Big Suits: SCC Refuses Leave to Appeal in Smith v. Inco

Some are surprised at the Supreme Court of Canada’s decision to dismiss leave to appeal in Ellen Smith v. Inco Limited on Thursday morning. Others not so much.

The case involved a plaintiff class of homeowners in Port Colborne who alleged that Inco’s refinery contaminated the soil with high levels of nickel and that it devalued their property. The action was dismissed by the Ontario Court of Appeal in 2011, reversing a 2010 trial judgment awarding $36 million against Inco.  

As Jean-Marc Leclerc, a litigation partner at Sotos, explains, the first case the Supreme Court ever heard relating to Ontario’s Class Proceedings Act was the 2001 Hollick v. Toronto (City) decision, an environmental class action the Court held should not be certified.

Many thought that leave to  appeal would be granted simply because the Smith v. Inco case offered a rare opportunity for the Supreme Court of Canada to revisit basic principles relating to environmental class actions against the background of a full trial record some 11 years after it first considered the issue in Hollick, he says.

Dianne Saxe, who heads Saxe Law Office environmental law boutique, wasn’t surprised by the news. 

I expected the SCC to refuse leave, she says, because the Court of Appeal had excellent grounds for finding that no damages had been proved. The apparent damages were almost wholly due to a MPAC flip-flop, reclassifying certain vacant lots from agricultural to residential.

As to the significance of the case, Leclerc thinks the effect may be that class action lawyers are less willing to bring environmental class actions in the future: 

It took 10 years to take the case to trial. The trial itself took months. And the plaintiffs came out of the process with nothing. Against this background, there will undoubtedly be some who will prefer more low-hanging fruit rather than take on the risk of an environmental class action and its unique challenges, he says.

Saxe comments on the significance for those involved in claims over contamination:

The case narrows the options for victims of contamination to obtain compensation through the courts, she says.

Larry Lowenstein, of Osler, Hoskin & Harcourt and Allan Lenczner, QC, of Lenczner Slaght led the team for the defendant, Inco Ltd.

Kirk Baert of Koskie Minsky was lead counsel for the plaintiffs.

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