Dear Colleagues:

 

I would be interested if any of you had any opinions about the recent ONCA decision in Smith v Inco Ltd. I am particularly interested in any thoughts that anyone has in regard to the following two issues:

 

1)     Physical Harm:  In Smith, the court decided (at [49]) that ‘the requirement of “material injury to property” is satisfied where the actions of the defendant indirectly cause damage to the plaintiff’s land that can be properly characterized as material, actual and readily ascertainable.” And that ‘where the nuisance is said to flow from the physical harm to land caused by the contamination of that land, the claimants must show that the alleged contaminant in the soil had some detrimental effect on the land or its use by its owners’ (at [57]).  

 

On the facts, the court found that there had been no physical harm to the property by the depositing of large amounts of nickel particles even if this caused a large drop in property values unless the plaintiff could prove “that the nickel particles caused actual harm to the health of the claimants or at least posed some realistic risk of actual harm to their health and wellbeing”.

 

The definition used by the court seems to collapse the distinction between nuisances that interfere with use and enjoyment and those causing physical injury to property, since on the court’s reasoning,  something is only physical damage if it had some effect on some proposed or possible use by the owner.  This may or may not be a bad thing but it seems to have this effect.

 

2)     Non-Natural/Special Use:  On this issue, the court stated “whether a use is a non-natural one, the court must have regard to the place where the use is made, the time when the use is made, and the manner of the use. Planning legislation and other government regulations controlling where, when and how activities can be carried out will be relevant considerations in assessing whether a particular use is a non-natural use in the sense that it is a use that is not ordinary.” 

 

In the end,  the court found no liability for the emissions of nickel particles since ‘the claimants did not … demonstrate that Inco’s operation of its refinery for over 60 years presented “an exceptionally dangerous or mischievous thing” or that the circumstances were “extraordinary or unusual”.  To the contrary, the evidence suggests that Inco operated a refinery in a heavily industrialized part of the city in a manner that was ordinary and usual and did not create risks beyond those incidental to virtually any industrial operations.’

 

One colleague pointed out to me that this seems inconsistent with Lord Goff’s statement in Cambridge Water (if one just substitutes nickel and refinery) that ‘I cannot think that it would be right in such circumstances to exempt E.C.L. from liability under the rule in Rylands v. Fletcher  on the ground that the use was natural or ordinary. The mere fact that the use is common in the tanning industry cannot, in my opinion, be enough to bring the use within the exception… . Indeed I feel bound to say that the storage of substantial quantities of chemicals on industrial premises should be regarded as an almost classic case of non-natural use; and I find it very difficult to think that it should be thought objectionable to impose strict liability for damage caused in the event of their escape.’ Does anyone have any thoughts? Would an escape of radiation from a highly regulated nuclear facility now not be actionable under Rylands given this regulation and the ubiquitous  nature of nuclear power? Is an explosion at a gas/petrol station not actionable for these same reasons?

 

All the best,

-- 
Jason Neyers
Associate Professor of Law
Faculty of Law
University of Western Ontario
N6A 3K7
(519) 661-2111 x. 88435