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Background and parties
Canadian National Railway Company (CN) owns railway lands neighbouring property owned by Hogg Fuel & Supply Limited (Hogg) in Kitchener, Ontario. For decades, coal tar waste from former municipal gas operations was allegedly transported to and deposited on the lands now owned by Hogg, and CN maintains that this waste migrated onto and contaminated its railway right-of-way. The dispute has unfolded through two related lawsuits: a long-running 1989 action that was ultimately dismissed for delay, and a later 2014 action that attempted to reframe the dispute as a claim for ongoing, post-2012 contamination. The City of Kitchener and the Public Utilities Commission of Kitchener (PUC) were initially co-defendants in both actions, reflecting allegations that they were responsible for generating and depositing the coal tar waste, but by the time of the appeal that is the subject of this decision, only Hogg remained in the litigation.
The first lawsuit and its dismissal for delay
In 1989, CN commenced an action against Hogg, the City and the PUC alleging that its property had become and continued to be contaminated with coal tar waste and other pollutants due to historical dumping and subsequent migration from the Hogg lands. CN advanced a broad range of causes of action: negligence, nuisance, interference with use and enjoyment of land, strict liability under the rule in Rylands v. Fletcher, trespass, and statutory liability under Ontario’s Environmental Protection Act. Crucially, CN pleaded not only historical contamination but also that coal tar and related wastes “continue to migrate off site” from Hogg’s property onto CN’s lands, causing an ongoing hazard to CN’s employees and groundwater and posing risks beyond CN’s property, including to nearby park lands. Hogg responded in the 1989 action with a statement of defence, counterclaim and crossclaim, seeking contribution, indemnity and its own damages against the other parties, effectively positioning the municipality and its utilities commission as the originators of the coal tar waste. In 2014, after approximately 25 years of very limited advancement of the litigation, the Superior Court (Myers J.) dismissed the 1989 action for delay. He found the delay inordinate and inexcusable, noted that key witnesses had died and their evidence had not been preserved, and concluded that it would be impossible to fairly determine the essential factual questions, in particular how the coal tar waste had been deposited and how it came to migrate onto CN’s lands. The court characterized the continuing migration issue as a “side issue” relative to the central historic contamination questions, and held that a trial would not be a fair and just resolution because the evidentiary record was irreparably incomplete. CN’s appeal to the Ontario Court of Appeal was dismissed, and the Supreme Court of Canada refused leave, leaving the dismissal for delay as the final disposition of the 1989 action.
The second lawsuit alleging continuing contamination
While the appeal from the dismissal of the 1989 action was still pending, CN issued a new claim in 2014 against Hogg, the City and the PUC. In this 2014 action, CN again alleged that coal tar—described as consisting primarily of toxic and carcinogenic polycyclic aromatic hydrocarbons—had migrated and continued to migrate from Hogg’s lands to CN’s property, causing significant and ongoing soil and groundwater contamination. The 2014 claim also added allegations about petroleum hydrocarbon contamination, including benzene, said to be migrating onto CN’s lands. In an accompanying letter served with the 2014 statement of claim, CN’s counsel explained that the new proceeding was commenced partly to protect CN’s rights in case its appeal from the 1989 dismissal order failed, and stated that CN was seeking damages for historical coal tar contamination occurring within the applicable limitation period and for ongoing migration. CN later discontinued the 2014 action against the City and the PUC, leaving Hogg as the sole defendant, and it subsequently took the position that it sought damages only for contamination from approximately 2012 or 2014 onward, which it characterized as new, continuing harm.
The motion judge’s partial summary judgment
Hogg moved for summary judgment in the 2014 action, arguing that CN’s coal tar claims were barred by res judicata or, alternatively, as an abuse of process, on the basis that they had effectively been exhausted by the dismissal of the 1989 action. The motion judge rejected the res judicata argument, holding that there had been no final adjudication on the merits in 1989 because the claim was struck for delay rather than decided after trial. However, he distinguished between coal tar and benzene issues. He treated the benzene-related contamination allegations as analytically separate from the coal tar claims and allowed those to proceed, concluding they did not raise the same trial fairness concerns that had underpinned the earlier dismissal. By contrast, he found that the coal tar contamination allegations, including assertions of ongoing migration, were functionally the same claims that CN had advanced in 1989 and that the fairness problems identified by Myers J. remained. On that basis, he dismissed the coal tar portion of the 2014 claim as an abuse of process. CN appealed that partial summary judgment to the Court of Appeal, maintaining only the coal tar issues for appellate review.
The issues on appeal
On appeal, CN argued that its coal tar claims in the 2014 action were distinct from those in 1989 because they were limited to contamination allegedly occurring since 2012 and framed as a continuing cause of action. It submitted that each day of ongoing migration gave rise to a fresh claim, and that the earlier dismissal for delay could not “exhaust” these later harms. CN also contended that the trial fairness concerns that justified the 1989 dismissal were not engaged in the new proceeding, since it did not need to prove who originally dumped the coal tar or exactly how it first arrived on Hogg’s lands in order to establish liability for ongoing migration. In addition, CN asserted that the motion judge had failed to give adequate weight to its expert evidence on continuing migration and had misapplied the abuse of process doctrine by effectively treating the 2014 action as identical to the earlier case. Hogg, by contrast, maintained that CN was attempting to re-litigate the very same continuing coal tar migration claim that had been part of the 1989 action, that the continuing tort theory could not be used to circumvent a prior dismissal for delay, and that allowing the 2014 action to proceed would undermine finality and the integrity of the administration of justice.
The Court of Appeal’s analysis of continuing torts and abuse of process
The Court of Appeal began by noting an apparent tension in prior case law about the standard of review for abuse of process, but held it did not matter whether correctness or palpable and overriding error applied because the result would be the same under either standard. The court reaffirmed that abuse of process is a flexible doctrine grounded in the court’s inherent power to prevent misuse of its procedures, particularly to avoid re-litigation that threatens judicial economy, finality, consistency and the integrity of the system. It recognized that continuing torts, such as ongoing nuisance or trespass, can generate a new cause of action each day if the injurious conduct and the legal injury both persist, but emphasized that this principle does not operate in a vacuum. In assessing CN’s continuing tort argument, the court stressed that CN had already expressly pleaded continuing migration of coal tar in the 1989 action and that this aspect of the claim had been dismissed alongside the historic contamination issues in the earlier delay ruling. Allowing CN to assert the same continuing migration theory in the 2014 action would, in the court’s view, amount to an end-run around the final 1989 dismissal order. The court rejected CN’s suggestion that exhaustion of a continuing tort claim requires a full trial on the merits or a compensatory award addressing future harm. It held that the abuse of process doctrine is not constrained by the strict requirements of res judicata or issue estoppel and that there is no principled basis for carving out dismissals for delay so that they do not preclude re-litigation. Accepting CN’s position, the court reasoned, would permit plaintiffs in continuing tort situations to repeatedly re-file their claims after dismissals for delay until they obtained a favourable outcome, undermining finality and discouraging efficient case management.
Trial fairness, expert evidence and limitations concerns
On trial fairness, the Court of Appeal concluded that the same evidentiary problems that rendered the 1989 action untriable persisted in the 2014 proceeding. Key witnesses had died, documentary and testimonial evidence about the origin and path of the coal tar had not been preserved, and Hogg had lost its practical ability to pursue contribution and indemnity against the City and PUC for their alleged role as original polluters. The court rejected CN’s attempt to recast liability in purely prospective terms, limited to Hogg’s post-2012 conduct, noting that responsibility for ongoing migration could not be fairly assessed in isolation from the original deposit and historic management of the coal tar waste. While CN relied on authority recognizing potential liability for a party that permits contaminants to continue migrating even if it did not cause the initial deposit, the Court of Appeal held that this did not address the central concern: whether it was fair and consistent with the administration of justice to conduct a trial at all in light of the earlier findings about irretrievable evidentiary prejudice. The court also held that the motion judge was entitled to give little weight to CN’s expert evidence about current migration rates because, even if accepted, it did not change the determinative conclusion that the coal tar claim had been exhausted and was barred as an abuse of process. Finally, the court noted unresolved limitations issues arising from CN’s shifting position on the period for which it sought damages—at times indicating 2012 onward and at other times 2014 onward—which underscored the difficulty of disentangling pre- and post-1989 dismissal migration and reinforced the appropriateness of treating the coal tar portion of the 2014 action as an impermissible attempt to revive the earlier, dismissed claim.
Final outcome and financial consequences
In the result, the Court of Appeal held that the motion judge had properly applied the abuse of process doctrine, correctly concluded that CN’s continuing coal tar migration claims were exhausted by the dismissal of the 1989 action, and reasonably found that permitting the 2014 action to proceed on those claims would bring the administration of justice into disrepute. The appeal was dismissed, leaving in place the summary judgment that struck CN’s coal tar claims while allowing only the distinct benzene issues to continue in the lower court. The court further ordered that CN pay Hogg its agreed all-inclusive costs of $40,000 on the appeal, so the net outcome is that Hogg, as the successful party, avoided liability on the coal tar contamination theory and obtained a quantified costs award of $40,000 in its favour.
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Defendant
Appellant
Respondent
Court
Court of Appeal for OntarioCase Number
COA-25-CV-0244Practice Area
Environmental lawAmount
$ 40,000Winner
RespondentTrial Start Date