On April 26, 2012, the Supreme Court of Canada ("SCC")
refused leave to appeal from the reversal of a $36 million
environmental class action award against Inco. As usual, the SCC
did not give reasons for declining to hear the appeal. The refusal
of the leave application means
the decision of the Ontario Court of Appeal ("ONCA")
will stand (
See November 2011 Focus on Environmental Law). The parties now
face a determination of the trial costs awarded to Inco (costs of
the appeal have been fixed at $100,000).
In a 3‐0 decision, the ONCA reversed a $36 million
trial award to members of an environmental class action. Thousands
of Port Colborne, Ontario's residents had sued Inco for
property devaluation caused by soil contamination arising from 66
years of nickel refining emissions from Inco's smelter.
Smith v. Inco Ltd. (formerly Pearson v. Inco
Ltd.) is notable as one of the first environmental class
actions to go to a full trial on the common issues.
The ONCA decision makes it much more difficult to pursue claims
of trespass, private nuisance and Rylands v. Fletcher
strict liability in cases of historic contamination and also
clarifies the application of limitation periods for class actions.
Since the ONCA could have easily dismissed the claim based on the
lack of damages or problems with a common limitation period alone,
it is unclear if the ONCA's sweeping limitation of private
nuisance and Rylands v. Fletcher strict liability claims
will be followed by future courts.
Since the Ontario Court of Appeal's decision is binding only
in Ontario, there are arguably different standards set by courts in
other jurisdictions in Canada for establishing the torts of private
nuisance and Rylands v. Fletcher strict liability in an
environmental context. Appellate court decisions are often
persuasive in other provinces, with any perceived incongruity
ultimately resolved by the Supreme Court of Canada. While the SCC
did not choose to hear Smith v. Inco Ltd., we have likely
not heard to the last word on this issue.
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