Category Archives: Insurance

Residential Contamination

While we often think of environmental litigation as dealing with significant oil spills, climate change, pollutants being lost from tailings ponds or to challenge government decisions to drastically alter a landscape, more common are the little events, like ones that can occur around your home. That was the case in Jerabek v. Scotia Fuels Ltd. 2015 NSSC 283.

In this case, some homeowners, on the advice of their home inspector, engaged their fuel oil supplier, Scotia Fuels Ltd. (“SF Inc.”) to replace their fuel oil tank in the furnace room of their residence. It was determined that the fuel tank was defectively installed by SF Inc., and an oil spill, consisting of approximately 25 litres of oil, had contaminated the ground below the residence, and reached the first chamber of septic tank which was then excavated and removed.

SF Inc. accepted full responsibility for the incident and assured the homeowners that their house would be made whole again through remediation work without any need to involve SF Inc.’s insurer. Despite this, however, the cleaning work performed by SF Inc. did not fully eliminate the oil smell in the residence. After completion of the remediation work, SF Inc. took the position that any continuing indoor air quality problem at the residence was not associated with the spill of fuel oil and, therefore, terminated its involvement with the residence.

Unfortunately, despite the remediation work, the homeowners could still detect a faint yet persistent hydrocarbon odour in the residence and retained company to conduct further air quality tests. After testing, the company recommended that the residence be cleaned by DLS Group, specialists in hydrocarbon decontamination. After cleaning, the hydrocarbon odour in the residence was fully eliminated. However, the cleaning cost the homeowners over $100,000.00, plus other expenses associated with the spill.

The homeowners brought a successful action for damages, alleging that the spill caused by SF Inc. led to the hydrocarbon smell, its remediation efforts were insufficient, and it then abandoned its remediation efforts. After a thorough review of the evidence, and an analysis of the law of causation in negligence, the Court found in favour of the homeowners, stating that:

““but for” causation is a factual inquiry into what likely happened. Scientific proof of causation is not required.

“…it is more likely than not that the root cause of the faint but persistent hydrocarbon odour complained of was the adherence of fuel oil vapours which permeated certain building materials and household contents during the initial remediation work.” My emphasis.

The homeowners were awarded damages of $166,399.49. The Court found that SF Inc. had an obligation to restore the residence to the same odour-free state that it was in before oil spill occurred.

James Early

Reintroduction of Wildlife: No Basis for Liability for Motor Vehicle Collisions

Imagine driving along a highway on the island of Newfoundland on a fine summer’s evening. Suddenly, seemingly out of nowhere, a moose bounds onto the road. Before you have time to avert the inevitable collision, 600 to 1,000 pounds of animal hits your car. Because the moose stands on long, spindly legs, the car proceeds through the legs and under the moose, resulting in its massive body coming over the hood of your car and crashing down on your windshield and roof. If the moose has not been killed instantly, it thrashes about in your car, making a horrific situation for you even worse. The result can be catastrophic – serious injury, paralysis and even death.

The Supreme Court of Newfoundland and Labrador Trial Division (General) (the “Court”), last week, rendered its decision in George v Newfoundland and Labrador, 2014 NLTD(G) 106. After opening his decision with the paragraph, above, Mr. Justice Robert P. Stack proceeded to the matter at hand.

This class action lawsuit concerned the introduction of moose to the island of Newfoundland and the Province’s subsequent management of the moose population as it relates to highway traffic safety.

The introductions of moose to the island of Newfoundland occurred first in 1874-75 in Gander Bay and later in 1904 at Grand Lake Station. It is not clear, however, whether the current moose population derives from the first attempted introduction or only the second. Moose were introduced for food for the residents and sport for hunters.

The Province has authority over the management of wildlife within Newfoundland and Labrador, as well as the development and maintenance of the highway system throughout the Province. The plaintiffs alleged that the Defendant Province was liable in strict liability, public nuisance, and negligence for personal injuries and loss of human life that were caused by moose-vehicle collisions outside national park boundaries in insular Newfoundland during the class period.

The plaintiffs’ action failed. The Court found:

(1) The Province is not liable to the plaintiffs in the tort of strict liability.

(2) The Province is not liable to the plaintiffs in the tort of public nuisance.

(3) The Provice does not owe a prima facie duty of care to the owners and occupiers of motor vehicles to mitigate the risk of moose-vehicle collisions, Even if the Province did, such a duty of care would be negated because it has adopted policies of moose population management and moose-vehicle collision risk mitigation that are neither irrational nor were made in bad faith.

In addition to other arguments around the principle of strict liability, as an alternative, the plaintiffs argued that the Province was strictly liable for harm caused by moose on the highways by virtue of the emerging principle of strict liability for abnormally dangerous activity. In support of this, the plaintiffs cited academics who postulate that a new basis of strict liability should be adopted, whereby liability flows from the defendant engaging in abnormally dangerous activities (Linden, et al).

While the Court found that it cannot be said that there will never be presented to the Court facts that would result in further evolution of the common law of strict liability, at this time, at least, such a tort is not recognized in Canadian law, and was specifically rejected in Smith v Inco Ltd., 2011 ONCA 628.

As you are no doubt aware, Parks Canada is in the process of reintroducing plains bison to Banff National Park. This decision should be welcome news for Parks Canada.

James Early

Treating the Symptom, not the Cause

On February 11, 2014 the federal government tabled the 2014 – 2015 federal budget. In addition, Finance Minister, Jim Flaherty, announced a federal plan to create a National Disaster Mitigation Program where, over a period of five years, the government would contribute $200,000,000.00.

This follows on from my post, yesterday, where I commented on the $1,700,000,000.00 damage caused by the June 2013 Alberta floods. What I did not mention was that, as the flood waters receded in Alberta, torrential downpours in Ontario caused flood damage in Toronto estimated to be in the region of $940,000,000.00 and that, according to the Insurance Bureau of Canada, bad weather in 2013 cost Canadian insurers approximately $3.2 billion (yes, that’s $3,200,000,000.00).

In fact, the Insurance Bureau of Canada reported that the 2013 losses came in the wake of four straight years of natural disasters where losses exceeded $1 billion.

The $200,000,000.00 investment announced by the government is to “support mitigation measures, such as infrastructure to control floods that can reduce the impact of severe natural disasters.” In addition, the government will consult with the insurance industry on how best to create a national approach to residential flood insurance.

Adaptation and preparedness for future natural disasters is a positive step taken by the government. It equates, though, to addressing the symptoms of climate change and not the causes.

On that issue, the government is falling behind. While Environment Canada suggests that “significant progress” is being made on Copenhagen Accord targets, the truth is that in its own report, entitled “Canada’s Emissions Trends”, it acknowledges that emissions, by 2020, are projected to be 122 megatonnes higher than the target set by the Accord.

Perhaps the government’s announcement of the National Disaster Mitigation Program is an attempt to cushion the blow of another failure to live up to an international treaty on emissions reductions?

By James Early.