Dear Jason;

A very interesting case.

(1) On the nuisance point, the court seems well aware of the distinction (which they trace back to St Helen's Smelting) between "material damage" to land and "amenity" damage (ie interference with use and enjoyment.) In favour of the plaintiff they rule that where there is a claim for "material damage" there is no balancing process of "unreasonable use" needed, it will usually be actionable. But they conclude that because the nickel particles deposited in the soil posed no scientifically recognised threat to human health or in any other way impacted on (presumably) the fertility of the soil, etc- hence an action for nuisance could not be based on "material damage". (In this respect the case is a bit like the Rothwell "pleural plaques" litigation- there were particles but no actual damage, so no cause of action.)

The plaintiffs were claiming that there was nuisance because at a point in time some 15 years after the particles were deposited, fears of members of the public about the impact of the nickel led to a drop in property values. (Ironically, as the court notes, at least some of those fears were generated by the plaintiff's legal action!)

One thing that struck me was whether the plaintiffs could have done any better by pleading "amenity" harm. So even if there was no material damage, what the defendants had done led to a drop in value which interfered with the plaintiff's "enjoyment" of their land. But in that case the court would have been at liberty to conduct an "all things considered" reasonableness enquiry, and may well have concluded that given that the drop in value came from fears in the market place not generated by the defendant, that what the defendants had done was not an "unreasonable" interference.

Jason, you say:

>The definition used by the court seems to collapse the distinction

>between nuisances that interfere with use and enjoyment and those

>causing physical injury to property, since on the court's reasoning,

>something is only physical damage if it had some effect on some proposed

>or possible use by the owner.

They do say something like this but I don't see it as problematic. Land in itself as a lump of physical space is not "damaged" by anything. For something to be physical damage to land it must interfere with a proposed use of that land by humans. So the reason that land is materially damaged by chemical emissions is that they prevent crops growing, or cause disease to animals or humans living on the land, etc. Even water "damage" is only such because it interferes with things that humans want to do on the land eg walk rather than swim. So I don't see this bit of the decision as a problem.

(2) After dismissing an invitation to create a new form of "strict liability" based on "extra-hazardous operations", the court ruled that the Rylands v Fletcher claim failed because operating a nickel refinery was not a "non-natural" use. I agree with you, Jason, that to rule in this way would seem to undercut the foundation of R v F claims substantially. To say that a chemical plant operated in an "industrialised" area does not seem to resolve the issue. Perhaps the best way to view this element of the action these days is to see it as merging somewhat with the issue of "foreseeable type of harm"? That is, did the activity on the land create a clearly foreseeable chance that if something went wrong, harm would be caused to others nearby (not necessarily adjacent neighbours.) After all, it would seem to be odd if each of 3 dangerous chemical plants could immunise themselves individually against R v F liability by putting their plants next to each other and hence creating a "toxic neighbourhood".

On the final issue of nuclear plants, etc, putting to one side statutory immunities or liabilities, is it good enough if a plant runs in accordance with all government planning rules, etc? This argument seems a bit like the "pre-emption" argument that was raised in the Australian Vioxx litigation recently: you can't sue me if I complied with government regulations! In my view the response ought to be the same: government regulations are meant to provide a minimum standard of care, not a maximum one!

But there is a kind of odd double-minded approach in para [100]:

"We agree that compliance with various environmental and zoning regulations is

not a defence to a Rylands v. Fletcher claim. In our view, however, compliance is an

important consideration in light of the approach to non-natural user taken in Tock."

 

Compliance with regulations seems to count towards establishing the running of the plant as not a "non-natural use". I disagree. The plant may comply with all government regs, but why should local land-owners be the ones who suffer when there is an escape of a dangerous substance? On balance I tend to agree with the overall result in this case simply because of the non-physically-harmful nature of the nickel. But I would not like to see this "compliance with regulations" defence succeed in other cases. Take the recent Buncefield explosion- it may well be true that Total and Chevron complied formally with all the safety regulations. But why should that mean they aren't liable when an explosion destroys hundreds of properties in the near vicinity?

Regards

Neil

Neil Foster
Senior Lecturer
Newcastle Law School
Faculty of Business & Law
University of Newcastle
Callaghan NSW 2308
AUSTRALIA
ph 02 4921 7430
fax 02 4921 6931

http://www.newcastle.edu.au/staff/profile/neil.foster.html

http://works.bepress.com/neil_foster/




>>> Jason Neyers <jneyers@uwo.ca> 10/26/11 1:11 PM >>>

Dear Colleagues:

I would be interested if any of you had any opinions about the recent

ONCA decision in /Smith v Inco Ltd/. I am particularly interested in any

thoughts that anyone has in regard to the following two issues:

1)_Physical Harm_: In /Smith/, the court decided (at [49]) that 'the

requirement of "material injury to property" is satisfied where the

actions of the defendant indirectly cause damage to the plaintiff's land

that can be properly characterized as material, actual and readily

ascertainable." And that 'where the nuisance is said to flow from the

physical harm to land caused by the contamination of that land, the

claimants must show that the alleged contaminant in the soil had some

detrimental effect on the land or its use by its owners' (at [57]).

On the facts, the court found that there had been no physical harm to

the property by the depositing of large amounts of nickel particles even

if this caused a large drop in property values unless the plaintiff

could prove "that the nickel particles caused actual harm to the health

of the claimants or at least posed some realistic risk of actual harm to

their health and wellbeing".

The definition used by the court seems to collapse the distinction

between nuisances that interfere with use and enjoyment and those

causing physical injury to property, since on the court's reasoning,

something is only physical damage if it had some effect on some proposed

or possible use by the owner. This may or may not be a bad thing but it

seems to have this effect.

2)_Non-Natural/Special Use_:On this issue, the court stated "whether a

use is a non-natural one, the court must have regard to the place where

the use is made, the time when the use is made, and the manner of the

use. Planning legislation and other government regulations controlling

where, when and how activities can be carried out will be relevant

considerations in assessing whether a particular use is a non-natural

use in the sense that it is a use that is not ordinary."

In the end,the court found no liability for the emissions of nickel

particles since 'the claimants did not ... demonstrate that Inco's

operation of its refinery for over 60 years presented "an exceptionally

dangerous or mischievous thing" or that the circumstances were

"extraordinary or unusual". To the contrary, the evidence suggests that

Inco operated a refinery in a heavily industrialized part of the city in

a manner that was ordinary and usual and did not create risks beyond

those incidental to virtually any industrial operations.'

One colleague pointed out to me that this seems inconsistent with Lord

Goff's statement in /Cambridge Water/(if one just substitutes nickel and

refinery) that 'I cannot think that it would be right in such

circumstances to exempt E.C.L. from liability under the rule in /Rylands

//v//. Fletcher / on the ground that the use was natural or ordinary.

The mere fact that the use is common in the tanning industry cannot, in

my opinion, be enough to bring the use within the exception... . Indeed

I feel bound to say that the storage of substantial quantities of

chemicals on industrial premises should be regarded as an almost classic

case of non-natural use; and I find it very difficult to think that it

should be thought objectionable to impose strict liability for damage

caused in the event of their escape.' Does anyone have any thoughts?

Would an escape of radiation from a highly regulated nuclear facility

now not be actionable under /Rylands/ given this regulation and the

ubiquitous nature of nuclear power? Is an explosion at a gas/petrol

station not actionable for these same reasons?

All the best,

--

Jason Neyers

Associate Professor of Law

Faculty of Law

University of Western Ontario

N6A 3K7

(519) 661-2111 x. 88435