Walton v Warren, 2020 BCSC 19

Jurisdiction:

BC

Court:

Supreme Court of BC

RETURN TO ALL RESULTS

Our law firm represented the purchasers of a residential property in Victoria. Subsequent to the purchase, the plaintiffs discovered an underground storage tank on the property.

In order to remediate the property to the standards set out in the Environmental Management Act and Regulation, the plaintiffs paid over $42,000.

A term of the purchase contract required the seller to remove any underground storage tanks. The clause read:

It is a fundamental term of this contract that the Seller shall ensure that any underground storage tank located on the property shall be removed by a qualified tank removal contractor and the surrounding soil remediated in accordance with any provincial or local government laws, including the British Columbia Fire Code 2006, where applicable.

The Seller shall remove the tank before the Completion Date.

The Seller shall be responsible for all costs associated with compliance, including any additional costs for environmental clean up and restoration of the property to its original condition.

The Seller shall provide to the Buyer on or before the Completion Date, written confirmation from the tank removal contractor and relevant Provincial or local government authority that the completed remediation complies with the Provincial or local government law as the case may be.

The primary issue in this case was one of contractual interpretation – i.e., did the above clause make the sellers responsible for oil tanks found after the closing? Because the case was likely to be determined on the basis of contractual interpretations, the plaintiffs elected to proceed by way of a summary trial.

The court agreed with the plaintiffs, that the clause in the contract did not restrict in any way the seller’s liability to underground storage tanks discovered before closing.

This case should serve as a warning to buyers, sellers, and their realtors, to look closely at any contractual clauses allocating the risk of environmental contamination when negotiating a real estate purchase.