Executive Summary: Key Legal and Evidentiary Issues

• Dispute over unpaid environmental remediation invoices, performed on a time-and-materials basis without a written contract, for a heavily contaminated commercial property in St. Catharines.
• Central allegation by the property owner that the contractor “over-remediated” by applying a higher Ministry of the Environment standard (Table 9) than legally required, thereby inflating costs.
• Competing expert evidence on whether remediation was excessive, focusing on use of visual and olfactory observations versus extensive laboratory testing to determine soil contamination and applicable site condition standards.
• Factual causation issues surrounding a broken sanitary sewer line and failed interceptor maintenance, and whether the landlord’s lack of oversight of an “unscrupulous” tenant caused the extensive contamination and remediation scope.
• Legal questions on interest: enforceability of a 2% per month (26.7% per annum) interest term printed on invoices, the operation of the Interest Act, and discretion to depart from default Courts of Justice Act rates.
• Evidentiary assessment of credibility between the remediation engineer (with “boots on the ground”) and the property owner, leading the court to prefer the contractor’s evidence and dismiss the owner’s large counterclaim in full.

Factual background and the parties’ relationship

Comco Canada Ltd. is an environmental remediation and petroleum management firm led by Gordon Thompson, a chemical and environmental engineer with decades of experience. Sam Peters Investments Limited, headed by Miltiadis “Mike” Peters, owns multiple commercial and residential properties in Ontario, including a one-storey strip at 387 Ontario Street in St. Catharines. The parties had a long-standing and previously amicable relationship, with Comco having done earlier remediation work at the same property in 2008 and 2015, both times on a time-and-materials basis and without written contracts, and both times fully paid. The units of concern in this case were The Frame Shop and, especially, Mr. Transmission, an auto repair operation at the north end of the building. Mr. Peters did not have a property manager for this strip; he visited once a year in spring for exterior upkeep and did not inspect the interior units.

Prior remediation and warnings about maintenance

In 2007–2008, Comco was retained to address serious contamination from hydraulic oil and transmission fluid. A prior consultant had already identified heavy contamination, cracked grease interceptors, and hoist-related spills. Comco’s 2008 work involved decommissioning hoists, removing the concrete floor, excavating contaminated soil, treating excavation limits, and replacing the interceptor and drains with a new three-stage system. In its 2008 final report, Comco stated that no further contamination was expected provided the interceptor was properly inspected, serviced, and waste oils were collected and removed from the site, and Mr. Thompson personally urged Mr. Peters to build these maintenance obligations into future leases. Comco again remediated localized contamination in 2015 around above-ground tanks at the northwest corner of the property. On both previous projects, Comco worked on time and materials, gave no fixed price, and was paid in full.

The 2018 property sale and need for a clean environmental report

In mid-2018, Mr. Peters received an offer to buy the property, roughly in the $2–2.5 million range, on the assumption the site was environmentally clean. A key clause in one offer required the seller to provide Phase I and II environmental reports acceptable to the buyer’s lenders by a fixed date. After Mr. Peters locked out the Mr. Transmission tenant and the other units were vacant, he turned to Comco to obtain up-to-date environmental reports and, if needed, remediation. Time was critical: an empty strip was generating no rental income, and the purchaser would not close until it received clean reports. A subsequent December 13, 2018 agreement of purchase and sale fixed a $2 million price and made closing conditional on Mr. Peters providing a clean environmental report from Comco confirming remediation to the Ministry of the Environment standards for the then-current commercial zoning. The deal was structured so that closing would not occur until the remediation was complete and the environmental reports delivered to the purchaser.

Scope of the 2018–2019 remediation engagement

For this 2018–2019 project, Comco again worked on a time-and-materials basis with no written contract and no formal estimate. Comco received a $50,000 retainer, and Sam Peters did not stipulate a budget. Mr. Thompson acted as the Qualified Person for environmental purposes and oversaw both the ESA work and physical remediation. The Phase I ESA identified multiple areas of potential environmental concern, including staining around the north side of the building and near above-ground tanks, interior hydraulic hoists and storage in Mr. Transmission, and a commercial garage across the street. Phase I concluded the property posed significant environmental risk for a purchaser and recommended a more invasive Phase II ESA.

Regulatory standards and the dispute over applicable tables

Ontario’s site condition standards are set out in O. Reg. 153/04, with Tables 1, 3, and 9 being relevant. Table 1 is the most stringent, used for sensitive sites; Table 3 is a generic standard for non-potable groundwater sites not near sensitive features; and Table 9 applies to properties within 30 metres of a water body or other natural features. Because the property abuts Twelve Mile Creek, a provincially significant wetland within an urban River Valley Boundary, Mr. Thompson considered the site environmentally sensitive and thus falling under standards equivalent to Table 9. However, there was practical complexity: Twelve Mile Creek itself was already significantly impacted by regional industrial activity, and Mr. Thompson considered it counterproductive and costly to remediate to the highest standard solely because of proximity to this already-degraded watercourse. To save Mr. Peters money, he had his team approach the Ministry of the Environment, Conservation and Parks to see if Comco could remediate to the less stringent Table 3 standard. The Ministry responded that this was only possible if the owner undertook a Risk Assessment or Modified Generic Risk Assessment, processes that could take months or years—an unacceptable delay given Mr. Peters’ insistence on speed. Mr. Peters rejected those options, so Comco proceeded on the basis that the property had to be remediated to a Table 9 equivalent standard, using a “dig and dump” approach.

Discovery of extensive contamination and the broken sewer line

The remediation started in September 2018 with boreholes outside and, when unexpectedly high contamination was found, boreholes inside both The Frame Shop and Mr. Transmission. The exterior work uncovered heavily contaminated soils near above-ground storage tanks, some of which were near the 30-metre line to the water body, requiring excavation to the Table 9 standard. Interior boreholes showed visible black staining, strong petroleum and “varnish” odours, wet and oily soil, and readings consistent with PHC impact in multiple locations between the two units. During exploratory excavation beneath The Frame Shop, the crew found a sanitary sewer pipe connected to the three-stage interceptor that was badly broken, constructed of older materials, and allowing oily wastewater and sewage to leak into the surrounding soils. Subsequent investigation confirmed the line carried effluent from the Mr. Transmission washroom and interceptor, ran the full length of The Frame Shop’s wall, and ultimately tied into the municipal sewer along Ontario Street. The break and lack of proper coupling allowed petroleum hydrocarbons and sewage to migrate beneath and along the foundation. Mr. Thompson proposed, and Mr. Peters approved, the plan to expose the entire length of the pipe, replace it, and excavate all impacted soils along that corridor. As the remediation progressed, the crew uncovered additional sources and conduits of contamination, including an unconnected steel culvert with oily soils, a small diameter pipe filled with oil, and heavily impacted soils near utilities and the former office area, as well as serious contamination in the rear yard around BH 4 with unknown catch basins and piping. The excavation inside Mr. Transmission became extensive: visual evidence and odour suggested that essentially the entire shop footprint was impacted, leading to excavation several feet below grade and removal of thousands of tonnes of contaminated soil.

Project escalation and communication about costs

As the scope of contamination became apparent, project costs escalated far beyond the initial rough expectations. Comco sent detailed monthly invoices specifying labour, equipment, and disposal charges. Mr. Thompson regularly reduced or wrote off some billable time, marking certain hours as not charged, and applied a significant discount to at least one invoice. In early December 2018, with costs around $81,000, he estimated a further $50,000 would be needed, but at that point the full extent of the broken sewer line contamination and deep impact under Mr. Transmission and at the rear of the building were still unknown. As the project continued and more contaminated soil was removed, Mr. Thompson later advised Mr. Peters that over 3,000 tonnes—roughly the equivalent of more than 150 tri-axle truckloads—had been hauled away, and that the total project cost would be in the neighbourhood of $500,000. Comco also accelerated work, including paying overtime during the Easter weekend, to ensure the property reached “hand over” condition so the sale could close; those overtime premiums were not passed on to Mr. Peters. Despite regular cost updates, detailed invoices, and clear communication that the site was far more contaminated than expected, Mr. Peters did not direct Comco to stop or change its approach, nor did he meaningfully challenge invoices or methodology while the work was ongoing. He acknowledged that, by that stage, it made no commercial sense to halt the remediation.

Delivery of Phase II ESA and completion of the sale

By April 10, 2019, Comco had completed sufficient investigative and analytical work for a Phase II ESA, even though some remediation continued. The report concluded that the property had been remediated to the applicable Ministry standards for its zoning and proximity to the water body, meeting the purchaser’s environmental condition. Mr. Peters initially objected to the wording, feeling it did not explicitly match the buyer’s contractual requirement, but the court accepted Mr. Thompson’s evidence that the report did exactly what was required, and that Comco later issued a formal letter of reliance to the buyer’s investment firm. The sale ultimately closed at the $2 million price after the environmental conditions were satisfied.

Invoices, partial payment, and emerging dispute

By April 2019, the outstanding receivable was in the vicinity of $400,000, while Sam Peters had only paid approximately $81,860. After the sale closed, Mr. Peters made a large lump-sum payment of about $539,639, leaving an unpaid balance of $157,941.43 on Comco’s invoices. Over the following months, Mr. Thompson sent repeated requests for payment and attempted to resolve the account. Mr. Peters initially cited being away and unwell and promised to outline his concerns. Only later did he articulate a complaint—first alleging that Mr. Thompson had recommended a Record of Site Condition and cost him $100,000 in delay, and then more broadly asserting that the remediation had been excessive and that Comco’s final invoices were unfairly “back-end loaded.” His position hardened into the belief that Comco had over-remediated beyond what the law required, and that the amount already paid was fair compensation for the work.

The litigation and the expert evidence battle

Comco sued in the Ontario Superior Court of Justice to recover the outstanding $157,941.43 under the simplified procedure. Sam Peters defended and launched a substantial counterclaim of around $650,000, alleging breach of contract and negligence in over-remediating to Table 9 instead of a lower standard and relying too much on subjective visual and olfactory indicators instead of comprehensive laboratory testing. To support its position, Sam Peters retained environmental consultants from Pinchin Ltd., who produced multiple reports criticizing Comco’s approach, especially its limited use of interim laboratory analysis and its assumption that the property as a whole required Table 9-level remediation. Comco, in turn, retained its own experts—initially from Roar Engineering and, after a late substitution due to maternity leave, from BlueFrog Environmental. A preliminary decision in 2025 granted Comco leave to serve the substitute expert report late, allowing the new expert’s evidence to be heard. Although the expert reports were numerous and technically detailed, there was broad agreement on several key points: the property required remediation; the general remediation methods Comco used were appropriate; the land east of the 30-metre line should be remediated to a more stringent standard; and the applicable regulatory tables could be aligned such that Table 1, rather than Table 9, was theoretically the right standard. The true debate was whether Comco had done more work than necessary, and whether its reliance on field observations rather than more exhaustive laboratory confirmation resulted in unnecessary excavation.

Court’s assessment of contamination, methodology, and “over-remediation”

Justice Casullo’s reasons emphasize the weight given to Mr. Thompson’s first-hand observations and long experience in environmental remediation. The court accepted his evidence that, in a site with a known free-phase petroleum source, obvious heavy black staining, strong odour, and sheen on water, visual and olfactory indicators—and simple field tests—could reliably show whether soils were contaminated without needing to send every sample to a laboratory. The judge accepted BlueFrog’s view that free-phase PHC fundamentally exceeds any of the table standards, such that once “pure product” is present, remediation must chase it to its full extent irrespective of whether the nominal regulatory label is Table 1, 3, or 9. The court also rejected the notion that Comco should have split the site into separate zones with different table standards (“one site, one table”), especially given the risk that residual contamination could migrate from a less stringently remediated area back into a cleaner zone, recontaminating it and exposing both Comco and the owner to future claims. Crucially, the judge found that the real driver of cost was not any conscious choice to over-remediate but the unforeseen aftermath of poor interceptor maintenance and a broken sewer line running beneath and along the building’s foundation. The interceptor had been specifically flagged for maintenance in 2008, yet Mr. Peters produced no documentary proof of regular service, waste oil removal, or tenant compliance. The court inferred that maintenance either did not occur or was not properly enforced, and that Mr. Peters, as an absentee landlord dealing with a problematic tenant, had effectively allowed the site to be re-contaminated over time.

Credibility findings and rejection of the counterclaim

On key points where Mr. Thompson’s and Mr. Peters’ evidence diverged, the court preferred Mr. Thompson’s version. Justice Casullo described Mr. Thompson as straightforward, knowledgeable, and grounded in practical experience—“standing in the stuff”—while Mr. Peters was seen as a sophisticated real estate businessman who at times was evasive, selective in his recollection, and inclined to present himself as more naive than he was. The judge noted that Mr. Peters initially complained about an alleged Record of Site Condition issue, not over-remediation, and that his narrative of being blindsided by costs was inconsistent with the detailed invoices and cost updates he had received. The court concluded that the property was highly contaminated, that the remediation undertaken was necessary to bring it into compliance and allow the sale to proceed, and that Comco did not over-remediate. As a result, Sam Peters’ substantial counterclaim for alleged excessive work and damages was dismissed in its entirety.

Interest, invoice terms, and costs

A further contested issue concerned interest. Comco’s invoices, including those issued over its long relationship with Sam Peters, stated that overdue accounts would accrue interest at 2% per month, equating to 26.7% per annum. There was no evidence that the parties expressly negotiated this interest clause, and Comco had not previously charged interest when Sam Peters was late paying on earlier projects. Mr. Peters argued that, since there was no explicit agreement on interest, the court should apply only simple prejudgment interest at the Courts of Justice Act rate. The court reviewed the Interest Act and the principle that interest cannot be imposed merely by unilaterally adding it to invoices in the absence of a contract. However, Justice Casullo held that the consistent wording of Comco’s invoices over many years gave Sam Peters actual notice of the interest term, and that the court was not strictly limited to the default statutory rate. In the circumstances—including Comco’s carrying of large receivables over time and the commercial sophistication of the defendant—the judge exercised discretion to award prejudgment and post-judgment interest at the 2% monthly rate stated on the invoices.

Outcome and monetary result

In the final analysis, the court found that Comco had fulfilled its contractual obligations to remediate the property to the appropriate environmental standard so that the sale could close, and that the high overall cost of the project was a direct consequence of longstanding contamination and failed maintenance rather than any over-remediation. Judgment was granted in favour of Comco Canada Ltd. for the full unpaid balance of its invoices in the amount of $157,941.43, together with prejudgment and post-judgment interest at 2% per month (26.7% per annum) as reflected in the longstanding invoice terms, and Sam Peters’ counterclaim was dismissed. The court held that Comco, as the successful party, was presumptively entitled to its costs, but the exact quantum of costs was left for either agreement or subsequent written submissions; accordingly, while the principal award of $157,941.43 is fixed, the total monetary recovery inclusive of interest and costs cannot be determined from this decision alone.