Why didn’t the limitation period protect Inco from the Port Colborne class action, Smith v. Inco (formerly Pearson v. Inco)? According to Justice Henderson, because of the discoverability principle. Everyone knew about the nickel refinery, and could easily have known that there was nickel in the soil in town. But most didn’t know it would affect the value of their properties. In fact, the nickel may not have affected property values.
But then there was a chain reaction, none of which was caused by Inco. The MOE did a study of the effect of nickel on plants. In Sept 2000, they published it. To protect themselves, real estate agents started to disclose nickel in local real estate transactions. And, according to Justice Henderson, that started the limitation period for loss in property value from running all over again.
If that’s all it takes, the same panicked chain reaction could happen in many other places. There is TCE in Barrie and Cambridge, PAHs and many other things in Toronto and nickel in Sudbury. Petroleum hydrocarbons have been spilled almost everywhere. Land near busy roads received lead and salt. Agricultural land may have pesticides. No one can count any longer on the limitation period having run for any of it.
Berkhout testified that until the 1998 MOE phytotoxicological study was publicly released on January 26, 2000, the real estate agents in the area did not refer to nickel soil contamination in any of the documentation used for the purchase and sale of properties in the area. When the MOE study was released in January 2000 Berkhout said that it was the first time that the industry could see on paper what they were dealing with.
[113] After a meeting of real estate board members on February 15, 2000, most of the real estate agents operating in Port Colborne started to insert clauses with respect to nickel soil contamination into the agreements of purchase and sale. In his memo to the real estate agents dated February 15, 2000, Berkhout wrote that “Financing and/or closings may be affected”.
[114] Therefore, I conclude that the real estate agents as a whole did not perceive that nickel in the soil could affect the residential real estate market prior to the release of the 1998 MOE phytotoxicological study. For the purposes of the discoverability issue I accept that the real estate agents in the area became aware of the potential effect on property values when the study was publicly released on January 26, 2000. Further, I accept that they would not have been aware of the potential effect on property values through reasonable diligence prior to that date.
[115] In my view, if real estate agents were not aware until January 2000 of the potential effect of nickel soil contamination on property values, it is extremely unlikely that most members of the public knew or ought to have known of the effect of nickel soil contamination on property values until at least that time. Most members of the public would not be aware of the effect on property values until information was disseminated through the real estate agents after February 15, 2000.
[116] Next, this court must consider how to apply the discoverability principle set out in Peixeiro to a class action. Does the limitation period start to run when all of the class members knew or ought to have known all of the material facts? Or, when only one of the class members knew or ought to have known? Or, when a majority of class members knew or ought to have known? There is no case law on point.
[117] In the present case, there were probably 10 or 12 property owners, out of approximately 7,000 property owners in the class, who had their own properties tested for nickel prior to the 1998 phytotoxicological study, and who therefore had some special knowledge of the general extent of nickel contamination of the soil in Port Colborne. However, I cannot assume that any of those property owners knew or ought to have known that their property values could be affected.