Smith v. Inco involved an environmental class action
brought on behalf of approximately 7,000 residential property
owners in the City of Port Colborne, where Inco operated a nickel
refinery from 1918 to 1984. The class proceeding arose primarily as
a result of a number of phytotoxicological studies and testing
conducted by the Ministry of the Environment ("MOE"),
indicating that nickel levels in the soil in many parts of Port
Colborne exceeded MOE guidelines.
Inco was found liable in private nuisance for the discharge of
nickel and under the doctrine of strict liability for failure to
prevent the escape of a dangerous substance. The class was awarded
a total of $36,000,000 in damages for diminution in property
values. In so deciding, the Ontario Superior Court of Justice made
the following findings that may be of interest to business owners,
as well as tenants and lessees of commercial properties:
Although Inco's operations constituted a
"reasonable" use of the land, it did not constitute a
"natural" use of land in that the nickel particles were
not naturally on the land or in the air over the land
A reasonable use of land for a lawful commercial purpose is not
necessarily a defence to a (Rylands v. Fletcher) claim of
strict liability and may still be deemed an unlawful nuisance
Nuisance claims can be based on a single isolated escape of
contaminant from land, and are not limited to the continuous or
long‐term release of contaminants
The claim against Inco constituted a private nuisance but did
not constitute a public nuisance since Inco's conduct did not
damage or interfere with matters such as public health or public
comfort, nor had it affected any public resource such as a lake or
The standards set by the MOE are for mandatory cleanup and do
not necessarily set the standard for civil liability
If nickel accumulated on the class members' properties in
such amounts as to negatively affect the values of the properties,
then the physical damage to the properties is
Interestingly, the Court found that even though the class
members had not yet sold their homes, they were entitled to seek
damages from Inco on the basis that the nickel particles in the
soil could not be removed and the damage suffered was therefore
permanent. The Court found that it was "inconceivable"
for it to require more than 7,000 property owners to sell or
attempt to sell their property before establishing a cause of
action against Inco.
Notwithstanding, the Court also held that Inco's conduct did
not warrant an award of punitive damages in that it was not so
malicious or oppressive that it "offends the court's sense
of decency". Rather, Inco was engaged in a lawful business
operation for many years and provided gainful employment to many
people, including some of the class members. Although Inco's
conduct was unlawful and caused widespread material damage to the
property of its neighbours, Inco had generally complied with the
MOE regulations throughout its history and had reduced emissions of
nickel from its refinery over time, eventually ceasing nickel
emissions altogether in 1984.
Leave to appeal to the Ontario Court of Appeal has been granted
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