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Will the Supreme Court of Canada grant leave to Ellen Smith to appeal the decision of the Ontario Court of Appeal rejecting her class action against Inco for the historic nickel contamination of soil in Port Colborne?

My friends in the environmental bar would appreciate clarification of the scope of “physical damage to land” nuisance, and of Rylands v Fletcher, but can Smith overcome her loss on damages as well as liability? By popular request, here in one place are Smith’s Leave To Appeal Application, Inco’s response, and Smith’s Reply.

Inco’s response includes some fascinating excerpts from the transcript. For example, even though Ms. Smith refused to allow Inco to perform the MOE-ordered cleanup of her property, leaving it contaminated well above the 8000 ppm Community Based Risk Assessment standard, (and even farther above the province-wide standard for nickel), she and her husband obtained a mortgage on the contaminated property in 2009 from a major bank. (Nor did she know of no one else in Port Colborne who had had trouble getting a mortgage because of the nickel.) Her husband used the money to buy another Port Colborne property, apparently without testing the soil for nickel.

Also, although nickel refinery dust is classed as a possible carcinogen in the workplace, Inco cites repeated studies showing no unusual health problems in Port Colborne that could be caused by nickel exposure, either when the refinery was operating or in the following decades. Thus, Inco says, how can the presence of nickel in the soil constitute “physical damage to property” if it is invisible, doesn’t impede daily activities, and doesn’t endanger health? And especially if, as found by the Court of Appeal, there was no loss in property value either?

“In this case the Applicant staked her claim on the theory that there was material physical damage to her land. Harrnless depositions of nickel causing no physical or other damage and causing no economic damages do not fall within the ambit of tort law. Absent any hartn and any damages, all of the 50 questions posed for the Court to consider are academic and hypothetical.”

Smith rejects the Court of Appeal’s finding on damages, and claims that loss in value is itself “physical damage” to land. She makes a heartfelt plea that Inco’s calculations are unfair and ignore the reality she experienced:

“Inco’s Response fails to squarely confront the very issue underpinning this case: who is responsible in law for damage to property precipitated by reasonable regulatory intervention, extensive health studies, risk, uncertainty and widespread media coverage caused by discovered pollution?…

Missing from Inco’s Response is a rationale for why tort law ought not respond to the shadow imposed on contaminated residential lands. Are homeowners to bear all the burden, risk and uncertainty grafted upon their properties by industry’s conduct which causes a decade’s worth of very public environmental scrutiny, risk assessment, scientific testing, community health studies, regulatory intervention and unprecedented media attention? The fact that a legal operation visits random damage on unfortunate individuals “does not tell us why those individuals should be responsible for paying that damage.”…When is chemical contamination of soil legally deemed to be damage to land so as to invoke the law of nuisance?”

Smith’s Reply also includes the endorsement of Justice Doherty of the Court of Appeal referring costs back to the trial judge:

“However, I have concluded that the matter should be remitted to the trial judge. In many ways, this is like a separate piece of litigation in which a wide variety of factual and legal issues may arise. There is a great deal of money at stake. The parties may want to lead evidence on various issues. There is a very real potential that legal issues of considerable public importance may be raised in the course of the costs proceedings. I think it is best to follow the usual litigation format. All relevant ·matters can be fully vetted before the trial judge in the trial forum with ready access to a full appeal to this court if either party is so inclined. This court will have the benefit of a full record and the reasons of the trial judge.”

The costs decision will be watched closely by the entire environmental bar, but especially by those who take the big risk of accepting cases on contingency.

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