Class Action judgment against Inco for environmental damages in the amount of $36 million

An Ontario trial judge has awarded a plaintiff class $36 million in damages in its action against Inco related to soil contamination.  The class proceeding was brought by residential properties owners in the City of Port Colborne alleging that emissions from the Inco refinery there contaminated the soil on many properties with high levels of nickel.  The action did not involve a claim for personal injury or adverse health effects.  Instead, the common issue that was allowed to proceed in the class proceeding (all class actions must first be "certified" by the Court before they will be allowed to proceed as class actions) related to property devaluation. 

The common issues before the Court in the trial were:

6(c) Did the disclosure from and after September 2000 of information concerning nickel contamination in the Rodney Street area and elsewhere in Port Colborne negatively affect property values in the Port Colborne area?

6(d) Did the discharge of nickel by Inco amount to a public and/or private nuisance?

6(e) Did the discharge of nickel by Inco amount to a trespass?

6(f) Is Inco strictly liable to the class for the discharge of nickel as a result of a failure to prevent the escape of a dangerous substance (Rylands v Fletcher)?

6(g) If Inco’s liability is established, can class members’ claims for property damages be assessed by group or area and, if so, what is the quantum of damages?

6(h) If Inco’s liability is established, did Inco’s conduct justify an award of punitive damages to the class, and if so, what amount of punitive damages is appropriate?

6(i) Are class members’ claims statute-barred by the six year limitation period provided for by s.45(l)(g) of the Ontario Limitations Act, that was in force during the relevant time?

The trial judge found that the representative plaintiff proved on a balance of probabilities that negative publicity and public disclosures by Inco concerning the contamination from and after September 2000 significantly affected property values in certain areas, somewhat affected property values in other areas, and had a slight effect on property values in another set of areas.  On this basis, different damage awards were made with respect to different areas within the plaintiff class of properties.

The Court used property tax assessment data from MPAC in order to determine the quantum of the losses suffered by the members of the plaintiff class.  An expert accepted by the Court analyzed the MPAC assessments for residential properties that were done in the years 1996, 1999, 2001, 2003, 2005 and 2008 in the cities of Port Colborne and Welland. He found that the average assessment for residential properties in the City of Port Colborne rose 59.5% between 1999 and 2008, and that the average assessment for residential properties in the City of Welland rose 65.4% for the same time period. Thus, residential properties in the City of Welland outperformed those in the City of Port Colborne by 5.9% from 1999 to 2008.  The expert concluded that the value of all of the residential property in Port Colborne is approximately $48,000,000 less than it would have been if property values in Port Colborne had kept pace with property values in Welland from 1999 to 2008.

Read the decision at: Smith v. Inco.