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Ontario Court of Appeal Reverses Judgment on Merits in Environmental Class Action
Posted in Environmental

The Ontario Court of Appeal has overturned the July 6, 2010 decision of the Honourable Mr. Justice Henderson in Smith v. Inco Ltd (2011 ONCA 628), setting aside the initial award of $36 million in damages.  At trial, the claimants successfully argued that the value of their properties were diminished because of nickel contamination originating from Inco’s refinery in Port Colborne in the 66 years prior to 1985. Henderson J found that Inco was liable in private nuisance and under the principle of strict liability in Rylands v Fletcher (1866) LR 1 Ex 265, aff’d (1868) LR 3 HL 330.

There was no liability in private nuisance because the plaintiffs could not establish that the presence of nickel in the soil caused any actual damage to the properties or rights associated with it. On Rylands, the plaintiffs failed to show that Inco’s use of the refinery was ‘non-natural’, ‘exceptionally dangerous’ or ‘extraordinary or unusual’ (for a nickel refinery). The three-member panel ruled unanimously that the plaintiffs failed to prove that Inco was liable or that their property values had suffered.

On December 5, 2011, the Plaintiffs filed its Application for Leave to Appeal to the Supreme Court of Canada seeking to appeal the decision of the Court of Appeal for Ontario which overturned the trial decision of the Honourable Mr. Justice Henderson in favour of the class. The Plaintiff expects a decision on the application for leave to appeal to the Supreme Court of Canada in approximately six months.

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Lawson Lundell's Project Law Blog focuses on updating proponents on issues emerging in the law and policy that applies to the development of major projects in Canada. The focus of the blog is on matters relating to environmental assessment and compliance, regulatory matters and Indigenous consultation.

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