In Smith v. INCO Limited, the Ontario Court of Appeal held that nickel particles released by Inco's operations and deposited in the plaintiffs' lands that raised unproven concerns about potential health risks did not constitute actionable private nuisance, despite the potential for diminuation of property values. The Court, writing per curiam, also clarified the operation of Rylands v. Fletcher in Ontario, finding that there is no independent common law rule of strict liability for extra-hazardous activities, and holding that, for the purposes of the Rylands tort, a nickel refinery is not a "non-natural use of land." Lastly, the Court clarified, in dicta, the other elements of the Rylands tort.
This class action was originally brought under Pearson v. Inco. The trial judge found that nickel emissions from the Inco plant had contaminated the plaintiffs' private properties, adversely affecting their value. Furthermore, Inco was held liable under private nuisance and also under the Rylands v. Fletcher strict liability rule.
The Court of Appeal reversed the trial courts ruling on both nuisance and Rylands v. Fletcher liability. To establish nuisance, the claimants had to show physical damage to their land caused by the nickel deposits. The Court held that without evidence the deposits had some detrimental effect on the land itself, rights associated with the use of the land, or the health and well-being of the occupants, the change in the chemical composition of the soil did not constitute physical damage. Public concerns about the nickel deposits that may have affected the plaintiffs' property values did not by themselves amount to actual, substantial, physical damage.
In regards to liability under Rylands v. Fletcher, the Court first clarified the juridical basis for the Rylands rule, holding that it does not arise from any broader rule of strict liability for those whose activities are extra hazardous. The Court then found that there was no liability under Rylands because the claim did not meet the "non-natural use" element of the tort; a nickel refinery that uses nickel brought in from off-site was not a "non-natural use," the Court reasoned, because it was an "ordinary or usual" use for land in a heavily industrialized part of the city. The Court stated that this was consistent with the "user appropriate" approach outlined in Tock v. St. John’s Metropolitan Area Board, a 1989 Supreme Court of Canada case.
In dicta, the Court clarified the other elements of the Rylands tort, suggesting that foreseeability by the tortfeasor of the kind of damages suffered may be an element of the tort, and also that, while the tort applies to the repeated and cumulative effects of multiple "escapes," it may not apply to "escapes" that are the intended result of the activity undertaken by the defendant.
October 7, 2011
Link to Decision
Diego Beltran, George Pakozdi & Kai Sheffield
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