On October 7, 2025, the Justice Schabas of the Ontario Superior Court of Justice released the long-awaited decision in Avedian et al v Enbridge Gas Distribution Inc., a case that spanned nearly 13 years and arose from a 2010 explosion in the laundry room of a high-rise apartment building.
Although liability for the explosion had been admitted, the matter proceeded to trial on the sole issue of damages, with the Plaintiffs seeking over $16 million in alleged economic loss. After a four-week trial, Justice Schabas dismissed the action in its entirety, finding that the Plaintiffs failed to prove their losses were caused by the explosion.
At trial, Christopher Morrison and Margaret Klassen were counsel for the fourth parties, working alongside a coordinated defence team that included James Norton for the defendants and Kirk Boggs and Michael Dunk for the third parties. This result is a reflection of the incredible teamwork and collaboration among counsel throughout the case and at trial.
On September 14, 2010, a gas explosion occurred in the laundry room of an apartment building at 399 Markham Road in Scarborough only a few weeks after it was acquired by 1815212 Ontario Inc. (1815). The individual plaintiffs were the sole shareholders of 1815 through their respective personal holding companies.
The fire was quickly extinguished, with damages largely confined to the laundry room and adjacent areas. Repairs were completed within 10 months and paid for by insurance, which also compensated 1815 for business interruption and lost income.
Despite this, the plaintiffs claimed that the explosion created a stigma that followed the building for years, with people in the community referring to it as “the building that blew up”. They alleged that this led to substantial economic losses, including:
In 2015, the plaintiffs sold the building for $33.5 million, nearly double their purchase price five years earlier. As part of the transaction, 1815 assigned its right to sue to its former shareholders, who then continued the lawsuit as plaintiffs.
As Justice Pepall of the Court of Appeal succinctly put it – this case has an “extensive and tortuous history, with multiple interlocutory motions and three separate trips to the Court of Appeal.
In 2022, D. Wilson J., as she then was, denied the plaintiffs’ motion to amend their claim to assert personal shareholder losses and to increase damages from $7.5 million to $57.5 million, with reasons set out in Avedian v. Enbridge Gas Distribution Inc., 2022 ONSC 3343. Wilson J. emphasized the inexcusable delay and prejudice to the defending parties, noting that the plaintiffs were not examined on the individual claims during discoveries in 2017 as the purchase agreement was not disclosed until 2019. The Court of Appeal upheld this decision in Avedian v. Enbridge Gas Distribution Inc., 2023 ONCA 289.
Seemingly undeterred, the plaintiffs later served an expert report advancing a new “reinvestment theory” that but for the explosion, they would have used the building’s equity to purchase an additional building, resulting in a loss of around $60 million. The defending parties brought a motion for directions before Wilson J., which was heard alongside two other motions brought by the plaintiffs, one to strike the defending parties pleadings and another to disqualify Wilson J. for bias.
The plaintiffs’ motions were dismissed for being devoid of merit. On the motion for directions, Justice Wilson held that the “reinvestment theory” could not be pursued at trial, emphasizing trial fairness and prejudice to the defending parties as the limitation period for asserting new claims had long passed (2024 ONSC 2376, leave to appeal denied).
Despite having legal counsel since the outset, the plaintiffs failed to preserve or produce key documents to support their claims, and documents that were produced late or that the defending parties obtained, undermined the plaintiffs’ claims and were inconsistent with any connection to the explosion.
The most striking example relates to the plaintiffs’ claim that the explosion caused damage to the elevators. Other claims hinged on this issue such as tenants leaving due to the lack of elevators. However, the plaintiffs did not produce one single document relating to the elevators – not one single report, letter, email, photograph, handwritten note, invoice, or any document of any kind that stated, suggested, or inferred that the elevators were damaged by the explosion, or that mentioned them at all.
That is, until one week prior to trial when the plaintiffs finally produced the elevator modernization contract after the defending parties saw a reference to the contract in one of the plaintiffs’’ experts reports prepared in 2018. Unsurprisingly, and as discussed in the credibility section below, the contract entirely contradicted the plaintiffs’ assertions at trial.
Of equal concern to Justice Schabas was that when the plaintiffs did produce records, they produced the records selectively or produced only portions. For example, the plaintiffs only produced the first page of their insurance renewal documents, showing an increase in premium but not a breakdown of coverage. When confronted with the full policies during cross-examination by Chris Morrison, the plaintiff, Bedros Avedian, acknowledged that the replacement cost of the building increased from $21.2 million in 2010 to $55.6 million the following year as a result of an appraisal required following acquisition.
Justice Schabas ultimately held that the plaintiffs’ failure to gather and present evidence supporting their assertions led to the inference that there was no such evidence.
Justice Schabas devoted extensive portions of his reasons to credibility, concluding that much of the plaintiffs’ evidence was neither reliable nor credible.
The plaintiffs’ case rested largely on the testimony of the plaintiff, Bedros Avedian, the principal of Orion Group, which managed the building. Over the course of nearly three days of cross-examination, Chris Morrison meticulously went through each of Avedian’s assertions, exposing where they lacked any evidentiary foundation (which was many), highlighting selective disclosure, and contradictions in his testimony. This proved successful as it revealed Avedian’s testimony to be “largely self-serving and unreliable” and “evasive or non-responsive” when confronted with contradictory evidence.
The clearest example brings us back to the elevator modernization contract. Avedian asserted that although they planned to modernize the elevators upon acquisition, the work was to be deferred for three years, but due to alleged damage from the explosion, it had to be advanced as soon as possible. He also claimed that the lack of working elevators contributed to tenant discontent and consequently, an increase in vacancies and the inability to charge for parking and storage or otherwise increase the rent.
The contract, however, signed one week before the fire, expressly contemplated the modernization work was to be performed in January 2011, not three years later, and the schedule was altered by only one month following the explosion. He was unable to explain why the contract was produced to an expert several years ago but not to the defence. Justice Schabas described Avedian’s evidence as “demonstrably false”, having “concealed [the contract] until they could not avoid it, just prior to trial. If there had been any damage to the elevators it would have been documented, and evidence would have been called to describe it.”
Ultimately, Justice Schabas found Avedian’s testimony to be based primarily on hearsay and consisted of assertions that were “either unsupported or contradicted by contemporaneous documents”.
The Plaintiffs called other fact witnesses, but their evidence was subject to similar issues:
Ultimately, much of the plaintiffs’ case rested on assertion rather than proof. But as Schabas J. stated, “Saying it is so does not make it so”.
A major point of contention at trial was the date when any diminution in value of the building should be determined. The plaintiffs argued that the period should run until 1815 was sold to Golden Equity in 2015 as the impact of the fire continued to that date, such that it would have been worth much more than the purchase price had the explosion not occurred. Schabas J. found this position to be flawed, factually and legally. Factual issues included.
On the law, that the plaintiffs were continuing to pursue individual claims that were barred by Wilson J. and affirmed by the Court of Appeal. By seeking to fix damages in 2015, the plaintiffs sought their own loss of the value of the investment, rather than a loss to 1815, which continues to own the building. This conflicts with the longstanding rule in Foss v Harbottle that “individual shareholders have no cause of action in law for any wrongs done to the corporation”.
Justice Schabas accepted the defending parties’ expert evidence and fixed the valuation date as April 12, 2011, with the diminution of value attributable to the damage caused by the explosion as $100,000.
The plaintiffs other claims involved consequential economic losses, arguing that they would have earned more income and had a more valuable assert if not for the explosion. Schabas J. stated that the law instructions the court to find a “substantial connection” between the wrong and the injury, and that the injury was, objectively reasonably foreseeable to a reasonable person in the position of the defendants. (Mustapha v Culligan).
Justice Schabas held that the plaintiffs failed this test on each hypothetical loss claim:
With regard to actual economic loss, Justice Schabas accepted the evidence of the defending parties’ expert that the plaintiffs’ economic losses attributable to the explosion up to April 2011 were $56,631.
In the end, the plaintiffs damages from the explosion totalled $156,631. However, as they received $162,457 from insurance for economic losses, Justice Schabas deducted this amount, concluding that the plaintiffs were not entitled to any damages. He held that the private insurance exception – where benefits received by a plaintiff through private insurance are not deductible – was not applicable. The existence of the subrogated claim in this case negated the private insurance exception. In addition, allowing the deduction would be contrary to the policy rationale behind the exception which is that it is unfair to let a wrongdoer benefit from an insured’s forethought. Here, the defending parties already paid $162,457 for their wrongdoing – “they do not benefit by avoiding liability as they have already paid damages, which they should not have to do again.”
Justice Schabas’ decision offers valuable reminders for trial counsel:
We are proud to have been a part of the defence team that secured this outcome. The decision is a testament to the exceptional advocacy of each counsel in dismantling the plaintiffs’ case and to our clients’ remarkable resolve. Despite the plaintiffs’ “kitchen sink” approach, advancing speculative claims and theories and withholding key documents, our clients refused to yield to pressure or settle, even in the face of a protracted four-week damages trial.
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