Polluters liable, even if they follow the rules, top court says

Janice Tibbetts, Canwest News Service

Published: Thursday, November 20, 2008

OTTAWA – Industrial polluters can be forced to pay damages if they excessively annoy nearby residents, even if companies comply with regulations governing emissions, the Supreme Court of Canada ruled Thursday in a decision that stresses environmental protection.

The unanimous judgment ends a long-standing battle between St. Lawrence Cement and people who lived near the plant in Beauport, Que., until it shut down in 1997.

The residents launched a class-action suit against the plant in 1993, complaining that its operation spewed residue on their homes, land, and cars, along with an ensuing odour and noise that devalued their properties.

The key issue in the Supreme Court ruling was whether companies in Quebec can be found civilly liable, even if they are not strictly at fault for the inflicted damage because they followed regulatory standards on maintaining equipment.

Although the case was confined to interpretation of the Quebec Civil Code, the court noted that no-fault liability is also found in common law that is used in all other provinces.

“What is more, such a scheme is consistent with general policy considerations, such as the objective of environmental protection and the application of the polluter-pay principle,” justices Marie Deschamps and Louis LeBel wrote in the 6-0 decision.

The court said that the test for civil fault is whether the pollution violates a standard of conduct of a reasonable person.

Environmental groups hailed the decision as a “massive victory” that will empower citizens to challenge environmental annoyances.

“The result is that future environmental nuisance claims will be more easily proven under a no-fault regime, and polluters will have even more incentive to clean up their act to avoid being sued by their neighbours,” said Will Amos, a lawyer for the University of Ottawa Ecojustice Environmental Law Clinic.

The decision upholds a ruling in the Quebec Superior Court, which absolved St. Lawrence Cement of wrongdoing, but nonetheless found the company liable for excessive disturbance and ordered it to pay about $15 million in damages to the residents.

The Quebec Court of Appeal rejected the lower court’s finding that a company can be found liable in the absence of fault. But the appeal court found St. Lawrence Cement guilty of wrongdoing in its compliance with environmental laws.

The appeal court also limited the scope of class-action suits by restricting damages to homeowners, and excluding tenants and family members from claims – a ruling that the Supreme Court rejected.

St. Lawrence Cement, based in Concord, Ont., said Thursday in a statement that the recognition of a no-fault liability scheme in Quebec could have “far reaching implications” for Canadian industry.

“SLC does acknowledge that, despite using state-of-the-art equipment to manage dust and consistently complying with all regulatory requirements, there was annoyance to our neighbours from the operation of the plant,” the statement said.

Court evidence showed that the cement plant, responding to ongoing complaints, spent $8 million between 1991 and 1995 on new dust collectors for its kilns.

The company continues to operate in more than 50 Canadian communities, employing about 3,000 people and generating annual revenue of more than $1.5 billion.


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