Smith v Inco Appeal Application

Kirk Baert has kindly permitted us to post his Application to the Supreme Court of Canada for leave to appeal the Ontario Court of Appeal's decision in Smith v. Inco. This was the first environmental contamination class action in Canada tried on its merits. The Appeal Court's decision on liability has substantially narrowed environmental causes of action against historic polluters, especially nuisance and Rylands v. Fletcher.

I agree with Baert that the case presents issues of national and public importance, including:

1. the scope and limits on environmental damages;

2. the threshold for tort liability in the context of historic contamination;

3. whether contamination and concomitant property devaluation constitutes physical damage to land; and

4. whether the stigma attaching to private contaminated lands is compensable based on a regulatory level or pristine levels.

He therefore proposes to raise the following issues:

(i) what is the threshold effect for liability in nuisance in the context of environmental pollution or contamination?

(ii) should the notion of "non-natural" usage of land continue to occupy a place in a common law strict liability analysis?

(iii) should the common law be subordinate to the environmental statutory standard for liability for contamination? and

(iv) is stigma a recognizable head of damage to land in Canadian law?

Unfortunately for the Port Colborne plaintiffs, the Court of Appeal decided against them on damages as well as on liability, and not because of the question whether "stigma" is a recognizable head of damage. Instead, the court ruled that the $36 million award, at trial, was entirely explained by the improper inclusion of a particular group of mostly vacant lots in the Port Colborne property value calculation.

It would be surprising for the Supreme Court to give leave, to argue liability, if the plaintiffs suffered no compensable damages in any event. In a sense, all the other important and surprising portions of the appeal judgment on liability are merely obiter (i.e. unnecessary, and therefore not binding), if the court of appeal was correct on damages. We could therefore have a long wait before the Supreme Court decides Baert's questions.

Here is the application, in PDF and text:

NOTICE OF APPLICATION FOR LEAVE TO APPEAL

(ELLEN SMITH, APPLICANT)

(Pursuant to Section 40 of the Supreme Court Act and

Rule 25 of the Rules of the Supreme Court of Canada)

APPLICANT

(Respondent)

RESPONDENT

(Appellant)

TAKE NOTICE that Ellen Smith hereby applies for leave to appeal to the Court, pursuant to

sections 40 and 43 of the Supreme Court Act, R.S.C. 1985, c. S-26 as amended, from the

judgment of the Court of Appeal for Ontario, Court File No. C52491, made the ih day of

October 2011, and for any further or other order that the Court may deem appropriate.

AND FURTHER TAKE NOTICE that this application for leave is made on the following

grounds, that the case presents issues of national and public importance, including:

that the case presents issues of national and public importance, including:

1. this is the first environmental contamination class action in Canada to be heard

and tried on its merits, thereby having precedential significance nationwide

regarding the scope and limits on environmental damages;

2. the threshold for tort liability in the context of contamination and the level at

which chemical airborne emissions or soil depositions become actionable by a

private property owner;

3. there are conflicting appellate decisions in. Canada on the issue of whether

contamination and concomitant property devaluation constitutes physical damage

to land, and a strong judgment at the trial court level;

4. the case presents an ideal and needed opportunity for the Court to reappraise what

continues to be the unsettled question of whether the stigma attaching to private

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contaminated lands is compensable based on a regulatory level or pristine levels,

which has far-reaching implications for all individuals and businesses across

Canada;

5. the case also raises the important and novel questions with respect to the interface

between property law, tort law and environmental law;

6. as a result, this proposed appeal raises the following issues:

(i) what is the threshold effect for liability in nuisance in the context of

environmental pollution or contamination?

(ii) should the notion of "non-natural" usage of land continue to occupy a

place in a common law strict liability analysis?

(iii) should the common law be subordinate to the environmental statutory

standard for liability for contamination?

(iv) is stigma a recognizable head of damage to land in Canadian law?

7. the determination of these issues will have an impact on the administration of

justice throughout Canada.

PART I- STATEMENT OF FACTS

1. OVERVIEW

   1. This test case is a juridical triangulation of three discrete areas of law into a single

   nationally important case, with a class actions overlay. The three primary areas of law: property

   torts and environmental law. It is a unique opportunity for Canada's highest court to lay down

   guiding principles for all of Canada in an increasingly litigious area, thereby providing more

   certainty to litigants and reducing litigation overall.

   2. This trigometric property/torts/environmental test permits this Honourable Court to

   determine at what legal threshold do chemical emissions become actionable by landowners at

   common law. Is actual injury to health a necessary prerequisite for liability in nuisance; do

   'ordinary' industrial activities no longer constitute non-natural uses of land. At what point along

   the juridical richter scale are owners of regulated smokestacks that release chemicals into the air

   immune from the very basic principles of property, tort and environmental law. What is most

   interesting is how those principles intersect and interplay: where is the boundary between these

   three separate areas of law.

   3. Against the backdrop of a contaminated community and a complicated environmental

   regime, provincially and federally, Canadians need a clear answer: what is actionable in the

   context of chemical depositions on private lands? The jurisprudence of this Court and provincial

   appellate courts concerning property torts has largely been confined to amenity nuisance and the

   availability of statutory authority defences, 1 rather than actionable levels of chemical pollution,

   which until now remain unchartered territory.

   4. This Court's clarification of whether human health is the new actionable threshold for

   contamination and final resolution as to the corr-ect meaning of "non-natural" use is required to

   provide landowners, regulators and industrial actors across Canada with certainty around their

   1 St Lawrence Cement Inc. v. Barrette, [2008] 3 S.C.R. 392 [St. Lawrence]; Susan Heyes Inc. v. Vancouver (City),

   2011 B.C.C.A. 77 [Heyes]; Antrim Truck Centre Ltd. v. Ontario (Minister of Transportation), [2011] O.J. No.

   2451, (C.A.) [Antrim]; Tock v. St. John's Metropolitan Area Bd., [1989] 2 S.C.R. 1181 [Tock]; St. Pierre v.

   Ontario (Minister ofTransportation), [1987] 1 S.C.R. 906.

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   obligations and liabilities. What is the appropriate threshold for actionable nuisance or strict

   liability in the context of contaminated lands? What should become of the entrenched

   triangulation of environmental no-fault liability, the inviolability of personal property and the

   polluter pays principle?2

   5. . Canadian homeowners, residents, industry, regulators and appellate courts really do need

   certainty on the following key issues:

   (i) the threshold effect for liability m nuisance m the context of

   environmental or contamination;

   (ii) the requirements for a "non-natural" use ofland;

   (iii) whether environmental statutory regimes are a complete code of liability;

   and

   (iv) whether property devaluation should be a recognized claim in nuisance.

   First Toxic Tort Test Case to be Heard by this Court- Opportunity to Provide Principles

   Respecting Class Action Trials and Environmental Law to Curtail Unnecessary Litigation

   6. The leading authorities in this area do not involve the toxic tort claims as advanced here.

   This test provides a unique opportunity to fix the boundaries of rights and obligations

   surrounding the historic contamination of private lands. At what point should the effects of

   chemical emissions be visited upon residential landowners without compensation if the effect of

   those depositions impacts the disposition of that property? Where are these lines properly drawn

   between residential and corporate neighbours in this modem era of environmental stewardship?

   7. This test case concerns residential lands in Port Colbome, Ontario which were

   contaminated by nickel oxide depositions emitted by !nco's refinery, a pollutant classified by the

   federal government as a group one-carcinogenic toxic substance.3 Once Ontario's Ministry of the

   Environment ("MOE") discovered the true extent and levels of Inco's nickel depositions, Port

   Colborne became the subject of extreme environmental scrutiny, risk assessments, scientific

   testing, regulatory intervention, unprecedented media publicity and health studies lasting almost

   2 St Lawrence Cement; Imperial Oil Ltd v. Quebec, 2003 SCC 58; British Columbia v. Canadian Forest Products

   Ltd., [2004) 2 S.C.R 74 [Can-For].

   3 Court of Appeal Reasons (Certification) para.6 [Tab 5B]; Court of Appeal Reasons, paras. 8, 26 [Tab 3D]

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   ten years. 4 The discovery of nickel contamination led Inco itself to commission the most

   extensive health study ever conducted in Canada and the MOE to issue a draft control order

   against Inco. 5 As a result, Port Colborne's real estate market was stigmatized and devalued.6

   Following a forty-five (45) day common issues trial, the trial judge granted judgment in favour

   of the 7,900 applicant class members in the aggregate amount of $36 million for damages

   sustained to the value of their homes as a result of the nickel contamination.7

   ...