Smith v. Inco Ltd., 2013 ONCA 724

• Judge: MacPherson, Watt and Pepall, JJ.A.
• Court: Court of Appeal (Ontario)
• Case Date: October 10, 2013
• Jurisdiction: Ontario
• Citations: 2013 ONCA 724;(2013), 313 O.A.C. 156 (CA)

Smith v. Inco Ltd. (2013), 313 O.A.C. 156 (CA)

MLB headnote and full text

Temp. Cite: [2013] O.A.C. TBEd. DE.003

Proceeding under the Class Proceedings Act, 1992

Ellen Smith (plaintiff/respondent) v. Inco Limited (defendant/appellant)

(C57026; 2013 ONCA 724)

Indexed As: Smith v. Inco Ltd.

Ontario Court of Appeal

MacPherson, Watt and Pepall, JJ.A.

November 29, 2013.

Summary:

The plaintiff class representative pursued a class action on behalf of all residential property owners in a defined area in the City of Port Colborne, alleging that emissions from a nickel refinery, owned by Inco Ltd., contaminated the soil on many neighbouring properties with high levels of nickel. The plaintiff further alleged that the negative publicity and public disclosures regarding nickel contamination of the soil in Port Colborne, from and after September 2000, negatively affected the values of class members' properties.

The Ontario Superior Court, in a decision reported [2010] O.T.C. Uned. 3790, allowed the action, holding that Inco was liable in private nuisance and under strict liability (i.e., Rylands v. Fletcher) for that loss. The trial judge fixed damages at $36 million. Inco Ltd. appealed.

The Ontario Court of Appeal, in a decision reported 284 O.A.C. 13, allowed the appeal, set aside the judgment below and dismissed the action. In a subsequent endorsement the court remitted the matter of costs to the trial judge.

The Ontario Supreme Court, in a decision reported [2012] O.T.C. Uned. 5094, awarded Inco costs of $1,766,000. Inco appealed.

The Ontario Court of Appeal dismissed the appeal.

Practice - Topic 210.3

Persons who can sue and be sued - Individuals and corporations - Status or standing - Class actions - Class or representative actions - Costs - The Ontario Court of Appeal stated that a costs award would be set aside on appeal only if the trial judge had made an error in principle or if the costs award was plainly wrong - The court stated further that the standard of "considerable deference" to a trial judge's costs award had been explicitly applied previously by the court to such awards in class proceedings cases - See paragraphs 16 to 20.

Practice - Topic 210.3

Persons who can sue and be sued - Individuals and corporations - Status or standing - Class actions - Class or representative actions - Costs - The plaintiff's class action against Inco Ltd. for nuisance arising from nickel refinery emissions was allowed at trial, but the decision was overturned on appeal - The plaintiff's motion for leave to appeal was dismissed (Supreme Court of Canada (SCC)) - The trial judge, in fixing costs, considered that this was a matter of public interest (Class Proceedings Act, s. 31(1)) - Inco appealed, arguing that the trial judge erred by failing to accord weight to the SCC's denial of leave to appeal (i.e., by denying leave the SCC had already determined that the case did not involve a matter of public importance) - The Ontario Court of Appeal agreed with the trial judge that the SCC's denial of leave was not determinative of the question of public importance - See paragraphs 23 to 26.

Practice - Topic 210.3

Persons who can sue and be sued - Individuals and corporations - Status or standing - Class actions - Class or representative actions - Costs - The plaintiff's class action against Inco Ltd. for nuisance and strict liability (i.e., Rylands v. Fletcher), arising from nickel refinery emissions was allowed at trial, but the decision was overturned on appeal - The trial judge, in fixing costs, considered that the proceeding raised a novel point of law (Class Proceedings Act, s. 31(1)) - While the case was grounded in well established causes of action, the judge held that this was one of the first cases to attempt to apply them to modern environmental concerns - Further, novelty existed in that the claim for environmental damage was being advanced through a class proceeding - Inco appealed, arguing that the trial judge erred in determining that the case raised novel points of law - The Ontario Court of Appeal rejected this ground of appeal - See paragraphs 27 to 35.

Practice - Topic 210.3

Persons who can sue and be sued - Individuals and corporations - Status or standing - Class actions - Class or representative actions - Costs - The plaintiff's class action against Inco Ltd. for nuisance and strict liability (i.e., Rylands v. Fletcher), arising from nickel refinery emissions was allowed at trial, but the decision was overturned on appeal - The trial judge, in fixing costs, considered that the proceeding involved a matter of public interest (Class Proceedings Act (CPA), s. 31(1)), because it enhanced access to justice, judicial economy and behaviour modification (all goals of the CPA) - Inco appealed, arguing that monetary gain, not public interest, was the motivation - The Ontario Court of Appeal rejected this ground of appeal - The public interest element was not undermined by the fact that the class plaintiffs sought, inter alia, to vindicate their own private property interests - In any event, the court had found on three previous occasions that the case involved the public interest - See paragraphs 36 to 49.

Practice - Topic 210.3

Persons who can sue and be sued - Individuals and corporations - Status or standing - Class actions - Class or representative actions - Costs - The plaintiff's class action against Inco Ltd. for nuisance arising from nickel refinery emissions ($36 million), was allowed at trial, but the decision was overturned on appeal - The trial judge, in fixing costs for disbursements, stated that a fair approach was for Inco to have 50% of the costs that would have been awarded but for the application of s. 31(1) of the Class Proceedings Act - Inco appealed - The Ontario Court of Appeal rejected this ground of appeal - The court stated that "This is precisely the type of costs analysis that has been undertaken in several of the leading cases; s. 31(1) discounts are typically applied to the total amount of costs claimed by the successful party, including disbursements ..." - See paragraphs 57 to 59.

Practice - Topic 8401

Costs - Appeals - Appeals to court of appeal - General - [See first Practice - Topic 210.3 ].

Cases Noticed:

Pearson v. Inco Ltd. et al. (2005), 205 O.A.C. 30; 78 O.R.(3d) 641 (C.A.), refd to. [para. 4].

Rylands v. Fletcher (1866), L.R. 1 Ex. 265 (Exch.), affd. (1868), L.R. 3 H.L. 330, refd to. [para. 5].

Hamilton v. Open Window Bakery Ltd. et al., [2004] 1 S.C.R. 303; 316 N.R. 265; 184 O.A.C. 209; 2004 SCC 9, refd to. [para. 18].

McDowell v. Barker, [2012] O.A.C. Uned. 698; 2012 ONCA 827, refd to. [para. 18].

McNaughton Automotive Ltd. v. Co-Operators General Insurance Co. (2008), 250 O.A.C. 352; 298 D.L.R.(4th) 86; 2008 ONCA 597, refd to. [para. 19].

Ruffolo et al. v. Sun Life Assurance Co. of Canada (2009), 247 O.A.C. 209; 95 O.R.(3d) 709; 2009 ONCA 274, refd to. [para. 29].

Barrette et al. v. St. Lawrence Cement Inc. et al., [2008] 3 S.C.R. 392; 382 N.R. 105; 2008 SCC 64, refd to. [para. 32].

Hollick v. Metropolitan Toronto (Municipality) et al., [2001] 3 S.C.R. 158; 277 N.R. 51; 153 O.A.C. 279; 2001 SCC 68, refd to. [para. 32].

Durling et al. v. Sunrise Propane Energy Group Inc. et al., [2012] O.T.C. Uned. 6570; 2012 ONSC 6570, refd to. [para. 34].

McCracken v. Canadian National Railway Co., [2012] O.A.C. Uned. 652; 2012 ONCA 797, refd to. [para. 39].

Pearson v. Inco Ltd. et al. (2006), 208 O.A.C. 284; 79 O.R.(3d) 427 (C.A.), refd to. [para. 44].

Boucher et al. v. Public Accountants Council (Ont.) et al. (2004), 188 O.A.C. 201; 71 O.R.(3d) 291 (C.A.), refd to. [para. 53].

Scapillati v. Potvin (A.) Construction Ltd. (1999), 122 O.A.C. 327; 44 O.R.(3d) 737 (C.A.), refd to. [para. 61].

Davies v. Clarington (Municipality) et al. (2009), 254 O.A.C. 356; 100 O.R.(3d) 66; 312 D.L.R.(4th) 278; 2009 ONCA 722, refd to. [para. 61].

Statutes Noticed:

Class Proceedings Act, S.O. 1992, c. 6, sect. 31(1) [para. 27].

Counsel:

Alan J. Lenczner, Q.C., Larry P. Lowenstein, Laura K. Fric and Lauren Tomasich, for the appellant;

Kirk M. Baert, Celeste Poltak and Eric K. Gillespie, for the respondent, Ellen Smith;

Scott Hutchison and Aaron Dantowitz, for the respondent, Law Foundation of Ontario.

This appeal was heard on October 10, 2013, before MacPherson, Watt and Pepall, JJ.A., of the Ontario Court of Appeal. The following decision was delivered for the court by MacPherson, J.A., on November 29, 2013.