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Stop the Smelter

02-May-12

by Michael Barbero

Supreme Court of Canada Denies Leave to Appeal In Ellen Smith v. Inco Limited

McLennan Ross has been reporting on the Inco Limited (“Inco”) matter as it proceeded through the Ontario Courts. Late last week the Supreme Court of Canada denied leave to appeal, bringing this $36 million dollar saga to an end.

BACKGROUND

Inco operated a nickel refinery in Port Colborne between 1918-1984. The operations emitted nickel into the air, which in turn was deposited in the soil of multiple properties located near the refinery.

LITIGATION

A class action was commenced on behalf of those residing within close proximity to the refinery. The main allegations were that the value of residential property had been affected by the deposit of nickel.

The Ontario Superior Court of Justice found Inco liable and ordered that $36 million be paid to past and present property owners. Liability was imposed on the basis of nuisance and Ryland v. Fletcher (whereby a land user is strictly liable for any damage caused by failing to prevent the escape of a dangerous substance from the property). The Court of Appeal overturned the trial judge's decision on a number of grounds (click here to see our previous email alert on this topic). In addition to dismissing the claim, the Court of Appeal awarded costs payable to Inco by the Plaintiff class.

As predicted, the Plaintiff sought leave to the Supreme Court of Canada. Late last week leave was denied.

CONCLUSION

The most interesting take away from the decision of the Ontario Court of Appeal was the view that the application of limitations legislation was not properly treated as a “common issue” to be determined on behalf of the entire class, but rather was an individual issue to be determined on a member-by-member basis after the common issues trial was over. The Supreme Court’s decision not to hear the appeal serves to cement the Court of Appeal’s findings.

This decision by the Supreme Court serves to confirm the notion that class actions in an environmental context have become more challenging to prosecute, especially where limitations issues are not to be included in the “common issues”. Indeed, the post mortem of Inco can not deny the realities of this case: 10 years before the matter proceeded to trial, months spent before the Superior Court and Court of Appeal, and in the end the Plaintiff Class loses and has to pay costs. The odds for environmental class actions aren’t looking so good.
 

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