Consolidated statement of claim re: Sunrise Propane explosion

3AND TO:AND TO:AND TO:AND TO:AND TO:AND TO:Artrr Tf1.nttg I V.Richmond Hill, ON L4C 5R2Shay (Sean) Ben-Moshe149 Bentoak CrescentThornhill, Ontario L4J 856Leonid Belahov114 Regent StreetRichmond Hill, ON L4C 9P3Arie Belahov114 Regent StreetRichmond Hill, Ontario L4C 9P32094528 Ontario lnc.20 Munay RoadToronto, Ontario M3K 1T2HGT Holdings Ltd.20 Murray RoadToronto, Ontario M3K 1T2Teskey Gonstruction Go. Ltd.20 Murray RoadToronto, Ontario M3K 1T2Teskey Concrete Go. Ltd,,20 Murray RoadToronto, Ontario M3K 1T2

Ifie Sunrfse Companies7.. The defendant Sunrise Propane Energy Group Inc. (hereinafter'SunrisePropane") is a corporation incorporated under the laws of Ontario. that suppliespropane and industrial gases through a facility located at 54 and 62 MunayRoad, Toronto, Ontario, operating under the names Sunrise Propane IndustrialGases and Sunrise Propane Industrial Cylinders8, The defendant 1367229 Ontario Inc is a corporation incorporated under the lawsof Ontario, carrying on business as Sunrise Propane, and is the holder of anauthorization to operate a propane filling plant pursuanto Ontario Regulation211t01, madb under the Technical Standards and Safety Acl S.O 2000 c,161g67229Ontario lnc. is named as a tenant on the lease of the property located at54 and 62 Murray Road,gThe defendant 1186728 Ontario Limited is a corporation incorporated under thelaws of Ontario, carrying on business as Sunrise Propane, and is the holder of anauthorizaiion to operate a propane filling plant pursuant to Ontario Regulaiion211t01, made under the Technical Standards and Safety Acf, S.O. 2000 c,,16.10,The defendant1452O49 Ontario Inc is a corporation incorporated underthe lawsof Ontario, carrying on business aS Sunrise Propane, and is the owner andoperator of a fleet of trucks/tank trailers used for the purpose of transportingpropane and other industrialgases to and from the Sunrise Propane facility.

B15,The defendant Leonid Belahov is a resident of Richmond Hill, Ontario, and wasat all material times an officer and director of 1367229 Ontario Inc16.The defendant Arie Belahov is a resident of Richmond Hill, Ontario, and was atall material times an officer and director of 1186728 Ontario Ltd,The Teskey Group of Gompanies17., The defendant 2094528 Ontario Inc. (hereinafter "the Teskey NumberedCompany'') is a corporation incorporated under the laws of Ontario and was at allmaterial times the owner of the property municipally described as 54 and 62Murray Road, Toronto, Ontario and owner of the property municipally describedas 20 Munay Road, Toronto, Ontario.,18.The defendant HGT Holdings Ltd (hereinafter"HGT") is a corporationincorporated under the laws of Ontario and was at all material times the owner ofthe property municipally described as 48 Murray Road, Toronto, Ontario,19The Teskey Numbered Company and HGT therefore each own part of theproperty where the Facility is located, which is hereinafter described as "thePropedy''20.The defendants, Teskey Construction Co. Ltd, and Teskey Concrete Co.. Ltd(hereinafter "Teskey Construction" and Teskey Concrete") are corporations

oincorporated under the laws of Ontario who lease the Property from the TeskeyNumbered Company and HGT At all material times Teskey Construction,Teskey Concrete, HGT and the Teskey Numbered Company were operated asone economic unit or one economic enterprise (hereinafter .the TeskeyCompanies"). Altematively, the Teskey Numbered Company and HGT wereoperated as the alter egos of Teskey Construction and Teskey Concrete.21.At all material times Teskey Construction, Teskey Concrete, HGT and the TeskeyNumbered Cornpany were each agent for the other and vicariously liable for theacts and omissions of the others as particularized below,22The plaintiffs plead that all defendants can only act through their employees,directors, officers and agents and are vicariously liable for their acts andomissions as hereinafter pleaded. The acts and omissions particularized andalleged in this claim to have been done by the defendants were authorized,ordered or done by each of the defendants' employees, directors, officers andagents while engaging in the management, direction, control and transaction ofbusiness of the defendants and are therefore acts and omissions for which thedefendants are vicariously liableClass Definition23., The plaintiffs bring this action pursuanto the Class Proceedings Act, 1992 onbehalf of the following (the "Class"): AII persons who were present or who

10owned, leased, rented and/or occupied any properties located within the area ofthe City of Toronto bounded by Keele Street, Highway 401, Sheppard Avenueand Dufferin Street on August 10{', 2008, when the hereinafter describedexplosions occuned.Facts Supporting Class Members' Claim Against the DefendantsThe explosions and fire24,, . On or about August 1Od', 2008, at approximately 4:00 a.m a series of explosionsoccuned at the Facility caused by the release of propane into the atmosphereand resulting in a fire at the Facility, $everal massive fireballs were released intothe air from the Facility, visible to many of the class membersZS. The series of explosions could be heard and felt by the plaintiffs and other classmembers., From the perspective of area residents, the noise, vibrations andfireballs made it appear as though some kind of bomb had gone off or explosionhad taken place26. The explosions and fire caused damage to the surrounding properlies, shatteringwindows and doors and setting buildings on fire.. Noxious fumes, smoke, gasand other chemicals and contaminants, including asbestos were released frornthe facility as a result of the explosion and fire. Waste and debris from theexplosion landed on the properties of the plaintitfs and class members and theresidue of fumes, gas and other chemicals have contaminated the properties of

13Authority conducted a spot inspection of the Facility and determined that theFacility had been carrying out truck-totruck propane transfers The inspectorissued a cease and desist order pursuant to Section 21 of the TechnicalSfandards and Safety Acf that was seryed on the defendant Shay (Sean) Ben-Moshe.3b. In spite of the order, the Sunrise Companies, including 1452049 Ontario lnc.,continued to routinely allow the unsafe practice of truckto{ruck prCIpanetransfers. The Sunrise Companies and their officers and directors failed to takereasonable precautions to ensure truck-to-truck propane transfers were notpermitted at the Facility The continuation of the truck-to-truck propane transfersindicated a lack of commitment on the part of the Sunrise Companies and theirofficers and directors to safety, and a general culture of lack of safety thatpersisted at the Facility. tt also caused an immediate threat to public safety30 A further unsafe practice that routinely occurred at the Facility was the lightingand smoking of cigarettes in close proximity to propane and other inflammablesubstances, by employees of the Sunrise Companies and other peopleaccessing the Property with their permission, The Sunrise Companies and theirofficers and directors failed to take reasonable precautions to ensure the lightingand smoking of cigarettes in close proximity to inflammable substances were notpermitted at the FacilitY,

1437, 1452049 Ontario Inc, failed to ensure that the drivers of the trucks which theyowned did not smoke while on the property. 1452049 is vicariously liable for theacts and omissions of the drivers under the Highway Traffic Acf, s. 207(1), as setout above,38 A regulation to the Technicalsfandards and Safety Acf requires that the operatorof a propane filling facility apply for and receive permission from the Directorbefore expanding or making changes to the operation of the facility. The SunrisePropane facility fell within the definition of "propane filling facilitt''" The officersand directors of the Sunrise Companies directed changes to the Facility withoutapplying for or receiving permission from the Director As a result, thosechanges were not reviewed or inspected by the Ministry to confirm that theycomplied with existing safety standards. The changes did not, in fact, complywith safety standards39, The Sunrise Companies are collectively liable to the plaintiffs and class membersfor acts or omissions attributable to one or more of the three companies because:(a)(b)(c)The acts and omission set out in the claim were done bythe Sunrise Companies in pursuit of their commonenterprise;Sunrise Propane is the directing mind of 1367229 Ontariolnc,, 1186728 Ontario Limited and 1452049 Ontario Inc ;The Sunrise Companies collectively carried out unlawfulactsas described in paragraphs 33-38.

15(d)(e)(f)(g)(h)(i)The Sunrise Companies prepare their financial statementson a consolidated basis;Sunrise Propane controls the day-today operations of1367229 Ontario Inc,, 1186728 Ontario Limited and 1452449Ontario lnc. and operates these companies as alter-egos ofSunrise Propane;The Sunrise Companies have common officers anddirectors:The Sunrise Companies carry on business jointly and areoperated as one economic unit or one economic enterprise;All of the companies held themselves out to the public andoperate under the.name Sunrise Propane;'Each of the Sunrise Companies was the agent of the other;Facts regarding the ownership of the property and relationship between theIeskey Group of companies40, On December 28s, 2007 the properg located at 54 and 62 Murray Road waspurchased by the Teskey Numbered Company, The Teskey Numbered Companywas the owner of that property at the time of the explosions hereinafterdescribed41. The Teskey Numbered Company purchased the property located at 54 and 62Murray Road from the defendant Teskey Construction and then leased thatproperty back to Teskey Construction or Teskey Concrete or both of them whowas the lessee of that property at the time of the explosions TeskeyConstruction purchased that property on March 1tt, 1996 and continued to ownthe property at the time that the Sunrise Companies took possession of that

16property. Teskey Construction leased that property to one or more of the SunriseCompanies tn 1easing the property, Teskey Construction established specificstandards and procedures regarding their supervision and control of that propertywhich remained in place when the Teskey Numbered Company assumed legalownership of that property and were in place at the time of the explosions andfire,42, The transfer of the property to the Teskey Numbered Company did not changewho controlled the property at 54 and 62 Munay Road, as the Teskey NumberedCompany was, in etfect, the alter ego of Teskey Construction or completelydominated by Teskey Construction and as the property was leased back toTeskey Construction or Teskey Concrete or both of themThat propertyremained under the control of Teskey Construction and its officers and directors,or subsidiaries, as described below,43 On July g1th, ZOOT the property located at 48 Munay Road was purchased byHGT, who was the owner of that property at the time of the explosions hereinafterdescribed44. HGT purchased the property located at 48 Murray Road from the defendantTeskey Concrete and then leased that property back to Teskey Concrete orTeskey Construction or both of them who was the lessee of that property at thetime of the explosions Teskey Concrete purchased that property on March 1st,

171gg6 and continued to own the property at the tirne that the Sunrise Companiestook possession of that property Teskey Concrete leased that property to one ormore of the Sunrise Companies ln leasing the property, Teskey Concreteestablished specific standards and procedures regarding their supervision andcontrol of that property which remained in place when the HGT assumed legalownership of that property and were in place at the time of the explosions andfire.45,The transfer of the property to HGT did not change who controlled the property at48 Murray Road, as the HGT was, in effect, the alter ego of Teskey Concrete orcompletely dominated by Teskey Concrete and as the properly was leased backto Teskey Concrete or Teskey Construction or both of them. That propertyremained under the control of Teskey Concrete and its officers and directors, orsubsidiaries, as described below.4G,The Teskey Companies were operated as one economic unit or a single groupenterprise as follows:(a)(b)(c)(d)(e)Each of the four companies is a parent or subsidiary of theothers or is an affiliate of the others;Each of the four companies is the agent of the others;All four companies have the same officers and directors;Allfour companies have common offices and employees;Allfour companies operate underthe same name;

18(f)(g)(h)(i)0)The Teskey Companies hold themselves out to the public asa single company;The residents in the area surrounding the TeskeyCompanies considered the Teskey Companies to own theproperties located at 48 Murray Road, 54 and 62 MurrayRoad and 20 Murray Road and to be in control of allproperties;The Teskey Companies prepare their financial statementson a consolidated basis;The acts and omission set out in the claim were done bythe Teskey Companies in pursuit of their commonenterprise;The Teskey Cornpanies carry on business jointly and areoperated as one economic unit or one economic enterprise.47,. While the Teskey Numbered Company and HGT held title to the Property at thetime of the explosions and fire, all of the Teskey Companies are collectively liableto the plaintiffs because of their operation as one economic unit or a single groupenterprise, Each company is vicariously liable for the acts and omission of theothers,48. Alternatively, Teskey Construction and Teskey Concrete are the controllingshareholders of the Teskey Numbered Company and HGT and should be heldliabte for the acts and omissions of the Teskey Numbered Company and HGTbecause:(a)(b)They exercised complete control over the Teskey NumberedCompany and HGT;The Teskey Numbered Company and HGT had noindependent decision making power and all decisions weremade by Teskey Construction and Teskey Concrete;

19(c)(d)(e)They treated the Teskey Numbered Gompany and HGT likealter egos of Teskey Construction and Teskey Concrete'They operated the Teskey Numbered Company and HGT ina manner that condoned illegal activity at the Property,specifically, the unlawfulactivities pleaded at paragraphs 33-38;They failed to take steps to prevent or conect the illegalactivity at the Property or have the Teskey NurnberedCompany or HGT take appropriate steps, when they knew ofthe illegal activity and had the power to take steps to preventor correct the illegal activity49, The Teskey Companies were at atl material times in control of the Propefty andacted as landlords to the Property where the Sunrise Propane Facility waslocated and leased the Property to one or more of the Sunrise Companies. TheTeskey Cornpanies have their head office located at 2Q Murray Road, in closeproximity to the Facili$, As a result of their role as landlords and as a furtherresult of their close geographic proximity to the Facility, the Teskey Companiesexercised control over the Property and the Facility.Plaintiffs' Individual CitcumstancesJames Durlingb0, James Dufling and his wife, Bice Amoroso, own a house located at 49 MurrayRoad, directly across from the Facility, Mr, Durling was home with his wife at thetime of the explosions and was awoken when his house shook violently. Hewitnessed huge flames in the sky immediately in front of his house.

2A51,Mr. Durling and his wife immediately fled their home, running through brokenglass and other debr,is, They ran several blocks along the street before they sawa police officer who advised them to keep running, They eventually foundsomeone who offered to drive both of them to the hospital,52,The roof of Mn Durling's house collapsed on top of him, causing a deep cut to hishead that required 6 stitches, He also suffered severe respiratory problems dueto the inhalation of smoke and noxious fumes. Mr Durling's wife suffered severebruising on her body as a result of the collapse of their home.and respiratoryproblems,53.Mr Durling's house was severely damaged by the explosion and fire, The roofcollapsed, doors were blown off and windows shattered His house was initiallydeclared condemned by the City of Toronto, though this designation was laterlifted. The house remains entirely uninhabitable and will likely have to be rebuiltDurling and his wife lost all of the contents of their home in the explosion and fire54.As a result of feeling and seeing the explosions and as a result of the physicalinjuries he and his wife suffered, Mr, Durling experienced panic and terror andfeared for his life and the life of his wife He has experienced emotional distress.He has lost time from work and sustained a loss of income.55,As a result of the explosions and fire Durling's property has been severely

21damaged In essence he has lost his house and its entire contents His propertyhas potentially been contaminated by debris, fumes and other chemicals. Hehas suffered a diminution in the resale value of his property as a result of thecontamination and the stigma of being located near the Facility, if the Facility isallowed to continue operating as a facitity for the storage and distribution ofpropane and other gases.56As a consequence of the damage to their hcime, Mr. Durling and his wife left theirhome following the explosion, After fleeing their home Mr. Durling and his wifestayed with relatives who provided them with both accommodation and food. Heconsequently incuned a rnoral obligation to those family members to compensatethem.Jan Anthony Thomas57, Jan Anthony Thomas owns a condominium townhouse located at 55 GeorgeAppleton Way, Unit 1035, where he resides with his fiancde He was home withhis fianc6e at the time of the exptosions and was suddenly awoken when he felthis property shake severely. He and his fiancde were subsequently evacuatedfrom their home.58.As a result of feeling and seeing the explosions Mr. Thomas experienced panicand terror and feared for his life and the life of his fiancde. He has experiencedemotional distress.

2259.As a result of the explosions and fire Mr. Thomas's property has been damagedand potentially contaminated by debris, fumes and other chemicals, He hassuffered a diminution in the resale value of his property as a result of thecontamination and the stigma of being located near the Facility, if the Facility isallowed to continue operating as a facility for the storage and distribution ofpropane and other gases60.As a precauiion, Mr, Thomas and his fiancde left their home following theexplosion After fleeing his home Mr, Thomas and his fiancde stayed withielatives who provided them with both accommodation and food,Heconsequently incurred a moral obligation to those family members io compensatethemJohn Sanforo61, John Santoro is the owner of a house located at 29 Munay Road, acrcss thestreet from the Facility, At the time of the explosion he rented the house to twotenants for approximately $1200/month plus utilities.62.Mr Santoro's house suffered extensive damage in the explosion and fire,including damage to the windows, walls, chimney and tiles. The house requiresextensive repair. Mr. Santoro's tenants were forced to flee the house and couldnot initially return due to the evacuation and damage to the house, One of thetenants has elected not to retum to the house,

2363,As a result of the explosions and fire Mr. Santoro's property has been damagedand potentially contaminated by debris, fumes and other chemicals. He hassuffered a diminution in the resale value of his property as a result of the'contaminationand the stigma of being located near the Facility, if the Facility isallowed to continue operating as a facility for the storage and distribution ofpropane and other gases.64 In addition, Mr, Santoro has lost rental income as one of his tenants chose not toreturn to the house following the explosionGiuseppina Santoro65 Giuseppina Santoro is the mother of John Santoro and co-owns a house locatedat 174 Spalding Road where she resides with her husband. She was home atthe time of the explosion and felt and witnessed the explosions.. Mrs. Santoroand her husband were subsequently evacuated from their home66,As a result of feeling and seeing the explosions Mrs. Santoro experienced panicand terror and feared for her life and the life of her husband. She hasexperienced emotional distress67,As a result of the explosions and fire Mrs, Santoro's house suffered extensivedamage, At the time of pleading the house remains uninhabitable, Mrs.Santoro's property has been damaged and potentially contaminated by debris,

24fumes and other chemicals, She has suffered a diminution in the resale value ofher property as a result of the contamination and the stigma of being locatednear the Facility, if the facility is allowed to continue operating as a Facility for thestorage and distribution of propane and other gases,,68As a consequence of the damage to their home, Mrs, Santoro and her husbandleft their home following the explosion, After fleeing their home Mrs, Santoro andher husband stayed with their daughter and son in law who provided them withboth accommodation and food. She consequently incurred a moral obligation tothose friends to compensate them,Francesco Manco, Anna Manco and Cesare MancoOYFrancesco and Anna Manco owil a house located at 149 Plewes Road wherethey reside with their three children, Cesare, Christina and Bianca, The familywas home at the time of the explosions and awoke to hear a loud bang and feeltheir house shaking. The front and back doors of the house flew open andcracks appeared in the ceiling.. The family fled the house in their sleepwear withno shoes.70.While fleeing, Francesco, Anna and Cesare Manco witnessed large fireballs inthe sky. As a result of feeling and seeing the explosions Francesco, Anna andCesare e4perienced panic and terror and feared for their lives and the lives oftheirfamily members,.

2571Anna Manco had severe difficulties breathing following the explosion and wastaken to the emergency room as she feared that she was having a heart attack.She experienced emotional distress as a result of her illness and as a result ofwitnessing the explosions72,.Francesco and Cesare have experienced emotional distress as a result of theillness of Anna and as a result of the explosions and the impact on their family.73,Cesare Manco is employed as a plumber and his truck containing all of hisequipment was parked at his home at the time of the explosions. He was unableto work for several days following the explosion as he was not permitted torecover his truck and equiPment.74.As a result of the explosions and fire the Manco family's house sufferedextensive damage and remained uninhabitable for several weeks. At the time ofthe explosions the Mancos were cornpleting a major renovation of their home.The Manco's property has been damaged and potentially contaminated bydebris, fumes and other chemicals. They have suffered a diminution in theresale value of their propefty as a result of the contamination and the stigma ofbeing located near the Facitity, if the facility is allowed to continue operating as aFacility for the storage and distribution of propane and other gases,

2675,As a consequence of the damage to their home, FrancescO, Anna and CesareManco left their home following the explosion, After fleeing their home theystayed at a hotel for several weeks Francesco, Anna and Cesare incurredexpenses for lodging and food as a result of being unable to retum to their homeWhile the Manco family has now retumed to their home, the house requiresfurther repairs and it is likely that the family will be unable to reside in the housewhile the repairs are being completed, Francesco, Anna and Cesare willtherefore incur further expenses for food and lodging,CAUSES OF ACTIONA. Strict LiabilitY76 The propane and other industrial gases distributed by the Sunrise Companiesthrough the Facility are highly dangerous. Under the common law of Ontario, thestorage and distribution of such large quantities of propane and othercombustible and inflammable gases constitutes a non-natural use of the FacilityThe Sunrise Companies are therefore strictly liable for damage caused by theescape of ProPane and other gases,77,On the morning of August 10m, 2008, the Sunrise Companies failed to preventthe escape of a large quantity of propane from the Facility, The escape of thepropane caused a series of explosions and a fire which caused personal injury toclass members and damage to class members' property, and resulted in an

27evacuation of the surrounding area* The Sunrise Companies are iherefore liablefor all damages flowing from the escape of propane from the FacilityB.7BNuisanceThe escape of propane and the explosions and fire from the Facility substantiallyand unreasonably interfered with the plaintiffs' and class members' use andenjoyment of their lands and properties, Atternatively, the escape ofcontaminants and subsequent contamination of the plaintiffs' and other classmembers' properties substantially and unreasonably interfered with the plaintiffs'and class members' use and enjoyment of their lands and properties- TheSunrise Companies are therefore tiable to the plaintiffs and other class mernbersin nuisance They are strictly liable for the nuisance79,,The Sunrise Companies are liable in nuisance as operators of the Facility fromwhich the nuisance emanated, As operators of the Facility, they havemanagement or control of the Facility80,,The Teskey Companies are also liable because they owned the Property andleased the Property to Teskey Construction and Teskey Concrete, who in tumsublease the Property to one or more of the Sunrise Companies. As landlords,the Teskey Companies exercised control over the Property, through the terms ofthe sublease and the operation of the Commercial Tenancies Acf, R.S.O', 1990c.L-7 Furthermore, the Teskey Companies are liable because the nuisance

28arose from a use of the Property that is contemplated by the lease with one ormore of the Sunrise Companies, that is, the operation of a propane storage andd istribution facility.BlBy virtue of their operation as one economic unit or, altematively, by virtue of thecomplete control exercised by Teskey Construction and Teskey Concrete overthe Teskey Numbered Company and HGT, all of the Teskey Companies hadcontrot over the Propefi and all four companies are therefore liable to theplaintiffs and other class members in nuisance82.The escape of propane and other contaminants and the explosions and fireconstitute a public nuisance causing harm to the environment under theEnvironmental Bitlof Rlghfs, S.O. 1993, C..28. The plaintiffs plead and relyonSection 103 of that statute which permits any person who suffered personal iniuryor direct economic loss as a result of a public nuisance causing harm to theenvironment to bring an action in respect of such losses,83,The plaintiffs and other class members suffered damages as a result of thenuisance including physical injury, psychiatric injury, emotional distress, damageto their properties and alternatively contamination of their properties, and damageto or loss of their chaftels These damages were a reasonably foreseeable resultof the nuisance for which the defendants the Sunrise Companies and the TeskeyCompanies are liable

29c.84,TrespassThe Sunrise Companies are liable in trespass to the plaintiffs and other classmembers, in that they have discharged or have caused the discharge ofcontaminants onto lands owned and occupied by the plaintiffs and other classmembers Specifically, the escape of propane, explosions and fire caused therelease of propane, noxious fumes, debris and other contaminants onto the landsowned and occupied by the plaintiffs and other class members..g5The discharge of the contaminants onto the lands owned and occupied by theplaintiffs and other class members caused damage to these lands and directlyinterfered with the use and enjoyment of the lands.D.86NegligenceAll defendants are liable to the plaintiffs and other class members in negligence,Neg I igence of the.9unrise CompaniesBT.. The Sunrise Companies, as operators of a facility that stores and distributeslarge quantities of propane and other industrial gases, owed a duty of care to theplaintiffs and other class members to carefully monitor the facility and protectagainst explosions and fire caused by the escape or mishandling of propane orother combustible gases.

3088.The circumstances of the Sunrise Companies being in the business of storingand supplying large quantities of propane and other industrial gases at a facilitylocated in close proximity to a residential neighbourhood are such that theSunrise Companies were under an obligation to be mindful of ihe safety of theplaintiffs and other class members when storing, distributing and supplyingpropane and other industrial gases This is especially true since the SunriseCompanies knew that if any of the propane or gases escaped, causing anexplosion and/or a fire, it was likely to cause damage to the class members'property and personal injury to the class members, including both physical injuryand psychological trauma89There was a sufficient degree of proximity between the plaintiffs and other classmembers and the Sunrise Companies to establish a duty of care because:(a)(b)(c)It was reasonable for the plaintiffs and other class membersto expect that the Sunrise Companies had implementedadequate safeguads to ensure that the storage, supply anddistribution of propane and other gases from the Facility wassafe;The nature of the Sunrise Companies' business, storing,supplying and distributing propane and other gases, had adirect causal connection to the explosions and fire thatcaused the plaintiffs and other class members to sufferdamages;The plaintiffs and other class members were vulnerable toany failure on the part of the Sunrise Companies to ensurethe safety of the Facility, as they had no way of ensuflngsufficient safety measures were taken, and no way ofprotecting themselves if sutficient measures were not taken.

31The Sunrise Companies breached their duty of care to the plaintiffs and to theclass members, as particularized below:(a)(b)(c)(d)(e)(f)(g)(h)(i)oThey breached the stop order issued by the TechnicalStandards and Safety Authority that they cease and desisttruck-totruck propane transfers;They routinely allowed the unsafe practice of transferringpropane from truck to truck, causing an immediate threat topublic safety;They breached the order of the Technical Standards andSafety Authority that they post adequate signage indicatingthat smoking was prohibited on the Property:They failed to prevent employees and other peopleaccessing the Property from smoking on the Property and inclose proximity to inflammable material;They breached Ontario Regulation 211101 to the TechnicalSfandards and Safety Acf, requiring that they apply for andreceive permission from the Director before expanding orchanging ihe operation of the Facility;They expanded or changed the Facility in a manner thatmade the operation of the facility unsafe;They failed to provide adequat equipment or procedures forthe construction and continued operation of the Facility;They failed to provide adequate safety equipment orprocedures to prevent the escape of propane or other gasesfrom the Facility;They failed to provide adequate equipment or procedures todetect the escape of propane or other gases from theFacility;They failed to provide necessary facilities, equipment orprocedures to ensure that any escape of propane or othergasses from the Facility would be contained so as not toiffect the surrounding properties, including the propefty ofthe class members;

32(k)They failed to provide necessary facilities, equipment orprocedures to ensure that any explosion or fire at the Facilitywas contained and did not cause damage to the sunoundingproperties, including the properties of the class members;(l) They failed to ensure that an adequate number ofthose emptoyees who did operate the Facility were properlyqualified, properly trained and properly superuised;(m)(n)(o)(p)(q)(r)(s)(t)They failed to ensure that customers accessing the Facilityfor the supply of propane and other gases were properlysupervised;They failed to operate the Facility in reasonably safe andprudent mannenThey failed to monitor or inspect the Facility in a reasonablysafe and prudent mannefiThey failed to comply with Section 14 of the EnvironmentalProtection Act, RS.O 1990 c.E-'19 by discharging orpermitting the discharge of contaminants into the naturalenvironment, causing an adverse affect,They failed to comply with Section 13 of O Reg' 214rc1,regulation to the Technicalsfandards and Safety Act 2040,S.O 2000 c,16, as they failed to ensure the safe operatingcondition of equipment used in the handling of a compressedgas, specifi cally proPane;They perpetuated a culture of lack of safety at the Facility;They failed to respond in an adequate and timely manner tothe explosions and fire.They breached the Occupier's Liability Act, R.S.O. 1990'c.,O-Z as pa rticu I anzed below,91. The Sunrise Companies are also occupiers within the meaning of the OccupiefsLiabiility Acf, R S.O. 1990, c. A-2, and owe a duty of care to the plaintiffs and

33other class members as neighbours of the Property to ensure that they do nbtsuffer damages as a result of the condition or activities carried on at the Propefi92,,The Sunrise Companies breached their duty of care to the plaintiffs and otherclass members by failing to take steps to ensure that the business of storing andsupplying propane and other industrial gases was operated in a reasonable andprudent manner.93,The Sunrise Companies also breached their duty of care to the plaintiffs andother class members by failing to maintain the Property as reasonably safe,contrary to the Occupier's Liability Act.Negligence of the Sunrse Officers and Directors94., Valery Belahov, Shay Ben-Moshe, Leonid Belahov and Arie Belahov (hereinafter'the Officers and Directors"), as officers and directors of the Sunrise Companies,owed a duty of care to the plaintiffs and other class members to ensure that theFacility was operated in a safe and prudent manner so as to protect againstexplosions and fire caused by the escape or rnishandling of propane or othercombustible gases.95,,There is sufficient proximity between the Sunrise Officers and Directors and theplaintiffs and other class members to establish a duty of care because:

34(a)(b)(c)It was reasonable for the plaintiffs and other class membersto expect that the Sunrise Officers and Directors hadimplemented adequate safeguards to ensure that thestorage, supply and distribution of propane and other gasesfrom the Facility was safe;The Sunrise Officers and Directors had a duty to ensure thatthe sunrise companies complied with all relevant provincialstandards relevant to the storage and distribution ofpropane, including the Environmental Protection Acf and theTechnica! Standards and Safefy Act and relevantregulations;The plaintffis and other class members were vulnerable toany failure on the part of the Sunrise Companies to ensurethe safety of the Facility, as they had no way of ensuringsufficient safety measures were taken, and no way ofprotecting themselves if sufficient measures were not taken96" The Officers and Directors failed in their duty as set out below:(a)(b)(c)(d)They failed to prevent employees and other personsauthorized to enter the site from engaging in truck-to-trucktransfers of propane, contrary to Ontario Regulaiion 211101to the TechnicalSfandards and Safety Act:They condoned and/or authorized employees to participatein repeated breaches of the order of the Technical Standardsand Safety Authority by failing to take precautions to ensuretruck-to-truck transfers of pnrpane were not permitted at theFacility;They failed to prevent employees and other personsauthorized to enter the site from lighting and smokingcigarettes while on the site, in close proximity to inflammablematerials, when they knew or ought to have known that thiswas routinely happening at the site;They arranged for the Facility to be significantly expandedwithout applying for authorization or 'approval from theTechnical Standards and Safety Authority, contrary toRegufation 211101, and knew that such changes did notcomply with statutory safety slandards for the storage anddistribution of propane;

35(e)(0(g)They knew the Facility was being operated in an unsafemanner, contrary to law, and took no steps to correct thesituation;They created and/or perpetuated a culture of lack of safetyat the Facility;They failed to respond in an adequate or timely manner tothe explosions and fire.97,The officers and directors also breached their duty under lhe Ontado BusinessCorporations ActRS,O 1990 cB-16, Section 134, to act honestly and in goodfaith and to exercise the care, diligence and skill of a reasonably prudent person.Particulars are described above in paragraph 60'Negligence of the Teskey CompanlesgB,The Teskey Companies, as owner$ and tenants of the Property where theFacility is located, owed a duty of care to the plaintiffs and other class membersto ensure that the business located on the Property was operated in areasonable, safe and prudent manner.99 There is a sufficient degree of proximity between the Teskey Companies and theplaintiffs and other class members to establish a duty of care because:(a)The Teskey Companies were at all material times theowners and tenants of properties zoned industrialocated inclose proximity to a residential neighbourhood, and the classmembers were owners and occupiers of the sunoundingproperties;

36(b)(c)(d)(e)(f)The circumstances of the Sunrise Companies being in thebusiness of storing and supplying large quantities of propaneand other industrial gases at a Facility located in closeproximity to a residential neighbourhood are such that theTeskey bompanies were under an obligation to be mindful ofthe safety of the plaintiffs and other class members whenexercising corrtrol over the Property as outlined below Thisis especiilly true since the Teskey Companies knew that ifany of the propane or gases escaped, causing an explosionand/or a fire, it was likely to cause damage to the classmembers' property and personal injury to the classmembers, including both physical injury and psychologicaltrauma;The Teskey Companies exercised cbntrol over the SunriseCompanies by virtue of their ownership and tenancy of theProperty and powers as landlords under the sublease withone or more of the Sunrise Companies and under theCommercial Tenancies ActThe Teskey Companies all exercised control over theProperty by virtue of the operation of the Teskey Companiesas one economic unit;It was reasonable for the plaintiffs and other class membercio expeci the Teskey Companies to use their ccntrol tcimplement adequate safeguards and monitoring proceduresto ensure ihat the Facility was being operated in a safemanner;The plaintiffs and other class members were vulnerable toany failure on the part of the Teskey Companies to ensurethe safety of the Facility, as they had no way of ensuringsufficient safety measure$. were taken, and no way ofprotecting themselves if sufficient measures were not taken100, The Teskey Companies are also occupiers within the meaning of the Occupier'sLiabitity Aci R,S.O, and owe a duty of care to the plaintiffs and other classmembers as neighbours of the Property to ensure that they do not sufferdamages as a result of the condition or activities carried on at the Property,

37101, The Teskey Companies breached their duty of care to the plaintiffs and otherclass members by failing to take steps to ensure that the Sunrise Companiesoperated the business of storing and supplying propane and other industrialgases in a reasonable and prudent manner.102., The Teskey Companies, with their office in close proximity to the Facility and byvirtue of their position as tenants of the Property, were aware or ought to havebeen aware that the Facility was being operated in a manner unsafe and contraryto the law, as described in paragraph 57,, The Teskey Companies breached theirduty of care to the plaintiffs and other class members by failing to take any stepsto remedy this situation through the exercise of their rights as landlords under thelease and under the Commercial Tenancies Act'103. The Teskey Companies also breached their duty of care to the plaintiffs andother class members by failing to maintain the Property as reasonably safe,contrary to the Occupiefs Liability Act,The Negligence of all defendants caused or contributed to the plaintiffs'losses104.. The negligence of the defendants outlined above caused or contributed to theescape of propane and/or other contaminants from the Facility, resulting in aseries of explosions and a fire which caused personal injury to the plaintiffs andother ctass members, damage to the plaintiffs' and other class members'

38property, and required the plaintiffs and other class members to evacuate theirproperties105, lt was reasonably foreseeable that the plaintitfs and other class members wouldsuffer personal injuries as a result of the explosion or escape of propane and,altematively, the escape of other contaminants from the facility, includingemotional and psychological trauma and mental distress, The plaintiffs whoresided near the Facility and other class members were awoken in the middle ofthe night, felt their homes being shaken, heard and felt a series of largeexplosions, saw several fireballs in the sky near their homes, and wereevacuated from their homes, These events reasonably caused them toexperience personal injury and to be in fear for their lives and the lives of theirfamilies106 lt was atso reasonably foreseeable that the plaintiffs' and other class members'property and contents would sustain property damage, and alternatively could becontaminated by the escape of propane and other contaminants from the facility'It was reasonably foreseeable that, as a re$ult of the explosions and fear offurther explosions, and alternatively as a result of the escape of contaminants,the plaintiffs and other class members would be displaced from their homes andbusinesses for a period of time, causing them to incur a variety of expenses,including expenses for shelter, transportation, meals and other necesslties, andreplacernent of inventory lt was also reasonably foreseeable that, as a result of

39this displacement and property damage, class members would suffer lossesincluding the loss of personal and business income107,, The plaintiffs plead and rely on the Negligence Acf, R..S,O 1990, c.N-1, asamendedREMEDIES10S, The plaintiffs and class members have suffered damages as a result of theescape of propane and other contaminants from the Facility and the explosionsand fire at the FacilitY,A. Non-Pecuniary General Damages109. The plaintiffs and other class members experienced physical injuries as a resultof the explosions and fire, including the inhalation of noxious fumes and directphysical injury resulting from the explosion.110, The plaintiffs who were on their properlies at the time of the explosion and otherclass members suffered psychiatric injuries as a consequence of witnessing theexplosion and fire and reasonably fearing for their lives and safety and the livesand safety of their families

40111 The plaintiffs and other class members suffered psychiatric injury as aconsequence of suffering physical injuries, including the inhalation of noxiousfumes and as a consequence of suffering property damage112. The plaintiffs and other class members will continue to suffer psychological injuryand emotional upset flowing from the explosion and fire for the foreseeablefuture113, The plaintiffs and other class members also suffered inconvenience andemotional distress as a result of being evacuated from their homes'B. Pecuniary Damages114, The expiosions and fire resuitecin damage to the properties owned andoccupied by the plaintiffs and other class members There has been damage tothe properties as a consequence of the explosions and fire, including damage tobuildings and damage to and loss of contents,11b. As a further consequence of the explosions and fire, the properties of theplaintiffs and other class members have likely been contaminated by debris,noxious fumes, and other chemicals released by the Facility. The plaintiffs andother class members will have to incur the costs of testing their property forcontamination and the cost of the remediation of the property if contaminated.

41116, The plaintiffs and otherclass members have suffered a diminution inthe resalevalue of their properties as a result of the proximity to the Facility and the stigmaof being located close to the Facilily, if the Facility is allowed to continueoperating as a facility that stores and distributes propane, The plaintiffs andother class members have also suffered a diminution in the resale value of theirproperties as a result of the risk of contamination from the explosions and fire.117,, Class members who own or occupy property that may be contaminated may, asa precaution, not return to the property until the lack of contamination isconfirmed, or the property is remediated. Others have been unable to return totheir properties as a result of damage to their properties. As a result, those classmembers witl incur the cost of retocation and alternative accommodation until it isdeterrnined that it is safe to return to their properties118, The plaintiffs and other class members were, as a precaution, evacuated fromtheir properties following the explosions. The plaintiffs and other class membersstayed away from their properties because of a fear of further explosions and, inthe altemative, fear of contamination. The plaintiffs and other class mernbershave incuned a moral obligation to compensate friends and family members whoprovided them with food and shelter, or have incurred the expense of food andalternative shelter. The plaintiffs and other class members incurred the cost oftransportation in conjunction with the evacuation, Class members also incurred

42the cost of personal care items and clothing which had to be purchased after theyfled their homes in the middle of the night,11g. The plaintiff Cesare Manco and other class members lost income as a result ofbeing unable to retum to work following the explosion, due to an inability toaccess their property. Other class members also lost personal income as aresult of being unable to go to work following the explosions, due to personalinjuries and the inability to access clothing and other necessary supplies at theirhomes120,, The plaintitf Mr. $antoro and other class members who orrrrn rent'al propertieshave lost rental income as a result of tenants being unable or unwilling to retumto the propeilies following the explosion,Punitive Damages121 The plaintiffs plead that the actions of all defendants in the ownership,occupation, use and control of the Property and the Facility and in the use,handling and storage of propane at the Facility, acted in a manner that was highhanded,outrageous, reckless, wanton, entirely without care, deliberate, callous,disgraceful, willful, in intentional disregard of the plaintiffs property rights and theproperty rights of the other members of the Class, in intentional disregard for thesafety of the plaintiffs and other class members, indifferento the consequencesand motivated by economiconsiderations'

43121 Because of the conduct of the defendants outlined above, this is an appropriatecase for an award of punitive damagesVenue129. The plaintiffs requesthat this action be tried in the City of Toronto.septembe r)b, zooeHaruin D. Pitch (L.S.U.C.# 12101P)Counsel to Stevensons LLPColin P. Stevenson (L.S.U.C.# 282604)Stevensons LLP400-144 Front Street WestToronto, ON MsJ 2L7Tele: (416)599-7900Fax: (416)599-7910(firm designated for service)Harvey T,, Strosberg, Q.C. (L.S.U"C'# 126400)Sutts, Stlosberg LLP600-251 Goyeau StreetWindsor, ON NgA 6V4Tefe: (519)561-6229Fax: 1 (866) 316-5311Theodore P. Gharney (L.S.U.G.# 26853E)Rachel Hepburn Graig (L.S.U.C.# 48034N)Falconet CharneY LLPBarristers at LawI Prince Arthur AvenueToronto. ON MsR 1AgTele: (416) 964-3408Fax: (416) 929-8179Richard M. Bogoroch (L.S.U. C.# 22g73HlBogoroch & AssociatesSun Life Financial Tower1707- 150 King Street WestToronto, ON MSH 1JgTele: (416) 341-5600Fax: (416)' 599-1800

44Henry Juroviesky (L.S.U.C.# 532335)Eliezer KarP (L.S.U.C.# 54317P)JurovieskY & Ricci LLP904-4950 Yonge StreetToronto, ON M2N 6K1Tele: (416) 481'0718Fax: (416) 481-1792Glyn Hotz (L.S.U.C.# 40878M)Hotz Lawyers602-40 Sheppard Avenue WestToronto, ON M2N 6KgTele: (416) 590-7823Fax: (416) 754-9962Todd J. McGarthy (L.S.U.G.# 29984F)Flaherty Dow Elliot & McCarthY250142A Adelaide Street WestToronto, ON M5H 1T1Tele: (416) 368-0231Fax: (416) 368-9229Solicitors for the Plaintiffs

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