This case was heard in the Supreme Court of Nova Scotia.
Wolfridge Farm Limited purchased a property from Mr. and Mrs. Bonang, and the Bonangs mortgaged the property under a vendor take-back mortgage agreement. The property was licenced for commercial use, and at the time of purchase all parties were aware of some hydrocarbon contamination that would need to be cleaned up. The Agreement of Purchase and Sale stated that the sellers would remediate the contamination to the “satisfaction of the purchaser”; however, an Indemnification Agreement that the parties signed before closing the sale stated that the sellers would “carry out and/or pay for all remedial work required by any governmental authority.”
Wolfridge Farm operated a used car sales business on the property for a number of years. During that time, the Bonangs engaged environmental companies to do some of the remediation work on the property. In 2009, Wolfridge Farm fell into arrears with its annual property taxes, and it failed to pay its taxes again in 2010 and 2011. In January 2011, the agent for Wolfridge Farm told Mr. Bonang that he wished to refinance the property with the Royal Bank of Canada but was unable to do so because of the residual contamination on the property. The Bonangs engaged an environmental company to do further testing on the property, but Wolfridge Farm refused to grant access to the property.
In July 2011, the Bonangs initiated foreclosure proceedings. In its defence, Wolfridge Farm argued that the Bonangs had breached the Agreement of Purchase and Sale by failing to remediate the property to the purchaser’s satisfaction. Ultimately, the Court held that Wolfridge Farm’s environmental complaint was a “red herring,” and that the Bonangs’ only legal obligation was to remediate the property according to accepted commercial standards. The Court rejected Wolfridge Farm’s defence and granted the foreclosure order that the Bonangs had sought.
To read about other decisions related to this case, go to Bonang v. Wolfridge Farm Ltd., 2014 NSSC 195, Wolfridge Farm Ltd. v. Bonang, 2014 NSCA 41 (CanLII), and Wolfridge Farm Ltd. v. Bonang, 2014 NSCA 70 (CanLII).