Canada: Case Law Summaries – Torts

Last Updated: April 1 2019
Article by Aidan L. Cameron, Lindsay Burgess, Vivian Ntiri and Jack Ruttle

Most Read Contributor in Canada, March 2019

HUANG V. FRASER HILLARY'S LIMITED, 2018 ONCA 527

In this case, the Ontario Court of Appeal held that foreseeability of harm is not an element of the tort of nuisance.

The finding was made in the context of historical environmental contamination of a property neighbouring that owned by the defendant, Fraser Hillary's Limited, which had operated a dry-cleaning business in Ottawa since 1960. Between 1960 and 1974, solvents used in the dry-cleaning process were discharged and subsequently contaminated the soil and groundwater on a neighbouring property owned by Mr. Huang. According to Fraser, the solvents had been used in accordance with the best practices at the time, and the environmental dangers of the solvents were not known at the time. The contamination was not uncovered until 2003 during an environmental assessment of Mr. Huang's property.

Mr. Huang brought an action against Fraser. Fraser was found liable under the tort of nuisance and s. 99 of the Environmental Protection Act (EPA), and was ordered to pay damages of over C$1.8 million. Fraser appealed, arguing that foreseeability of harm was a constituent element of the tort of nuisance, and that the EPA was being applied retrospectively.

Fraser's appeal was dismissed. The Court held that foreseeability of harm is not an element of the tort of nuisance, noting that a foreseeability requirement would blur the distinction between negligence and nuisance and that there were good policy reasons for maintaining the independent strength of the tort of nuisance. This meant that despite the fact that the impact on Mr. Huang's property was not foreseeable at the time of Fraser's actions, Fraser could still be held liable in nuisance.

The Court also rejected Fraser's argument that the EPA was retroactively applied. Part X of the EPA imposes duties to report and remediate spills and imposes liability for damage caused by a spill, but was not in force until 1985, which was well after Fraser's spills ceased. However, the Court held that once s. 93(1) came into force, it imposed a duty on all those that had previously owned or controlled a pollutant at the time it was spilled to take steps to remediate it, regardless of whether that discharge was ongoing. Fraser did not comply with this duty, and so was liable under the EPA.

For further analysis of this decision, see McCarthy Tétrault's Canadian ERA Perspectives blog post entitled "Uncertain Ground: Owners May Be Liable for Unforeseeable Environmental Effects". Fraser has sought leave to appeal to the Supreme Court of Canada.

IMPERIAL METALS CORPORATION V. KNIGHT PIÉSOLD LTD., 2018 BCSC 1191

In this decision, the British Columbia Supreme Court struck out some third-party claims brought against the Province of British Columbia (Province) in an action arising from the 2014 breach of the Mount Polley Mine tailings storage facility (Facility) in British Columbia.

Mount Polley Mining Corporation (Company), and its parent company, had sued two engineering firms (Engineers) seeking damages arising from the breach. The Engineers in turn filed third-party claims against the Province alleging that the Province was liable to the plaintiffs for negligent regulatory oversight. The Province's Chief Inspector of Mines, and his Ministry staff, had issued the permits for the construction of the facility; reviewed all subsurface investigation reports, design reports, bi-monthly progress reports, as-built reports, and annual raise design reports; and annual inspection reports; issued amendments to them; conducted on-site geotechnical inspections; and hired third-party consultants to review the work of the Engineers and provide advice in respect of such work.

The Court struck out all third party claims that alleged the Province owed a duty of care to the Engineers, but allowed some of the claims alleging the Province owed a duty of care to the mine owner. In doing so, the Court articulated a narrow set of circumstances in which sufficient "proximity" could exist to establish a duty of care between a regulator (the Province) and the regulated (the Company). As a starting proposition, the Court held that where a regulator deals with a regulated party for the purpose of administering and enforcing a statutory scheme, the general rule is that such interactions will not give rise to a relationship of proximity and therefore no duty of care arises. In coming to this conclusion, the Court chose not to follow jurisprudence that imposes such a duty of care in analogous circumstances involving building inspectors and property owners.

After articulating the general rule, the Court then outlined a set of exceptions that could give rise to sufficient proximity for a duty of care to arise, including: (i) where the governing statute provides a mandatory obligation on the regulator to take regulatory action in the face of foreseeable harm to human safety or the environment; (ii) where the regulator steps outside the role of regulator and assumes the role of designer, developer or advisor to the regulated party; (iii) where the regulator acquires knowledge of serious and specific risks to a clearly defined group of the class that the statutory scheme was intended to protect; (iv) where the regulator makes a specific misrepresentation to the regulated party that invites reliance; and (v) where interactions between the regulator and the regulated party give rise to expectations that the regulator will consider the interests of the regulated party. Subject to the foregoing exceptions, the Court held that any duty of care based solely on conduct within the regulator's powers to regulate should be struck.

Some of the Engineers' allegations fit within the Court's articulated exceptions and the Court granted the Engineers leave to amend their respective Third Party Notices to remove any claims that did not fit within one of the exceptions and, where necessary, to re-cast the claims to conform with the Court's decision.

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