Canada: Does Midwest Properties Ltd. v. Thordarson Mean An Expansion In Environmental Liability?

The Supreme Court of Canada recently denied leave to appeal the decision of the Ontario Court of Appeal in Midwest Properties Ltd. v. Thordarson.1 Accordingly, the Court of Appeal's decision to award compensation under section 99 of the Ontario Environmental Protection Act ("EPA") stands. As a result, remediation costs which exceeded $1 million and the reduction in property value was determined to be the appropriate compensation in the circumstances.

Historically, there has been debate among the courts about whether diminution of property or remediation costs are the proper method for awarding damages. Given the outcome in Thordarson, the strategy for dealing with such claims will change. Environmental claims regarding contaminated property will now effectively always include a claim under s. 99, in addition to the traditional claims under negligence, nuisance, trespass and Rylands v. Fletcher.2 Further, the strategy for responding to such claims will also change.


The defendants, John Thordarson and his company, Thorco Contracting, inappropriately stored waste petroleum hydrocarbons ("PHC"), which contaminated the soil and groundwater on their property. For many years, the defendants were almost constantly in breach of their approvals and compliance orders issued by the Ministry of the Environment and Climate Change. Groundwater migrated from the defendants' land onto adjoining property belonging to the plaintiff, Midwest Properties, and contaminated it with significant concentrations of PHC. Midwest launched a claim against Thorco Contracting and Mr. Thordarson based on three causes of action: (1) s. 99 of the EPA; (2) nuisance; and (3) negligence. The plaintiff was successful on all three actions at the Ontario Court of Appeal and was awarded full remediation costs, in addition to punitive damages for the defendants' egregious behaviour.

Remediation Cost or Diminution of Value?

In the Court of Appeal decision, Justice Hourigan discussed the debate between awarding damages based on restoration costs versus diminution in property value. At paragraph 70 the court concluded:

"... restricting damages to the diminution in the value of property is contrary to the wording of the EPA, the trend in the common law to award restorative damages, the polluter pays principle, and the whole purpose of the enactment of Part X of the EPA."3

This decision affirms the purpose of s. 99, which is to provide a flexible statutory cause of action that superimposes liability over the common law.4 Justice Hourigan further notes that restoration costs may exceed the value of the property and, therefore, an award based on diminution in value may not be sufficient to fund the cleanup. As such, diminution in property value is no longer a cap on a claim of this nature. Further, as explained below, it is not necessary for the plaintiff to prove negligence as part of the claim.

Post Midwest, a plaintiff bringing a s. 99 claim only needs to prove that contamination has occurred. Fairness to, and fault of, the defendant are not relevant considerations under the legislative scheme of the EPA. Accordingly, once the plaintiff proves contamination, the defendant must demonstrate "that they took all reasonable steps to prevent the spill of the pollutant" to avoid liability. Taking all reasonable steps is a relatively difficult onus to meet and would require the defendant to provide sufficient evidence that its conduct was sufficient at each step in the chain of events. Were the underlying materials handling policies and training sufficient? Was spill response sufficient? As such, the availability of this cause of action provides an advantage to plaintiffs. For this reason, it is likely that s. 99 claims will be advanced with more regularity.

The Court of Appeal's stated intention was to ensure the restoration of the environment by making the plaintiff provide sufficient funding for the remediation of the contamination. However, it is unclear whether this intention will be satisfied – especially if the restoration cost exceeds the value of the property or even the reduction in the value of the property resulting from the contamination. A defendant will be incented to act in their financial interest which will likely change the litigation and settlement dynamics for environmental claims.

Projecting costs of remediation is, to say the least, very difficult to forecast. It is likely that future cases will not only have competing expert evidence on the origin of the claim, but now on the method and cost of remediation. As such, trials will potentially become longer and more uncertain.

What's to Come?

The availability of s. 99 under the EPA provides plaintiffs with the strategic advantage of not having to demonstrate negligence and not having damages capped by the impact on the market price of the property. As such, s. 99 claims will likely be advanced in effectively all environmental claims. This development will change the litigation and settlement strategy for cases of this nature.

However, questions still remain: Will a court always award damages on the basis of the cost to remediate? Are there situations where the decrease in property value will still be the proper measure? What is the onus on the defendant to mitigate?


1 [2016] SCCA No 22.

2 [1866] CCS No 66.

3 2015 ONCA 819 at para 70 [Midwest].

4 Ibid at para 73.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

To print this article, all you need is to be registered on

Click to Login as an existing user or Register so you can print this article.

Gobind S. Ahuja
In association with
Up-coming Events Search
Font Size:
Mondaq on Twitter
Register for Access and our Free Biweekly Alert for
This service is completely free. Access 250,000 archived articles from 100+ countries and get a personalised email twice a week covering developments (and yes, our lawyers like to think you’ve read our Disclaimer).
Email Address
Company Name
Confirm Password
Mondaq Topics -- Select your Interests
 Law Performance
 Law Practice
 Media & IT
 Real Estate
 Wealth Mgt
Asia Pacific
European Union
Latin America
Middle East
United States
Worldwide Updates
Check to state you have read and
agree to our Terms and Conditions

Terms & Conditions and Privacy Statement (the Website) is owned and managed by Mondaq Ltd and as a user you are granted a non-exclusive, revocable license to access the Website under its terms and conditions of use. Your use of the Website constitutes your agreement to the following terms and conditions of use. Mondaq Ltd may terminate your use of the Website if you are in breach of these terms and conditions or if Mondaq Ltd decides to terminate your license of use for whatever reason.

Use of

You may use the Website but are required to register as a user if you wish to read the full text of the content and articles available (the Content). You may not modify, publish, transmit, transfer or sell, reproduce, create derivative works from, distribute, perform, link, display, or in any way exploit any of the Content, in whole or in part, except as expressly permitted in these terms & conditions or with the prior written consent of Mondaq Ltd. You may not use electronic or other means to extract details or information about’s content, users or contributors in order to offer them any services or products which compete directly or indirectly with Mondaq Ltd’s services and products.


Mondaq Ltd and/or its respective suppliers make no representations about the suitability of the information contained in the documents and related graphics published on this server for any purpose. All such documents and related graphics are provided "as is" without warranty of any kind. Mondaq Ltd and/or its respective suppliers hereby disclaim all warranties and conditions with regard to this information, including all implied warranties and conditions of merchantability, fitness for a particular purpose, title and non-infringement. In no event shall Mondaq Ltd and/or its respective suppliers be liable for any special, indirect or consequential damages or any damages whatsoever resulting from loss of use, data or profits, whether in an action of contract, negligence or other tortious action, arising out of or in connection with the use or performance of information available from this server.

The documents and related graphics published on this server could include technical inaccuracies or typographical errors. Changes are periodically added to the information herein. Mondaq Ltd and/or its respective suppliers may make improvements and/or changes in the product(s) and/or the program(s) described herein at any time.


Mondaq Ltd requires you to register and provide information that personally identifies you, including what sort of information you are interested in, for three primary purposes:

  • To allow you to personalize the Mondaq websites you are visiting.
  • To enable features such as password reminder, newsletter alerts, email a colleague, and linking from Mondaq (and its affiliate sites) to your website.
  • To produce demographic feedback for our information providers who provide information free for your use.

Mondaq (and its affiliate sites) do not sell or provide your details to third parties other than information providers. The reason we provide our information providers with this information is so that they can measure the response their articles are receiving and provide you with information about their products and services.

If you do not want us to provide your name and email address you may opt out by clicking here .

If you do not wish to receive any future announcements of products and services offered by Mondaq by clicking here .

Information Collection and Use

We require site users to register with Mondaq (and its affiliate sites) to view the free information on the site. We also collect information from our users at several different points on the websites: this is so that we can customise the sites according to individual usage, provide 'session-aware' functionality, and ensure that content is acquired and developed appropriately. This gives us an overall picture of our user profiles, which in turn shows to our Editorial Contributors the type of person they are reaching by posting articles on Mondaq (and its affiliate sites) – meaning more free content for registered users.

We are only able to provide the material on the Mondaq (and its affiliate sites) site free to site visitors because we can pass on information about the pages that users are viewing and the personal information users provide to us (e.g. email addresses) to reputable contributing firms such as law firms who author those pages. We do not sell or rent information to anyone else other than the authors of those pages, who may change from time to time. Should you wish us not to disclose your details to any of these parties, please tick the box above or tick the box marked "Opt out of Registration Information Disclosure" on the Your Profile page. We and our author organisations may only contact you via email or other means if you allow us to do so. Users can opt out of contact when they register on the site, or send an email to with “no disclosure” in the subject heading

Mondaq News Alerts

In order to receive Mondaq News Alerts, users have to complete a separate registration form. This is a personalised service where users choose regions and topics of interest and we send it only to those users who have requested it. Users can stop receiving these Alerts by going to the Mondaq News Alerts page and deselecting all interest areas. In the same way users can amend their personal preferences to add or remove subject areas.


A cookie is a small text file written to a user’s hard drive that contains an identifying user number. The cookies do not contain any personal information about users. We use the cookie so users do not have to log in every time they use the service and the cookie will automatically expire if you do not visit the Mondaq website (or its affiliate sites) for 12 months. We also use the cookie to personalise a user's experience of the site (for example to show information specific to a user's region). As the Mondaq sites are fully personalised and cookies are essential to its core technology the site will function unpredictably with browsers that do not support cookies - or where cookies are disabled (in these circumstances we advise you to attempt to locate the information you require elsewhere on the web). However if you are concerned about the presence of a Mondaq cookie on your machine you can also choose to expire the cookie immediately (remove it) by selecting the 'Log Off' menu option as the last thing you do when you use the site.

Some of our business partners may use cookies on our site (for example, advertisers). However, we have no access to or control over these cookies and we are not aware of any at present that do so.

Log Files

We use IP addresses to analyse trends, administer the site, track movement, and gather broad demographic information for aggregate use. IP addresses are not linked to personally identifiable information.


This web site contains links to other sites. Please be aware that Mondaq (or its affiliate sites) are not responsible for the privacy practices of such other sites. We encourage our users to be aware when they leave our site and to read the privacy statements of these third party sites. This privacy statement applies solely to information collected by this Web site.

Surveys & Contests

From time-to-time our site requests information from users via surveys or contests. Participation in these surveys or contests is completely voluntary and the user therefore has a choice whether or not to disclose any information requested. Information requested may include contact information (such as name and delivery address), and demographic information (such as postcode, age level). Contact information will be used to notify the winners and award prizes. Survey information will be used for purposes of monitoring or improving the functionality of the site.


If a user elects to use our referral service for informing a friend about our site, we ask them for the friend’s name and email address. Mondaq stores this information and may contact the friend to invite them to register with Mondaq, but they will not be contacted more than once. The friend may contact Mondaq to request the removal of this information from our database.


This website takes every reasonable precaution to protect our users’ information. When users submit sensitive information via the website, your information is protected using firewalls and other security technology. If you have any questions about the security at our website, you can send an email to

Correcting/Updating Personal Information

If a user’s personally identifiable information changes (such as postcode), or if a user no longer desires our service, we will endeavour to provide a way to correct, update or remove that user’s personal data provided to us. This can usually be done at the “Your Profile” page or by sending an email to

Notification of Changes

If we decide to change our Terms & Conditions or Privacy Policy, we will post those changes on our site so our users are always aware of what information we collect, how we use it, and under what circumstances, if any, we disclose it. If at any point we decide to use personally identifiable information in a manner different from that stated at the time it was collected, we will notify users by way of an email. Users will have a choice as to whether or not we use their information in this different manner. We will use information in accordance with the privacy policy under which the information was collected.

How to contact Mondaq

You can contact us with comments or queries at

If for some reason you believe Mondaq Ltd. has not adhered to these principles, please notify us by e-mail at and we will use commercially reasonable efforts to determine and correct the problem promptly.