Property owners often suffered damage when storm and sanitary
sewers malfunction. Canadian municipalities are generally exempt
from civil suits in nuisance relating to their sewers, due to
special statutes adopted across the country. However, they can be
successfully sued in negligence. Such suits are increasingly
popular, especially because property owners are often unable to
obtain insurance against sewage backups, especially if they have
In Pearson v. Fort Frances, the property owners
successfully sued the town for negligence relating to a storm sewer
built on an easement across their property by a subdivision
In 2001, a sinkhole developed on the property following large
storms; in 2002 their entire back yard slid into a ravine.
The Town argued that any harm the plaintiffs suffered falls
under the tort of nuisance, which is statute barred under the
Municipal Act. It further argued that any wrongful action or
failure to act was an exercise of its discretionary power under the
Municipal Act, and no cause of action lies against it. The Town
also asserted that it was not responsible for the easement and its
sewer, that the Town never formally acknowledged assumption of the
The Court ruled that the Town had accepted the sewer by
returning the security deposit to the developer, as well as by its
subsequent work on the sewer. There was an actual break in the
pipe, causing soil to be flushed out under the surface, and digging
the trench for the pipe had weakened the ground.
Held: The Town was negligent. It had failed to recognize the
pipe break in its 2001 inspection and to act decisively on that
evidence. Ms. Pearson was awarded $232,500 plus prejudgment
interest, representing the loss of value of the house due to the
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