In Windsor v. Canadian Pacific Railway Ltd., 2014 ABCA 108 (“Windsor”), the Alberta Court of Appeal summarily dismissed certain claims in an environmental class action. The appellant, Canadian Pacific Railway Ltd. (“CP”), operated a locomotive repair facility near Calgary. Nearly a century after it began the operations, CP discovered that a contaminant, trichloroethylene (TCE), used on site had leaked into the groundwater and migrated to adjacent properties. The adjacent property owners brought a class proceeding, claiming, among other things, nuisance and strict liability under the Rylands v. Fletcher doctrine. The class action, made up of two class groups, sought damages for diminution in property value and loss of rental income. In one group this included 70 properties where sub-slab depressurization systems had been installed to address the air quality impacts from the TCE; a second group had TCE levels below Health Canada thresholds. The distinction between the two groups was critical in determining whether their claims survived.
CP sought to dismiss all claims by way of summary judgment, but succeeded only in obtaining a dismissal of the nuisance claim against the class members where no active remedial steps were undertaken – i.e. the group with air quality below the Health Canada threshold. The motion judge declined to dismiss the claim based upon strict liability as he concluded that TCE has escaped, and there was a triable issue as to whether the class members were entitled to general damages for interference with the enjoyment of their property. With respect to the class where the depressurization system had been installed, the judge refused to dismiss the nuisance claim, concluding that the need for continuous mitigation itself was some evidence of loss of enjoyment of their land. CP appealed the application judge’s decision on the basis that the other claims should have been dismissed too. (There was no cross appeal).
The Alberta Court of Appeal stated that the standard of review for the legal test for summary judgment is correctness. The Court drew heavily from the recent case of Hryniak v. Mauldin, 2014 SCC 7 (“Hryniak”). In Hryniak, the Supreme Court of Canada lowered the bar for summary judgement, stating that “summary judgment rules must be interpreted broadly, favouring proportionality and fair access to the affordable, timely and just adjudication of claims”. While Hryniak applied the Ontario Rules of Civil Procedure, the Alberta Court of Appeal held that the principles articulated applied equally in Alberta where the rules are similar. The Court also noted that the motion judge’s decision on summary judgment had been made prior to the Supreme Court’s decision in Hryniak, and therefore it was appropriate for the Court of Appeal to examine whether there was, in fact, any merit to the claims genuinely requiring a trial.
On the strict liability claims, the appellate court allowed the appeal against both classes. It held that on the evidence before the motion judge, the respondents had failed to raise any genuine or triable issue under the principles of Rylands v. Fletcher, as laid out in the leading Canadian case Smith v. Inco, 2011 ONCA 628. On the elements of a claim in strict liability, the Court of Appeal held that a) there was no unreasonable use of lands; b) it was not foreseeable at the time of use of TCE that its escape would do damage (its use was not known at the time to possess harmful qualities – and this evidence was uncontradicted on the record); c) the “escape” of TCE was not the result of an unintended accident or event, but was the result of deliberate conduct acceptable at that time; d) since the other elements of the strict liability tort were not made out, it was not necessary to address the damages issue.
On the nuisance claim, the Court agreed with the motion judge’s finding that there was only proof that one class of property owners had suffered non-trivial damages – those where the depressurization system had been put in place. The claim in nuisance against CP by that class survived to see another day.