On January 26, 2016,
Siskinds LLP filed an
Application for Leave to Appeal on behalf of John Thordarson
and Thorco Contracting Limited ("Applicants"), seeking
leave to appeal the Ontario Court of Appeal's decision. The
court awarded Midwest Properties Ltd. judgment against the
Applicants, jointly and severally, for $1,328,000 in damages under
s.99 of the Environmental Protection Act. The
Court also awarded punitive damages, following a finding that the
Applicants had been liable to Midwest Properties Ltd. in both
nuisance and negligence.
Midwest discovered after it purchased the property that it was
contaminated and sued its neighbour Thorco and John Thordarson,
Thorco's principal, on three bases: (1) a breach of s.99(2) of
the Environmental Protection Act ("EPA"); (2) nuisance,
and (3) negligence.
At trial, Midwest lost on all claims, primarily, but not
exclusively, on the basis that Midwest had suffered no damages. The
trial judge also concluded that because the Ministry of the
Environment had ordered the respondents to remediate the Midwest
property, it could not also recover under s.99 of the EPA, so as to
avoid "double recovery".
The Court of Appeal's decision, in reversing the trial
decision, is significant in its implication for contaminated land
law suits. The Applicants submitted the following in the leave
application for the court's consideration:
This case raises a pressing and
increasingly common concern for property owners across Canada. To
what extent is a property owner liable to its neighbours for the
alleged migration of historical contamination?
The decision of the Court of Appeal
for Ontario ("Court of Appeal") has distorted important
common law principles applicable to contaminated land disputes. It
has also created liability for owners of property with historical
contamination under section 99 of the Environmental Protection
Act ("EPA") beyond what the statute itself
contemplates and where none previously existed.
Without the intervention of this
Honourable Court, the application of the Court of Appeal's
decision would result in indeterminate liability and uncertainty
for owners of property with historical contamination. The
implications of this decision are far-reaching and include:
A property owner is now liable
pursuant to section 99 of the EPA for historical contamination
where there has been no identifiable spill of pollutants, contrary
to a plain reading and existing judicial interpretation of this
The ancient doctrine of caveat
emptor has been overturned, such that the purchaser of a
property can hold neighbouring property owners and vendors of
contaminated property liable even where the purchaser knew, or
ought to have known, of the contamination at the time of
An owner of a contaminated property
is required to pay twice for the remediation of the same historical
contamination: civilly, through payment of damages for restoration
costs, and statutorily, through an administrative order for those
same restoration costs; and
Damages awarded against a property
owner for contaminating a neighbouring property will be calculated
based on the cost of restoring that property as opposed to on the
diminution in its value. This is so even absent proof of diminution
in the value of the property and irrespective of whether there has
been any attempt to mitigate damages.
The respondent and Ministry of the Environment and Climate
Change, which participated as an intervener, have 30 days following
the filing of an application for leave to appeal to respond.
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