Since the Ontario Class Proceedings Act, 1992 came into force there has been a lot of speculation about how it would be applied in the context of environmental cases. This legislation is of particular interest to those that manage or control companies that have the potential to cause an impact on the environment — either through waste management activities or by their various emissions.
In June 2002, the Ontario Superior Court of Justice released its decision in a case involving the Class Proceedings Act, 1992. The case involves contamination that had been caused by the operations of Inco’s refinery in the Port Colborne area.
In a decision released last year (Hollick v. City of Toronto), the Supreme Court of Canada denied certification of a class action against Toronto and its municipal waste landfill. In this decision (Pearson v. Inco), certification was again denied. It is useful to examine the court’s reasoning.
The background of the matter is complex, but essentially relates to the operations at the Inco refinery where various toxic and hazardous substances emitted into the natural environment resulted in land contamination. In addition to Inco, other defendants were named including the Ontario government, the City of Port Colborne, and the Regional Municipality of Niagara.
The approximately 20,000 individuals requesting certification owned or occupied properties (or attended school since March 1995) within the area of Port Colborne. The damages claimed were in the amount of $600-million, together with punitive damages of $150-million and certain injunctive relief.
Test for class certification
In order to gain certification of an action as a class proceeding the plaintiff must satisfy the requirements of subsection 5(1) which states that the pleadings must: disclose a cause of action, identify a class of persons that would be represented, and must raise common issues. In addition, the class proceeding must be the preferable procedure to resolve the common issues, and there must be a representative plaintiff who would fairly and adequately represent the interests of the class who does not have a conflict and who has produced a plan for the proceeding.
Inco agreed that the statement of claim disclosed a reasonable cause of action against it. However, the court concluded that the class, which was defined principally by geographic boundaries, was not a properly identifiable class. The court found that the class included some individuals who appeared to have no claim, and excluded other individuals who had identical claims to persons who were included in the class.
The court also found that the temporal component of the class definition would include anyone who lived in the Port Colborne area since March 1995 and exclude those that did not, even if they had suffered harm from the activities of Inco. As such, the court held that the proposed definition for the class was arbitrary and that it failed to constitute a properly identifiable class.
When deciding whether the resolution of the proposed common issues would sufficiently determine liability, the court held that it needed to consider whether any individual issues would remain after the common issues were resolved. The court held that the common issues relating to Inco were common to all members of the proposed class, but that this would not reduce the extreme complexity involved in resolving those issues.
The court held that the issue of preferable procedure was where the request for certification faced its greatest difficulty. The court stated that it needed to consider the degree to which resolution of the common issues would advance the overall action, compared to the individual issues that be determined thereafter. The court — guided by the objectives of judicial economy, access to justice, and behavior modification — found that a class action proceeding would not satisfy any of these three objectives.
The court held that the overall determination of all of the claims would only be minimally assisted by a determination of the common issues. For example, the process to determine whether a causal link exists for a given class member with respect to an allegation of harm is extensive and very much individualized. In addition, with regard to lost property value, the wide range of factors to consider demonstrates the complexity and individualized nature of the issue. As such, the class proceeding would become unmanageable because it would result in the need for thousands of individual trials.
With regard to access to justice, the court noted the existence of the community-based risk assessment, which would address many of the concerns put forward in the claim. It also noted that the Ministry of Environment was actively involved in the matter and that behavior modification (in other words, ensuring that Inco acted appropriately) was not a rationale for a class proceeding.
The court considered whether there were other avenues of redress available and relied on the Hollick decision, which held that Ontario’s environmental legislation provides other avenues by which a complainant could ensure that the respondent takes full responsibility for its actions. The Supreme Court in Hollick held the existence of such legislation does not preclude the possibility of environmental class actions but addresses legitimate concerns about behavior modification.
Finally, the court held that the representative plaintiff did not meet the three-part test.
Based on this decision, it would appear that it would be difficult for a plaintiff to obtain certification on behalf of a class in situations involving environmental contamination. One of the characteristics of environmental contamination is that numerous parties are impacted in very different ways, depending on the nature and extent of contamination and to which they have been exposed, and due to other contributing factors.
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Rosalind Cooper, LL.B. is a partner with Fasken Martineau DuMoulin LLP, with offices across Canada. Ms. Cooper is based in Toronto, Ontario.