The Supreme Court Clarifies The Application Of The St. Lawrence Cement Inc. v. Barrette Decision

On March 7, 2013, the Supreme Court of Canada (SCC) rendered a decision in which it clarified the application of St. Lawrence Cement Inc. v. Barrette1(St. Lawrence Cement), a decision that had recognized a strict liability regime for neighbourhood disturbances in Québec, a liability regime similar to that of common law nuisance. Such lawsuits can be instituted by class action which may have major consequences for corporate defendants.

In Antrim Truck Centre Ltd. v. Ontario (Transportation)2(Antrim), the SCC clarified the criteria for nuisance in a case involving a claim for injurious affection under the Expropriation Act3 of Ontario.

The Facts of the Antrim Case

The appellant in this case was the owner of a lot on Highway 17 in Ontario on which it operated a truck stop with a restaurant and a gas station. It enjoyed the patronage of drivers travelling along the highway. In 2004, the Ministry of Transportation of Ontario opened a new section of Highway 417. The construction of the 417 Highway significantly altered the conditions from which the appellant benefited, as the motorists on the new stretch of highway had no direct access to the truck stop. This situation led the appellant to close his truck stop, causing him damages for loss of market value of property and loss of business.

The SCC recognized that such circumstances may give rise to compensation for the adverse effect under the Expropriation Act (Act) of Ontario. To be entitled to compensation, the appellant has to meet three statutory requirements, namely:

1. the damage must result from action taken under statutory authority;

2. the action would give rise to liability but for that statutory authority; and

3. the damage must result from the construction and not the use of the works.

When these three conditions are met, the Act entitles the plaintiff to compensation for such reduction in the market value of the land attributable to the infringement of his rights, and such personal and business damages.4

The first and third conditions were clearly met in this case, and the SCC had to determine whether the second requirement was met. The SCC ruled in favour of the appellant and decided that the second requirement was met, confirming the decision of the Ontario Municipal Board to grant compensation and to reverse the decision of the Ontario Court of Appeal. The issue addressed by the SCC was whether the appellant could have, under the law of private nuisance, obtained damages if the...