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Ontario's highest court has set aside a decision against mining company Inco Ltd. that awarded $36 million in damages to residents of Port Colborne, Ont.
In June 2010, an Ontario Superior Court justice made the award to about 7,000 Port Colborne households that claimed elevated levels of nickel had negatively affected the values of their properties.
Inco acknowledged that its Port Colborne refinery, which ceased nickel emissions in 1984, was the source of the vast majority of the elevated levels of nickel found in the area.
The class-action claim was for the decrease, or lack of increase, in the values of properties from September 2000.
In a decision released Friday, the Ontario Court of Appeal found the trial judge erred in a number of areas in reaching his decision. Among other issues, the Appeal Court ruled the claimants had failed to prove Inco's emissions constituted a nuisance as determined by the trial judge.
"Had the claimants shown that the nickel levels in the properties posed a risk to health, they would have established that those particles caused actual, substantial, physical damage to their properties," the appeal justices wrote. "However, the claims as advanced and as accepted by the trial judge were not predicated on any actual risk to health or well-being arising from the particles in the soil."
Inco, which was acquired by Brazilian mining company Vale SA in 2006, had argued at trial that the limitation period to make a claim had expired, but Judge J.R. Henderson ruled that the extent of contamination wasn't generally known until early 2000. The Appeal Court noted that this implied that some residents would have been aware earlier of the potential effect of the nickel.
"It is an error to treat the limitation period as running from the date when a majority, even an overwhelming majority, of the class members knew or ought to have known the material facts in issue," the appeal judges said.
The trial judge also found that Inco's operation between 1918 and 1984 of the nickel refinery in Port Colborne, a city located southwest of Niagara Falls on the north shore of Lake Erie, constituted a non-natural use of the property.
The Appeal Court said the evidence suggests that Inco operated in a heavily industrialized area in a manner that was ordinary and usual and did not create risks beyond those incidental to virtually any industrial operation.
"In our view, the claimants failed to establish that Inco's operation of its refinery was a non-natural use of its property," the justices wrote.
The Appeal Court also ruled that the claimants failed to prove damages and the $36 million award was based, in part, on flawed data.
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