This case was heard in the Supreme Court of Newfoundland and Labrador (Trial Division).
Community Mental Health Initiative Inc. ("CMHI") arranged to purchase property from Summit Lounge Inc. ("Summit"). The purchase agreement between the two companies stated that Summit would carry out an environmental site assessment to verify that the property was not contaminated. Summit hired Jacques Whitford Stantec Ltd. ("Stantec") to carry out the site assessment, and the agreement between Summit and Stantec stated clearly that Stantec would not be liable to any third party for the quality and accuracy of its work.
After CMHI discovered contamination on the property, it sued Stantec. In turn, Stantec applied for a summary judgment dismissing CMHI’s claim, arguing that CMHI was a third party to the contract between Summit and Stantec, and therefore could not hold Stantec liable for any losses or injuries it had suffered. After considering the terms of the contracts, the Court agreed with Stantec’s position, and CMHI’s action was dismissed.