESIE) set out in the 1998 Soil Protection and Contaminated Sites Rehabilitation Policy, had been reached, regardless of subsequent changes to this threshold. Last, despite a five-year delay to reach the target set in the transaction, the judge accepted that the appellant had suffered no prejudice.

The appellant invoked art. 1425 of the Civil Code of Québec (S.Q. 1991, c. 64) and Uniprix inc. c. Gestion Gosselin et Bérubé inc. (S.C. Can., 2017-07-28), 2017 SCC 43, SOQUIJ AZ-51412992, 2017 EXP-2143, [2017] 2 S.C.R. 59) to argue that the judge should have concluded that the wording of the transaction was ambiguous and gone beyond it to seek the common intention of the parties. He would then have considered the context, in this case the appellant's difficulty in obtaining hypothecary financing since the early 2000s due to potential lenders’ concerns about the environmental risks associated with the site of its property.

The judge correctly concluded that PCE was the only contaminant concerned by the obligation to decontaminate. The parties knew that it would be transformed into by-products that are also considered contaminants. The appellant did not establish that the common intention of the parties was different than the one expressed in the contract. The judge also did not err in concluding that the transaction did not include an obligation of result, that is, complete remediation of the contamination to obtain financing, contrary to what the appellant argues.

Moreover, there is no reviewable error in the judge’s finding that the remediation included in the transaction consisted of lowering the PCE concentration in the groundwater on the appellant’s land to below the RESIE threshold indicated in the 1998 policy. The judge did not err in determining that the criteria applicable to the decontamination of the appellant’s land are those that existed when the transaction was made. The rights and obligations created by a contract are in fact fixed and crystallized at the time of its formation, such that the rights and obligations of the parties to a contract are in principle governed by the law in force at the time of its formation. The parties to a contract must clearly and unequivocally provide in the contract that a new law that comes into force after a contract has been concluded can modify their rights and obligations. This reasoning applies even more in this case because the criteria in the policy are not legal standards. The target cannot be a moving target unless the parties expressly so provided, which they did not.

Last, the judge was correct in stating that the appellant did not establish how the five-year delay in reaching the decontamination target had caused it prejudice.

Text of the decision: http://citoyens.soquij.qc.ca