Contaminated Lands Claims: Summary Dismissal

The Alberta Court of Appeal (the “Court”), today, ruled on the issues of summary dismissal, strict liability and nuisance. The decision relates to litigation commenced as a result of land contamination: Windsor v Canadian Pacific Railway Ltd., 2014 ABCA 108.  

Background

Canadian Pacific Railway Ltd. (“CPR”) has operated a locomotive repair facility known as the “Ogden shops” in Calgary, Alberta since the early 1900’s. At the time of construction, the Ogden shops were located outside of the city limits of Calgary. They are also located in a heavily industrialized zone.

Between the 1950’s and 1980’s a degreasing solvent consisting mostly of Trichloroethylene (“TCE”) was used by CPR at the Ogden shops. In 1999, CPR discovered that TCE had leaked into the groundwater under portions of the Ogden community, which is now a residential area located within the Calgary city limits.

The varying levels of TCE underneath the properties were divided into two categories. The first consisted of properties where there were measurable amounts of TCE that exceeded Health Canada thresholds. For areas within this category, CPR installed sub-slab depressurization (“SSD”) systems to exhaust the TCE vapours and reduce levels to below Heath Canada thresholds.  The second consisted of properties with levels of TCE below Health Canada thresholds which have not required any remediation.

Litigation

The plaintiffs, representing a class of residents in the Ogden area (the “Class”), commenced litigation against CPR alleging:

(a) the Class’ lands have been rendered unhealthy and much less fit for use and occupation;

(b) the Class’ lands have reduced value for renting to third parties; and

(c) the Class’ lands have greatly diminished value.

The Class did not advance claims for personal injury damages. It appears that this allegation was excluded to ensure that the Class would be certified.

Summary Dismissal Application by CPR

CPR applied to the Court of Queen’s Bench (“QB”) for summary dismissal of certain parts of the Class’ claim including:

(a) the strict liability claim by the Class under the doctrine in Rylands v Fletcher;

(b) the claim in nuisance by class members with SSD systems in place; and

(c) the claim in nuisance by class members without SSD systems.

The Class had conceded, before the summary dismissal application, that the Class’ claims in trespass should be dismissed. CPR did not attempt to summarily dismiss the claims in negligence.

QB Finding

QB would not dismiss the Class’ claims based upon strict liability or the claim in nuisance against those class members who had SSD systems installed. QB did, however, allow CPR’s application to dismiss the claim in nuisance against those class members who did not have SSD systems. QB concluded that damage to these non-SSD system lands was trivial or nonexistent.

CPR appealed the first two components of the ruling.

Test for Summary Dismissal

The Court reviewed the test for summary judgment in light of the recent decision of the Supreme Court of Canada in Hyryniak v Mauldin. In that decision, the Supreme Court found that summary judgment rules must be interpreted broadly, favouring proportionality and fair access to the affordable, timely and just adjudication of claims.

Strict Liability

The rule in Rylands v Fletcher provides that a landowner who allows unusual dangerous substances to escape from his lands would be liable to his neighbours for any resulting damage. The liability under this principle is exceptional in that it is “strict”; liability is not dependent upon a finding of negligence or other fault.

The leading case on strict liability in Canada is Smith v Inco Ltd. The Court followed the guidance set by the Ontario Court of Appeal in Inco. The requirements of this tort are:

(a) the defendant made an “extraordinary”, “special” or “extra-hazardous” use of its land;

(b) the defendant brought onto its land something that was likely to do mischief if it escaped;

(c) the substance in question in fact escaped; and

(d) damage was caused to the plaintiff’s property as a result of the escape.

In allowing CPR’s appeal, and dismissing the Class’ claim on this issue, the Court found that CPR was not using its land in any unreasonable way, and the land was, in fact, zoned for this type of industrial use. Further, the Court found that it was not foreseeable that TCE would do any mischief at the time it was being used and that the TCE did not “escape” from the land (for an escape to occur, there must be some unintended accident or mishap). In this case, TCE “migrated” and was a normal and intended consequence of the activity being conducted on the land.

Since the other parts of the Rylands v Fletcher test were not met, the Court found it unnecessary to explore the issue of damages in order to dismiss the strict liability claims of the Class. The Court did consider the issue of damages in its analysis of the nuisance claims.

Nuisance

Claims in nuisance depend on proof of damage. Nominal or trivial damages are insufficient to support a claim in nuisance.

QB, in dismissing CPR’s application, held that there was some proof of damage at the SSD system lands for the following reasons:

– the presence of vapours in some of the SSD system properties;

– the consequences and impacts of mitigation; and

– the very need for mitigation.

The Court found no error in QB’s reasons as they pertain to the nuisance claim advanced by those members of the class located in the SSD system area. As such, the Court dismissed that portion of CPR’s appeal, directing that this issue proceed to trial.

Summary

CPR now faces ongoing litigation with the Class in relation to claims in negligence, and the claims of the SSD system residence in nuisance.

This decision provides litigants with an up-to-date precedent of how summary dismissal applications will be handled by the Alberta courts post-Hrynyiak. The decision should also provide litigants pursuing and opposing land contamination claims with guidance on how Alberta courts will handle the strict liability and nuisance aspects of those claims. To see the full decision, click here.

By James Early.