On July 6, 2010, the Ontario Superior Court of Justice awarded
$36 million in damages to a class of approximately 7,000
residential property owners living in the vicinity of the Inco
refinery in Port Colborne, Ontario. Other than in Québec,
this is the first successful environmental class action in
Canada.
The claim originally included damages for human health impacts but
was scaled back to focus on property damages.
In finding for the plaintiffs, the Court found that property values
had decreased following the issuance of a Ministry of Environment
("MOE") study which identified health concerns due to
elevated nickel levels in soil caused by emissions from the Inco
refinery. The Court awarded damages equal to the total decrease in
residential property values despite accepting that nickel levels on
the affected properties did not exceed MOE mandatory clean-up
standards.
The refinery was confirmed to have had all requisite permits during
operation and was in all relevant respects compliant with
applicable laws and regulations. However, the successful claims
were based in private nuisance and on Rylands v.
Fletcher (i.e., non-natural use of property which leads to
an escape causing damage), for which there is no due diligence
defence. The Court concluded that the utility of Inco's
operations to the community was either irrelevant or outweighed by
the extent and degree of the damage to the affected residential
neighbourhoods.
This award could have significant implications with respect to
emissions from industrial operations that are otherwise considered
to be immaterial and/or compliant with regulatory requirements, and
will be of particular interest to legacy operations.
It is anticipated that Inco will seek leave to appeal to the
Divisional Court.
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